Intellectual Property Valuations

Thorough IP valuations that reflect the true value of your assets

Modern enterprises, more than ever, create value through the generation and exploitation of intellectual property assets.  IP valuation is an exercise to determine the value of such IP assets to assist in the discussion or execution of various IP transactions.  The value of intellectual property is ultimately based on the future commercial utility of the IP asset in question, and is also informed by the purpose of the valuation (e.g. acquisition of IP for growth vs. liquidation).  What is often missed, is that IP assets, beyond the traditional patents and trade marks, do possess value and thus can be valued as well.  This includes common assets such databases, software code and even certain types of business information.

The true value of intellectual assets is central to financial reporting –but it can also be useful where you want others to recognise the value of your IP; for example, for lenders when using IP as collateral, prospective investors when restructuring a business, buyers when transferring IP, or licensees during license negotiations. Ingentium’s tailored hybrid quantitative and qualitative approach to IP valuations looks beyond the numbers.

We take time, drawing on subject-matter experts where required, to form a deeper understanding of your IP assets, arriving in turn at a meaningful valuation figure to confidently convey the value of your intellectual assets to other parties. Depending on the purpose of the valuation, our IP valuation can be as detailed as may be required, making our IP valuation service a cost-effective exercise for any purpose.

 

A three-step approach & our own proprietary systems to arrive at a meaningful value

We take a three-step approach to all IP valuation exercises:

    1. Understanding the purposes of the valuation;
    2. Assessing the IP assets under interest, looking into factors such as technology, legal protection, and the industry and market in which the IP assets have been/will be exploited;
    3. Looking at valuation scenarios to inform our analysis.

Ingentium has developed and utilises ‘asset-class’ specific algorithms to quantify qualitative aspects of your IP assets, based on a wide-ranging array of considerations, which ultimately impact on IP value.  It’s an approach based on:

  • NEVER using out-of-the-box or ‘plug and play’ solutions – our IP valuations are as unique as your organisation and its intellectual assets;
  • Taking the full technical profile of your intellectual assets and the nature of their use into account; for example, if your IP underpins a platform-technology, that would positively affect its value and should be factored in;
  • Keeping you involved throughout the process, to ensure accuracy, transparency and your satisfaction at all times;
  • Providing a tailored report, offering clear indications of our findings, including any shortcomings or risks that could affect the value of your intangible assets, and recommendations for mitigating such risks.

 

Key advantages for you and your organisation

Gaps in valuation-related data, whether this is transaction disclosure data or comparability data, make it difficult to easily quantify the value of intellectual assets – which are after all unique to each organisation. But by taking time to delve deeper into understanding the IP assets we are valuing, taking into account your business and relevant industries, contextual value and exploitation potential, Ingentium goes beyond a simplistic one-dimensional “reading the numbers” in order to ascertain a robust valuation figure that our clients and third-parties can rely on.

Intellectual Property valuation could be useful for:

  • Raising funds as a means to establish the growth value potential, or conversely, liquidation value, of your organisation’s IP assets;
  • Establishing the value of IP assets which can be sold off in cases of insolvency;
  • Supporting the purchase or sale of individual IP assets or portfolios (see our case study);
  • Transfer pricing, where IP assets are to be transferred from one company to another under a common ownership;
  • Licensing transactions, particularly where the parties wish to establish a fair remuneration structure (e.g. royalty rates, milestone payments, etc.) which take in to account the overall value of the IP assets over their lifespan;
  • Pre and post-M&A for the purposes of financial reporting.

See how Ingentium’s approach to IP valuations worked for a digital business looking to sell only part of its IP portfolio

CASE STUDY: Using IP valuations to strengthen your negotiating position

Have an IP or strategy question?

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“The effective management of IP is essential in aiding businesses to maximise their innovations and successfully commercialise in-house technologies. A key determinant for sustainable industrialisation, particularly in low-middle-income nations.”

Alex Makotose
Senior Associate, Ingentium