Intellectual Property (IP) valuation is easily one of the most misunderstood topics surrounding the management of intangible assets. Over the last 20 years we have seen the migration of IP valuation from being a tool for estimating IP damages into more “main stream” applications, and with the explosive growth in IP transactions, the need for assigning a monetary value to IP assets is higher than ever.  Having said that, inside the IP community there is a high degree of frustration expressed by all constituents when it relates...

Patent valuation, as a subject, is still “hot”. When in LinkedIn a question was posted on how to value IP[1] a large number of comments,  suggestions and ideas appeared. The overall conclusion – it is fair to say – is that valuation is all about context. This might not be very helpful for those that seek a clear and universally applied method, but unfortunately in the absence of a functioning  IP market, this is proven to be right many times over. We blogged earlier about accounting initiatives to come...

As research has shown, owners have an incentive to exaggerate the valuation of their property. This is true for all kind of property but is it also true for intellectual property? People are reluctant to part with their property, and the amount that they are willing to accept to sell it generally far exceeds the amount that others are willing to pay for it. This gap has been termed the “endowment effect”[1] and it has been detected for a number variety of forms of property. In investing this effect leads to an inherent tendency...

Over the years patent build up could go without repercussions for the patent “market”. Let us say the market for supply and demand for patent rights. Initially, during the 1980s and early 1990s this was because Japanese, Taiwanese and Korean companies took licenses from European and US patent owners. Then the Korean powerhouses came up, well  placed to take over the consumer electronics market but low on IP.  Taiwan had its own policy but was not afraid of buying strategically, be it a lot less then Korean companies. ...

What have canisters of milk and patents in common? Guess you figured, not much. Wrong. Like a date stamped on a can of milk after which it should not be sold, patents have their similar “pull dates” as, like milk, patents are perishable goods. Take the recent demise of yet another European “gem” in the semiconductor industry, Qimonda AG, Germany’s DRAM maker, an Infineon subsidiary. You were, for years among the most important and well known semiconductor companies in Europe. …

Would a change in accounting rules, as they are now being discussed, have an impact on the role IP can play as a collateral for (new) debts? The current financial crisis has brought about a call for easing the accounting rules on fair value of assets (meaning that companies have to mark most of their financial holdings to market prices). Those who are in favor of easing the accounting rules on fair value claim that fair value has undermined banks’ balance sheets by forcing them to report assets at current (weak) market...

We noticed over the last two years an increase in investment houses to invest in IP as an asset class showing quite interesting and different risk profiles. We continue to see parties tapping on this new interest finding appropriate business models to develop IP monetization strategies. The different models become clearer by time. We have the non practicing entities. We blogged earlier about this. As a category its way too diverse to be a helpful “definition”. The term “Patent troll” is something we just...

Increasingly we see the term “IP strategist”. So we did a quick round in our network in the IP community to form an idea of what we collectively would consider a good IP strategist.  What do we understand to be a good IP strategist? What is in fact an “IP Strategist”? The concept of strategy has been borrowed from the military and adapted for use in business.  The word “strategy” comes from the Greek strategia, meaning “generalship.” …

Patent Valuation is the subject of many debate. With over a 100 methods of “valuing” patents, its difficult to find any good yardstick by which to measure the value of a patent. After all, like many other difficult questions its not only who you ask but also in which context the issue arises. I guess a lawyerish answer on “how much value has a patent?” probably is right on: “it depends”. From a defensive perspective if one considers patents to be crucial for freedom to operate, numbers count....

INTA, the International Trademark Association is having its Annual Conference in Berlin, starting today. All kind of interesting subjects that brand owners keep happily busy are being dealt with in workshops, break out sessions and the like. Subjects like “How to Combat Counterfeit”, “Taxes and Trademarks” and of course the CTM (Community Trademark) are on the agenda. A more frivolous subject “Why We Do What We Do?” is being offered, as the program describes it “Why it is that trademark...

Two European trademark blogs, MarkenBlog and Class 46 referred to a publication in Germany’s business newspaper Handelsblatt on the effect of the proposed new “Bilanzrichtlinien modernisierungs gesetz” (Accounting Directives Modernizations Law). According to the two blogs this introduces new accounting rules for small and medium sized companies how and when to report development costs of their intellectual property on their corporate balance sheet. …