In the market approach, the value of an IP asset is determined by the arm's length price paid in transactions deemed comparable to the circumstances surrounding the IP being valued. The theory is that a licensee or buyer of IP will not be willing to pay more than the amount others have paid for similar intellectual property.
It would be nice if there were an active public market in which to exchange IP and view exchanges of comparable assets. Here a valuator could also view pricing, terms, and whether or not the exchange was in an arm’s length transaction. There have been attempts to create pure auction environments and marketplaces, and those we hear about are reported in IP Value Wire. The pure marketplace for IP does not exist, but now is an excellent source of data that thousands are using to value IP: ktMINE.
ktMINE is an interactive intellectual property database that provides direct access to royalty rates, full text of over 14,000 license agreements complete with detailed summaries that allow for easy searching. BVR represents ktMINE to the broad valuation community. Valuation analysts seeking royalty rates for an income approach to valuing IP, for relief-from-royalty, and for the market approach now have an excellent tool at their disposal. 24-hour passes are available. For more information, to see a User’s Guide or to learn pricing options, contact Randy Cochran at firstname.lastname@example.org.