The document discusses several approaches for valuing patents, including the cost approach, market approach, and yield approach. It focuses on the yield approach, also known as the license analogy approach, which values patents based on estimating potential royalties from licensing agreements in a similar way to how employee inventions are valued for remuneration in Germany. The license analogy approach involves determining an appropriate royalty rate and base and then calculating the net present value (NPV) of expected royalty cash flows over the lifetime of the patent.

1. 31/10/01/11/07 – Valuation of Patents Valuation of Innovative Technologies – License Analogy based Approaches according to Employees‘ Inventions Remuneration Calculation in Germany Heinz Goddar Boehmert & Boehmert

6. 31/10/01/11/07 – Valuation of Patents “Pension Formula“ for NPV C 1 C 2 C ty NPV = C 0 + ------- + --------- + ..... ---------- 1 + r (1 + r) 2 (1 + r) ty wherein C 0 is the royalty cash flow in the starting year, C 1 in the first year thereafter, and so on, until C ty means the royalty stream in the terminal year of (patent) protected sales. Furthermore, r is the discount rate to be applied, i. e. the average bank interest rate for lending money to be applied, e.g. 10% interest means r = 0.1.