Valuation Of Intellectual Property Based On Real Options

As a kind of intangible property rights, Intellectual property rights can create great economic value. With the increasing of intellectual property trade and investment projects, the value of intellectual property evaluation is becoming more and more people’s concern and attention. But, due to the complexity of intellectual property rights itself characteristics and variability of the influencing factors, there is no objective accurate estimate in the actual evaluation work. By reading the literature analysis found that the current practice of intellectual property assessment, mainly the replacement cost method, three income approach and the current market price method commonly used assessment methods. However, in practice the assessment of these methods in a way there are some limitations, basic earnings reflected in future costs and benefits costing weak correspondence, comparable market approach nonpublic information, the non-profit law certainty.In practice of the Intellectual property assessment, our country often use Income approach. Income approach can overcome the reference object of intellectual property law to assess markets faced difficult choices cost benefits and costs of law faced the problem of weak correspondence, there are certain advantages. The difficulty lies in its application of the income approach involves many data collection and analysis and to identify and quantify parameters, including revenue sharing rate, the discount rate and so on. This is a challenging task in practical operation.By analyzing the existing intellectual property assessment case, we can know that currently valuation drawback common assessment method does not consider the dynamic nature of the assessment process, ignoring the uncertainty of the value created. So, how to choose the right evaluation methods have become very important in the field of intellectual property management issues. In order to adapt to the healthy development of the knowledge economy and enhance the value of intellectual property and scientific and objective assessment methods need to be explored to improve the assessment of intellectual property rights.To solve the above problem, this paper introduces the concepts of intellectual property, after analyzing the characteristics of intellectual property and its benefits, pointed out the three basic evaluation methods exist in the current assessment of the practical application of intellectual property defects. Based on the literature and then finishing on the introduction of the real options approach, describes the method of real option theory to explore the option of investment decisions and valuation process, and then discusses the nature of intellectual property rights as well as the option to assess real options method is applied feasibility of intellectual property, and on this basis, given the real options evaluation model based on intellectual property law, the last example shows that the method is applicable and rationality, to assess the use of the same patent by comparing the income method and real options method different outcomes rights, concluded that based on the traditional methods of real options method to make up for discounted cash flow method does not consider the benefits and disadvantages of the company’s future uncertain decision-making flexibility, provided in both the potential value of intellectual property By assessing more fit reality.