Valuation Enabling Accurately Priced Licensing Model

• Published date: 04 April 2023
• Subject Matter: Intellectual Property, Energy and Natural Resources, Energy Law, Oil, Gas & Electricity, Licensing & Syndication
• Law Firm: Rouse
• Author: Mr Erik Oskarsson and Thomas Randes

Overview

The Rouse Consultancy team were hired by a commercial project, tied to a Swedish university, that specialises in scientific and technological improvements for positive environmental effects. Rouse was asked to value the client's intellectual property (IP) portfolio and to evaluate the prospect of licensing the innovation, globally, to organisations with similar needs. The innovation in question was a revolutionary material that is added onto windows increasing its ability to insulate, reducing the amount of energy required for cooling down or heating an establishment in the summer and winter respectively. This smart solution improves house temperature regulation while also reducing the use of electricity.

The primary challenge for the client was to obtain an accurate valuation of their IP in order to create licensing models and thus create a new revenue stream. The valuation needed to be transparent and concise to enable the commercial project group to understand and agree the intrinsic value of the business, demonstrating a clear link between the valuation and an accurate pricing of the license agreement. This would generate confidence that the valuation would lead to acceptance on the stock market with the resulting licensing agreement attracting new global players.

Our approach

Rouse worked with the client to obtain relevant data and information to understand the concept and difficulties of this technologically advanced product. The data was then compiled into a detailed business analysis consisting of: identifying assets, categorising them into registered and unregistered IP and allocating a value to them, in order to obtain an economic valuation. The business analysis assessed the scope and strength of control...