Patent valuation

“What is this patent worth?” is a business question wearing legal clothes.

In simple words

Estimating the economic value of a patent or a portfolio - typically by cost, by market comparables, or by the income it can be expected to protect or generate.

Think of it as

Pricing a right to exclude.

Why it matters

Value comes from three things a valuation model cannot fake: the breadth of the independent claims, the strength of the patent against invalidity attack, and whether anyone actually needs to practise the claims to compete. A wide, weak patent and a narrow, solid one can be worth similar amounts for opposite reasons.

A simple example

A patent whose claims are narrowed during prosecution to precisely one commercial embodiment often loses most of its licensing value while keeping all its renewal costs.

Common mistake

Valuing on filing and prosecution cost. Cost is what you spent; it is not what anyone will pay.

Where it comes from

Commercial practice; no statutory valuation standard in Indian patent law