What is the “cost” approach for IP valuation?

Minneapolis intellectual property attorney Gary Speier defines the cost approach for IP valuation.

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The cost approach is premised on the fact that you would have a correlation between all the costs that were incurred in acquiring the IP and the value of that IP. So for the cost it would be patent office fees, attorney fees, administrative fees, maybe even within the corporation their overhead, their personnel. So it’s all the costs that are incurred acquiring that IP.