Tuesday, 7 January 2014

The easiest questions to ask aren't always so easy to answer ...

A fairly distinguished and senior member of the European IP fraternity has emailed me to ask a short, simple question:
"Sorry to bother you, but could you please recommend a book about the economic evaluation of IP rights, in particular trade marks and designs?"
My immediate answer was "no". While I have spent many pleasant hours in the company of people who make a living either from valuing IP assets or, I suspect, from writing about it, I hesitate to make any recommendations at all. My particular concerns include but are not limited to the following:
* the absence of generally accepted methodologies that can be consistently applied by members of the valuation so as to reach the same valuation on the same data; 
* the fact that the valuation of an IP asset seems to be so strongly influenced by the reason for seeking it: fixing a purchase price for parties at arm's length or for inter-group transactions, securitisation, boosting a business's asset value, or anything else; 
* the reluctance to take account of the fact that different markets behave in different ways and are bounded by different legal regimes both for intellectual property rights and for accountancy; 
* the risk of double accounting where the IP is part of an ongoing business and of speculation where the IP is not currently used in the course of commerce.
However, putting all prejudices aside, I'm happy to invite readers' recommendations -- preferably with reasons. Do please post them below, if possible, or email me at jjip@btinternet.com with your suggestions (even if you've written it yourself).

1 comment:

Anonymous said...

I know of naughty clients having more than one valuation done for a patent family, and then choosing the one that valued it higher.

I think we all know that sometimes there is a lot of guesswork involved. Sometimes the value of IP is effectively what it was valued at, especially if the people making the valuation are respectable (e.g. Ernst & Young rather than a one-man band).