This is a really cool story. We’ll let you know that up front because there are some things we can’t tell you. We can’t tell you the names of some of the characters in the story, like the Venture Capital Fund (we’ll just call him VC, okay?) and the Innovator. We can’t tell you the innovation or patent numbers. You may have a hard time getting invested in a story when you don’t know the names of the characters, but we promise the story is still so cool that you’ll be hanging on all the way to the end.
Ready? Let’s dig in.
VC found the Innovator and thought they may have a good investment opportunity on their hands. The Innovator seemed to be making positive strides in a cancer treatment technology, building out a global portfolio of 13 patents issued in the United States and 8 more in other countries.
Now, investing is always a gamble. Unlike slot machines, though, some investigation can actually help your chances. Before taking a chance on the Innovator, VC wanted to determine if there were any other players in the same or similar technology space, and whether the company’s patents were strong and protected the company’s technology and business strategy.
Enter IPVision. We provided our proprietary process and analysis, which consists of 3 components: landscape analysis, patent claims analysis, and overall portfolio assessment.
Step 1: Searched portfolio of patents and assessments to make sure that Innovator is truly unique.
Problem: Though the US patents have been issued for a number of years, only ONE patent cites any of them.
ln a commercial portfolio, one citation is unusual. However, this may often be seen in an academic portfolio for a new technology that has not yet been commercialized.
IPVision’s question for the VC: is there a technology/product/market fit and does the existing team have sufficient commercialization experience and capability?
Step 2: Investigated the Extended Patent Landscape to provide a broader context, in this case the Backward Cousin Patents that cite the same patents that Innovator patents cite. More than 460 patents are in the extended landscape.
PATENT CLAIMS ANALYSIS
How “good” are the claims of the company’s patents? Claims Analytics determines the quality of the claims
Create a “Benchmark” portfolio of “Peer Patents”— for each patent find patents in the same technology classification group (CPC Subclass) as the Portfolio patent issued in the same year as the Portfolio patent—to get a fuller picture of claims strength.
OVERALL PORTFOLIO ASSESSMENT
- Assess the value of the company’s intellectual property and the relative importance of that IP in protecting the short and long term revenue streams and profitability of the company. The value of a single patent is dependent on 3 main factors:
- The Importance of the Invention.
- A measure of importance is the number of citations a patent has received relative to patents in the same space and same age
- The Protection of the Invention.
- The quality of the patent claims and the protection strategy.
- The Commercialization Strategy.
- Plan to extract the value that has been created and captured
- The Importance of the Invention.
What did we find? The results are where the story really gets exciting.
IPVision Level 1 Portfolio Ratings have been shown to be highly correlated with investment and commercial success for companies in venture capital portfolios. The Innovator’s US patent portfolio had a Level 1 score of 3.2 out of a possible 5, which put them slightly above average.
The patents in the US portfolio also had a high degree of cross-citation with each other, which is usually a good indicator of a coherent patenting strategy. The patent claims were Broad and the Structure of the claims was about average, meaning they’re reasonably strong.
The Innovator’s Peer Patents’ Benchmark Portfolio consisted of 28,823 patents and their 62,733 independent claims. Compared to the Benchmark patents, the Innovator claims were rated “A,” the broadest, while only 67% of the Benchmark patents were “A” rated.
If the technology works, they are well protected from an IP viewpoint. IPVision also provided VC with a list of companies appearing in the related patent space. Now, technical experts are reviewing the technology for the VC.
In conclusion, the lack of citations had rendered Innovator nearly invisible in the technology landscape, but IPVision determined that the company’s patent portfolio could support the commercialization of the company’s technology. However, the company’s commercialization strategy and execution plans need to be further investigated in order for this to be a viable investment option for VC.