Method and apparatus for patent valuation

• US 7,792,728 B2
• Filed: 05/13/2003
• Issued: 09/07/2010
• Est. Priority Date: 05/13/2002
• Status: Active Grant

• Current Assignee: IP Holdings LLC
• Original Assignee: Alexander Poltorak
• Inventors: Poltorak, Alexander I.
• Primary Examiner(s): Kyle; Charles R
• Assistant Examiner(s): Wood; David L
• Application Number:
  US10/437,547
• Publication Number:
  US 20030212572A1
• Time in Patent Office: 2,674 Days
• Field of Search: 705/36.R
• US Class Current: 705/36.00R
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 50/184 Intellectual property management

Abstract

Patent valuation method uses discounted present value analysis and statistical 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 rights 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 arrive at an estimate of the relative values of the individual patents within the portfolio.

Claims

1. A computer system implemented method of computing from data received by a computer system an appraisal of a patent monopoly provided by a patent portfolio of at least one patent over an applicable period, the applicable period comprising a plurality of subperiods, the method comprising the steps of:

(a) determining a plurality of subperiodic incremental values of the patent monopoly, each subperiodic incremental value being associated with a different subperiod, 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 competitive environment without the patent monopoly, wherein the step of determining the plurality of subperiodic incremental values comprises;

estimating optimal pricing of unit price of the goods under conditions of the patent monopoly to generate one or more first price estimates, a first price estimate per subperiod,

estimating optimal pricing of the goods in the hypothetical competitive environment without the patent monopoly, to generate one or more second price estimates, a second price estimate per subperiod,

estimating volume of the goods sold under conditions of the patent monopoly to generate one or more first volume estimates, a first volume estimate per subperiod,

estimating volume of the goods sold in the hypothetical competitive environment without the patent monopoly to generate one or more second volume estimates, a second volume estimate per subperiod,

estimating unit cost of the goods under conditions of the patent monopoly to generate one or more first cost estimates, a first cost estimate per subperiod,

estimating unit cost of the goods in the hypothetical competitive environment without the patent monopoly, to generate one or more second cost estimates, a second cost estimate per subperiod,

computing, for said each subperiod, a difference between (1) product of the first volume estimate of said each subperiod and difference between the first price and cost estimates of said each subperiod, and (2) product of the second volume estimate of said each subperiod and difference between the second price and cost estimates of said each subperiod;

(b) determining a plurality of discount interest rates for the subperiods of the applicable period, each discount interest rate of the plurality of discount interest rates being associated with a different subperiod and reflecting one or more uncertainties associated with forecasting future revenues;

(c) computing a discounted present value of the patent monopoly as aggregate present value of the subperiodic incremental values of the patent monopoly by discounting said each subperiodic incremental value to present value using the discount interest rate of the subperiod associated with said each subperiodic incremental value, and aggregating the discounted subperiodic incremental values;

(d)(1) adjusting the discounted present value of the patent monopoly by one or more probabilities of one or more patents of the portfolio being infringed;

(d)(2) adjusting the discounted present value of the patent monopoly by one or more probabilities of one or more patents of the portfolio being enforced;

(d)(3) adjusting the discounted present value of the patent monopoly by one or more probabilities of one or more patents of the portfolio being enforced successfully;

(d)(4) adjusting the discounted present value of the patent monopoly by one or more probabilities of an owner of the patent portfolio being willing to enforce the patent monopoly; and

outputting a result of the steps of adjusting by the one or more probabilities of being infringed, being enforced, and being enforced successfully;

wherein the steps of determining the plurality of subperiodic incremental values, determining the plurality of discount interest rates, computing the discounted present value of the patent monopoly, adjusting the discounted present value by one or more probabilities of one or more patents of the portfolio being infringed, adjusting the discounted present value by one or more probabilities of one or more patents of the portfolio being enforced, adjusting the discounted present value by one or more probabilities of one or more patents of the portfolio being enforced successfully, and outputting the result are performed by the computer system.

2. The method of claim 1, 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.

3. The method of claim 1, 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.

4. The method of claim 1, 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.

5. The method of claim 1, wherein:

(I) the patent monopoly was infringed and a proceeding to enforce the patent monopoly is expected (1) to restore the patent monopoly in subperiod k, (2) to result in present value costs of CL, and (3) to result in recovery of past damages having a present value of PD;

(II) the steps of adjusting by the one or more probabilities of one or more patents of the portfolio being infringed, adjusting by the one or more probabilities of one or more patents of the portfolio being enforced and adjusting the one or more probabilities of one or more patents of the portfolio being enforced successfully comprise adjusting the discounted present value of the patent monopoly, to obtain an adjusted present value of the patent monopoly, according to the following formula;

AdjPV(PP)=PD−

CL+(1−

P×

(1−

E×

F))×

PV(PP),

wherein;

(III) AdjPV(PP) denotes the adjusted present value of the patent monopoly;

(IV) PV(PP) denotes the discounted present value of the patent monopoly;

(V) P denotes a probability that at least one patent of the patent portfolio will be infringed;

(VI) E denotes a probability that the patent portfolio will be enforced; and

(VII) F denotes a probability that the patent portfolio will be enforced successfully.

6. The method of claim 5, further comprising a step of setting CL to a median value of patent litigation costs.

7. The method of claim 5, further comprising a step of setting CL to about two million dollars.

8. The method of claim 5, further comprising a step of setting F to a statistical measure of a rate of patent owners prevailing in litigations to enforce the owners'"'"' patents.

9. The method of claim 5, further comprising a step of setting F to about 0.68.

10. The method of claim 5, further comprising the following steps:

(e) determining an expected present value of lost profits recovery LP;

(f) determining an expected present value of reasonable royalties RR;

(g) determining probability Q of obtaining the lost profits recovery LP;

(h) calculating the present value of damages PD according to the formula

PD=Q×

LP+(1−

Q)×

RR.

11. The method of claim 10, further comprising a step of setting Q to a statistical measure of a probability of obtaining lost profits.

12. The method of claim 10, further comprising a step of setting Q to about 0.38.

13. A computer system implemented method of computing from data received by a computer system an appraisal of a patent monopoly provided by a patent portfolio of at least one patent over an applicable period, the applicable period comprising a plurality of subperiods, the method comprising the steps of

(a) determining a plurality of subperiodic incremental values of the patent monopoly, each subperiodic incremental value being associated with a different subperiod, 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 competitive environment without the patent monopoly, wherein the step of determining the plurality of subperiodic incremental values comprises:

estimating optimal pricing of unit price of the goods under conditions of the patent monopoly to generate one or more first price estimates, a first price estimate per subperiod,

estimating optimal pricing of the goods in the hypothetical competitive environment without the patent monopoly, to generate one or more second price estimates, a second price estimate per subperiod,

estimating volume of the goods sold under conditions of the patent monopoly to generate one or more first volume estimates, a first volume estimate per subperiod,

estimating volume of the goods sold in the hypothetical competitive environment without the patent monopoly to generate one or more second volume estimates, a second volume estimate per subperiod,

estimating unit cost of the goods under conditions of the patent monopoly to generate one or more first cost estimates, a first cost estimate per subperiod,

estimating unit cost of the goods in the hypothetical competitive environment without the patent monopoly, to generate one or more second cost estimates, a second cost estimate per subperiod,

computing, for said each subperiod, a difference between (1) product of the first volume estimate of said each subperiod and difference between the first price and cost estimates of said each subperiod, and (2) product of the second volume estimate of said each subperiod and difference between the second price and cost estimates of said each subperiod;

(b) determining a plurality of discount interest rates for the subperiods of the applicable period, each discount interest rate of the plurality of discount interest rates being associated with a different subperiod and reflecting one or more uncertainties associated with forecasting future revenues;

(c) computing a discounted present value of the patent monopoly as aggregate present value of the subperiodic incremental values of the patent monopoly by discounting said each subperiodic incremental value to present value using the discount interest rate of the subperiod associated with said each subperiodic incremental value, and aggregating the discounted subperiodic incremental values;

(d) adjusting the discounted present value of the patent monopoly to reflect at least one of the following probabilities;

(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; and

outputting a result of the step of adjusting;

wherein;

the steps of determining the plurality of subperiodic incremental values, determining the plurality of discount interest rates, computing the discounted present value of the patent monopoly, adjusting the discounted present value, and outputting the result are performed by a computer system;

wherein;

the step of determining a plurality of subperiodic incremental values comprises a step of determining the plurality of subperiodic incremental values according to the formula Δ

_i=<

PRFT>

_i−

PRFT_i, wherein Δ

_i denotes a subperiodic incremental value of subperiod i, <

PRFT>

_i denotes profits derived from sales of goods covered by the patent monopoly under conditions of the monopoly during the subperiod i, and PRFT_i denotes profits derived from the sales of goods covered by the patent monopoly in the hypothetical competitive environment without the patent monopoly during the subperiod i;

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

$\mathrm{PV}<br><br>\left(\mathrm{PP}\right)=\underset{i=1}{\overset{i=l}{\sum <br><br>}}<br><br>\frac{{\mathrm{\Delta <br><br>}}_i}{{\left(1+l_i\right)}^i},$

wherein PV(PP) denotes the discounted present value of the patent monopoly, l is the number of subperiods in the applicable period, and I_i denotes the discount interest rate for the subperiod i;

the step of adjusting comprises a step of adjusting the discounted present value of the patent monopoly, to obtain an adjusted present value of the patent monopoly, according to the formula AdjPV(PP)=(1−

P×

(1−

E×

F))×

PV(PP), wherein AdjPV(PP) denotes the adjusted present value of the patent monopoly, P denotes a probability that at least one patent of the patent portfolio will be infringed, E denotes a probability that the patent portfolio will be enforced, and F denotes a probability that the patent portfolio will be enforced successfully; and

the patent portfolio is owned by an owner, the method further comprising a step of computing E by multiplying a probability E_w of the owner being willing to enforce the patent monopoly during the applicable period by a probability E_a of the owner being able to enforce the patent monopoly during the applicable period in accordance with the formula E=E_w×

E_a.

14. The method of claim 13, further comprising a step of computing the probability F according to the following formula:

$F=1-\underset{j=1}{\overset{n}{\prod <br><br>}}<br><br><br><br>\left(1-F_v^j\times <br><br>F_i^j\times <br><br>F_e^j\right),$

wherein;

(I) the patent portfolio comprises n≧

1 patents;

(II) F_i^j denotes a probability that j^th patent of the patent portfolio will be found infringed during the applicable period, for 1≦

j≦

n;

(III) F_v^j denotes a probability that j^th patent of the patent portfolio will be found not invalid, for 1≦

j≦

n; and

(IV) F_e^j denotes a probability that j^th patent of the patent portfolio will be found not unenforceable, for 1≦

j≦

n.

15. The method of claim 14, wherein the patent portfolio comprises a plurality of patents.

16. The method of claim 14, wherein said each subperiod of the plurality of subperiods corresponds to one month.

17. The method of claim 14, wherein said each subperiod of the plurality of subperiods corresponds to a year.

18. The method of claim 14, wherein said each subperiod of the plurality of subperiods corresponds to a week.

19. The method of claim 14, wherein the applicable period corresponds to the statutory period of at least one patent of the patent portfolio.

20. The method of claim 14, wherein the end of the applicable period corresponds to a time of estimated technological obsolescence of a technology protected by the patent monopoly.

21. The method of claim 14, wherein the end of the applicable period corresponds to a time of commercial obsolescence of a technology protected by the patent monopoly.

22. The method of claim 14, wherein the end of the applicable period corresponds to a time about five years from a date of development of a technology protected by the patent monopoly.

23. The method of claim 14, wherein the step of determining a plurality of subperiodic incremental values comprises a step of adding licensing revenues of said each subperiod to the subperiodic incremental value of said each subperiod, wherein the step of adding licensing revenues is performed before the step of computing a discounted present value of the patent monopoly.

24. The method of claim 14, wherein the applicable period begins on the issue date of the earliest issued patent in the patent portfolio and ends on the date of expiration of the last-to-expire patent in the patent portfolio.

25. A computer system implemented method of computing from data received by a computer system an appraisal of a patent monopoly provided by a patent portfolio comprising a plurality of patents owned by an owner, over an applicable period, the applicable period comprising a plurality of subperiods, the method comprising the steps of:

(a) determining a plurality of subperiodic incremental values of the patent monopoly, each subperiodic incremental value being associated with a different subperiod, 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 competitive environment without the patent monopoly, wherein the step of determining the plurality of subperiodic incremental values comprises;

estimating optimal pricing of unit price of the goods under conditions of the patent monopoly to generate one or more first price estimates, a first price estimate per subperiod,

estimating optimal pricing of the goods in the hypothetical competitive environment without the patent monopoly, to generate one or more second price estimates, a second price estimate per subperiod,

estimating volume of the goods sold under conditions of the patent monopoly to generate one or more first volume estimates, a first volume estimate per subperiod,

estimating volume of the goods sold in the hypothetical competitive environment without the patent monopoly to generate one or more second volume estimates, a second volume estimate per subperiod,

estimating unit cost of the goods under conditions of the patent monopoly to generate one or more first cost estimates, a first cost estimate per subperiod,

estimating unit cost of the goods in the hypothetical competitive environment without the patent monopoly, to generate one or more second cost estimates, a second cost estimate per subperiod,

computing, for said each subperiod, a difference between (1) product of the first volume estimate of said each subperiod and difference between the first price and cost estimates of said each subperiod, and (2) product of the second volume estimate of said each subperiod and difference between the second price and cost estimates of said each subperiod;

(b) determining a plurality of discount interest rates for the subperiods of the applicable period, each discount interest rate of the plurality of discount interest rates being associated with a different subperiod and reflecting one or more uncertainties associated with forecasting future revenues;

(c) computing a discounted present value of the patent monopoly as aggregate present value of the subperiodic incremental values of the patent monopoly by discounting said each subperiodic incremental value to present value using the discount interest rate of the subperiod associated with said each subperiodic incremental value, and aggregating the discounted subperiodic incremental values;

(d) adjusting the discounted present value of the patent monopoly to reflect at least one of the following probabilities;

(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; and

outputting a result of the step of adjusting;

wherein;

the steps of determining the plurality of subperiodic incremental values, determining the plurality of discount interest rates, computing the discounted present value of the patent monopoly, adjusting the discounted present value, and outputting the result are performed by a computer system;

wherein;

the step of determining a plurality of subperiodic incremental values comprises a step of determining the plurality of subperiodic incremental values according to the formula Δ

_i=<

PRFT>

_i−

PRFT_i, wherein Δ

_i denotes a subperiodic incremental value of subperiod i, <

PRFT>

_i denotes profits derived from sales of goods covered by the patent monopoly under conditions of the monopoly during the subperiod i, and PRFT_i denotes profits derived from the sales of goods covered by the patent monopoly in the hypothetical competitive environment without the patent monopoly during the subperiod i;

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

$\mathrm{PV}<br><br>\left(\mathrm{PP}\right)=\underset{i=1}{\overset{i=l}{\sum <br><br>}}<br><br>\frac{{\mathrm{\Delta <br><br>}}_i}{{\left(1+l_i\right)}^i},$

wherein PV(PP) denotes the discounted present value of the patent monopoly, l is the number of subperiods in the applicable period, and I_i denotes the discount interest rate for the subperiod i;

the step of adjusting comprises a step of adjusting the discounted present value of the patent monopoly, to obtain an adjusted present value of the patent monopoly, according to the formula AdjPV(PP)=(1−

P×

(1−

E×

F))×

PV(PP), wherein AdjPV(PP) denotes the adjusted present value of the patent monopoly, P denotes a probability that at least one patent of the patent portfolio will be infringed, E denotes a probability that the patent portfolio will be enforced, and F denotes a probability that the patent portfolio will be enforced successfully; and

the method further comprising the steps of;

(e) computing 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; and

(f) computing the probability F according to the following formula;

F=1−

(1−

F_v×

F_i×

F_e)ⁿ, wherein;

(1) the plurality of patents comprises n patents;

(2) F_i denotes a probability that any individual patent of the patent portfolio will be found infringed during the applicable period;

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

(4) F_e denotes a probability that any individual patent of the patent portfolio will be found not unenforceable.

26. The method of claim 25, wherein said each subperiod of the plurality of subperiods corresponds to one month.

27. The method of claim 25, wherein said each subperiod of the plurality of subperiods corresponds to a year.

28. The method of claim 25, wherein said each subperiod of the plurality of subperiods corresponds to a week.

29. The method of claim 25, wherein the applicable period corresponds to the statutory period of at of at least one patent of the patent portfolio.

30. The method of claim 25, wherein the end of the applicable period corresponds to a time of estimated technological obsolescence of a technology protected by the patent monopoly.

31. The method of claim 25, wherein the end of the applicable period corresponds to a time of commercial obsolescence of a technology protected by the patent monopoly.

32. The method of claim 25, wherein the end of the applicable period corresponds to a time about five years from a date of development of a technology protected by the patent monopoly.

33. The method of claim 25, wherein the step of determining a plurality of subperiodic incremental values comprises a step of augmenting the subperiodic incremental value of said each subperiod by licensing revenues of said each subperiod, wherein the step of augmenting is performed before the step of computing a discounted present value of the patent monopoly.

34. 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 and an input device coupled to the processor and being capable of providing information to the processor, causes the processor to perform the following steps to compute from data received by the processor an appraisal of a patent monopoly provided by a patent portfolio of at least one patent over an applicable period, the applicable period comprising a plurality of subperiods:

(a) determining a plurality of subperiodic incremental values of the patent monopoly, each subperiodic incremental value being associated with a different subperiod, 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, wherein the step of determining the plurality of subperiodic incremental values comprises;

estimating optimal pricing of unit price of the goods under conditions of the patent monopoly to generate one or more first price estimates, a first price estimate per subperiod,

estimating optimal pricing of the goods in the hypothetical competitive environment without the patent monopoly, to generate one or more second price estimates, a second price estimate per subperiod,

estimating volume of the goods sold under conditions of the patent monopoly to generate one or more first volume estimates, a first volume estimate per subperiod,

estimating volume of the goods sold in the hypothetical competitive environment without the patent monopoly to generate one or more second volume estimates, a second volume estimate per subperiod,

estimating unit cost of the goods under conditions or the patent monopoly to generate one or more first cost estimates, a first cost estimate per subperiod,

estimating unit cost of the goods in the hypothetical competitive environment without the patent monopoly, to generate one or more second cost estimates, a second cost estimate per subperiod,

computing, for said each subperiod, a difference between (1) product of the first volume estimate of said each subperiod and difference between the first price and cost estimates of said each subperiod, and (2) product of the second volume estimate of said each subperiod and difference between the second price and cost estimates of said each subperiod;

(b) determining discount interest rates for each subperiod of the applicable period, each discount interest rate of the plurality of discount interest rates being associated with a different subperiod and reflecting one or more uncertainties associated with forecasting future revenues;

(c) computing a discounted present value of the patent monopoly as aggregate present value of the subperiodic incremental values of the patent monopoly by discounting said each subperiodic incremental value to present value using the discount interest rate of the subperiod associated with said each subperiodic incremental value, and aggregating all of the discounted subperiodic incremental values;

(d) adjusting the discounted present value to reflect the following probabilities;

(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; and

outputting a result of the step of adjusting;

wherein;

the step of determining a plurality of subperiodic incremental values comprises a step of determining the plurality of subperiodic incremental values according to the formula Δ

_i=<

PRFT>

_i−

PRFT_i, wherein Δ

_i denotes a subperiodic incremental value for subperiod i, <

PRFT>

_i denotes profits derived from sales of goods covered by the patent monopoly under conditions of the monopoly during the subperiod i, and PRFT_i denotes profits derived from the sales of goods covered by the patent monopoly in the hypothetical environment without the patent monopoly during the subperiod i;

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

$\mathrm{PV}<br><br>\left(\mathrm{PP}\right)=\underset{i=1}{\overset{i=l}{\sum <br><br>}}<br><br>\frac{{\mathrm{\Delta <br><br>}}_i}{{\left(1+l_i\right)}^i},$

wherein PV(PP) denotes the discounted present value of the patent monopoly, l is the number of subperiods in the applicable period, and I_i denotes the discount interest rate for the subperiod i;

the step of adjusting comprises a step of adjusting the discounted present value of the patent monopoly, to obtain an adjusted present value of the patent monopoly, according to the formula AdjPV(PP)=(1−

P×

(1−

E×

F))×

PV(PP), wherein AdjPV(PP) denotes the adjusted present value of the patent monopoly, P denotes a probability that at least one patent of the patent portfolio will be infringed, E denotes a probability that the patent portfolio will be enforced, and F denotes a probability that the patent portfolio will be enforced successfully;

the patent portfolio is owned by an owner, wherein when said data processing system executes said instruction code, said instruction code further causes the processor to perform a step of computing 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.

35. The article of manufacture according to claim 34, wherein when said data processing system executes said instruction code, said instruction code further causes the processor to perform a step of computing the probability F according to the following formula:

$F=1-\underset{j=1}{\overset{n}{\prod <br><br>}}<br><br><br><br>\left(1-F_v^j\times <br><br>F_i^j\times <br><br>F_e^j\right),$

wherein;

(A) the patent portfolio comprises n≧

1 patents;

(B) F_i^j denotes a probability that j^th patent of the patent portfolio will be found infringed during the applicable period, for 1≦

j≦

n;

(C) F_v^j denotes a probability that j^th patent of the patent portfolio will be found not invalid, for 1≦

j≦

n; and

(D) F_e^j denotes a probability that j^th patent of the patent portfolio will be found not unenforceable, for 1≧

j≧

n.

36. The article of manufacture according to claim 35, wherein the patent portfolio comprises a plurality of patents.

37. The article of manufacture according to claim 35, wherein said each subperiod of the plurality of subperiods corresponds to one month.

38. The article of manufacture according to claim 35, wherein said each subperiod of the plurality of subperiods corresponds to a year.

39. The article of manufacture according to claim 35, wherein said each subperiod of the plurality of subperiods corresponds to a quarter.

40. The article of manufacture according to claim 35, wherein the applicable period corresponds to the statutory period of at least one patent of the patent portfolio.

41. The article of manufacture according to claim 35, wherein the end of the applicable period corresponds to a time of estimated technological obsolescence of a technology protected by the patent monopoly.

42. The article of manufacture according to claim 35, wherein the end of the applicable period corresponds to a time of commercial obsolescence of a technology protected by the patent monopoly.

43. The article of manufacture according to claim 35, wherein the end of the applicable period corresponds to a time about five years from a date of development of a technology protected by the patent monopoly.

44. The article of manufacture according to claim 35, wherein the step of determining a plurality of subperiodic incremental values comprises a step of augmenting the subperiodic incremental value of said each subperiod by licensing revenues of said each subperiod, wherein the step of augmenting is performed before the step of computing a discounted present value of the patent monopoly.

45. The article of manufacture according to claim 35, wherein the end of the applicable period begins with the date of issue of the first issued patent of the patent monopoly and ends with the expiration of the last to expire patent in the patent monopoly.

46. 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 and an input device coupled to the processor and being capable of providing information to the processor, causes the processor to perform the following steps to compute from data received by the processor an appraisal of a patent monopoly provided by a patent portfolio of at least one patent over an applicable period, the applicable period comprising a plurality of subperiods:

(a) determining a plurality of subperiodic incremental values of the patent monopoly, each subperiodic incremental value being associated with a different subperiod, 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, wherein the step of determining the plurality of subperiodic incremental values comprises;

estimating optimal pricing of unit price of the goods under conditions of the patent monopoly to generate one or more first price estimates, a first price estimate per subperiod,

estimating optimal pricing of the goods in the hypothetical competitive environment without the patent monopoly, to generate one or more second price estimates, a second price estimate per subperiod,

estimating volume of the goods sold under conditions of the patent monopoly to generate one or more first volume estimates, a first volume estimate per subperiod,

estimating volume of the goods sold in the hypothetical competitive environment without the patent monopoly to generate one or more second volume estimates, a second volume estimate per subperiod,

estimating unit cost of the goods under conditions of the patent monopoly to generate one or more first cost estimates, a first cost estimate per subperiod,

estimating unit cost of the goods in the hypothetical competitive environment without the patent monopoly, to generate one or more second cost estimates, a second cost estimate per subperiod,

computing, for said each subperiod, a difference between (1) product of the first volume estimate of said each subperiod and difference between the first price and cost estimates of said each subperiod, and (2) product of the second volume estimate of said each subperiod and difference between the second price and cost estimates of said each subperiod;

(b) determining discount interest rates for each subperiod of the applicable period, each discount interest rate of the plurality of discount interest rates being associated with a different subperiod and reflecting one or more uncertainties associated with forecasting future revenues;

(c) computing a discounted present value of the patent monopoly as aggregate present value of the subperiodic incremental values of the patent monopoly by discounting said each subperiodic incremental value to present value using the discount interest rate of the subperiod associated with said each subperiodic incremental value, and aggregating all of the discounted subperiodic incremental values;

(d) adjusting the discounted present value to reflect the following probabilities;

(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; and

outputting a result of the step of adjusting;

wherein;

the step of determining a plurality of subperiodic incremental values comprises a step of determining the plurality of subperiodic incremental values according to the formula Δ

_i=<

PRFT>

_i−

PRFT_i, wherein Δ

_i denotes a subperiodic incremental value for subperiod i, <

PRFT>

_i denotes profits derived from sales of goods covered by the patent monopoly under conditions of the monopoly during the subperiod i, and PRFT_i denotes profits derived from the sales of goods covered by the patent monopoly in the hypothetical environment without the patent monopoly during the subperiod i;

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

$\mathrm{PV}<br><br>\left(\mathrm{PP}\right)=\underset{i=1}{\overset{i=l}{\sum <br><br>}}<br><br>\frac{{\mathrm{\Delta <br><br>}}_i}{{\left(1+l_i\right)}^i},$

wherein PV(PP) denotes the discounted present value of the patent monopoly, l is the number of subperiods in the applicable period, and I_i denotes the discount interest rate for the subperiod i;

the step of adjusting comprises a step of adjusting the discounted present value of the patent monopoly, to obtain an adjusted present value of the patent monopoly, according to the formula AdjPV(PP)=(1−

P×

(1−

E×

F))×

PV(PP), wherein AdjPV(PP) denotes the adjusted present value of the patent monopoly, P denotes a probability that at least one patent of the patent portfolio will be infringed, E denotes a probability that the patent portfolio will be enforced, and F denotes a probability that the patent portfolio will be enforced successfully; and

the patent portfolio comprises a plurality of patents capable of being enforced by an owner, wherein when said data processing system executes said instruction code, said instruction code further causes the processor to perform the steps of

(I) computing 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 during the applicable period; and

(II) computing the probability F according to the following formula;

F=1−

(1−

F_v×

F_i×

F_e)ⁿ, wherein;

(1) the patent portfolio comprises n>

1 patents;

(2) F_i denotes a probability that any individual patent of the patent portfolio will be found infringed;

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

(4) F_e denotes a probability that any individual patent of the patent portfolio will be found not unenforceable.

47. The article of manufacture according to claim 46, wherein said each subperiod of the plurality of subperiods corresponds to one month.

48. The article of manufacture according to claim 46, wherein said each subperiod of the plurality of subperiods corresponds to a year.

49. The article of manufacture according to claim 46, wherein said each subperiod of the plurality of subperiods corresponds to a week.

50. The article of manufacture according to claim 46, wherein said each subperiod of the plurality of subperiods corresponds to a calendar quarter.

51. The article of manufacture according to claim 46, wherein the applicable period corresponds to the statutory period of at least one patent of the patent portfolio.

52. The article of manufacture according to claim 46, wherein the end of the applicable period corresponds to a time of estimated technological obsolescence of a technology protected by the patent monopoly.

53. The article of manufacture according to claim 46, wherein the end of the applicable period corresponds to a time of commercial obsolescence of a technology protected by the patent monopoly.

54. The article of manufacture according to claim 46, wherein the end of the applicable period corresponds to a time about five years from a date of development of a technology protected by the patent monopoly.

55. The article of manufacture according to claim 46, wherein the step of determining a plurality of subperiodic incremental values comprises a step of augmenting the subperiodic incremental value of said each subperiod by licensing revenues of said each subperiod, and wherein the step of augmenting is performed before the step of computing a discounted present value of the patent monopoly.

56. A computer implemented method of computing an appraisal of a patent monopoly provided by a patent portfolio of at least one patent over an applicable period, the applicable period comprising a plurality of subperiods, the method comprising the steps of:

(a) receiving, from an input source, through a 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;

(b) computing a plurality of subperiodic incremental values of the patent monopoly, each subperiodic incremental value being associated with a different subperiod, by computing subperiodic differences between the values derived from the goods covered by the patent monopoly under conditions of the patent monopoly and the corresponding values in a hypothetical environment without the patent monopoly, the step of determining the plurality of subperiodic incremental values comprising;

estimating optimal pricing of unit price of the goods under conditions of the patent monopoly to generate one or more first price estimates, a first price estimate per subperiod,

estimating optimal pricing of the goods in the hypothetical competitive environment without the patent monopoly, to generate one or more second price estimates, a second price estimate per subperiod,

estimating volume of the goods sold under conditions of the patent monopoly to generate one or more first volume estimates, a first volume estimate per subperiod,

estimating volume of the goods sold in the hypothetical competitive environment without the patent monopoly to generate one or more second volume estimates, a second volume estimate per subperiod,

estimating unit cost of the goods under conditions of the patent monopoly to generate one or more first cost estimates, a first cost estimate per subperiod,

estimating unit cost of the goods in the hypothetical competitive environment without the patent monopoly, to generate one or more second cost estimates, a second cost estimate per subperiod,

computing, for said each subperiod, a difference between (1) product of the first volume estimate of said each subperiod and difference between the first price and cost estimates of said each subperiod, and (2) product of the second volume estimate of said each subperiod and difference between the second price and cost estimates of said each subperiod;

(c) receiving discount interest rates for the subperiods of the applicable period, each discount interest rate being associated with a different subperiod and reflecting one or more uncertainties associated with forecasting future revenues;

(d) computing a discounted present value of the patent monopoly as aggregate present value of the subperiodic incremental values of the patent monopoly by discounting said each subperiodic incremental value to present value using the discount interest rate of the subperiod associated with said each subperiodic incremental value, and aggregating the discounted subperiodic incremental values;

(e) receiving at least one of the following probabilities and adjusting the discounted present value to reflect the received probabilities;

(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; and

outputting a result of the step of adjusting;

wherein;

the steps (a), (b), (c), (d), (e) and outputting are performed by a computer system;

the step of computing a plurality of subperiodic incremental values comprises a step of computing the plurality of subperiodic incremental values according to the formula Δ

_i=<

PRFT>

_i−

PRFT_i, wherein Δ

_i denotes a subperiodic incremental value for each subperiod i, <

PRFT>

_i denotes profits derived from sales of goods covered by the patent monopoly under conditions of the monopoly during said each subperiod i, and PRFT_i denotes profits derived from the sales of goods covered by the patent monopoly in the hypothetical environment without the patent monopoly during said each subperiod i;

the step of computing a discounted present value comprises a step of computing the discounted present value according to the formula

$\mathrm{PV}<br><br>\left(\mathrm{PP}\right)=\underset{i=1}{\overset{i=l}{\sum <br><br>}}<br><br>\frac{{\mathrm{\Delta <br><br>}}_i}{{\left(1+l_i\right)}^i},$

wherein PV(PP) denotes the discounted present value of the patent monopoly, l is the number of subperiods in the applicable period, and I_i denotes the discount interest rate for said each subperiod i;

the step of adjusting comprises a step of adjusting the discounted present value of the patent monopoly, to obtain an adjusted present value of the patent monopoly, according to the formula AdjPV(PP)=(1−

P×

(1−

E×

F))×

PV(PP), wherein AdjPV(PP) denotes the adjusted present value of the patent monopoly, P denotes a probability that at least one patent of the patent portfolio will be infringed, E denotes a probability that the patent portfolio will be enforced, and F denotes a probability that the patent portfolio will be enforced successfully; and

the patent portfolio is owned by an owner, the method further comprising a step of computing 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.

57. The method of claim 56, further comprising a step of computing the probability F according to the following formula:

$F=1-\underset{j=1}{\overset{n}{\prod <br><br>}}<br><br><br><br>\left(1-F_v^j\times <br><br>F_i^j\times <br><br>F_e^j\right),$

wherein;

(I) the patent portfolio comprises n≧

1 patents;

(II) F_i^j denotes a probability that j^th patent of the patent portfolio will be found infringed during the applicable period, for 1≦

j≦

n;

(III) F_v^j denotes a probability that j^th patent of the patent portfolio will be found not invalid, for 1≦

j≦

n; and

(IV) F_e^j denotes a probability that j^th patent of the patent portfolio will be found not unenforceable, for 1≦

j≦

n.

58. The method of claim 57, wherein the patent portfolio comprises a plurality of patents.

59. The method of claim 57, wherein said each subperiod of the plurality of subperiods corresponds to one month.

60. The method of claim 57, wherein said each subperiod of the plurality of subperiods corresponds to a year.

61. The method of claim 57, wherein said each subperiod of the plurality of subperiods corresponds to a week.

62. The method of claim 57, wherein said each subperiod of the plurality of subperiods corresponds to a calendar quarter.

63. The method of claim 57, wherein the applicable period corresponds to the statutory period of at least one patent of the patent portfolio.

64. The method of claim 57, wherein the applicable period commences with the date of issue of the earliest issued patent of the patent portfolio and ends on the date of expiration of the last to expire patent of the patent portfolio.

65. The method of claim 57, wherein the end of the applicable period corresponds to a time of estimated technological obsolescence of a technology protected by the patent monopoly.

66. The method of claim 57, wherein the end of the applicable period corresponds to a time of commercial obsolescence of a technology protected by the patent monopoly.

67. The method of claim 57, wherein the end of the applicable period corresponds to a time about five years from a date of development of a technology protected by the patent monopoly.

68. The method of claim 57, wherein the step of determining a plurality of subperiodic incremental values comprises a step of augmenting the subperiodic incremental value of said each subperiod by licensing revenues of said each subperiod, wherein the step of augmenting is performed before the step of computing a discounted present value of the patent monopoly.

69. A computer implemented method of computing an appraisal of a patent monopoly provided by a patent portfolio comprising a plurality of patents, over an applicable period, the applicable period comprising a plurality of subperiods, the method comprising the steps of:

(a) receiving, from an input source, through a 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;

(b) computing a plurality of subperiodic incremental values of the patent monopoly, each subperiodic incremental value being associated with a different subperiod, by computing subperiodic differences between the values derived from the goods covered by the patent monopoly under conditions of the patent monopoly and the corresponding values in a hypothetical environment without the patent monopoly, the step of determining the plurality of subperiodic incremental values comprising;

estimating optimal pricing of unit price of the goods under conditions of the patent monopoly to generate one or more first price estimates, a first price estimate per subperiod,

estimating optimal pricing of the goods in the hypothetical competitive environment without the patent monopoly, to generate one or more second price estimates, a second price estimate per subperiod,

estimating volume of the goods sold under conditions of the patent monopoly to generate one or more first volume estimates, a first volume estimate per subperiod,

estimating volume of the goods sold in the hypothetical competitive environment without the patent monopoly to generate one or more second volume estimates, a second volume estimate per subperiod,

estimating unit cost of the goods under conditions of the patent monopoly to generate one or more first cost estimates, a first cost estimate per subperiod,

estimating unit cost of the goods in the hypothetical competitive environment without the patent monopoly, to generate one or more second cost estimates, a second cost estimate per subperiod,

computing, for said each subperiod, a difference between (1) product of the first volume estimate of said each subperiod and difference between the first price and cost estimates of said each subperiod, and (2) product of the second volume estimate of said each subperiod and difference between the second price and cost estimates of said each subperiod;

(c) receiving discount interest rates for the subperiods of the applicable period, each discount interest rate being associated with a different subperiod and reflecting one or more uncertainties associated with forecasting future revenues;

(d) computing a discounted present value of the patent monopoly as aggregate present value of the subperiodic incremental values of the patent monopoly by discounting said each subperiodic incremental value to present value using the discount interest rate of the subperiod associated with said each subperiodic incremental value, and aggregating the discounted subperiodic incremental values;

(e) receiving probabilities and adjusting the discounted present value to reflect the received probabilities, the received probabilities comprising;

(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; and

outputting a result of the step of adjusting;

wherein;

the steps (a), (b), (c), (d), (e) and outputting are performed by a computer system;

the step of computing a plurality of subperiodic incremental values comprises a step of computing the plurality of subperiodic incremental values according to the formula Δ

_i=<

PRFT>

_i−

PRFT_i, wherein Δ

_i denotes a subperiodic incremental value for each subperiod <

PRFT>

_i denotes profits derived from sales of goods covered by the patent monopoly under conditions of the monopoly during said each subperiod i, and PRFT_i denotes profits derived from the sales of goods covered by the patent monopoly in the hypothetical environment without the patent monopoly during said each subperiod i;

the step of computing a discounted present value comprises a step of computing the discounted present value according to the formula

$\mathrm{PV}<br><br>\left(\mathrm{PP}\right)=\underset{i=1}{\overset{i=l}{\sum <br><br>}}<br><br>\frac{{\mathrm{\Delta <br><br>}}_i}{{\left(1+l_i\right)}^i},$

wherein PV(PP) denotes the discounted present value of the patent monopoly, l is the number of subperiods in the applicable period, and I_i denotes the discount interest rate for said each subperiod i;

the step of adjusting comprises a step of adjusting the discounted present value of the patent monopoly, to obtain an adjusted present value of the patent monopoly, according to the formula AdjPV(PP)=(1−

P×

(1−

E×

F))×

PV(PP), wherein AdjPV(PP) denotes the adjusted present value of the patent monopoly, P denotes a probability that at least one patent of the patent portfolio will be infringed, E denotes a probability that the patent portfolio will be enforced, and F denotes a probability that the patent portfolio will be enforced successfully; and

the patent portfolio is capable of being enforced by an owner, the method further comprising the steps of;

(e) computing 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; and

(f) computing the probability F according to the following formula;

F=1−

(1−

F_v×

F_i×

F_e)ⁿ,

wherein;

(1) the plurality of patents comprises n patents;

(2) F_i denotes a probability that any individual patent of the patent portfolio will be found infringed during the applicable period;

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

(4) F_e denotes a probability that any individual patent of the patent portfolio will be found not unenforceable.

70. The method of claim 69, wherein said each subperiod of the plurality of subperiods corresponds to one month.

71. The method of claim 69, wherein said each subperiod of the plurality of subperiods corresponds to a year.

72. The method of claim 69, wherein said each subperiod of the plurality of subperiods corresponds to a week.

73. The method of claim 69, wherein the applicable period corresponds to the statutory period of at of at least one patent of the patent portfolio.

74. The method of claim 69, wherein the end of the applicable period corresponds to a time of estimated technological obsolescence of a technology protected by the patent monopoly.

75. The method of claim 69, wherein the end of the applicable period corresponds to a time of commercial obsolescence of a technology protected by the patent monopoly.

76. The method of claim 69, wherein the end of the applicable period corresponds to a time about five years from a date of development of a technology protected by the patent monopoly.

77. The method of claim 69, wherein the step of determining a plurality of subperiodic incremental values comprises a step of adding licensing revenues of said each subperiod to the subperiodic incremental value of said each subperiod, and wherein the step of adding licensing revenues is performed before the step of computing a discounted present value of the patent monopoly.

78. The method of claim 69, wherein the applicable period commences on the date of issue of the earliest issued patent of the patent portfolio and ends on the date of expiration of the last to expire patent of the patent portfolio.

79. The method of claim 69, wherein said each subperiod of the plurality of subperiods corresponds to a calendar quarter.