Gerard Pannekoek of IPXI
One way to monetize intellectual property assets is to license patents to others. Unfortunately, this process is far from efficient, and lacks transparency. That’s why a group of IP experts banded together in 2007 to form IPXI, with the goal that it could help create a level playing field, focusing on establishing quality patent portfolios and establish a fair price for them.
To do this, they would form a marketplace.
As an example Gerard Pannekoek, president and CEO of IPXI, says, “One of our first offerings was from JPMorgan, relating to 20 patent assets in the technology space for value cards. There are 135-150 potential licensees for this technology. In a traditional model, JPMorgan would have to approach each and every potential licensee and have individual discussions about patents, value propositions, etc. Those can take years and end up with a cross-licensing agreement. This goes against the notion of IP as an asset class that you can generate revenue with. More and more companies are starting to realize that they have no indication of whether they have competitive licensing terms in relation to their competition.”
In the IPXI model, JPMorgan would bring their portfolio to IPXI, which would determine using their own research the strength of the patents and the demand for the technology in the marketplace. Then, IPXI would hold what is essentially an IPO, and potential licensees could learn of the merits of the technology and purchase unit license rights. After the closing of the initial offering, these rights can be traded in a secondary market.
The process is designed to ensure that all patents listed are high quality, that the technology is something that the marketplace desires, and that it is priced according to its true market value, rathen than by the IP owner.
IPXI offers other features, like an amnesty program and a membership structure, but its founders are attempting to address the true value of intellectual property by treating it like another commodity and letting market forces drive its value, adding transparency and efficiency to a process that was severely lacking those two qualities before.
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