Enter "percent of
patents that don't make money" into Google and you can see the chaos. From the first page you find claims that over
98% of patents never get commercialized yet, somehow, only 97% percent of
patents lose money. And if you follow
these numbers to the source you wind up in endless loops of hearsay and popular
media cross-references. I chased one of
these chains of unsubstantiation back to the 60's.
The numbers regarding patents
can be huge. In March 2013, Monsanto and
DuPont settled a patent infringement lawsuit for $1.75 billion. In 2011, Nortel's patent portfolio was sold
in a bankruptcy auction for $4.5 billion.
Yet the conventional wisdom and anecdotal evidence are also clear: many patents don't seem to be worth very
much.
So what's a patent
worth?
A study of patent value,
called PatVal-EU, was published by the European Union in 2009. PatVal-EU was a survey of inventors of
patents initially filed with the European Patent Office between 1993 and 1997. While the intent of the survey was to look at
characteristics of inventors, it included a question asking the inventor to
estimate the minimum price that the patent owner would have sold the patent
rights for on the day the patent was issued.
Based on a sample of 7,754
patents, the top line number was that the average European patent was worth
about $8.5 million. But before we start
running with these scissors, there are some problems:
First, the data is
skewed. While the average patent in the
study was worth $8.5M, when you dig into the data you find:
The bottom 83% of patents
probably averaged closer to $380k
The bottom 67% of patents
probably averaged closer to $175k
The bottom 45% of patents
probably averaged closer to $ 72k
The bottom 25% of patents
probably averaged closer to $ 25k
Interestingly, you find that
no more than 8% of the patents can be described as truly worthless but up to
25% of patents may be valued for less than the direct costs of acquiring the
patents.
Second, this is self reported
survey data which creates statistical concerns of bias in who responded, bias
towards industries that value patents more highly, and how impartial inventors
will actually be about their inventions.
Unfortunately, it is also difficult to identify someone
other than the inventor who would be more qualified to answer the
question.
Finally, there is a problem with
what I call the German issue.
Specifically, when the data is adjusted with a dummy variable to identify
German inventors, the average patent valuation was cut almost in half. It is unclear whether this is because German
patents are worth more or because Germans value their patents more.
So in the end, the data finds
some truth in the conventional wisdom.
Many patents probably lose money.
But the number of losers is far less than 97%.
Below is a summary of
selected patents that have been recently issued in textile related
classification codes:
Unobtrusive High-End Ready to
Wear Concealable Body Armor: Torso body
armor made to look like the vest of a three piece suit. Patent #:
8555412. Inventors:
Aquino, et.al. Not Assigned.
Crimp-Imbalanced Protective
Fabric: Multi-layer fabric armor that
incorporates different crimp properties in the individual fabric layers. This is accomplished by coating the yarns
before fabric formation with a removable coating that appears to vary the size
of the fabric. Patent #: 8555472. Inventor:
Cavallaro. Assignee: The United
States Of America As Represented By The Secretary Of The Navy.
One Piece Footwear: Flat piece
of material that can be attached to the ankle and at least one toe to become a
shoe. Patent #: 8555524. Inventors:
Hammerbeck, et.al. No Assignee.
Resilient Shoe with a Pivoting Sole:
A shoe with springs mounted in the heel to improve sole resiliency when
walking and additional elastic connections that limit the motion of the
sidewall. Patent #: 8555526. Inventor:
Elnekaveh. No Assignee.
Weighted Shoe Insole and
Method of Making the Same: Weighted shoe
for sports training. The process is that
they make an insole with cavities that they fill with a relatively dense
material (heavier than water). Patent #: 8561237. Inventor:
Stratten, et.al. Assignee: Stratten Performance Group, LLC.
Device and Method for Repairing a
Knitted Article: A device that repairs a
dropped stitch by taking the first stitch in a hook and recovering a second
stitch in a second hook without releasing the first stitch. Patent #:
8561433. Inventor:
Kellogg. Not Assigned.
Circular Knitting Machine, a Method
for Knitting an Article with a Circular Knitting Machine and an Item of
Clothing: A circular knitting machine and a method
for knitting an article with such a circular knitting machine, wherein the
article is at least partially knitted by a reciprocating rotational movement of
a needle cylinder in a forward direction and a backward direction. Patent #: 8561434. Inventor:
Busi. Assignee: Steps Holding B.V.
Braided Carbon
Nanotube Threads and Methods of Manufacturing the Same: A low tension braider capable of braiding
carbon nanotube filaments which have low breaking strength in the linear
direction. The braiding process improves
this strength. Patent #: 8561514. Inventor:
Head, et.al. Assignee: Atkins and
Pierce, Inc.
Workpiece
Holder: A workpiece holder usable with
an embroidery sewing machine including a needle bar movable upward and downward
and a transfer mechanism transferring the workpiece in two directions. Patent #:
8561560. Inventor:
Kawaguchi and Yamasaki.
Assignee: Brother
Kogyo Kabushiki Kaisha
Weaving Apparatus: This is a device that weaves friendship
bracelets. Patent #: 8561650. Inventors:
Wijerama, et.al. Assignee: Horizon Group USA, Inc.
Fabric, Fabric Manufacturing
Method and Seat: This is a way to make a
seat fabric composed of elastic and non-elastic yarns in a way that reduces
wear on the fabric caused by people getting in and out of the seats. Patent #:
8561651. Inventors:
Watanabe and Yamada.
Assignee: Toyota Boshoku Kabushiki
Kaisha.
Three Dimensional Weaving
Surface: A weaving process for direct
manufacture of three-dimensional structures with bidimensional walls with
corners, without the need for sewing or other assembly between two ridges. The
weaving is made by transforming weft threads into warp threads for making at
least one face. The process is particularly adapted for the weaving of
reinforcing elements for composite structures of corner fitting type. Patent #:
8561649. Inventors:
Legrand, et.al. Assignee: Airbus Operations S.A.S
Jim Carson is a principal of
RB Consulting, Inc. and a registered patent agent. He has over 30 years of experience across
multiple industries including the biotechnology, textile, computer,
telecommunications, and energy sectors.
RB Consulting, Inc. specializes in providing management, prototyping,
and regulatory services to small and start-up businesses. He can be reached via email at James.Carson.Jr@gmail.com or by
phone at (803) 792-2183.
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