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Why Some Patents Sell Better Than Others

How valuable is a patent? Much of any patent’s value depends on how well the patent is written. In this video, patent attorney Rich Goldstein discusses how intellectual property is valued in the marketplace, and the qualities that make some patents more valuable than others. These are important considerations when planning your IP strategy.

The scope of a patent is critical to determining its value

You may have noticed that some patents sell for a lot of money while other patents don’t sell at all. You might’ve heard in the news about the sale of Motorola’s portfolio of patents. There were thousands of patents that were being sold together as one package. It was purchased by a group of companies in the Silicon Valley for billions of dollars. If you divide the total purchase price of this portfolio of patents by the number of patents, you’ll notice that each patent was valued at nearly a million dollars. But it’s important to note that some of the patents are good ones and some are bad ones. But still, the average purchase price was nearly a million dollars.

Clearly, the tech industry is placing a high value on patents these days. But that doesn’t mean that they’d be willing to pay a premium for just any patent. For example, one single patent might sell for a lot of money because the technology contained in it is of great interest to a software company, who wants to acquire it so that they can use that technology with their existing business. On the other hand, another patent for a similar solution might not sell at all.

The secret, really, is in the scope of the patent. What it comes down to is whether you can get a broad patent that covers a whole technology, or whether you end up with a narrow patent that’s just for a specific solution. This is where patents get tricky. This is where it’s most important to know what’s the closest prior art to your invention. Because the thing that really determines whether you get a broad patent or a narrow patent is the prior art.

You might have a really great idea, and you think that the idea itself is novel. But once it goes through the patenting process, perhaps the thing that you thought was getting patented gets paired down a bit—narrowed—to the point where what you end up getting the patent on is more of a specific solution. Then, if that solution isn’t really the only way to do what your idea does, or isn’t the best way to solve the problem addressed by what you’ve patented, then the patent isn’t that interesting to potential buyers.

What’s really interesting is when a patent embraces the best solution there is to a given problem. When you have a patent that embraces the best solution, then you have something that is really valuable. Once you really know what the prior art shows, you can get a really solid sense of what the patent would cover—and whether a company would be interested in purchasing this patent from you. From there, you can make a good decision about whether it makes sense to file a patent application.