IP valuation methodologies derive from the three foundational approaches. When focusing on a trademark valuation, copyright valuation or an Internet related valuation, Nevium typically reviews the following IP valuation methodologies:
Cost Approach: Quantification of the time, effort and investment to replicate, replace or repair. IP valuation methodologies include: replacement cost, cost to create, cost to repair, corrective advertising and more.
Income Approach: Quantification of the present value of future economic benefits received from ownership of an asset / business. IP valuation methodologies include: discounted cash flows (DCF), relief from royalty (RfR), unjust enrichment and lost profits damages, and typically involve an apportionment of past or future profits specific to the subject intellectual property.
Market Approach: Quantification based on observed transactions involving comparable or similar asset. IP valuation methodologies include: comparable transactions, guideline companies, and comparable licensing transactions.
The objective is to apply as many methods and tools to an IP value assignment as possible. We believe a valuation opinion is better supported when the results are based on as many approaches as possible.
Click here to download a guide that will assist in starting an Intellectual Property Valuation analysis.
Context for Intellectual Property Valuation
Nevium professionals have over 20 years of experience in intellectual property and intangible asset valuation. Our valuation assignments typically include non-tangible assets that come with formal and explicit government protection such as trademarks, copyrights and patents. The assignments can also include assets that have no physical being, apart from a writing, which evidences their existence such as customer lists, distribution networks and procedures and practices. We are also very familiar with trade secrets and rights of publicity. Our experience includes:
IP Valuation for Transactions:
- Buying, Selling, Licensing
- IP portfolio alignment
- ROI & ROMI
Intellectual Property Valuation for Compliance:
- Fair value reporting
- Impairment, Allocation
- Estate transfers, Contributions
- Transfer pricing
- Transfer: non-profit to for-profit
- Eminent domain