IP Valuation

Definition

The process of estimating the economic value of intellectual property rights including patents, trademarks, copyrights, trade secrets, and know-how. IP valuation methodologies span the income approach (relief-from-royalty, MPEEM), the market approach (comparable licence transactions), and the cost approach (replacement cost). IP valuations are required for purchase price allocation, internal transfer pricing, litigation support, licensing negotiations, and IP-backed financing.