Benefits of patent data
Highly objective early stage data
Since patent data is related to R&D, it helps to detect technology innovations objectively at an early stage.
Patents are virtually the only objective data in the technology field. Patents play an important role in decision-making based on objective data, and are an important tool in the decision-making process to persuade others that you are right.
Proactively recognize key person
For M&A/investments in technology companies, prior awareness of key research person is important. In M&As/investments, retention of key personnel can be reflected in the terms of the contract or the contract price.
Contribute to price control in M&A/investments
When shortlisting or negotiating with technology companies for M&A/investments, prior awareness of a company's financial vulnerability is important for acquiring assets at a lower price. There are several important signals in patent data that indicate a company's financial vulnerability. These include i) a sharp decline in (overseas) patent applications, ii) an increase in the abandonment of annual maintenance fees for patents in possession, and iii) the setting up of security over patent rights.
In addition, a systematic and precise analysis of the patent vulnerabilities of the technology companies targeted for M&A/investing companies may also help to reduce their own acquisition price.
In the event of an exit, resale, or M&A, reflected in the price of the company
Play a big role in the event of exit, resale, or M&A. In particular, patents in possession of a small or medium-sized company may end up in the hands of a large or global company through M&A. In this case, patents have a tremendous leverage effect. It is true that small and medium-sized companies have no power to enforce the patents in possession in the real world. However, large companies/global companies have the power and ability to project their patent rights to the market. Because of this, a strong patent portfolio is reflected in the price of the company in M&A, etc.
An effective screening source for early stage technologies/companies
Fourth, for early technologies or small technologies or rising technologies, there are few good sources of information except patents. The technologies that are introduced in the news or broadcast tend to be the ones that readers have heard of or are big technologies. It is difficult to obtain reliable data from news, blogs, social media, etc. for early and small technologies that are rising. Global patent big data, which is a technology collective intelligence, is effective in discovering companies related to these early, small, and rapidly growing technologies.
Temporal precedence
In the forest of technology, there is nothing like patents to screen technology companies for M&A/investments, or to discover technology companies to invest in at a lower price when others are not aware of them. Because patents are based on R&D, they have an inherent advantage over financial/marketing data in that they have a temporal precedence over it.
Existence of relationship data
There are various relationships in patents, such as 'citation-forward citation' relationships and patent rejection relationships. A patent portfolio of an M&A/investing company may be heavily cited by a market leader's recent patents or act as a preceding patent to reject their recent patents. In this case, the M&A/investing company is often unaware of this fact, so it may not be reflected in the price of the company.
Market legally defense methods
Without the exclusivity of a patent, a company has no way to legally defend its (niche)market. Non-patent based technology companies have to spend much more cost to defend their market or clients base.