When should a company value its intellectual property?

| Oct 3, 2019 | Firm News |

You have protected your intellectual property as the cornerstone of your Colorado company and the basis for its success. Trademarks, copyrights and trade secrets are just three of the methods you may have used to ensure this protection. 

According to The Federal Lawyer, intangible capital accounts for over half the rise in output-per-hour in the United States throughout the last few decades. You should calculate the value of all your intangible assets before any transaction. Knowledge of the value of your intellectual property is important for a variety of other reasons, as well 

  • Business formation or dissolution 
  • Financial and income tax accounting 
  • Assessment of company business values 
  • Determination of royalty rates 
  • Bankruptcy or reorganization 
  • Litigation support and defense 

The frequency and focus of the valuation may depend on the type of intellectual property assets. For example, you may want to have an annual valuation of goodwill intangibles, which can include your company’s brand or image, customer base, reputation and marketplace advantage. Annual valuation may also benefit your other intangible assets, such as: 

  • Copyrights, patents and trademarks 
  • Processes, procedures, methods and programs 
  • Franchises and licenses 
  • Contracts 
  • Technical data 
  • Studies, estimates and forecasts 

There may also be triggering events or changes in circumstances that prompt you to value your intangible assets. For example, if your company loses a customer or supplier that affects your operations or your financial performance significantly, it is important to review your intellectual property values.  

Being proactive in valuing your intellectual property can put you in a position to realize the potential of your company’s intangible assets. This general overview not intended as legal advice.