Decision No. 1624/QD-TTg of the Prime Minister on the Intellectual Property Strategy through 2030 (as amended and supplemented) sets a target of piloting support for the valuation of 100 IP rights held by research institutes, higher education institutions and innovative start-ups. This is a pilot initiative aimed at transforming IP rights from protected subject matter into assets that can be valued, transferred, contributed as capital and commercially exploited.
Bottlenecks in intellectual property asset valuation
Although IP is a core driver of growth, turning IP rights into economic assets in Viet Nam currently faces major institutional and practical obstacles.
First is the legal barrier and the “fear of making mistakes and losing State assets” surrounding public assets. Most IP rights at research institutes and universities are created using State budget funding. The legal framework for managing public assets does not yet provide flexible valuation mechanisms for intangible assets, which carry a high degree of commercial risk. Managers constantly face legal risks: if an asset is valued too low, they fear being held responsible for causing losses of State assets; if it is valued too high, potential buyers may be unwilling to accept the price. Most institutional leaders and managers therefore choose the safer option of continuing to keep such assets in storage.
Second is the serious lack of market data. Valuing intangible assets requires comparable data on transfer prices and royalty rates in past transactions — in other words, comparable transactions against which valuations can be benchmarked. As Viet Nam’s market remains at an early stage of development, technology transactions are largely confidential or not systematically registered. This leaves valuation organisations with insufficient databases for reference, making valuation results less convincing and causing valuations to rely too heavily on experts’ subjective assumptions.
Third is the limited methodology and capacity of intermediary organisations. Valuers in Viet Nam currently have mainly experience in valuing tangible assets. They lack specialised valuation methods for intangible assets.
Fourth is the barrier posed by the financial and banking system. Due to their low liquidity and the risk of patents being invalidated, credit institutions are generally reluctant to accept IP rights as collateral. Banks lack a secondary market for handling IP assets used as collateral when bad debts arise, resulting in their unwillingness to accept such assets as security. Without credit flows, IP rights cannot fulfil their role as a financial leverage tool. The appraised value provides a reference point, while the actual transaction price depends on many other factors.
Fifth is the distinctive nature of intellectual property assets. Unlike tangible assets, the value of IP lies not in the asset itself but in its ability to generate future cash flows. The same invention can have very different values depending on the holder’s ability to exploit it, the size of the market and the supporting assets available. The wide gap between laboratory research at an early stage and a fully developed commercial product makes forecasting future cash flows highly uncertain.
Criteria, methods and implementation mechanisms
For the pilot programme to achieve substantive results, its implementation needs to be systematically designed, from the selection and valuation of assets to the recognition of valuation results.
Regarding selection criteria, the focus should be placed on three main groups. The first is the group with clear legal status, including inventions, utility solutions and plant varieties that have been officially granted protection certificates and are not subject to disputes or complaints.
The second is the group with a certain level of technology readiness. For technological assets, the Technology Readiness Level (TRL) scale can be used as an indicator of technological maturity. For other types of rights, corresponding indicators should be developed to assess market readiness, exploitation potential and legal strength.
The third is the group with market relevance and commitment. Priority should be given to assets for which businesses have already placed orders or committed to receiving technology transfers, contributing capital or acquiring the assets.
Regarding valuation methods, a flexible combination of methods should be applied depending on the nature of each asset. For example, for IP rights intended for licensing, the relief-from-royalty method can be applied; for start-ups raising capital, an income approach based on discounted cash flow adjusted for technological risk can be used; while for early-stage technologies with high risks, a real-options analysis approach should be considered.
In general, it is necessary to distinguish value assessment from monetary valuation. On that basis, fundamental approaches recommended by the World Intellectual Property Organisation (WIPO) can be applied, including the cost approach, market approach and income approach, along with a number of other methods.
Regarding the process and entities responsible for implementation, valuation should be conducted by a consortium, such as professional valuation organisations, IP, technology and financial experts, technology transfer offices (TTOs), and others. A standardised process should be established, covering selection, legal due diligence, the scope of protection and other relevant steps. The process could be designed in greater detail, with cases involving high-value or complex assets subject to additional assessments by businesses or potential investors.
Regarding mechanisms for recognising and using valuation results, in addition to assigning responsibilities to relevant ministries, the Ministry of Finance and the Ministry of Science and Technology should issue guidance recognising valuation certificates issued under the pilot programme as valid reports. Research institutes and higher education institutions could use the valuation results to record increases in asset value, establish a floor price for negotiations on transfers, or determine the value of capital contributions when establishing spin-off companies.
Conditions for scaling up after the pilot phase
The pilot programme will only be successful if it creates the foundation for a coherent and sustainable institutional framework in the future. WIPO emphasises that there is no single valuation model suitable for all intellectual property assets. The method must depend on the purpose of the valuation, the level of maturity, the field and the market context.
First, the legal framework for a risk-liability exemption mechanism should be completed. If managers of public assets properly and fully follow the valuation procedures and disclose transactions in accordance with the pilot regulations, they should be exempt from personal liability if the assets are subsequently unsuccessful in commercialisation or lose value due to market fluctuations.
Second, a national data bank on intellectual property asset valuation and transactions should be established. All data on costs, valuation methods, licensing agreements and actual transaction prices from the 100 IP rights in the pilot programme should be digitised, coded and made public to an appropriate extent. This would provide a standardised source of input data for the market to use as a reference for subsequent transactions.
Third, the system of intermediary organisations should be standardised and strengthened. WIPO emphasises that valuation plays an important role in technology transfer, investment and commercialisation, while a lack of professional capacity remains one of the major obstacles. Therefore, Viet Nam needs to issue dedicated Vietnamese valuation standards for intellectual property assets, while developing a national training programme to certify IP valuation experts equipped with integrated knowledge, particularly in law, technology and finance.
Fourth, alongside creating “supply”, there is a need to create market “demand”, linking valuation to specific commercial needs while establishing market validation mechanisms and developing risk-sharing instruments. Valuation must be closely linked to genuine business demand. In addition to an IP Credit Guarantee Fund established by the Government, insurance companies should be encouraged to develop insurance products covering patent-related legal risks, thereby reducing risks for the banking system when accepting intellectual property assets as collateral.
