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What are the Legal Factors that Affect the Valuation of Patent Rights?

Patents, as an important part of intangible assets, have attracted more and more attention from enterprises with the increasing status of intangible assets in the development of enterprises. However, there are many factors influencing the valuation of patent rights. In this article, we will explain the legal factors that affect the valuation of patent rights.


[Type of Rights and Potency of Patents]


The value evaluation of patent right must pay attention to the potency intensity of various patent right. Generally speaking, the invention patent is greater than the utility model patent, and the utility model patent is greater than the design patent.


[Scope of Protection of Patent Rights]


The scope of protection of patent right needs to be confirmed by relevant legal documents. In a legal document for a patent for invention, it is necessary to pay attention to whether the protected rights are generalized broadly, how broad are the rights protected, how many subordinate rights are, whether the limited technical features are detailed, etc. These contents directly determine the scope of protection of patent rights, and the scope of protection involves the value of patent rights.


[Legal Status of Patent Right Itself]


The value evaluation of patent right must pay attention to the current legal status of patent right. The legal status includes two aspects: the property rights status of the patent and the degree of stability of the legal status. The property status of a patent includes the identity of the inventor, the right to apply for and authorize the patent, the ownership of the patent right, as well as the past history of the assignment of patent application right, the assignment of patent right, the patent license and the pledge of patent rights, and the registration of patent right submitted to the customs for record in import and export trade.The stability of the legal status of a patent refers to whether the patent has a history of litigation, whether it has been involved in invalidation procedures or infringement litigation disputes.


[The Status of Patents in the Patent Family]


When a single patent belongs to a certain patent family, its value is connected with the value of other patents in the patent family. When the patent is the core patent in the patent family, it is necessary to analyze the degree of its relevance to other patents; when the patent is a peripheral patent, it is necessary to analyze whether it is connected to multiple core patents, and how it is related to other peripheral patents.


[Risk of Patent Rights]


Since patented technology is public, patent infringement is more likely to occur. Especially for patents that are not protected by special protection technology, the ability to resist infringement is very low. When the legal environment is not ideal, the realization of the economic value of patent technology may be reduced due to infringement, and sometimes even fatal losses may occur. Therefore, when evaluating the value of a patent, it is necessary to consider the cost of protecting the right that may be caused by the patent being infringed and the risk of a possible reduction in market profitability.


[Timeliness and Territoriality of Patent Right Protection]


The timeliness of patent right protection refers to the different time periods of the protection period of the patent right. The timeliness of the patent right will definitely affect its value.The territoriality of the patent right means that when the product involved in the patent application in China has an overseas market, it is necessary to consider whether it has also filed a patent right application in other countries in the overseas market, and also needs to consider whether other countries' patent law has extraterritorial effect in the overseas market.


[Legal and Remaining Economic Life]


The return that a patent right can bring is different during different periods of the legal validity period. The value of a patent increases monotonously with the movement of the patent validity period, but at the same time, the marginal income decreases exponentially. Due to technological development and market changes, the economic life of a patent is generally much shorter than the legal life of the patent.