Intellectual property refers to creations of the mind; inventions, literary and artistic works, and symbols, names, images, and designs used in commerce.
IP is divided into two categories: Industrial property, which includes patents, trademarks, industrial designs, and geographic indications of source; and Copyright, which includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs. Rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings, and those of broadcasters in their radio and television programs.
Intellectual Property and Intangible Assets continue to drive the world business and their importance is going to grow in time to come. Intellectual Property is an integral part of the business concept and is best understood and utilized with in that context. In very real sense I strongly believe, intellectual property can no more be considered as intangible but are tangible assets, conferring rights to owner of such property that are both de-jure and de facto. Many of the new generation corporations have invested billions of rupees not in land and machinery but in intellectual capital. At the same time value creation and its growth are the ultimate goal of a management team; therefore the management performance can only be measured through the valuation of intellectual property at regular intervals, which becomes imperative. In the recent past valuation of intangible assets related to intellectual property has gained a considerable importance. Valuation of individual intangible assets is a recent concept in India, though the generic intangible assets better known, as Goodwill has been valued for a very long time. Goodwill is an umbrella concept. The Goodwill was valued whenever a business as a whole was transferred from one entity to another or when new partners were brought in or old partners left the business to give them their dues as part of their contribution to the business. Intellectual Property can be clearly distinguished from goodwill. UK & Australian (GAAP) has specified goodwill as an umbrella concept consisting of unidentifiable intangible assets and should not include those Intellectual Properties which are capable of individual identification and can be sold separately.
Just as the idle floor of the corporate building is leased to others, Intellectual Property is also being exploited in the same fashion. Idle assets are no good business you must use it or rent it and if you don’t need it for longer or forever then lease it or sell it. The recent concept of valuation of intangible assets related to Intellectual Property like Patents, Copy rights, Design, Trademarks, Brands etc, is also getting greater importance as these Intellectual Properties of the business is now often sold and purchased in the market by itself, like any other asset.