IP & Patent Value Calculator

The three main approaches are: cost (what it cost to create or replicate), market (what comparable IP has sold or licensed for), and income (discounted cash flow on expected royalty or profit streams). Income-based DCF is the most common for active patents and trademarks; cost is more common for early-stage IP.

IP discount rates are typically 15-30%, much higher than for ordinary business cash flows because of legal risk (invalidation, design-around), market risk, and short useful life. Pharmaceutical patents may use 10-15% once approved; early-stage software or biotech IP can require 25-40%.

Utility patents last 20 years from the earliest non-provisional filing date, subject to maintenance fees at 3.5, 7.5, and 11.5 years. Design patents last 15 years from grant. Trademarks can last indefinitely as long as they are used in commerce and renewed every 10 years. Copyrights last life of the author plus 70 years.

Before licensing negotiations, M&A transactions, litigation damages claims, financial reporting (purchase price allocation), tax planning (transfer pricing, charitable donation), or disputes between IP co-owners. Formal valuations from credentialed appraisers commonly cost $5,000-$50,000+.