This guide provides foundational knowledge and tools to apply practical valuation methods, empowering technology transfer offices to assess early-stage innovations effectively. It covers market, cost, and income approaches, emphasizing practical application even when data is limited or ambiguous. Throughout the guide, case study examples help users navigate each stage of the IP valuation process.
- Acknowledgments
- Abbreviations
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Image: WIPO 1 Introduction
This chapter introduces the purpose of the guide and its intended audience of technology transfer professionals. It explains why IP valuation is critical for turning research outcomes into societal and commercial impact, framing valuation as a core skill for effective technology transfer. The introduction sets the stage for readers to approach the topic with both practical expectations and awareness of its complexity.
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Image: WIPO 2 Objectives and background
This section outlines the goals of the guide and provides essential context for IP valuation in a technology transfer setting. It highlights the inherent challenges of valuing early-stage IP, including uncertainty, assumptions, and the lack of robust market comparables, while stressing the importance of defensible methods. The chapter underscores the need for a holistic and pragmatic approach to ensure valuations are both credible and useful.
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Image: WIPO 3 IP valuation methods
This chapter introduces the main valuation methods available to technology transfer professionals, and fundamental principles of IP valuation.
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Image: WIPO 4 The cost method
The cost method estimates the value of IP based on the resources required to recreate or replace it. It is most useful for very early-stage assets with limited commercial proof points but lacks predictive power for future revenues. The cost method is best viewed as a baseline approach when other data is not available.
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Image: WIPO 5 The market approach
The market approach relies on identifying comparable transactions to benchmark IP value. While powerful in contexts with robust market data, its usefulness is constrained by the scarcity of reliable comparables in early-stage technology transfer. This approach is most effective when the market for similar technologies is active and transparent.
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Image: WIPO 6 The income approach
This method values IP based on expected future cash flows discounted to present value. It is a widely used and credible method but depends heavily on assumptions about revenues, timelines, and risk factors. The income approach provides strong insights where there is sufficient data to construct realistic financial forecasts.
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Image: WIPO 7 The real options method
Real options analysis values the flexibility to make future decisions as uncertainty resolves. This is particularly relevant in technology transfer where projects may proceed through multiple uncertain stages such as trials or regulatory approval. The method helps capture the value of strategic choices in managing risk and opportunity.
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Image: WIPO 8 Monte Carlo simulation
The Monte Carlo approach uses computer-based modeling to test a wide range of scenarios and probabilities for key valuation variables. It provides a richer picture of risk and uncertainty, particularly for complex or high-risk IP assets. Monte Carlo simulations can produce more defensible valuations by explicitly accounting for variability in outcomes.
- Conclusions
- Glossary
- References