The Patent Portfolio and Its Effect on Stock Price

• Author: Alexander I. Poltorak/Paul J. Lerner
• Profession: Is the founder, Chairman, and CEO of General Patent Corporation (GPC), an intellectual property (IP) firm focusing on intellectual property strategy and valuation, IP licensing, and enforcement/Is the Senior Vice President and General Counsel of General Patent Corporation (GPC)
• Pages: 180-184

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CHAPTER 10

The Patent Portfolio

and Its Effect on

Stock Price

After reading this chapter you will be able to:

Identify those firms in an industry that are likely to experi-

ence the greatest increase in value.

Recognize three figures of merit useful in analyzing patent

portfolios and their potential impact on stock pr ice.

It is generally believed—or hoped—that research and development

(R&D) expenditures by a business corporation will lead to increased

profits and, ultimately, to an increase in the value of the corporation

and the price of its stock. Empir ical research tends to support this belief.

It should be apparent, however, that all such expenditures do not

produce equal results. Some R&D programs are technologically success-

ful, while others are not. Some programs are focused on areas of declin-

ing interest or value, producing only incremental improvements to

mature technologies, while other programs are pioneering efforts in

promising new fields. Some otherwise successful R&D efforts result

in products that are market failures.

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