Thoughts about two common KPIs in patent management

A presentation recently by Ralph Schroeder of Hyperion Research Group listed the ten most common key performance indicators (KPIs) and metrics used in intellectual asset management (IAM). Eight of them made complete sense to me, but two left me with questions.

“Number of own patents v. competition” was one of them while the other was “Patent usage (e.g., % patents in products, licensed, etc.)”. Regarding a company’s patent portfolio in comparison to the competition’s portfolio, that seems to be a crude measure rife with assumptions. Crude because sheer numbers of patents owned poorly indicates the quality, strength and centrality to one’s business. Assumption ridden because you have to pick your competitors appropriately and then the specific segments where your patents go head to head. The subjectivity and judgment is obvious.

The patent usage metric also raised questions for me. Your patents that bring in royalties or other benefits through license agreements can be pinned down precisely, but the percentage of your patents in products brings many more challenges. Even more difficult would be to attach revenue generated by particular patents.

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