IBM and IPwe are building the infrastructure to turn patents into non-fungible tokens and store the records on a blockchain network. This approach will make it easier for patents to be sold, traded and commercialized by investors and innovators, according to a press release from the companies.
IPwe is a global patent market that combines the information and tools to identify, research and evaluate intellectual property and to transact in patents.
Jason Kelley, general manager, Global Strategic Partnerships at IBM Services, said in a press release that this project is an example of the company’s collaborations to drive outcomes powered by blockchain capabilities and digital assets.
“As businesses increasingly look to transform how they work with intelligent workflows, blockchain technology is a critical tool to increase transparency and reduce barriers,” he said.
A smart contract is built into the token with standardized terms associated with every patent. The owner of the patent sets the contract terms, including what is public and what is not. IPwe expects the platform to be available in Q4 of 2021.
IPwe CEO Erich Spangenberg said in a press release that the platform has the potential to transform the patent asset class.
“This is expected to benefit not only large enterprises that have significant intellectual property, but it will bring new opportunities to small and medium enterprises and even individual IP owners,” he said. “We believe it will usher in new offerings by financial services firms and corporations to promote the evolution of a new patent asset class.”
According to IPwe’s FAQ, NFTs make trading IP much more cost efficient by simplifying the current paper-based process that requires attorneys and contracts. Securing a patent can cost up to $56,000 with $12,000 in filing fees and $44,000 in legal fees, according to the consulting firm BlueIron.
According to IPwe, the platform can protect ownership of information, generate patent and portfolio analytics, facilitate transaction and report on patent pooling, which is an agreement among multiple patent holders to license IP jointly. IPwe stated that copyright, trade secrets and patents can all be turned into an NFT.
IPwe sees this shift as a benefit to small- and medium-sized companies because it allows IP to be treated as collateral or part of an organization’s value, which allows it to be more easily leveraged when seeking funding.
According to the company, the IPwe Registry collects current, active and historical patent records in a single, freely accessible registry with enhanced search enabled by IBM AI. The company plans to build a broader ecosystem including financial institutions, insurers, enterprises and other patent stakeholders to support the use and exchange of tokenized patents using NTFs and blockchain.