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PATENT EVALUATION
Patent Value Ticker
KNOWING THE TRUE VALUE OF INVENTIONS IS REAL INSIDE KNOWLEDGE
Nowadays companies know the asset value of every screw in their stock. But they often don't know what determines one of the largest parts of their wealth: their patents. The value of a (technical, scientific) company is nowadays determined by up to 90% of the intangible assets. These are, for example, patents and utility models. Knowing the value of your patent portfolio makes your IP strategy stronger and your decisions more effective.
Find more insights in our Q&A and in our blog "Patent Insider" .
We help established companies and start-ups and support them in securing liquidity by increasing their creditworthiness and creating collateral and thus improved access to capital.
We evaluate your entire patent portfolio or individual intellectual property rights, for example in connection with financing, and help with the implementation of your financing project.
SERVICE OFFER
YOUR NEEDS ARE IMPORTANT TO US - FIND THE RIGHT SERVICE
DEPENDING ON YOUR GOALS, EXPECTATIONS AND THE TYPE OF PROJECT
The result, quality and speed will inspire you - just like hundreds of customers before you. We would be happy to advise you.
MECHANICAL
PATENT EVALUATION
A fully automated patent valuation based on 27 different, partially hybrid value indicators. The evaluation is also possible retrospectively back to the year 2007, qualitatively as well as monetary (market value). The procedure is based on scientifically recognized methods and results from our more than 21 years of experience in the evaluation of patents and utility models. Well suited for large to very large patent portfolios.
MANUAL
PATENT EVALUATION
A manual, indicator-based patent rating based on up to 70 other different value indicators, depending on the reason for the evaluation. The procedure is complementary to the machine evaluation and very precise: the Hit rate is over 98%, ie almost all values determined so far corresponded to the actual values or were later traded at this value. Retrospective evaluations are also possible. Well suited for individual patents and smaller patent portfolios.
LICENSE ANALOGY
PATENT EVALUATION
A manual, indicator-based evaluation of patents, inventions including their future potential based on earnings and earnings forecasts and reference license rates. The procedure is based on the license value analogy valuation method described in the SIGNO standard .
Well suited for individual patents and smaller patent portfolios to estimate their value potential.
All patent assessments are concluded with a comprehensive report. It contains statistical evaluations, various value statements, the essential findings and phenomena found in the investigation. Request (alienated) sample reports from us to see how complex and extensive a patent evaluation can look. Our valuations comply with current norms and valuation standards, so the expertise that we have prepared for customers has also been recognized by authorities and auditors.
Over 21 years of experience in patent evaluation, our innovative Software instruments and recognized scientific indicator-based methods enable us to evaluate large patent portfolios in a short time - at a very affordable price with the highest possible quality and forecast reliability. There are no limits to the number of intellectual property rights to be evaluated - from individual patents to complete patent portfolios. Depending on the reason for the evaluation, we use the most suitable procedure for our customers.
Let experienced and excellent experts advise you:
For the 5th year in a row, we have received several awards as the best German patent valuation company.
Q&A
Q1 - DEFINITION
Q4 - METHOD
Q7 - VORTEIL
Q10 - RESULT
Q13 - CUSTOMERS
Q5 - PATENT VALUE
Q8 - TIME
Q11 - VALUATION TYPE
Q6 - VALUE / PRICE
Q9 - KOSTEN
Q12 - APPLICATION
Q15 - YOUR QUESTIONS
Do you have any further questions?
Ask us!
Q1 What does patent valuation mean?
Patent rating has two basic meanings:
The qualitative (comparative) evaluation of patents - the result is a qualitative value or a direct comparison with the competition: e.g. patent A is better than patent B or portfolio A has a better technical value than portfolio B. Special indicators are used for the qualitative evaluation. Here, simple manual scoring methods for assigning a qualitative score to an indicator are widely used. An evaluation according to this method must be carried out individually for each case and is usually difficult to understand ("why was the technical quality given a 3 and not a 5?"). Better approaches are automated or semi-automated methods with multiple choice questions. They are better protected against manipulation and are more transparent. The qualitative assessment is suitable for internal purposes such as benchmarking, R&D controlling or supporting decision-making processes.
The quantitative / monetary assessment. This assessment can be more complex. Depending on the method used, it can be combined with indicator models. There are various norms and standards for monetary valuation, which often describe general earnings value, cost value or market analogy methods. With the indicator-based market analogy evaluation method, you get both a qualitative and a monetary value. This method is effective, fast, reliable and offers the most possibilities for use in different areas such as accounting, purchase/sale of patents, security and allows significantly more application possibilities as well as a better understanding in the field of benchmarking, R&D controlling and strategy development.
Q2. Why should companies know the value of their patents?
Patent valuation offers an enormous range of applications in controlling, strategy, marketing and finance. Why not, for example, compare your own IP and R&D activities with those of your competitors in order to draw strategic conclusions from them? Wouldn't it be good to know the best patents of the competitors? How about knowing all the assets of the company? What speaks against having a higher company valuation? Why not benefit from additional assets in terms of better creditworthiness (rating)? So the right question is “Why not?”
Companies with (good) patents have a higher value than shown on the balance sheet as long as the patents are not yet activated. If the actual value is not disclosed - this can lead to conflict situations with shareholders.
Q3 Why should companies consider the patent value of other companies know?
It's no secret that companies with good quality patents and strong IP activities have better prospects for the future than those that are less innovative (Hall, Bronwyn H.; Thoma, Grid; Torrisi, Salvatore, 2007). That is, information about the patent values is a powerful tool for investors to forecast the future development of a company on the stock market.
Knowledge of your competitors' IP value and/or trends in specific technology areas is also an important tool for making strategic decisions and gathering the necessary information.
Q4 What methods do you use for patent valuation?
We use an indicator-based market analogy method. In this procedure, patents are not directly compared to other patents in terms of technologies, shares in a product or addressed markets, but rather their characteristics and indicators, which are then compared. The calculated value is based on the reference samples of patents traded in the past. The more indicators that can be used, the more accurate the model and value forecast will be.
The result of the assessment is a qualitative and quantitative (monetary) value of a patent, a family or an entire portfolio.
Q5. Which value is calculated?
The value is referred to as "fair value", "market value" or "fair market value". With the indicator-based market analogy method, the patent value is determined as for a commodity. This approach is known and recognized from real estate valuation. A value range is also determined for real estate according to indicators: e.g. location, living space, equipment, year of construction, etc. The patent value is therefore very close to a later sales price, since the indicator set (an abstract model of a patent) is compared with patents that were awarded in the past traded at a certain price. The reference data is therefore empirical and results in a very realistic market value.
Q6. What is the difference between the value and the price?
Value is the basis for negotiating the price of a commodity (in this case a patent) between seller and buyer. The price is the amount that will eventually be paid and may be the result of negotiation. The value and the price do not have to be the same. For example, the price may be much higher if the individual value (utility) for a particular buyer is higher than the market value. Of course, the price can also be lower if the buyer is not willing to pay a certain amount or if an offer includes additional services (e.g. services, complete portfolio or licenses).
Q7 What are the advantages of your evaluation process?
There are many advantages over other methods:
All patent types can be evaluated.
"Fair value" corresponds to all norms, standards, guidelines, even accounting standards (e.g. IDW S5).
Market value is a potential trade value
The evaluation takes place without great effort and can be highly automated
Low error rate (empirical data)
Automated patent value data and software solutions are already available on the market.
The approach is currently in the scientific research focus
Most of the other valuation approaches that are also mentioned in standards were not originally developed for patent valuation. Some are derived from company valuation (e.g. discounted earnings method) or accounting approaches (e.g. cost approach). This creates problems when applying these methods to patents. Also, different approaches can lead to completely different results for the same patent. Furthermore, these approaches are usually very complex. These facts make other approaches less precise and uneconomical compared to the indicator-based market analogy approach.
Q8 How long does a patent evaluation take?
As a rule, the evaluation takes less time than the preparation of a project, the research and the assignment of the correct publication numbers by our customers.
The duration also depends on the scope of the assessment: The decisive factor here is whether a fully automatic assessment should be supplemented by a manual assessment in order to get more precise results.
Of course, the duration of the evaluation depends on the number of patents evaluated. From experience we can say that the evaluation was always much faster than our customers expected. We can usually provide a first impression of the value within a day. Our longest project lasted 4 weeks including a manual evaluation - shorter than the ordering and invoicing process at the customer.
Q9 What will this cost me?
The expected costs depend on the size of the patent portfolio and the preferred method (manual or machine evaluation). The machine valuation gives you a good appreciation for a very reasonable price. If you want a more accurate and detailed value, choose our manual assessment with up to 72 additional indicators. The evaluation result is extremely precise and the costs are manageable. Ask us for an individual offer.
Q10. How accurate are the results of the assessment?
The evaluation result ranges from "precisely enough" to "100% precise", depending on the selected evaluation method/depth of evaluation. Reviews that we have evaluated both automatically and manually have never been wrong. This means that a price traded later was always within our calculated range of values. In the table you can find some valuation examples: in it are our machine-calculated values for patents/patent families/patent portfolios and the price that was later paid if results were published.
*USD value converted to Euro based on exchange rate on trade date.
Q11. What is the difference between a quantitative and a qualitative assessment?
The quantitative (monetary) valuation describes the market value of a patent. This is the value derived from sales prices carried out in the past (market value analogy). The indicator-based patent evaluation follows the same principle. A range of electronically available data (and possibly also manually evaluated indicators) is taken into account, which makes the evaluation independent of seller or potential buyer interests.
The qualitative evaluation provides an abstract, comparative picture of a patent, eg in comparison to a percentage scale, an average or another (competitive) patent
The qualitative result of our indicator-based method consists of 6 different key figures - different indicators are used for each of them:
Market Attractiveness: shows from an IP perspective how many competitors are active and how many innovations are being made in the various technical areas of the company
Market Coverage: shows the size of the market covered by the IP and in how many countries IP protection is guaranteed.
Technical quality: shows the degree of innovation that can be derived from the company's IP
Applicant Value: takes into account the R&D behavior of the company
Legal aspects: shows the legal strength of the IP in terms of the degree of protective effect
Overall IP quality: consists of all the previously mentioned key figures and shows the overall quality level
Q12. What are the typical areas of application?
Marketing intelligence, portfolio management & monetization
Technology Benchmarking
competition monitoring
Buying and selling patents
licensing
IP rating for funding
Patent valuation in the context of patent litigation
Share assessment in the context of joint ventures
R&D and patent management
finance
M&A purchase price allocation
Patent valuation for the transfer price
Accounting for intangible assets (IFRS) to reduce interest rates
Partner/shareholder interests, share price
Q13. What are your most frequent customers?
Large companies and SMEs that want to evaluate their own or someone else's patent portfolio, plan a takeover or buy or sell a patent portfolio, grant or take licenses, or want to capitalize their own intellectual property rights in the balance sheet as intangible assets.
Banks and M&A companies in the context of securing financing with patents and in the sale or purchase of companies or parts of companies.
Private equity, venture capital and rating companies in the context of evaluating companies with patents.
Research institutions to evaluate patents for technology transfer or spin-offs.
Patent attorneys in the context of patent litigation and portfolio optimization.
Sole inventors and start-ups with patents to support seed or growth financing.
Authorities who want to know the value of a portfolio, e.g. in the context of tax-related issues (e.g. transfer pricing).
Insolvency administrator in the context of the liquidation of patents.
Q14: What are your unique selling propositions in the patent appraisal market?
We have a unique valuation approach that allows us to calculate potential transfer value as if a patent were traded from one owner to another.
Information quality: We use the largest set of indicators that provides the most reliable results, also compared to other valuation approaches (such as earning value or cost value)
Build Quality: We have a reference database for past traded patents. This enables us to evaluate patents both qualitatively and monetarily
Data Availability: We link patent assessment data to a company's business data to which we also have access
Competence: We have in-depth expertise of more than 17 years in patent evaluation
Value for money and time: Our approach in combination with innovative software solutions enables us to evaluate patents unrivaled quickly, with the best results at very fair prices.