Intellectual Property Exchange International, Inc.
|Intellectual Property Exchange International|
|Key People|| Gerard Pannekoek, CEO|
James E. Malackowski, Co-Chairman
|Products||Unit License Right (ULR) contracts|
The Chicago-based Intellectual Property Exchange (IPXI) is aiming to become the world’s first financial exchange with an intellectual property focus. The exchange expects launch its first trading products in 2012.
The IPXI marketplace is designed to allow owners of IP to monetize their IP assets more efficiently and give them access to risk management tools to hedge their exposure. On the buy-side, it will give investors access to new trading, investment, and arbitrage opportunities.
IPXI was created by Ocean Tomo LLC. IPXI aims to meet the transaction and data needs of the IP marketplace including issuers, investors, traders, market makers, and brokers. According to early IPXI press releases, the IP market has a value of $9.2 trillion in the United States alone.
In December 2011, IPXI announced that it had secured $10 million in funding from a group of investors, including the Chicago Board Options Exchange (CBOE) and Royal Philips Electronics (Philips). The five founding members - who have pledged to trade at least one Unit Licence Rights (ULR) contract on the exchange - are Philips; Com-Pac International, the packaging group, as well as Rutgers University, Northwestern University and the University of Utah.
Unit License Right (ULR) Contract
Through the ULR contract model, IPXI’s objective is to build an exchange that operates under two core principles that do not exist in traditional bi-lateral licensing: transparency and efficiency. The process starts with legal analysis designed to give the marketplace confidence in the quality of all patent rights listed as ULR contracts. Then IPXI undertakes the licensing process in a manner similar to a public equity offering for a corporation by utilizing detailed offering memorandums, road shows and potential buyer one-on-one meetings.
Once an initial offering has been priced, IPXI manages the primary issuance of ULR contracts. IP also maintains a secondary market which provides ULR contract purchasers and sellers an opportunity to realize liquidity through resale and trading. The secondary market also increases the primary market demand for ULR contracts as they become investment products, thereby maximizing revenues to the ULR contract sponsor. As demand requires, IPXI will issue follow-on primary market offerings of ULR contracts.
Finally, a rules-based approach to directed enforcement allows ULR contract sponsors to passively enforce IP rights with different choices to fund litigation, including either self-funded enforcement, IP insurance or third-party funded enforcement.
IPXI was founded by Ocean Tomo. The development of the exchange began with support from the State of Illinois in 2006. Two public town-hall meetings with several hundred corporate IP owners, inventors and other market participants were held. Fourteen national and international corporate and university IP managers attended the initial Rulebook meeting in March 2010. Beyond these formalized meetings, hundreds of IP ecosystem participants have contributed to the development of the exchange and the initial product, the ULR contract.
- Gerard J. Pannekoek, President & CEO
- James E. Malackowski, Co-Chairman
- Michael D. Friedman, Director
- Ian D. McClure, IP Transactional Associate