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A patent valuation maybe needed for accounting purposes, taxation compliance, for fundraising purposes, etc. As an asset of a company, which are the most common valuation ways to valuate a patent?

DCF analysis is one of my favourites in the Corporate Finance world... not sure if it is the most used to valuate patents and/or trade secrets.

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    This is really a business or accounting question and probably off topic here. Perhaps review Wikipedia? en.m.wikipedia.org/wiki/Patent_valuation
    – Eric S
    Commented May 27, 2022 at 21:05
  • I agree that it isn’t in topic.
    – George White ♦
    Commented May 27, 2022 at 22:48
  • Myybe it is off topic... though I feel it is of interest for any company holding or planing to apply for a patent. "If the business purchased the patent, it should be valued at the cost to acquire the patent from the former owner. If the business developed the patent internally, it should be valued by adding all of the costs associated with registering and protecting the patent" smallbusiness.chron.com/…
    – Raul Alvarez
    Commented May 28, 2022 at 8:52
  • It is an interesting question. However it’s not a question you are likely to get an answer to on this site. Hence my link to Wikipedia. If you feel like you know something about the subject, feel free to answer your own question.
    – Eric S
    Commented May 28, 2022 at 16:34

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Assuming the owner is a publicly traded company, you can look at stock price reaction when a patent is granted or its application published.

If it's a drug patent, you can easily apply DCF using forecasted drug sales.

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  • This could help, however the stock price change could be due to many different reasons. I am more interested on the long-term patent valuation.
    – Raul Alvarez
    Commented Jul 20, 2022 at 16:20

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