Know-How Evaluation

The know-how evaluation service provides the opportunity to determine the economic value of know-how.

Know-how evaluation is one of the services in the practice area “Intangible assets evaluation“. The assessment concerns specific knowledge and/or confidential processes (so-called know-how) that increase the competitive capacity of the company. The service includes a preliminary legal analysis and a legal-administrative consistency assessment. According to the standards governing the sector as well as to professional practice, intangible assets such as trademarks, on-line platforms, software, patents, know-how, etc., in order to be eligible for financial evaluation, must be:

  • independently identifiable (so-called principle of identifiability);
  • subject to the control of the owner, enabling him to profit economically and to limit or prevent exploitation by third parties (so-called principle of control).

WHO REQUIRES THE EVALUATION OF KNOW-HOW

The problem of determining the economic value of know-how arises in the following cases: 

  • contribution; 
  • transfer or licensing; 
  • extraordinary operations (acquisition, transfer of company or branch, merger, demerger); 
  • tax concessions (e.g. patent box)
  • revaluation.

In case of contribution to a company, the economic evaluation of the know-how is compulsory pursuant to art. 2343 of the Italian Civil Code. The Italian Civil Code prescribes a certified appraisal report to guarantee the actual amount of share capital. The evaluation of know-how is also strongly recommended whenever doubts may arise about transactions involving know-how.

Please note, the legal valuation (STEP 1, see below) is often requested to our Firm by accountants who need to check the actual legal existence of the asset before proceeding with its evaluation.

SERVICE FEATURES

Our evaluation comprises two steps:

STEP 1. Legal evaluation (verification of juridical consistency): the Law Firm performs a specific due diligenceThe Law Firm assesses the ownership, confidentiality, features and scope of the know-how.Through dedicated checklists and interviews, the Law Firm gathers all relevant documents and information. The outcome of the legal valuation consists of a comprehensive report (legal advice) that is an integral part of the subsequent appraisal report. 

Please note that this legal evaluation (STEP 1) can also be provided by our Law Firm independently from the appraisal report. We are often requested to carry out a legal evaluation by accountants who need to verify the consistency of intangible assets for their clients before proceeding with their financial evaluation.

STEP 2: Appraisal report (economic valuation): the economic value of know-how is estimated using methods based on profitability, costs and empirical data. The estimate of the know-how’s value is the result of applying several valuation methods. The professional chooses the methods that are most consistent with the company’s peculiarities, the current situation and the available data. The appraisal is usually carried out by accountants selected by the Canella Camaiora Law Firm. The service referred to in Phase 1 is preliminary to the economic evaluation (Phase 2).

ADVANTAGES

The Canella Camaiora Law Firm is highly qualified in the management and protection of industrial and intellectual property rights. Among the Law Firm’s services, the know-how evaluation service is one of the most requested and appreciated. 

The legal valuation (verification of legal consistency, STEP 1) of the intangible can also be estimated and provided by the Canella Camaiora Law Firm independently from the appraisal report (STEP 2). The economic appraisal, if requested, is carried out by accountants – experts in intellectual property and selected by the Firm – who regularly collaborate with the Court of Milan.

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