Adopting Real Estate Valuation Methodology for Valuing Intellectual

ADOPTING REAL ESTATE VALUATION METHODOLOGY FOR VALUING INTELLECTUAL PROPERTY RIGHTS (IPR)

Dr. Fauziah Raji
Dr. Nor Ashikin Mohamed Yusof
Associate Professor Dr. Nazli Yahaya
Associate Professor Dr. Azmi Ab. Rahman

Universiti Teknologi Malaysia (UTM)

ABSTRACT

Although Intellectual Property (IP) is an intangible, as it has no physical substance, in essence, it has qualities which make it tangible. Hence, like tangible property, IP can be sold or bought and rented out, and in addition to that, IP can be used as collateral for financing and refinancing purposes. IP has become highly marketable and has a position within a company's asset portfolio. Hence, the need to attach a value to an IP is gaining credence. Of more importance is to value the IP correctly. So far, patent attorneys, agents, and accountants are mainly involved in valuing IPs. In light of this, it is argued that the established Real Estate (RE) valuation methodology can be adopted to value IP. This paper is focused on the valuation of patents. The real estate (RE) industry has an established valuation methodology that is universally accepted.

Several methods to appraise the value of RE have been determined and adopted throughout the world. This report studies the attributes which give value to patents and addresses the adaptation of RE valuation methods to value patents.

Key words: Intellectual property, valuation of patent.