The role of sustainability and SDGs in patent valuation
| Published date | 01 August 2024 |
| DOI | http://doi.org/10.1177/1023263X241270285 |
| Author | Krista Rantasaari |
| Date | 01 August 2024 |
| Subject Matter | Articles |
The role of sustainability and
SDGs in patent valuation
Krista Rantasaari*
Abstract
There is an urgent demand for developing and adopting environmentally sound technologies
(ESTs). This article studies the existing methodologies for incorporating sustainability considera-
tions into the complex field of patent valuation, focusing on start-ups and growth companies.
Due to the agility and innovative potential, growth companies play a pivotal role in advancing
ESTs, and patents serve as crucial instruments in facilitating technology transfer, provided that
effective patent valuation processes are in place. The article shows the diversity of guidelines
and standards available for patent valuation, highlighting that they provide valuable non-binding fra-
meworks. However, the study reveals that most existing patent valuation standards do not expli-
citly address sustainability concerns, except for the World Intellectual Capital Initiative (WICI),
which is actively engaged in the sustainability discourse. Overall, the challenge is how companies
observe sustainability in the valuation process. The United Nations Sustainable Development
Goals (SDGs) emerge as a global framework that can guide patent valuation practices. The article
highlights the need for patent valuation guidelines to embrace sustainability as an integral compo-
nent, ensuring that sustainability and ESTs are integrated throughout every phase of the patent life
cycle. Acknowledging that start-ups and growing companies often face financial constraints and
need guidance in their valuation practices is crucial.
Keywords
Patent, valuation, environmentally sound technologies, sustainable development goals, legislation,
standards, guidelines, start-up, growth companies
*
Law School, University of Eastern Finland, Joensuu, Finland
Corresponding author:
Krista Rantasaari, University of Eastern Finland, Law School, Joensuu Campus, Yliopistonkatu 2, Joensuu FI-80100, Finland.
Email: krista.rantasaari@uef.fi
Article
Maastricht Journal of European and
Comparative Law
2024, Vol. 31(4) 469–486
© The Author(s) 2024
Article reuse guidelines:
sagepub.com/journals-permissions
DOI: 10.1177/1023263X241270285
maastrichtjournal.sagepub.com
1. Introduction
Entrepreneurs and businesses confront increasing environmental and social challenges. The
COVID-19 pandemic has highlighted the possibility of increasing the pace of research, devel-
opment and large-scale diffusion of innovations to address urgent global challenges.
1
While the
pandemic has primarily focused on social-impact innovations, the urgent need for environmen-
tally sound technologies (ESTs) to address climate change and ecological crises cannot be
overstated. ESTs, which are less polluting, more resource-efficient, and socially acceptable,
are of paramount importance.
2
The increasing importance of sustainable development creates
risks and opportunities for companies, necessitating the development of ESTs, products and
services and their combinations.
3
Instead of focusing on short-term profits, stakeholders now
anticipate companies delivering a triple bottom line of economic, environmental and social
value creation.
4
Over the last decades, the number and value of patents have increased significantly, and this has
been followed by greater attention to transparency and accuracy in the valuation process.
5
The need
to provide better guidelines on how to value intellectual property (IP) was already on the agenda in
2013 when the European Commission published an expert group report on intellectual property
valuation.
6
In 2021, the European Financial Reporting Advisory Group (EFRAG) published a dis-
cussion document on the information produced by intellectual property rights. The EFRAG con-
sider values related to sustainable development as quantitative or qualitative non-financial
information.
7
The research question this essay raises is what methods exist to address sustainability
in patent valuation.
Although scholars representing different fields of science have written much about patent valu-
ation, there are only scattered mentions and writings about the relationship between patent valuation
and sustainable development.
8
This essay looks at patent valuation from a start-up and growth
1. For example, the development of artificial intelligence-based medical imaging software, see F. Tietze et al.,
‘Crisis-Critical Intellectual Property: Findings From the COVID-19 Pandemic’,69IEEE Transactions on Engineering
Management (2022).
2. United Nations (UN), ‘Agenda 21’UN Conference on Environment and Development, Rio de Janeiro, 3–15 June 1992,
23 April 1992, UN Doc A.CONF/151/26 (Vol. III). See also B. Borthakur, ‘Who Owns What? The Patent Landscape of
Environmentally Sound Technologies’,18Journal of Intellectual Property Law & Practise (2023), p. 566.
3. S.L. Hart and M.B. Milstein, ‘Creating Sustainable Value’,17Academy of Management Executive (2003).
4. V. Vimalnath et al., ‘Responsible Intellectual Property Strategy for Sustainability Transition –An Explanatory Stud’,73
World Patent Information (2023). See also J. Elkington, Cannibals with Forks: The Triple Bottom Line of 21st Century
Business (Wiley, 1999).
5. K.W. Dam, ‘The Economic Underpinnings of Patent Law’,23The Journal of Legal Studies (1994); F. Munari and
R. Oriani, The Economic Valuation of Patents: Methods and Applications (Edward Elgar Publishing, 2001), p. 5. See
also S. Porter and M. Rakiec, IP Strategy,Valuation and Damages (LexisNexis, 2016). K. Birch, ‘Rethinking Value
in the Bio-Economy: Finance, Assetization, and the Management of Value’,42Science, Technology, and Human
Values (2017); J. Haskel and S. Westlake, Capitalism without Capital: The Rise of the Intangible Economy (Princeton
University Press, 2018).
6. European Commission, Intellectual Property Valuation, Final Report from the Expert Group (2013), https://op.europa.eu/
en/publication-detail/-/publication/797124c6-08cb-4ffb-a867-13dd8a129282.
7. European Financial Reporting Advisory Group, Better Information on Intangibles –Which is the Best Way to Go?,
European Financial Reporting Advisory Group (2021), p. 45.
8. Instead, a lot has been written, for example, about the valuation of the real estate industry and sustainable development.
For example, G. Warren-Myers, ‘Valuing Sustainability Part 1: A Review of Sustainability Consideration in Valuation
Practice’,40Journal of Property Investment & Finance (2022).
470 Maastricht Journal of European and Comparative Law 31(4)
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