Related ServicesProtection IP Strategy & Management Due Diligence
Related PeopleKate Hillis David Spinner Meeta Mistry Emma Leland Fry Jakob Bumke Rachel Wallis Rhiannon Turner
UKIPO Report on Valuation of IP Assets
The UKIPO has recently issued a report which assesses the market for the valuation of Intellectual Property assets. The report confirms what many already suspected, namely, that the value of these intangible assets is poorly recognised by the companies holding the assets and, often, their financial advisers. This situation does appear to be improving, however.
Current reasons for conducting a process of ascribing value to a company’s IP assets typically include events such as company purchase or IPO, licensing negotiations, or litigation. However, the report also identifies that, as the understanding of the accounting and finance industries increases in relation to the nature and potential value of IP assets, there are is an increasing trend for valuation to be carried out. Valuation is also likely to be necessary if IP insurance is contemplated, increasingly of interest to start-up companies as well as more established organisations. The report notes its findings that, for a reasonably non-complex review of a company’s assets, the cost could be expected to be in the region of £2,500-5,000, or even less in some cases, which may be a lower cost than many companies expect. The value of the assets can then appear on a company’s balance sheet, which is likely to assist when raising finance, for example.
A useful first step in obtaining a valuation of a company’s IP assets is likely to be to carry out an IP Audit. Funding is available to companies to carry out such an audit, as we describe here.
The report recommends that the UKIPO should develop an outreach program of education and incentives which may be accessed by companies, universities and individuals. The report also suggests that the UKIPO should provide a directory of companies providing IP valuation services. As we hear more news of these initiatives, we will provide updates. If you have any questions regarding your IP assets and the potential to obtain a valuation of these, please contact any of us here at Greaves Brewster LLP.
If you are interested in reading the report, including its executive summary, it can be accessed at https://www.gov.uk/government/publications/hidden-value-a-study-of-the-uk-ip-valuation-market.