👉 Patent math, often referred to as patent accounting or patent valuation, involves using financial and statistical methods to estimate the economic value of a patent. The core idea is to translate the patent's potential future benefits into monetary terms, considering factors like market size, competitive landscape, development costs, and remaining patent life. This process typically involves forecasting future revenues or cost savings attributable to the patent, then discounting these projections to present value using an appropriate discount rate. Patent math also accounts for uncertainty by employing probabilistic models and sensitivity analyses to assess the range of possible outcomes. The goal is to provide a realistic, defensible estimate of the patent's worth for licensing, sale, or other commercial purposes, balancing financial metrics with strategic business considerations.
