Queen Rania Center for  Entrepreneurship (QRCE) Technology Commercialization Program The 3rd Conference on Technology Comm...
“ There is Gold in the Garden!”
To Value….. a natural need! <ul><li>Natural tendency of people to want to know </li></ul><ul><li>what they own; how much t...
On a deeper level…. <ul><li>More compelling rationales why valuating IP constitutes crucial component in contemporary comm...
Summary of  Rationales Utilizing Legal  Protection Dictations  of  Corporate  Structure Business  Indicator Credit  Levera...
1. Utilizing Legal Protection Effectively <ul><li>The Law:   </li></ul><ul><li>Creates “property” concept; provides rules/...
2. Dictations of Corporate Structure  <ul><li>Most commercial dealings conducted by corporations.  </li></ul><ul><li>Corpo...
… Valuation of Corporation’s IP (placing it on balance sheet): <ul><li>Constitutes “Promise” about corporation’s  value. <...
3. Business (Compass) Indicator <ul><li>Management keen to: </li></ul><ul><li>Boost financial success. </li></ul><ul><li>I...
4. Intellectual Property as a Credit Leverage <ul><li>Corporations need wealth/capital to expand.  </li></ul><ul><li>Funds...
… .Credit Leverage <ul><li>Company holding intangible assets of value: More likely to receive loans. </li></ul><ul><li>Loa...
5. Tax Benefits:  Amortization  of Depreciating IP <ul><li>Prevalent in IP with limited term (Patents: 20 years patents; C...
…Amortization <ul><li>Amortization of estimated useful life of patent/copyrighted work: “business expense”-- not applicabl...
Conclusion <ul><li>Dominance of IP assets in commerce & industry prompts recognition for its value.  </li></ul><ul><li>IP ...
<ul><li>So…why value IP? </li></ul><ul><li>… Why not? </li></ul>
Thank you! Amir H. Khoury
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Amir Khoury Why Value Ip Oct 2007 Sent

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Amir Khoury Why Value Ip Oct 2007 Sent

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Amir Khoury Why Value Ip Oct 2007 Sent

  1. 1. Queen Rania Center for Entrepreneurship (QRCE) Technology Commercialization Program The 3rd Conference on Technology Commercialization Why Value Your Intellectual Property? Dr. Amir H. Khoury Amman, October, 2007
  2. 2. “ There is Gold in the Garden!”
  3. 3. To Value….. a natural need! <ul><li>Natural tendency of people to want to know </li></ul><ul><li>what they own; how much they are “worth”: </li></ul><ul><li>Personal curiosity. </li></ul><ul><li>Social prestige. </li></ul>
  4. 4. On a deeper level…. <ul><li>More compelling rationales why valuating IP constitutes crucial component in contemporary commercial dealings. </li></ul>
  5. 5. Summary of Rationales Utilizing Legal Protection Dictations of Corporate Structure Business Indicator Credit Leverage Tax Benefits: Amortization of Depreciating IP
  6. 6. 1. Utilizing Legal Protection Effectively <ul><li>The Law: </li></ul><ul><li>Creates “property” concept; provides rules/methods for protecting it. </li></ul><ul><li>Property includes tangible & intangible assets (i.e. IP). </li></ul><ul><li>Intervenes when property rights are infringed. </li></ul><ul><li>Provides host of remedies for property holder (compensation; restitution). </li></ul><ul><li>In order to utilize legal protection there is a need to: </li></ul><ul><li>Determine extent of “harm” inflicted on property owner. </li></ul><ul><li>Need clear understanding of IP value. </li></ul>
  7. 7. 2. Dictations of Corporate Structure <ul><li>Most commercial dealings conducted by corporations. </li></ul><ul><li>Corporations have a broad base of investors (shareholders). </li></ul><ul><li>Shareholders: a versatile group; buys/sells assets; maneuvers between corporations looking to maximize earnings. </li></ul>
  8. 8. … Valuation of Corporation’s IP (placing it on balance sheet): <ul><li>Constitutes “Promise” about corporation’s value. </li></ul><ul><li>Shareholders advised re corporation’s value. </li></ul><ul><li>Exposes hidden assets; corporation rendered a more attractive investment. </li></ul><ul><li>IP generated added-value raises share prices (value); generates earning for corporations/ shareholders. </li></ul>
  9. 9. 3. Business (Compass) Indicator <ul><li>Management keen to: </li></ul><ul><li>Boost financial success. </li></ul><ul><li>Improve performance. </li></ul><ul><li>IP assets of business provide strong indication of </li></ul><ul><li>Management’s overall performance: </li></ul><ul><li>(e.g. Valuable brand = Goodwill of business). </li></ul><ul><li>Business’s brand --- worth more than total tangible assets. </li></ul><ul><li>“ pending” patents/copyrighted works ---- promises of great commercial success. </li></ul>
  10. 10. 4. Intellectual Property as a Credit Leverage <ul><li>Corporations need wealth/capital to expand. </li></ul><ul><li>Funds not always available: Need to borrow. </li></ul><ul><li>Lenders (i.e. banks/financial institutions) require security against loan (mortgage; floating charge; legal lien on land/assets -- including IP assets. </li></ul>
  11. 11. … .Credit Leverage <ul><li>Company holding intangible assets of value: More likely to receive loans. </li></ul><ul><li>Loans on more favorable terms: Enabling borrower to expand operations/raise earnings. </li></ul>
  12. 12. 5. Tax Benefits: Amortization of Depreciating IP <ul><li>Prevalent in IP with limited term (Patents: 20 years patents; Copyrights: 70 years after creator’s death). </li></ul><ul><li>Value of Patent/Copyrighted work falls each year: nears entry to “public domain”. </li></ul><ul><li>From right holder’s perspective --- value nears zero. </li></ul>
  13. 13. …Amortization <ul><li>Amortization of estimated useful life of patent/copyrighted work: “business expense”-- not applicable to goodwill (duration not limited in time). </li></ul><ul><li>Declining value of patent/copyrighted work can be used to offset earnings – Constitutes clear tax benefit. </li></ul>
  14. 14. Conclusion <ul><li>Dominance of IP assets in commerce & industry prompts recognition for its value. </li></ul><ul><li>IP valuation merely states the obvious: Great value attaches to IP assets. </li></ul><ul><li>Valuating (appraising) IP is taking the world by storm. </li></ul><ul><li>Prediction: “Valuating Intellectual Property” to become “standard procedure” for accountants; business people; lawyers. </li></ul>
  15. 15. <ul><li>So…why value IP? </li></ul><ul><li>… Why not? </li></ul>
  16. 16. Thank you! Amir H. Khoury

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