What is the difference between an industrial design and a utility model?

An industrial design protects the visual, aesthetic appearance of a product (e.g., the shape of furniture or packaging). A utility model protects minor technical improvements or functional solutions of a device, substance, or method.

What documents do I need to start the valuation process in Georgia?

You will need the registration certificate or patent issued by Sakpatenti, financial data regarding product sales and costs, technical descriptions, and any existing licensing or franchise agreements related to the asset.

Which valuation methods are used for these IP assets?

Valuers use three main approaches compliant with International Valuation Standards (IVS): the cost approach (expenses to recreate the asset), the market approach (comparable market transactions), and the income approach (calculating future economic benefits generated by the asset).

Can I use the valuation report to secure a bank loan?

Yes. Under the Civil Code of Georgia, registered intangible assets like industrial designs and utility models hold property value and can be pledged as collateral to secure financing from commercial banks, provided you have a certified valuation report.

How long does the valuation process typically take?

The timeline depends on the complexity of the intellectual property and the availability of financial data. On average, preparing a comprehensive and fully compliant valuation report takes between 2 to 4 weeks.

Industrial Design & Utility Model Valuation | Legal.ge

What is Industrial Design and Utility Model Valuation?

In the modern business environment, intellectual property objects often represent the most valuable assets of a company. The valuation of industrial designs and utility models is an independent, objective financial and legal procedure aimed at determining the exact market, investment, or book value of these intangible assets. Against the backdrop of the rapid development of Georgia's economy, technology, and manufacturing sectors, industrial design—which protects the aesthetic appearance of a product (e.g., specific furniture design or packaging shape)—and utility models—which represent minor technical improvements to devices, substances, or methods—play a crucial role in enhancing business competitiveness. Accurate valuation of these assets is vital for both local entrepreneurs and international corporations operating in Georgia, allowing them to commercialize their intellectual property, attract investments, and strengthen their market position. Professional valuation provides a company with a clear understanding of its financial potential, which is essential for making sound strategic decisions and minimizing risks. This service requires not only a high level of financial modeling expertise but also an in-depth knowledge of Georgian legislation and intellectual property protection specifics.

What Does This Legal and Financial Service Cover?

The valuation of industrial designs and utility models is a complex service that covers various targeted areas based on the company's business needs. A qualified valuation process encompasses the following key aspects:

Valuation for Financial Reporting and Accounting: Reflecting intangible assets on the company's balance sheet in full compliance with International Financial Reporting Standards (IFRS), which increases the company's capitalization.
Transactional Valuation for Mergers and Acquisitions (M&A): Determining the fair market value of designs and models in the portfolio during company buyouts, mergers, or share transfers to ensure a secure transaction.
Valuation for Attracting Investments and Financing: Justifying the value of assets for banks or venture investors when intellectual property is used as collateral (pledge) to secure loans.
Support for Licensing and Franchising: Calculating reasonable, market-adjusted royalty rates so the owner can gain maximum economic benefit by transferring the right of use.
Valuation for Tax Purposes: Determining value during the transfer of intellectual property between related parties (transfer pricing) to avoid tax compliance risks.
Dispute Resolution and Damage Calculation: Providing expert valuation during court or arbitration disputes to accurately determine the amount of material damage caused by the illegal use or infringement of a patent or design.

In What Real-World Scenarios Do You Need This Service?

At various stages of business development, specific situations arise where the valuation of an industrial design and utility model becomes an absolute necessity. Here are the most common scenarios:

Commercialization of Technology by a Startup: A tech startup has registered a utility model for a new type of energy-efficient device at Sakpatenti. They wish to sell the technology license to a foreign manufacturer. Without an accurate valuation, they cannot determine a fair royalty rate and might lose significant revenue.
Securing Loan Obligations: A local furniture manufacturer with several unique, high-demand industrial designs needs additional capital to expand production. A commercial bank requires collateral. The manufacturer hires a valuer to assess the design portfolio so it can be pledged to secure the bank loan.
Company Mergers and Acquisitions: A foreign investor is purchasing a Georgian pharmaceutical company that owns a new medical packaging design and a drug delivery utility model. For the transaction to proceed correctly, the investor requests an isolated valuation of these intangible assets to determine the overall value of the target company.
Litigation Over Copyright and Patent Infringement: A competitor has illegally copied your registered product design and started selling it. To file a lawsuit in a Georgian court and claim financial damages, you need a valuation report prepared by an authorized expert confirming the exact volume of lost profits.
International Tax Obligations: A Georgian holding company transfers its intellectual property (utility models) to a subsidiary registered abroad. To avoid penalties from the Revenue Service, the company must comply with transfer pricing rules, which requires establishing the fair market price of the transferred assets.

Georgian Legal Framework and Regulatory Norms

In Georgia, the protection, registration, and valuation of intellectual property, specifically industrial designs and utility models, are regulated by several key normative acts. Primarily, the Patent Law of Georgia defines the concepts of utility models and industrial designs, the rules for their registration at the National Intellectual Property Center of Georgia (Sakpatenti), and the exclusive rights of the owner. Only rights properly registered or recognized under international treaties are subject to full financial valuation. The transfer of ownership rights, pledging, and execution of licensing agreements are carried out in accordance with the Civil Code of Georgia, which treats intangible property rights with the same legal regime as tangible assets. From a financial and accounting perspective, the Law on Accounting, Reporting and Auditing is crucial, as it obliges entities to follow International Financial Reporting Standards (IFRS). Furthermore, the Tax Code of Georgia regulates the amortization rules for intangible assets, VAT taxation, and transfer pricing matters. To ensure the methodological accuracy of the valuation process itself, professional valuers are obligated to comply with the International Valuation Standards (IVS), ensuring the final report is recognized by both national courts and international financial institutions.

The Step-by-Step Process of Receiving the Service

Working with a professional valuer and IP lawyer proceeds according to strictly defined stages, ensuring the highest quality of results. Step one involves an initial consultation to identify the purpose of the valuation (e.g., alienation, dispute resolution, financial accounting) and the specific nature of the asset. Step two is the legal audit—lawyers check the validity of the design or model registration in the Sakpatenti database, protection terms, and any existing legal encumbrances (such as existing licensing agreements). Step three consists of gathering financial and market data. The valuer selects the appropriate methodology: the cost approach (how much it would cost to recreate an identical asset), the market approach (analysis of sale prices of similar assets), or the income approach (what economic benefits the asset will bring in the future). Step four involves complex financial modeling and calculations based on the chosen methodology. The fifth and final step is the issuance of an official, legally binding valuation report that fully complies with Georgian legislation and IVS requirements. If necessary, specialists provide ongoing support during negotiations or court proceedings.

Why Should You Use the Legal.ge Platform?

The valuation of industrial designs and utility models requires a unique blend of knowledge in both financial modeling and intellectual property law. Legal.ge is a platform that gives you the opportunity to quickly and easily find verified specialists who specialize in the valuation of intangible assets in Georgia. The experienced professionals featured on our platform are deeply familiar with the Georgian legislative framework and international standards. Through Legal.ge, you can review the qualifications and focus areas of specialists and contact them directly. Find your specialist on Legal.ge to ensure an accurate, reliable, and legally flawless valuation of your intellectual assets, protecting you from financial risks and fostering the strategic growth of your business.

What is Industrial Design and Utility Model Valuation?

What Does This Legal and Financial Service Cover?

Valuation for Financial Reporting and Accounting: Reflecting intangible assets on the company's balance sheet in full compliance with International Financial Reporting Standards (IFRS), which increases the company's capitalization.
Transactional Valuation for Mergers and Acquisitions (M&A): Determining the fair market value of designs and models in the portfolio during company buyouts, mergers, or share transfers to ensure a secure transaction.
Valuation for Attracting Investments and Financing: Justifying the value of assets for banks or venture investors when intellectual property is used as collateral (pledge) to secure loans.
Support for Licensing and Franchising: Calculating reasonable, market-adjusted royalty rates so the owner can gain maximum economic benefit by transferring the right of use.
Valuation for Tax Purposes: Determining value during the transfer of intellectual property between related parties (transfer pricing) to avoid tax compliance risks.
Dispute Resolution and Damage Calculation: Providing expert valuation during court or arbitration disputes to accurately determine the amount of material damage caused by the illegal use or infringement of a patent or design.

In What Real-World Scenarios Do You Need This Service?

At various stages of business development, specific situations arise where the valuation of an industrial design and utility model becomes an absolute necessity. Here are the most common scenarios:

Commercialization of Technology by a Startup: A tech startup has registered a utility model for a new type of energy-efficient device at Sakpatenti. They wish to sell the technology license to a foreign manufacturer. Without an accurate valuation, they cannot determine a fair royalty rate and might lose significant revenue.
Securing Loan Obligations: A local furniture manufacturer with several unique, high-demand industrial designs needs additional capital to expand production. A commercial bank requires collateral. The manufacturer hires a valuer to assess the design portfolio so it can be pledged to secure the bank loan.
Company Mergers and Acquisitions: A foreign investor is purchasing a Georgian pharmaceutical company that owns a new medical packaging design and a drug delivery utility model. For the transaction to proceed correctly, the investor requests an isolated valuation of these intangible assets to determine the overall value of the target company.
Litigation Over Copyright and Patent Infringement: A competitor has illegally copied your registered product design and started selling it. To file a lawsuit in a Georgian court and claim financial damages, you need a valuation report prepared by an authorized expert confirming the exact volume of lost profits.
International Tax Obligations: A Georgian holding company transfers its intellectual property (utility models) to a subsidiary registered abroad. To avoid penalties from the Revenue Service, the company must comply with transfer pricing rules, which requires establishing the fair market price of the transferred assets.