LUDWIGSHAFEN, Germany/MIDLAND, Michigan – BASF SE and The Dow Chemical Co. have jointly announced their support for the Patent Asset Index, a new methodology that measures research and development (R&D) effectiveness, innovation strength and how these factors lead to sustained competitive advantage. Findings based on 2008 results rank BASF first in the overall Patent Asset Index. Dow ranks first in a critical measurement of the Patent Asset Index – Competitive Impact™.
The new Patent Asset Index, created by Holger Ernst of the WHU – Otto Beisheim School of Management, Vallendar, Germany, is a science-based metric that overcomes the key limitations of current patent analytics by offering a global perspective, more transparency and a more robust quality measurement for the assessment of patent portfolios. In comparison to other methodologies, the Patent Asset Index takes into account the total global patent portfolio of a company and is not restricted to a just a single country or a limited period of time.
Ernst, Chair of Technology and Innovation Management at WHU and expert in the area of measuring innovation, has initially applied his new methodology to rank the innovation strength of large, global chemical companies and plans to rank companies in other industries in the future.
The Patent Asset Index is comprised of several sub-components and measures the overall strength of a company’s patent portfolio. It is based on two factors: portfolio size (the number of worldwide active patent families) and competitive impact, which is the combination of technology relevance and market coverage. “Technology Relevance” measures the number of citations a patent receives in other patents, and “Market Coverage™” measures the extent of patent protection in global markets. Thus, the Patent Asset Index offers a more detailed, accurate and robust perspective than current methodologies used to measure innovation strength.
According to the 2008 results, Dow’s patents are the most cited in other patents, placing Dow first in the Technology Relevance measurement and thus also in the related Competitive Impact metric. BASF clearly leads the overall Patent Asset Index, showing the company’s global innovation strength.
For further information about method and results of the patent benchmarking based on the Patent Asset Index, visit www.whu.edu/tim/pai.