Valuation of Patent: A Classification of Methodologies

Abstract

In the modern days business is centred on technological development, with patents recognised as valuable assets. These are transferable in nature; hence it is necessary to determine their fair market price, thus valuation. Worldwide several methods exist for determination of financial worth of patents. Aer a review of relevant literature like serious books, journals, newspaper articles, whitepapers, and websites, it has been found that there are plenty of methods of patent valuation. These methods are either outcome of academic research or they are proprietary assets of specialist firms involved in patent valuation. Some of these models are adopted for valuation, while others remain stand-alone. The existence of such large number of methods is like a jungle, where the practitioners and academic researchers find themselves lost. In this paper an attempt has been made to map this jungle, through presenting a classification of the existing methods. The review of a large number of relevant documents given confidence, that the main approaches have been captured. The existing methods are classified into two broad groups' viz. praxis models and academic models, indicating their advantages and disadvantages.