IP Asset Valuation - An Overview

57 IP Valuation

No-one really knows how to value a business’s Intellectual Property in its own right. Brands, for example, are usually tied to the sales they help to generate. Patents ditto if they generate royalty-bearing licences. But in general it is not easy to separate IP assets from the business of which they form part. And yet every manager faces that problem when surveying the assets he or she now controls or might invest in.

All businesses have Intellectual Property assets. Directors need to put a value on these just as much as the tangible business assets they own or are buying. As a long-established firm of Intellectual Property lawyers, we have developed a way at arriving at that value on factors which separate the IP asset in its own right from any other business-surrounding factors.

Our method involves assessing and scoring the financial strength of an IP asset in which we apply a list of questions and score, up or down, an initial cost-to-establish figure. We can arrive at that figure from our own expertise in our day to day practice. The scoring factors we select, and the weight we give to them individually to modify that initial value, have been evolved over 40 years of that same developed practice dealing almost entirely with SME’s and other corporates.

No-one else, as far as we are aware, is offering a legal-practice-based solution to the problem. We’ve supplied around 40 individual valuation reports to clients, receivers, and would-be investors. None has ever been rejected, and our professional indemnity insurers have confirmed this as a branch of our practice which they rate insurable as well as our main work.

This is a growing part of our business and is on offer to all turnaround specialists, insolvency practitioners, directors, investors or financial advisers in need of it.

Bill Jones, Chairman for ip21 Ltd