Patents and other intellectual property rights are being used increasingly as means

for doing business, and business centred around pure owning and exploitation of

patent rights to generate revenue has become commonplace. It is therefore necessary

and advantageous for companies to understand the value of their patents and

the significance of patents to their business, as well as to be able to determine the

risks of patent infringement in their business and determine the pecuniary value

of the patent risk.

The aim of this thesis is to offer companies some practical tools for valuing

patent risk against their products and services from other companies’ patents in

a given technology. For that, the fundamental concepts of patents are presented

to the extent it is necessary to understand them for the modelling in this work.

Also valuation of patents as an asset is discussed with the help of references to

prominent literature in this field of economics. Furthermore, methods for managing

risks in general are introduced as a foundation for combining patent valuation

and risk management into patent risk valuation.

In the thesis, a component model is presented for valuation of patent risks taking

into account business factors, research and development activity, the specific

technology in question and the relevant company and patent environment. The

model is based on direct estimation of the expected values of the components of

patent risk in a given technology.