Patent search engine and patent informatics company PatentCafe announces the launch of its Patent Factor Index Report (PF/i), an online patent analysis tool that evaluates the Legal, Commercial and Technological quality and valuation indicators of an issued patent.

Used for investment and acquisition due diligence, to support product strategies, help establish licensing value, or to evaluate infringement litigation risk, the PF/i Reports provide a fast, reliable overall assessment of a patent’s strengths and weaknesses.

The computerized report, which uses the company’s human-like Latent Semantic Analysis patent search engine, is a significant advancement for computer-based patent evaluation. The PF/I reports are an affordable alternative to the hand-researched patent reports that consulting firms charge thousands of dollars for. The PF/I Reports may even outperform humans since the semantic engine, which searches nearly 3 million US patents, finds highly relevant patents that even the most skilled patent searchers miss.

The PF/I Report, the latest addition to PatentCafe’s quickly expanding line of patent informatics solutions, performs dozens of calculations for each patent being evaluated. The reports also integrate with the recently introduced ICO Patent Portfolio Manager, and ICO Patent Competitive Intelligence Alerts.

Sneak previews of the solution have already found favor with university, venture capital, patent licensing, and Fortune 500 executives, as well as intellectual property consulting organizations – and for good reason: the reports perform in about a minute as much as a patent professional can accomplish in a few days.

Andy Gibbs, the company’s CEO notes: “during the 1960s, patent counts and frequency of occurrence of certain patent indicators were proven as reliable statistical predictors of economic, legal and technological behaviors of patents. We believe our PF/i Reports are the single most comprehensive patent evaluation modeling tool ever made commercially available”.

The PF/i Report is the first to combine over 50 years of collective work on proven patent data modeling by renowned economists, mathematicians and researchers, including Criscuolo, Hall, Jaffe, Trajtenberg Reitzig Schankerman, Lanjouw, the seminal work of Griliches and Scherer, as well as PatentCafe’s own innovation analysis model introduced in 1996.

With 85% of the market cap of the Fortune 500 companies attributable to intangible assets, being able to value, or evaluate patents is no longer a luxury, but a must. But computerizing patent analysis is tough. Gibbs says “the few patent reports currently available compute a total ‘score’ or ‘rating’. Single scores distort the real world analysis that demands separate consideration of the three core patent value components: the Legal, Commercial, and Technological factors.”

Over the past few years, critics have argued that the US Patent and Trademark Office has issued thousands of poor quality patents that should never have been issued in the first place. An example is Smucker’s recent patent number 6,004,596 for a crustless peanut butter and jelly sandwich.

The Patent Factor Index Report for the ‘596 patent scored a “zero” for patent validity of the PB&J patent because of the more than 100 closely related patents it identified while computing the report. One of the relevant prior art patents cited by the PF/i report was Little Caesar’s 1995 pizza pocket patent no. 5,756,137, “Method for preparing a [stuffed] baked dough food product”.

The Smucker’s patent scored well in the PF/i Commercial Factors section, and indeed Smucker’s sales of its PB&J “Uncrustables” has been sweet. But making a “GO” investment decision based on commercial scores alone, without assessing the corresponding Legal risks or Technology value, can be a misuse of the company’s time and money.

“The bottom line”, says Gibbs, “is that the PF/I report shows that the crustless PB&J may be a profitable slice of Smucker’s business pie, but as the Patent Office and critics attest, the technological value may not rise to the level of patentability. Our new reports empower non-patent professionals to get an excellent perspective on a patent’s value in just minutes.”

Using proven models such as multivariate regression, econometric, citation and bibliometric analysis of patents that analyze large data sets of patent indicators, the PF/i reports analyze the three critical indicators to help determine “value’. The final report provides more than a patent score, it provides backup information such as a list of potential patent licensees for the patent portfolio manager, and lists of closely related patents that litigators may use for invalidity defense in a patent infringement suit.

The PF/I reports, more than 10 pages long, even provide insight on the patent’s ability to withstand an opposition (such as invalidity attempts against it), and predict the likelihood of a patent being the subject of a patent lawsuit.

Individual PF/i Reports for any US patent issued since 1976 may be purchased online for under $300. Analysts, litigators and Biz Dev managers may obtain unlimited licenses to PF/i Reports by contacting PatentCafe.