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|
Chicago-based Intellectual Property Exchange International, Inc. (IPXI) is the world’s first financial exchange for licensing and trading intellectual property rights. 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. It will also allow investors to speculate on the value of emerging technologies and invest directly in those IP rights instead of in the equity of the companies managing those technologies, with the ability to trade those rights as the value appreciates.
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 ULR contracts. IPXI’s membership includes some of the world’s leading innovative companies with IP assets representing a variety of technology markets, university research institutions and national laboratories.
As of February 2013, IPXI had more than 45 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. The 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 determine the quality of all patent rights listed as ULR contracts. A ULR contract is an exchange-tradable non-exclusive license right product offered at a market-based price and with standardized terms. The contracts are priced and sold on a technology-unit basis, where each unit-base is determined by IPXI in collaboration with the sponsor, according to the underlying technology. This allows the use of the technology to be easily monitored.
Each purchaser of a ULR contract is granted the right to use the underlying technology for an established number of instances: 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 in its entirety, a purchaser can choose to trade the ULR contract on IPXI's electronic trading platform.
ULR contracts will be 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, where purchasers and sellers can trade the products.
The secondary market lets market participants trade the ULR contracts. The secondary market also increases the primary market demand for ULR contracts, maximizing revenues to the contract's sponsor. IPXI will issue follow-on primary market offerings of ULR contracts as demand requires.
Finally, a rules-based approach to directed enforcement allows IP rights to be enforced with different choices to fund litigation, including either self-funded enforcement, IP insurance or third-party funded enforcement.
IPXI was founded in 2008 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.
In December 2011, IPXI completed funding for its U.S. operations from strategic investors including Royal Philips Electronics and CBOE Holdings. IPXI’s founding members met frequently in early 2012 to develop and approve the release of the IPXI Market Rulebook Working Version 1.0. IPXI plans to launch a new version of its IPXI Market Rulebook and its first offerings on the exchange in 2013.
In March of 2013, IPXI announced that the U.S. Department of Justice Antitrust Division had concluded an eight-month business review of the exchange and issued its Business Review Letter highlighting many "innovative and efficient" aspects of the IPXI's licensing model. The exchange initiated the business review process to provide certainty to its members and market participants that IPXI's model does not warrant enforcement action by the DOJ.
- Gerard J. Pannekoek, President & CEO; Co-Chairman
- James E. Malackowski, Co-Chairman
- Robert A. Moore, Managing Director
- Ian D. McClure, Director
- IPXI: Trading Patents in 2012. CNBC.
- IPXI. IPX International.
- New IP exchange offers transparent and efficient alternative to litigation. Swiss Derivatives Review.
- CBOE backs new intellectual property bourse. Financial Times.
- An Intellectual Property Exchange. The Economist.
- U.S. Department of Justice Concludes Eight-Month Review of IPXI Licensing Model. press release.