The value of intangible assets (IPR), especially patents, can be determined using two main methods: intuition or mathematical model. These methods are quite different and result in a wide range of values. The intuitive approach relies on subjective opinions, such as "I want this much," "I need this much," or "I feel it could be worth this much."

In contrast, the mathematical model is based on calculating the present value of future incomes. This involves using various scenarios and outcomes, risk factors, such as legal, market, technological, economic, and strategic considerations.

Another type of mathematical method involves business forecasts and calculating the present value of future cash flows. This method compares the scenario of owning the IPR with licensing it from a third party. Owning the intangible asset can save the costs associated with licensing, and different risk factors are considered to determine the final value.

Sometimes, the value is based on the investments made to develop the intangible asset. For instance, if the investments are 5 million euros, the buyer might consider the IPR portfolio's value to be between zero and 5 million at the time of purchase. The final value depends on the market, competing technologies and the superiority of the patented technology. Before that buyers always also consider the opportunity cost, which is the cost of developing the same technology themselves.

No matter which method is used, the analysis depends on accurate data and future predictions. Without understanding the market and competition, valuations can be inaccurate. Even at its best, estimating the value of IPR is still somewhat uncertain.

For small companies, patents might not be very valuable because they lack the resources to defend them. In contrast, large companies can benefit greatly from patents since they have the means to protect their assets. Patenting is worthwhile because patents can be important when selling a technology company. Typically, buyers pay for future business potential. The more secured the future profits are the higher the value is. For large companies, patents are a way to protect that potential.

Conclusion: It's most important to focus on growing the business. The real value of IPR is shown through business success. Even the greatest patented ideas are worthless, if they do not produce secured profits.