IP VALUATION
IP appraisals correlate financial, economic, market and legal factors / parameters including IP market share, current or potential litigation involvement, remaining life term of the asset, uniqueness, novelty, and relief from discounted and forecasted royalty payments due to the asset ownership.
IP valuators’ proprietary techniques and formulas incorporate cost (of asset replication or replacement), share (present value of asset share in that industry’s IP market), market (an asset’s market equilibrium point or similar item prior sale’s price), and income (present value of discounted forecasted income flow) valuation methods.
Federal Law Requires Intangible Asset Value Disclosure. All business have intangible assets including patents, trademarks, trade secrets, know-how, copyrights, and etc. The Sarbanes-Oxley Act of 2002 (“SOX”) requires a financial report certification by corporate management. IP Owners must conduct regular internal audits (ongoing due diligence) to identify, exploit, and protect IP so as to comply with the senior executives’ obligations to shareholders under the Act. SOX §302 requires CEO/CFO certification of annual (10-K) and quarterly (10-Q) reports. SOX §404 mandates certification of control procedures by a company’s officers to ensure that companies have taken steps to identify and value all of their assets, including IP assets.
SEC Disclosure Requirements. The Securities and Exchange Commission (“SEC”), Division of Corporate Finance, monitors intellectual property explanations in corporate filings. SEC regulations and SOX require disclosure of non-financial information “material” to the company’s finances and certification of financial statements and asset tacking procedures (audits) for intangible and other assets. Such audits must be done to meet federal law requirements.
IP Monetization Requires IP Valuation. Valuators assist the Intangible and Non-Performing Asset (Capital) owners (companies and sophisticated individuals located worldwide) to determine the value of their existing assets in order to monetize them. Practically every business has such unutilized assets, which could be turned into revenue or tangible capital.
EXAMPLES OF INTELLECTUAL / INDUSTRIAL PROPERTY
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Design/utility patents and patent applications
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Product / trade dress
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Literary/ graphic / art works
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TV programs / audiovisual works
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Packaging design
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Brands / internet domains/ slogans
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Architectural designs
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Celebrity names
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Image rights
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Product formulae
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Engineering blueprints
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Business method/ ”know-how”
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Goodwill
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Copyrighted cartoons/ movies