Intellectual property valuation refers to the process by which the worth of a particular intellectual property item is determined. This is an important aspect of many different business endeavors and operations. The value of intellectual property (IP) can determine many factors, such as sales prices, holding of shares, non-disclosure agreements, and other aspects of a transaction.
The value of intellectual property may be determined in many ways. Two common ways of valuating IP include:
- Cost analysis- How much an investor would be willing to pay for similar property
- Market analysis- Comparing the amount of similar property that has been bought and sold by competitors in the marketplace
Other factors that might be used in IP valuation are:
- Whether the property has legal protections associated with it
- Projected growth and profitability of the intellectual property or trade secret
- Whether similar types of works or materials exist
For certain types of intellectual property, there may be industry standards that set formal guidelines for merchants to follow when conducting intellectual property valuation.
What Are Some Legal Issues Associated with IP Valuation?
Intellectual property valuation can lead to various legal disputes and conflict. Just as in real property appraisals for homes, IP valuations can be subject to legal issues such as:
- Misrepresentations of monetary figures and values associated with the IP
- Intellectual property fraud, such as where an invention promotion company quotes a lower price in order to reap a higher profit
- Breach of contract, such as quoting one monetary value and then attempting to change the price after an agreement has been finalized
One of the main difficulties with intellectual property is that there is often no other existing product or idea for comparison in terms of value. This is especially true for new inventions and new product ideas. Thus, people who hold intellectual property interests should consult with professionals and/or lawyers during IP valuation processes to get a better idea of the worth of their property.
Are There Any Legal Remedies for a Property Valuation Dispute?
In the event of a dispute over intellectual property valuation, legal action may often be required to settle a conflict. IP lawsuits can result in various legal remedies such as:
- Monetary damages for losses caused by a violation
- Transfer of property rights (for instance, if there was infringement or intellectual property theft involved)
- Cease and desist orders, which are instructions issued by the court for one party to stop performing infringing acts
Protecting intellectual property interests is an important aspect of maintaining successful business practices. Many IP valuation disputes can be prevented through proper registration of IP interests.
Should I Hire a Lawyer for Help with IP Valuation Issues?
Intellectual property helps a business keep their operations fresh and relevant to consumer needs. IP laws can often be complex and may vary from state to state. You may need to hire an intellectual property lawyer in your area if you need assistance or guidance with any IP valuation concerns. Your attorney can provide you with legal advice, research, and representation with regards to your issues. Also, if you need to file a lawsuit, your attorney can guide you through the process with the courts.