Develop taxonomy and playbooks to execute tactics and goals Discern between financial, defensive and competitive value Design portfolio optimization techniques given constraints and objectives METHOD OF OPTIMIZATION INVESTMENT VALUE GOALS AND TACTICS
Current Quantitative discipline that enables optimized results Manage Costs ConsistencyConsistency Investment Tradeoffs Patent Portfolio Optimized
Organizes investments into categories for clearer communication Provides a clear correlation between tactics and type of value created Measures investments by assets and liabilities resulting in closer relationship to the income statement and balance sheet. DefensiveRisk Conflicts Internal Investment External Investments Assets / Liabilities Financial Enterprise Value Creation Investment Cost Tactics Map to Matrix Competitive Total
Cost & Financial Value Competitive Value Defensive & Risk Value Determine potential internal cost and damages if patents owned and asserted by a 3 rd party: - Number of assertions - Probability of assertion - Potential settlement cost - Legal fees - R&D feature work-arounds Moderate risk on return Connect the technology acquired to business success: - Market share - Time to market - Average selling price - Cost efficiencies High risk on return Cost represents the initial payment and subsequent cash outflows (e.g. maintenance fees) Transactional cash inflows comprise financial value: - Patent purchase price - Outbound licensing revenue Low risk on return Conclusion $66M is a positive return, but will turn to breakeven without the high risk competitive value. There is significant risk to this investment. DefensiveRisk External Investment Financial Enterprise Value Creation Investment Cost Total NPV Competitive
Portfolio Gap Analysis Patent Filing Rate Risk Assessment Evaluate the size of the revenue pool associated with patent counts from each technology area. Determine whether products with material revenue are exposed or protected relative to the competitor(s) using a weighted ratio. Combinations of technology areas comprise products. To determine the correct volume of patents to file, the portfolio life cycle is charted (below). Depending on desired issuance levels, the number of patents to be filed in future years are calculated. Analyze how well our portfolio aligns to one or more competitors for existing and emerging technology areas. Product Category Exposure Ratio Product A3.0 : 1 Product B0.5 : 1 Product C1.0: 1 Quality of patents is an important variable and is an overlay to the quantity analysis above.