In constructing the comparative radar diagrams 22 measures of portfolio performance are calculated in the three areas of legal, citation, and geographic strengths. In the “Example Patent Portfolio Metrics of Acquisition Target A” figure, the metrics associated with prosecution / maintenance / litigation are shown the upper left quadrant along the red arc. Those metrics associated with citations are shown along the bottom blue arc, and those with geographic strength are shown in the upper right quadrant along the green arc.
“Outstanding” in this evaluation method is defined as being two standard deviation units above the average for the particular metric being graphed. “Above average” in this evaluation metric is shown as the light yellow area on the graphic display and is defined as being above average but below two standard deviation units above the average. “Below average” is shown as the orange tinted area of the graphic. The rating of a particular portfolio is displayed as dots along the red line for each axis or arm of the spider diagram.
This example Acquisition Target A’s portfolio has no “outstanding” performance in any one area. The company had over six above average performance areas, making it a B+ portfolio (benefiting from how new and small the portfolio is). Of importance, it had intellectual property sharks following their work and scored high on ”IPC dispersity” and “claim length”. The portfolio has weak international coverage. In conclusion it is a defensive portfolio designed to support product offerings versus supporting licensing out programs. These attributes make it a possible partner for acquisition as this portfolio and strategy matches that of the acquiring company.
Another acquisition target’s portfolio is shown in the “Acquisition Target B” figure. This company’s portfolio had five “outstanding” performance areas. These were related to having the largest portfolio in the field, and all of its art is applications (new) versus patents. This company also had six above average performance areas. This pattern of results also made it a B+ portfolio, benefiting from breadth of disclosures from an examiner’s IPC standpoint. It has strong US but weak international coverage. The competitive intelligence conclusions derived from studying such a spider diagram concludes that this company also has a defensive portfolio designed to support product offerings versus supporting license-out programs. It too is another possible partner for the acquiring company.
From a due diligence standpoint both portfolios have overall strengths and weaknesses comparable to one another. Which one is better will depend upon the strengths and weaknesses of the other non-intellectual property aspects of the acquisition deal.