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Paul Cliff
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Experts in business and intangible asset valuation

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Intellectual Property / IP Valuation

Intellectual property or IP refers to creations such as inventions; literary and artistic works; designs; symbols; names; and images used in commerce.

IP is protected in law by (in particular) patents, copyright and trademarks. These enable recognition or financial benefit from such inventions or creations. The rights attached to IP are aimed at fostering an environment in which creativity and innovation can flourish within a competitive context. Intellectual property valuation or IP valuation covers the commercial aspects relating to these legal rights.

Valuing IP therefore encompasses mainly rights arising from patents, copyright, trademarks and other forms of IP such as design rights and registered designs.

Widely adopted IP valuation approaches

When carrying out an IP valuation, Intangible Business adopts widely accepted approaches based on a combination of the income, market and cost approaches.

  • The income approach uses estimates of future estimated economic benefits or cash flows and discounts them, for the associated time and risks involved, to a present value.
  • The market approach uses market based indicators of value. For intellectual property this can be transactions involving selling, buying, franchising or licensing brands, which are often in practice bundled with other deals.
  • There are two general considerations to the cost approach: the historic cost of creating the IP and the estimated cost and time that would be required to create an equivalent or replacement IP.

Focus of Intangible Business

The application of these approaches benefits from Intangible Business’ specific focus on forecasts, with research and analysis of market transactions for different but comparable assets where relevant information is difficult to obtain. Intangible Business adopts a thorough approach based on good knowledge and experience of how to find, analyse and present information in a way which better informs an intellectual property valuation.

Intangible Business also ensures that the approaches used, and conclusions reached, are commercially balanced, realistic and consistent with analyses required for all the different reasons IP valuations are required and carried out in practice.

Support to legal services

If IP value is at stake, it will be a significant issue. Intangible Business is experienced in providing expert independent IP valuation services for IP management, owners and their legal or other advisers in particular for: dispute resolution; corporate deals; IP management; and supporting other legal services.

Example Cases