The Issue of No Benchmark in Determining the Economic Value of Intellectual Property

Abstract

The absence of a benchmark for determining the economic value of Intellectual Property Rights (IPR) poses multifaceted challenges for individuals, businesses, and policymakers. Intellectual Property Rights, encompassing patents, trademarks, copyrights, and trade secrets, serve as intangible assets crucial for fostering innovation, creativity, and economic development. The lack of a standardized benchmark not only hinders a clear understanding of the economic value of intellectual property but also acts as a potential deterrent to innovation and technology transfer. Determining a fair market value for IPR is crucial in negotiations, licensing agreements, mergers, acquisitions, and other transactions. The absence of a benchmark makes it challenging for parties involved to reach mutually agreeable terms, potentially hindering the transfer or licensing of intellectual property. This uncertainty may lead companies to exhibit hesitancy in investing in novel ideas or sharing technologies, thereby impeding overall economic progress. Moreover, the absence of a standardized benchmark increases the risk of both undervaluing and overvaluing intellectual property, with undervaluation potentially resulting in lost revenue opportunities and overvaluation leading to suboptimal investment decisions and financial losses. The establishment of standardization measures is essential to promote transparency, efficiency in transactions, robust risk management, and improved resource allocation within the intellectual property ecosystem.