Method and system for patent valuation

• US 7,606,757 B1
• Filed: 08/11/2003
• Issued: 10/20/2009
• Est. Priority Date: 08/11/2003
• Status: Active Grant

• Current Assignee: IP Holdings LLC
• Original Assignee: Alexander Poltorak
• Inventors: Poltorak, Alexander I.
• Primary Examiner(s): Kazimi; Hani
• Assistant Examiner(s): Akintola; Olabode
• Application Number:
  US10/638,802
• Time in Patent Office: 2,262 Days
• Field of Search: None
• US Class Current: 705/36.00R
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

Patent valuation method uses discounted present value analysis and statistical risk adjustment techniques to compute an estimate of the value of a patent or portfolio of patents. The present value of the projected incremental annual income generated by the patent monopoly is adjusted for the probabilities of actual infringement, the owner'"'"'s willingness and ability to enforce the patent rights, and the probabilities that the individual patents will be held not invalid, not unenforceable, and infringed. A formal matrix approach is used to construct a patent portfolio weight matrix and arrive at an estimate of the relative values of the individual patents within the portfolio.

Claims

1. A computer-implemented method of computing an estimate of value EV of a first patent of a patent portfolio providing patent monopoly over an applicable period, the applicable period comprising a plurality of l subperiods, the patent portfolio comprising a plurality of n patents, the method comprising the steps of:

(a) obtaining an average subperiodic value V of the patent portfolio over the applicable period;

(b) generating a plurality of matrix elements p_i^j, one matrix element p_i^j per combination of j^th patent of the patent portfolio and sequential subperiod i of the applicable period, so that the following relationship is satisfied for 1≦

i≦

l;

2. A computer-implemented method according to claim 1, wherein magnitude of the matrix element p_i^j depends on at least one of the following parameters:

length of the portion of the subperiod i during which the j^th patent is active, and

number of patents of the patent portfolio that are active during the subperiod i.

3. A computer-implemented method according to claim 1, wherein, for a given subperiod, K is apportioned pro rata among all patents of the patent portfolio that are active during the given subperiod.

4. A computer-implemented method according to claim 1, wherein the step of generating a plurality of matrix elements comprises the steps of:

(i) dividing the subperiod i into fractions;

(ii) apportioning K among the fractions in proportion to lengths of the fractions, resulting in apportioned K parts, one apportioned K part per fraction;

(iii) for each fraction, subdividing the apportioned K part corresponding to said each fraction among all patents of the portfolio that are active during said each fraction, so that each patent active during said each fraction is assigned an equal subdivision of the apportioned K part corresponding to said each fraction; and

(iv) aggregating all subdivisions of the j^th patent for the subperiod i to obtain the matrix element corresponding to the j^th patent and the subperiod i.

5. A computer-implemented method according to claim 2, wherein the step of obtaining an average subperiodic value V comprises the step of computing the average subperiodic value V.

6. A computer-implemented method in accordance with claim 5, wherein K is set to one.

7. A computer-implemented method according to claim 1, wherein the step of generating a plurality of matrix elements comprises the step for generating a plurality of matrix elements.

8. A computer-implemented method according to claim 2, wherein the magnitude of the matrix element p_i^j depends on whether the j^th patent has been reexamined.

9. A computer-implemented method according to claim 2, wherein the magnitude of the matrix element p_i^j depends on whether the j^th patent has been successfully litigated.

10. A computer-implemented method according to claim 2, wherein the magnitude of the matrix element p_i^j depends on forward citation index of the j^th patent.

11. A computer-implemented method according to claim 5, wherein the step of computing the average subperiodic value V comprises the steps of:

determining a plurality of subperiodic increments of the patent monopoly by computing subperiodic differences between values derived from goods covered by the patent monopoly under conditions of the patent monopoly and corresponding values in a hypothetical freely-competitive environment without the patent monopoly, each subperiodic increment being associated with a different subperiod;

computing a total value of the patent monopoly by aggregating the subperiodic increments over all subperiods; and

dividing the total value of the patent monopoly by l to obtain the average subperiodic value V.

12. A computer-implemented method according to claim 11, wherein the step of computing the average subperiodic value V further comprises the step of adjusting the average annual value V to reflect one or more probabilities of one or more patents of the portfolio being infringed and at least one of the following probabilities:

one or more probabilities of one or more patents of the portfolio being enforced, and

one or more probabilities of one or more patents of the portfolio being enforced successfully;

wherein the step of adjusting the average subperiodic value V is performed before the step of dividing the total value of the patent monopoly by l.

13. A computer-implemented method according to claim 5, wherein the step of computing the average subperiodic value V comprises the steps of:

determining a plurality of subperiodic increments of the patent monopoly by computing subperiodic differences between values derived from goods covered by the patent monopoly under conditions of the patent monopoly and corresponding values in a hypothetical freely-competitive environment without the patent monopoly, each subperiodic increment being associated with a different subperiod;

obtaining one or more discount interest rates of the subperiods of the applicable period;

computing a discounted present value of the patent monopoly as aggregate present value of the subperiodic increments of the patent monopoly by discounting said each subperiodic increment to present value using the discount interest rate of the subperiod associated with said each subperiodic increment, and aggregating the discounted subperiodic increments over all subperiods of the applicable period; and

dividing the discounted present value of the patent monopoly by l to obtain the average subperiodic value V.

14. A computer-implemented method according to claim 13, wherein the step of computing the average subperiodic value V further comprises the step of adjusting the average subperiodic value V to reflect

(I) one or more probabilities of one or more patents of the portfolio being infringed, and

(II) at least one of the following probabilities:

(A) one or more probabilities of one or more patents of the portfolio being enforced, and

(B) one or more probabilities of one or more patents of the portfolio being enforced successfully;

wherein the step of adjusting the average subperiodic value V is performed before the step of dividing the total value of the patent monopoly by l.

15. A computer-implemented method according to claim 13, wherein the step of computing the average subperiodic value V further comprises the step of adjusting the average subperiodic value V to reflect

(I) one or more probabilities of one or more patents of the portfolio being infringed, and

(II) one or more probabilities of one or more patents of the portfolio being enforced, and

(III) one or more probabilities of one or more patents of the portfolio being enforced successfully;

wherein the step of adjusting the average subperiodic value V is performed before the step of dividing the discounted present value of the patent monopoly by l.

16. The computer-implemented method of claim 15, wherein the values derived from the goods covered by the patent monopoly under conditions of the monopoly and the corresponding values in the hypothetical freely-competitive environment without the patent monopoly are gross profits.

17. The computer-implemented method of claim 15, wherein the values derived from the goods covered by the patent monopoly under conditions of the monopoly and the corresponding values in the hypothetical freely-competitive environment without the patent monopoly are net profits.

18. The computer-implemented method of claim 15, wherein the values derived from the goods covered by the patent monopoly under conditions of the monopoly and the corresponding values in the hypothetical freely-competitive environment without the patent monopoly are gross revenues.

19. The computer-implemented method of claim 14, wherein:

(A) the step of determining a plurality of subperiodic increments comprises the step of determining the plurality of subperiodic increments according to the formula Δ

_i=PRFT_i−

PRFT_i, wherein;

Δ

_i denotes a subperiodic increment of the subperiod i,

PRFT_i denotes profits derived from sales of the goods covered by the patent monopoly under conditions of the monopoly during the subperiod i, and

PRFT_i denotes profits derived from sales of said goods in the hypothetical freely-competitive environment without the patent monopoly during the subperiod i;

(B) the step of computing a discounted present value comprises the step of computing the discounted present value of the patent monopoly according to the formula

20. The computer-implemented method of claim 15, wherein:

(A) the step of determining a plurality of subperiodic increments comprises the step of determining the plurality of subperiodic increments according to the formula Δ

_i=PRFT_i−

PRFT_i, wherein;

Δ

_i denotes a subperiodic increment of the subperiod i,

PRFT_i denotes profits derived from sales of the goods covered by the patent monopoly under conditions of the monopoly during the subperiod i, and

PRFT_i denotes profits derived from sales of said goods in the hypothetical freely-competitive environment without the patent monopoly during the subperiod i;

(B) the step of computing a discounted present value comprises the step of computing the discounted present value of the patent monopoly according to the formula

21. The computer-implemented method of claim 20, wherein the patent portfolio is owned by an owner, the step of adjusting further comprising the steps of:

determining a probability E_w of the owner being willing to enforce the patent monopoly during the applicable period;

determining a probability E_a of the owner being able to enforce the patent monopoly during the applicable period; and

computing E by multiplying the probability E_w by the probability E_a.

22. The computer-implemented method of claim 21, the method further comprising the step of computing the probability F according to the formula:

F=1−

(1−

F_v×

F_i×

F_e)ⁿ, wherein;

F_v denotes a probability that any individual patent of the patent portfolio will be found not invalid;

F_e denotes a probability that any individual patent of the patent portfolio will be found not unenforceable; and

F_i denotes a probability that any individual patent of the patent portfolio will be found infringed during the applicable period.

23. The computer-implemented method of claim 20, further comprising the step of computing the probability F according to the formula:

24. A computer-implemented method according to claim 5, wherein the step of computing the average subperiodic value V comprises the steps of:

(i) determining a plurality of subperiodic increments of the patent monopoly according to the formula C_i=(PR_i−

CG_i)×

S_i−

(PR_i−

CG_i)×

S_i, wherein;

(I) PR_i is an average unit price of goods covered by the patent portfolio during the subperiod i under the patent monopoly of the patent portfolio,

(II) CG_i is an average unit cost of the goods during the subperiod i under the patent monopoly,

(III) S_i is unit sales volume of the goods during the subperiod i under the patent monopoly,

(IV) PR_i is an average unit price of the goods during the subperiod i in a hypothetical freely-competitive environment without the patent monopoly,

(V) CG_i is an average unit cost of the goods during the subperiod i in the hypothetical freely-competitive environment without the patent monopoly,

(VI) S_i is unit sales volume of the goods during the subperiod i in the hypothetical freely-competitive environment without the patent monopoly, and

(VII) C_i is a subperiodic increment of the subperiod i; and

(ii) determining discount interest rates for the subperiods of the applicable period;

(iii) computing a discounted present value of the patent monopoly as aggregate present value of the subperiodic increments of the patent monopoly by discounting each subperiodic increment to present value using the discount interest rate of the subperiod associated with said each subperiodic increment, and aggregating the discounted subperiodic increments over all subperiods; and

(iv) dividing the discounted present value of the patent monopoly by l to obtain the average subperiodic value V.

25. A computer-implemented method according to claim 24, wherein the step of determining discount interest rates comprises the step of determining discount interest rates for the subperiods of the applicable periods based on uncertainties associated with forecasting future revenues and risk of infringement of the patent monopoly.

26. A computer-implemented method according to claim 13, wherein:

(I) the step of obtaining one or more discount interest rates comprises the step of setting each of the discount interest rates of the subperiods equal to a first constant I;

(II) the step of determining a plurality of subperiodic increments comprises the step of setting each of the subperiodic increments to a second constant Δ

; and

(III) the step of computing a discounted present value comprises the step of computing the discounted present value of the patent monopoly according to the formula

27. A computer-implemented method of computing an estimate of value EV of a constituent patent of a patent portfolio providing patent monopoly over an applicable period, the applicable period comprising a plurality of l subperiods, the patent portfolio comprising a plurality of n patents, the method comprising the steps of:

(a) a step for obtaining an average subperiodic value V of the patent portfolio over the applicable period;

(b) a step for generating a plurality of matrix elements p_i^j, one matrix element p_i^j per combination of j^th patent of the patent portfolio and sequential subperiod i of the applicable period, so that the following relationship is satisfied for 1≦

i≦

l;

28. An article of manufacture comprising a machine-readable storage medium with instruction code stored in the medium, said instruction code, when executed by a data processing system comprising a processor, causes the processor to perform the following steps to compute an estimate of value EV of a first patent of a patent portfolio providing patent monopoly over an applicable period, the applicable period comprising a plurality of l subperiods, the patent portfolio comprising a plurality of n patents:

(a) obtaining an average subperiodic value V of the patent portfolio over the applicable period;

(b) generating a plurality of matrix elements p_i^j, one matrix element p_i^j per combination of j^th patent of the patent portfolio and sequential subperiod i of the applicable period, so that the following relationship is satisfied for 1≦

i≦

l;

29. An article of manufacture according to claim 28, wherein the instruction code causes the processor to generate the matrix elements so that magnitude of the matrix element p_i^j depends on at least one of the following parameters:

length of the portion of the subperiod i during which the j^th patent is active, and

number of patents of the patent portfolio that are active during the subperiod i.

30. An article of manufacture according to claim 28, wherein the instruction code causes the processor to generate the matrix elements so that, for a given subperiod, K is apportioned pro rata among all patents of the patent portfolio that are active during the given subperiod.

31. An article of manufacture according to claim 28, wherein the instruction code causes the processor to perform the following steps when performing the step of generating the matrix elements:

(i) dividing the subperiod i into fractions;

(ii) apportioning K among the fractions in proportion to lengths of the fractions, resulting in apportioned K parts, one apportioned K part per fraction;

(iii) for each fraction, subdividing the apportioned K part corresponding to said each fraction among all patents of the portfolio that are active during said each fraction, so that each patent active during said each fraction is assigned an equal subdivision of the apportioned K part corresponding to said each fraction; and

(iv) aggregating all subdivisions of the j^th patent for the subperiod i to obtain the matrix element corresponding to the j^th patent and the subperiod i.

32. An article of manufacture according to claim 29, wherein the instruction code causes the processor to perform the following steps when performing the step of obtaining an average subperiodic value V:

receiving information from which the average subperiodic value V can be determined; and

computing the average subperiodic value V from the information.

33. An article of manufacture in accordance with claim 32, wherein the instruction code causes the processor to set K to one.

34. An article of manufacture according to claim 28, wherein the instruction code causes the processor to perform the step for generating a plurality of matrix elements when performing the step of generating the matrix elements.

35. An article of manufacture according to claim 29, wherein the instruction code causes the processor to generate the matrix elements so that the magnitude of the matrix element p_i^j depends on whether the j^th patent has been reexamined.

36. An article of manufacture according to claim 29, wherein the instruction code causes the processor to generate the matrix elements so that the magnitude of the matrix element p_i^j depends on whether the j^th patent has been successfully litigated.

37. An article of manufacture according to claim 29, wherein the instruction code causes the processor to generate the matrix elements so that the magnitude of the matrix element p_i^j depends on forward citation index of the j^th patent.

38. An article of manufacture according to claim 32, wherein the instruction code causes the processor to perform the following steps when performing the step of computing the average subperiodic value V:

determining a plurality of subperiodic increments of the patent monopoly by computing subperiodic differences between values derived from goods covered by the patent monopoly under conditions of the patent monopoly and corresponding values in a hypothetical environment without the patent monopoly, each subperiodic increment being associated with a different subperiod;

computing a total value of the patent monopoly by aggregating the subperiodic increments over all subperiods; and

dividing the total value of the patent monopoly by l to obtain the average subperiodic value V.

39. An article of manufacture according to claim 38, wherein the instruction code causes the processor further to perform the following steps when performing the step of computing the average subperiodic value V:

adjusting the average subperiodic value V to reflect one or more probabilities of one or more patents of the portfolio being infringed and at least one of the following probabilities;

one or more probabilities of one or more patents of the portfolio being enforced, and

one or more probabilities of one or more patents of the portfolio being enforced successfully;

wherein the step of adjusting the average subperiodic value V is performed before the step of dividing the total value of the patent monopoly by l.

40. An article of manufacture according to claim 32, wherein the instruction code causes the processor, when performing the step of computing the average subperiodic value V, to perform the steps of:

determining a plurality of subperiodic increments of the patent monopoly by computing subperiodic differences between values derived from goods covered by the patent monopoly under conditions of the patent monopoly and corresponding values in a hypothetical environment without the patent monopoly, each subperiodic increment being associated with a different subperiod;

obtaining one or more discount interest rates of the subperiods of the applicable period;

computing a discounted present value of the patent monopoly as aggregate present value of the subperiodic increments of the patent monopoly by discounting said each subperiodic increment to present value using the discount interest rate of the subperiod associated with said each subperiodic increment, and aggregating the discounted subperiodic increments over all subperiods of the applicable period; and

dividing the discounted present value of the patent monopoly by l to obtain the average subperiodic value V.

41. An article of manufacture according to claim 40, wherein the instruction code causes the processor, when performing the step of computing the average subperiodic value V, further to perform the step of adjusting the average subperiodic value V to reflect

(I) one or more probabilities of one or more patents of the portfolio being infringed, and

(II) at least one of the following probabilities:

(A) one or more probabilities of one or more patents of the portfolio being enforced, and

(B) one or more probabilities of one or more patents of the portfolio being enforced successfully;

wherein the step of adjusting the average subperiodic value V is performed before the step of dividing the total value of the patent monopoly by l.

42. An article of manufacture according to claim 40, wherein the instruction code causes the processor, when performing the step of computing the average subperiodic value V, further to perform the step of adjusting the average subperiodic value V to reflect

(I) one or more probabilities of one or more patents of the portfolio being infringed,

(II) one or more probabilities of one or more patents of the portfolio being enforced, and

(III) one or more probabilities of one or more patents of the portfolio being enforced successfully;

wherein the step of adjusting the average subperiodic value V is performed before the step of dividing the total value of the patent monopoly by l.

43. The article of manufacture according to claim 42, wherein the values derived from the goods covered by the patent monopoly under conditions of the monopoly and the corresponding values in the hypothetical freely-competitive environment without the patent monopoly are gross profits.

44. The article of manufacture according to claim 42, wherein the values derived from the goods covered by the patent monopoly under conditions of the monopoly and the corresponding values in the hypothetical freely-competitive environment without the patent monopoly are net profits.

45. The article of manufacture according to claim 42, wherein the values derived from the goods covered by the patent monopoly under conditions of the monopoly and the corresponding values in the hypothetical freely-competitive environment without the patent monopoly are gross revenues.

46. The article of manufacture according to claim 41, wherein:

(A) the instruction code causes the processor, when performing the step of determining a plurality of subperiodic increments, to perform the step of determining the plurality of subperiodic increments according to the formula Δ

_i=PRFT_i−

PRFT_i, wherein;

Δ

_i denotes a subperiodic increment of the subperiod i,

PRFT_i denotes profits derived from sales of the goods covered by the patent monopoly under conditions of the monopoly during the subperiod i, and

PRFT_i denotes profits derived from sales of said goods in the freely-competitive hypothetical environment without the patent monopoly during the subperiod i;

(B) the instruction code causes the processor, when performing the step of computing a discounted present value, to perform the step of computing the discounted present value of the patent monopoly according to the formula

47. The article of manufacture according to claim 42, wherein:

(A) the instruction code causes the processor, when performing the step of determining a plurality of subperiodic increments, to perform the step of determining the plurality of subperiodic increments according to the formula Δ

_i=PRFT_i−

PRFT_i, wherein;

Δ

_i denotes a subperiodic increment of the subperiod i,

PRFT_i denotes profits derived from sales of the goods covered by the patent monopoly under conditions of the monopoly during the subperiod i, and

PRFT_i denotes profits derived from sales of said goods in the freely-competitive hypothetical environment without the patent monopoly during the subperiod i;

(B) the instruction code causes the processor, when performing the step of computing a discounted present value, to perform the step of computing the discounted present value of the patent monopoly according to the formula

48. The article of manufacture according to claim 47, wherein the patent portfolio is owned by an owner, and the instruction code causes the processor, when performing the step of adjusting, further to perform the steps of:

determining a probability E_w of the owner being willing to enforce the patent monopoly during the applicable period;

determining a probability E_a of the owner being able to enforce the patent monopoly during the applicable period; and

computing E by multiplying the probability E_w by the probability E_a.

49. The article of manufacture according to claim 48, wherein the instruction code further causes the processor to perform the step of computing the probability F according to the formula:

F=1−

(1−

F_v×

F_i×

F_e)ⁿ, wherein;

F_v denotes a probability that any individual patent of the patent portfolio will be found not invalid;

F_e denotes a probability that any individual patent of the patent portfolio will be found not unenforceable; and

f_i denotes a probability that any individual patent of the patent portfolio will be found infringed during the applicable period.

50. The article of manufacture according to claim 47, wherein the instruction code further causes the processor to perform the step of computing the probability F according to the formula:

51. An article of manufacture according to claim 32, wherein the instruction code causes the processor, when performing the step of computing the average subperiodic value V, to perform the steps of:

(i) determining a plurality of subperiodic increments of the patent monopoly according to the formula C_i=(PR_i−

CG_i)×

S_i−

(PR_i−

CG_i)×

S_i, wherein;

(I) PR_i is an average unit price of goods covered by the patent portfolio during the subperiod i under the patent monopoly of the patent portfolio,

(II) CG_i is an average unit cost of the goods during the subperiod i under the patent monopoly,

(III) S_i is unit sales volume of the goods during the subperiod i under the patent monopoly,

(IV) PR_i is an average unit price of the goods during the subperiod i in a hypothetical environment without the patent monopoly,

(V) CG_i is an average unit cost of the goods during the subperiod i in the hypothetical environment without the patent monopoly,

(VI) S_i is unit sales volume of the goods during the subperiod i in the hypothetical environment without the patent monopoly, and

(VII) C_i is a subperiodic increment of the subperiod i; and

(ii) determining discount interest rates for the subperiods of the applicable period;

(iii) computing a discounted present value of the patent monopoly as aggregate present value of the subperiodic increments of the patent monopoly by discounting each subperiodic increment to present value using the discount interest rate of the subperiod associated with said each subperiodic increment, and aggregating the discounted subperiodic increments over all subperiods; and

(iv) dividing the discounted present value of the patent monopoly by I to obtain the average subperiodic value V.

52. An article of manufacture according to claim 51, wherein the instruction code causes the processor, when performing the step of determining discount interest rates, to perform the step of determining discount interest rates for the subperiods of the applicable periods based on uncertainties associated with forecasting future revenues and risk of infringement of the patent monopoly.

53. An article of manufacture according to claim 40, wherein:

(I) the instruction code causes the processor, when performing the step of obtaining one or more discount interest rates, to perform the step of setting each of the discount interest rates of the subperiods equal to a first constant I;

(II) the instruction code causes the processor, when performing the step of determining a plurality of subperiodic increments, to perform the step of setting each of the subperiodic increments to a second constant Δ

; and

(III) the instruction code causes the processor, when performing the step of computing a discounted present value, to perform the step of computing the discounted present value of the patent monopoly according to the formula

54. An article of manufacture comprising a machine-readable storage medium with instruction code stored in the medium, said instruction code, when executed by a data processing system comprising a processor, causes the processor to perform the following steps to compute an estimate of value EV of a first patent of a patent portfolio providing patent monopoly over an applicable period, the applicable period comprising a plurality of l subperiods, the patent portfolio comprising a plurality of n patents:

(a) a step for obtaining an average subperiodic value V of the patent portfolio over the applicable period;

(b) a step for generating a plurality of matrix elements p_i^j, one matrix element p_i^j per combination of j^th patent of the patent portfolio and sequential subperiod i of the applicable period, so that the following relationship is satisfied for 1≦

i≦

l;

55. A system for computing an estimate of value EV of a first patent of a patent portfolio providing patent monopoly over an applicable period, the applicable period comprising a plurality of l subperiods, the patent portfolio comprising a plurality of n patents, the system comprising:

a processor;

an input device coupled to the processor, the input device being capable of providing information to the processor; and

an output device coupled to the processor;

wherein

the processor receives, through the input device, data sufficient to obtain (i) an average subperiodic value V of the patent portfolio over the applicable period; and

(ii) a plurality of matrix elements p_i^j, one matrix element p_i^j per combination of j^th patent of the patent portfolio and sequential subperiod i of the applicable period, the matrix element p_i^j providing a relative value of the j^th patent during the subperiod i;

the processor computes the plurality of matrix elements p_i^j so that the following relationship is satisfied for 1≦

i≦

l;

56. A system according to claim 55, wherein:

the processor computes the matrix elements so that magnitude of the matrix element p_i^j depends on at least one of the following parameters;

length of the portion of the subperiod i during which the j^th patent is active, and

number of patents of the patent portfolio that are active during the subperiod i; and

the processor sends EV to the output device.

57. A system according to claim 55, wherein, for a given subperiod, the processor apportions the constant K pro rata among all patents of the patent portfolio that are active during the given subperiod.

58. A system according to claim 55, wherein the processor:

(i) divides the subperiod i into fractions;

(ii) apportions the constant K among the fractions in proportion to lengths of the fractions;

resulting in apportioned K parts, one apportioned K part per fraction;

(iii) for each fraction, subdivides the apportioned K part corresponding to said each fraction among all patents of the portfolio that are active during said each fraction, so that each patent active during said each fraction is assigned an equal subdivision of the apportioned K part corresponding to said each fraction; and

(iv) aggregates all subdivisions of the j^th patent for the subperiod i to obtain the matrix element corresponding to the j^th patent and the subperiod i.

59. A system according to claim 56, wherein the processor computes the average subperiodic value V from the data.

60. A system in accordance with claim 59, wherein the processor sets K to one.

61. A system according to claim 56, wherein the processor computes the magnitude of the matrix element p_i^j based at least in part on whether the j^th patent has been reexamined.

62. A system according to claim 56, wherein the processor computes the magnitude of the matrix element p_i^j based at least in part on whether the j^th patent has been successfully litigated.

63. A system according to claim 56, wherein the magnitude of the matrix element p_i^j depends on forward citation index of the j^th patent.

64. A system according to claim 56, wherein the magnitude of the matrix element p_i^j depends on the number of claims of the j^th patent.

65. A system according to claim 64, wherein said claims of the j^th patent are independent claims.

66. A system according to claim 59, wherein the processor and the input device are coupled by a computer communication network, and wherein the processor:

computes a plurality of subperiodic increments of the patent monopoly by computing subperiodic differences between values derived from goods covered by the patent monopoly under conditions of the patent monopoly and corresponding values in a hypothetical environment without the patent monopoly, each subperiodic increment being associated with a different subperiod;

receives one or more discount interest rates of the subperiods of the applicable period;

computes a discounted present value of the patent monopoly as aggregate present value of the subperiodic increments of the patent monopoly by discounting said each subperiodic increment to present value using the discount interest rate of the subperiod associated with said each subperiodic increment, and aggregates the discounted subperiodic increments over all subperiods of the applicable period; and

divides the discounted present value of the patent monopoly by/to obtain the average subperiodic value V.

67. A system according to claim 66, wherein the processor, before dividing the total value of the patent monopoly by l, adjusts the average subperiodic value V to reflect

(I) one or more probabilities of one or more patents of the portfolio being infringed,

(II) one or more probabilities of one or more patents of the portfolio being enforced, and

(III) one or more probabilities of one or more patents of the portfolio being enforced successfully.

68. The system of claim 67, wherein:

(A) the processor receives from the input device a number PRFT_i indicating profits derived from sales of the goods covered by the patent monopoly under conditions of the monopoly during the subperiod i;

(B) the processor receives from the input device a number PRFT_i indicating profits derived from sales of the goods covered by the patent monopoly in the hypothetical environment without the patent monopoly during the subperiod i;

(C) the processor receives from the input device a number I_i indicating the discount interest rate for the subperiod i;

(D) the processor computes the discounted present value PV(PP) from the formula

69. The system of claim 68, wherein the patent portfolio is owned by an owner, and the processor computes E by multiplying a probability E_w of the owner being willing to enforce the patent monopoly by a probability E_a of the owner being able to enforce the patent monopoly.

70. The system of claim 69, the processor computes the probability F according to the formula:

F=1−

(1−

F_v×

F_iF_e)ⁿ, wherein;

F_v denotes a probability that any individual patent of the patent portfolio will be found not invalid;

F_e denotes a probability that any individual patent of the patent portfolio will be found not unenforceable; and

F_i denotes a probability that any individual patent of the patent portfolio will be found infringed during the applicable period.

71. A computer-implemented method of computing an estimate of value EV of a first patent of a patent portfolio providing patent monopoly over an applicable period, the applicable period comprising a plurality of l subperiods, the patent portfolio comprising a plurality of n patents, the method comprising the steps of:

(a) receiving from an input source, through a computer communication network, information sufficient to compute an average subperiodic value V of the patent portfolio over the applicable period;

(b) receiving from the input source, through a computer communication network, information sufficient to generate a plurality of matrix elements p_i^j, each matrix element p_i^j reflecting relative weight of j^th patent of the patent portfolio during sequential subperiod i of the applicable period;

(c) computing the average subperiodic value V;

(d) generating the plurality of matrix elements p_i^j, one matrix element p_i^j per combination of the j^th patent and the subperiod i, so that the following relationship is satisfied for 1≦

i≦

l;

72. A computer-implemented method according to claim 71, wherein magnitude of the matrix element p_i^j depends on at least one of the following parameters:

length of the portion of the subperiod i during which the j^th patent is active, and

number of patents of the patent portfolio that are active during the subperiod i.

73. A computer-implemented method according to claim 71, wherein, for a given subperiod, K is apportioned pro rata among all patents of the patent portfolio that are active during the given subperiod.

74. A computer-implemented method according to claim 71, wherein the step of generating the plurality of matrix elements comprises the steps of:

(i) dividing the subperiod i into fractions;

(ii) apportioning K among the fractions in proportion to lengths of the fractions, resulting in apportioned K parts, one apportioned K part per fraction;

(iii) for each fraction, subdividing the apportioned K part corresponding to said each fraction among all patents of the portfolio that are active during said each fraction, so that each patent active during said each fraction is assigned an equal subdivision of the apportioned K part corresponding to said each fraction; and

(iv) aggregating all subdivisions of the j^th patent for the subperiod i to obtain the matrix element corresponding to the j^th patent and the subperiod i.

75. A computer-implemented method in accordance with claim 72, wherein K is set to one.

76. A computer-implemented method according to claim 71, wherein the step of generating a plurality of matrix elements comprises the step for generating a plurality of matrix elements.

77. A computer-implemented method according to claim 72, wherein the magnitude of the matrix element p_i^j depends on whether the j^th patent has been reexamined.

78. A computer-implemented method according to claim 72, wherein the magnitude of the matrix element p_i^j depends on whether the j^th patent has been successfully litigated.

79. A computer-implemented method according to claim 72, wherein the magnitude of the matrix element p_i^j depends on forward citation index of the j^th patent.

80. A computer-implemented method according to claim 72, wherein:

(i) the step of receiving from an input source, through a computer communication network, information sufficient to compute an average subperiodic value V comprises the step of receiving from the input device, through the computer communication network, values derived from goods covered by the patent monopoly under conditions of the patent monopoly and corresponding values in a hypothetical environment without the patent monopoly;

(ii) the step of computing the average subperiodic value V comprises the steps of;

computing a plurality of subperiodic increments of the patent monopoly, each subperiodic increment comprising a subperiodic difference between value derived from the goods covered by the patent monopoly under conditions of the patent monopoly and the corresponding value in the hypothetical environment without the patent monopoly, said each subperiodic increment being associated with a different subperiod;

computing a total value of the patent monopoly by aggregating the subperiodic increments over all subperiods; and

dividing the total value of the patent monopoly by l to obtain the average subperiodic value V.

81. A computer-implemented method according to claim 80, wherein the step of computing the average subperiodic value V further comprises the step of adjusting the average subperiodic value V to reflect one or more probabilities of one or more patents of the portfolio being infringed and at least one of the following probabilities:

one or more probabilities of one or more patents of the portfolio being enforced, and

one or more probabilities of one or more patents of the portfolio being enforced successfully;

wherein the step of adjusting the average subperiodic value V is performed before the step of dividing the total value of the patent monopoly by l.

82. A computer-implemented method according to claim 72, wherein:

(i) the step of receiving from an input source, through a computer communication network, information sufficient to compute an average subperiodic value V comprises the step of receiving from the input device, through the computer communication network, one or more discount interest rates of the subperiods of the applicable period, values derived from goods covered by the patent monopoly under conditions of the patent monopoly, and corresponding values in a hypothetical environment without the patent monopoly;

(ii) the step of computing the average subperiodic value V comprises the steps of;

computing a plurality of subperiodic increments of the patent monopoly, each subperiodic increment comprising a subperiodic difference between value derived from the goods covered by the patent monopoly under conditions of the patent monopoly and the corresponding values in the hypothetical environment without the patent monopoly, said each subperiodic increment being associated with a different subperiod;

computing a discounted present value of the patent monopoly as aggregate present value of the subperiodic increments of the patent monopoly by discounting said each subperiodic increment to present value using the discount interest rate of the subperiod associated with said each subperiodic increment, and aggregating the discounted subperiodic increments over all subperiods of the applicable period; and

dividing the discounted present value of the patent monopoly by l to obtain the average subperiodic value V.

83. A computer-implemented method according to claim 82, wherein the step of computing the average subperiodic value V further comprises the step of adjusting the average subperiodic value V to reflect

(I) one or more probabilities of one or more patents of the portfolio being infringed, and

(II) at least one of the following probabilities:

(A) one or more probabilities of one or more patents of the portfolio being enforced, and

(B) one or more probabilities of one or more patents of the portfolio being enforced successfully;

wherein the step of adjusting the average subperiodic value V is performed before the step of dividing the total value of the patent monopoly by l.

84. A computer-implemented method according to claim 82, wherein the step of computing the average subperiodic value V further comprises the step of adjusting the average subperiodic value V to reflect

(I) one or more probabilities of one or more patents of the portfolio being infringed, and

(II) one or more probabilities of one or more patents of the portfolio being enforced, and

(III) one or more probabilities of one or more patents of the portfolio being enforced successfully;

wherein the step of adjusting the average subperiodic value V is performed before the step of dividing the total value of the patent monopoly by l.

85. The computer-implemented method of claim 84, wherein the values derived from the goods covered by the patent monopoly under conditions of the monopoly and the corresponding values in the hypothetical environment without the patent monopoly are gross profits.

86. The computer-implemented method of claim 84, wherein the values derived from the goods covered by the patent monopoly under conditions of the monopoly and the corresponding values in the hypothetical environment without the patent monopoly are net profits.

87. The computer-implemented method of claim 84, wherein the values derived from the goods covered by the patent monopoly under conditions of the monopoly and the corresponding values in the hypothetical environment without the patent monopoly are gross revenues.

88. The computer-implemented method of claim 83, wherein:

(A) the information sufficient to compute V comprises a number PRFT_i indicating profits derived from sales of the goods covered by the patent monopoly under conditions of the monopoly during the subperiod i, a number PRFT_i indicating profits derived from sales of the goods in the hypothetical environment without the patent monopoly during the subperiod i, and a number I_i indicating the discount interest rate for the subperiod i;

(B) the step of computing a plurality of subperiodic increments comprises the step of computing the plurality of subperiodic increments according to the formula Δ

_i=PRFT_i-PRFT_i, wherein Δ

_i denotes a subperiodic increment of the subperiod i;

(C) the step of computing a discounted present value comprises the steps of computing the discounted present value of the patent monopoly according to the formula

89. The computer-implemented method of claim 84, wherein:

(A) the information sufficient to compute V comprises a number PRFT_i indicating profits derived from sales of the goods covered by the patent monopoly under conditions of the monopoly during the subperiod i, a number PRFT_i indicating profits derived from sales of the goods in the hypothetical environment without the patent monopoly during the subperiod i, and a number I_i indicating the discount interest rate for the subperiod i;

(B) the step of computing a plurality of subperiodic increments comprises the step of computing the plurality of subperiodic increments according to the formula Δ

_i=PRFT_i−

PRFT_i, wherein Δ

_i denotes a subperiodic increment of the subperiod i;

(C) the step of computing a discounted present value comprises the steps of computing the discounted present value of the patent monopoly according to the formula

90. The computer-implemented method of claim 89, wherein the patent portfolio is owned by an owner, the step of adjusting further comprising the steps of:

receiving from the input device, through the computer communication network, information sufficient to estimate a probability E_w of the owner being willing to enforce the patent monopoly during the applicable period;

receiving from the input device, through the computer communication network, information sufficient to estimate a probability E_a of the owner being able to enforce the patent monopoly during the applicable period; and

computing E by multiplying E_w by E_a.

91. The computer-implemented method of claim 90, further comprising the step of computing the probability F according to the formula:

F=1−

(1−

F_v×

F_i×

F_e)ⁿ, wherein;

F_v denotes a probability that any individual patent of the patent portfolio will be found not invalid;

F_e denotes a probability that any individual patent of the patent portfolio will be found not unenforceable; and

F_i denotes a probability that any individual patent of the patent portfolio will be found infringed during the applicable period.

92. The computer-implemented method of claim 89, further comprising the step of computing the probability F according to the formula:

93. A computer-implemented method according to claim 72, wherein the step of computing the average subperiodic value V comprises the steps of:

(i) computing a plurality of subperiodic increments of the patent monopoly according to the formula C_i=(PR_i−

CG_i)×

S_i−

(PR_i−

CG_i)×

S_i, wherein;

(I) PR_i is an average unit price of goods covered by the patent portfolio during the subperiod i under the patent monopoly of the patent portfolio,

(II) CG_i is an average unit cost of the goods during the subperiod i under the patent monopoly,

(III) S_i is unit sales volume of the goods during the subperiod i under the patent monopoly,

(IV) PR_i is an average unit price of the goods during the subperiod i in a hypothetical environment without the patent monopoly,

(V) CG_i is an average unit cost of the goods during the subperiod i in the hypothetical environment without the patent monopoly,

(VI) S_i is unit sales volume of the goods during the subperiod i in the hypothetical environment without the patent monopoly, and

(VII) C_i is a subperiodic increment of the subperiod i; and

(ii) obtaining discount interest rates for the subperiods of the applicable period;

(iii) computing a discounted present value of the patent monopoly as aggregate present value of the subperiodic increments of the patent monopoly by discounting each subperiodic increment to present value using the discount interest rate of the subperiod associated with said each subperiodic increment, and aggregating the discounted subperiodic increments over all subperiods; and

(iv) dividing the discounted present value of the patent monopoly by l to obtain the average subperiodic value V.

94. A computer-implemented method according to claim 93, wherein the step of determining discount interest rates comprises the step of determining discount interest rates for the subperiods of the applicable periods based on uncertainties associated with forecasting future revenues and risk of infringement of the patent monopoly.

95. A computer-implemented method according to claim 71, wherein:

(I) the information comprises an interest rate I and a subperiodic increment Δ

; and

(III) the step of computing the average subperiodic value V comprises the step of computing the average subperiodic value V according to the formula

96. A computer-implemented method of computing an estimate of value EV of a first patent of a patent portfolio providing patent monopoly over an applicable period, the applicable period comprising a plurality of l subperiods, the patent portfolio comprising a plurality of n patents, the method comprising the steps of:

(a) receiving through a computer communication network information sufficient to;

(i) obtain an average subperiodic value V of the patent portfolio over the applicable period, and

(ii) generate a plurality of matrix elements p_i^j, each matrix element p_i^j reflecting relative contribution of j^th patent to the patent portfolio during subperiod i of the applicable period;

(b) a step for obtaining the average subperiodic value V of the patent portfolio over the applicable period from the information;

(c) a step for generating the plurality of matrix elements p_i^j, one matrix element p_i^j per combination of the j^th patent and the subperiod i, so that the following relationship is satisfied for 1≦

i≦

l;