Learn How to Value Your Company's IP Portfolio as a Source of Income with Patent Scorecarding

It’s imperative that intellectual property counsel, especially those responsible for the protection of innovation in the electrical, chemical, pharmaceutical and life-science arenas, regularly audit their company’s IP portfolio. Here’s the best way to do it.

Intellectual Property Scorecarding Benefits
Troy A. Groetken

Troy A. Groetken

March 9, 2022 01:00 PM

At least once a year—maybe even as often as every quarter—astute inside counsel will want to assess both the value (based against return on investment or the protection of key company product/technology platforms and strategies) and the cost of the company’s intellectual property portfolio or various segments thereof. Depending on the portfolio’s size, complexity and geographic reach, this request can make for a daunting task. The trick to managing it in a timely manner and with one’s sanity mostly intact: patent scorecarding. It offers an effective way to make a review like this manageable while providing crucial insights that can be built upon over time. Further, patent scorecarding enables a company to more efficiently and effectively evaluate and implement its intellectual property strategy in both the short and long term.

McAndrews Best Lawyers Inline

What Is Patent Scorecarding, and How Does It Work?

In essence, patent scorecarding is a system of assigning value, both quantitative and the more subjectively qualitative, to every IP asset in a given portfolio. The system and process help management decide which parts of the portfolio to retain and which, perhaps, to license or sell. But the process does not end there.

Through patent scorecarding, a company uses its own “company-specific variables.” Those might include:

  • currently identifiable revenue tied to the IP asset
  • currently identifiable products, product lines or technology platforms that are supported by or involve the IP asset
  • future short- and long-term business goals or revenue generation that will involve the IP asset
  • overall IP life of the asset
  • competitive concerns/challenges involving the asset

Through such an analysis, companies are able to more effectively prioritize and direct resources toward the IP assets that are most essential (i.e., “core” versus “non-core”) to its business objectives in both the short- and long-terms.

Further, patent scorecarding allows a company to forecast the potential performance of each asset, group of assets or the entire portfolio over time in order to justify related costs, evaluate improvements and sell or abandon underperforming assets. An objective assessment will also help identify the key IP assets that constitute true economic value for the company over time, and the manner in which they do so. Such information is critical for a business at any stage of its evolution, whether it needs to establish support for a funding valuation, redistribute IP asset resources or assess potential options for divestiture or licensing, among others.

How Your Score Card Can Justify IP Asset Return on Investment

Patent scorecarding also allows for “tying”—in essence, the linking of a particular IP asset, or bundle of assets, to a company’s technology platform, product line or licensing program. Doing so is invaluable: Once a given asset is tied to an income-producing platform or product, executives can immediately visualize the return on investment it offers. Think of patent scorecarding, then, as regular financial hygiene, identifying and ranking beneficial assets and gauging their performance as often as needed.

Because scorecarding is metric-based—with the metrics employed naturally varying from industry to industry, even company to company—a performance value can also be tailored with precision to each IP asset, thereby identifying and tracking that performance over time. For example, patent scorecarding can assign metrics (e.g., existence or nonexistence of composition claims; of challenging method or product-by process claims; of challenging or changing case law; or of competitive landscape challenges, among others) to fully assess over time the strength of the claims of a particular patent asset or group of related assets. All of these variables can be tailored and then used quantitatively and qualitatively, which allows the business, legal and research-and-development teams to value each patent asset according to whichever metric it deems most important.

Moreover, if an asset’s performance is inadequate, the company can deploy additional resources or measures (e.g., claim amendments, reissue applications, and the filing of related continuation or divisional applications, among others)—to enhance its value. Alternatively, if the asset’s underperformance is too great, the company can redirect resources to better-performing assets while either selling or abandoning the underperforming one.

Uncovering New Financial Opportunities

Patent scorecarding’s advantages extend further still. A company’s scorecarding program can help uncover other revenue-generating and revenue-saving opportunities. For example, if a particular asset or asset group no longer supports a technology platform or product within the company’s interests, the asset(s) can be divested or licensed.

The benefits of divestiture are twofold: First, selling any IP asset that is no longer needed can generate funds that the company can use to support more critical IP assets, products or projects. Second, any asset identified as worthy of divestiture will by definition no longer need financial or other support from the business.

For licensing, a company might prefer to own and manage its non-tied IP assets rather than sell them to someone else. Doing so will help the company control quality metrics, prevent competitive use of assets and warehouse one’s IP over time, among other virtues.

Company executives and counsel should implement and regularly tailor their patent scorecarding process and metrics to identify the assets best suited for product and platform support, divestiture or licensing. This will provide a means to numerically assess, value and structure IP assets so they’re income generators, not revenue eliminators. The company can then live another day to ford the turbulent eddies of modern commerce, secure in the knowledge that its intellectual property is doing the most efficient, most valuable and most remunerative work it can.

For more information regarding patent scorecarding and examples thereof, please contact Troy A. Groetken at 312-775-8259 or

Related Articles

What Entrepreneurs Should Know About Intellectual Property

by Todd Fichtenberg

With the growing rates of entrepreneurs and startups during 2020, applications for EINs and intellectual property protections should grow proportionately.

Business Owners And Intellectual Property

The State of Women Inventors

by Amanda Hermans and Kate Rockwood

What’s being done to improve the gender patent gap—and how attorneys can help.

How to Improve the Gender Patent Gap

Property Protectors

by Best Lawyers

Georg Schönherr and Thomas Adocker discuss the theft of trade secrets, patent infringement, and strategies to combat fake goods.

An Interview With Schwarz Schönherr Rechtsanw

Protect Your Intellectual Property From Patent Trolls

by Best Lawyers

Michael Ritscher discusses how he advises clients to better protect their trade secrets.

An Interview With Meyerlustenberger Lachenal

Anna Inventing: The Importance of Diversity in Innovation

by Emily C. Peyser

A patent from 1887 by female inventor Anna Connelly not only revolutionized fire safety, but highlighted the need for diversity in innovation. Our world is facing big problems that need diverse voices at the table to find solutions that work for everyone. Building diverse teams and encouraging diversity in innovation is a beneficial step forward in resolving our collective challenges.

Diversity in Innovation and Technology

Anthony M. Insogna - San Diego 2021 Lawyer of the Year

by Best Lawyers

Litigation - Intellectual Property San Diego, California

Anthony M. Insogna

Technology and the Changing IP Climate in Mexico

by Best Lawyers

Roberto Arochi discusses Arochi & Lindner’s 2019 “Law Firm of the Year” award for Intellectual Property Law in Mexico in an interview with Best Lawyers.

Arochi & Lindner "Law Firm of the Year" Q&A

Alicia Lloreda on the Increasing Complexity of IP Law

by Best Lawyers

The Lloreda Camacho & Co. attorney discusses the firm's 2019 “Law Firm of the Year” award for Intellectual Property Law.

Alicia Lloreda Law Firm of the Year

After 30 Years, Kevin R. Casey Looks Back on IP Law

by Best Lawyers

Kevin R. Casey, the 2019 "Lawyer of the Year" winner for IP Law in Philadelphia talks about his practice and career.

Kevin R. Casey 2019 "Lawyer of the Year"

Understanding the Constitutionality of Patent Law

by John Powers

Ideas can be stolen, just like the machines or products they were used to create.

Why Patents Lead to Innovation

The Argument Against Self-Representation in Patent Cases

by John Powers

A look back at the 1983 Nilssen case, and what it means for patent law today.

Do I Need a Lawyer to File a Patent?

Four Disastrous IP Mistakes Most Companies Make

by Eric Vaughn-Flam

Registering and investigating trademarks are just the beginning when it comes to keeping your intellectual property safe.

Four IP Mistakes and How to Avoid Them

Famous Songs Unprotected by Copyright Could Mean Royalties for Some

by Michael B. Fein

A guide to navigating copyright claims on famous songs.

Can I Sing "Happy Birthday" in Public?

New European Unitary Patent Is Not-So-Wonderful

by Michael B. Fein

If the European Parliament and the 25 participating states were trying to emulate a U.S. patent and replace the present Balkanized system wherein each state has its own patent granting authority and courts handling patent litigation, it has failed miserably.

European Unitary Patent

Supreme Court Rejects the 'Promise of the Patent,' Redefines Canada’s Patent Utility Requirement

by Julie Desrosiers and Michael Shortt

The nine judges of the Supreme Court ruled on Friday that the so-called “promise doctrine” was not part of Canadian patent law, and laid out a new approach to the utility requirement which substantially lowers the bar to proving usefulness of patented inventions.

'Promise of the Patent'

Victory for The Slants and Redskins

by Carol Steinour Young and Emily Hart

On June 19, 2017, the United States Supreme Court settled the issue of whether an offensive name—in this case, an Asian-American rock band called “The Slants”—can properly be registered as a trademark.

The Slants Legal Case Decoded

Trending Articles

The Best Lawyers in South Africa™ 2023

by Best Lawyers

Best Lawyers proudly announces lawyers recognized in South Africa for 2023.

South African flag

Announcing the 2023 The Best Lawyers in America Honorees

by Best Lawyers

Only the top 5.3% of all practicing lawyers in the U.S. were selected by their peers for inclusion in the 29th edition of The Best Lawyers in America®.

Gold strings and dots connecting to form US map

Best Lawyers Voting Is Now Open

by Best Lawyers

Voting has begun in several countries across the globe, including the United States, the United Kingdom and Europe. Below we offer dates, details and answers to voting-related questions to assist with the voting process.

Hands holding smartphone with five stars above phone

Best Lawyers: Ones to Watch in America for 2023

by Best Lawyers

The third edition of Best Lawyers: Ones to Watch in America™ highlights the legal talent of lawyers who have been in practice less than 10 years.

Three arrows made of lines and dots on blue background

Announcing The Best Lawyers in Australia™ 2023

by Best Lawyers

The results include an elite field of top lawyers and firms from Australia.

The Best Lawyers in Australia™ 2023

Announcing the 2023 The Best Lawyers in Canada Honorees

by Best Lawyers

The Best Lawyers in Canada™ is entering its 17th edition for 2023. We highlight the elite lawyers awarded this year.

Red map of Canada with white lines and dots

Famous Songs Unprotected by Copyright Could Mean Royalties for Some

by Michael B. Fein

A guide to navigating copyright claims on famous songs.

Can I Sing "Happy Birthday" in Public?

Could Reign Supreme End with the Queen?

by Sara Collin

Canada is revisiting the notion of abolishing the monarchy after Queen Elizabeth II’s passing, but many Canadians and lawmakers are questioning if Canada could, should and would follow through.

Teacup on saucer over image of Queen's eye

Rising Transfer Taxes

by Angus C. Beverly

Transfer taxes in California are becoming a statewide trend with potentially national implications. Here is a breakdown of the effects in several cities.

State of California in orange with city in backdrop

What the Courts Say About Recording in the Classroom

by Christina Henagen Peer and Peter Zawadski

Students and parents are increasingly asking to use audio devices to record what's being said in the classroom. But is it legal? A recent ruling offer gives the answer to a question confusing parents and administrators alike.

Is It Legal for Students to Record Teachers?

The Upcycle Conundrum

by Karen Kreider Gaunt

Laudable or litigious? What you need to know about potential copyright and trademark infringement when repurposing products.

Repurposed Products and Copyright Infringemen

Caffeine Overload and DUI Tests

by Daniel Taylor

While it might come as a surprise, the over-consumption of caffeine could trigger a false positive on a breathalyzer test.

Can Caffeine Cause You to Fail DUI Test?

Wage and Overtime Laws for Truck Drivers

by Greg Mansell

For truck drivers nationwide, underpayment and overtime violations are just the beginning of a long list of problems. Below we explore the wages you are entitled to but may not be receiving.

Truck Driver Wage and Overtime Laws in the US

Best Law Firms® Research Has Begun

by Best Lawyers

Best Law Firms® rankings are annually produced awards recognizing the top law firms across the United States. We are here to offer insight into the submission process for all eligible firms.

Black background with colorful squares and faces

Choosing a Title Company: What a Seller Should Expect

by Roy D. Oppenheim

When it comes to choosing a title company, how much power exactly does a seller have?

Choosing the Title Company As Seller

Thirteen Years of Excellence

by Best Lawyers

For the 13th consecutive year, “Best Law Firms” has awarded the most elite and talented law firms across the country through a thorough and trusted data review process.

Red, white and blue pipes and writing on black background