What is your knowledge worth?
IPR valuation can be useful in a variety of contexts. Knowing the financial value is important if you intend to trade the right or entering the value in your accounts, but it can also be a valuation of the potential that the right represents to the company. IPR valuation, for example, can be used to assess how the right should be exploited, but it can also be used prior to registering your technology, your brand or design so you know how many resources to devote to protection.
IPR valuation can be an exhaustive process and if you need to know the monetary value, it may be a good idea to engage a specialist. We have gathered a few questions which you can ask yourself when assessing the value of your knowledge to the company:
Are there alternatives?
For patents in particular, it may be relevant to see whether alternative technology capable of performing the same function exists or could quickly be developed . The more viable the alternatives, the lower the patent’s value. Seek help from the development department – if they were to develop an invention ‘outside of the patent’, what would they come up with? This method can be used before and after applying for a patent and if the patents of competitors block your application.
How solid is the right?
It is also important to assess the probability of the right being upheld. If it is a patent that has been granted and that has uncontested for a long time, the degree of security is greater than if it is an untested right – e.g. a design registration where you have not investigated the market yourself. For trademarks, you also need to assess whether you use the trademark correctly and document such use to eliminate the risk of losing the right. When it comes to design registrations, you can assess whether the design is covered by supplementary forms of protection. If the design has an artistic quality, it may be protected by copyright, just as in rare cases it is possible to register a product’s form as a trademark.
Where and for how long is the right valid?
The value of the right will also depend on the location and period for which it is valid. Does the right apply in the most relevant countries? What period of protection remains and will the right be fully exploited during that time? Particularly with designs, the lifetime can be an important factor, as some types of products design have short lifespan – but also with patents it is very relevant to assess whether the technology will soon be replaced by an improved one.
What advantages does the right offer?
If there is a high awareness of the trademark among the target group – or if the trademark is positively perceived and unique in relation to other trademarks – this increases the value. If the registered design is what gives the product its primary value for the consumer, the right may be extremely valuable. When it comes to patents, you can assess how good the next-best invention is, seen from a market standpoint. If the invention provides significant added value to the consumer or reduced production costs, the value of the right is probably higher.
What exploitation options are there?
A right can, for example, protect part of a product, a product series, a product packaging or a production process. If, for example, a patented technology can be used in numerous different products – or even different sectors –then its value, all other things being equal, will be higher. If a trademark protects a product and does not make much sense in other contexts, it will have a low value measured against this parameter.
How does the market look?
The value also depends on the market for the product or the service which the right protects. Here, you should both consider the market share in current markets, potential markets and the degree of growth.
A patent can protect part of a product, but this is no guarantee that the product may be sold. Perhaps the product contains other protected technology which blocks exploitation? Or it may be a patent application for an invention requiring further development, which – all other things being equal – will reduce the value. The value of trademarks can be negatively affected if a matching domain name is relevant, but unavailable.
Do you want to know the value of a patent, a trademark or a design? Here you can gain access to the free tool