In certain European jurisdictions, companies undergoing financial distress have the opportunity to reach agreements before formal bankruptcy proceedings begin. In such cases, valuation plays a crucial role in guiding strategic decisions—whether for asset transfers, legal substantiation, or restructuring strategies.
AN Valuations was recently engaged by a global medtech company specializing in software for medical discovery. This client, known for supporting major pharmaceutical companies, national health agencies, and startups, required a valuation of intellectual property assets related to one of its European subsidiaries. The goal was to support legal proceedings, with the parent company considering an asset purchase.
Challenges in Valuing Intellectual Property in Legal Contexts
Valuation cases in legal contexts can evolve as new facts and circumstances emerge. A client may initially request a valuation from one perspective (for example, a liquidator’s perspective) only to find that a different perspective (for example, a seller’s perspective) becomes more relevant as legal discussions progress. Flexibility and deep valuation expertise are essential to pivot quickly while maintaining accuracy and independence.
Additionally, a critical component of these valuations is understanding the client’s business model and key value drivers. While this client originally sought a valuation for a specific asset, our experience in the software industry allowed us to identify additional assets that were equally relevant to the case. This broader scope ensured that all key intellectual property elements were properly assessed, providing a more comprehensive and defensible valuation.
The Importance of Clear, Defensible Valuation Reports
Legal valuation opinions must be thorough, well-reasoned, and able to withstand scrutiny in a courtroom or negotiation setting. Judges and legal professionals often reject expert reports due to insufficient substantiation. Therefore, every assumption must be explicitly justified, and every valuation approach must be rigorously supported by industry best practices.
At AN Valuations, we recognize that independence and objectivity are paramount. At the same time, understanding the client’s perspective—and that of their legal counsel—is crucial. Maintaining credibility requires balancing professional independence with a collaborative approach that ensures all relevant factors are considered. What may sometimes appear to be efforts to influence our independence can, in fact, provide valuable input that strengthens a logical and well-supported valuation analysis.
Balancing Speed and Quality in Legal Support Cases
Legal support valuations are often required under tight deadlines. However, speed should never come at the cost of accuracy or defensibility. A proper valuation analysis and well-reasoned opinion require careful evaluation, reflection, and clarity in presentation.
To navigate these challenges efficiently, AN Valuations collaborates with a global alliance of seasoned experts. This network allows for the rapid exchange of critical questions and perspectives, enhancing the quality of our valuations while ensuring that clients receive timely, well-reasoned insights.
Approaches to Intellectual Property Valuation
Valuing intellectual property requires careful selection of the most relevant methodology based on available data and the context of the case. Some common approaches include:
The choice of methodology depends on the reliability of available inputs and the unique characteristics of the intellectual property in question.
Strategic Insights Gained Through IP Valuations
Beyond the immediate legal or financial objectives, intellectual property valuations often uncover valuable insights for decision-makers. These analyses highlight key strengths, potential risks, and critical value drivers that may not have been previously apparent.
For companies with strong customer relationships—such as those serving top pharmaceutical firms and national health agencies—valuations must carefully consider customer attrition rates, procurement cycles, and the strategic importance of long-term contracts. These factors can significantly influence the perceived and actual value of intellectual property assets.
Jurisprudence and Its Role in IP Valuation
Legal precedents and settled case law can have significant implications for valuation in legal proceedings. While novel valuation theories can offer fresh perspectives and add value in some cases, judges—particularly in European jurisdictions—often seek fair and reasonable settlements. Legal advisors require valuation results that are not only rigorous but also explainable within a legal framework.
If a valuation approach has been disqualified in one or more historical cases, this must be acknowledged and carefully considered in the case at hand. At AN Valuations, we incorporate jurisprudence at an early stage of our analysis, ensuring that our methodologies align with relevant case law. This proactive approach provides critical guidance in discussions with clients and their legal teams, forming an essential component of a credible and defensible valuation opinion.
Final Thoughts
The valuation of intellectual property in legal support cases requires expertise, adaptability, and a strong commitment to defensibility. At AN Valuations, we help clients navigate these complexities with clear, well-reasoned valuation opinions that stand up to legal and financial scrutiny. Whether supporting pre-bankruptcy negotiations, asset transfers, or litigation, our approach ensures that decision-makers have the insights they need to proceed with confidence.
If your company is facing a similar challenge and requires a robust intellectual property valuation, call us at +31 70 221 0058 or send us an email at info@anvaluations.com to discuss how we can assist.