BVR's Guide to Intellectual Property Valuation, Second Edition

March 2012 ISBN#: 978-1-935081-60-9 Hardcover, PDF (367 pages)

Michael Pellegrino

Business Valuation Resources, LLC

Author and leading IP expert Michael Pellegrino analyzes real-world examples of IP valuation and discusses each of the primary IP categories including patents, trademarks, copyrights and trade secrets. This edition includes chapters on:

  • Valuation approaches and guidance
  • Due diligence
  • Discount rate development
  • Royalty rates
  • And much more
This publication and many more are also available for download with a subscription to the Digital Library or BVResearch Pro.

Table of Contents

  • CHAPTER 1: ABOUT THIS GUIDE
    • The Growing Importance of IP
    • Why Is This Guide Needed?
    • What This Guide Is Not
  • CHAPTER 2: IP VALUATION OVERVIEW
    • About Patents
    • The Advantages of Patents
    • The Disadvantages of Patents
    • About Copyrights
    • The Advantages of Copyrights
    • The Disadvantages of Copyrights
    • About Trademarks
    • The Advantages of Trademarks
    • The Disadvantages of Trademarks
    • About Trade Secrets
    • The Advantages of Trade Secrets
    • The Disadvantages of Trade Secrets
  • CHAPTER 3: ABOUT IP VALUATION
    • Applying the Science
    • Practicing the Art
    • The Science-Art Continuum
  • CHAPTER 4: USING VALUATION APPROACHES
    • The Cost Approach
    • The Market Approach
    • The Income Approach
    • The Assignment-Approach Match
    • Common Pitfalls of the Various Approaches
    • Reconciling Several Valuation Approaches
    • Valuation Method Selection Summary
  • CHAPTER 5: GENERAL DUE DILIGENCE
    • Performing Initial Interviews
    • Analyzing Historical Financials
    • Understanding the IP
    • Verifying IP Ownership
    • Commissioning Independent Counsel Review
    • Reviewing Enforcement History and Ability
    • Performing Market Analysis
    • Evaluating the Regulatory Environment
  • CHAPTER 6: PATENT DUE DILIGENCE
    • The Invention Status
    • Current Art
    • Patent Utility
    • Patent Quality
    • Patent Age
    • The Administrative House
    • Blocking Patents
    • Status of Active Administrative or Legal Actions
    • Outstanding Contractual Provisions Affecting Value
  • CHAPTER 7: COPYRIGHT DUE DILIGENCE
    • Nature of the Copyrighted Material
    • Verifying the Nature of Rights to Value
    • Administrative Issues That Can Impair Copyright Value
    • Registration
    • Factual Works
    • Fair Use Value Erosion
    • Work Made for Hire
    • Copyright Notice
    • Ease of Duplication
    • Mechanical Rights for Nondramatic Musical Works
    • Termination of Transfers
    • Public Domain
    • Visual Artists Rights Act of 1990
    • Special Considerations for Computer Software
    • Easier to Avoid Infringing Activity
    • Disclosure
    • The Rule of Doubt
    • Special Considerations for Semiconductor Designs or Masks
  • CHAPTER 8: TRADEMARK DUE DILIGENCE
    • What Is Trademark Due Diligence?
    • Maintenance Fees
    • Owner of Record
    • Pending Trademark Challenges
    • Continued Use
    • Public Notice
    • Durability
    • Incontestability
    • Interference
    • Standards of Use
    • Trademark Strength
    • Dilution
    • Counterfeit Risk
    • Market Dynamism
    • Fair Use Value Impacts
  • CHAPTER 9: TRADE SECRET DUE DILIGENCE
    • Trade Secret Value Sources
    • Trade Secret Floor Value
    • Factors That Prolong Trade Secret Value
    • Factors That Kill Trade Secrets
    • Litigation Effects
    • Inadvertent Disclosures
    • Trade Secret Agreement Terms
    • Publication as Patent or Copyright
  • CHAPTER 10: DISCOUNT RATE DEVELOPMENT
    • Accounting for IP Risk
    • Deeper Analysis of Current Methods
    • An IP Discount Rate Estimation Model
    • Target Rate of Return
    • Holding Period
    • Success Rates
    • Target Returns
    • Investment Expenses
    • What About Empirical Evidence of Support?
    • Proving the Model
    • Model Extensions
    • Back to the Roots
    • Real-World Examples
  • CHAPTER 11: DETERMINING ROYALTY RATES
    • Royalty Rate Considerations
    • Royalty Rate Magnitude
    • Common Royalty Rate Determination Methods
    • Analytical Royalty Rate Determination Process
    • Calculating the Value Proposition
    • Determining Licensor and Licensee Contributions
    • Analytical Method Attack Points
  • CHAPTER 12: CASE STUDY IN IP VALUATION
    • A Poor Example of Celebrity Valuation
    • A Credible Approach to Celebrity Valuation
  • CHAPTER 13: MANAGING AN ENGAGEMENT
    • Project Preparation
    • Initial Due Diligence
    • IP Analysis
    • Market Analysis
    • Valuation Modeling
    • Valuation Reporting
    • Project Support
  • CHAPTER 14: AUDITOR’S REVIEW GUIDE
    • Analyzing the Analyst
    • Analyzing the Due Diligence
    • Report Boilerplate
    • Economic Conditions and Nature of the Industry
    • IP Utility
    • Government Protections
    • Functional Realization
    • Demand Analysis
    • Financial History
    • Chronology
    • Royalty Rate Analysis
    • Income Approach Using Reasonable Royalty Method
    • Consideration of Cost Approach
    • Use of Market Methods for IP Valuation
    • Use of Valid and Reliable Inferential Statistics
    • Repeatability