Intellectual Property Valuation essay

Nowadays companies and businesses realize the necessity of valuing intellectual property as it gives them an excellent opportunity to take comparative advantage over other companies. For example, businesses processes are often patented today not to let other companies steal their business ideas and concepts. Contemporary businesses are based on high technologies and, therefore, they pay thorough attention to intellectual property.

Moreover, business managers, leaders and executives tend to develop their intellectual knowledge as it gives a chance to become professionals in intellectual property valuing and to become successful leaders in the era of technologies and information. (Financial Consulting Group, 2000) Today intellectual knowledge embraces human capital, structural capital, intellectual assets and intellectual property.

Progress of society is significantly contributed by proper use of knowledge. Intellectual property defends experiences, education and skills of all employees, as well as process documentation, tangible and intangible assets, human capital, etc. Intellectual property includes literary works, brand names, technical documentation, etc. Modern companies distinguish 5 basic intellectual property forms: patents, copyrights, trademarks, trade secrets and know-how or innovations.

Nevertheless, some companies may fail capitalizes offered opportunities as they have never considered the importance of intellectual property. (Financial Consulting Group, 2000) Intellectual property valuation is challenged by abilities “to determine the market royalty rates that should be used”. (Financial Consulting Group, 2000) Usually royalty rates are developed basing on information from clients, surveys and judicial opinions, although all these traditional sources depend on individual factor.

It is obvious that intellectual property drives success of businesses and companies. Intellectual property is considered “the value generator of the future”. Therefore, companies are tending to identify available intellectual capital and to value its components, to protect intellectual capital and to license intellectual property.


Financial Consulting Group, L. C. (2000). Intellectual Property Valuation. Retrieved April 7, 2008, from http://accounting. smartpros. com/x7594. xml