The fine line between over- and under-management of patent renewals can have steep financial consequences for those who get it wrong, according to a new analysis by LexisNexis Intellectual Property Solutions.
For nearly three decades, International Business Machines Corp. was the most prolific patent filer in the US.In 2019, the Armonk, NY-based multinational tech titan received 9,262 patents from the US Patent and Trademark Office — “the highest ever awarded to a single company,” IBM touted online at the time, capping 27 consecutive years as the patent prosecution frontrunner.
Although it lost the title in 2022 to Samsung Electronics, that was no accident.
Instead, IBM announced in 2020 a newfound emphasis on patent quality over quantity.
As part of that strategy, it stopped renewing low-performing or under-utilized technologies, in a practice known as patent pruning.
A new LexisNexis Intellectual Property Solutions analysis (see here) demonstrates the wisdom behind that choice (MLex is owned by a division of LexisNexis).
According to the report, approximately $10 billion will be spent on patent renewal fees in 2026 alone. The sum does not factor in the associated cost of portfolio management — docketing specialists and patent agents who track deadlines and prepare filings as needed for each renewal, in each office where protection is maintained.
But when many of those renewals are for technologies that are no longer being commercialized or have faded from competitive relevance, it begs the question of whether patentees are throwing good money after bad.
“Patent portfolios have long been treated as static assets, but our research shows that strategic pruning guided by patent quality metrics can turn them into a powerful lever for financial performance,” Marco Richter, senior director of IP analytics and strategy for LexisNexis Intellectual Property Solutions, told MLex.
“By objectively assessing the strength of each patent, companies can focus their renewal efforts on the most valuable and impactful patents, while redirecting savings toward continued innovation,” he added.
— 13-year benchmark —
High-value patent families, as measured by competitive impact, will have a lifespan 30-percent longer than those at the opposite end of the spectrum according to the report, which examines the pruning rates of 133 global innovation leaders spanning 11 industries in North America, Europe, the Middle East, Africa and Asia.
Their results show that even low-value patent families survive an average of 13 years before their registrations are allowed to lapse.
In the US, that means even a patent which is not in practice could be renewed three times — as required by the USPTO at 3.5, 7.5 and 11.5-years post-issuance — before it is retired.
For patentees with sizable portfolios, that can add up quickly.
Under the USPTO’s fee schedule, newly adjusted in 2025, large entities pay $2,150 for the first maintenance fee, $4,040 for the second, and $8,280 for the third. Fees not falling within that targeted adjustment were hit with a blanket increase of 7.5 percent.
In the European Union, renewal fees for unitary patents are paid to the EU Patent Office annually in an amount ranging from €35 ($40.45) in year two to €4,855 ($5617.20) in year 20.
While that represents cost savings over maintaining a traditional European patent in individual member states, even a unitary patent owner by year 13 — when LexisNexis Intellectual Property Solutions says most low-value patents are abandoned — would have spent €10,025 ($11,598.85) in lifetime fees.
In China, meanwhile, the first fee associated with a new grant is levied within two months of a notice of allowance. Patentees then make annual payments ranging from 900 yuan ($126.50) in years one to three, to 8,000 yuan ($1,124.42) in years 16-20.
At the 13-year mark, a patentee will have paid the China National Intellectual Property Administration an average of 30,300 yuan ($4,258.76) to maintain a patent, regardless of its competitive impact.
— Sector, geographic variance —
According to the report, while “high-quality patents are rarely sacrificed,” how companies treat their lower-value patents varies widely across sectors.
The industrial automation; imaging, optics and sensing; and automotive manufacturing industries are considered aggressive pruners, for example, and have Portfolio Improvement Index scores of 8.65 percent, 6.31 percent and 7.89 percent to back it up.
The metric, developed by LexisNexis Intellectual Property Solutions, aims to measure changes in the proportion of low- and high-quality patents over time.
Semiconductor patents, by contrast, are retired roughly half as often and have a Portfolio Improvement Index score of 3.94 percent as a result.
US-issued patents split that difference and were pruned at a rate of 18 percent.
“These variations translate directly into financial implications. If all companies were to align with the most aggressive pruners in their industry, the cumulative savings potential would be immense,” according to LexisNexis Intellectual Property Solutions.
To that end, the report theorizes that “if peers adopted the pruning intensity of leading streamliners in sectors such as Automotive, Electronics or Technology platforms, the industry-wide savings could amount to as much as $527 million in 2026 alone and up to $8 billion over the remaining lifetime of the portfolios.”
— Stakeholder feedback —
Mark Vallone, chief patent counsel for the Americas at IBM, says knowing what patents to prune — and when — is key for healthy budget hygiene, but that knowledge shouldn’t be gleaned in a “legal vacuum” where attorneys, alone, make decisions about when to forego renewal.
“The biggest risk,” Vallone told MLex, “is that you prune something that eventually becomes more valuable than you thought it would.”
A good starting point involves assessing how patents are being used — defensively, to protect a product or service on the market, or prospectively, as a driver of potential licensing revenue down the road. Once that assessment is made, Vallone said, companies should seek input from a variety of voices.
“You have to be aligned with your business clients, internally, and ask ‘Is this patent still strategic for your particular business area?’ Even then, you're probably not going to be 100 percent right depending on the volume at which you're pruning. If you're aggressive, I think that risk goes up,” he noted.
“But it is important to do a good due diligence with stakeholder feedback to make the best decisions that you can based on the data that you have available to you,” Vallone added.
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