NEWS

The "comparative value method" of the valuation of patents in the United States"

Release time:

2016-08-09 16:37

According to experts from Nanjing Huaxun, the comparative value method is a supplement to the discounted cash method, not a substitute. It is the two most popular patent value assessment methods.

The comparative value method is characterized by taking into account the visible market price level and the behavior of buyers and sellers, with reference to historical transaction knowledge, and based on the relationship between the planned transaction and the historical transaction.

Nanjing Huaxun believes that if the comparative value method is successfully used as part of the value assessment, there must be a suitable set of patent transaction data.

The process of the comparative value approach is as follows:

1. Determine the characteristics of the comparative transaction. These include intrinsic characteristics, such as technical areas, product characteristics, and service linkages; extrinsic characteristics, such as legal stability, foreign applications, etc.; and market characteristics, such as transaction times, market supply and demand, the environment of the parties involved, and payment details.

2. Collect transaction data on features. Information channels include purchasing databases, stock market disclosures, subscription data services, media reports, and industry websites.

Utilizing comparable individual transactions requires a deep understanding of the trading environment of comparable transactions. If you want to compare a series of transactions, you need a certain amount and quality of transaction data, and at the same time understand the similarities and differences between the transactions to be evaluated and those in the database.

3, analysis of transaction data to select comparable transactions. Transform specificity into generality, distill available value ranges with selected comparable data, and then make decisions.

Market data for the United States around 2010 show that the value of a standard patent portfolio containing 25 U.S. patent families can be determined by a certain price range based on its relevant market value. A very valuable set of market standard trades are worth $5-9 million, and a weaker set is worth $1-2 million.

The comparative value approach is generally referred to as the market approach in China. The market approach is a simple and effective evaluation method that seems simple and clear, but it must have two prerequisites for its application: first, it must have an active market and a sufficient number of similar transactions. The second is publicly available price information. In the case of small number of patent transactions and opaque patent transaction information, the comparative value method is very difficult to evaluate the value of patents.