Lesson 1: Innovate the business model
The innovation of a trading exchange needs to lie in its business
model, not the technology it uses. In this sense, an IP trading exchange can be
compared to a network business since it aims to move international information
on IP. Says Andy Gibbs, owner of Patentcafe, an online international patent
search engine: “When HP was looking for a licensor of its printing
technology, the typical partner seemed to be in the printing industry. Yet, the
ideal licensing partner turned out to be a fire extinguishing company, a
partner HP could have never found without specialized search
engines.”
A functioning trading exchange can not operate in isolation, but
needs to be part of a broader network of additional actors. Just like NASDAQ
would not work without brokers who bring bonds and stocks closer to the end
user, a broker can pro-actively approach IP owners and their representatives to
engage in trading their IP trading.
Lesson 2: Bring small and big players together
A successful IP trading exchange helps to counterbalance asymmetries
between Small and Medium Sized Enterprises and large corporations. It can be
the exchange, where “garage girls and guys” and multinational
companies can come together, meet eye on eye, create win/win deals and help
overcome funding challenges.
The “financing gap” has prevented many start-ups and
new technology firms, particularly in developing countries to bring innovation
to the market, a shortcoming that not only worked towards the disadvantage of
the individual innovator, but for society as a whole. Innovation needs new
brains, which put a new light on established perspectives. An IP trading
exchange can provide the cash flows those people need, by linking those who are
interested in licensing new technologies with those who have the guts to
develop them .
Acknowledging that SMEs do not necessarily have the means to hire an
attorney to do the legal work of the exchange, contracts and licensing
agreements need to be available for download on its website. To help determine
licensing fees, free online scoring tools for IP need to be equally made
available.
Lesson 3: Provide a distinctive value added to your
customer
A successful IP trading exchange needs to comprise patent
information from databases from the U.S.A., the E.U., Australia and Japan and
also have the means to collect developing country information. The database
needs to offer consistency of form, technology, style and the patent
information needs to be put in a format readable for everybody. In this sense
it can offer the IP community tools for in-depth prior art search. Law firms,
patent offices in developing countries and innovators aiming to get a better
picture of the current state of the art should be able to do so, in an easy,
comfortable and informal way. In the knowledge based economy information
platforms facilitating the exchange of knowledge are crucial for business
success. As such, a well structured IP trading exchange can provide a whole new
pathway for innovators and their IP, both in terms of market transparency and
background research.
Lesson 4: Empower the Intellectual Property
Owners
A smart IP trading exchange helps to save users time and
costs. Since it is a trading platform open to everybody, the relationship
intellectual property owners have to their attorneys can be redefined.
Attorneys can provide advice on structuring the licensing deal, a market based
transaction generating direct revenues for the owner. Designed as a one-stop,
an IP trading exchange should furthermore offer the whole set of tools users
need to perform their search for a potential licensor or licensee. Helpful in
understanding the competitive market structure and looking for business
partners outside the traditional realm, an IP trading exchange democratizes the
innovation process.
Lesson 5: Do your homework in marketing
Finally, a successful business strategy for an IP trading exchange
needs to address the following questions:
What can be done to assure the use of the exchange? Who is the
target group? What are customers looking for and how can an IP exchange help
them achieve their goals? How can trust and confidence be built up? If the next
generation of IP exchanges does their homework well, it can provide substantial
leverage, to its customers, its bottom line and society as a whole.
Simply Bring Buyers and Sellers
Together
An IP trading exchange stands for a disruptive Intellectual Property
paradigm and offers a new perspective on the internationalization of business
operations. It can be to IP, what eBay is to the retail market: simply bringing
buyers and sellers together!
The idea of first generation exchanges was good, but it is going to
be the smart business model that makes or breaks the success for IP trading
exchanges. If the business model is driven by a growth oriented business
strategy, rather than an admiration for technology, it can provide the space
necessary to turn many of the patents, trademarks or copyrights of an
organization into a cash cow.
Sources: Information interview with the following corporations:
Patentcafe, TechEx, Ocean Tomo, IPB Bewertungs A.G., as well as patent search
on current U.S. patents for exchanges.
1.
Part I of this article is published in IPR-Helpdesk Bulletin num.
37.(«)
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