Patent Infringement Risk Exposure Analysis

by Fadi Micaelian, Matt Huey, Richard Schank and Sanjay Prasad

Fadi Micaelian

Intellectual Ventures, Portfolio Architect MountainView, CA, USA

Matt Huey

Intellectual Ventures, Intern, Santa Clara, CA, USA

Richard Schank

Intellectual Ventures, Head, Pricing and Portfolio Analytics, Mountain View, CA, USA

Sanjay Prasad

Intellectual Ventures, Client Account Executive, Mountain View, CA, USA

This paper analyses a company’s overall exposure to patent infringement actions. While companies currently assess their risk mainly by evaluating the strength of their portfolio in certain key class codes, often referred to as heat-mapping, this paper advocates an approach that considers a statistical perspective to patent infringement litigation outcome. The rationale behind this work is that, on an aggregate basis, litigation outcome encapsulates all the factors that affect the exposure of an entity. In order to characterize this exposure we have attempted to develop some metrics around the size of the company–expressed in annual revenue. Largely based on this determination, a web application has been developed to allow users to determine several key characteristics of risk by entering basic company information. This paper explains the assumptions, determinations and applications of this analysis and is focused mainly on patent litigation occurring within the software industry.

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