LES Philippines Hosts First Intangible Asset Valuation Roundtable
Participants in the first Roundtable Discussion on Intellectual Property Valuation held at the Acacia Hotel, Alabang, Muntinlupa City, on 3 March 2023. Seated (L-R): IPOPHIL IP Academy Assistant Director Dr. Frederick Romero, DOST-PCAARRD Executive Director Dr. Reynaldo Ebora, WIPO Asean consultant Atty. Editha Hechanova, WIPO international consultant Dr. Andre Gorius, PwC Isla Lipana Managing Director Ms. Jade Roxas-Divinagracia, DOST-PCHRD's Ms. Julie Anne Balangat, and LES Philippines President Atty. Bayani Loste; Standing (L-R): APP President Atty. Misael Costes, DPITC Director Mr. Noel Catibog, SVBB's Atty. Leonides Madrilejo, IPOPHIL DITTB's Mr. Michael Junsay, DOST-PCIERRD's Mr. Samuel Cahimat, and DOF's Mr. John Marlowe Badillo
Practitioners and government regulators attended the Philippines' first roundtable discussion on intangible asset valuation last 3 March 2023 at the Acacia Hotel, Alabang, Muntinlupa City, Philippines. Organized by the Licensing Executives Society Philippines (LES Philippines) together with the Department of Science and Technology - Philippine Council for Agriculture, Aquatic, and Natural Resources Research and Development (DOST-PCAARRD) and the Association of PAQE Professionals, Inc. (APP), the half-day event focused on determining the standards of IA valuation in the country, the need for professionalizing
of the valuation practice, and the minimum requirements of training and experience that a practitioner must have to prepare a credible report.
Dr. Reynaldo Ebora, Executive Director of DOST-PCAARRD, welcomed the participants and opened the roundtable by reviewing the laws and regulations affecting IA valuation, from the Technology Transfer Act of 2009 to the recently approved House Bill 8453 or the Valuation Reform Act.
Dr. Frederick Romero, Assistant Director at the Intellectual Property Office of the Philippines (IPOPHIL) and officer-in-charge of IPOPHIL's IP Academy, confirmed that there is a more urgent need to standardize the practice of IA valuation because of the effect that this practice has on the intellectual properties of the various stakeholders in the country. Dr. Romero added that an environment of IA valuation should be created and that a database of valued IPs has to be established to benchmark royalty rates.
Ms. Mary Jade Roxas- Divinagracia, Managing Partner at PwC Isla Lipana & Co., posited that while only one of the three general approaches to valuation is sufficient to provide a credible value for an IA, the first approach must be cross-checked with the other two methods due to the subjectivity of the practice. The use of International Valuation Standards with the International Finncial Reporting Standards in Filipino IA valuation, Ms. Divinagracia added, should improve transparency in local valuation reports. She also cautioned that IA valuation should be principles-based and not rule-based to build a momentum of trust and credibility in the valuation practice. Ms. Divinagracia joined Dr. Romero's call on possibly requiring accreditation of IA valuators to protect IP stakeholders.
Mr. John Marlowe Badillo of the Department of Finance's Bureau of Local Government Finance intimated that when his agency adopted the IVS for both real estate valuation and IA valuation in the creation of
Atty. Leonides Madrilejo of Sapalo Velez Bundang & Bulilan Law Offices shared that, in valuing IA of government-funded technologies, he found difficulty securing more information from the researchers and scientists. He had to rely more on the Cost Approach to draft credible reports.
On the other hand, Mr. Michael Junsay of IPOPHIL's Documentation Information and Technology Transfer Bureau narrated that when he and his team conducted an IA valuation of university technologies, the practice became empowering for the generators of the IP as they saw the commercial potential of their work immediately. Mr. Junsay stressed that it is crucial to delineate the stakeholders' roles in the valuation and use different scenarios from various perspectives to develop a credible report.
Representatives of government councils funding the R&D efforts in the Philippines likewise emphasized the need for credible IA valuation. DOST-PCAARRD's Noel Catibog, Director of the DOST-PCAARRD Innovation and Technology Center, reported that the 68 technology business incubators that DOST-PCAARRD helped establish would require the skillsets of IA valuators. Ms. Julie Anne Balangat of the DOST-Philippine Council for Health Research and Development echoed Mr. Catibog's call for her Council's HeartNovation and IPROTECH initiatives, specifically for the Fairness Opinion Board sessions required by the Technology Transfer Act of 2009. Mr. Samuel Cahimat of DOST-Philippine Council for Industry, Energy, and Emerging Technology Research Development expounded on his Council's work insofar as IA valuation is concerned.
World Intellectual Property Organization (WIPO) international consultant Dr. Andre Gorius posited that IA valuation is neither a science nor an art but merely an opinion of experts that requires due consideration of the culture and country where the report will be used. Drawing from his more than 30-year experience in doing valuation work for his previous company, Solvay Group, Dr. Gorius acknowledged the challenges of coming out with a reasonable opinion: the credibility and training of the valuator and the IP awareness of the team involved in crafting the report. Dr. Gorius also focused on the importance of knowing the purpose of IA valuation and the conduct of due diligence to secure a more principled account of the IA.
LES Philippines President Bayani Loste closed the roundtable with a consensus among the participants that there is a need to continue with the conversation to ensure that the burgeoning practice would be accepted by more established private institutions, government agencies, and the public at large.
WIPO Asian consultant and past APP President Editha Hechanova moderated the roundtable.