Category Royalty Compliance Analysis

Question / Issue Does the licensee (or sublicensee) operate in markets where conducting royalty audits might be problematic?

Sample Commentary Except for Japan (where language and cultural issues make conducting royalty audits challenging), royalties are expected to be collected in regions in which it is relatively easy to conduct high-integrity royalty audits.

Category Internal Valuation Analysis

Question / Issue In how many jurisdictions were the patents filed? How does this compare to the patentee's historical filings (in multiple jurisdictions)?

Sample Commentary The subject patent families were filed in an average of seven jurisdictions. This compares favorably to the company's historical average of filing patent families in four jurisdictions.

Category Analysis of Technical Review

Question / Issue Were the parameters of the testing / technical review changed before the technical review was published?

Sample Commentary According to my discussions with management, the parameters of the technical review remained consistent from the initiation of the technical review until the publication of the technical review report.

Category Provenance Analysis

Question / Issue What is the ratio of the inventor's patents divided by his age?

Sample Commentary For inventor Thomas Petersnick, the ratio of issued patents divided by his age is 0.25 (10 patents / 40 years old). For inventor Marvin Gateson, the ratio of issued patents divided by his age is 0.10 (5 patents / 50 years old).

Category Chain of Title Analysis

Question / Issue Is the first company that received assignment of the subject patent now defunct?

Sample Commentary The first company to which the assignment had been made is now defunct. While I believe that the initial assignment was properly effected and the related records are well maintained, if this proves not to be the case, this issue raises a potentially catastrophic problem. If there is a problem with the initial assignment, it may be very expensive to revive a company that has been defunct for a long time. The process may require paying many years of back franchise taxes to the state in which the initial assignee was incorporated.

Category Apportionment Analysis

Question / Issue What does the company's organizational chart reveal about the value management places on different departments?

Sample Commentary In my opinion, Alpha Company's success is largely a function of its intangibles, namely its Supply Chain Management and its patent-protected innovations. I believe that only 25% of the subject company's intangible value should be apportioned to its patents. This is because Alpha's management clearly holds its Supply Chain Management in higher regard than its patents. To wit:

• The current CEO was the former VP of Supply Chain Management and no one from either the Research Department or Patent Department has ever been nominated to become the CEO of Alpha Company;
• The current VP of Supply Chain Management reports directly to the CEO while there are three layers of management between the Patent Director and the CEO;
• The size of the Supply Chain Management department is much larger than the Patent Department and its professionals are much more highly compensated than the patenting team; and,
• The Supply Chain group is eligible for as many as twenty awards, enjoys lavish retreats every year and are allocated parking spaces very close to the entrance of Alpha Company's headquarters whereas the patenting team is eligible for only six awards, enjoys no retreats and its parking spaces are on the outer perimeter of Alpha Company's campus.

Category Encumbrance Analysis

Question / Issue To what extent are there prohibitions against litigating against the initial patentee's customers?

Sample Commentary The buyer of the subject patents would be prohibited from asserting against Alpha, Beta and Delta companies for three years from the date of purchase of the subject patents.

Category Opposition Analysis

Question / Issue If the patent was sold or licensed, did the inventor commit to cooperate in post-grant opposition?

Sample Commentary The inventor has committed to cooperate in post-grant opposition proceedings which could be important in terms of narrowing claims so as to preclude invalidation attempts or to target infringers.

Category Ability to Detect Infringement

Question / Issue What is the level of ease / difficulty of detecting infringement of the subject patents?

Sample Commentary It will be very difficult to detect infringement. The invention can be detected only with specialized, uncommon test equipment or inordinately expensive procedures.

Category Patent Lawyer Analysis

Question / Issue Did the lawyer that drafted the patents have patent litigation experience?

Sample Commentary Marc Johnson has been involved in patent litigation matters throughout the world. This is a positive indication of the patents' abilities to withstand invalidity attempts since lawyers who draft patents and that also have backgrounds in litigating patents can better determine where vulnerabilities might lie should such patent become embroiled in litigation.

Category Provisional Patent Application Analysis

Question / Issue Is there at least one inventor that is common to the provisional patent application and non-provisional patent application?

Sample Commentary The subject patent meets the commonality requirement with respect to the provisional patent application because there is at least one inventor common to both the provisional and the non-provisional patent application.

Category Prior Art Search Analysis

Question / Issue Were the prior art searches equipped to detect synonyms?

Sample Commentary The company that was commissioned to conduct the prior art search was instructed to search for synonyms of key words used in the claims.

Category Patent Drafting Analysis

Question / Issue Did the law firm that drafted the patent have a policy of having documents reviewed by another attorney?

Sample Commentary It was the policy of Williams, Evens and Jones, the law firm that drafted the patent to have each piece of correspondence with the patent examiner reviewed by another attorney. It was related to me that this policy was in force with respect to the subject patents.

Category Patent Citation Analysis

Question / Issue What is the average age of the citations made by the patentee?

Sample Commentary The average age of the patent citations made by the patentee was 3.7 years from their publication dates. This indicates that the research behind the subject patent was based on relatively new inventions.

Category Drawings Analysis

Question / Issue Were the patent drawings used in marketing brochures?

Sample Commentary Two of the 12 drawings in the subject patent were used to market products bearing the patented features. This indicates that the drawings were highly descriptive.