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New Patent Exchange For Exchanging Patent Rights

The Intellectual Property Exchange International (IPXI) is a new financial exchange that allows companies to buy, sell and hedge patent rights. The idea behind the new approach is to commoditize intellectual property and trade it as if it were any other asset.

The idea is to offer a patent or collection of patents which will be sold as “unit license rights” (ULRs), which can be bought and sold like shares of stock. The purchase of a ULR will entitle a one-time right to use a certain technology in a single product.

The hope is that the marketplace allowing buyers and sellers to interact directly with one another will make things easier, faster and cheaper than the current process which involves drawn out negotiations between teams of highly paid attorneys. The current process makes it difficult if not impossible for medium companies to participate given the high cost, something the IPXI market intends to remedy. The approach is not a panacea and will not work for all varietiesof intellectual property, for example, exclusive licensing situations.

IPXI has already signed up 30 members including electronics powerhouse Philips. Ruud Peters, chief intellectual-property officer at Philips, said that IPXI’s novel approach is ideal for the open, non-exclusive licensing of smartphone-related patents and is excited by the prospect. The exchange is set to open later this year. Though it may bring good news for technology companies,the plan could spell trouble for the legal industry.

Source:Marketplace of ideas,” published at Economist.com.

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