Claire KARSENTI, Partner at Sorgem Evaluation, participated on the topic of “Intangible assets at the heart of value creation” at…
Like all assets, a patent is an asset whose value depends on the amount of revenue it will generate based on its legal characteristics (such as copyright limitation and validity period).
The scope of application includes various fields:
- brand acquisition or disposal;
- internal restructuring;
- Purchase Price Allocation (PPA);
- determination and justification of the patent’s royalty rate;
- counterfeit damages.
Different methods can be applied depending on the valuation context, the patent’s characteristics, in particular the legal ones, and available information:
- licence fee method based on a market rate analysis;
- excess earnings method based on the results attributable specifically to the patent;
- cost method base on patent’s reproduction or replacement cost and its economic life.
These methods are based on an economic analysis of the patent’s role and a prospective analysis of the incremental value generated by the patent.
Our work includes the description and analysis of the value added related to the patent as well as recommendations on how to optimise the patent’s financial value and on the most suitable royalty rate applicable for licensing agreements.