What Is Involved in Patent Valuation?

The evaluation of patent rights is based on specific purposes, following fair and statutory standards and procedures, and using appropriate methods to confirm, value and report patent rights, and to provide a measure of value for asset business.

Evaluation of patent rights

The evaluation of patent rights is based on specific purposes, following fair and statutory standards and procedures, and using appropriate methods to confirm, value and report patent rights, and provide asset business

1. It has solved the difficulty for enterprises to invest in all monetary funds, and can free up some monetary funds for the daily operation of the enterprise or continue to develop new technologies;

2. For a legal person organization or natural person who owns intellectual property rights but does not have sufficient funds to operate it, they can put their intellectual property rights into the company through joint ventures and cooperation with others. Article 27 of the Company Law stipulates that the amount of money contributed by all shareholders must not be low. 30% of the registered capital of a limited liability company. From another perspective, the company's capital contribution to intangible assets is up to 70%. That is to say, with a registered capital of 10 million, we can invest 3 million (30%) in currency and 700 (70%) in intangible assets. 10,000, and so on. Realize market-oriented operation of own intellectual property rights and control of company equity;

3. Solve the market requirements for registered capital when enterprises bid for projects;

4. Capitalize intellectual property rights of enterprises.

Patent financing loan

Among enterprises mainly based on technology, in the course of business operation, intangible assets such as patents can be fully capitalized as intellectual property rights. The advanced and independent nature of their technology in the industry field is an important basis for attracting investment. Relevant laws in China also stipulate that intangible assets such as patents and trademark rights can be used as collateral to pledge loans at banks and other financial service institutions, and revitalize a large number of intangible assets for enterprises.

Patent Achievement Transfer and External Rights Protection

It provides a strong value basis for the patentee's research and development results to be realized, and clearly understands the capitalization value of patent results in the market. At the same time, it provides professional patent value protection for patentees and enterprises in external rights protection.

Patent right evaluation steps

The patentee communicates with the appraisal institution in advancedetermining the purpose and scope of the appraisal of patent rightsnegotiating fees in accordance with national charging standardsthe appraisal agency assigns a team to live and inspect the research and development of the patentgathering the information needed for patent evaluation After collecting patent evaluation data, returnthe evaluation agency writes a reportissues a draft evaluation report and communicates with the patenteeissues the official version of the report and charges the remaining evaluation fees.

Considerations for Patent Evaluation

(1) The completeness of tenure, that is, the completeness of the patent right owned by the patentee or client. The more complete the ownership, the greater the value it reflects.

(2) The degree of legal protection includes two aspects, the status of the patent and the integrity of the claims. The status of the patent refers to the status of the technology in the patent application. Whether it is in the preliminary examination stage or the substantive examination stage or the stage of obtaining the patent certificate, the more valuable it is in the later stages. Different types of patents have different degrees of protection. Because the invention patent has passed substantial examination, it is less likely that the patent of another person will be plagiarized or it will be revoked after obtaining a patent certificate. Compared with the other two types of patents, their technical content is higher, the application period is longer, and the risk borne by the right holder is also greater, so the value is relatively high. The completeness of the claims refers to the scope of the patents to be protected as set out in the claims of the patent application, and also reflects the quality of the claims. Some claims are complete and better protect the rights of the patentee. Some claims are incomplete and only protect part of the rights of the patentee.

(3) The remaining service life is generally determined by adopting the shorter of the economic life of the patented technology and the statutory service life. The longer the service life, the greater its value.

Patent right evaluation method

First, when evaluating patents, we must first consider and study patent validity, types, term of rights and other issues that are closely related to the patent itself, and accurately grasp the basic factors that affect the value of patents.

(1) Whether the "patent" has been approved, and whether the approved patent has gone through opposition procedures.

The rights in the "patent application" are also intellectual property rights and can be transferred or licensed. However, there are two possible cases of approval or rejection of the application, and the value is completely different in both cases. The transferee or licensee must investigate whether the relevant technology or new product of the other party is patented or approved.

If the relevant patent industry undergoes opposition procedures, and the opposition has been declared untenable, the reliability of the validity of the relevant patent is high, and the value assessed under the same conditions is relatively high. Conversely, patents that have not gone through the opposition process have a relatively low valuation.

(2) Types of related patents.

China's "Patent Law" provides for three different types of patents: inventions, utility models, and designs. Among them, utility models and designs have not undergone substantial examination. It is very likely that someone will submit an invalid application to the Patent Reexamination Board in the future. The possibility of a new or design patent being declared invalid is very high. Therefore, the valuation of these two types of patents cannot be treated the same as the valuation of invention patents.

(3) Whether the relevant patent is a "first patent" or a "second patent" (subordinate patent).

According to the relevant provisions of international treaties and China's "Patent Law", the implementation of the second patent must be licensed by the owner of the first patent, and the owner of the second patent does not have the right to independently license a third party to implement its patent. Without the authorization of the owner of the first patent, the owner of the second patent does not have the right to negotiate a license contract with a third party. However, the owner of the second patent has the right to assign his own patent. At this time, the assignee should be aware of the possibility of cooperating with the first patent owner or obtaining a compulsory license after the second patent is transferred. How big. If it is difficult to obtain the license of the first patentee, the value of the second patent will be reduced accordingly.

(4) Whether the patent owner has a reliable record of paying the annual patent fee on time.

Failure to pay annual patent fees may result in patent revocation. Although recovery procedures are required by law, they are too much trouble. If a patent that misses the annual fee but is likely to be restored, the costs in the restoration process and the losses to the transferee once it cannot be restored will be offset to a certain extent value.

(5) The period during which the patent protection period expires.

This is probably the most important factor affecting patent evaluation. Since the patent protection period is non-renewable, the impact is more important than in trademark evaluation. If the patent protection period is only two years, the value of the patent is easy to assess. Because, no matter how the patentee evaluates its patent, the assignee will never receive more than, equal to, or close to the sum of the assignee's two-year estimated profit.

(6) Whether the relevant patent is involved in patent disputes such as infringement lawsuits and invalidity lawsuits.

Once the relevant patent is involved in this type of lawsuit, especially before the court has made a decision, its evaluation must be discounted at the price evaluated according to the general evaluation method.

Evaluation data directory

One. Enterprise Basic Information

1. Business license, tax registration certificate, production license, etc.

2. company profile;

3 company policy;

4 Distribution of corporate marketing networks;

5. Enterprise product quality standards;

6. News media, consumer reports and evaluations of product quality and services;

7. other.

two. Patent technical information

1. Brief introduction of the client's patent product research and development, and patent developer's profile;

2. Patent certificates and related legal documents and payment documents for acceptance, transfer, change (contract);

3 Patent specification

4 Questionnaire on the basic situation of patented technology (see attached table);

5. Patent product project proposal, joint venture cooperation letter of intent, feasibility study report or technical transformation plan;

6. Patent technology test report, scientific and technological achievements appraisal certificate, patent technology retrieval materials, technology evaluation by well-known experts in the industry, etc

7. Receipts and certificates of patent application fees, maintenance fees, annual fees and other fees paid annually;

8. Expert opinions on novel patented technology

9. Copy of patent register

three. Financial Information

1. The client's balance sheet, profit and loss account or patent income-related financial income statistics for the past five years (including the evaluation base date);

2. Statistics on investment and cost of patented product development (Table 1);

3 Client's development plan for the next five years;

4 The entrusting party forecasts and compiles a description of the patented product's income for the next 3-5 years (Table C).

four. Other information

1. Patent product award certificate, high-tech enterprise recognition certificate.

2. Annual commitment to pay the patent maintenance commitment.

3 Letter of commitment from the client. ^[1]

Other requirements for patent rights assessment

(1) The "claims" of a patent should be studied in depth.

A "claim" is the sole basis for legally determining the scope of a patent. If a patentee applies an unimportant embodiment as a sovereign right to an independent claim in the claim when applying for a patent, no matter how broad the possible application scope of the patent, the scope of protection of its rights has been greatly reduced, As a result, the patent value is correspondingly reduced.

(2) The minimum and maximum profits that patent market applications will bring to patentees should be studied. The supplier shall strictly adhere to the minimum profit limit in the evaluation, and the recipient shall not be breached.

The general principle of "high investment and high output" does not apply in the field of patents. Although the patentee will include the entire cost of its own research and development in the appraisal value, if there is no market for the patented product or product itself, such a cost-based appraisal will be meaningless.

On the other hand, in order to maintain the cost of patents (such as infringement litigation costs), the previous investment can be used as one of the basis for evaluation. The reason is that patents that are closely related to market demand and do not have market benefits are generally not the target of infringement.

(3) Must understand the possibility and timing of more advanced alternative technologies or products.

If it is discovered that more advanced patented products will be born in two years, the term of protection will only have legal significance and not much practical significance, and its market life will be only two years or a little longer.

(4) Proportion of royalties.

When China enacted the "Regulations on the Administration of Technology Import Contracts" in 1985, the usual ratio of international technology valuation (if paid by royalties) was 5% -7% in the 1920s and 1970s. By the 1990s, this number had not changed much.

(5) Others.

Some countries that have hundreds of years of experience in patent evaluation can also refer to the methods listed in their administrative documents. For example, in the "Antitrust Guidelines on Intellectual Property License Trade" promulgated by the US Federal Trade Commission in 1995, Articles 4.1.1 and 4.1.2, which are the principles and methods of patent evaluation.