Many people think of business value as being made up of your tangible assets, things like profits and equipment and real estate. While that may have historically been true for most traditional brick-and-mortar businesses, many of today’s startups and emerging businesses find a lot more of their value in their intangible assets. If you’re a modern business, particularly one that offers innovative or creative products and services, your intellectual property might be your most valuable asset of all. Just because you can’t touch it, doesn’t mean it doesn’t hugely impact your bottom line.
Not long ago, most companies paid little attention to their intellectual property and saw it, at best, as a legal matter to be handled by lawyers. Those days are long gone. As today’s economy becomes increasingly digital and information-based, intellectual property has become a major factor on the balance sheets of many companies.
How to Maximize the Value of Your Intellectual Property
While you may know that your intellectual property is valuable, it can be very difficult to place an exact worth on your company’s IP portfolio, or even the individual components within that portfolio. Because the prevalence of intellectual property has grown so rapidly in recent years, IP valuation is an evolving field. The value of your portfolio can change significantly when you’re faced with things like litigation, infringement claims, or changes in the relevant law.
One thing is for sure, though – most businesses tend to undervalue their intellectual property or fail to capitalize on the revenue their existing IP could generate. Intellectual property gives you a market advantage, which translates into value. The key is maximizing that value.
Just as you’re always trying to maximize your profits and eliminate unnecessary expenses, you need to have a similar strategy for your IP portfolio. You should treat your IP with the same priority you give your tangible financial assets.
- Know Your IP Portfolio. This may seem obvious, but in order to get the most value out of your IP, you need to know exactly what you have. The first step is to catalog all of it, along with the corresponding rights and protections, to understand everything you own. Also, make sure all registrations are up to date.
- Keep Tabs on the Market. Market and technology shifts can have a huge bearing on the value of your portfolio. Competition can boost or impair the value of your existing IP, depending on the circumstances. The worth of your IP derives largely from its usefulness in the market, so if you’re being infringed or your products are being surpassed, you need to know that.
- Determine the Value of Your Existing IP. The focus should be on quality rather than quantity when it comes to your IP portfolio. Track all of your IP assets to gain an ongoing sense of their value, and set metrics that you want each asset to meet. See how your IP is used across all aspects of your business, so you know the true extent of its value and how it’s best used.
- Maximize the Value of Your Portfolio. The goal is to exploit all the possible value out of your existing IP before investing in new IP. If you determine that certain assets are underutilized, figure out how to get the best value out of them. This could mean selling or licensing an asset. IP can also incur expenses, so only hold onto things that you really need or are bringing you value.
The key to leveraging your IP portfolio is to unlock all the possible potential of your IP assets.
Intellectual Property Guidance For Growing Businesses
At The Gouchev Law Firm in New York, we work with businesses of all sizes, including start-ups and franchise businesses. Call us at (212) 537-9209 or schedule a free strategy session today to see what The Gouchev Law Firm can do for your business.