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THE IMPORT OF MONETIZING INTELLECTUAL PROPERTY - copyright: Esv Lekan Akinwunmi 2020 - IP Radio

The concept of Intellectual property (IP) is that of protecting the absolute right of discoveries or innovations made by humans in different field of endeavour.

The property in question is an intangible one because it does not possess physical structure but this drives the physical. One can also say that it is the private property of the inventor, it is when made public or commercialized that someone else can use but does not have the right to imitate or copy without due approval.

But most of these intellectual property are not well monetized, the few that are monetized are facing serious challenges of piracy, perhaps because the enabling laws do not impose stiff punishments on pirates or infringers. .

Infringement on IP is as good as someone forcefully collecting your physical assets( robbery). IP outlives the investors so it needs to be guided jealously. Every area of our economic sectors has its IP, and the following are few of IPRs that needs serious protection and commercialization. Trademarks, Copyright, Designs, Patents, Passing off (goodwill).

When IP is monetized, it can be used as collateral to secure loans to boost various businesses, the royalty on IP is like income from real estate , likewise the turnover.Several benefits will accrue to IP owners if that area is well harnessed.

the import of monetizing intellectual property
the import of monetizing intellectual property

Monetizing IP will encourage youths to demonstrate their potential.. As employment is created, government would earn tax as reward for protecting this sector, while several professionals would  earn increased revenue.

IP is the life wire of any business, let the value be determined just like the real assets are valued; the International Valuation Standard have  standards on properly valuing the IP to ensure the rights of  property owner is properly enumerated, the rule of thumb is not absolute; the scientific methods of carrying out the valuation is well spelt out.   

Valuers may perform direct valuations of intangible assets where the value of the intangible assets is the purpose of the analysis or a part of the analysis. Furthermore, when valuing businesses, business interests, real property, and machinery and equipment, valuers should consider whether there are intangible assets associated with those assets and whether they directly or indirectly impact the asset being valued.

Intangible asset valuations are performed for a variety of purposes. It is the valuer’s responsibility to understand the purpose of a valuation and whether intangible assets should be valued, whether separately or grouped with other assets. A non-exhaustive list of examples of circumstances that commonly include an intangible asset valuation component is provided below:

(a) For financial reporting purposes, valuations of intangible assets are often required in connection with accounting for business combinations, asset acquisitions and sales, and impairment analysis.

(b) For tax reporting purposes, intangible asset valuations are frequently needed for transfer pricing analyses, estate and gift tax planning and  reporting, and ad valorem taxation analysis.

(c) Intangible assets may be the subject of litigation, requiring valuation analysis in circumstances such as shareholder disputes, damage calculations and marital dissolution  (divorce).

(d) Other statutory or legal events may require the valuation of intangible assets such as compulsory purchases/eminent domain proceedings.

(e) Valuers are often asked to value intangible assets as part of general consulting, collateral lending and transactional support engagements.

The value of IP in some case is 75% of the assets of the company.

This underscores the importance of  Intellectual Property in today’s economic landscape

“If this business were split up, I would give you the land and bricks and mortar, and I would take the brands and trademarks and I would fare better than you” John Stuart, former CEO of Quaker Oats Company.

                                                                           ESV. Lekan Akinwumi 2020

Chairman  of  The Division of Business Assets and Intellectual Property Valuation of the Nigerian Institution of Estate Surveyors and Valuers (NIESV)


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