The UKIPO (UK Intellectual Property Office) has published Hidden Value: a study of the UK IP valuation market, which questions why companies often fail to consider the hidden financial value of their intangible IP assets.
Researchers Martin Brassell and Jackie Maguire compiled more than 250 responses from a combination of IP-owning companies, valuers and intermediaries, finding that “there is a prevailing view that the number of IP valuations conducted by businesses is not currently at an optimum level, considering the economic importance of intangible IP assets.”
They concluded that:
- The volumes of IP valuations have fallen “below what might be expected”, in the context of the high level of investment in creating intangible assets, and particularly when compared with practices relating to tangible assets;
- The strongest influences on the volume of activity in situations where this serves an established need, are “factors outside the IP valuation market”;
- “vertical relationships between intermediaries and valuers” and “weak searching behaviour” are likely to be key causes of market failings; and
- The positive development of the market requires “additional incentives and/or education” and these should be aimed at “making the ‘business case’ for conducting IP valuation clear and incontrovertible.”
The study outlined a number of recommendations under the headings set out below:
- “Use case studies to highlight the benefits to business of valuing their IP”;
- “Develop a directory of IP valuation suppliers and their specialisms”;
- “Tailor an outreach programme targeted individually at businesses, intermediaries and investors”;
- “Research into links between intangible asset valuations and IP strategy;” and
- “Voluntary IP statements and/or labelling.”
It’s good to note that the UK government are taking IP seriously, and understand the real value that IP can have to businesses and we hope that they take this same approach to the value of IP in their Brexit negotiations.