The IP valuation challenge

The subject of IP valuation always livens up a conference, and this week’s Intellectual Property Business Conference in San Francisco is no exception.  Marquera’s Andrew Ramer stated though there are many different perspectives on IP valuation, the challenge is there is little public data on transactions, therefore, one can only make guesses about IP’s value, and that’s always context specific. (Readers of this blog realize there is much more than “guessing” involved with IP valuation, and ktMINE would be a good starting place for “public” comparables, at least with respect to royalty rates and arm’s length license agreements,” but the difficulties reflected in Mr. Ramer’s presentation are real.)

Richard Buttrick, RB Intellectual Property, who focuses on Scotland’s estimated two hundred thousand SMEs, twenty thousand of which have been categorized by the Intangible Asset Centre as “innovative” SMEs acknowledged though IP valuation is vital to SMEs, “in its current form it is too difficult, complex, unreliable, and expensive.”   The bottom line to Buttrick is messaging:  IP and intangible asset valuation must be presented in a way SMEs understand, but where does one find qualified, legitimate practitioners to value client’s IP? 

In part, the answer to Buttrick’s question came from Dr. Jackie Maguire, CEO of Coller IP Management, who encouraged attendees to look to an organization she helped found, International IP Strategists Association (INTIPSA) to identify qualified (competent) valuators and IP strategists.  In the U.S., several IP valuation practitioners boast the Distinguished insignia in BVR’s Directory.

David Haigh, , CEO, Brand Finance, suggested falling back on the standards, specifically ISO valuation standard ISO 10668 for brand valuations and International Valuation Standards Council (Guidance Note 4) on valuing intangible assets.