Assessing the true value of IP

On Behalf of | Dec 14, 2020 | IP Agreements And Transactions |

Businesses often focus on protecting tangible property but may forget that intangible assets like intellectual property are just as important to protect, if not more so. Why is this the case? Maybe people may think that tangible protections are easier to understand, such as installing locks, alarms, burglar-resistant windows, camera systems and more. While it’s true that those measures can secure items in and around the building a business calls home (as well as the building itself), far too often entrepreneurs fail to adequately protect their intellectual property assets with a patent, trademark or copyright. So, what is the value of IP and how can you protect it?

Determining the true value of your IP

In order to determine the monetary worth of your home, an assessor will look at the property, neighborhood and market prices of similar homes. But the real value of your home includes intangibles such as your memories, familiarity and convenience.

Likewise, the true value of IP includes more than just the price it could fetch on an auction block. True value includes intangibles such as respect, goodwill, prestige or media attention that a business derives from owning and making use of its intellectual property.

Consider these factors, too

Other aspects of true IP value include the intellectual property’s lifespan, any associated maintenance fees, as well as the monetization of the IP via licensing or royalties. It’s also important to factor in monetization offers and monetization opportunities that haven’t been taken advantage of yet.

Intellectual property’s true value can also include a company’s ability to leverage the IP when it wants to borrow, acquire or seek investors.

One of the greatest benefits of assessing the true value of a business’s intellectual property is that the assessment process can often suggest ways in which some assets can be further monetized or make it clear that some valuable assets are in need of formal protection (e.g., a trademark, copyright or patent).