Patent technology indicators

Patents are the most valuable form of information available for competitive analysis. Different indicators are being used to predict the value of a patent or the strength of any company. Tech-Line® uses three standard patent indicators and six advanced citation indicators invented by CHI to analyze corporate technology strength.

All indicators are calculated for particular companies, on specific technologies over a period of time. Because patent citation rates differ by technology, comparisons should be made only within groups of similar technologies.

basic indicators

* Number of patents

* Percentage of patent growth in the area

* Percentage of company patents in the area

Patent Citation Indicators

* Citations per patent

* Current Impact Index (CII)

* Technology Strength (TS)

* Technology Cycle Time (TCT)

Scientific linkage indicators

* Scientific Link (SL)

* Scientific Force (SS)

basic indicators

Tech-Line uses three indicators based on patent counts:

Number of Patents: Count of a company’s issued patents in the US patent system. Because the US is such a large market, even non-US companies seek US patent protection for their innovations more important. By tracking the number of patents, patent growth, and distribution across technology areas, you can monitor and compare the evolution of companies’ R&D activity by technology area. The number of patents tracks R&D spending, but can be broken down between technologies, whereas R&D spending typically cannot.

Area Patent Growth Percentage: The change in the number of patents from one time period to another, expressed as a percentage. This identifies technologies receiving increasing emphasis and those where innovation is declining. It also identifies companies that are increasing their technological development, and those whose R&D&i is exhausted.

Percentage of Company Patents in Area: The number of patents in a technology area divided by the total number of patents in that company, expressed as a percentage. This tells you which technologies form the core of a company’s IP portfolio.

Patent Citation Indicators

Four Tech-Line indicators are derived from analysis of references on patent title pages, or “patent citations.” References are placed in patents to help establish the novelty of the invention. Inventions must be novel to obtain a patent. To enable the patent office examiner to assess the novelty of the invention, a patent document lists “prior art” in the form of references to prior patents in the same area. Patent citations also play an important role in patent infringement litigation by delimiting the domain of the patent.

By counting citations, we reverse the perspective and count how many citations a patent receives from subsequent patents. This is a way of counting how many times a patent becomes prior art in future technological advances. Research has established that highly cited patents represent economically and technically important inventions. Details on the history and validity of patent citation analysis can be found in the Tech-Line background paper.

Citations per patent: Count of citations received by a company’s patents from subsequent patents. This allows you to assess the technological impact of patents. High citation counts are often associated with major inventions, which are critical to future inventions. Companies with highly cited patents may be more advanced than their competitors and have more valuable patent portfolios.

Current Impact Index (CII): The number of times a company’s previous five years of patents are cited in the current year, relative to all patents in the US patent system. Indicates the quality of the patent portfolio. A value of 1.0 represents the average citation frequency; a value of 2.0 represents twice the average citation frequency; and 0.25 represents 25% of the average citation frequency. In a Tech-Line company report, you can identify the technologies on which companies produce their best work. In a Tech-Line technology report, you can compare a company’s technology quality to other companies and to the technology average. (CIIs vary by technology. For example, they are high in semiconductors, biotech, and pharmaceuticals, and low in glass, clay, and cement, and textiles.) CIIs have been found to predict a company’s stock performance.

Technology Strength (TS): Quality-weighted portfolio size, defined as the number of patents multiplied by the current impact index. Using Technology Strength, you may find that even though one company has more patents, a second company may be more technologically powerful because its patents are of better quality.

Technology Cycle Time (TCT): Indicates the speed of innovation or the rate at which the technology is evolving, defined as the average age in years of the US patent references cited on the front page of US patents. the company. Companies with shorter cycle times than their competitors move faster from old technology to current technology. In semiconductors, cycle times are short (3-4 years); in shipbuilding they are long (more than 10 years). The average is 8 years. In fast-moving technologies, TCT allows you to identify companies that can gain an advantage by innovating faster.

Scientific linkage indicators

Two Tech-Line indicators are derived from the analysis of the cover of the patents. Patent documents must cite the relevant prior art (see patent citation). Increasingly, patents cite non-patent documents as prior art, and many of these are articles in scientific journals. The Tech-Line Science Linkage and Science Strength indicators are based on counts of patent references to scientific articles. Patents that reference many scientific journal articles are different from patents that do not reference any. For example, a patent on a genetically modified seed or on a process control based on a neural network may refer to 10 or more scientific articles. In contrast, an improved design for an engine part may not refer to either. The Tech-Line indicators are based on this difference, differentiating companies and technologies that are high-tech from those that are not. This is particularly useful in areas such as agriculture, where patents for plows are mixed with advanced agrobiotechnology. Science Linkage can differentiate between the two.

Science Linkage (SL): The average number of scientific references cited on the cover of the company’s patents. A high scientific linkage indicates that a company is building its technology based on advances in science. High-tech companies tend to have a stronger connection to science than their competitors. Science Linkage allows you to pick out high-tech players even in traditional areas like agriculture or textiles. Science Linkage has been found to predict a company’s stock market performance.

Scientific strength (SS): the number of patents multiplied by the scientific linkage. Indicates the total amount of scientific linkage activity of a company. The Power of Science reminds us that while a small biotech company may use science very intensively, a large pharmaceutical company is, in fact, more reliant on science because it makes use of research in an R&D effort. much older.