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Determining the value of

intangible assets - A study and an
empirical application

Article in International Journal of Innovation and Technology Management ·

March 2008
DOI: 10.1142/S0219877008001278

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January 19, 2008 17:18 WSPC/ws-ijitm 00127

International Journal of Innovation and Technology Management

Vol. 5, No. 1 (2008) 123–147

c World Scientific Publishing Company

DETERMINING THE VALUE OF INTANGIBLE ASSETS — A

STUDY AND AN EMPIRICAL APPLICATION

VITTORIO CHIESA
Department of Management
Economics and Industrial Engineering, Politecnico di Milano
Piazza Leonardo da Vinci 32, 20133 Milano, Italy
[email protected]

ELENA GILARDONI∗
Department of Management, Economics and Industrial Engineering
Politecnico di Milano, Milano, Italy
Consultant, E*Finance Consulting Reply, Milano, Italy
via delle Vigne 13, 22010 Mezzegra Como, Italy
[email protected]

RAFFAELLA MANZINI
Università Carlo Cattaneo — LIUC
Corso Matteotti 22, 21053 Castellanza, Varese, Italy
[email protected]

EMANUELE PIZZURNO
Università Carlo Cattaneo — LIUC
Corso Matteotti 22, 21053 Castellanza, Varese, Italy
[email protected]
ENI Corporate University — Scuola Mattei
Via Salvo 1, 20097 S. Donato Milanese, Milano, Italy
[email protected]

Received 3 November 2006

Revised 3 June 2007
Accepted 20 October 2007

It is widely recognized nowadays that intangible assets represent the crucial base for
business development and companies are often required to value them. The paper aims
to analyze the critical problems emerging from the empirical application of available
valuation approaches through a case study on a medical device patent pending.

Keywords: Intangible asset; valuation; case study.

∗ Corresponding author.

123
January 19, 2008 17:18 WSPC/ws-ijitm 00127

124 V. Chiesa et al.

1. Introduction
Over the years, the relevance of intangible assets (IAs) is greatly increased. There
are several definitions of what IAs are. For example, an IA could be defined as
a resource which does not have a physical embodiment and whose industrial and
economic exploitation gives a claim to future benefits [Boutellier (2000); Holzmann
(2001); Khoury (2002); Lev (2001); Smith and Parr (2000)]. Other authors define
the IAs as the core competencies of firms [Harvey and Lusch (1997)]. These are
factors of growing importance in boosting corporate competitiveness and economic
performance. In fact, at the beginning of the twentieth century, the largest indus-
trial companies in the world were US Steel, Exxon, J&P Coats and Pullman. The
equivalent list today includes Merck, Coca-Cola, Intel and Microsoft. This sim-
ple comparison exemplifies an important and continuous change: the competitive
advantage of these new largest companies rests in the brand, control of standards,
innovations and patents protection. Consequently the foundations of the economy
have shifted away from the traditional industries, e.g. cars and steel, to the high
technology and information-based industries.
Among the wide range of resources called IAs, a subset of them is called intel-
lectual properties (IPs); the name is derived from legal protections (i.e. intellec-
tual property rights). Examples of intellectual property rights are patents, trade
secrets, trademarks and copyrights. IPs are increasingly recognized as the “key
value drivers” of companies (Ghosh, 2003) and are playing a greater role in the
economy than these have ever done.
The relevance of IPs has been widely confirmed by several authors [Chatterji
(1996); Chiesa (2001)]; Roberts (2001)] who observed that the cross licensing agree-
ments are improving, as well as (i) the number of patents issued to the indus-
try (Table 1), (ii) the patent infringement lawsuits, (iii) the interest in external
sources of innovations and technologies such as acquisitions, licensing, outsourcing
(Table 2).

Table 1. Number of patent applications registered in 2003, 2002, 2001 and 2000 (European
Patent Office, Japan Patent Office, US Patent and Trademark Office).

2000 2001 2002 2003

European Patent Office 27.523 34.702 47.381 59.989

Japan Patent Office 125.880 121.742 120.018 122.511
US Patent and Trademark Office 175.979 183.972 184.376 187.015
Total 329.381 340.416 351.775 369.515

Table 2. Percentage of companies relied upon external

sources of technology [Roberts (2001)].

1992 1995 1998 2001

Europe 22 47 77 86
Japan 35 47 72 84
North America 10 30 75 85
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Determining the Value of Intangible Assets 125

Table 3. Examples of compensations of major patent infringements [Goldscheider (2002)].

Compensation
($million) Year

(Sentence)
Polaroid versus Eastman Kodak 873 1991
Havoort versus Steelcase 211 1996
Exxon versus Mobil Oil 171 1998
3M versus Johnson & Johnson 129 1992
Honeywell versus Minolta 96 1992
(Settlement)
Digital Equipment versus Intel 1,500 1997
Texas Instrument versus Samsung 1,100 1996
Texas Instrument versus Hyundai 1,100 1999
University of California versus Genentech 200 1992
Genentech versus Eli Lily 145 1995

Moreover, number of patent infringement lawsuits has increased [Sullivan (2000)]

and the compensations, received for patent infringements, closed with a sentence or
a settlement, are usually very high sums (Table 3).
As a consequence it is important to appraise these emerging assets, even if the
task of assessing their value is particularly difficult [Harhoff et al. (2003)]. Despite
this growing importance and the relevance of IPs valuation, a small number of
studies presents a methodical examination of the whole valuation process, and a
limited number of empirical examples and cases is available [Park and Park (2004)].
Moreover few and little contributions underline the real need of having a valuation
approach leading the appraiser during the entire valuation activity [Chiesa et al.
(2005)] beyond the application of the valuation methods. So, to make a further step
into this field — through an empirical application of appraisal approaches to a case
study — the paper aims to:

• identify the critical problems emerging from the application of valuation

approaches;
• verify whether the adoption of a specific valuation approach affects the result of
the valuation.

These aims has been achieved thanks to a case study concerning a medical
device patent pending which is able to improve the muscular strength and to allow
rehabilitating the muscular hypotrophy.
The paper is organized as follows. In the next section, two themes are presented:
the major accepted valuation methods are briefly presented and an overview of the
major contributions on the valuation process is laid out. These contributions ana-
lyze and discuss the application of the valuation methods and the basic concepts
related to the valuation of intangible assets. Section 3 presents the empirical anal-
ysis; the application of three valuation process to the case study is described, in
order to identify the critical problems emerging from their application, and verify
the impact of different valuation approaches on the IP value. Section 4 discusses
some managerial implications and further research developments.
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126 V. Chiesa et al.

2. The IP Valuation State of the Art

The academic literature as well as corporate practice posed great attention to the
valorization of IPs.
With respect to the aims of the paper, among the literature contributions, (i)
the methods for valuing IPs, and (ii) the valuation processes of IPs seem to be the
most relevant issues.

2.1. Methods for valuing intangible assets

As far as the methods for valuing intangible assets are concerned, alternative clas-
sifications are available and methods are grouped differently [as in the case of the
auction, Razgaitis (2002)]; notwithstanding, as largely accepted by scholars and
practitioners, the most traditional diffused valuation methods are classified into
three groups: cost, market and income methods. This classification is well docu-
mented in an extensive bibliography, among the others it is important to mention
Anson (1996); Anson (2001); Anson and Serrano (2001); Hoffman and Smith (2002);
Khoury et al. (2001); Mard et al. (2000); Mard (2001); Park and Park (2004);
Razgaitis (1999); Reilly and Schweihs (1999); Smith and Parr (2000); Spadea and
Donohue (2001); Stiroh and Rapp (1998); Tenenbaum (2002); WIPO.
In this paper, the methods are presented for an illustrative purpose and are
not intended to reflect a comprehensive review of this issue; Table 4 presents a
comparison of the three most accepted traditional methods, while the required data
and information of each valuation method are reported in Table 5.

2.2. The valuation approaches

The literature on IPs valuation process is quite wide; the contributions can be
classified into two groups; the former group focuses on and analyses several aspects
of this issue such as:
• the most important principles of the valuation process [King (2001); Reilly and
Schweihs (1999)];
• why the valuation is performed and who is expected to rely on the appraisal
[Anson (2002); Smith and Parr (2000)];

Table 4. Comparison of the most accepted valuation methods [adapted by Park and Park (2004)].

Method Cost Market Income

Definition Valuing based on cost Valuing based on the Valuing based on the
required to reproduce price of IPs in present worth of
or replace the IP market future income flow
Advantages Easy to calculate if cost Possible to calculate Possible to capture
data is available the most rational present worth based
value if market data on profit generating
is available capability
Disadvantages Ignorance of future Lack of market data Change of error due
potential of IP on comparable IPs to subjective
estimation
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Determining the Value of Intangible Assets 127

Table 5. Data and information required by each valuation method.

Method Necessary data

Cost Material: tangible elements used during the intangible asset development
process
Labor: human capital efforts associated with intangible asset development
process Overhead: it includes for example taxes, legal fees, management
and supervisor expenditures Developer’s profit: it is the amount of profit
expected by developer as a return
Entrepreneurial incentive: it is the amount of expenditures required to
motivate the owner of the intangible asset to enter into the development
process
Capitalization rate the past cash flows will be capitalized
Obsolescence, i.e. the reduction in the value of the intangible asset due to
improvements in technology
Market Similar transactions: transactions involving similar assets that have occurred
recently in similar markets
Income Future net cash flows: incremental revenues; incremental expenses; additional
investments
Time horizon: the period during which the intangible is expected to generate
net cash flows
Actualization rate: the future net cash flows will be actualized

• the choice of valuation methods [Anson (2001); Mard et al. (2002)];

• the coherence between the techniques and the type of asset [Smith and Parr
(2000)] as well as the techniques and the objective of leveraging technology
[Contractor (2001); Khoury (1998)];
• the linkage between the appraisal method and the specific form of transaction
(e.g. licensing agreement) [Berkman (2002)];
• the identification of intangible resources [Carmell (2004)].

The latter group discusses the entire IP valuation process (i) suggesting a valu-
ation approach, [among the others Andriessen et al. (1999); Anson (2002); Chiesa
et al. (2005); Hall (1993); Harvey and Lusch (1997); Park and Park (2004); Reilly
and Schweihs (1999)], and (ii) discussing the theoretical and practical problems
of the valuation process of intellectual properties. As far as this second aspect is
concerned, few academic contributions are available [e.g. Chiesa et al. (2005); Park
and Park (2004)] whilst there are some contributions coming from the consulting
literature and drawing guidelines by the practical experience of companies [Reilly
and Schweihs (1999)].
The literature analysis highlights the complexity of IPs valuation process. It
consists of not only in the selection and application of a valuation method, but
also (i) the identification of the IPs to be valued, (ii) the description of the scope
of analysis, (iii) the identification of limiting conditions such as the accuracy level
of data used in the appraisal, (iv) the preliminary analysis, data selection and
collection; (v) the application of the valuation method(s); (vi) the reconciliation of
values.a

a When an analyst uses several valuation methods, different value indications can be obtained, thus

a range of “significant” values has to be defined.

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128 V. Chiesa et al.

Furthermore, a valuation approach, supporting the appraiser, is useful even if

each intellectual property valuation is unique [Reilly and Schweihs (1999)]; its utility
is proven because it gives a pattern [Smith and Parr (2000)] which can be used in any
appraisal assignment to value an IP. Chiesa, et al. [2005] and Reilly and Schweihs
[1999] confirm that a valuation approach:

• forces to perform a systematic and rational analysis;

• allows to synthesize and conclude a reasonable value estimate;
• forces to solve some critical trade-offs and to deal with contrasting elements;
• gives a communication tool, people with different competencies are usually
involved in valuation processes and the approach can make the valuation
easier;
• allows people (even those not directly involved in the valuation process) to under-
stand how the value of the asset has been determined and the validity, reliability
and precision of the obtained results.

With respect to the aims of the paper, several academic and consulting literature
contributions have been considered such as: Chiesa et al. (2005); Park and Park
(2004); Ratnatunga et al. (2004); Anson (2002); King and Henry (1999); Harvey
and Lush (1997); Hall (1993). In addition, some contributions, coming from different
international valuation firms, have been considered such as Appraisal, Economics,
Inc., Inavisis, Inc., The Financial Valuation Group, The Patent & License Exchange
Inc., Valutech Pty. Ldt., Willamette Management Associates. These international
valuation firms provide independent valuation services to the business financial
and legal communities and draw some guidelines for valuing IPs from their direct
experience.
Among these contributions, three valuation approaches have been selected and
applied to the case study here presented in order to reach the aim of the paper. The
approaches are the following:

• Reilly and Schweihs (1999, Willamette Management Associates);

• Park and Park (2004);
• Chiesa, Gilardoni and Manzini (2005).

The Reilly and Schweihs’ valuation process has been selected and applied to the
case study, because:

• the authors have acquired practical experiences in valuing IPs working as (i) man-
aging directors in a firm which provides independent valuation services to the
business financial and legal communities, and (ii) expert witnesses in many intel-
lectual property disputes;
• their contribution seems to be one of the most complete approaches suggested by
international valuation firms, in fact the other contributions are usually limited
to presenting and proposing a valuation process plan without debating (e.g. The
Financial Valuation Group and Valutech Pty. Ldt.).
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Determining the Value of Intangible Assets 129

The Park and Park’s valuation process has been selected and applied to the case
study, because:

• it seems to be appropriate in fitting the scope of the valuation, facing several

aspects to gain a precise monetary value;
• it is one of the most recent and operative academic contributions;
• it presents a detailed procedure;
• it decomposes the complexity of valuation into several modules.

The Chiesa, Gilardoni and Manzini’s valuation process has been selected and
applied to the case study, because it is the valuation approach proposed by the
authors of this paper and they would like to discuss their proposal and improve it.

2.2.1. Reilly and Schweihs (Willamette Management Associates)

Reilly and Schweihs [1999] asserted that the appraisal of intangibles is the culmi-
nation of the exploratory research into the predictable economic performance of an
intangible asset.

The Valuation Process The authors consider the valuation process a systematic
approach able to answer to specific questions about asset value. The process pro-
vides a pattern — that can be used in any appraisal assignment to perform market
research and data analysis — to apply appraisal methods and procedures, and to
integrate the results of these analyses into an estimate of a defined value.
The authors identified the basic steps of the valuation process and a synthetic
description of the phases of the valuation process and their practical application is
hereafter explained.

(1) Identification of the appraisal problem. The appraisal problem should be defined
considering not only the intangible asset, but also (i) the rights legally held,
(ii) the objective of the appraisal assignment (iii) the purpose of the appraisal
assignment, (iv) the date of the value estimate. All these elements, in fact, could
affect the value of an intangible asset.
(2) Data collection. In this step the appraiser should develop an analytical work
plan to gather, analyze and adjust data. Usually data should include the fol-
lowing:
• characteristics of the intangible asset (such as ownership interest to be valued,
rights, privileges and factors affecting ownership or operational control);
• historical financial information for the intangible asset;
• economic factors (such as the nature and conditions of the relevant industries)
affecting the intangible asset;
• prior transactions involving the intangible asset.
(3) Three approaches to value. The authors suggested for appraising the intangible
asset to consider three distinct methods to value: the cost, market and income
method. In fact, value indications can serve as useful comparison for assessing
the reasonableness of the results of the principal methods.
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130 V. Chiesa et al.

(4) Valuation conclusion. Even within the same valuation approach, different
methods will typically result different indications of value. Consequently a
process of reconciliation is required for obtaining a final value. However the
appraiser should review the entire intangible appraisal for appropriateness and
for accuracy.

To strengthen valuation, the authors suggested to make a sensitivity analysis;

in fact, with a sensitivity analysis, a reasonable range of values for the intangible
may be established. The authors recognised the value is strictly related not only to
the intangible asset, but also to several factors characterising the particular place,
time and circumstances the intangible asset is in. Nevertheless, they did not suggest
(i) which factors have to be considered, (ii) how to quantify them and (iii) how to
use them in the valuation. The authors recognised that some general assumptions
have to be made in order to carry out an appraisal assignment in an efficient way.
Moreover they suggested to apply independent appraisers for certifying that the
appraiser has conducted the appraisal without personal interests and biases.

2.2.2. Park and Park

Park and Park [2004] applied their proposed valuation method to a case study and
presented the flowchart of their valuation process.

The Valuation Process The authors explained that the whole valuation process
is module-based where different modules focus on specific functions. The modules
are: VOT Module, VOM Module and Value Computation Module. The “value of
technology” (VOT) is the potential value embedded in the asset itself, the “value
of market” (VOM) denotes the practical value of the asset that is materialized in
the market or business process.

(1) VOT Module. In VOT module the assessment of factors reported in Table 6 is
required; this assessment is necessary for quantifying the impact of some factors
(VOT factors) on the intangible asset value. The assessment is carried out in
the form of score, percentage, number or other, depending on the single factor.
These factors allow computing the “adjusting factor” and “discount rate”.
The adjusting factor serves as a weight for the amount of income in VOM
and it is evaluated as follows:
• weights (wi ) for each factor based on consultation with specialists are
assigned;
• scores (si ) for each factor are assigned (the range is 0–1);
• the weighted sum is computed Eq. (1);


wi × si
i=f actors

• the adjusting factor is determined based on a pre-determined table (Table 7).

The discount rate serves to determine the risk of income in VOM and the
process is similar to the previous one.
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Determining the Value of Intangible Assets 131

Table 6. VOT factors and their input metric [Park and Park (2004)].

VOT factors Definition Input metric Useful for

Proprietary position Degree of protection Score adjusting

factor/discount
rate
Level of technology Technical level of technology Score adjusting
(compared to state of the art) factor/discount
rate
Life of technology Income-generating duration of Year VOM module
technology
Degree of standardization Degree of standardization Score adjusting
factor/discount
rate
Type of technology Product, process Classification VOM module
Contribution ratio Contribution ratio to expected Percentage VOM module
income flow
Scope of application Number of applications Number VOM module
Degree of completeness Readiness for commercialization Score adjusting
of technology factor/discount
rate

Here the term “technology” means IPs or the technology the IPs is based

Table 7. Calculating adjusted factor [Park and Park (2004)].

Weighted sum Adjusting factor Weighted sum Adjusting factor

0–4 0.7 20–24 1.1

5–9 0.8 25–29 1.2
10–14 0.9 30–34 1.3
15–19 1

(2) VOM Module. In VOM module the income flow is estimated considering the
profit generation and cost saving of IP.
(3) Value Computation Module. In the Value Computation module, the monetary
value of subject IP is finalized.

2.2.3. Chiesa, Gilardoni and Manzini

Chiesa et al. [2005] presented an approach aimed to give a systematic vision of the
appraisal process.
The authors distinguished three different elements: activities, constraints and
links.

(1) Activities
• Identifying the unit of analysis. The activity focuses on the identification
of intangible asset; the authors underline the relevance of considering if the
intangible asset is an independent economic unit or if it is a part of a complex
product/system. This process requires a precise identification of the unit of
analysis.
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132 V. Chiesa et al.

• Identifying the aim and scope of analysis. The comprehension of the aim and
scope of analysis allows describing the context in which the valuation takes
place (e.g. licensing agreements, infringement damages, strategic alliances,
etc.). Moreover this activity requires the identification of a set of actors poten-
tially involved in the transaction agreement. Consequently the accuracy and
quality of valuation should be increased.
• Identifying the most proper methods. The choice of the most proper method(s)
is not trivial, but it is strictly linked not only to the unit and the context of
analysis, but also to the availability of time and resources.
• Comparing necessary and available data. The activity could require coming to
a compromise. Sometimes the gettingbnecessary data needs greater resources
and time than available. Consequently the appraiser could accept to obtain
an appropriated value (in terms of accuracy, precision, overall coherence, etc.)
rather than the best one.
• Collecting data. The activity expects to (i) identify data sources, (ii) identify
the right data and information, (iii) establish the level of completeness and
accuracy of gathered data.
(2) Constraints. The valuation process suggests some potential constraints such as
(i) the available data, time and allocated resources and (ii) the necessary data,
time and resources required to apply a method.
(3) Links. There are several links within the approach. These ensure (i) a careful
management of the valuation process and (ii) making the different activities
coherent.

The aim of Chiesa, Gilardoni and Manzini’s work is to force the appraiser to solve
the trade-off between the level of truthfulness of valuation and the amount of
resources used to carry out the valuation.

3. The Case Study

Through the case study, the three selected valuation processes have been applied
to a real IP valuation case, in order to verify whether the adoption of a specific
valuation approach affects the result of the valuation. This application has been
developed in collaboration with the inventor and owner of the IP, who disclosed all
relevant information.

3.1. The context

The valuation processes have been applied to a medical device for the purpose of
improving the muscular strength and rehabilitating muscular hypotrophy.
At present, the medical device is patent pending; the inventor is following the
patent procedures for establishing a legal protection of his invention; the patent will
ensure the legal protection for the next 15 years.b The inventor needs to estimate the

b Generallyan European patent is valid for 20 years from the filing date (www.european-patent-
office.org) and a supplementary protection could be obtained for some medical products once the
January 19, 2008 17:18 WSPC/ws-ijitm 00127

Determining the Value of Intangible Assets 133

value of his invention, for licensingc it to a producer for its exploitation. Thus the
objective of the valuation process is the determination of the monetary value of the
medical device patent (MDP). As patent is pending, some data and information
reported in this paper have been disguised for confidentiality reasons.

3.2. Approaches application to the case study

This section consists in the application of the three aforementioned valuation pro-
cesses to the specific MDP with the aim to obtain a monetary value of the asset
itself.

3.2.1. Reilly and Schweihs (Willamette Management Associates)

Following the steps proposed by Reilly and Schweish, and applying them to the
case study, the first phase encountered is the identification of the appraisal problem.
More in details it is important to:

• identify the intangible asset subject: the MDP;

• identify the intangible asset subject’s property rights to be valued: in the first
phase an Italian patent is going to be established; an international patent will be
required;
• clarify the aim of the intangible asset appraisal assignment: to determine the
monetary value of the intangible asset;
• define the purpose of the intangible asset appraisal assignment: the intangible
asset has to be licensed (the owner and inventor of the asset want to license it);
• define the appropriate standard of value: monetary value;
• identify the date of the value estimate: the valuation has been conducted in 2004.
• list the limiting conditions, if any: none (as intended in this process).

The second step is the data collection. In this step the appraiser develops an ana-
lytical work plan to gather, analyze and adjust data. Usually gathered data include
the following information:

(1) characteristics of the intangible asset;

(2) historical financial information for the intangible;
(3) economic factors affecting the intangible asset;
(4) prior transactions involving the intangible asset.

original patent protection has expired. This second kind of protection has a maximum duration of
15 years from the time the medical product obtains the authorization to be commercialized in the
EU (Council Regulation (EEC) No 1768/92). That means the MDP could be legally protected for
almost 35 years, notwithstanding the inventor and owner of the MDP estimated that his invention
could be commercialized during the 1–10 year with a growth rate of 2–1% and during the 10–15
year with a 0% growth rate. After 15 years, the inventor judged the market will be not interested
in the MDP any more mainly due to technological improvements.
c By the inventor, a license is intended, but what type of license, i.e. lump-sum, royalty or a different

type of license, is not explained. So even if, looking at the value of the technology, the financing
structure of the transfer agreement is crucial. (Razgaitis, 2002, pp. 29–33; Chiesa et al., 2003;
Chiesa et al., forthcoming) This consideration has not been taken into account.
January 19, 2008 17:18 WSPC/ws-ijitm 00127

134 V. Chiesa et al.

In this case, respectively:

(1) the operational control of the licensee will be complete without limitations.
Additionally the nature, history and outlook of the business and industry in
which the intangible asset has been analyzed and observed (e.g. the medical
industry) present a high rate of growth and a whole wide market (according to
the possible utilizations of the device). Moreover related assets and liabilities
required for economic operation of the intangible asset subject have been inves-
tigated and it has been detected that all competences required for exploiting
the intangible asset are available and are referred to mature technologies, all
raw materials and components are available on the market without limitations
or wide price fluctuations;
(2) not available due to the novelty of the device;
(3) none specific, notwithstanding a negative economic conjuncture affecting the
world economy, and Italy more than other countries, has been observed;
(4) none; the MDP is a completely new invention, never involved in buy-cooperate-
sell decisions. Notwithstanding it is useful remember that currently the rate of
return on a risk free investment is about 1.5% per year.

As the third step, the authors suggest to apply three approaches to value. The
authors underline that the choice of a valuation method depends upon the (i) type
of property, (ii) use of appraisal, (iii) quality and quantity of data available. Addi-
tionally the authors suggest to consider three distinct methods (cost, market and
income method) for appraising the intangible assets. Due to the absence of further
indications about method selection, the authors’ suggestion, of applying more than
one method, has been followed choosing the methods for which the necessary data
is available. In the case study the market approach is not usable due to the absence
of required information (see Table 5), in fact, there are not similar competitors’
products. Instead, the data, related to the cost and income method, is available.

The cost method. The application of the cost method indicates the value is equal to
15680 (Table 8). It has been established considering the following types of cost:

• patent cost (see overhead cost in Table 5): this type of cost is referred to the cost
incurred to obtain the legal protection. This cost has been incurred in the year
of the valuation of the MDP (year 0) and it is equal to 5900;
• medical researchers (see labor cost in Table 5): the cost of electrocardiograms,
echographies, spirometries, test equipment, and medical examinations have been
included. These costs have been sustained three years before the data of the
valuation ( 2000 per year);
• prototype cost (see material cost in Table 5): it is the sum of the costs of the
items used for producing the prototype of the medical device patent and it is
equal to 340.
• 10% capitalization rate, 5% developer’s profit and 10% entrepreneurial incentive
have been considered. The obsolescence has been omitted because there have been
no improvements in technology and none are expected in the near future.
January 19, 2008 17:18 WSPC/ws-ijitm 00127

Determining the Value of Intangible Assets 135

Table 8. The value of the medical device patent established following

Reilly and Schweihs’ approach and using the cost method.

Years

−3 −2 −1 0
Patent cost ( ) 5,900
Medical research cost ( ) 2000 2000 2000
Prototype cost ( ) 340
Total cost ( ) 2340 2000 2000
Capitalization rate 10%
Capitalized cost ( ) 3115 2420 2200 5900
Total capitalized cost ( ) 13635
Developer’s profit (5%) ( ) 682
Entrepreneurial incentive (10%) ( ) 1363
Value ( ) 15680

The income method. To implement this method, data about future net cash flows,
actualization rate and time horizon, has been gathered thanks to the inventor’s
support. In order to make the valuation easier, the inventor assumed to license the
MDP to an Italian firm. In defining the previous data and information, the inventor
started from the characteristics of the Italian firms working in the field of orthopedic
devices. In Italy there are 21 firms, these are quite similar to each other, thus the
inventor collected data and information (e.g. projected sale units, price and cost of
production) about a generic firm; the price and cost of production of medical device
have been supposed to be constant; whilst a growth rate for the projected sale units
has been supposed to be variable as reported in Table 9.
The value of the MDP using the income method is 71644 (Table 10).
Additionally, the authors suggested focusing on contingent and limiting condi-
tions. A list of several limiting conditions is available in Reilly and Schweihs’ work,
but between liens to encumbrances, between external to hidden information, from
environmental hazards to compliance with law, none of these conditions meet the
feature of the MDP itself. Moreover, the suggested independent appraisal certifica-
tion is not considered as necessary by the inventor.
The fourth step suggested by the authors requires to focus on valuation con-
clusion. Even within the same valuation approach different methods will typically
result in different indications of value. Consequently a process of reconciliation is

Table 9. Collected data.

Collected data

Price ( /unit) 110

Cost of production ( /unit) 65
Projected sale units (1st year) 500
Projected sale units — growth rate (% per year)
1st–5th years 2
6th–10th years 1
11th–15th years 0
Actualization rate (%) 15
Time horizon (years) 15
 136
V. Chiesa et al.

Table 10. The value of the medical device patent established following Reilly and Schweihs’ approach and using the income method.
January 19, 2008 17:18 WSPC/ws-ijitm

Reilly and
Schweihs 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Projected sale units (u) 500 510 520 531 541 547 552 558 563 569 569 569 569 569 569
Projected unit price ( /u) 110 110 110 110 110 110 110 110 110 110 110 110 110 110 110
00127

Total projected sales ( ) 55.000 56.100 57.222 58.366 59.534 60.129 60.730 61.338 61.951 62.571 62.571 62.571 62.571 62.571 62.571
Cost of production ( /u) 65 65 65 65 65 65 65 65 65 65 65 65 65 65 65
Cost of production ( ) 32.500 33.150 33.813 34.489 35.179 35.531 35.886 36.245 36.607 36.974 36.974 36.974 36.974 36.974 36.974
Operating income ( ) 22.500 22.950 23.409 23.877 24.355 24.598 24.844 25.093 25.344 25.597 25.597 25.597 25.597 25.597 25.597
Tax expenses 45% 10.125 10.328 10.534 10.745 10.960 11.069 11.180 11.292 11.405 11.519 11.519 11.519 11.519 11.519 11.519
Income after tax ( ) 12.375 12.623 12.875 13.132 13.395 13.529 13.664 13.801 13.939 14.078 14.078 14.078 14.078 14.078 14.078
Patent cost ( ) −5.900
Net cash flows ( ) −5.900 12.375 12.623 12.875 13.132 13.395 13.529 13.664 13.801 13.939 14.078 14.078 14.078 14.078 14.078 14.078
Discount rate 15%
Discounted net ( ) −5.900 10.761 9.544 8.465 7.509 6.660 5.849 5.137 4.512 3.962 3.480 3.026 2.631 2.288 1.990 1.730
cash flows
Value ( ) 71.644
January 19, 2008 17:18 WSPC/ws-ijitm 00127

Determining the Value of Intangible Assets 137

required for obtaining a final value. However the analyst should review the entire
intangible appraisal for appropriateness and accuracy. Then if the different results
persist, the authors suggested the adoption of the “process of reconciliation”, which
guides the appraiser to obtain a final value. In this case the value of the MDP should
be the average of the values previously obtained, i.e. 43662.

3.2.2. Park and Park

As far as the steps proposed by Park and Park are concerned, the three modules
have been computed.

VOT Module. The VOT evaluation module has been performed and the results are
summarised in Table 11.
The weighted sum is 14.8 and hence the adjusted factor is set to be 0.9 (Table 7);
while the discount rate is 13.5% (it has been determined starting from the discount
rate suggested by inventor, 15%, and adjusting it on the basis of the adjusted factor).

VOM Module. The VOM evaluation module has been carried out. Based on the
forecasted demand of the medical device, prediction of price of the device, cost of
production, and tax rate, the amount of income flow has been projected. Taking
the contribution rate into account, the income flow of the IP has been computed.
In this case the income flow of the medical device patent and the income flow of IP
are the same due to the fact that the contribution rate is equal to 100%. Then the
adjusted income flow is calculated by adopting the adjustment factors.

Table 11. VOT factors.

VOT factors Input metric Score (0–10) Weight1 Weighted sum

Proprietary position Score 32 0.8 14.8

Level of technology Score 53 0.7
Degree of standardisation Score 14 0.9
Degree of completeness Score 85 1
Type of technology Classification Product technology — —
Contribution ratio Percentage 100% — —
Scope of application Number 1 — —
Life of technology Year 15 — —

1 the weights have been defined (i) considering the weights proposed by Park and Park [2004]

for product technologies and (ii) basing on the consultation with specialists;
2 up to today the medical device is not covered by a patent, in fact the inventor is pursuing

the patent procedures for establishing a legal protection of his invention. Thus the authors,
according with the inventor, assigned a low score to this factor. It is important to notice that
the score is not null because the existing patents seem not to affect the probability of falling
foul to infringements. This score will increase while the patent procedure goes on;
3 the medical device is based on existing technologies thus a low-medium score has been

assigned;
4 the medical device does not have the interoperability feature thus a medium-high score has

been assigned;
5 the medical device could be already commercialised thus a medium-high score has been

assigned.
January 19, 2008 17:18 WSPC/ws-ijitm 00127

138 V. Chiesa et al.

Value computation module. Finally, in the value computation module, the monetary
value of the MDP is produced by applying the discount rate (13.5%). Hence the
MDP value has been estimated at 75,347 (Table 12).

3.2.3. Chiesa, Gilardoni and Manzini

Referring to the valuation process proposed by Chiesa et al. [2005], the required
activities have been carried out.
Identifying the unit of analysis. This process requires a precise identification of the
unit of analysis; the medical device is composed of different elements: (i) the design
and the materials of the device; (ii) the medical researches, (iii) the know how, and
(iv) the patent right.
As far as the design of the these elements is concerned, the first includes draw-
ings, the bill of materials and a pre-built prototype; consequently these allow the
licensee to reproduce the device without any further information. The second ele-
ment identifies the trials that have been conducted for three years. During this
period, the testers wore the particular device for three hours every day, they did
not change their ways of life in order to avoid any kind of alterations of the observed
and controlled parameters. General and specific tests have been performed to collect
data for identifying possible counter-indications due to the use of the MDP. The
gathered data highlight the utility and the importance of the medical device patent
providing in addition positive results in terms of improvement of muscular strength
and respiratory capacity.
The third element has been generated from studies in sport-medicine and the
research protocol. For confidentiality reasons, it is not possible to explain and clarify
the nature of the know-how deriving from the research study and the inventor’s
experience. Notwithstanding it represents a relevant part of the medical device
because it makes the device unique and difficult to be replaced by competitors;
moreover it could be the base for new medical devices.
The fourth and last element is the legal right to exclude others from using the
disclosed medical device. It is a legal instrument enhancing the importance and
assuring the originality of the device, in fact similar devices are not available on the
market. As a consequence, in this specific context, the value of the medical device
is increased, too; in fact, it grants a monopoly (for the next 15 years).
Subsequent to the grant of the patent, it incorporates these four units of the
analysis into a specific IP, which, for this reason, has to be considered as one inde-
pendent and indivisible economic unit. In fact, the patent represents a tool for
transferring the know-how and benefits of the medical device (benefits that have
been supported by the medical studies), in addition to the technical features of the
new product.
In this case the identification of the unit of analysis does not present any trouble.
Identifying the aim and scope of analysis. The owner of the medical device patent
has theoretically two different possibilities; he, in fact, could exploit the device inter-
nally or externally, for example by licensing or selling the patent to other companies.
Because he is unable to (i) sustain high production and marketing investments and
 Table 12. The value of the medical device patent established following Park and Park’s approach.

Park & Park 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

January 19, 2008 17:18 WSPC/ws-ijitm

Projected sale units (u) 500 510 520 531 541 547 552 558 563 569 569 569 569 569 569
Projected unit price ( /u) 110 110 110 110 110 110 110 110 110 110 110 110 110 110 110
Total projected sales ( ) 55.000 56.100 57.222 58.366 59.534 60.129 60.730 61.338 61.951 62.571 62.571 62.571 62.571 62.571 62.571
Cost of production ( /u) 65 65 65 65 65 65 65 65 65 65 65 65 65 65 65
00127

Cost of production ( ) 32.500 33.150 33.813 34.489 35.179 35.531 35.886 36.245 36.607 36.974 36.974 36.974 36.974 36.974 36.974
Income flow before tax ( ) 22.500 22.950 23.409 23.877 24.355 24.598 24.844 25.093 25.344 25.597 25.597 25.597 25.597 25.597 25.597
Tax expenses 45% 10.125 10.328 10.534 10.745 10.960 11.069 11.180 11.292 11.405 11.519 11.519 11.519 11.519 11.519 11.519
Income flow of the MDP ( ) 12.375 12.623 12.875 13.132 13.395 13.529 13.664 13.801 13.939 14.078 14.078 14.078 14.078 14.078 14.078
Income flow of IP ( ) 12.375 12.623 12.875 13.132 13.395 13.529 13.664 13.801 13.939 14.078 14.078 14.078 14.078 14.078 14.078
Adjusting income flow (0,9) 11.138 11.360 11.587 11.819 12.056 12.176 12.298 12.421 12.545 12.671 12.671 12.671 12.671 12.671 12.671
Discount rate 13.5%
Value ( ) 75.347
Determining the Value of Intangible Assets
139
January 19, 2008 17:18 WSPC/ws-ijitm 00127

140 V. Chiesa et al.

(ii) exploit the patent in certain geographical areas, he has decided to exploit the
device externally. Moreover he aims to license the patent in order to prevent prob-
lems with further research rather than selling it.
This activity requires the identification of the potential licensees, in fact, as the
authors have shown in their foregoing works, the choice of potential licensees is
very important in valuing the assets because it influences the value [Chiesa et al.,
2005]. In this case the owner identifies, among the 21 Italian firms, the potential
licensee. It has been identified considering its geographical location, its dimension,
and its interest in commercialising innovative medical devices. The selected licensee
is a small-middle size firm located in the North of Italy and interested in signing a
licensing agreement with the inventor and owner of the medial device patent.

Identifying the most proper method(s). Considering the context of the valuation,
the identification and adoption of a method able to capture the future economic
benefits associated with the patent is critical for the success of the process. Thus
the cost method does not seem to be adequated to the aim of this valuation; this
method, in fact, does not take into account incremental profits of the medical device
patent. The market method cannot be considered adequate as well, because other
medical devices similar to the object of this valuation are not on the market.
On the contrary, the income method seems to be the best option, according to the
aim and scope of the analysis. As a consequence the factors influencing the adoption
of a specific valuation method (e.g. the variables of the decision process) are the unit
of analysis, the aim and scope of the analysis and the available time and resources as
well as the available data. The available time and resources do not represent a real
constraint, in fact, there are not competitors and, up to today, the medical device
is under patent process. Concerning specific resources, such as the competencies
needed to apply more sophisticated methods, these can be easily obtainable. The
available data does not represent a problem, too; in fact the appraiser is also the
inventor and the owner of the MDP so he can access data without problems of
confidentiality and “secrecy”. For this reason the data is always easily accessible.

Comparing necessary and available data. The situation of available and neces-
sary data required by the most appropriate method previously identified (income
method) for valuing the medical device patent is here presented. The time horizon
and the actualization rate do not present trouble; on the contrary the future net
cash flows will be estimated referring to the potential licensee, who has showed
interest in the MDP.

Collecting data. In order to implement the selected method, some data about
future net cash flows, actualization rate and time horizon, have to be collected.
In doing this, external sources of data have been used and they are Kompass Italia,
a database containing data on Italian firms, private and public entities, and the
National Institute of Statistic and the International Yearbook of Industrial Statis-
tic. Referring to the potential licensee, the collected data and information is reported
in Table 13: it defines the price starting from the full cost of the medical device sup-
posing a mark up of 70%; it has a pattern of production costs decreasing during
January 19, 2008 17:18 WSPC/ws-ijitm 00127

Determining the Value of Intangible Assets 141

Table 13. Collected data about the identified licensee.

Data about the licensee

Price ( /unit) = C (1 + %mark up)

Mark up (%) 70%
Cost of production — C ( /unit)
1st –5th years 75
6th –10th years 70
11th –15th years 65
Marketing expenses ( /year)
1st –5th years 10.000
6th –10th years 6.000
11th –15th years 4.000
Projected sale units (1st year) 400
Projected sale units — growth rate (% per year)
1st –5th years 2
6th –10th years 1
11th –15th years 0
Actualization rate (%) 15
Time horizon (year) 15

the time horizon; it requires specific marketing expenses for promoting the medical
device in the orthopedic community.
Other assumptions have been required concerning the time horizon and the
actualization rate.
Determining the value asset. Before determining the asset value, the authors sug-
gested to consider constraints and links. As far as the constraints are concerned,
these have been already taken into account (see point 1 “Activities”) and do not
represent a critical point as well as the links.
Consequently, in order to establish the value of the medical device patent, the
income approach has been applied and the value ascribed to the patent is 45420
(Table 14).

3.3. Remarks on the empirical application of the valuation

processes
The three selected valuation processes have been applied to the case study and the
following remarks, about their practical application, have been identified.
A critical task is the collection of necessary data and information. This is a
weakness point of the valuation approaches. In fact, first of all, the identification of
the potential licensee could present some problem. Referring to Chiesa, Gilardoni
and Manzini’s approach, this problem seems to be minimized, in fact the potential
licensee, as well as its characteristics, such as its competences, its marketing strategy
and/or cost structure have been identified. On the other hand, referring to Reilly
and Schweihs’ approach, this problem is not solved, in fact data and information
about a generic licensee has been collected.
Additionally, the computing of discount rate, referring to Park and Park’s con-
tribution represents a trivial task, in fact it is not clear how it is calculated and the
authors did not support the description with exhaustive examples.
 142

Table 14. The value of the medical device patent established following Chiesa et al.’s approach.
V. Chiesa et al.

Chiesa, Gilardoni
and Manzini 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
January 19, 2008 17:18 WSPC/ws-ijitm

Projected sale (u) 400 408 416 424 433 437 442 446 451 455 455 455 455 455 455
units
Projected unit ( /u) 128 128 128 128 128 128 128 128 128 128 128 128 128 128 128
price
Total projected ( ) 51.000 52.020 53.060 54.122 55.204 55.756 56.314 56.877 57.446 58.020 58.020 58.020 58.020 58.020 58.020
00127

sales
Cost of production ( /u) 75 75 75 75 70 70 70 70 70 70 65 65 65 65 65
Cost of production ( ) 30.000 30.600 31.212 31.836 30.308 30.611 30.917 31.226 31.539 31.854 29.579 29.579 29.579 29.579 29.579
Marketing ( ) 10.000 10.000 10.000 10.000 10.000 6.000 6.000 6.000 6.000 6.000 4.000 4.000 4.000 4.000 4.000
expenses
Operating income ( ) 11.000 11.420 11.848 12.285 14.896 19.145 19.396 19.650 19.907 20.166 24.441 24.441 24.441 24.441 24.441
Tax expenses 45% 4.950 5.139 5.332 5.528 6.703 8.615 8.728 8.843 8.958 9.075 10.999 10.999 10.999 10.999 10.999
Income after tax ( ) 6.050 6.281 6.517 6.757 8.193 10.530 10.668 10.808 10.949 11.091 13.443 13.443 13.443 13.443 13.443
Patent cost ( ) −5.900

Net cash flows ( ) −5.900 6.050 6.281 6.517 6.757 8.193 10.530 10.668 10.808 10.949 11.091 13.443 13.443 13.443 13.443 13.443
Discount rate 15%
Discounted net ( ) −5.900 5.261 4.749 4.285 3.863 4.073 4.552 4.010 3.533 3.112 2.742 2.889 2.513 2.185 1.900 1.652
cash flows
Value ( ) 45.420
January 19, 2008 17:18 WSPC/ws-ijitm 00127

Determining the Value of Intangible Assets 143

Finally, the assignment of weights and scores to VOT factors (referring to Park
and Park’s contribution) is a subjective activity. Another critical task is represented
by the management of different values obtained by the application of more than one
valuation method. Concerning this aspect, only one contribution suggests how this
problem has to be faced (i.e. Reilly and Schweihs’ contribution).
In the case study here presented, other issues, that an appraiser could meet
during the application of the proposed approaches, have been identified. As far as
Reilly and Schweihs’ approach is concerned, the authors did not suggest how the
steps of the valuation process have to be managed through a real and specific case
and how some problem, emerging during the appraisal process, has to be solved.
An example of these problems is how the value of an intellectual property asset
embedded in a complex product can be established.
Concerning Park and Park’s approach, the authors lacked in explaining how
value the IP when the income method is not applicable and if the pre-determined
relationship between “weighted sum” and “adjusted factor” is given common cur-
rency.
Finally in Chiesa, Gilardoni and Manzini’s approach the authors did not suggest
how support the appraiser when he or she uses several valuation methods and a wide
range of value is obtained.
On the other side, each approach here presented underlines several useful sug-
gestion. Reilly and Schweihs introduced the concept of “reconciliation process”,
i.e. a phase during which the appraiser has to analyze, understand and com-
prehend the real meaning of value obtained from the application of valuation
methods.
Moreover they introduced the sensitivity analysis, in order to strength the valu-
ation. This specific suggestion appears to be relevant if linked to the “identification
of the counterpart” [Chiesa, Gilardoni and Manzini (2005)]. In fact, during the
negotiation phase additional and more precise data, by the licensee, could emerge
affecting the value of the IP. The sensitivity analysis carried out before negotiation
phase allows being aware of the probable changing in the IP value.
Another interesting suggestion for strengthening the valuation is related to the
independent appraisers’ certification: the analyst should conduct the appraisal with-
out personal interests and biases.
In the same way, Park and Park’s process is remarkable because it introduces a
structural and systematic model. The model has been considered structural because
it considers the relationship between several technological factors and market fac-
tors; it is considered systematic because it decomposes the complex valuation pro-
cess into several modules. Finally the Chiesa, Gilardoni and Manzini’s approach
highlights that (i) the choice of the valuation method is not trivial, in fact it is
influenced by several factors (e.g. the availability of time and resources, the unit
of analysis, the aim and scope of analysis, etc.), (ii) the coherence throughout the
process and consistency among the various hypotheses and assumptions, needed to
finally identify a (range of) final value(s), are required, (iii) the bargaining power of
the appraiser increases during the negotiation phase with a potential counterpart,
allowing a clear and complete understanding of the value of the asset.
January 19, 2008 17:18 WSPC/ws-ijitm 00127

144 V. Chiesa et al.

Additionally, it is remarkable to note that:

• Park and Park, differently from the other authors, recognized that some specific
IP characteristics can affect the IP value and proposed an operative procedure
for including them in the valuation;
• Reilly and Schweihs and Chiesa,Gilardoni and Manzini recognized the value is
strictly related to several factors characterizing the particular place, time and
circumstances the IP is in. Nevertheless, it is not clear how quantify these factors
and how use them in the valuation. A partial listing of factors influencing the
value has been outlined while several factors are not presented, as the financial
structure of the transfer agreement, i.e. the type of license (also in Chiesa et al.,
forthcoming).

4. Managerial Implications and Further Research

In the literature, as well as corporate practice, great attention is paid to the problems
of IP valuation and several valuation approaches have been presented. However an
in-depth analysis of these themes is lacking. In view of this, the paper aims at taking
some steps to amend this situation.
The paper has recognized the importance and usefulness of having a complete
approach for supporting the appraiser during the IP valuation due to the complexity
of the valuation process. As far as this aspect is concerned, starting from the con-
tributions available in the literature, the paper selected three valuation approaches
and analyzed them. The analysis confirmed that it is necessary the involvement of
different competencies and specialists with expertise into the valuation process for
accomplishing the appraiser’s knowledge.
Additionally, thanks to the availability of a well-detailed process, people —
even if not directly involved in the process – can understand how the value of the
assets has been determined and the validity, reliability and precision of the results
obtained.
About the aims of the paper, the application of the processes to the case study
has documented how the valuation approach affects the value of IP; in fact, the
application of the three approaches brought to different MDP value. The reason
seems to be, basically, ascribable to:

• the factors influencing the IP value; in fact, the value is related not only to the IP
itself, but also to other elements, which are differently highlighted by the authors.
Even if the listing of these factors is partial presented, the choice about what to
include or neglect, is left to the appraiser without any suggestion;
• the management of the subjectiveness of collected data and information, (e.g.
Park and Park tried to clarify and explain the relationship between IP value and
other factors, such as the proprietary position or the degree of completeness).

Additionally, the case study has showed the limits of the existing approaches in
a real context and identified opportunities to enrich, improve and complete them,
as well as has illustrated as different approaches present different levels of accuracy
concerning factors considered during the valuation.
January 19, 2008 17:18 WSPC/ws-ijitm 00127

Determining the Value of Intangible Assets 145

This third evidence seems to explain the difference of the final monetary value.
Considering the strength points identified from the presented and examined
approaches, suggestions for further research emerge. Chiesa,Gilardoni and Manzini’s
approach could be complemented according these emerged suggestions. The renewed
approach will be applied to a considerable number of significant and different case
studies to improve its strength and to identify specific problems and characteristics
not emerged up to today.

Acknowledgments
This paper is the results of the joint work of the authors. However Vittorio Chiesa
and Raffaella Manzini wrote Sec. 1, Elena Gilardoni Secs. 2 and 3, Emanuele
Pizzurno Sec. 4.
Special thanks to the inventor and to Marco Donati and Marco Sicari for the
support given.

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Biography
Emanuele Pizzurno is currently teaching Management Engineering at University
Carlo Cattaneo — LIUC where he spends most of his academic career. He is also
responsible for “Managing Technical Assets in the Energy Industry” program study
of Master MEDEA at Scuola Mattei — Eni Corporate University and carries out
research and teaching at the Department of Management Engineering at Politecnico
di Milano. The prevailing research and teaching topics concern the management
of technology and innovation and the management and organization of R&D; he
has also studied environmental strategies and management. He is the author of
numerous scientific publications.
Elena Gilardoni is currently working as a consultant in the insurance and financial
sectors. The prevailing research and teaching topics concerning the valuation and
management of technology-based intangible asset, the analysis and valuation of the
technology selling, licensing agreements and other forms of transactions and the
approach to patent strategy. She has also studied the profitability of multichannel
banking. She is the author of many scientific publications and books.
Vittorio Chiesa is Full Professor of R&D Strategy and Organisation at Politec-
nico di Milano (Milan, Italy). He teaches Business Economics and Organisation at
Politecnico di Milano and Università degli Studi di Milano — Bicocca. He conducts
research and consultancy activities (to companies, private groups, industrial asso-
ciations and Public Administration) in four main fields: management of research
activities, development and technological innovation in enterprises, high-tech com-
pany generation, evaluation of intangible assets, and biotechnology industry analy-
sis. He is the author of numerous scientific publications.
Raffaella Manzini is an Associate Professor at the University C. Cattaneo (LIUC),
Castellanza (Varese, Italy). She teaches Economics and Business Organization at
LIUC, as well as Management of Technology at LIUC. She obtained her Master
Degree in Management Engineering at Politecnico di Milano. Her research interest
include R&D and innovation management, technology strategy, management and
organization.