IP valuation: speaking a common language


IP is increasingly valuable. Many companies rely on their IP assets as key elements of their balance sheets. But it is not always clear how to value IP accurately. WIPR takes a look, in advance of the IP Week panel on IP valuation.

One of the major challenges to businesses looking to do deals, whether mergers and acquisitions or licensing, is gaining an accurate picture of the relevant intellectual assets. Most companies have an idea of which assets are valuable – their brands, their patents, their designs – but many might be unsure of exactly how to put a monetary figure on that value.

Because of course, a brand is worth as much as people think it’s worth, and knowing which people are qualified to make that judgment is not always easy. Similarly, patents may carry with them the costs of their development and registration, but can that really be said to amount to their worth? Or is a patent’s value dictated by its use? If so, how much of a product’s price can be attributed to the patents that contribute to it?

Pekka Valkonen, of Fortum Power Solutions in Finland, underlines the importance of building an accurate picture. “Intellectual assets are now a major part of companies’ value – about two-thirds of a typical deal. And intellectual property is one of the hardest parts of intellectual assets,” she says. “Therefore getting accurate valuations of a company’s IP is imperative.”

IP week, valuation