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 the world’s first financial exchange for licensing and trading intellectual property. The exchange facilitates non-exclusive licensing and trading of IP rights using market-based pricing and standardized terms.
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. IPXI identifies, evaluates and executes IP licensing transactions through its Unit License Right (ULR) model. Through a proprietary electronic trading platform, members can purchase and trade IP rights in the form of ULRs. IPXI’s membership includes some of the world’s leading innovative companies with significant IP assets representing a variety of technology markets, top university research institutions and national laboratories.
IPXI was created by Ocean Tomo LLC.
As of February 2013, IPXI has 46 members. Among these members are IPXI’s 20 Founding Members, including Ford Global Technologies, LLC; J.P. Morgan Chase & Co.; Philips Intellectual Properties & Standards; Sony Corporation of America, and Hewlett-Packard Company. These founding members have committed to sponsor offerings on the exchange with an aggregate target market value of more than $750 million.
Unit License Right (ULR) Contract
Through the ULR contract model, IPXI intends to meet its objective of operating an exchange 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. A ULR contract is an exchange-tradable non-exclusive license right product, offered on a nondiscriminatory basis at a market-based price and with standardized terms. ULR contracts are priced and sold on a standardized technology-unit basis, where each unit-base is uniquely determined by IPXI, in collaboration with the sponsor, according to the underlying technology. This allows the adoption and reported use of the technology to be easily monitored.
Each purchaser of a ULR contract is granted the right to use the underlying technology for a pre-established number of instances (the technology unit); for example, the right to manufacture and/or sell a certain number of product units incorporating the patented technology. As soon as one instance of use occurs and is reported to IPXI, the ULR contract is consumed and retired from the purchaser's registry account. If a ULR contract is not consumed, a purchaser can alternatively trade the ULR contract on the electronic trading platform maintained by IPXI.
ULRs will be marketed and introduced in the form of initial offerings, similar to an IPO of a company. Once an initial offering is priced, IPXI will maintain a secondary market on its electronic trading platform, which will give ULR purchasers and sellers, including institutional investors and liquidity providers, an opportunity to trade.
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