IP valuation is the process of estimating the economic value of intellectual property for a specific purpose, at a specific point in time, and within a defined commercial and legal context. Unlike financial assets, intellectual property does not have an intrinsic or universal value; it’s worth depends on enforceability, scope of rights, market relevance, remaining life, and the manner in which it is or can be exploited.

At IIPRD, IP valuation is approached as a structured analytical exercise, grounded in legal realities and aligned with the commercial objective for which the valuation is undertaken.

Valuation outcomes are meaningful only when they are tied to a clearly defined purpose. Accordingly, the valuation framework, assumptions, and level of analysis vary depending on the intended use.

IP valuation is commonly undertaken in the context of:

• Licensing and technology transfer (royalty setting, deal structuring)
• Mergers, acquisitions, joint ventures, or strategic investments
• Fundraising, investor evaluation, or internal portfolio assessment
• Corporate restructuring, spin-offs, or IP transfers
• Strategic planning and monetisation analysis

Each of these contexts requires a tailored approach, both in methodology and in interpretation of results.

A credible IP valuation requires integration of multiple inputs, including:

Legal Scope and Enforceability

• Nature and breadth of claims or rights
• Jurisdictional coverage and remaining term
• Ownership clarity and chain of title
• Known limitations, encumbrances, or risks

Technical and Functional Relevance

• Role of the IP in the underlying product or process
• Degree to which the IP is core, enabling, or peripheral
• Availability of alternatives or design-around possibilities

Commercial and Market Context

• Market size and growth potential
• Competitive landscape and barriers to entry
• Actual or potential revenue linkage
• Alignment with business and product strategy

These factors inform not only valuation outcomes, but also the selection of appropriate valuation methodology.

While financial experts may apply valuation models, the selection and application of those models must be informed by IP-specific considerations.

Commonly used approaches include:

• Income-based methods, focusing on projected economic benefits attributable to the IP
• Market-based methods, referencing comparable transactions where available
• Cost-based methods, relevant in limited scenarios such as early-stage or defensive valuation

IIPRD’s role typically involves ensuring that:

• The chosen methodology is appropriate to the IP and the purpose
• Legal and technical assumptions are realistic and defensible
• The scope of rights being valued is clearly defined

IIPRD supports IP valuation exercises by bridging the gap between legal analysis and commercial valuation.

Our involvement commonly includes:

• Defining the valuation objective and scope
• Analysing the legal strength, coverage, and limitations of the IP
• Assessing commercial relevance and usage scenarios
• Supporting valuation professionals with structured legal and technical inputs
• Reviewing valuation assumptions from an IP risk and enforceability perspective

Where required, we work alongside financial advisors, accountants, or transaction teams to ensure coherence across disciplines.

Organisations typically benefit from IP valuation when:

• Preparing for licensing, monetisation, or collaboration
• Entering investment or transaction discussions
• Reviewing or rationalising IP portfolios
• Assessing strategic importance of specific technologies or brands

Valuation is most effective when undertaken proactively, rather than reactively.

1. Valuation for Semiconductor & Advanced Technology

In one engagement involving a semiconductor technology company, IIPRD was engaged to support valuation of a multi-layered intellectual property portfolio for the purpose of outbound licensing and strategic partner negotiations with device manufacturers and platform integrators.

The portfolio included granted and pending patents relating to processor architecture and system-level functionality, semiconductor layout-design (topography) rights, registered designs covering physical chip configurations and packaging, and associated proprietary technical documentation. Given the nature of the assets, the valuation exercise required assessing how different IP rights operated collectively, rather than in isolation, to support commercial adoption.

IIPRD first conducted a technical and legal segmentation of the portfolio to distinguish:

• rights covering foundational architectural features essential to performance or interoperability,
• rights limited to implementation-specific optimisations, and
• rights contributing to manufacturing efficiency, design wins, or reverse-engineering resistance.

From a valuation perspective, an income-based approach was selected as the primary methodology, as the IP was intended to be monetised through field-limited and product-specific licensing, rather than outright transfer. Royalty benchmarking and projected licensing revenue scenarios were developed by mapping IP clusters to identifiable licensing fields, accounting for remaining term, jurisdictional enforceability, standard relevance, technology adoption cycles, and expected obsolescence.

Cost-based indicators were used only as a secondary reference, to avoid over-attribution of value to patents and designs that were technically peripheral or commercially substitutable. The resulting valuation framework enabled the client to enter licensing discussions with defensible, technology-linked value assumptions, avoid inflation of non-core assets, and align licensing expectations with actual market dependence on the protected technology stack.

2. Brand Valuation: Consumer & Retail Business

In a separate engagement involving a consumer and retail-facing enterprise with a strong offline and digital presence, IIPRD supported valuation of a trademark portfolio in the context of a proposed strategic investment and brand-led expansion plan.

The engagement involved reviewing the registered and applied-for trademarks, assessing scope of protection across key jurisdictions, consistency of use across product categories, renewal posture, and exposure arising from coexistence or enforcement gaps. Particular attention was paid to the relationship between the trademarks and consumer recognition, channel leverage, and pricing power, rather than mere registration counts.

Given that the brand’s value was tied to market position and revenue generation, a relief-from-royalty method was adopted as the primary valuation approach. Hypothetical royalty rates were assessed based on comparable brand licensing arrangements, adjusted for the strength of legal protection, geographic coverage, and the extent to which the brand drove consumer preference and repeat purchases. Income projections were aligned with actual sales performance and planned market expansion.

The valuation exercise enabled the client to support investment discussions with reasoned, legally anchored brand value inputs, avoid over-reliance on goodwill assumptions, and structure internal and third-party brand licensing arrangements on commercially and legally defensible terms.