Competitive and Technical Intelligence ToolBox

Valuation is an accounting term which means a lump sum of money payable to receive the future benefits of an asset at a particular time. There are three generally accepted accounting theories for valuing assets: market, cost, and income. Market theory values an asset as the present value ascribed to similar assets in an active public market. Cost theory values an asset by the cost of replacing the asset. Income theory values an asset by the present worth of the net anticipated economic benefit of the asset. Can we apply any of these theories to value patents? Click here to read more

The rules for calculating patents terms changed when the US implemented policies set forth by the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). Prior to this implementation, the term of a US extended 17 years from the issue date. However, to be consistent with the TRIPS recommendations, the policy in the US changed in 1995. The current patent term is extends 20 years from the earliest filing date instead of 17 years from the issue date. Rather than retroactively changing the patent terms for patents that were pending or in force prior to the policy change, the US has adopted a scheme in which the patent term is calculated based on the longer of the two possible patent terms (17 years from the issue date, or 20 years from the earliest filing date). This makes the calculation of patent terms for older patents somewhat complicated. June 8, 1995 was the "magic date" when the patent term calculation changed. In terms of patent term calculations, US pa...

The article entitled “ Excavating the technology landscape: deploying technology intelligence to detect early warning signals ” published in IEEE, consists of good information on value of technology Intelligence (TI). According to author, Technology intelligence (TI) is a process by which organizations develop an awareness of technological opportunities and threats external to the firm and the opportunities present within the firm. There are two primary forms of TI: * Proactive scanning and * Reactive searching. The purpose of proactive scanning is to identify external technologies that have the potential to disrupt the nature of current business. It functions as the ~eyes and ears' or the ~early warning system' of the firm. Reactive searching is deployed when there are specific needs within the firm. The firm may define the needs or problems in a solution-neutral way and develop a targeted search process. The paper presents a set of approaches associated with setting up a tech...

Evaluating intellectual property in general and patents in particular is difficult and imprecise. One of the first questions you should consider is this: do you wish to place a value on a “naked” patent, or on a patent that is part of a technology and business package. In most cases a potential buyer would have more interest in a package, than in just a stand-alone patent. Most evaluation methods are based combinations of the following: - development cost – This may be useful for internal bookkeeping or tax purposes, but usually irrelevant to potential buyers. - business value to current owner – If the patent gives a quantifiable advantage to the current owner, such as the patent blocks competition or increases the cost to the competition, then traditional accounting methods may be used to estimate value to the current owner. - business value to potential customer – What can the potential customer do with this patent that they can not do without this patent? Traditional account...

* Patent Valuation: Is Fair Market Fair * THE VALUATION OF PATENTS : A review of patent valuation methods * Patent Valuation Techniques - Federal Partners in Technology Transfer * Patent Valuation * Method and apparatus for patent valuation - Patent 20030212572

Intellectual Property Rights (IPRs) are viewed as being of increasing importance in many fields of business. Current practice in patent valuations are reviewed as is relevant literature gathered from a number of fields including accounting methods, discounted cashflow (DCF), related decision tree analysis (DTA) methods, and econometric methods based on renewal and stock market data. Intellectual Property Rights (IPRs) can be highly valuable rights playing a key role in many fields of business. However their value has been highlighted largely through their involvement in relatively rare but highly conspicuous transactions and litigation concerning successful businesses. The problem in the case of patents is particularly complex due to the, sometimes lengthy and certainly complex, application process involving initial uncertainties about both the technical and commercial success in competitive markets of the underlying technology as well as uncertainties about the legal challenges which ...