Cost-efficient IP appraisal backed by market research for an accurate assessment of nominal and present value.
Comprehensive income approach analysis with precise invention-specific review to support financial decisions and reporting.
Fully client-customizable valuation for specialized circumstances.
Services include:
• Technical Review and Summary
• Total Addressable Market Investigation
• Industry-Backed Royalty Rates
• Income Approach Analysis
• Nominal Value Calculation
• Net Present Value Calculation
•1 patent family with up to 3 patents
Services include:
Basic Valuation services, plus:
• Invention-Specific Market Investigation
• Royalty Rate Comparables
• Enterprise Risk Analysis
• Litigation Risks Review
• Potential Infringers/Licensees
•1 patent family with up to 5 patents
Services include:
Customizable to user needs, including any available add-ons:
• Additional Patent Families
• Additional Patents and Patent Applications in same families
• Market Approach Analysis
• Commodity Replacement Cost
• Non-Infringing Alternative Cost
• Litigation and Appeals Cost
Summary: The Standard Valuation is a more thorough analysis relative to the Basic Valuation. Specifically, this tier will commence with an introductory meeting to discuss (for example): (a) the relevant patent(s), (b) the intent of pursuing a patent valuation, (c) the potential or current products associated with client and/or third parties, and (d) any relevant documents and/or data (e.g., business plans, industry reports, market segment data, competitor assessments, etc.) the patent owner owns and/or is aware of which may be relevant to the valuation. Through this client interaction, a more in-depth analysis of the appropriate Total Addressable Market (“TAM”), royalty rate indicators, and potential risk adjustments can be analyzed and evaluated.
Summary: The Custom Valuation is for specialized analyses. For example:
• If the client/patent owner is interested in understanding the range of potential values associated with licensing their patented technology, a thorough analysis of such licensing activities (be it through an arms-length transaction or a litigation model) and associated costs and timing will be evaluated and incorporated into the valuation model.
• If the client/patent owner is interested in understanding whether potential design-arounds (non-infringing alternatives) to the patented invention exists, the report can be tailored to focus on the technical merits of the patented technology while also considering the costs associated with any potential design around costs.
• If the client/patent owner is interested in understanding the value associated with a contemplated patent pool and licensing share of revenue for each patent contributor, the report can be tailored to focus on the relative strength of each contributing patent and the value of the pooled patent assets.
• If the client/patent owner is interested in partnering with a third party to incorporate their patented technology in future products, the report can be tailored to focus on the licensing value of the technology (and potential know-how) as well as identifying potential partners.
Use Cases: This valuation is recommended for patent owners seeking an accurate estimate of the value of their patent(s). The Basic Valuation is recommended for general planning and strategic development, communications, marketing, and negotiations.
Use Cases: This valuation is recommended for patent owners seeking a report which contains a more in-depth and informed valuation of their patent(s). The Standard Valuation is required if the intended use of the valuation is in conjunction with financial and accounting institutions, e.g., for fundraising, financial reporting, and audits.
Use Cases: This tier is recommended for clients/patent owners seeking customizable examination of various circumstances to fit their specific needs.
Deliverables: A report which includes estimates and high-level methodologies relied upon to determine TAM, royalty rate indicators, nominal value of the patent(s), and NPV of the patent(s). Source materials relied upon will be provided.
Deliverables: A thorough report which includes descriptive write-ups of the subject patent(s), relevant industry and/or market segments, relevant TAM, comparable royalty rate indicators, discount rates and risk adjustments, and a conclusion of value for the subject patent(s). All relevant materials, data, and the valuation model will be provided as part of the final deliverables.
Deliverables: Customizable in form and content. Default form includes a report in the style of the Standard Valuation, but with additional analyses integrated into the document.
Basic Valuation |
Standard Valuation |
|
| EXPERT TECHNICAL REVIEW & SUMMARY | ✓ | ✓ |
| PATENT SPECIFICATION & CLAIMS REVIEW | ✓ | ✓ |
| PATENT FILE HISTORY REVIEW | ✓ | |
| TOTAL AVAILABLE MARKET ANALYSIS | ✓ | ✓ |
| — INDUSTRY MARKET ANALYSIS | ✓ | ✓ |
| — INVENTION-SPECIFIC MARKET ANALYSIS | ✓ | |
| — MARKET COMPARABLES | ✓ | ✓ |
| ROYALTY RATE COMPARABLES | ✓ | ✓ |
| — INDUSTRY-BACKED ROYALTY RATES | ✓ | ✓ |
| — INVENTION-SPECIFIC ROYALTY RATES | ✓ | |
| — COMPARABLE UNCONTROLLED TRANSACTIONS | ✓ | |
| INCOME APPROACH ANALYSIS | ✓ | ✓ |
| — EXPECTED RETURN RATE ANALYSIS | ✓ | ✓ |
| — ENTERPRISE RISK ANALYSIS | ✓ | |
| — GEOGRAPHICAL IMPACT | ✓ | |
| NOMINAL VALUE CALCULATION | ✓ | ✓ |
| NET PRESENT VALUE CALCULATION | ✓ | ✓ | PRECISION & CONFIDENCE OF ESTIMATE | Medium | High |
| REPORT PURPOSE | Communications, Marketing, Basic Negotiations | Fundraising, M&A, Financial Reporting |
| FEE |
Starting at $4,950 |
Starting at $9,950 |
Expert IP valuation determines the appropriate value of intellectual property assets and should be a critical part of any IP-related business transaction and/or IP monetization activity. It is important to understand that reducing risk and increasing profitability must be the primary focus during a patent valuation. IP Valuations are also necessary during various types of IP transactions (including the sale, licensing, acquisition) or assertions . Hence, the prices paid during an IP transaction must be estimated through a detailed valuation process before it can be objectively understood by the potential parties involved. The necessary skill sets used in an IP valuation are cornerstones of our intellectual property consulting services and include: financial, market, and technical expertise.
Patent valuation services from GHB Intellect have been perfected through direct case experiences over decades working with a range of clients. Specific goals can include IP analysis, IP strategy, IP valuation, and/or IP monetization, depending on our clients’ individual needs.
In recent years, the IP asset transaction market has grown rapidly. Patents are a substantial portion of allIP transactions. IP asset purchases can strengthen a position during a negotiation, can be used as a risk-mitigation tool, and can be used as investment opportunities. On the other hand, IP asset sales can be a quick way to raise capital and are frequently used to sweeten business deals.
This client engaged us to estimate the financial value of its patent portfolio so that the client could fund the development of their invention. As part of every financial valuation, we routinely perform a technical evaluation on the merits of the invention. Performing this due diligence, in this case, revealed a series of modifications that could be made to the client’s design, to improve practicality, cost, profitability, as well as industry, legal, and regulatory compliance. The client revised their designs as well as their business plan according to our recommendations and, as a result, was able to leverage the improvements to negotiate superior funding terms. When asked whether our financial valuation process had an impact on their business development, the client’s response was:
If you are considering selling your IP assets, then we can walk you through the steps necessary to close a deal. This includes helping to evaluate the portfolio, strategizing on a monetization approach, marketing the patents and other IP assets, and negotiating the best deal. If you are buying IP assets, then we can help mitigate risks by performing proper due diligence from all angles (Technology, Market, Law, Finance), including assessing the patents and other assets and identifying their fair market value.
Our patent valuation services include evaluating the patent technology, identifying markets and competitors, and assessing legal aspects. From here, we define the valuation model that will result in the most appropriate guidance. Our due diligence methods coupled with our overall science and technology expertise allow us to develop comprehensive valuation reports that are unbiased, credible and reliable.
Intellectual Property (IP) is a crucial portion of a company’s assets. A strong IP portfolio is instrumental for; fundraising, leverage in business transactions, an exit strategy, M&A valuation. Additionally, having a strong collection of IP provides confidence and relative freedom to operate (FTO). The IP transaction market has grown rapidly, due primarily to the boom in new patents. GHB Intellect Patent Valuation Services have expanded rapidly over recent years as demand for our comprehensive expertise (Technology, Market, Law, Finance) has continued to grow.
Patent valuation services have become a major discipline to determine what that patent or a patent portfolio is worth. The principles of sound patent valuation services are important to ensuring positive asset transaction outcomes. We have outlined the types of IP valuation applications in the following subsections.
As industries mature, older players benefit tremendously from licensing. A valued portfolio provides leverage in cross licensing portfolios. For example: Intel licenses AMD patents for $1 billion.
A strong IP portfolio greatly contributes to a successful IPO. Many business valuation professionals rely heavily on input based on the health of the IP and the valuation of the IP portfolio.
Investors always look to IP health of early stage companies. A valued IP portfolio strongly enhances the likelihood of successful fundraising.
Patent valuation services should allow valued portfolios to become much more easily liquidated. In some cases, the value of patents is greater than that of the company itself (e.g. Nortel).
Portfolio strength and Freedom-to-Operate (FTO) have a huge impact on acquisition totals. There are varying discount rates between 10-30%. This could change the valuation of a company significantly.
IP itself has developed into a market. Whopping transactions in recent decades have occurred through direct and indirect bidding. Nortel, Motorola Mobility, and Eastman Kodak are good examples.
Strategic players are always on the lookout for strong patents. Large corporations look closely at the strength of a patent portfolio before investing. The role of FTO opinion is crucial in any partnership.
Patents have grown from more fancy and honorary to all-out financial assets. Even though patent sales have been around for more than a century, recent decades have created their own market. This is partly due to the increasing economic abstraction of value. Abstraction of business started a long time ago for several reasons. The more abstract a line of business is, you can expect it to be more; sophisticated in its methods, hidden from laymen, profitable, and scalable. But, that also comes with more risk.
Everyone is trying to commoditize others. An excellent example of this can be seen in the vertical integration of all tech giants. When the chip market moved over in favor of hardware systems, IBM was the leader. Then, the hardware systems market was commoditized and software giant Microsoft became the market leader in the computer world. Next, Google benefited when the software market was commoditized, elevating intelligence, ads and services to the top of the food chain. Finally, we now see further commoditization of the ads and services products and market evolution towards ideas and patents.
Commoditization of the IP market is increasing because old markets are constantly commoditized to be replaced by new markets. Abstraction is inevitable.
Henry Woodward was a Canadian medical student developing devices for medical field. He was the inventor of the electric light patent filed in 1874. Thomas Edison bought the patent along with many others. This transaction took place some 150 years ago, when Edison, in pursuit of rights to the electric light, bought Woodward’s patent in this field.
75 years later, on August 11, 1942, Hollywood darling Hedy Lamarr (actress by day, inventor by night) co-invented frequency-hopping, the basis of many of today’s communication systems. She eventually sold this patent to Bell Labs.
As you can see, the commoditization of IP is nothing new. In fact, it has been one of the most important drivers of commercialization of innovation and has significantly impacted the technologies made available to consumers.
Patent valuation services play an important role in this ecosystem. A multi-disciplined set of expertise is required to properly value intellectual property, especially for high-tech/high-science patents. Please contact us if you have any further questions about our patent valuation services. Or, read more about our IP valuation methods for a closer look at how we perform them.
We offer specific service plans depending on your current requirements.
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GHB Intellect’s team consists of highly credentialed and seasoned experts and professionals from various disciplines (technology, science, intellectual property, finance, business) who are brought into each project as needed to enable the most reliable analyses and work products. With over 600 experts and professionals, GHB Intellect seeks to never use generalists for any project. We staff each project with experts that best match its requirements and objectives. We also have experienced IP professionals to manage the team and to interface with our clients effectively. To meet our team, please check out our Management Team as well as our Experts.
