Recently, BVR held a four-hour workshop on valuing intangible assets that was loaded with good insights and current trends related to brands, trademarks, patents, copyrights, and trade secrets. For example:
- Over the past 18 months, internal brand valuations have reached 34% to 74% of firm value in a transaction context;
- Software is an intangible asset, but it’s not intellectual property—a key distinction;
- Significant changes in the substantive patent law have increased the challenge of discounting for legal risk;
- Copyrights are the most litigated IP type, but it doesn’t seem that way because patents and trademarks grab the most headlines;
- To forecast revenue for some copyrights, there’s a correlation between revenue and media hits;
- In trade secret litigation, value can be impacted because the secret must be disclosed, so make sure it’s protected from disclosure, e.g., clear the courtroom during testimony, seal the record, etc.; and
- FASB is mulling rules for recognizing internally generated intangible assets on the financial statements, but the rule-makers are mum on the details.
Speakers at the four-hour workshop were: Mike Pellegrino, founder and president of Pellegrino & Associates, a firm devoted to IP valuation; Christopher Rosenthal, a director and leader of Ellin & Tucker’s Disputes, Forensic and Valuation Services practice; Edgar Baum, co-founder, CEO, and chief brand economist for Strata Insights; and Ron Laurie, managing director of Inflexion Point Strategy, the first investment bank for intellectual property. A recording of the workshop, Understanding Intangibles: Classification, Identification and Valuation, is available here.
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