The cost method is based on the licensor’s investment in the technology. The cost approach is based on the economic principle of substitution. An investor will pay no more for an asset than the cost to develop or obtain another asset of similar utility. The value of the intellectual property is equal to [...]
Cost approaches are utilized under the premise that a prudent licensee would pay no more for the intellectual property at issue than the cost to obtain, either by purchaser by construction, an exact replica of the subject technology or an alternative that achieves the same function. Two types cost methodologies predominate: Reproduction cost [...]
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