What Is Intellectual Property Valuation?

The evaluation of intellectual property rights belongs to the category of enterprise asset evaluation. It is used to determine the current value of intellectual property and the value obtained through future effects. The value of intellectual property rights emphasizes future interests. As the value of intellectual property rights is more and more recognized by enterprises, the profitability of intellectual property rights has now become a way for enterprises to use all resources to maximize returns. Therefore, when evaluating intellectual property, it is important to understand the various rights associated with intellectual property and how they are used. The assessment of a company's intellectual property should be based on its most potential use, not the way it is actually used by the company during the assessment.

Evaluation of intellectual property

The evaluation of intellectual property rights belongs to the category of enterprise asset evaluation. It is used to determine the current value of intellectual property and the value obtained through future effects. The value of intellectual property rights emphasizes future interests. As the value of intellectual property rights is more and more recognized by enterprises, the profitability of intellectual property rights has now become a way for enterprises to use all resources to maximize returns. Therefore, when evaluating intellectual property, it is important to understand the various rights associated with intellectual property and how they are used. The assessment of a company's intellectual property should be based on its most potential use, not the way it is actually used by the company during the assessment.

Chinese name

Evaluation of intellectual property

Meaning

Evaluation of intellectual property evaluation objects

Object

Trademark and patent rights

Opportunity

enterprise

Intellectual property evaluation refers to the behavior of a registered asset appraiser of an intellectual property evaluation agency to analyze, estimate, and issue professional opinions on the value of the intellectual property of the subject of intellectual property evaluation under the specific purpose of the evaluation base date in accordance with relevant laws, regulations and asset evaluation guidelines And process. There are many intellectual property rights involved in the evaluation of intellectual property rights. Generally, intellectual property rights are generally evaluated on common intellectual property rights such as trademark rights, patent rights, and copyrights. ^[1]

I. Use of intangible assets pledged loans (trademark rights, patents, copyrights and other pledged loans), industrial and commercial registration, capital increase and share expansion, participation in equity participation, license use, transfer, lease contract, liquidation auction, etc .;

2. Improve brand awareness, outreach corporate strength, and enhance cohesion;

3. The operation of enterprises using intangible assets is in line with international standards, and then enters the international market;

4. The need to protect intellectual property rights and provide a basis for claims for anti-counterfeiting, infringement and litigation;

Fifth, through the evaluation of intangible assets, you can find out the family base and provide management operators with reasonable allocation of resources;

6. Project financing, joint venture cooperation, corporate mergers, acquisitions, and attracting investment;

7. Intangible assets can increase registered capital and can account for 70% of registered capital;

8. Intangible assets can also be amortized according to the stipulated period of time before tax.

From the perspective of domestic and international business and legal practice, intellectual property evaluation mainly occurs in the following places: First,

The factors that need to be examined in the evaluation of intellectual property rights are: the eligibility of the right holder: when collecting and evaluating the positive and negative evidence of intellectual property rights.

Classification of intellectual property

According to the "Notice of the Ministry of Finance and the State Intellectual Property Office on Strengthening the Management of Evaluation of Intellectual Property Assets", the "Patent Law of the People's Republic of China", the "Trademark Law of the People's Republic of China", the "Copyright Law of the People's Republic of China", The Republic of China Security Law, the Measures for the Evaluation and Management of State-owned Assets, and other relevant provisions, where an intellectual property holding unit meets one of the following conditions, an asset assessment of intellectual property shall be conducted.

(1) in accordance with the provisions of Article 27 of the "Company Law", the establishment of a limited liability company or a joint stock limited company at the price of intellectual property assets;

(2) Pledged by intellectual property rights, the market does not have a reference price, and the pledgee requests an evaluation;

(3) The administrative unit auctions, transfers, or replaces intellectual property rights;

(4) the restructuring, merger, separation, liquidation, investment, transfer, replacement, or auction of state-owned public institutions involves intellectual property rights;

(5) the restructuring, listing, merger, separation, liquidation, investment, transfer, replacement, auction, and debt repayment of state-owned enterprises involve intellectual property rights;

(6) State-owned enterprises acquire or obtain the intellectual property rights of non-state-owned units through replacement, or accept non-state-owned units to invest in intellectual property rights;

(7) State-owned enterprises license foreign companies, enterprises, other economic organizations, or individuals for intellectual property use, and the market does not have reference prices;

(8) determining the value of litigation involving intellectual property rights, which is required by the people's court, arbitration institution, or the parties for evaluation;

(9) Other matters required by the law and administrative regulations for asset evaluation.

If non-state-owned units engage in intellectual property rights when economic activities such as merger, division, liquidation, investment, transfer, replacement, debt repayment, etc., may refer to the state-owned enterprise for asset evaluation. ^[2]

Intellectual property evaluation mainly includes evaluation items such as trademark evaluation, patent evaluation, copyright evaluation, software copyright evaluation, etc. Intellectual property evaluation is an important intangible asset evaluation project. The basis of intellectual property evaluation is an important guarantee for determining the scientific value of evaluation .

(I) Basis of conduct in the evaluation of intellectual property rights

The basis for the evaluation of intellectual property evaluation determines the start of the evaluation of intellectual property. The entrustment agreement between the client and the trustee for the asset evaluation business is the basis for the conduct of the intellectual property evaluation business.

(II) The legal basis of intellectual property evaluation

In order to regulate the evaluation of intangible assets, especially the evaluation of intellectual property rights, relevant state departments have successively issued a number of policies and regulations such as evaluation guidelines and guidance. It is precisely because of the promulgation of these policies and regulations that it provides a legal basis for the development of China's intellectual property evaluation business.

Order No. 91 of 1991 of the State Council on `` Administrative Measures for the Evaluation of State-owned Assets '';

Former State Administration of State-owned Assets Administration [1992] No. 36 "Rules for the Implementation of Measures for the Administration of State-owned Assets";

Former State-owned Assets Management Bureau of the State-owned Assets Management Office issued [1996] No. 23 "Opinions on Operational Evaluation of Assets Evaluation (Trial)";

Ministry of Finance Caishangzi [1999] No. 91 "Notice on Printing and Distributing the" Interim Provisions on the Basic Content and Format of Asset Evaluation Reports ";

"Asset Evaluation Criteria-Intangible Assets" issued in 2008;

Guiding Opinions on the Evaluation of Copyright Assets implemented by the China Rating Association since July 1, 2011

Guiding Opinions on the Evaluation of Trademark Assets implemented by China Rating Association since July 1, 2012

Guiding Opinions on the Evaluation of Patent Assets implemented by China Rating Association since July 1, 2009

"Asset Valuation Standards-Basic Standards" issued by China Assets Evaluation Association in 2007;

Other relevant laws, regulations and rules promulgated by relevant state departments.

(3) Basis of property rights for intellectual property evaluation

The evaluation object of intellectual property evaluation requires clear property rights, which is related to the legal authority of the intellectual property evaluation report. The property right basis for the evaluation of intellectual property rights is generally the trademark certificate, patent certificate, software copyright certificate, and copyright certificate of the property owner.

(4) Price basis and reference basis

The price and reference basis in the process of intellectual property evaluation are generally the client's feasibility report on the commissioned project; other relevant information provided by the client; market data and other data collected by the appraiser. ^[3]

I. Signing of an intellectual property evaluation project: Before the evaluation, the client needs to sign an intellectual property evaluation commission agreement with the company, regarding the scope of intellectual property evaluation, the purpose of the intellectual property evaluation, the intellectual property evaluation base date, the intellectual property evaluation fee, and the delivery of the intellectual property evaluation report They agreed on the time and other items, formally signed an agreement on intellectual property evaluation, paid 50% of the intellectual property evaluation fee in advance, and jointly supervised the implementation.

2. Establishing an IP evaluation project team: Depending on the size and difficulty of the evaluation project, a project evaluation team with industry experts, evaluation experts, and economic, legal, technical, social, and accounting professionals will participate in the project evaluation. The group implements an expert responsibility system.

3. The entrusted unit shall provide the evaluation materials as required and the project leader s field inspection to verify the situation: the entrusted party provides the intellectual property-related information of the entrusted evaluation, and our unit's project manager conducts a preliminary review of the provided information. The project team conducted in-depth inspections of enterprises to understand the development and changes of the enterprise, economic benefits, market prospects, technology life cycle, equipment technology, economic status, check various legal documents and accounting statements, and listen to reports from leading cadres above the middle level.

4. Market survey: Use modern methods to conduct surveys in consumer groups in different regions and with different economic incomes. Some assessments also need to conduct international market surveys to obtain first-hand information on assessments.

V. Design of mathematical model: The internationally accepted theories and methods are used to design a mathematical model based on the actual situation of the enterprise to be evaluated, to scientifically determine the values of various parameters, and to perform multiple calculations by computer.

6. Discussion by the expert committee: The expert advisory committee demonstrates the evaluation results. The expert advisory committee must be attended by more than two-thirds of the staff, industry experts must be present, and more than half of the experts have passed a secret ballot to approve the evaluation results.

7. Reporting the evaluation results of the intellectual property rights of the customers: Notifying the customers of the evaluation results, and the customers pay the evaluation fees.

8. Print the intellectual property evaluation report and send it to the customer.

Nine, post-service work: extended service, consulting, publicity planning of the evaluation results. ^[4]

1. The enterprise submits a written application for intellectual property pledge loan to the bank

2. Evaluation of corporate intellectual property by professional assessment agencies

3. The bank reviews the information submitted by the enterprise and the evaluation results of the exclusive right to use the trademark

4. After the review, the two parties signed the "Loan Contract" and "Trademark Pledge Contract"

5. Registration of intellectual property pledges

6. Execution of the loan contract

Finally, for the disposal of the pledged property: the realization methods of the pledge right mainly include sale, auction, and use of the pledged property to offset the debt (must have the agreement of the parties). The auction of pledged property is one of the methods to implement the right of pledge. China's "Auction Law" stipulates that the pledget and the pledgee should reach an agreement on the issue of the pledged property to implement the pledge right by auction. If the agreement is not reached, the pledge holder can sue in the people's court. ^[5]

As a category of asset evaluation, intellectual property evaluation also belongs to a social justice service industry. The state has

Flow chart of intellectual property evaluation ^[6]

The assessment requirements are specified. According to the State Council Order No. 91, asset evaluation should follow the principles of authenticity, scientificity, and feasibility. Asset evaluation must be carried out in accordance with the statutory procedures for application for project approval, asset inventory, assessment and evaluation, and confirmation. The asset assessment shall be based on the original value, net value, new and old procedures, replacement cost, profitability and other factors, using the present value of income method, replacement cost method, current market price method, liquidation price method and the provisions of the State Council's State-owned Assets Administration. Assessment by other assessment methods. Of course, the evaluation of enterprise intellectual property rights should also be carried out in accordance with the relevant provisions of national asset evaluation. However, compared with other asset evaluations, there are some special features in the evaluation of corporate intellectual property rights. Only the principles of corporate IP evaluation are discussed here.

Asset evaluation is an activity that compares the legal valuation standard with the value of the assessed intangible asset. Asset evaluation involves three elements: the evaluation standard, the amount to be evaluated and the evaluation method. As an important part of the evaluation of intangible assets, the evaluation of corporate intellectual property rights should also comply with the three requirements of evaluation, and meet the principles of fairness and legality, science and feasibility, objectivity and authenticity. This is also the technical principle of intellectual property evaluation. The basic principles of intellectual property evaluation also include the purpose principle of intellectual property evaluation and the principle of the mechanism of the content of evaluation.

The principle of purpose is the premise of judging fairness and reasonableness, and the principle of the mechanism of action of evaluation content is the premise of ensuring scientific, authentic, and feasibility. The basic principles of enterprise intellectual property evaluation are a unified combination of these three principles. In addition, according to the special nature of corporate intellectual property, such as the status of corporate intellectual property investment as a resource in corporate business activities, the principles of corporate intellectual property assessment can further include the following:

Substitution principle

In general, he said that the buyer's bid for an enterprise's intellectual property is unwilling to be higher than the similar intellectual property cost that he can achieve in the market and meet the requirements. If there are alternative assets that can be replaced, such as patent product substitutes, the value of the intellectual property will be affected.

2. Expected income principle

Generally, he said that the value of an intellectual property right is not directly proportional to its development cost, but has a lot to do with the expected or future benefits of the intellectual property right. Therefore, the prediction of the future benefits of intellectual property rights has become an important basis for evaluating an intellectual property right. In addition, the optimal value of the expected return of the company's intellectual property rights is generated when the intellectual property rights are used optimally. Therefore, when assessing the value of an enterprise's intellectual property, it should also study the benefits that the intellectual property can generate when it is optimally used, and cannot be limited to the current utilization situation.

3. Principle of change

The value of intellectual property rights is affected by a variety of factors in the operation of the company. What are the changing trends of these factors and how large is the coefficient of influence on changes in the value of intellectual property rights, especially how much intellectual property rights are for the profitability of enterprises, it is an assessment of corporate knowledge. Issues that must be considered in the value of property rights.

4. Principle of consistency

There are many related factors and variables to be considered in the evaluation of corporate intellectual property rights, and there must be reasonable consistency between these related factors and variables, otherwise the scientificity and authenticity of the evaluation results will be affected.