Competitive Impact

What is the Competitive Impact measure in PatentSight+?

How is it calculated?

Where can I find this measure in PatentSight+?

Summary

What is the Competitive Impact measure in PatentSight+?

Competitive Impact is a patent family–level indicator in PatentSight+ that measures the relative business value and strength of an individual patent family.

It represents the individual strength of a patent family and forms the foundation of the Patent Asset Index (PAI) framework.

Key characteristics:

• Calculated at the patent family level

• Reflects both technological importance and market importance

• Used to rank patent families globally

• Serves as the building block of the Patent Asset Index (PAI)

Since the Patent Asset Index is defined as the sum of the Competitive Impact values of all patent families in a portfolio, the Patent Asset Index of a single patent family equals its Competitive Impact.

(Active patent families have a Competitive Impact greater than zero. Inactive patent families always have a Competitive Impact of zero.)

How is it calculated?

Competitive Impact is calculated as:

Competitive Impact = Technology Relevance × Market Coverage

Both indicators are calculated at the patent family level.

Technology Relevance

Technology Relevance measures the technological importance of a patent family based on citations it has received (subsequent art citations) however, it is not a simple citation count. 

Several adjustments ensure comparability:

• Patent office citation practices
  Some patent offices cite more frequently than others. Citation counts are normalized to account for these differences.

• Age adjustment
  Older patent families have had more time to accumulate citations. Citation counts are adjusted relative to patent families of the same age.

• Technology field normalization
  Citation intensity varies across technology fields (based on IPC classifications). The metric adjusts for average citation behavior within each field.

Because of these adjustments, Technology Relevance is a relative indicator:

• The global average Technology Relevance in the database equals 1.

Market Coverage

Market Coverage measures the market size protected by the patent family. It is based on:

• The countries/authorities where the patent family has active members (granted or pending)

• The Gross National Income (GNI) of those countries

How it works:

• The US is assigned a reference value of 1 (largest GNI).

• Other countries are weighted relative to US GNI.

  • Example: If Japan’s GNI is roughly one-third of the US, a Japanese patent contributes approximately 0.3 to Market Coverage.

• Only active (in force or pending) patent family members are considered.

Final Calculation

After calculating:

• Technology Relevance (technical value)

• Market Coverage (market value)

They are multiplied:

This results in the Competitive Impact, representing the overall strength of the patent family.

Competitive Impact Deciles

PatentSight+ ranks all active patent families globally by Competitive Impact.

They are divided into ten equal groups (deciles):

• Decile 10 → Top 10% of patent families worldwide

• Decile 1 → Bottom 10%

This allows benchmarking of individual patent families or portfolios against the global distribution.

Note - If inactive patent families are included in a search, the ranking basis may change accordingly.

Relationship to the Patent Asset Index (PAI)

The Patent Asset Index (PAI) is calculated as:

PAI = Sum of (Competitive Impact of all patent families in a portfolio)

This means PAI reflects:

• Quantity → Number of patent families

• Quality → Strength of each family (via Competitive Impact)

PAI therefore measures the innovative strength of an entire portfolio.

Importantly, PAI can be calculated for:

• An entire company portfolio

• A technology segment

• A selected group of patent families

• Any defined subset of patents

Where can I find this measure in PatentSight+?

Competitive Impact appears in multiple areas of PatentSight+:

Patent Asset Index Methodology

• Competitive Impact is the core patent family–level metric used to calculate the Patent Asset Index. These measures are used in various charts and tables, and the Results list, in PatentSight+.

Owner Summary

Displays key performance indicators including:

• Patent Asset Index

• Portfolio Size

• Average Competitive Impact

• Average Technology Relevance

• Average Market Coverage

Charts and Tables

• Many charts and tables show Competitive Impact deciles and scores

• Find more information here about how the Competitive Impact measure, and key performance indicators of the Patent Asset Index are shown in the charts and tables of PatentSight+

Result List

• By default, search results are sorted by Competitive Impact

• Competitive Impact is displayed at the patent family level

Custom Field & Correlation Analysis

• Average Competitive Impact can be used in analytical comparisons

• Can be correlated with custom numeric fields

Summary

Competitive Impact is a core PatentSight+ indicator that measures the individual strength of a patent family.

It combines:

• Technology Relevance (citation-based, normalized technical value)

• Market Coverage (GNI-weighted market protection value)

By multiplying these two factors, PatentSight+ generates a robust, globally comparable measure of patent family strength.

Competitive Impact:

• Is calculated at the patent family level

• Forms the foundation of the Patent Asset Index

• Enables global benchmarking through decile rankings

• Is visible across multiple areas of PatentSight+ for analysis and comparison

Together with the Patent Asset Index, Competitive Impact provides a transparent and data-driven way to evaluate patent quality, market positioning, and portfolio strength.