In this, the first major section of the book, the reader will find the principles that are the foundation of the sections that follow. In order to quantify the value of intellectual property and intangible assets, it is necessary to fully understand their nature and economic characteristics. It is clear that these assets do not create value by themselves. They must be teamed with other assets in order to be economically exploited. Therefore, we discuss the relationship between intellectual property and intangible assets and the business enterprise in which they reside or in which they will be placed for exploitation.
Valuation is not a crystal ball exercise. Because it is firmly based in return on investment principles, this section presents these underpinnings before moving on to the specific valuation techniques. With that grounding, we then proceed to discuss some finer points as they apply to special business situations, embryonic technology, and international issues.