The proprietary system VALMATRIX® Analysis Technique, was developed by CONSOR more than two decades ago. It uniquely employs a matrix of the most important predictors of value for a trademark, patent, or piece of software. The technique is an integral part of the royalty rate, competitive environment, and comparable transaction analyses we perform in many of CONSOR’s valuation projects.
The predictors for each of these types of intellectual property are unique. Essentially a relative strength analysis, VALMATRIX® objectively measures 20 different attributes associated with the intellectual property being valued, the owner of the intellectual property, and the past, intended and potential usage of the asset. The attributes cover factors such as financial performance, legal strength, marketing activities and competition, among others. They are used in a unique manner, however: to score a given intellectual property asset against its peers on a numerical scale.
Value is established relative to similar trademarks or patents. The factors included in each customized VALMATRIX® analysis are specific to the type of intellectual property being analyzed and the focus of the project, which provides a great deal of flexibility. While there is some overlap in key factors, VALMATRIX® analyses for trademarks, patents and copyrights are appropriately different to incorporate the differences in these various asset types. For example, one would not compare the Levi’s trademark to the Toyota trademark. Similarly, a VALMATRIX analysis that measures factors related to litigation matters, such as confusion and damages, varies somewhat from those performed in other valuation contexts.
The numerical score, generated by assessing and weighing the 20 factors in the VALMATRIX® approach is used to establish a percentile ranking relative to all similar intellectual property assets – similar trademarks, similar patents, and similar software. This relative value ranking is applied to the appropriate range of market comparables or streams of income. Over time, the VALMATRIX® technique has proven to be especially useful in ascertaining at which point in the spectrum of comparable intellectual property values an asset is positioned.
The flexibility of this tool and the clarity of its conclusions are elements that have contributed to its popularity and success.
To contact CONSOR about valuing your or your client’s intellectual property, send an email to info@consor.com.