On many an occasion, clients are confronted with a question that is often more difficult to answer than one would initially think. What is the value of your intellectual property asset?

Most intellectual property owners would (by default) give an answer which indicates that they consider their intellectual property asset very valuable, but few would have any idea about how to go about quantifying that value. Yet this is one of the most fundamental things an intellectual property asset owner needs to know if the goal is to ultimately commercialise that intellectual property asset. Be it a patent, design, trade mark or copyright, the intellectual property owner faces the dilemma of trying to set down an amount which is supposed to be reflective of their asset’s worth. The trouble is that there is no set way to calculate the value of intellectual creativity - there is no set scale by which you could compare, for example, the value of a cyclonic vacuum cleaner with that of a catchy musical jingle. More often than not, the value of an intellectual property asset boils down to what the free market will tolerate - that is, the value of the intellectual property asset is, more often than not, what others are willing to pay for it.

Take, for example, a Canadian artist’s recent refusal of internet giant Google’s offer to provide him with free exposure in return for the use of his works in Google ’skins’ here, which has provided cause for some very active debate and argument here about whether an artist giving away their intellectual property assets necessarily degrades their ability to demand payment for subsequent works produced by them.

On the one hand, Google’s offer for free exposure may provide a struggling artist with an extremely wide network which the artist would not otherwise be able to afford or access. Wider exposure may also mean an increase in reputation and recognition which may also lead to greater returns for the artist that develops a following as a result of that exposure. All of which are generally valuable, non-monetary outcomes. On the other hand - as pointed out by artist Julia Breckenreid the linked article above - giving away proprietary product now may help to establish an expectation that future product will also be made freely available.

While there are benefits sometimes to consider exchanging intellectual property assets for non-monetary payment (as seen mostly in the case of freeware and shareware), the payoff is not always ideal in every case. Intellectual property owners should, therefore, take care to evaluate thoroughly transactions affecting the value of their intellectual property assets - while the short-term gains may be enticing, owners may find themselves painted into the corner if they are not themselves aware of the true value of their intellectual property assets.

- Daniel Lo

Read about Actuate IP’s intellectual property licensing and commercial contract services.