Royalty Rates for Licensing Intellectual Property
Chapter One
Intellectual Property and
Corporate Value
In the last thirty years, intellectual property (IP) and intangible assets
have become the dominant assets of major corporations. These assets are at
the heart of competitive advantage. They are the foundation of new product
categories and sometimes entirely new industries. They differentiate
products, provide unique utility, and even permeate products and services
with cachet. Often, they allow the manufacturer to obtain a premium price
for an otherwise ordinary item. Other times, they provide the user with
substantial cost savings.
Ocean Tomo is an integrated, intellectual capital merchant bank. It
conducted an analysis of the largest companies in the United States and
found that patents, trademarks, copyrights, and other intangible assets have
exploded as a percentage of the S&P 500's market value, from seventeen
percent in 1975 to eighty percent in 2005 (see Exhibit 1.1). No longer do
markets value companies based on balance sheet cash and fixed assets.
Today, stock prices reflect the impo ... read full excerpt from Royalty Rates for Licensing Intellectual Property ebook
