A HIDDEN CHALLENGE FOR FOSTERING INNOVATION: SELECTION OF IP VALUATION METHODS

Year 2018, Volume: 5 Issue: 3, 251 - 268, 30.09.2018

Aysun Beyazkilic Koc Nihan Yildirim

Abstract

Purpose- There exist a
large variety of sources on the definition or application process of the IP
Valuation methods in literature, but there is still room for research for
applications, related cases and preference criteria of each method as the
theoretical and practical publications are very limited. Before starting IP
valuation process there are some fundamental prerequisite steps such as setting
the purpose of valuation, acquiring deep knowledge about the IP technology
being valued, definition of the type of the process of patent application,
defining TRL of IP and identifying the available data. To fulfil the gap of
knowledge, the main aim of this study is to provide a case study for developing
country context by exploring the current practices of patent valuation methods
and determining the applicability, usefulness, challenges, necessities and
advantages of IP valuation methods in IP ecosystems of technology.

Methodology- Within a
qualitative research methodology which utilized the experiences of the IP
valuation experts and professionals in technology transfer ecosystem in Turkey,
Europe and USA, data were collected through structured in-depth interviews and
Delphi Survey about level of expert knowledge, level of usage for different
quantitative IP valuation methods, the purpose of using different IP valuation
methods, challenges or benefits of applying the methods in patent valuation.

Findings- Findings revealed
that replacement cost, reproduction cost, sales comparison, DCF, the 25 percent
rule, comparable profit margin and RFR methods are widely preferred and known
IP valuation methods which are priorly expressed by the respondent experts of
this study. Advanced valuation methods are much rarely known and used when
compared to previously stated methods. In order to make effective and
well-supported estimates of an IP value, more than one valuation method which
can be selected according to the objectives and different situations and
qualitative parameters should be considered because of their indirect effect to
the valuation.

Conclusion- The
findings of this study show the whole necessities/inputs to apply valuation
method in line with the literature. When an IP is valued, qualitative
parameters should be considered because of their indirect affect to the
valuation. In order to make effective and well-supported estimates of an IP
value, more than one valuation method which can be selected according to the
objectives and different situations and qualitative parameters should be
considered because of their indirect effect to the valuation. This study is
expected to help valuers that are in need of choosing most suitable valuation
method for their IPs. 

Keywords

Intellectual property, IP valuation, IP valuation methods, Delphi Method

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