The PDMA Handbook of New Product Development

19.2. Patent Portfolio Screening: What Is It? Why Do It?

Screening involves quickly examining each patent in the portfolio according to established evaluation criteria to identify—albeit on a preliminary basis—its commercial potential. This preliminary information is used to decide which patents should be selected for in-depth assessment. As indicated earlier, the assessment is used to determine more accurately a technology's commercial value and to decide whether to invest in NPD, market it for out-licensing, or do neither.

The goal of patent portfolio screening is to expend minimal time and cost in making a reasonably accurate preliminary value judgment. Spending too much time uses more resources than necessary to make a good decision about pursuing in-depth assessment. Spending too little time yields information insufficient to reduce the risks of making a bad decision. Those risks include wasting resources assessing a patent that does not have sufficient commercial potential as well as the opportunity cost associated with disregarding a patent with good, but not readily obvious, potential.

Patent portfolio screening has been most frequently used as a first step to generating revenue via out-licensing. Rather than venture into an NPD that is outside its core business(es), the company can generate fees and royalties by licensing its patents to noncompetitors. Texas Instruments, Zenith, and Dow Chemical each have licensed their unused patents to generate more than $100 million ...