7th sep, 2009

IP in a financial context

What’s IP really good for other than driving up lawyer costs and getting you into courts? How does IP support your organizations economy?

The IP finance and IP asset maximizer blogs are discussing how IP can be used for raising capital. Much of the dogma surrounding IP is that IP can be used by companies to raise capital. If a start-up can show a patent or other IP developed by the company it will be easier to raise capital. Being in a financial crisis you would think that this would lead companies and investors to investigating how valuation of IP could be improved. Today most companies do not treat their IP as a financial instrument. This mean that most companies have no clue as to the value of their IP and the same goes for their investors.
This means that when investing in IP you do it blindly. I have observed several cases where a start up files a load of patent and trademark applications and gets investments primarily because the investors think that the patents represents a value. Sometimes it’s true sometimes it’s not.
So what is the solution? As both IP finance and IP asset maximize suggests a joining of competences is needed. You need a legal analysis of the IP –how is the patent positioned compared to the competition? How valid is the IP? Then you need financial and market knowledge to transform this into money. What does this mean in relation to the economic potential of the IP? Will it generate a constant revenue stream? And finally you need to bring in the strategist. What does this mean for the company? Will the IP support Company strategy? The fruit of this collaboration will enhance your evaluation of the IP and make investments safer. Furthermore the company itself will benefit from this work and probably save money thrown away on strategically bad IP decisions.



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