Return on Investment in Patents

Return on investment in patents (ROIP) is very similar to the common investment analysis metric Return on Investment (ROI), which measures the return or gain on an investment against the original cost of the investment. Return on investment in patents (ROIP) is essentially the same logic behind return on investment (ROI), but applied specifically to patents. Thus, a positive annual ROIP would mean that dollars generated from having a patent exceeded dollars spent on filing, maintaining, and holding the patent for a 365 day period. Conversely, a negative annual ROIP would mean that the cost associated with filing, maintaining, and holding a patent exceeded the revenue generated by holding said patent for a 365 day period.

HOW IS ROIP USED?

There is an ever-increasing awareness among corporations, patent attorneys, and inventors that patents are business assets. As such, many of these entities are starting to treat patents as an integral part of corporate strategy. Since Fortune 1000 companies often hold large numbers of patents, they in particular have become very interested in maximizing a patent’s value. ROIP is used as one of the metrics for objectively analyzing a patent’s value to the corporation or holder. Several key business decisions are made based, at least in part, on the ROIP metric:

• Whether to license certain patents
• Whether to buy or sell certain patents
• Whether to renew certain patents

As the innovation economy continues to evolve and landscapes become even more competitive, the use of ROIP will only continue to increase.

COMPANIES DEVOTED TO MAXIMIZING ROIP

ROIP is a relatively new concept, so there are few firms that specialize in helping corporations, patent attorneys, and innovators maximize their ROIP.

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