Bankruptcy and Financial Distress Litigation

IP Valuation

The proper valuation of intellectual property (IP) requires a thorough understanding of the realities of the market(s) in which that property is used. Rule-of-thumb calculations often fail to withstand hostile scrutiny in the event of legal actions. Outside of disputed proceedings, cookie-cutter applications of valuation methods and accounting allocations often incorrectly assess the value of the IP in question.

NERA economists understand that proper and defensible valuation of IP assets requires thoroughly considering the relevant market and IP-specific information. In so doing, we formulate and test forward-looking assumptions about the prospective economic conditions of the IP assets at issue. Our experts apply rigorous economic analysis to a variety of IP-related issues including: the monetary impact of theft of IP assets; the internal transfer price for the use of IP assets across divisions of a multinational corporation; the value of an IP asset or portfolio in connection with its sale or license; the decision to license IP, including a recommendation of an appropriate price and other terms; and the monetary impact of theft of loss of IP legal protection.

NERA economists have extensive experience valuing intangible assets. These include assignments relating to financial reporting and tax requirements, spin-outs, and asset sales, and calculating the internal transfer price for its use across divisions of a multi-national corporation. We provide guidance about IP asset value before and after transactions have been consummated, enabling parties to create appropriate documentation to support tax-reporting requirements.