Intellectual Property Monetization –
A Brief Insight
Intellectual Property monetization serves as an effective finance management tool to improve the
financial performance and valuation. Read on and know how to monetize intellectual property.
hen bankruptcy like situation arises or when the resources are constrained,
intellectual property seems to be the last asset that comes to your rescue.
Intellectual Property as outlined by Organization For Economic Cooperation and
Development (OECD) mainly refers to intangible possession other than the hard
or financial assets, which can be owned and controlled for commercial purpose. The moment
your hard assets like inventory, real estate, equipment etc. are being addressed, automatically the
attention shifts to the left-out intangible assets. The intangibles prove to be the biggest
opportunity to build substantive incremental value for the estate through intellectual property
monetization and value creation process (VCM). Protection of such assets, shelling out the related
costs, the control, supervision and responsibility of development are some of the basic tests for IP
valuation and ownership entitlement.
How Do You Monetize Intellectual Property?
Intellectual Property Monetization can be done in several ways:
Protection of Products in Marketplace- The most significant way to monetize intangible
asset is to reap the benefits of commercial advantage given to your services or products as
a result of the exclusive rights. Since a patent lets the owner to leave out other products
from the marketplace, your products mostly enjoy good market share, maximum gross
revenue and higher per product income. In several technical fields, a robust patent listing
brings down the company's operational costs by letting the company achieve licenses to
others patents with no or limited payments.
License patents in lieu of Value – There are quite a good number of grounds where a
patent owner, involved in creating direct income from a patent might opt for licensing the
patent. Patents can be licensed for the Royalty. One can also prefer to license technology in
exchange for other company's technologies.
Selling Intellectual Property Or Portfolio- Variety Of Approaches
One can make good use of varied approaches when the matter relates to selling Intellectual
property or Portfolio.
These are as follows:
Sell it Yourself: As an intellectual property owner, one can do the necessary market research to
select the companies which might be making products covered by the patent. You can also also
take on the extra work of deciding the true valuation for the patent followed by negotiating a
Engage an Agent Or Broker: You can also take the help of an agent or a broker to sell a patent or
portfolio of patents. The brokers or the agents takes pride in having a good network of other
parties, interested in licensing and sales or have experience with the valuation of assets. Mind it,
the fees that are being charged for such work is just a percentage of sales proceedings.
Public Auctions: Patents being collected are often sold through public auctions which are hosted
by entities such as ICAP Patent Brokerage. The auctions enjoy a good deal of benefits over the
private transactions. They come up with more controlled and dedicated transaction process
coupled with opacity and a sense of competition when it comes to sales.
So, develop a strategy around safeguarding and monetizing the intellectual property and improve
the financial performance.