Intellectual Property is an essential part of a company’s assets. Patents, in particular, are crucial to increasing the likelihood of having a successful initial public offering (IPO), improving mergers and acquisitions (M&A) values, and providing ease to fundraising and investment efforts.
Strong patent portfolios are highly sought after. They establish a sense of confidence in creating high company valuation and providing leverage in certain transactions. Patents are no longer an honorary symbol; patent transactions have flourished into a huge market on their own.
In this case study, we provide an in-depth explanation of our services and market analyses to determine a fair market valuation of a brewing company.
We provided valuation services to a large brewing company.
The client’s patent portfolio consists of utility and design patents. The utility patents concentrated on the company’s chemical as well as mechanical inventions. The chemical inventions concentrated on brewery methods, hops, and yeast, whereas the mechanical patents were geared towards the design of bottles, cans, cartons, trays, taps, and brewery equipment.
Our services were recruited to assist in the company’s search for the utility of its products and IP outside of the beverage industry. The client was interested in obtaining an accurate patent valuation, which could be used later for monetization purposes (sale or licensing).
At GHB Intellect, we understand that patent valuation is a team effort. We are adamant to assign each project to only those individuals whose experience and background perfectly match and support the requirements of the project. Consequently, we included four experts to collaborate and provide a holistic framework to best manage and perform the tasks at hand. These consisted of two technical experts, one IP strategist, and one business/valuation expert.
The first Technical Expert has a PhD in Chemistry with over 25 years of extensive experience with patent analysis. Throughout his career, he has acquired expertise in solar energy harvesting principles and implementations.
The second Technical Expert has a master’s degree in Life Sciences. She comes with over 20 years of experience along with an extensive range of relevant knowledge, including Life Sciences, Food and Nutrition, Immunology/Hematology, Transfusion Medicine, Vaccines and Blood Products, and more.
Given the goals of this project, we also added a veteran IP strategist and a business/valuation expert with extensive experience in IP valuations.
With over 25 years of experience, our IP strategist has an extensive background in Intellectual Property and Business Strategy.
Our business/valuation expert has performed over 10 years of IP valuation in a multitude of fields. With his relevant experience in the Food and Beverage industry, he served as an invaluable team asset.
Through our technical analysis, we assessed all patents and applications by investigating a variety of factors, including (but not limited to):
- Probability of Use
- Ease of Work-Around
- Divided Infringement Issues
- Claim Language Structure
- Market Size
- Potential Targets
- Forward Citations
- Remaining Life
After gathering and analyzing this data, we were able to perform initial mapping to applicable products and identify further areas for investigation.
Potential Use Cases
Our team found that there are a variety of applications in the brewing company’s practices with remarkable opportunities to benefit the food and medical industries.
One of the company’s chemical inventions demonstrated a usage that may be applied towards processing cell cultures. This invention poses pharma applications, such as plasma fractionation, which can be used to develop blood derivative products.
Another potential use of this company’s patents was the ability to remove cell culture contamination through their yeast-related invention. This device decontaminates yeast and could be employed as natural preservatives in food applications.
Upon our analysis, we found that one of the company’s family of inventions may be relevant to the development of antimicrobial peptides, which can possibly create the means to prevent bacterial infections that are resistant to multiple drugs. Antimicrobial peptides are currently being considered as an alternative to conventional drugs and are being evaluated in preclinical and clinical trials. Though the process is under development now, positive results are continuously on the rise.
Through our market analysis, we researched potential markets and players who would benefit from the company’s patents and technology. Our intent was to look for a specific portion of the available market that holds a strong IP culture, is open to IP deals, and is not fragmented.
In order to find viable markets, we tapped into recent transactions, portfolio developments, and historical business transactions. Our research indicated a high demand for use of this technology which supported the acquisition of the IP.
Fair Market Valuation
Through our Fair Market Valuation, we utilized two methodologies to gauge the value of the brewing company’s utility and design patents: Market Approach and Cost Approach.
The Market Approach
We used the Market Approach to assess the company’s utility patents and compare how much similar patents are selling for. Through the Sales Comparison Method, we examined the patents of both related and general industries to facilitate our client’s patent pricing. To achieve accurate findings, we used transacted patent databases. Company acquisitions were analyzed to evaluate similar clientele and naked patent transactions to estimate the values of related businesses.
The Cost Approach
Since no infringement potential was found, we used the Cost Approach to analyze finances of the company’s design patents. This approach allowed us to account for the costs invested into creating the designs as well as conclude the expenses required to generate a similar design.
The Patent Valuation Service You Need
A patent valuation requires attention to all relevant factors and a multi-disciplined team of experts to execute it. GHB Intellect has over 500 experts in high-tech, science, finance, and IP. By organizing the best and most appropriate team of experts (including technical, financial, legal, and business) for every project, and by utilizing best practices in IP evaluation and fair market valuation, GHB Intellect is able to provide accurate, reliable, and unbiased valuation reports. As such, the team stands by its reports and is able to defend it in any discussion, negotiation, dispute with third parties.
As a global Intellectual Property Consulting Firm, GHB Intellect offers a wide array of high-end services to support its clients in their IP matters. We specialize in portfolio valuations, M&A advisory, patent litigation support, engineering, as well as IP development, management, and monetization. Contact GHB Intellect today to get the reliable intellectual property consulting you can bank on.