ISO Pushing Forward to Establish International Standard for Patent Valuation

In an ambitious effort, the International Organization for Standardization (ISO) is moving forward to establish an international standard for patent valuation. According to an email letter from the project’s leader Alexander Wurzer (received yesterday at the IAM blog), the ISO is seeking participants to help in this project

The International Organization for Standardization, ISO, has published a new work item proposal for the standardization of patent valuation processes.

The proposal was initiated by the German Institute for Standardization, DIN, and is based on a publicly available specification PAS 1070 “General Principles of Proper Patent Valuation" (SAB1), published in 2007.

The PAS 1070 was developed by a working committee of DIN, chaired by Prof. Alexander Wurzer, together with representatives from all relevant and concerned groups, including industry, consulting, accounting and academia. The PAS defines general principles and requirements for a reliable and appropriate valuation of patents. Its main intention is to serve as a guideline for users of patent value information, to enable a quality assessment of valuation reports and expert appraisals.

The publication of PAS 1070 encouraged great response, emphasizing the necessity and demand for consolidation and standardization of patent valuation, and for a definition of general principles for proper and reliable patent valuation. It also highlighted that national initiatives in this issue of high global importance are not sufficient.

DIN therefore formed a working committee and initiated this international standardization project on patent valuation at ISO. This shall meet the requirement for an international standard. ISO followed that initiative and will appoint a committee to develop an ISO-standard for patent valuation if all relevant and concerned groups articulate their interest to ISO through their national standardization bodies.

You can participate in the development of an ISO standard on patent valuation.

ISO follows a general procedure in implementing working committees for new work item proposals. Therefore you only have to contact your national standardization body and inform them about this proposal and your interest to join the development of an ISO standard on patent valuation. Your national standardization body as your representative at ISO will follow this proposal and bring all other interested groups in your country together to join the implementation of this ISO standard.

To make such an international project work, individual experts or single companies cannot directly contact ISO, which is why you have to contact your national standardization body. To contact your national standardization body, you may use the following list at ISO which provides direct links to your representatives: http://www.iso.org/iso/about/iso_members.htm

Your national standardization body will fill out the ballot form for the implementation of the ISO committee for this new work item proposal. Your national standardization body can download the required ballot form from the ISO website at www.iso.org/forms by simply following the link: “Form 04 New Work Item Proposal”.

Of course you can further support the development of this ISO standard on patent valuation by forwarding this message to any of your partners who may be interested in or concerned by it. Additional information on ISO standards and procedures can be obtained from http://www.iso.org/ or your national standardization body.

Best regards,

Alexander J. Wurzer

Chairman of the working committee for Patent Valuation at DIN e.V.

For a preliminary run-down of patent valuations techniques, see Grünewald & Wurzer, "Approaches and Methods of Patent Valuation" (link).

See also IAM Magazine, ""Developing a patent valuation standard", May 01, 2007 (link). From the article:

So, how can technical progress be promoted? We need inventions and their exploitation – their realisation or transfer into our daily lives. What helps to facilitate this? Legal protection and money. But surely, there is a lot more we could do; for example, a technology transfer market. For such a market, you need prices. And in order to attract money – which for the main part is risk-averse – you have to reduce the risk incurred. One way of doing this and to establish trust is to devise a generally accepted standard for quantitative financial patent valuation.

This would also help to reduce many of the problems associated with the limited amount of information generally available for investors in the complicated area of technology and patents. And this is what banks have been asking for before they can feel comfortable in investing in patents or in using them as collateral.