Intellectual Property (IP) includes patents, trade secrets, designs, trademarks, literary and artistic works, inventions, and other assets created by the mind. The most common IP assets we value are patents and their associated drawings and processes, although we often see IP that is still in development and may not be patented. IP valuations are most often performed when the IP is going to be sold or transferred offshore or when the owner is seeking investors to help commercialize the IP.
The method most frequently used to value patents is called “Relief of Royalty.” This method requires estimating the royalties that would be paid or received for use of the IP if it were licensed, and then calculating the present value of those royalties expected to be received over the life of the IP. We subscribe to databases that track licensing deals and royalties for a wide variety of IP in many industries so that we have market support for the royalty rates we use.
BEAR, founded in 1986, is a business valuation firm working through a nationwide network of valuation experts, CPAs, business brokers, and consultants. BEAR has performed over 50 valuations of patents, patent portfolios, and other IP. Among our staff we have the major valuation credentials, including ASA, CPA/ABV, CVA, CFA, and MVS.