Intellectual property disputes are becoming an increasingly common phenomenon, and for good reason. As more and more of our ideas and technological developments go virtual, the ways in which they can be utilized, transmitted, and shared become increasingly hard to regulate. Concepts are snapped up and passed along, often going viral or becoming a major component in a product or service before the company or individual who pioneered them has time to react.
If your company has a trademark, patent or copyright on something, you were obviously trying to protect your intellectual property. However, if it was used or copied in some way and you weren’t consulted or compensated, should you seek legal redress? Only your lawyer can truly answer that question, but we can supply information that may help them and you come to a conclusion as to the profitability of a suit and also aid your case.
We do this through a process called intellectual property valuation. This is exactly what it sounds like: we determine the economic value of your intellectual property through various means. For instance, we meet with your management team to get an overall view of the issue and details, and evaluate the financial history and projections associated with the specific IP. Appraisal Economics will check out every detail of your use of the intellectual property, from the amount of advertising you invest in it, to competition, and the values of comparable IP. Once we have analyzed the data to the fullest, we provide a value for the intellectual property, as well as fair royalty rates.
When in the process of considering legal action, accurate information about your IP’s value is crucial in several ways. For one thing, it can help you and your lawyer come to a conclusion about the relative effectiveness of a suit. For instance, if a long, drawn-out court case would cost much more than the property is worth, it’s good to have that information going in. This can help you weigh your options against your odds of success. This works in reverse, as well, and knowing how much you stand to win can make legal action more tenable. This, of course, is a separate issue from the legal precedent any ruling would set about IP, which is being redefined constantly.
Once you have already decided to bring a suit against an entity who is potentially utilizing your property unlawfully, an IP valuation can still help your case. If it can be demonstrated that your intellectual property had a perceived value on the market, this can go a long way towards establishing how and why the infringing party may have used it. If their unfair use is decreasing the value of your IP, it can also be proven in part by our analysis and testimony.
Any information about IP values can also help your legal team set a fair settlement or award amount. If your company is winning the case and the defendant is considering a settlement, your lawyer may be able to use an IP valuation to negotiate with the opposing counsel. Likewise, an impartial valuation can help the presiding judge award an appropriate amount in damages, if the lawsuit goes through and you win the case.
There are many types of cases in which an IP valuation could be used. Take last year’s KIND LLC v. Clif Bar & Co. suit. In that case, the KIND snack bar maker sued their competitor for trademark infringement over what is known in the industry as “trade dress.” This is essentially the specific look of the packaging that distinguishes it from others of its type and identifies the brand. KIND is known for using clear packaging so that consumers can see the ingredients within. When Clif started using clear packaging, KIND felt that their product and its recognizability was sufficiently threatened to warrant a lawsuit. A great deal of this case hinged on whether or not the packaging style was really the sole property of KIND and how closely the one resembled the other; however, a valuation and evidence that profits went down due to product confusion could have validated the suit. In this particular case, a settlement was reached, but this is just one example of the potential uses of IP valuation.
The intellectual property valuation process is vital to a great deal of modern litigation, but it’s just one of the many valuation services that we offer at Appraisal Economics. Contact us here for more information.