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Tuesday, May 12, 2009

Appraising Your Business’ Intellectual Property

Peter King
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Intellectual property has become a hot topic. Make no mistake that patents, trademarks and copyrights can become a valuable asset in the portfolio of your small business, and should be managed prudently.  
 
It’s always an ongoing and daunting question for a business owner to face when the time comes to sell – “What do I have to sell?” Believe it or not, the main asset that you have to market is goodwill aside from the phone number, address and equipment. Yet defining goodwill can be difficult to identify and value.  
 
Assessing Goodwill through Your Portfolio
How do you measure goodwill? How difficult would it be for another business to gain the goodwill that your business has built in the marketplace from scratch? How fast could that buyer develop their own goodwill, especially after the vacuum that your departure will cause?  
 
Yes, there are accountants that have shrewd ways of creating the numbers in support of appraising your goodwill. Still, all the quick amassing of numbers will leave you feeling unsure and uncomfortable. Most of all, your prospective buyers will not be persuaded.  
 
A great way of providing hard, cold facts to support your appraisal is the intellectual property portfolio of your business. You can strengthen your case to a buyer that your goodwill is worth a set amount with a United States Patent and Trademark (USPTO) registration.  
 
If you are in the manufacturing industry, a prospective buyer may feel more at ease if you display some patents that you have on your products as well as any proprietary methods and processes that you use in order to run your business. They may feel at ease that they are given some leverage to assert in the marketplace with patent protection.  
 
Using an Attorney to Measure the Value
Keep in mind that as much as a portfolio of intellectual property may raise a lot of buyers’ attention, it doesn’t mean that it will be easy to appraise and value – most patents never gain much worth if any at all. If you are looking to buy a business with such an array of patents, trademarks and copyrights, hire an attorney that specializes in that field to take at what lies beneath the surface. They will be able to tell you the real potency and value.

Comments

Response to: Appraising Your Business’ Intellectual Property
Joyce Azaria says
Many businesses can benefit from identifying, protecting and leveraging multiple types of Intellectual Property way before the decision is made to sell. For example, a company that creates software applications for a particular market may file patent applications related to its innovative software to protect its core technology. Steps may also be taken to protect its product names, company logos and company name through trademark applications.

Response to: Appraising Your Business’ Intellectual Property
Noah Brother says
if you create something or file for a patent then you are safe from somebody stealing your idea and making a profit from it with their own business.

Response to: Appraising Your Business’ Intellectual Property
Tony Carruthers says
A successful Intellectual Property Strategy focuses on the types of IP assets that are most appropriate for the business. Consider your current and future business activities when setting IP goals as the potential buyer will as well.

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