Evaluation of intellectual property

Intellectual property, like other types of property, can bring good income to its owner. Thus, intellectual property has a value. Its definition makes it possible to regulate the mechanisms that affect profit. In addition, the evaluation of intellectual property objects is a reliable protection against illegal use by individuals or legal entities.

Valuation of intellectual property objects is one of the priority areas of work of our law firm “PRIKHODKO & PARTNERS”. We will conduct an independent examination and draw up a Report on the assessment of rights to a certain object/objects of intellectual property in accordance with the requirements of current Ukrainian legislation.

In what cases may it be necessary to evaluate intellectual property?

Intellectual property valuation may be required in the following situations:

• Preparation of the conclusion of the license agreement.
• Conclusion of agreements related to the purchase and sale of trademarks, patents, etc.
• Consideration of disputes regarding the compensation of material and moral damage associated with the illegal use of intellectual property.
• Determining the amount of compensation for the loss received by the right holder due to the illegal use of his trademarks, patents, etc.

What objects of intellectual property are evaluated?

The objects of intellectual property that are evaluated include:

1. Artistic and literary works.
2. Computer programs, databases.
3. Useful models, inventions, industrial samples.
4. Videograms, phonograms, programs of broadcasting organizations.
5. Animal breeds, plant varieties.
6. Patents for useful models, inventions.
7. Trademarks, service marks, copyright certificates, etc.

What are the approaches and methods of intellectual property assessment?

There are the following approaches and methods for determining the value of intellectual property:

• Cost-effective approach

Assets are the basis of this assessment of intellectual property. That is, the cost of expenses necessary to replace or reproduce the object of assessment is determined.

The cost approach to the assessment of intellectual property involves determining its value by calculating the costs of obtaining and developing legal protection or determining the amount of costs for creating an alternative model.

• Income approach

It is used in cases where it is possible to determine the total amount of income from the object/objects of intellectual property. The main method of the income approach is the capitalization of income, determining the value of the object by the amount of available or estimated income.

• Comparative (market) approach

The comparative approach to the assessment of property rights of intellectual property is used in cases where there is a sufficient amount of reliable information on the market value of similar objects. That is, the value of intellectual property is compared with a similar object of intellectual property.

In the process of processing the next object that goes through the assessment of intellectual property, our lawyers take into account the following types of price:

1. Rynkov
2. Estimated
3. Investment
4. Balance

Market price

This is the maximum price for which an object of intellectual property can be sold. It is appointed under the following conditions: the presence of free market competition, full awareness of the owner and the buyer about the terms of use of the object of intellectual property.

Estimated price of intellectual property

This price is set by the parties in the process of detailed study of the contract. Each of the parties assigns its own cost. In the end, the success of the operation will be considered the amount that is minimally acceptable for the seller and the maximum possible for the buyer.

The investment price of intellectual property

We are talking about the price for each individual investor. The price is determined by specific criteria and investment goals.

Book value of intellectual property

The price of the currency equivalent of intellectual property is on the firm’s balance sheet in the form of assets.

What are the advantages of the correct valuation of intellectual property?

Thanks to the correct assessment of the value of intellectual property objects, the following tasks can be solved:

• Reduce the tax on the company’s total profit.
• Create an additional asset. This asset is of commercial interest to third parties.
• Reduce the amount of material damages in cases of illegal use of the company’s intellectual property objects by third parties.
• Increase the market value of intellectual property objects.

Specialists of our legal company “PRIKHODKO & PARTNERS” know perfectly all the features and subtleties of such a specific field as the evaluation of intellectual property objects. We apply a systematic, comprehensive approach to the assessment of objects and have been doing this for more than 5 years. Contact professionals for an estimate – fill out the form below and calculate the cost of our services!