The Valuation of Copyright

All About Copyright

Copyright is a type of lawful security for protecting innovation. Licensed innovation is a making of the identity. Licensed innovation that might be copyrighted incorporates unique scholarly, melodic, emotional, and creative works. Therefore, these innovative works are exemplified in a frame that can be shared, reproduced, copied, or made. Valuation of Copyright registration grants exclusive ownership rights to reproduce, distribute, perform, and display the works publicly.

Related: Intellectual Property Management

The sole right to prohibit the following uses of their copyrighted works:

  • To reproduce all or part of the work.
  • Making new (derivative) versions.
  • Distribute copies by selling, renting, leasing, or lending them.
  • To perform (that is, to recite, dance, or act) the work publicly.
  • To display the work publicly, directly, or by means of film, TV, slides, or other device or process.

The initial three rights are abused when anybody duplicates, portions, adjusts or distributes a copyrighted work without authorization. Hence, a copyright legitimately secures the first articulation of thoughts, Not simply the thoughts, that implies a thought cannot be copyrighted. It is the declaration of the thought the way it is displayed that is copyrighted. The Copyright provides uniqueness, originality, innovation, and creativity to the users and helps them in additional sales, more incremental margins with some reduced promotions.

Related: Keep Your Idea Safe With Trademark, Patent & Copyright

Two Step Process

The Valuation of Copyright can be broken down into two major steps:

  • Determination of the profits.
  • And then dividing the profits to the Copyright

The 3 generally accepted methods of IP valuation may be applicable to the analysis of copyrights:

Cost Method

The Cost Method is based on the intention of establishing the value of an IP asset by calculating the cost of developing the same or identical IP asset either internally or externally. The method aims to determine the value of an IP asset at a particular point in time. Therefore by aggregating the direct expenditures and opportunity costs involved in its development and considering the obsolescence of an IP asset. However, the Cost Method is generally the least used method as, in most cases, it is considered suitable only as a supplement to the income method.

Market Method

The Market Method is based on comparison with the actual price paid for a similar IP asset under comparable circumstances. The market approach is the most commonly used method in the Valuation of Copyright analysis. The free and simple sale of copyrights is usual practice in the market. It is true with regard to all of the types of copyrighted materials like musical, artistic, literary. However, the pricing details related to these copyright sales are not publicly disclosed. Also, it is often difficult for analysts to develop metrics in order to extract market-derived pricing multiples from these transactional data. As it is not easy to convert pricing data regarding the actual sale of a copyright into a logical ‘per picture’, ‘per lyric’ or ‘per word’ pricing multiple.

Income Method

The Income Method is very commonly used in the valuation and economic analysis of copyright for intellectual properties, focusing on the income generating efficiency of the property. The Income method values the IP asset based on the amount of economic income that the IP asset. The Valuation of Copyright is expected to generate, adjusted to its present-day value.

Benefits of Valuation of Copyright

Mentioned below are the Copyright generate the following benefits for:

  • Increases the pricing power
  • Greater Profit Margins
  • Litigation award
  • Protect from the threat of litigation
  • Additional Sales
  • Reduced Marketing
  • Incremental margin

Related: Rights of Copyright Owners


A copyright an important analysis for a valuation is the assessment of reasonable royalties that would be payable under a license/license agreement. Intangible Business assesses this in the context of the licensing strategy being employed and analyzing complex elements including the inclusion of other commercial rights and obligations. Therefore, the relief from royalty method has the advantage that it is based on the income approach. It is the fundamental premise of commercial value. However, It also uses components which can be benchmarked or compared, under the market approach, with license/license agreements. It is, therefore, a rounded and commercial method.

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