Valuation of Intellectual Property Assets
Updated: Mar 15, 2020
The importance of IP as corporate assets in the last 30 years has increased up to 70%. According to a study by WIPO (World Intellectual Property Organization) the amounts of filed patents in the last year has increased to 3.3 million, trademarks to 14.3M and industrial designs to 1.3M. A proper valuation of IP assets allows companies to use them to create more revenue.
Factors to consider for the valuation of IP assets are:
Purpose of the valuation
Description of the asset (trademark, patent, copyright),
How will the asset be used
Who is the assumed target or creditor of the IP
Wow is the IP being valued used in conjunction with other IP, etc.
With technology patents the useful life is critical to determine how long it will bring revenue. Trade secrets by contrast only last as long as the information remains secret (and remains a competitive advantage). For trademarks the valuation is tied to its use in commerce and goodwill while for copyrights valuation is determined by the life of the creator plus 70 years after her death, plus limitations over the rights to reproduce, distribute, make changes, perform, publish or display.