Increasing Demand and Market Growth of Patent Valuation
Fortune Business Insights forecasts the patent analytics industry to rise from $1,007.8M in 2023 to $2,364.6M in 2030, a CAGR of 13%.?
Patent valuation has become crucial for businesses, investors, and policymakers in our modern, knowledge-based economy. It is pivotal in mergers and acquisitions, licensing negotiations, and litigation proceedings.?
A study by the European Patent Office found that industries that use intellectual property rights intensively account for 45% of GDP in the EU, highlighting the economic impact of patents and their valuation.
Why is there such an increasing demand for patent valuation? What is the future of patent valuation? We will cover them all in this article.
Factors driving the increasing demand for Patent Valuation
Two crucial factors are driving up the demand for patent valuation:?
Let's understand these main drivers in detail:
Growth in Intellectual Property (IP) Filings
Active patents increased by 4.1% in 2022 to reach over 17.3 million globally. Notably, China held the lead with the greatest number of active patents (4.2 million), followed by the US (3.3 million) and Japan (2 million).
There's been a marked rise in intellectual property filings globally. This uptrend is driven by the need to protect innovative outputs and capitalize on them through licensing, mergers, or acquisitions. The global patent filings in 2022 reached 3.5 million, a 1.7% increase from the previous year.
This uptick is driven by the need to protect innovative outputs and capitalize on them through licensing, mergers, or acquisitions. The growth in IP filings reflects increased innovation activities and emphasizes the importance companies now place on their intellectual property portfolios as core business assets.
Increasing R&D Investment
Increases in public and private funding for research and development have contributed significantly to the overall upward trend in R&D spending worldwide. The primary objectives of this investment are to promote innovation and acquire competitive advantages in different markets.?
Source: WIPO
In 2022, companies in the United States spent over €500 billion on research and development, with investments from China and the European Union closely behind. The top 2,500 R&D spenders worldwide spent over €1.3 trillion. This tremendous influx of funding into R&D requires comprehensive patent valuation tools to monitor and maximize intellectual asset value.
The need for analytics tools has grown because of more research and development (R&D) in industry, healthcare, IT telecommunications, and other fields. Consumers in these sectors spend a great deal of money before releasing groundbreaking innovations to the market to secure intellectual property rights.
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Technological Advancements Impacting the Field
Technological advancements are reshaping patent valuation, with Large Language Models (LLMs) and generative AI leading the charge. These AI systems excel in natural language processing, revolutionizing several key areas:
Market Growth Analysis
Technological developments and rising demand across various industries are propelling the market for patent analytics' significant expansion. Key aspects of this market expansion include:
Market projections
The market value is expected to double from USD 1,007.8 (2023) to USD 2,364.6 (2030), growing at a robust CAGR of 13%. This significant growth reflects the rising importance of patent analytics in business strategy and innovation.
Regional trends
Regarding technological development and intellectual property filings, North America is at the top of the market. The region's dominance is particularly evident in the IT and healthcare sectors. Europe and Asia-Pacific are also showing substantial growth, with increased investments in product development and a surge in patent applications.
Industry adoption?
Key sectors driving demand include IT & Telecommunications, Healthcare, and BFSI (Banking, Financial Services, and Insurance). These industries utilize patent analytics for various purposes:
Key players and innovation
The market is characterized by dynamic activity from key players continually developing new platforms and solutions. In this space, leading companies like Anaqua Inc., LexisNexis, and Clarivate Analytics offer cutting-edge tools to help companies better manage and evaluate their patent portfolios.
Choose Eqvista’s Valuation Services for Your Business!
Patent valuation trends are evolving rapidly, driven by biotechnology, blockchain, and AI innovations. These advancements create new opportunities and challenges for businesses seeking to maximize their intellectual property value, and expert valuation services are becoming crucial.
At Eqvista, we specialize in navigating these complexities. Our comprehensive services include professional valuation, 409A valuations, and cap table management. We employ cutting-edge methodologies and proprietary algorithms to deliver accurate, market-aligned valuations. We ensure our clients obtain current strategic insights by keeping our team updated on recent advances in the field.
Contact us to explore how we can support your patent valuation needs and drive your business forward.