Later this year a new form of exchange will open that has the potential to dramatically increase the efficient use, application and valuation of corporate knowledge. The exchange in question is the Intellectual Property Exchange International, or IPXI, which will let companies trade their intellectual property (IP), in the form of patents, like any other asset.
The rule book governing how the exchange will work has been recently published. In practice it seems that the exchange will function like a central location for licensing agreements. It is foreseen that patents, or groups of patents (known as Unit License Rights or ULRs) will be bought and sold like shares. A ULR will allow the one-time use of the IP in question in a single product or service. The benefits of this system are likely to accrue particularly to smaller companies, which are disproportionately affected by the high costs involved in IP negotiations.
Amongst the investors in IPXI is CBOE Holdings, owners of the Chicago Board Options Exchange, which lends credibility to the assumption that they have, or at least have access to, the resources and knowledge base necessary to make such an innovative undertaking feasible. In addition, thirty members have already signed up, including Philips, the electronics multinational, suggesting this is an avenue that will be taken seriously by the corporate world.