4. Evaluating IP

After capturing organisational IP its worth, or potential value, as IP to the business needs to be established. It also needs to be verified that the IP of interest is not owned by other parties, including the public, and that it is of a defendable nature. A business decision needs to be made if any rights to the IP can be secured.

a. Can it be protected?

Initially, it should be verified that the IP can be protected at all.   From this exercise derives the range and extent of potential types of protection that is available for the IP.  Key questions to ask include:

• Has the information been released into the public domain in any form?
• Is the information of sufficient novelty (uniqueness) that it can be protected?
• What characteristics does the novelty of the potential IP have?

b. Claims

Companies normally consider exploiting new IP because it promises certain benefits that will help them achieve their business goals. The benefits that may be derived from the IP may not be immediately obvious to the inventor. The same technology might have several applications, and its biggest commercial application may be different to what the inventor had envisaged.

Identifying the widest range of possible uses for and benefits from the IP is of economic importance. From the potential uses and benefits, a set of claims can be derived (trade marks, patents, etc); and from these suitable methods of protecting the claims and IP can be identified.

c. Economic value

Estimating the economic value of IP is a challenging task, but can be achieved via consideration of the following issues and steps:

• Market research: The different markets and segments, the value chain and customer value proposition, competing products.
• Competitor R&D and marketing strategy needs to be surveyed to understand novelty, differentiation and first to market opportunities
• Barriers to market entry need to be recognised and considered.
• The development stage and remaining life of the IP.
• The required know-how, time, and funds invested into further IP commercialisation required.

Additionally, there is always the risk that the anticipated return does not materialise which can reduce the value of the IP substantially. The enthusiasm, capability, tacit know-how, and skill of the organisation and (potential) partners greatly influence this risk.

Completing a similar commercial feasibility process is insightful here to further determine the value of the IP to the business in the context of the market, development and financial risk of the broader organisation’s business operations.

d. Business Judgment

If and in what form of protection or publication of the IP should be secured will eventually be a business judgment on the basis of the contractual implications, the commercial and economic value to the organisation, as well as its ability to defend resulting intellectual property rights.

Links to subsections of this topic

Scan your organisation for IP
Introduce an IP Management Strategy
1. An organisation IP policy
2. Identifying and capturing IP
3. Storing IP
4. Evaluating IP
5. Protecting IP
6. Enforcing IP