The Patent Asset Index Methodology
The Patent Asset Index™ is an objective measure of global technological strength and innovation. It considers the entire global patent portfolio and takes into account both the number of patent-protected inventions and their quality or value. The methodology has been developed and validated in scientific research and many years of advising companies on patents and innovation strategy.
The Patent Asset Index™ method allows for identifying patent gems that businesses can leverage to create value from innovation. It is therefore a key element in our unique databases, business intelligence software, and expert services. The Patent Asset Index™ is also used by major companies to illustrate the strength of their patent portfolios in annual reports and further investor communication.
How the Patent Asset Index™ is Calculated
The Patent Asset Index™ of a portfolio is the sum of the Competitive Impact of all patent families in that portfolio. It can be calculated for the overall portfolio of a company, for a group of patent families that belong to a certain technology, or for any other population of patent families.
The Competitive Impact is calculated on patent family level and represents the relative business value of each patent family. It is obtained by multiplying the → Technology Relevance (the technical value based on the number of citations a patent family has received) and the → Market Coverage (the market value calculated based on the GNI of all authorities in which the patent family is active) of each patent family. Thus, active patent families have a Competitive Impact that is higher than zero, while the Competitive Impact of inactive patent families is always zero.
The Patent Asset Index™ is calculated on patent portfolio level and can measure the total strength of any patent portfolio. It is obtained by adding up all the Competitive Impact (individual patent strength) of each patent family within this portfolio. Hence, the Patent Asset Index™ of only one patent family would equal the Competitive Impact of this patent family.
You can reread the analysis method in the corresponding scientific article:
Ernst, H., Omland, N. (2011): The Patent Asset Index – A New Approach to Benchmark Patent Portfolios. World Patent Information 33, pp. 34–41.
For further details, you can also refer to the following patent (application):