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A business enterprise has both physical and intellectual assets. In today’s world, intellectual property or IP is worth more than physical assets.
Intellectual property refers to the intangible asset a company has. These may be in the form of brand value, corporate status, customer loyalty, reputation, etc.
What is IP evaluation and why is it necessary?
A company’s trademark and brand equity have a definite stake in its net worth. It is a must to include the value of these assets. IP evaluation is the process of quantifying such intangible assets by determining the company’s market value.
If you do not do an IP evaluation, your company’s balance sheet will reflect only the investment and financial balance of the company. This means the company will be undervalued.
If a company decides to merge with another, each company does an IP evaluation of its counterpart. They do this to verify if the merger is really viable. The same is the reason for acquisitions too.
What is the role of a law firm in IP evaluation?
The main difference between Intellectual Property and other assets is that the law protects and enforces IP.
IP assets have an economic value and life. Each IP asset can be identified independently. They are legally transferable. This is why law firms are engaged to do IP evaluation for companies.
In Canada, IP litigation costs a lot. That is why sometimes companies try to underwrite their IP value through insurers to reduce these costs. In all such cases, it is best to enlist expert law firms to evaluate your company’s IP before initiating legal action.
Challenges for IP evaluation
SinceIntellectualProperty is intangible, IP evaluation poses many challenges like these
- Some IP assets may be overlooked
A company’s IP includes all kinds of knowledge and research information, in both written or digitized form. These may include physical files with documents or even files on the computer.
Apart from these, some other assets qualify for IP like pending patents, software developed in-house, etc.
One of the main challenges for Canadian law firms is that these assets may be overlooked during IP evaluation.
- IP not embodied in a granting document
Certain IP assets like pending patents cannot be embodied in a document immediately. They can be enforced only in the future when the patent is issued. This is a challenge for IP evaluation.
- Information in employee notebooks
In every company, employees, lab assistants, and engineers jot down notes in their notebooks. Should this vast amount of information be treated as the Company’s IP asset? This challenge comes up during IP evaluation.
Law firms have to carefully deal with such issues during IP evaluation.
Opportunities presented by IP evaluation
IP evaluation offers plenty of opportunities like these
- IP can be exploited directly
A company’s IP can be its brand, trademark, name etc. By using these in Marketing and Advertising, the IP can be exploited directly.
- Sale of IP
Somestart-ups nurture and develop an idea of a product initially. Then they may sell this IP to another company for want of funds. Here IP evaluation plays a major role in deciding the sale of IP.
- Licensing of IP
A company can earn millions by licensing its IP. Patents, trademarks, and copyrights are examples of such licensed IP assets. Your IP evaluation can tell you how much you can gain by licensing your IP.
- Preventing competition by using IP
Exercising your IP rights can prevent competition in a big way. Do this effectively by doing an IP evaluation to know the scope of your IP assets.
Only expert law firms can identify and exploit such opportunities from IP evaluation.
IP evaluation is the need of the hour for every budding company that values its information assets seriously. It can bring you tremendous economic gain. All you need is an expert IP law firm like Trademarks Canada to handle your IP evaluation.