Top 5 Proven IP Valuation Insights And Best Practices
To make the most of your key technologies and the opportunities in front of your organization, accurate and effective IP valuation is vital.
However, IP valuation is a complex process due to the interminable variation of underlying technologies, legal issues, business issues and the context in which they are conducted.
To ensure your intellectual property serves your business strategy, you must avoid churning out patents without a plan. The following five points are proven best practices when it comes to patent valuation.
1. Conduct Patent Portfolio Mining
Over the years, your IP portfolio may become overstuffed with valuable patents, and it is important to mine them for improved company revenue. Companies that neglect their IP portfolio are wasting money. Which patents are no longer relevant to your business strategy?
To discover which patents in your portfolio are relevant and which are not, have an IP valuation expert conduct patent portfolio mining. Having your patents mined helps you to see where and how your patents apply to industries and technologies. Patent portfolio mining clears up the clutter of your IP portfolio and may also help you find potential buyers for your unused patents.
2. Partner With Patent Portfolio Management Experts
Bringing on an IP consulting firm, one that fully comprehends the industry and the technology that they are valuating, is important for your organization. These experts are made up of engineers and analysts with years of industry experience.
With their high level of experience, an IP consulting firm helps you identify, evaluate, capture and protect valuable IP assets. Their invaluable knowledge of IP valuation is what helps you create a robust and effective IP strategy.
3. Perform Comprehensive Market Analyses
Another effective way to conduct IP valuation is to have your IP consulting firm perform comprehensive market analysis to determine where your technology stacks up amongst your competitors.
Market analysis is a methodology that involves determining what a buyer is willing to pay for similar intellectual property. This comes by ascertaining if there’s an active market for the patent, or a similar one, and also if there have been past transactions of comparable property.
4. Determine Your Patents’ Life Cycle
Most investors aren’t going to be interested in a patent that has limited years of relevance or patent protection left. On the other hand, with a recently issued patent, the technology has not properly matures and there is no potential to litigate at that time.
That is why it is important to understand where your technology exists in its life cycle. Generally speaking, it is better to acquire a patent after it has been proven useful in the marketplace.
5. Take Timing Into Consideration
Technology changes rapidly, which affects the value of your patents. The values of your patents are going to fluctuate, depending on how old they are and how relevant they are.
You may need to sit on your patent for several years, even a decade, and wait for technology to catch up. Conversely, waiting too long means you may have a hard time attracting demand. Your IP consulting firm helps you navigate the ever-changing tide of technology.
IP valuation requires in-depth knowledge of relevant technologies, market conditions and patent law. Along with this understanding is the ability to bring many facts and considerations together to build an argument for why a patent has value. Patent valuation is not only a function of revenue, but also a matter of timing and the other strategic benefits it may yield.
Ready to learn more about proven best practices for mining patent gold? Contact the IP valuation experts at TechPats today.