Open AccessIntellectual Property Valuation Using Income Approach Method for Technology Licensing
Author(s) -
Dhruv M. Joshi
Publication year - 2011
Publication title -
information management and business review
Language(s) - English
Resource type - Journals
ISSN - 2220-3796
DOI - 10.22610/imbr.v3i6.947
Subject(s) - licensee , commercialization , intellectual property , license , valuation (finance) , profitability index , monopoly , industrial organization , business , database transaction , economics , transaction cost , key (lock) , microeconomics , commerce , marketing , finance , computer science , computer security , programming language , operating system
Technology licensing is one of the key transactions that enable translation of R&D investments into profits by commercialization of technology. The elementary economics of such transaction suggests that while a licensor attempts to derive benefits greater than the cost of development of the technology protected by IPR, in exchange of monopoly rights, the licensee attempts to minimize the license value to ensure higher profits. This leads to the requirement of valuation of the technology by either party. This paper presents some of the key characteristics related to intellectual property valuation and an analysis of the income method approach in estimating the profitability of commercialization of a technology involving a patent.