Valuation of the Industrial Property portfolio

The value of your trademark or patent is key

Thanks to the fact that the professional team fulfils the requirement of being both Intellectual Property Agents and Economists, ISERN is highly qualified to carry out this type of valuations, as it has more than 26 years of proven experience.

These valuations of intellectual property portfolios are very useful for purchase and sale transactions, filing accounts with the Tax Authorities, Social Security, the Wage Guarantee Fund, etc. This allows transactions between related companies, valuations before judicial bodies and as a guarantee or collateral for financial transactions and loans.

In order to obtain an accurate estimate of trademarks and patents, legal and economic aspects, as well as individual characteristics of each case, must be taken into account.

There are four valuation techniques or methodologies

Market

The market approach consists of comparing the actual price paid for the transfer of the rights to a similar intellectual property asset in a similar situation. It is a simple technique for estimating a rough valuation when you want to price your portfolio.

Price

The price approach stipulates the value of an intellectual property asset. It is done by calculating the price of another similar or the same intellectual property asset. It is very useful when the aim is to reproduce this asset, but the economic benefit of this resource cannot be accurately quantified. This approach does not take into consideration unnecessary costs or the unique or novel qualities of the asset being valued.

Income

The income approach is the most commonly used approach in the valuation of an intellectual property portfolio. It calculates the value of the asset by the amount of economic income it is expected to generate. In this way, it is adjusted to its current value. It is usually the simplest approach when the asset being valued has positive cash flows; for those whose cash flows can be reliably calculated over the long term, a risk approximation can be used to arrive at discount rates.

25% Rule

Using the twenty-five percent (25%) rule approach, it is possible to determine the value that an intellectual property asset can generate. It is often very useful when licensing such an asset, as this rule is based on the owner of the right keeping 25% of the profit to be generated by the licensee or, alternatively, 5% of the turnover.