Limitations of identifying M&A/investing target companies by patent analysis
There are certain limitations to using patent analysis to identify M&A/investing companies.
First, patent analysis does not include financial or marketing achievements. However, i) the recent drop in patent applications, ii) the recent drop in overseas patent applications, and iii) the setting of security over patents are signs of financial deterioration that can be read from patents.
Second, good patents or technologies do not always make good M&A/investments targets, especially for app-based companies where traffic or user base is important, or in technical fields with short technology life cycles and rapidly changing technology environments, patents accumulated in the past may not play a big role.