Patent evaluation mandate in the context of a cross-border industrial partnership
Patent evaluation mandate carried out on behalf of a Swiss company active in the treatment of organic waste and the production of biogas, in the framework of a technological partnership with a European manufacturer in the environmental chemistry sector.
Mandate description
The mission aimed to determine the fair value of a patent relating to a innovative process for the catalytic conversion of organic residues into valuable biomethane.
This patent, resulting from an applied research program, was to be the subject of a partial transfer of exploitation rights to a European partner.
The purpose of the evaluation was to determine the economic value of intellectual property in the context of negotiations, to assess the financial impacts of the sharing of rights and to objectify the basis for calculating future royalties.
During the mission, some legal points of attention have been reported to the customer, including:
- the need to verify the exact scope of the patent in the light of similar filings in other European jurisdictions;
- the importance of clarifying the conditions for co-ownership and exploitation of the patent between partners;
- and the vigilance to be adopted regarding the residual period of protection before expiration, which may affect economic value.
These items have been identified As an observation, without constituting a legal analysis.
Key issues
The main challenges consisted of:
- promote a technological patent developed in an international partnership framework;
- estimate the share of value attributable to the Swiss company in the context of a partial sale;
- ensure the neutrality of the evaluation in order to facilitate dialogue between partners;
- and establish a solid economic basis for strategic and contractual discussions.
Approach and results
The valuation mobilized several complementary approaches, recognized by practitioners in the valuation of intangible assets:
- revenue approach (royalty savings method) —valuation of the patent based on theoretical royalty flows. The royalty rate Has been calculated intrinsically to society, based on a Formula derived from the Black-Scholes-Merton model, integrating the volatility of expected flows, the residual life of the patent and the risk specific to the project;
- cost approach, based on the reconstruction of R&D expenses, validated with the company's financial and technical services;
- Market approach, based on the study of comparable transactions in the field of methanization and waste recovery processes.
The results made it possible to establish a reliable and well-reasoned value interval, used as the basis for negotiation in the Memorandum of Understanding.
The evaluation also highlighted several future valuation levers, in particular the possible extension of the patent to new industrial applications.
The transactions shown include those completed by, or with the involvement of, Hectelion team members in current or previous professional roles. They are presented for illustrative purposes only and do not imply exclusive responsibility by Hectelion.
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The transactions presented were carried out by, with the contribution of, or with the participation of members of the Hectelion team in the context of functions performed currently or previously.