Can you predict which patents are high risk?

She compared litigated and non litigated patents and researched the effect of “acquired characteristics” or events that happen after the patent has been granted. She shows that these so called “post-issued events” or “traits” of a patent improve insight into a patent’s worth. There are “intrinsic” characteristics  of a patent, those that are within the control of the patentee, (e.g. number and broadness of claims) and external traits,  events that occur after grant, such as whether the patent is being traded (transferred) or securitized, whether reexamination took place, or otherwise undergone investment of sort, etc.  Patents originally assigned to individuals and small companies are more likely to be litigated.From older studies it is known that patents that end up in litigation differ from the patents that do not. Litigated patents have been differently prosecuted, may have be assigned to certain types of patentees, have more claims, more prior art citations and larger families and are generally older (and hence for which maintenance fees have been paid), to name a few.Mrs. Chien however focuses more on the acquired characteristics of patents, decision points in a patent’s lifetime, such as:

• changes in patent ownership
• post issuance investment in the patent (maintenance fees, ex parte reexamination
• patent collateralization
• adjusted forward citations to the patent

The results of Prof. Chien’s research are, in her own words, “dramatic”, litigated patents do significantly differ after grant than unlitigated patents.

1. Litigated patents are more likely to be transferred and nearly four times as likely as unlitigated patents to experience a change in owner size.

2. they are hundredfold more likely  to experience ex parte reexamination than the unlitigated patents

3. they are maintained more times, on average, than are unlitigated patents

4. they are more often used as collateral

5. they are cited twice as many times

all of these differences are statistically significant.

Litigation is a costly enterprise. If Prof. Chien’s analysis can help identifying patents that can cause disruption of businesses, hinder R&D or can be subject to licensing enforcement actions  the IP risk management tasks will become a lot more effective and predictable and could significantly alter the way IP managers will conduct clearance and conduct risk assessment projects.

Click here for the full text of the research article

For a critical review of Prof. Chien’s results, see Patently-O and Prof. Lee Petherbridge “Response, On Predicting Patent Litigation“

[This post originally appeared at ipeg.]