Patent valuation is a hot topic that has been addressed in numerous discussions, publications and conferences over the past for years. Whether the purpose is to include patents in the balance sheet or to measure their technical relevance, to date the only consensus about patent valuation seems to be its importance and necessity.
Patent valuation is often misunderstood and confused with the principle of patent evaluation. Further, patent valuation seems difficult for several reasons. However, patent evaluation has come a long way and some methods have proved to be surprisingly efficient – provided that the context is established correctly.
Valuation or evaluation? Wikipedia defines ‘valuation’ as the “determination of the economic value of an asset or liability”. It defines ‘evaluation’ as “a systematic determination of a subject’s merit, worth and significance, using criteria governed by a set of standards… to help in decision-making; …any particular definition of evaluation would have to be tailored to its context”.