Intellectual property valuation: how to approach the selection of an appropriate valuation method

Abstract

PurposeThis paper aims to assess how to select an appropriate intellectual property valuation method according to the valuation situation and context.Design/methodology/approachThe article describes the difference between the quantitative and qualitative methods and principles. It reviews the principal approaches and methods used to evaluate an intellectual property asset and proposes a framework to help the evaluators to select an appropriate valuation method. The paper initiates a discussion on the parameters and requirements that influence the choice of an IP valuation method in order to reach the expected valuation result.FindingsThis paper provides useful guidelines for any evaluator who would be responsible for executing an IP valuation and who would be faced with the difficult task of choosing an appropriate IP valuation method. It is the intention of this paper to develop a synthesised and integrated procedure for the selection of an IP valuation method.Research limitations/implicationsThe limitation of this paper is that not all of the existing methods were described and taken into account in the final proposed procedure. The authors made a series of assumptions and a selection of the methods that may not be entirely shared by other researchers and practitioners. The authors are conscious that this constitutes a first proposal in the selection process of the most relevant IP valuation method. Further discussions and developments would be carried on in the future to enhance the proposed procedure.Originality/valueThis paper proposes a framework to orientate the choice of an appropriate IP valuation method according to the context and situation in which the valuation is to be implemented.