A patent portfolio is a set of families, not a set of patents.
Counting documents is the wrong unit because a family of eight patents sharing one specification protects one invention. Eight unrelated patents protect eight things badly.
Structure decides value. Where the coverage sits, how deep it goes, which markets it reaches, and whether it reads on what people actually build.
A large portfolio covering approaches nobody uses is worth less than a small one covering the thing everybody does.
The unit is the family
| Member | What it is |
|---|---|
| Parent | The original non-provisional |
| Continuation | Further claims from the same specification |
| Divisional | Claims to a distinct invention required to be split |
| Continuation-in-part | Adds new matter, gets a later date for it |
| Foreign counterparts | Same priority, national rights |
| Reissue | Corrects an error in a granted patent |
All family members share the specification and, for US members in a chain, the expiry date.
Term runs from the earliest non-provisional filing. A continuation filed in 2024 from a 2016 parent expires in 2036, not 2044 — which is the single most misread fact in portfolio review.
Depth within a family
| Layer | Covers | Role |
|---|---|---|
| Core claim | The central invention | What cannot be avoided |
| Implementation claims | Specific ways of doing it | Blocks the obvious routes |
| Improvement claims | Refinements | Extends the useful life |
| Alternative embodiments | Different approaches | Closes design-arounds |
| Method and apparatus | Different claim types | Reaches different infringers |
Depth is what makes a family hard to design around. One broad claim can be avoided or invalidated; a family with claims at several levels leaves fewer routes.
Continuations are how depth is added, and the window closes when the parent grants with nothing pending.
Claim type matters for who infringes. A method claim reaches the party performing the steps; an apparatus claim reaches the maker and seller. See patent application process.
Jurisdictional spread
| Coverage | Restrains |
|---|---|
| US only | US making, using, selling, importing |
| US + EP | Adds European markets, per validated state |
| + manufacturing country | Where the product is actually made |
| PCT pending | Preserves options, decides later |
| Nothing filed | Nothing |
Rights are national. A US-only portfolio does nothing about a competitor selling in Germany, though importation into the US remains reachable.
Manufacturing jurisdictions are undervalued. Coverage where the product is made can stop the supply chain rather than chasing distribution.
Each jurisdiction adds annual renewal cost, so spread should follow revenue. A four-country family generates up to twenty deadlines a year. See patent annuity.
Core versus peripheral
| Core | Peripheral | |
|---|---|---|
| Covers | The central invention | Implementations and improvements |
| If challenged | Portfolio value falls sharply | Limited effect |
| Design-around | Hard | Possible individually |
| Renewal priority | Always pay | Assess |
| Buyer interest | The reason for the deal | Supporting |
Buyers price the core and treat the periphery as supporting. A portfolio with a weak or narrow core is a collection of peripheral patents regardless of size.
Peripheral patents earn their place by closing routes, which is real value and not headline value.
Categorising for review
| Category | Test | Decision |
|---|---|---|
| Core | Practised, enforced, or blocking | Pay |
| Defensive | Useful if sued by a specific party | Pay while relevant |
| Licensed | Generating income | Pay while it exceeds cost |
| Dormant | Nobody practises the claims | Sell or lapse |
| Legacy | Covers a discontinued product | Sell or lapse |
Dormant is the largest category in most portfolios and the least examined, because nothing about a dormant patent demands attention until a fee falls due.
The categorisation should happen before the deadline, not at it.
What it costs to hold
| Fee | Due after grant | Large | Small | Micro |
|---|---|---|---|---|
| First | 3.5 years | $2,150 | $860 | $430 |
| Second | 7.5 years | $4,040 | $1,616 | $808 |
| Third | 11.5 years | $8,280 | $3,312 | $1,656 |
| Total per US patent | $14,470 | $5,788 | $2,894 |
Thirty large-entity US patents carry over $430,000 in lifetime fees, and foreign members add annual annuities that frequently exceed the US total.
The escalation forces re-evaluation three times, which is what the schedule is designed to do.
What the data shows about holding
| Ipiry Patent Survival Curve v1.0 | Rate |
|---|---|
| Survive the 3.5-year fee (2022 cohort) | 85.8% |
| Survive the 7.5-year fee (2018 cohort) | 64.6% |
| Reach full term (2014 cohort) | 41.4% |
| Abandoned before full term | 58.6% |
| Lost at the third fee | 23.2 points |
| Conditional: paid first two, pay third | 63.0% |
Computed from 27,273,654 USPTO maintenance fee records covering 8,262,336 US utility patents — see the patent survival curve.
Portfolios shrink by design. The conditional 63.0% is the useful benchmark: of patents already paid for twice, more than a third are still released at the third fee.
Worked example: two portfolios
| Portfolio A | Portfolio B | |
|---|---|---|
| Patents | 62 | 14 |
| Families | 51 | 3 |
| Continuations per family | 0.2 | 3.7 |
| Jurisdictions | US only | US, EP, CN |
| Claims read on shipping products | 6 patents | 11 patents |
| Average remaining term | 6 yrs | 11 yrs |
| Annual fee burden | High | Moderate |
How a buyer sees them
| Portfolio A | Portfolio B | |
|---|---|---|
| Structure | 51 unrelated singles | 3 deep families |
| Design-around difficulty | Low per patent | High |
| Manufacturing coverage | None | China covered |
| Diligence burden | 51 chains to verify | 3 |
| Likely valuation | Low despite size | Higher |
Portfolio B is a quarter the size and worth more. Depth, jurisdictional reach, and claims that read on real products all favour it.
Portfolio A's diligence burden is itself a discount. Fifty-one assignment chains to verify is weeks of work before anyone values anything.
What makes one saleable
| Requirement | Why |
|---|---|
| In force | 58.6% are not |
| Clean recorded ownership | A gap stops the deal |
| Claims reading on real products | The value |
| Meaningful remaining term | Under 3 years is hard to sell |
| No unresolved encumbrances | Liens, licences, obligations |
| Documentation available | File histories, prosecution records |
Recorded ownership is checked first and fails most often. An unrecorded assignment, a dissolved entity in the chain, or an employee agreement never executed each stop a transaction. See patent assignment database.
Remaining term is the constraint that arrives quietly. A patent worth selling at year eight is frequently unsellable at year eleven.
Running the review
| Step | Timing |
|---|---|
| 1. List every fee due in the next 18 months | Q1 |
| 2. Verify entity status | Same |
| 3. Recalculate at the correct rate | Same |
| 4. Check who practises the claims | Cheap per family |
| 5. Categorise | Core / defensive / dormant |
| 6. Start any sale process | Months before the deadline |
Eighteen months of lookahead is what makes selling possible. A review conducted in the final month leaves paying or lapsing.
Run it on families, not patents. Decisions about one member of a family affect the others. See patent portfolio management.
Patent portfolio: the checklist
- Count families, not patents. The family is the meaningful unit.
- Calculate expiry from the earliest non-provisional filing in each chain.
- Build depth through continuations while the window is open.
- File where the market and the manufacturing are, not everywhere.
- Identify the core explicitly. Everything else is supporting.
- Categorise every family as core, defensive, licensed or dormant.
- Model the full lifetime fee burden, including foreign annuities.
- Review annually against eighteen months of deadlines.
- Verify recorded ownership before you need to. Gaps stop sales.
- Prune deliberately. A patent sold before a deadline is worth something; one lapsed afterwards is worth nothing.