Patent Monetization Reality Check: Can Your Patent Portfolio Survive Due Diligence? | IPWatchdog Unleashed

Patent monetization is often discussed as if the hard part begins when a patent owner makes the decision to license, sell, finance, or enforce its patent assets. That is a mistake and demonstrates a lack of understanding of the difficulties and complexities of patent monetization. By the time a patent owner is sitting across the table from a potential licensee, buyer, lender, litigation funder, or accused infringer, much of the outcome has already been fully determined. The real work begins years earlier in preparation for monetization.

That was the central theme of our conversation during the IPWatchdog Patent Masters™ 2026, which published earlier this week as an episode of the IPWatchdog Unleashed podcast.  I was joined by Dean Geibel, Chief Patent Counsel for Samtec, Inc., and Karl Maersch, who leads the Patent Advisory & Monetization practice at Hilco Global. The discussion came at an important pivot point in the program, as we moved from discussions about obtaining patents and managing portfolios into monetization and enforcement. But rather than jump immediately to litigation tactics or licensing strategy, we started where every serious monetization discussion must start—with the diligence required to understand what a company actually owns.

Knowing What You Own Comes First

As I explained at the outset, companies need to ask some basic but frequently uncomfortable questions before they can credibly pursue any monetization strategy. What patents are core? Which patents are defensive? Which patents may be more valuable to someone else than to the company that owns the patent or portfolio? Where has the company accumulated too much protection in one area, and has that concentration left gaps somewhere else? “If you don’t have the narrative about what you own, how can you do any of this?” I asked.

A patent portfolio is not valuable simply because it is large. Nor is it valuable simply because it maps to products that generate revenue, although both of those things can and do have great impact on value. Still, as a preliminary matter a patent portfolio becomes valuable when it can be understood, explained, defended, and successfully deployed. There must be a business narrative, a market narrative, and a litigation narrative. Without those, a patent portfolio will just be expensive to maintain and difficult to monetize.

Value Depends on Business Relevance and Litigation Credibility

Geibel framed the issue in practical, in-house terms. “The first thing I look at when I look at any patent is does it cover what we’re doing or does it cover what a competitor is doing?” he said. “And if it’s not, then I question its value.” That is the right starting point. Patent value does not exist in a vacuum. It depends on business relevance, competitive relevance, and enforceability. A patent that covers no meaningful product, no competitive activity, and no plausible future market behavior may still have technical elegance, but it is unlikely to move the commercial needle.

Geibel added two additional filters: whether the patent will survive litigation and whether a third party believes it will survive litigation. That distinction matters. A patent does not have to be litigated to matter, but it does have to be credible enough that a rational party that may be infringing takes it seriously. The reason for this litigation focus should be obvious: in many industries, licensing is driven less by abstract respect for patent rights than by a sober assessment of risk. If the accused party believes the patent can survive scrutiny and create exposure, licensing becomes a business option and not an emotional reaction.

Portfolio Diligence Requires Market Intelligence

Maersch approached the same question from the perspective of an outside advisor and monetization consultant. He described the process of helping companies create what he called a patent taxonomy: a disciplined effort to get their arms around the portfolio, evaluate what is core and non-core, map patents to revenue and growth curves, and determine what the portfolio means not only to the company but to the broader industry. In fact, the best monetization opportunities often arise when a company owns patents in an area it did not ultimately pursue, while others in the market did. In that situation, the usual business sensitivities around enforcement or licensing may be reduced because the company is not suing customers, suppliers, or strategic partners in its own active market.

According to Maersch companies do not pay enough attention to what is happening outside their own walls. “The piece that companies leave out is that feedback between what’s going on in the market and how we can improve our portfolio based on it,” he said. That feedback loop should not only influence prosecution strategy, but it should also help determine where the company places bets about how a technology may eventually come to market. In other words, a patent application should not merely memorialize what an inventor built yesterday; it should anticipate where competitors, customers, and the market are likely headed tomorrow. That is easier said than done.

As I said during the conversation, this is “the non-glamorous stuff,” but it is also “the essential stuff.” It is what allows a patent owner to understand not just what has been filed, but what has actually been obtained, which can often be completely different. A patent disclosure may begin with a commercially meaningful invention, but the issued claims may end up covering something much narrower, something entirely different, or something that no longer matters to the business. Without periodic review, business leaders will continue to make the choice to pay to keep patents alive that no longer advance any rational strategy.

Patent Valuation Is Harder Than It Looks

The valuation question is even harder. Geibel put it bluntly: “patent valuation is like alchemy.” A company may know that a product covered by patents generates substantial revenue in the United States, Europe, China, or elsewhere. But that does not prove the patents caused the revenue. Competitors may be staying out of the market because of the patent, or because there is a lack of demand, an inability to scale, tooling problems, a lack of technical know-how, brand strength that makes penetrating the market too difficult, or insufficient distribution. That is why a royalty stream, if one exists, makes valuation more concrete.

Maersch agreed that valuation involves both art and science, but emphasized that the purpose of the valuation matters. A fair market valuation, liquidation valuation, transfer pricing analysis, or lender-driven assessment may each use different assumptions. Existing revenue may be easier to analyze than projected revenue. Brand strength can complicate the picture because brands themselves create exclusivity and differentiation. The key is not pretending valuation is mathematically perfect. The key is ensuring that the assumptions are visible, defensible, and connected to a market reality.

Claims Strategy Must Match Monetization Strategy

One of the more poignant parts of our discussion involved picture claims. For years, many practitioners treated picture claims as a kind of consolation prize: claims so narrow that an examiner could not reasonably reject them. Over time, after interviewing hundreds of in-house counsel, I have come to see the issue differently. If a company has a real product, it needs claims that cover that product specifically. If the concern is knockoffs on Amazon, trade show copying, or exact competitive duplication, a good picture claim — particularly when paired with design patent protection — can be extremely valuable.

Maersch agreed, but with an important caveat. “You have to have picture claims, but you can’t only have picture claims,” he said. That is exactly right. Picture claims can protect the company’s own product and provide direct enforcement utility against copyists. But if the entire portfolio consists only of narrow claims covering exactly what the company sells, there may be little external value beyond direct knockoff protection. To create monetization opportunities, the company must also pursue claims that anticipate how others do or may practice the technology, how the market may evolve, and where competitors may place their own bets.

That led naturally into the role of design patents, which I believe remain one of the most under appreciated tools in the IP toolkit. “Design patents are so undervalued,” I said during the panel. They can be especially important where products must interoperate, match standards, or compete in markets where visual configuration and consumer-facing design matter. In the right circumstances, design patents can be powerful tools against knockoffs, particularly when timing matters and enforcement pressure must be brought quickly. Of course, like picture claims, you can’t simply have design patents, but it is a mistake not to have at least some if you are making money selling a tangible product.

Trade shows also emerged as a practical source of market intelligence. Companies that want market-informed portfolios need to know what competitors are showing, where customers are moving, and what salespeople are saying. Patent strategy should not be built in an internal legal silo. It should be informed by inventors, engineers, sales teams, marketing teams, business unit leaders, finance personnel, and outside counsel. A portfolio that is disconnected from the business will eventually become a maintenance-fee liability instead of a strategic asset.

Monetization Is the Result of Portfolio Discipline

The broader lesson is straightforward. Patent monetization is not an event. It is the downstream consequence of years of disciplined portfolio development. A company that waits until it wants to license or sue before asking whether its patents are commercially relevant, enforceable, properly scoped, globally aligned, and market-informed has waited too long. Or, at the very least now has a substantial project that must be undertaken before any decision on turning patents into revenue can be made.

It is critical to remember that the best patent portfolios are built with some end in mind. They protect current products, anticipate competitor behavior, account for market evolution, survive litigation scrutiny, and give business leaders options. They are periodically reviewed and pruned. They are mapped to products, revenue, business units, competitors, and future opportunities. They are supported by prior art searching and landscape intelligence. They are not merely accumulated; they are managed. And luckily, regardless on the strategy a patent owner ultimately employs the responsible portfolio development, cultivation and positioning is largely the same regardless of the end strategy, particularly in the world we live in today where often licensing efforts go nowhere, and litigation becomes necessary to force infringers to the bargaining table.

The Reality Check for Patent Owners

The uncomfortable truth is that many patent portfolios will not survive serious due diligence. Some contain deadwood. Some contain claims too narrow to monetize. Some cover yesterday’s business strategy. Some are disconnected from the market. Some were prosecuted under budget constraints that made sense at the time but left the company with assets unlikely to withstand modern litigation pressure. But the opportunity is equally clear. Companies that take portfolio diligence seriously can find hidden value, reduce waste, improve future prosecution, and create real monetization options.

Patent owners do not need more patents for the sake of having more patents. They need better portfolios that can be explained, defended, licensed, sold, financed, and, when necessary, enforced. That is the reality check. Before a patent portfolio can generate revenue, it first must survive diligence.

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