Identifying Intangible Assets and Intellectual Property To qualify as an intangible asset, the owner should be able to specifically identify and describe the asset, and it should be subject to legal protection. Moreover, one should be able to privately own the asset and legally transfer or sell it to another party. For an intangible asset to have quantifiable value from an appraisal perspective, it should possess certain economic attributes or characteristics in addition to those that indicate legal existence.

intangible assets There are five general classifications of intellectual property, including: Trademarks Copyrights Patents Know-How Trade secrets Intellectual property differs from other intangible assets in that it is the result of conscious creative activity.

Examples of Intangible Assets Examples of intangible assets some businesses may possess: Trademarks, trade names, brand names, logos Process patents, product patents, technical know-how Copyrights, blueprints, trade secrets Computer software and automated databases Customer lists, customer contracts, open purchase orders License and franchise agreements Trained and assembled workforce, employment agreements Leasehold interests, mineral rights, air and water rights Going concern goodwill, professional practice goodwill

Intellectual Valuation Methods that value intellectual property under the income approach may by focus on: The greater level of income realized by the owner of the intellectual property compared to not owning the property (leading to higher profitability). The lower levels of costs realized by the owner of the intellectual property compared to not owning the property (also leading to higher profitability). “Relief From Royalty” methods, which are based on a hypothetical royalty payment that the owner of the intellectual property would be willing to pay or otherwise would have to pay to a third party

Income Approach The subject patented technology allows the business to generate greater profits every year compared to not owning the patent. The added profitability adds value to the business.

Market Approach Comparable patent sales are related to the industry in which the subject business operates. The value of the comparable transactions are determined.

Cost Approach The cost of developing the patent (including employee labor hours, testing costs, design costs, etc.) are determined.

Intellectual Property Losses Research has estimated the value of trade secret theft in the US to be 1% to 3% of its GDP, the equivalent of US$200 billion to $550 billion per year. Extrapolating that estimate to other advanced industrial economies could put the global cost of trade secret theft in the trillions.

Intellectual Property Losses Research has estimated the value of trade secret theft in the US to be 1% to 3% of its GDP, the equivalent of US$200 billion to $550 billion per year. Extrapolating that estimate to other advanced industrial economies could put the global cost of trade secret theft in the trillions.

Intellectual Property Loss Control Enforce Stringent Internal Security Policies Limit Access And Enhance Security Limit release of information Implement A Process That Keeps Networks Safe Set Up Proper Access Controls   Obtain patents, copy rights, trademarks, etc.

Two Pennsylvania residents bought more than 8,500 counterfeit baseball, football, hockey and basketball jerseys from China between September 2007 and July 2014, providing photographs of licensed jerseys to their Chinese manufacturers to ensure that the bogus goods looked legit. The men were charged with conspiracy to traffic in and illegally import counterfeit sports jerseys, trafficking in counterfeit goods, and smuggling. They received prison terms and the judge ordered restitution in the amount of $30,000, forfeiture of $89,895.57, and all seized jerseys, three years of supervised release, and a $100 special assessment.