Intellectual Property Valuation: Asset Strength Approach (Evaluation of the Strength of an Asset Against the Commercial Technology Covered by the Asset)

98 Pages Posted: 7 Jun 2015 Last revised: 9 Feb 2016

See all articles by Gary Speier

Gary Speier

Carlson Caspers

Raj Gupta

American College of Healthcare Trustees; American College of Healthcare Trustees

Date Written: May 20, 2015

Abstract

Intangible assets include intellectual property (IP), such as patents, trademarks, copyrights, etc. There are numerous reasons for valuing intangible assets, and different approaches have historically been employed. The historical methods of IP valuation share a common drawback ─ the failure to critically evaluate the IP per se. The IP valuation approach set forth herein utilizes both a critical evaluation of the strength of the IP, as well as a market analysis of the key (or “target”) technology covered by the IP. The market analysis yields a value of the key technology. A critical evaluation of the IP is then carried out. For the critical evaluation, the IP (e.g., patent) is carefully reviewed to determine how well (or poorly) the IP covers the key technology, and how strong (or weak) is the underlying IP. The strength of the IP is evaluated by carrying out a detailed and exhaustive due diligence review of the IP and a freedom-to-operate (FTO) clearance review of the key technology. The asset strength approach for IP valuation is unique in that it includes an assessment of the strength/weakness of the underlying IP.

Keywords: valuation, IP valuation, patent valuation, intellectual property valuation, IP, intellectual property, patent, cost approach, income-based approach, market approach, option-based approach, asset strength approach, due dilligence, freedom to operate, FTO

Suggested Citation

Speier, Gary and Gupta, Raj, Intellectual Property Valuation: Asset Strength Approach (Evaluation of the Strength of an Asset Against the Commercial Technology Covered by the Asset) (May 20, 2015). Available at SSRN: https://ssrn.com/abstract=2615115 or http://dx.doi.org/10.2139/ssrn.2615115

Gary Speier (Contact Author)

Carlson Caspers ( email )

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Raj Gupta

American College of Healthcare Trustees ( email )

PO Box 1714
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United States
04730 (Fax)

HOME PAGE: http://www.facht.org

American College of Healthcare Trustees ( email )

PO Box 1714
Houlton, ME 04730
United States
04730 (Fax)

HOME PAGE: http://www.facht.org

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