Intellectual Property Exchange International, INC (IPXI) announced that on July 18 it successfully closed its first two initial offerings involving license rights. Founded in 2008, IPXI is the world’s first financial exchange for licensing and trading intellectual property rights.
According to a company release, the offerings are based on patent rights to prepaid stored value card (SVC) technology owned by JPMorgan Chase Bank. Trading on the contracts can now happen on the IPXI Trading Platform after several years in the making.
Intellectual asset management blog IamMagazine.com reports that last year, the patent exchange revealed that it was offering potential investors and licensees the opportunity to buy unit license rights (ULRs) covering the patents. The buyers of ULRs, which are similar to shares in a traditional initial public offering, can either use them like a traditional patent license or trade them via IPXI’s platform.
IPXI lauds the exchange as one that fosters transparency and efficiency, and it could be alternative to costly litigation.
"We are delighted to price our first offerings and usher in the start of trading – the result of years of preparation, extensive consultation with the world's leading IP experts, infrastructure-building and market education,” said IPXI president and CEO Gerard Pannekoek. “This is a significant milestone, particularly as it demonstrates that companies are willing to voluntarily license valuable technology without litigation."
The patents in the two offerings involve technology related to prepaid stored value cards (SVC) with each ULR representing the right to produce 100 cards. Each ULR has been priced at $5 with up to 750,000 expected to become available. The company says the process it undertakes in the licensings process is somewhat similar to a public equity offering for a company or corporation by utilizing detailed offering documents akin to an S-1 document filed with Securities and Exchange Commission and the “Roadshow” when company executives talk to potential investors and in this case, includes potential purchaser’s one-one-one meetings.
Once an Initial Offering has been priced, IPXI maintains a Secondary Market which provides ULR purchasers and sellers an opportunity to realize liquidity through resale and trading.
Pannekoek anticipates a slow and steady build for those who have and need the technology. “These are the first in what we expect will be a long line of offerings involving well-vetted IP portfolios that together can make the one-to-many licensing model significantly more efficient for all parties, thereby reducing costly litigation, bringing much-needed transparency and enabling organizations to monetize their innovations,” said Pannekoek.