What is involved in patent valuation?

Patent awards are usually made using classic accounting practice or more adaptable approach. The accounting method includes determining the value of the patent on the basis of its estimated market value, costs and income potential. This is often largely theoretical and the approach, which is considered more practical, is a patent price based on the possible use of the patent and the probability of breaking the patent.

6 Like many businesses in the Western world, profitable -award -winning models are moving on products and services based on intellectual property, it is increasingly important to correctly make patent awards for the protection and development of this property. One of the main problems with patents is the fact that the patent in no way indicates how long there may be a time frame between the development of successful ideas and its implementation in production and marketing. A good example is the invention of fax stroIt is patented in 1843, while the first successful model was tested by an Italian physicist called Giovanni Caselli in 1865, 22 years later. It was 11 years before the invention of the phone itself, because the first fax machine was tested by Telegraph and the fax machine became the basis in most office environments, a popular and necessary machine only almost a century and a half later.

those who use accounting principles in patent awards are aware of their limitations. The use of the market theory is the most difficult, because for most patents there is no objective selling price or a clear competitive market and are often bought and sold to discourage innovations of competitors as often as they should internally encourage it. The use of the theory for the patent valuation is based on the fact that the value of the object is determined by the source to produce it. However, the cost of the patent is a one -off cost because once the subject or process is patented and that the patent purchased by the company,It cannot be patented again by someone else, limiting the reflection of the actual costs. Valuation of income for patents in accounting practices has the most direct relationship with the actual value, but they are based on the idea that once it is owned, immediate work will be carried out in the development of profits from the use of the patent. However, as with equipment such as a fax machine or companies that buy patents to eliminate competitors from the market, it is often subject to incorrect interpretation.

Instructions for use and violations include multiple abstract values ​​that intellectual ownership includes, such as license fees, legal costs and renewal rates for patents. This approach to patent awards attempts to look for this from a more fundamental aspect of intellectual property and the distance from the actual level of marketing and production for what is protected. This may be a more accurate way to appreciate patents because they are increasingly defined by a narrower and narrower range for technological processes and objects that are in the eagleThey often overlap the sector. Instructions for use can be determined by looking at how often the patent is quoted in literature and databases through online search, which is a clear indicator of interest in further development of this idea. The arrival of internet and public documentation and analysis of top research since 2011 has made an extensive evaluation of industrial interest in newly patented ideas much more practical for patent valuation than only a few decades ago.