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IP Valuation

Assigning Value to IP Assets

Though they may not be physical assets, Intellectual Property like trademarks, copyrights, patents, etc. are important intangible assets that can hold great value. Understanding the value an IP holds becomes critical in several situations such as when you plan to license IPs, buy or sell IPs or when you’re setting up joint ventures and merging companies. If you choose to someday sell your company, the value of its trademarks will play a huge role in determining the value of the sale. It is also important when you’re securing financing or settling disputes. Thus, arriving at the right valuation is key.

IP valuators take into account several factors ranging from dates and terms of protection to the stage of development. There are multiple valuation methods that may be used to understand how much IP and IP rights are worth. Each has its pros and cons and it is only with experience that you can choose an appropriate method to value your IPs. 

IP Valuation Services :

The asset worth of the company, in modern times, is directly related to the intellectual property that the company has and owns. IP for the company paves way for market dominance and assures of continuing profitability . The IP of a company is also a key factor when the company wants to take over another company or wants to merge with another company. Valuations are also done to know the asset base and the IP worth of the company and a regular valuation would give the economic demography of the company. Valuation is, essentially, a bringing together of the economic concept of value and the legal concept of property.

Inspite of the fact many of the business entities have started understanding the importance of IPR as an asset of business, still, there is a great vacuum between the though process of valuating and the actual physical process of valuating the IP of a firm. Valuation is some thing more than mere application of accounting standards and involves application of certain recognized and universally accepted methods.

Some of the questions that the entities may need to ask themselves for a better understanding of their IPR is :

  • What are the IPRs used in the business?
  • What are the legal process to protect it?
  • What is their value (and hence level of risk)?
  • Who owns it (could I sue or could someone sue me)?
  • How may it be better exploited (e.g. licensing in or out of technology)?
  • At what level do I need to insure the IPR risk?

The presence of an asset for a company is its ability to generate a return, such generation of returns to be continuous thereby building further the asset worth of the Company. In other word the rule of commercial valuation is : the value of something cannot be stated in the abstract; all that can be stated is the value of a thing in a particular place, at a particular time, in particular circumstances.

In order to conduct an accurate valuation of the business, it is important to have as much information as possible about the business.

  • Objective of the valuation – why are you conducting the valuation?
  • Business description and company history
  • Documents detailing the business financial, operational and ownership structure including past years financial statements (3-5 years), corporate presentations, organizational chart, Inventory details, etc.
  • Company financial forecast (if available)
  • Details on the industry in which the company operates, current market players and company’s market share
  • Detailed competitive analysis (if available)
  • Value chain analysis relevant to your business – Which are the suppliers? Who are the clients? Who are the partners?
  • Details on Intellectual Property (if any)

Our expert team of Patent Attorneys, Registered Intellectual Property Valuation Analysts, and Certified Licensing Agents bring legal, business, financial and economical perspectives to conduct valuations for various business needs such as,

  • Internal decision making or business planning within a Company
  • Mergers and Acquisitions
  • Sale of assets or the entire business
  • Licensing in or Licensing out
  • Other types of asset transactions such as, university spinouts, startups, etc.
  • Raising Capital from banks or investors
  • Financial Reporting
  • Transfer Pricing
  • Tax Planning

Get Your IP Valuated

The stronger your IP assets and the higher their valuation, the higher your likelihood of success. It is only when you understand the value of your IP that you will be able to exploit it to its full potential.