The Valuation of Artificial Intelligence-Driven Know-How and Patents

The know-how (to do it) and trade (industrial) secrets are proprietary information or knowledge that assists or improve a commercial activity, but that is not registered for protection in the manner of a patent or trademark. The sharing and transferability of know-how is the basis of its economic appraisal, which is based on complementary methodologies projecting the future usefulness of the costs incurred, the relief from royalties by the license, or the differential income from internal exploitation. Unlike patents, the know-how is not independently negotiable and is more difficult to enforce against third parties, but at the same time, it retains some characteristics of confidentiality that with the patenting in part must be disclosed. Patents can create scalable value, levered by debt, and serviced by intangible-driven incremental EBITDA and cash flows.