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Patent Valuation

In a much different way than trademarks, copyrights and other intellectual property, the value of patents is very much affected by the relative maturity of the technology. As one goes from very early stage technology and patent applications to fully mature and fully commercialized patents and technology, value will rise on a non-linear but fairly predictable curve from low to high.

One of the most important considerations in patent and technology development is stage of development. Of course, there are other important considerations. Included among those are the following:

  • The uniqueness or novel nature of the patent or technology
  • The breadth and depth of the technology
  • Competing or existing technologies
  • Time and processing costs required to fully commercialize a technology
  • The ability to protect the technology with various patents
  • Size of the market and, of course, future prospects for that market
  • Strategic or econometric influences on the future of the technology

From this we can see that value is truly situation specific and context driven when it comes to valuing patents and technology — developing versus developed technology, competitive versus non-competitive, internal development versus external development, each of these factors can greatly affect value. As with most intellectual property and intangible assets, the primary reasons for valuation can be either legal-based or business-based. On the one hand, valuation may be necessary because of legal challenges to a patent or other ownership; or there may be litigation over possible infringement or unauthorized use of the technology. On the business side, the normal deal making drivers of the valuation process exist: mergers, acquisitions, spin-offs, licenses, bankruptcy, company reorganization or company transfer, among other factors.

The experts at CONSOR are prepared to discuss the valuation context specific to the subject patents and determine the best way to analyze and extract value, whether individually or as a part of larger portfolios or technology bundles.

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