Assessing the quality of patents and large patent portfolios based on quantitative approaches – Opportunities, threats and the new St. Gallen Patent Index™ (SGPI™) as an innovative and strong approach Marc Tobias (BGW, Switzerland) Imagine you need to present functional KPIs to the CEO; Imagine your company is redefining its technology strategy and you need to (re)value the patent portfolio; Imagine you need to develop a patent strategy with regard to an IP portfolio benchmark of your competitors; Imagine your Head of R&D is approaching you urgently to receive a first IP-Value-Assessment as well as IP-Trends in a totally new technology field for your company. Often companies and also governmental institutions need a quantitative assessment of patents and patent portfolios. But existing approaches have different challenges or shortcomings. Based on scientific research over several years the SGPI™ has been developed by a consortia lead by the Institute of Technology Management at the University of St. Gallen. This new approach is trying to overcome these shortcomings. The presentation will give a short overview on the scientific state of the art regarding quantitative patent portfolio assessment and discuss existing approaches as well as needs of companies and institutions. Further on the SGPI™ with its integrated bottom-up and top-down approach will be presented including sample results.

1. Assessing the Quality of Patents and
large Patent Portfolios based on quantitative Approaches –
Opportunities, Threats and the St.Gallen Patent Index™
ICIC 2013 – Vienna, 16th October 2013
Marc Tobias
T +41 71 511 2776
Marc.tobias@bgw-sg.com
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ICIC 2013 – Vienna
BGW AG - Management Advisory Group
Varnbüelstrasse 13, CH-9000 St. Gallen
T +41 71 511 2116
contact@bgw-sg.com
www.bgw-sg.com
BGW
Management Advisory Group
St. Gallen – Wien

2. Quantitative vs. Qualitative Approaches
How can we structure the different approaches?
Qualitative Approaches
Quantitative Approaches
Valuation Assignment of a monetary value to Assignment of a monetary value to a
a patent/patent portfolio by experts patent/patent portfolio by a market
mechanism (auction, financial market)
Rating
Assignment
of
qualitative Assignment of quantitative indicators
indicators based on a expert based on objective data from market
opinions
and patent databases (Patent Indices)
Source: Gassmann/Bader 2012
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BGW
Management Advisory Group
St. Gallen – Wien

3. Challenges within Companies
When shall we use quantitative approaches to analyse patents and patent
portfolios?
Three of several possible situations in your company that can be
handled using quantitative approaches:
1) Your company is redefining its technology strategy and you need to (re)value the
patent portfolio of your company and your competitors, presenting further functional
KPIs to the CEO
2) Your marketing or investor relations managers like to show the company`s
innovativeness by its patent power in an objective way
3) Your head of R&D is approaching you to receive a first IPR-value-assessment as
well as IPR-trends in a totally new technology field for your company
4) You are interested in licensing or selling a subportfolio and are looking for a first
overview on potentially interested companies
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BGW
Management Advisory Group
St. Gallen – Wien

4. Opportunities and Threats
What have to be considered when implementing quantitative approaches?
Opportunities
Threats
 Resource savings
 Not a detailed claim analysis
 Time advantages
 Statistical shortcomings to be
considered
 Cost reduction
 “2nd view” on the patent situation
 Objective and transparent analysis
 Trade-Off:
Analysis of few important factors vs.
a huge bundle of factors leading to a
loss of transparency and complicated
algorithms
Quantitative approaches are a strong tool
to analyse your patent portfolio
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Management Advisory Group
St. Gallen – Wien

5. Main Variables in Quantitative Analysis
What influences the quality of an analysis conducted via patent indices?
Correctness
Objectivity
Input
Scope
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Process
Output
Transparency
BGW
Management Advisory Group
St. Gallen – Wien

6. Main Indicators in Quantitative Analysis
What indicators should be incorporated in quantitative patent portfolio analysis?
Three main fields:
1
2
3
Technology
Market
Portfolio
Measured by:
e.g. forward and
backward citations;
age
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e.g. GDP;
industry specific
indicators
e.g. relative share of a
companies` portfolio within
the entire portfolio of a
technology
BGW
Management Advisory Group
St. Gallen – Wien

7. St.Gallen Patent Index™ (SGPI™)
Created in cooperation between…
BGW
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Management Advisory Group
St. Gallen – Wien
BGW
Management Advisory Group
St. Gallen – Wien

8. St.Gallen Patent Index™ (SGPI™)
What is the core idea of the SGPI™?
Market
Strength
of a
Patent
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SGPI™
Techn.
Relevance
of a Patent
Bottom-up
Quantitative single
evaluation of each
patent document
with respect to
technology, age
and target markets
Top-Down
Strength
of the
Portfolio
Bottom-up
Core Idea
Calculation of a comprehensive index enabling the valuation of single patents and the
patent portfolio by using a bottom-up and top-down approach within one single analysis
BGW
Top-down
Analysis of the
patent portfolio
in its entirety
with respect to
the technology
field
Management Advisory Group
St. Gallen – Wien

9. St.Gallen Patent Index™ (SGPI™)
In which fields can the SGPI ™ be used?
Company Level
Financial Market
Level
Governmental
Policy Level
Strategy Development
SGPI™ based Equity
Funds
Policy Development
Controlling
KPI in Financial
Transactions
Communication
Instrument
Communication
SGPI™ based Stock
Index
Benchmarking Cluster
and Regions
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10. St.Gallen Patent Index™ (SGPI™)
How does the SGPI™ work?
Further
analysis
possible
Patent /
Portfolio
Definition
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Data
Collection
Analysis and
Calculation of
the SGPI™
Results and
Discussion
BGW
Management Advisory Group
St. Gallen – Wien

11. Challenges within Companies
Why shall we use quantitative approaches to analyse patents and patent
portfolios?
Three of several possible situations in your company that can be
handled with quantitative approaches
1) Your company is redefining its technology strategy and you need to (re)value the
patent portfolio of your company and your competitors, presenting further functional
KPIs to the CEO
2) Your marketing or investor relations managers like to show the company`s
innovativeness by its patent power in an objective way
3) Your head of R&D is approaching you to receive a first IPR-value-assessment
as well as IPR-trends in a totally new technology field for your company
4) You are interested in licensing or selling a portfolio and are looking for a first
overview on potentially interested companies
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BGW
Management Advisory Group
St. Gallen – Wien

12. Sample Analysis
Specific IPC-class within the technology field for Lithium-Ionen Batteries
SGPI™ – Relative Shares of Total Value
1%
2% 1%
0% 1%
0%
SAMSUNG SDI CO LTD
SONY CORP
7%
MATSUSHITA DENKI SANGYO KK
LG CHEM LTD
18%
47%
SANYO ELECTRIC CO LTD
SHINETSU CHEM IND CO LTD
TOSHIBA KK
OHARA KK
23%
NEC CORP
HITACHI MAXELL KK
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BGW
Management Advisory Group
St. Gallen – Wien

13. Sample Analysis
Specific IPC-class within the technology field for Lithium-Ionen Batteries
SGPI™ – Relative Shares of R-Factor (Technological Value)
HITACHI MAXELL KK
NEC CORP
OHARA KK
TOSHIBA KK
SHINETSU CHEM IND CO LTD
SANYO ELECTRIC CO LTD
LG CHEM LTD
MATSUSHITA DENKI SANGYO KK
SONY CORP
SAMSUNG SDI CO LTD
0,00
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ICIC 2013 – Vienna
0,10
0,20
0,30
0,40
0,50
BGW
0,60
0,70
Management Advisory Group
St. Gallen – Wien

14. Sample Analysis
Specific IPC-class within the technology field for lithium-ionen batteries
Comparison: SGPI™ vs. simple patent counting
50,00%
45,00%
40,00%
35,00%
30,00%
25,00%
20,00%
15,00%
10,00%
5,00%
0,00%
© BGW AG 2013 | Page 14
ICIC 2013 – Vienna
BGW
Management Advisory Group
St. Gallen – Wien

15. Challenges within Companies
Why shall we use quantitative approaches to analyse patents and patent
portfolios?
Three of several possible situations in your company that can be
handled with quantitative approaches
1) Your company is redefining its technology strategy and you need to (re)value the
patent portfolio of your company and your competitors, presenting further functional
KPIs to the CEO
2) Your marketing or investor relations managers like to show the company`s
innovativeness by its patent power in an objective way
3) Your head of R&D is approaching you to receive a first IPR-value-assessment as
well as IPR-trends in a totally new technology field for your company
4) You are interested in licensing or selling a subportfolio and are looking for a
first overview on potentially interested companies
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ICIC 2013 – Vienna
BGW
Management Advisory Group
St. Gallen – Wien

16. Sample Analysis
Specific IPC-class within the pharmaceutical markets for cancer
Comparison: Future Portfolio Development
China
40%
35%
30%
25%
20%
15%
10%
5%
0%
2015
Japan
35%
2015
30%
2010
2010
2010
2015
2010
2015
25%
2015
2010
20%
2015
2010
15%
10%
5%
2010 2015
2010 2015
0%
Your
Company ACompany B Company
Company
C
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Your
Company ACompany B Company
Company
C
BGW
Management Advisory Group
St. Gallen – Wien

17. Sample Analysis
Specific IPC-class within the pharmaceutical markets for cancer
SE
NO
GB
DK
DE
RU
CA
FR
CH AT
IT
SP
US
CN
ME
JP
KO
IN
BR
AU
SA
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Management Advisory Group
St. Gallen – Wien

18. Sample Analysis
Specific IPC-class within the pharmaceutical markets for cancer
6 focus patents (green) belonging to one company ranked in comparison
to the top 20 patents of the analyzed overall patent portfolio
SGPITM Value Share of Total Top 20 Ranked Patents
18,00%
16,00%
14,00%
12,00%
10,00%
8,00%
6,00%
4,00%
2,00%
0,00%
xxx
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xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
BGW
xxx
xxx
xxx
Management Advisory Group
St. Gallen – Wien

19. Conclusion
The SGPI™ is a very clear and objective approach
1) Quantitative approaches are a very strong tool to analyse patents and patent
portfolios.
2) These approaches enable a first or further view on the patent situation.
3) They help to save important ressources in terms of time and money.
4) But one have to consider also statistical shortcomings.
5) The SGPI™ is a very transparent and objective approach.
6) The SGPI™ is able to analyse your patents and patent portfolio by using mainly
three factors and can be used in several situations.
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20. Thank you for your attention.
Marc Tobias
Senior Consultant
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ICIC 2013 – Vienna
Dr. Martin A. Bader
Managing Partner
BGW AG - Management Advisory Group
Varnbüelstrasse 13, CH-9000 St. Gallen
T +41 71 511 2116
contact@bgw-sg.com
www.bgw-sg.com
BGW
Management Advisory Group
St. Gallen – Wien

21. BGW AG – Spectrum of Competences
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22. Addendum
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