How Much Are Patents Worth?

By: Jim Dossey, MS, MBA, JD

In recent years, individuals and companies have been trying to unlock value from their patents and patent portfolios. In some cases, a company may be looking to sell its patent portfolio to raise capital by transforming its non-liquid goodwill into liquid assets. In other cases, an individual may have paid $10-20k to obtain a patent only to have it sitting underutilized and not generating revenue.

Based on recent studies, the average value of a patent is approximately $500,000. The price range for patents is very broad, however, with some patents selling for $1000 to $2000, while others have sold for over $1,000,000. The price varies according to the following factors:

Factors:

  • Area of technology… is it hot?
  • Are the patents of high quality? The claims of a patent are similar to the boundaries of a tract of property… the more area they cover, the more valuable they are.
  • How do the patents compare to prior art? Are the patents incremental improvements, or a technological breakthrough that could change an industry?
  • Are the patents provisional or non-provisional? Provisional patents have not been through the claim vetting process at the US patent and trademark office, so are much less valuable than non-provisional patents.
  • Are there any encumbrances on the patents? In other words, have the patents been challenged in the courts?
  • If selling a portfolio of patents, does it blanket an entire technology area?
  • Based on the claims in the patent, who are the likely infringers?

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