Determining Qualitative Parameters Using TRIZ for Estimating IP Value of Intangibles
One of the primary issues faced by the knowledge economy is the valuation of intellectual assets. Intellectual assets are generally categorized into, Intellectual property (Patents, Trademarks, and Copyrights etc.), explicit knowledge (specific business related processes, methodologies and procedures etc.), and human resources. Value may be defined as the worth or the economic benefit that accrues for the intellectual assets to the owner over a time period. Valuation of any of these intangible asset is essential for financial reporting, M&A, commercialization, securitization, sale, calculating damages on IP infringement etc. However, valuation of each of these intellectual assets and most typically, valuation of technology assets/patents poses a problem unique to it and can be complex in nature depending on the situation. Further, the absence of organized trading in intangibles has been a major hindrance to their recognition as actual intangible assets in financial reports. Currently, there are a number of methods commercially available for valuation of patents or technology. However, these methods do not take into account the intrinsic value or technological merit of any technology asset or patents and therefore, companies usually prefer to adopt conventional techniques financial methods of valuation, which we believe is incomplete and does not reflect the real value of technological intangible assets. Hence, it is essential for companies to consolidate the IP value of an intangible asset along with the financial value to derive the actual value of the asset. In this paper, the authors use the TRIZ methodology to derive the factors and parameters that influence the IP value of a technological asset and more particularly, a patent and then use this factor along with the financial value to determine the actual projected value of an intangible asset.