Intellectual Property Forums (http://www.intelproplaw.com/Forum/Forum.cgi)

(Message started by: Bear on Jun 21st, 2005, 11:55pm)

Title: How to do a Patent Valuation
Post by Bear on Jun 21st, 2005, 11:55pm
Hi everyone:

Does anyone knows how to evaluate how much a patent is worth? Such as what kind of criteria, factors that I have to put in. And what "discounted Present value" factor to plug in, if there is any? If anyone could help would be great.

Thanks a lot

Bear

Title: Re: How to do a Patent Valuation
Post by Wiscagent on Jun 22nd, 2005, 8:13am
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 accounting methods may help, but the seller normally does not have access to the potential customer’s information.

You also need to speculate on the cost of developing technology or business strategy that by-passes the patent claims.  Additionally, you need to obtain legal opinions on the “strength of the patent”, i.e. the likelihood of the patentee prevailing in an infringement suit (even though there may currently be no infringement).

As with most things, the only way to determine what something is worth is to actually sell it.

There are books available on the subject.  If this is important to you, read several, and hire a consultant that specializes in technology transfer.


Richard Tanzer

Title: Re: How to do a Patent Valuation
Post by JimIvey on Jun 28th, 2005, 2:48pm
You might also check the archives.  I didn't look at Richard's post, but I'm sure it's good as usual.  However, I'd swear I just posted a really long answer to a very similar question within the last couple of weeks.

Regards.

P.S.  Found it:
http://www.intelproplaw.com/Forum/Forum.cgi?board=licensing;action=display;num=1118295981
[TinyURL: http://tinyurl.com/dy5hg]

Title: Re: How to do a Patent Valuation
Post by Rick Neifeld on Dec 24th, 2007, 6:22pm
I should see the web site named PatentValuePredictor for automated valuations.  Or, google my name, I am the president of that site.  Rick Neifeld, Patent Attorney



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