Since its inception in 2007, Intellectual Property Exchange International, Inc. (IPXI) has positioned itself as a market-based alternative to the current bilateral and litigation models for licensing and investing in intellectual property. Now, the world’s first financial exchange for licensing and trading IP rights has grown from a concept to a reality, with real investors, members and offerings for listing on the Exchange. IPXI is funded by strategic investors which include the Chicago Board Options Exchange (CBOE), the world’s largest options exchange, and Koninklijke Philips N.V. (Philips), the world leader in healthcare, lifestyle and lighting. In addition, IPXI has grown its membership to more than 50 organizations, including major IP owners such as Philips, Ford, Hewlett-Packard, Panasonic, Columbia Technology Ventures, Sony, the Regents of the University of California and JPMorgan Chase Bank, N. A.
Today, IPXI is announcing a signature event to begin marketing the first Unit License Right™ (ULR™) contract offering to be listed on the Exchange. This first-of-its-kind offering will enable operating companies, investors and other market participants to buy and sell ULR contracts covering a portfolio of more than 600 assets, including 225 granted patents worldwide, related to organic light-emitting diode (OLED) technology for display screen applications. The portfolio is the result of nearly 20 years of research in the field by Koninklijke Philips N.V. (Philips), the global leader in health care, lifestyle and lighting. IPXI will conduct two public web-based presentations, the first of which will be on June 5, 2013, at 10 a.m. CT, that will unveil the OLED ULR contract offering, present important offering details and mark the start of the marketing campaign for the ULR contracts. Those interested in participating in the webinar can register here. Participants will have the opportunity to submit questions and comments prior to the webinar at firstname.lastname@example.org and during the webinar through the webinar platform, which will be addressed as time permits following the presentation.
Much of the IP industry anxiously awaits the launch of IPXI as it was created to provide transparency and efficiency in patent licensing and technology transfer, maximizing licensing opportunities and access to technology for corporations, universities and laboratories. As a result, many believe IPXI will accelerate innovation by providing more complete information and independent analysis on the value and adoption of technology. Moreover, the Exchange will create market-based pricing and quality benchmarks for IP. Uniquely, IPXI maintains a secondary market for trading the technology units. The model gives institutional investors the opportunity to invest directly in technology rights and allows operating companies to hedge their exposure to new technologies and manage exposure to the risk of patent infringement.
Over the course of its development, IPXI has hit many milestones to make the Exchange’s launch possible, such as securing funding from strategic investors, building its staff, achieving a critical mass of membership from leading IP owners and developing its proprietary electronic trading platform. In a step IPXI considered essential before its launch, the U.S. Department of Justice (DOJ) completed in March an eight-month business review of IPXI, issuing a Business Review Letter that highlighted many innovative and efficient aspects of the Exchange. The DOJ declined to take an enforcement position regarding the current IPXI model.
Importantly, last week, IPXI made the updated version of its comprehensive IPXI Market Rulebook, the body of rules to govern the Exchange, publicly available on its website, highlighting its commitment to transparency. The new edition of the IPXI Market Rulebook, the operative version that will govern the Exchange for its first offerings, contains substantial additions and modifications as IPXI prepares for launch. The changes were recommended by the IPXI Rules Committee, composed of representatives from the Exchange’s Founding Members, and approved by the Executive Committee and Board of Directors. The new edition represents the effective governance and foundational structure for the issuance, trading, use and enforcement of ULR contracts offered through the Exchange.
The ULR contract offering and trading model begins with a submission by an IP owner of patents and technologies to IPXI for evaluating and packaging a possible ULR contract offering. IPXI then initiates an internal and external diligence process, including a committee review and approval process, designed to provide confidence in the quality of all ULR contract offerings. Marketing of a ULR contract offering may include conducting public and industry webinars, exhibiting at industry conferences and meetings with potential purchasers, all of which comprise the offering’s roadshow. The focal marketing and disclosure document for each offering is an Offering Memorandum available in the offering’s data room on the IPXI Electronic Trading Platform. During the roadshow period, potential purchasers, once they have executed a Membership Agreement, can place indications of interest directly on the IPXI Electronic Trading Platform or communicate indications of interests to IPXI which will then enter the indications of interest in an order book. Once the order book contains sufficient indications of interest to price Tranche A of the offering, Tranche A will close. Purchasers may then either use or resell their ULR contracts on the IPXI Electronic Trading Platform.