Although tremendous amounts of money, time, and effort are dedicated to financial agreements, companies often undervalue the key intellectual assets - patents, trademarks, copyrights, brand names, and trade secrets - that make most companies truly valuable.

To help companies understand the full value of the intellectual assets within a transaction, Mr. Gordon Petrash, a PricewaterhouseCoopers partner within the firm's Intellectual Asset Management Practice, has developed a list of five of the most commonly made intellectual asset management mistakes in mergers and acquisitions and the solutions to those mistakes.

Mistake No. 1: Being unaware of a company's key intellectual assets and their economic value when entering into a joint venture, divestiture, merger, or acquisition.

Solution: Understanding the key intellectual assets on both sides of a deal should be fundamental in most industries, particularly technology. Once assets are identified, there are several readily available methodologies designed to help you estimate their value.

Mistake No. 2: Undervaluing intellectual assets. Many dealmakers value intellectual assets in their present context rather than in their new context, thus missing the value of the synergy.

Solution: The value contribution of intellectual assets should be linked to both their short- and long-term benefits. To assist in this process, seek individuals who understand the economic value of intellectual assets and examine the business plans with and without the intellectual assets.

Mistake No. 3: Brand-name recognition, one of the most costly types of intellectual assets a company may have built, is frequently undervalued.

Solution: Often, a company benefits greatly by simply being able to associate itself with another more recognized company. This needs to be considered as part of the value contribution and compensated for, particularly when it is valued against having to build the brand equity from scratch.

Mistake No. 4: Reviewing the value of intellectual assets after a deal is finalized.

Solution: If companies verify all aspects of the intellectual assets either before or during negotiations, they increase their ability to negotiate and protect themselves from surprises.

Mistake No. 5: Negotiating the value of intellectual assets as a whole rather than individually.

Solution: For intellectual asset valuation, the whole often is not as valuable as the parts individually. Value is often lost when companies assign a general estimated value to all of their intellectual assets. When proper focus and understanding is given to each intellectual asset, the process usually results in consistently higher valuations.

According to early July reporting, Ambar Mexicana, an oil drilling service based in Cuidad del Carmen, Mexico, is suing Baker Hughes for $400 million, accusing the Houston-based energy supply company of stealing trade secrets after backing out of an acquisition agreement. Ambar claims Baker Hughes was trying to buy out Ambar so it could enter the Mexican market.

Ambar's suit, filed in federal court in Houston, maintains that Baker Hughes backed out of the deal and purchased a Mexican competitor of Ambar, then used Ambar's trade secrets to unfairly compete against it. The suit, which seeks $100 million in compensatory damages and $300 million in punitive damages, alleges that Baker Hughes "continued to reassure Ambar of its intent to acquire Ambar's business" and instructed Ambar not to bid new contracts in Ambar's name so the contracts could be bid and awarded jointly to Baker Hughes and Ambar.

Unknown to Ambar at the time, Baker Hughes had purchased one of Ambar's competitors, Zapata International. "Ambar has reason to believe that (Baker Hughes), through Zapata, is using Ambar's prices, business plan, marketing information, customer information, and all of Ambar's proprietary business information and trade secrets to unfairly compete with Ambar," the suit claimed.