Valuation of intellectual property rights, 1st and 2nd edition

2nd edition - effective from 1 June 2020

Please note, this document was reissued in May 2023 as a professional standard. It was previously published in March 2020 as a guidance note. The regulatory requirements remain the same.

This professional standard discusses the valuation of intellectual property (IP), a subset of intangible assets. Its purpose is to expand on the International Valuation Standards (IVS) and RICS Valuation – Global Standards (Red Book Global Standards) in order to clarify the legal, functional and economic characteristics of IP that should be considered and reported on in an IP valuation.

IP is a legal concept that refers to creations of the mind that are derived from intellectual or creative effort and for which exclusive rights are recognised at law. These rights enable the owner to prohibit others from using their property without permission.

IP can be categorised as registered or unregistered, and includes:

• trademarks
• patents
• copyright
• design rights
• plant breeders’ rights and
• trade secrets, which in this document mean confidential information that has commercial value.
  

This professional standard describes how the legal, functional and economic characteristics of IP influence the definition of the IP that is the subject of the valuation (subject asset), the extent of investigation, the choice of valuation methodology and the valuation analysis.