3/08/2007

How to Value a Patent

"Inventors help solve vexing problems, both sophisticated and simple, and as a result sometimes enjoy considerable celebrity and rewards. Our society’s economic success, too, is based on innovation. To encourage public disclosure of inventions, the U.S. Patent and Trademark Office (USPTO) issues an inventor a patent, which excludes others from making, using, selling or importing that invention into U.S. territories for a limited period of time.

The three kinds of U.S. patents cover living plants, ornamental designs and useful inventions (the latter are called “utility” patents). Familiar products once protected by U.S. utility patents include Alexander Graham Bell’s “improvement in telegraphy” (the telephone), the Wright brothers’ “flying machine” and Thomas Edison’s “incandescent lamp” (the light bulb)."

This article [20 Steps for Pricing a Patent] provides an excellent and detailed set of basic procedures for valuing U.S. utility patents.