Intellectual property (IP) rights and other intangible assets may account for a significant proportion of the total value of a business.
There are many reasons why it may be useful, or necessary, to value the IP of a business. Some of the reasons why a business may wish to establish the value of its IP, or the IP of another business include:
There are a number of different methods to establish the value of a business’ IP, each with advantages and disadvantages. The choice of which IP valuation method to use will depend upon the nature of the IP and the purpose of the valuation. For example, the method used to determine the value of a single piece of IP held by a business (e.g. a patent) may not necessarily be the most suitable method for determining the value of a business’ entire IP portfolio (e.g. patents, trade marks, designs etc.).
The method of IP valuation should also take into consideration that: (i) a patent may not be as valuable without the associated “know-how”; (ii) a brand of a business may derive its market reputation and value from the value and reputation of other brands of the same business; and (iii) the design of a product may be closely related to a specific trade mark of the business.
Contact us if you have a question, or if you would like to find out more about IP Valuation.