As the economy becomes more knowledge-based and innovation-driven, intangible assets are becoming more important in creating business value. Under the new provisions of the 2025 Intellectual Property Law, intellectual property rights are not only protected by law but can also be used in economic activities.
According to Article 8a of the 2025 Intellectual Property Law, owners of intellectual property rights may use these rights in civil, commercial and investment transactions. The State also encourages the use of intellectual property rights for capital contribution or as collateral for loans, in accordance with the law.
This shows an important change: intellectual property is no longer viewed only as a protected right, but also as an asset that can create economic value. However, before intellectual property rights can be used for investment, capital contribution, transfer or loan security, their value must be determined in an objective and reliable way.
In practice, valuation of intellectual property assets is not only useful for transactions. It also helps businesses and related parties understand the asset’s value, its commercial potential, and how much it contributes to the overall value of the enterprise.
From legal rights to economic value
01. Legal perspective: Foundation for ownership rights
To value an asset properly, it is important to first understand the difference between intangible assets in general and intellectual property assets in particular.
Under the International Valuation Standards (IVS), intangible assets may include groups such as:
- Marketing-related intangible assets, such as trademarks, data and unique commercial designs.
- Customer-related intangible assets, such as customer lists, customer contracts and customer relationships.
- Artistic-related assets, such as copyrights for books, music or films.
- Contract-related intangible assets, such as licenses, franchise rights and exploitation rights.
- Technology-related intangible assets, such as patents and software databases.
Intellectual Property (IP) rights are only one part of a company’s intangible assets.
According to the Intellectual Property Law No. 131/2025/QH15, intellectual property rights are the rights of organizations and individuals over copyright and related rights, industrial property rights, and rights to plant varieties.
From a valuation perspective, intellectual property assets are property rights that are recognized and protected by law, and that can create future economic benefits.
Under the Intellectual Property Law No. 131/2025/QH15, intellectual property rights include three main groups:
Copyright and related rights
Literary, artistic and scientific works; performances; sound recordings, video recordings; and broadcasts.
Industrial property rights
Inventions, industrial designs, layout designs of integrated circuits, trademarks, geographical indications, trade names and trade secrets.
Rights to plant varieties
Propagation materials and harvested materials.
02. Reviewing protection scope and legal risks
In valuation, the geographical scope of protection has a direct impact on asset value. The value of an intellectual property asset may change depending on the country or region where it is registered and protected, the market it can reach, and the ability to use the asset commercially in each territory. For example, a trademark protected only in Vietnam has a different value from a trademark registered in several international markets.
Therefore, valuers need to review the geographical scope of protection together with market size, competition, enforceability of rights in each country, and the cost of maintaining protection. These factors help assess the asset’s ability to create future economic benefits.
The protection period is also important. For example, an invention is protected for 20 years, a utility solution for 10 years, and a trademark can be renewed every 10 years without limit. These are important inputs when applying the Cost Approach, Market Approach and Income Approach.
Legal risks should also be reviewed. This may include litigation history, the ability to prove infringement by third parties, and Freedom to Operate (FTO). This helps ensure that using the asset does not create risks of infringing other parties’ intellectual property rights.
03. Market perspective: Turning rights into value
The legal perspective helps confirm ownership and protection scope. The market perspective helps determine whether the intellectual property asset can actually create economic value.
When valuing intangible assets, especially intellectual property assets, market analysis is an important step. It helps explain how the asset can generate revenue in real business conditions. This analysis should not only look at numbers, but also consider qualitative factors that show the core value of the asset.
The valuer should assess how important the intellectual property asset is to the products or services it protects. This includes looking at how the asset supports reputation, decision-making, and the value of other assets of the company.
It is also important to review the business environment of the intangible asset, including market position, competitiveness, market size, growth potential in the short, medium and long term, and whether that growth is sustainable. External factors such as policies and regulations should also be considered because they may affect how the asset can be used.
Based on this analysis, the valuer can assess how the intellectual property asset may support revenue growth, improve operations, build the brand and increase overall business value.
04. Linking intellectual property assets to the business model
To understand value clearly, the asset should be placed within the company’s business model:
- Customers: Identify customer groups and how the intellectual property asset helps improve customer loyalty.
- Value Proposition: Identify the needs that the protected innovation can help solve.
- Resources and Functions: Review supporting resources such as expertise, production facilities and time to market.
- Revenue streams: Link revenue growth to the geographical protection scope of the asset and related maintenance costs.
For intellectual property assets protected in many countries or regions, revenue potential should be analyzed by each market. An invention or trademark with international protection usually has greater commercial potential. It may also support market expansion, franchising or cross-border licensing.
In contrast, if protection is limited to one territory, expected revenue and the ability to use the asset may also be limited. Therefore, geographical protection should be reflected in cash flow forecasts, reference royalty rates and valuation risk.
This helps show that an intellectual property asset is not only a legal asset, but also a factor that can increase revenue, create competitive advantage and improve business value.
Porter’s Five Forces is a useful framework for assessing the attractiveness of an industry and the ability to gain market share. Key factors include the bargaining power of suppliers and buyers, the threat of new competitors, barriers such as patents or brands, and the risk of substitute products.
The results of market analysis provide important inputs for choosing a valuation method, selecting reference royalty rates and determining discount factors. For new technologies or unproven markets, the risk level may be high, which can directly affect the final valuation result.
05. Key points when valuing intellectual property and intangible assets
When valuing an intangible asset, the valuer needs to clearly understand what asset is being valued and why the valuation is being performed. For example, customer data such as names and addresses may have a very different value from existing customer contracts. It is also different from customer relationships, which include the value of ongoing relationships with customers, both current and future.
The type of intangible asset and how it is defined may change depending on the purpose of valuation. Different definitions can lead to significant differences in value.
According to IVS 210:
The economic life of an intangible asset may be limited by legal, technological, functional or economic factors. It may also be different from the useful life used for accounting or tax purposes.
When estimating economic life, the following factors should be considered:
- Product life cycle
- Level of technological obsolescence
- Market changes
- Competitor behavior
- Investment needed to maintain the asset
- Dependence on other assets
- Relevant legal rules
It is also necessary to consider possible decreases in economic benefits caused by:
- Substitute technology
- Loss of competitive advantage
- Changes in prices and costs
This decrease may happen slowly or suddenly.
For customer-related intangible assets, customer attrition is an important factor when estimating future cash flows.
This rate reflects the expected loss of customers over time. It is usually based on historical data combined with future forecasts.
TAB is the tax benefit created from the amortization of intangible assets.
- Under the Cost Approach and Market Approach: this factor is usually already reflected in the value.
- Under the Income Approach: TAB should be considered when estimating after-tax cash flows.
Correctly treating TAB can have a significant impact on the valuation result.
As intangible assets make up a larger share of business value, it is important to understand their legal nature, economic characteristics and valuation methods. Valuation of intangible assets is not only a technical process. It also supports investment decisions, asset management and business value optimization. A suitable valuation method helps reflect the true economic value of the asset and supports a more transparent and efficient market.
- Intellectual Property Law 2025.
- Vietnamese Valuation Standards.
- International Valuation Standards.
- Reference materials from the World Intellectual Property Organization (WIPO).
