CA2725823A1 - Method for aggregating and valuing intellectual property in an exchange - Google Patents

Abstract

The present invention relates to methods of aggregating and valuing intellectual property in a financial exchange The present invention provides means whereby holders of intellectual property rights may sell, or license intellectual property to an aggregator and receive shares of stock or cash for the contribution based on the aggregated value of the intellectual property held by the aggregator.

Description

NON PROV SIO AL APPLICATION FOR

UNITED STATES PATIENT
INVENTOR:
Steven Henning FOR

yy~ ~ ,/~~
p, 7 ,{D r~ rRE` ~GA3.IN~;~,G AND VALUING
ME~E-~+HO FOR AGG.^ Y~' IN.ELLE Li: ~_: `T -\' {~F 'lI d.Y
, WAN EXCHANGE

Prepared By ~
REED SMITH LL P
0 Sol.,ith Wacker Drive 40:" Floor Chicago, L 60606-7507 Telephone (312) 207-1000 y Facsimile (3 12) 207-6400 Attorney DocketNo; 29,"Rr.3 .00004 THE ' iEk OF `l l:l-' IN N'TIt l l [0001] The present invention relates to methods be creating ty of financial exchange that trades in intellectual property rights from a pool of in teuiect al property rights and in equity interest in the exchange whereira the value of each intellectual property right is based on all aggregated value of the pooled intellectual property and the value of a:
equity interest has a value based at least in part or., the aggregated salve.

13AC KGRGUM) Of T_ NW EN IFION

002] The role of intellectual property in the global economy has grown significantly overshe past decades. For man of America's most pro inent companies intellectual. property value, represents more than 70% of the market v algae of the individual -ompaniOs. In spite of the economic importance of intellectual prope , a true intellectual property-based economy has yet to develop. One factor that has stymied. the development of such an e onon?t z s 1 "_e contextual value of we intellectual property. The value of a riven intellectual pr:ope. ~
right. Ã ill vary, as a function of the value perceived by the acquirer of the intellectual property night. For example, in a given transaction type, the Value of intellectual property transferred will change as the needs and intended use of the acquirer change, The value of the intellectual property r nsfer e'd ma6' also change as profit margins achievable t: :rough the application of the intellectual property change.

[0003] While many attempts have been made to create generic processes for intellectua property transactions none of these attempts wiswers the contextual value problem. For example, Companies have been formed that acquire the intellectual property rights from .ridividualiiiie ~e< trial property rights holders. These companies then license or sell bundles of intellectual property rights to licensees or purchasers. Typically the original intellectual propei-ty right holder enters into such a transaction. because of a 1r aireed a ni.d the -value paid to the original intellectual property right holder tends to be minimized. One reason for such a minimization is that, the i i Trial intellectual property right holder does not have a w..Ide range of access to the p op~:riv market. I is limited access results in a limited number of buyers for the intellectu l property right. Therefore, with a limited number of tuners the intellectual property right never realizes its full and true market value :n such a transaction, On the other hand; the coy pansy acc uir ng such individual intellectual property &d-its typically hasa wide range of access to the markets. And so for the company, the value of the i-ntellectual property right tends to be maximized. This wide discrepancy à 7 < 1_.C:S
I'.'ir a si gle intellectual property is due to t h e , di.ferent coÃ..e\t in which the rete lecturl property right w a s s Ãan;ste.rred;
[000$] One cons quence of such discrepanctes in value is a Minim, 7; i o: i of incentives to innovate. Smaller companies and independent innovators may find it dif cult to balance innovation costs against the value of intellectu<l property if their market access is constrained.
[0005] Therefore, what is needed is a process for transacting intellectual property rights which seek .s to maximize the i .centiv:es for innovation and which also mitÃgates the wide range and d'i'fferences in economic, valuation fora. single intellectual property right.

[00061 W hat, i s a[ o nee c is a method fc aggregating intellectual i up{.Y -ghts f of a plirlity, oof intellectual property rights holders and providing a value to the intellectual property rights holders that is based on t. e a4ggregate value.

[0007] What is further needed is a method for valuing intellectual property that mitigates the vide range in economic valuation for intellectual property realized using present methods and adds to the intellectual property.

3.-UlS M,! ~ :Y OF THE INVENTION [0008] The present invention provides a computer implemented method which promotes op.--n source collaboration and seeks to r -maximize innovation, while minimizing, differences in economic value caused. by the context in -which an i:: tellectcual property right is transferred.
[0009] ir; one err b,.odiment the ; method of the present invention provides the means for operating an exchange based on rights, in intellectual property. the method of the present invention an exchange is created an aggregator of intellectual property rights that obtains rights in intellectual property from a Plurality of Intellectual property rights folders. The ag regator obtains such intellectual property rights either through a license or an acquisition from the original. intellectual property rights holders. The rights to -the ag. red ed intellectual property are then vested in the exchange, The value of the intellectual property rights is not determ'n . ct only or,,, o per ;right basis but rather the aggre ted ntesl x lu: l property rights are, valued. lri r,e etr b d?itià zit t t: resent nvention pro 'i es a rrl.eth d o combrning a;~ estlr gate f he value of the intellectual property rights with ar. assessment of the:
impact of the intellectual property, rights held by the. exchange on the aggregated value oft fie intellectual pro [00010] In some embodiments , the present invention provides a method for creating a Publicly traded security in an ,r:ellectual ray F aggregator that operates an MteLedmal property exchange, the method com risin .

transferring-in a plurality of intellectual property, rights from a plurality of intellectual property n,; + hts holders to the intellectual p c ,, aggregator calculating an aggregated intellectualp rt value for the pluratiq, of transferred intellectual property rights, estimating an exchange intellectual paaperty value for each of the plurality of intellectual property right-s' the exchange rtt lle ual property value being estimated by appoitioning the aggregated intellectual property va..ac among each of the plurality of rntc;l al property rights, transferring-out a Portion of the plurality of in ellectual Property rights to one or more acquirers of intellectual property rights, receiving from each acquirer of intellectual property nights a Payment, t:~ .:
s .t equal tõ+ for each " of the ~~ a-c~.+tuat r property r rights, to the exc(-~ 2~pa .. ifttetl~.ct:ral property value bf ,ir~t~il ~>~'~
.property s transferred out to e: ch acquirer;

calculating an updated aggregated intellectual property value to account for each payment received; and issuing a plurality of security .interests, each security interest being.
purchasable for a price, the price being representative of the updated aggregated .intellecctual. property value.

4001 l] In. some embodiments, the present i 3venÃion provides a method for operating an i.er t-r = computer based i^ e zat, exchange based ~ on rights .in intellectual pr~~~iert~=Ãa~tl.leriimplementeby a syst comprising Ãl e steps of, aggregating a plurality of into llectÃial property rights from a plural ty of intellectual property rights holders in an intellectual property= aggregator by transferring in a first transfer the intellectual property rights to the intellectTu:.a property ag r-ega o';;

storing in a first database a first se of formation describing each of the plurality of intellectual property rights holders +toring in a second database a second set of i for matio l &s-- each of the pllz'rali v`-efintellecti-ml property rights, the second set of informatiÃn comprising a intellectual property value for each of the plurality of intellectual property rights, storing on a third database a third set information describing a plurality of acquirers of a portion. of the plurality intellecamil grope t' 3 ~;,,t ,, the third se, o comprising ,payment information for each acquirer for each payment made to the intellectual property ;ti"e: i r a second transfer of the intellectual property rights to the acquirer;

storing on a aourth database a fourth set of information, describing a plurality of investors, each 1 : ,'estz r being a purchaser of a equity inte4,e t 'M, the intellectual property aggreeh`ator, the fimrth set of information comprising investor information for )r each investor for investments made to the intellectual property aggrega.tor-;

input :inn into a valuation module information selected from the group consisting of the first set of intor .t alukin:., the second set of information, the third s t-o information and the fourth set of info mation;

calcullating a value of the aggregated intellectual property rights in the valuation module to account for the informatiorc, estimating an exchange intellectual property value for each of the plurality of intellectual property rights, the e-xchaa e intellectual property value being estimated by apportioning the aggregated intellectual property value wrong eachof the l x :.y , intellectual property fights, and calculating an updated aggregated intellectual property value to account :oi each payment received;

wherein th e payment received for ainte ie:. 1 prerp. . i-y right ,.~....ds the exchange intellectual property value for the intellectual property right.
DETAILED DESCRIPTION OF THE [N-VENTION

[00012] in the method of One present Ãnventioi an exchange i created by an aggregator of intellectual property that obtains rights in intellectual Property fro:: a pluralÃty of intellectual property rights holders. The aggregator o thins ii li .iit llectu l property rights either through a license or an acquisition f_.o the original intellectual property rights holders.

[00 0 l3] An Exchange I according to the present invention is illustrated in Figure 1. The Exchange I comprises an [P Owner 10, an .P Ag gegato 20, L cÃluirer 30, Other Licensee/ 'e. y'er 40, Investors 50, Investrrien Research 60 and Technical Expertise 70. In one embodiment, the [P Aggregator 20 ca. be a corporatio . In another embodiixient, the Aggregator 20 can be a joint Venture among investors, In vet another embodiment the [ Aggregator 2t:
.ay be a limited liabi rty Company or other legal entity such, as apak tnership. The Exchainge 1 provides means for determining the value of an intellectual property right and transferring rights in the intellectual property from an intellectual propelP, :`grit holder, aggregating the transfen,-ed intellectual property rights in a central fa alit, and further transferring portions of t a. gregated intellectual pro; ert,~ rights. Ea c:. of these elements of the Exchange I is described in further detail below, [00014] In the Exchange 1, an IP w nier 10 transfers rÃ-opts in an intellectual property to an r .gg -e ;at~rr 20 as it ustrated by ow path`,, ``.a." lP = er 10 rya be a sin g e cent r cif an intellectual property right or II? Owner 10 aye e a plurality of owners of a ,pl:.uraii-; of intellectual property rights. The transfer of.rights in an intellectual property may be by a lip erise agreement between the l % r;per 10 and the 1? Aggregator 20 or the transfer of rights m axr be by a sale of the rights to the III Aggregator 20 from the Owner 10. Thus, flow path "a" of lgure represents tie sale or license of an intellectual property right from an .-W
owner 10 to an IP
I

. gregator 20. x'l w path "a" is hereinafter referred to as 7'l~d/ :1.c ns 'a' The icense of intellectual property from an IP Owner 10 to an I Aggregator 2-0 may be either an exclusive license or a à on-ee. li sive license. In one enibod lent, IP Aggregator 20 may be s plurality of Aggregator 20 wherein each 3i Ag .regator 20 obtains rights to intellectual property The Aggregator 20 is the owner of the intellectual ` .;lt t chnol ? Z c to ones o la sses, r C

property rights pool, the intellectual property rights pool. comprising the intellect. l property rights acquired by the l Aggregator 20 from the IP Owner 10.

[00015'j In yet another embodiment, each of the plurality of [P Aggregator 210 may have different iity t it cl>5ectives. The different i, . s merit objectives may incl tide, for example, aggregation of a fa-iiily of intellectual property rights focused um a single technology or technology are a- aggregation ok a family of intellectual. property rights focused on a specific industry; aggregation of intellectual property rights that, require f aril research and development ll:e the intellectual property rights viable for, oIn lff- ercia]ization; or a.g? r ation of intellectual property rights from. a phiralitw of disciplines or tech nol__ogies which when combined may create new products and/or processes, 000161 The consideration for Sale,, License "a," can include any of the well-known forms of consideration used in the sale or license of intellectual property, `'!'he lP Owner 10 may elect to receive a payinent; a share or shares of stock or other equity interest in the l? Aggregator'.20, or some combination of payment and shares as consideration for the license or sale of" the intellecmial property. rights to the lP Aggregator 20. The payment may be a royalty payment or a lump-sum payment. The payment of consideration for Sae.!License "a" is illustrated by flow pad-, "b" of 2} path ":~i " z .~
~. ~ .,ur~ ~ . Flow natl.. is hereinafter referred to as "~~t -~=~aynte.~t `~".

[000171 The intellectual property and .ssoc ated intellectual property rights of the present invention include patents, copyrights, trade secrets, knew-hog and confidential information.
Intellectual property rights in patents, copyright and trade secrets arise under statutes enacted by the governmental body having authority over such rights. In the United States, patent rights arise under 35 UT. S. C. I t seq. Similarly, in. countries ether than the United States, patent rights arise under the national laws of that country. Copyright also arses under the laws of cou tries p r:n cE 'r ghtprote~:tio . aide secret r ghts in the United States arise under statutes enacted by the individual States or under the common lav, of States which have not ent: ted statutes protecting trade secret rights:. In countries other than the United States, trade secret r ghts typically arise under the.-national, laws of that country Know-how and confidential information if not legally definable as trade secrets may be inteilectuil property rights defined and protected under contract. Accordingl T, intellectual property and the associated intellectual property rights; as the terms are used with respect to the present invention:
are as described [00018] Out--Paymment`sly is biased on a . Ã . ? t. of the intellectual property right transferred in Sale/License "a." The value assigned to Out-Payment"b" is determined from a deter urination of the value of the intellectual property right itself (`'IP'\r-") and the value of the aggregated intellects al property rights ,( AlPV'). After nitial zation of the Exchange 1, the value assigned to Out-Payment "b" is the exchange intellectual proper",).--right ht value ("EIPV'>.
The IPV may be determined using a y7 of the well-known methods for valuing intellectual property rights. These well-known valuation methods include the "cost approach," the "market approach" and the "income approach,"

[00019] Initialization of the Exchange I occurs Stith the first acquisition of intellectual on initialization, AIPV equals propert rights by the 113 aggregator 20 from the IP Owner 1O. U
p IP for the first acquired intellectual property rights minus the Out-Payment "b" made by the 1P
.Aggregator 20 to the IP %vaer 10. In of the Exchange 1, the Intellectual property rig 1s may include a single intellectual properly right'. or a plurality of intellectual property rights.

p00,201 In the "cost approach," the value of the intellectual property is set equal to the cost to reproduce or replace the intellectual property=. The cost to fel is ...icc the intellectual property is the cost to reproduce the exact same property being valued, The reproduction cost estimate may er ' Uri include cost c.ompmr entss Fv ? eb are estimates of ..eesea cl; and development costs, estimates of costs io test an cefate the intellectual property and costs to make an embodiment of the intellectual property available for commercialization. The to the intellectual property being valued. The replacement cost may therefore also include cost com=ponents which are estimates of research and development costs, estimates of costs to test and refine the intellectual property and costs to make an embodiment of the intellectual property avai,able aL> c;om.mercaaÃzatic,n. Typically, ==ardor the "cost the valraatiori measures costs as of the date of valuation and does not rely on historical cost intorrmation.

[00021] In the "r:n:arket approach" the value estimate is based on the cost of similar intellectual property. The "mar eta pro ac " re s}res the existence ofa nmrlcet for comparable intellectual property and know edge of the terms of the sale Or license of à e c ommpa abi.
intellectual props ty.

[00022] In the "income approach" the present discounted value of iLiurc a income stream is estimated. The future income stream is typically esti: it..ed based on a number of fak-ctors including benefits of the intellectual property to al ernative products or processes, the size of the market into which coa)rnercia.l sales based on the intellectual property' will be made, manufacturing and/or supply factors z lu ing t,the coil mercialization, and estimated demand for the commercialized product or press.

[00023] The Al .P'V is es imated as the total value of the intellectual property rights hel : by the IP Aggregator 20. The value of the AIPPV is the su of the individual IPV
for each intellectual propea right held by the lP Aggregator 20 plus the value that accrues to the 1?

;` gg egaitr r 20 from Investors 50, Acquirer 30 and Other Licensee Su er 40 ator 20 .il.intra }d by f0 w [000241 Investors 50 purchase shares of stock in the Aggreg Ll r grethgator 20 illustrated by -flow path path "g", of IKi i=re 1 by : cash, payments tot-he ~` of Figure Flow . 1 Fpath a "a" is ?le,,'+`..inoft c~'. Flow l t i, pat z~.xi :.g"
~-'t r~^r ,~.fi'.I 1` ~3~ tS~. . "'Stock 1~a~'.itieatt "i' is hereinafter referred to as ,.Stock Purchase [g} r}

[00025] Licensees or purchasers (individually or collectively) may -acquire rights in ga intellectual ` r 1313 IP .r 'g' f~c~.ior 20. 1P Aggregator 20 ii'"~:t~aA;z of ~:~' ai~~T~ey,eb.:'~ 1~"~t''d ~i'il 1. .,~. 4.f~'rF,.

transfers rights in an intellectual property to Acquirer 0 as illustrated by flow path "c.;, Acquirer 30 may be a single acquirer of an intellectual property right or Acquirer 30 may be a plurality, of acquirers of a plurality- of intellectual property rights. The transfer of rights in wn it telle;tual property may be by a license agreement between the lP Aggregator 20 and the Acquirer 30 o the tra`.sfeT of rights may be, by asae of the rights to the Acquirer 30 from the Aggregator 20. Thus, flow path .c' of Figure 1 represents the sale or ilcerise of an intellectual.
property right from an Ag rgator 20 to as Acquirer 30. Flow path "c" is hereinafter referred to asTra.nsfer out c:'.'' Corrsi eration for Transfer Orrt "Ccan include arse of the we t-kno nr forms of consideration used in the sale or license of intellectual property.
For example, III

Aggregator 20 may elect to receive a lu rr. -soar payment or a royalty payment for a sale or license an à t `l ? ttr l property or some combination of payment types as consideration for the license or sale of the intellectual property rights to an Acquirer 30. The payment of t:rarrsi er .:E3:: for Transfer Out "c" is illustrated by flow at "tl" of i re 1. Flow path :'d" is hereinafter referred to as "1 -Pavmeà t 'd- lea-Pays ent ad;" In one embodim,-nt of the present mention, is a negotiated payment agreed upon by Acquirer 30 and Agg eraO:r;'0.

[000261 Other Licensee,/`::tier 40 may a qui; e rights in portions of the aggregated r tellectrral property from tie Ili Agtgregator 2u. P Aggre~ to 20 transfers rights in an intellectual property to a Other Licensee/Buyer 40 as illustrated by flow path "e,'' Other Licensee/Buyer 40 maybe a single acquirer of an intellectual property right.
or- Other Licensee/Buyer 40 may be a plurality of acquirers of a Plurality ofintellwalall rights, `I h_ ransfer of rig rights in an intellectual property may be by a license agreemeat between the Aggregator 2.0 and the t= =.er Licensee` uyYer 40 or the transfer of rights may be bya sale of the rights to the Other Licensee., uyer 40 from the IF Aggregator '0. Thus, flow path "e" of Figure I represents the sale or license of an intellectual property right from an IP
Aggregator 20 to Other Licensee/ Buyer 40, Flow path "e" is hereinafter referred to as "Other Transfer Out V."
Consideration for Other Transfer- Out "e" can include any of the well-K.nc- =r for. us of consideration used in the sale or license of rrt llect al property. For example, IF Aggregator 20 :: may elect to receive a iu -s u Payment or a royalty payment for a sale or license of an intellectual property some combination of payment ti as consideration for the l.i tense or sale of the intellectual property rights to the Other Licensee/ Buyer 40. The payment of consideration for Other Transfer Out "e" ;s illustrated by flow path ` f' of Figure 1. Flow path 'T' is hereinafter rete red to as "Other hi . a.ynent = f..}) 4/tASe In P y 7mei t , m on evtrl?f3slrsrS n the present invention, is a negotiated payment agreed upon by Other Licensee/Buyer 40 and IP
5ggre ator 20.
g [00027] In ionic embodiments of the present inve ition., the AIPV may be represented by the following Formula 1:

3 orttula l ;.

AIPY
"dl u i'I
{D4OL>,- ay ent "b"] 4) [000281 The `lFV; , represents he surn of all V estimated for the intellectual property held by the IP Aggregator D), For transactions between IP Aggregator 20 and Acquirer 30, there is a cash value that accumulates with the IF Aggregator 20 from payments made by Acquirer 30 and this accumulated cash value is represented by ! 1n-Pay rent "d"] .
Similarly, for transactions between l;" Aggregator 20 and Other l.,icenseeiBuyer 40 there is a cash value that accumulates with the IP Aggregator 20 from payments made by Other Licensee;Buyer 40 and thÃs accuimrulated cash value is represented by7 :[tuner Ina-P~laymernt `xt:''] x, investors 50 who purchase stock in the IF Aggregator 20 pay a purchase price for the stock Ãtnd this cash value also :ccumulaies with the IP Aggregator 20. The sum of payments made for stock purchases is represented by E[ Other Ir.-Payment "f The a q,, sition o. wt& ct u l property r . t 1 2P
O moaner 10 by the IP Aggregator 20 requires SO fur -x of r . y .ntun 'it m the Aggregator 20 to the [P Owner 10; As rioted above, such a payment may be in the form of cash, s~Ock in the tP
Aggregator 20, or a. combination of these types of payments. The sum of all payments r lade by the IP Aggregators 20 to the IP O rw:ner 10 is represented by E[ ut-Payment "b"] 4.

[00029] In addition to the E [Oui Payment " ], The IP Aggregator r ay have additional cash outflow -which may be appropriate to include in the AIPV, For example, if dividends are paid to holders of stock or other equity interest in the IP Aggregator 20, it may be ;appropriate to C
deduct the sum of dividend pays à ?ents made front: the AIPV. Also, it ::aye be appropriate to deduct certain types of operating expenses, other ti an Out-Payment "u " from the AIPV.
Formula I may be modified to account for such additional deduct ons.

[00030] I-;- so ne e nbodrntents, the AIPY is determined by a manager of tine IP Aggregator 2-0. The he manager may use any of the now known or ater developed avccowating and"

economics methods for valuing intellectual property. in t' he present invention, the A.IIPV is art estimate of the value of all. intellectual property rights held by the IP
Aggregator 20 and includes in some embodiments the effect of other value measures as describeti_ [000.31 ] As the I Aggregator 20 intellectual Proper rights from I'l' Owner 10, the AIPV may be updated to account for the newly acquired IPV, payments made and received by the ff, Aggregator 20 and other value measures considered by the manager of the 11 Aggregator 20.

0;30 32j The AaIPV may be represented by a stock price, the stock price being the price per share for stock in the IP Aggregator 20, but the total value of all issued stock will not necessarily equal the t lP\ The stock price may be set based on anyaf the reel.- iio'+vn market processes such as an auction process or a. negotiation. In one embodiment of the, present invention, stock In the l_P Aggregator 20 may be in the, form of one or more of a well-known security or securities. As used ereirz the term "stook" willi refer to securities which represent c' n interest in the capital, assets, property or profits of the l=_ '20, The types of securities may include equity securities such as common or preferred shares of stock, debt securities, which bonds and debentures; and mutual fu d investments which enable an investor to pool an investment with many other investors. The process of buying, and selling of stock may include public ing of the stock. The buying and selling of stock may additions ly be z.c Ã,:.a ec by any of the known or to be developed web-based methods for trading stocks also known as electronic trading. Such web-based methods would be accessible to investors 50 vie the Internet and;
.fior example, the per share value of the stock would be posted on the electronic trading web site and Investors 50 would be provided the capability to buy shares of the stock over the Internet.

the res nt er r noon ma additio lly : c pi e s I :~ r., [000331 TbeExchang Research 60 and Technical Expertise TO as inputs into the Exchange 1.
Investment Research 60, for example, may include marl et i arils for determining the V ofai intellectual p operty.
Investment Research à 0 may also include industry] research to Ãdentify 11:1 Owner 10, Acquirer ) 0 r t alter l iceiase aye <là . vest..n Q-it Research 60 aids the deterini.nation of W rnd AIPV in th e exchange -l.

[00334 '.Technical Expertise 70, similarly aids the operation of the Exchange 1. Technical Expertise 70 may also include expertise on setting the value of stock.
Technical Expertise 70 may include economic expertise or, determining the AIPV. Additionally, Technical E per:tise 70 may include expertise for using the intellectual property sold or licensed in Transfer Out=`c' aricl car Otlier-'1 raiisfer Otte "e '' In one embodimeÃit of the present inv ntion, Technical..expertise 70 is a subsidiary company sanv to ' A(g gregatÃir 20. Employees of Tech.nÃc al Expertise 7 0 1 < , the requisite knowledge to make and use the subject matter of the.i iteilectu%il property sold or licensed ii`, Transfer Out "c" and/or Other Transfer Out "e." In one e.mbu imient. of the present invention, an Ae .-:a rei 30 would receive the benefit .of 't icai Expertise 70 in addition to rights in the sold or licensed intellectual property, in the same e bÃ>.: `
;~F? or in another embodiment, Other Licensee/ Buyer 40 would e a:,.'e the benefit of Technical Expertise 70 in addition to rights in the sold or licensed intellectual property. The benefit received .from Technical Expertise 70 can .ia .a tde no l?c or, how to make and use the subject matter, such is a product or process, of the intellectual property sold or licensed by the ? aggregator "20.
[0,003S] In one embodiment, Technical Expertise 70 provides an evaluation of the intellectual property the i Aggregator 20 has an interest iu buying or licensing aril based on the evaluation provides guidance to the [P aggregator. 20 on such transactions.
The guidance may include direction how, to pair the intellectual proper;,. the I Ag .re ator 20, has an interest in buying or licensing with other intellectual property to which the P Aggregator 20 has rights or guidance intellectual property to which the IP rey tor 20 ssl o ld seek to acquire rights. The may Include direction on which intellectual property can be combined to create a portfolio of intellectual property covering new products or processes. The guidance may further inckÃde identification of areas of innovation that should be developed in order ,to create new intellectual property, Technical Expertise 70 may> also function as a#acilitttor of collaborative research and development between the 1,11 Aggregator 20 and IF Owner 10, between two or more =P Owners 10, and between one or IP Owner 10 and a third party. The collaborative research and development: may include thin -party sponsored research: A third pity in the context of the present invention is a personn, or entity other than Ii' Aggregator 2O and IP
< .ggregato 10.

ue: e the 1 % by al ctirr g an increase in 1n [0003) 61 Technical Expertise ma Intl Payment "d" paid by Acquirer 30 for the benefit of Technical Expertise 70 in addition. to Ãights in the sold or licensed intellectual property. Similarly, Technical Expertise 70 may cause an increase in Other 1n Payme.,nt "f' paid by Other Licensee/Buyer 40 for the benefit of Technical Expertise 70 in addition to r ghÃs in the sold or intellectual piroperty, hi some embodiments of the present invention, Technical Expertise 70 may generate know-how or,, thw use or application of fhesoid or licensed intellectual pro Ãerty. In such embodiments,. Acquirer 30 or Other Licensee/Buyer 40 may agree to make a higher pays ment when the knmx -how generated by technical Expertise 70 is Included in the transfer of rights Technical Expertise 70 may,. a.. an increase in AIPV because of Technical. Expertise 70 directed acquisition of intellectual prop rt5 ning of intellectual property into a. portfolio covering new a product or process, and colL.borative research and development where the result of the collaboration _:s rnelt' inteilcc Ãra? property to which the IP Aggregator holds rights.

[000-17] The EIPV is detenuined by apportioning the IPV among the intellectual property rights held ben the III Aggregator 20. The apportionment is based on a consideration of weighted factors, the factors in some embodiments include. scope of exclusivity of the intellectual property rights; est,ruted pe "od of the exclusivity; pro,,-Imit intellectual property not held by the IP Aggregator 20; extent of trade secrets, l ozv how and or confidential information transferred to the l I P A 20 from the IP Owner .1 geographÃc.
scope of the exclusivity (e.g. extent of foreign. intellectual property rights included in the intellectual property right's transferred to the fly Aggregator 20 by the II
Owner 10), relative enforceability of the intellectual prop rty^ rights transferred to the IP
Aggregator 210, and extent of commercial opportunities available for license or sale of the intellectual property held by the :1 Aggregator to ``=` (< u_:tr 30 and -,)T Other Li ense i 40. In one embodiment, the determination of EIPV is illustrated by Formula 2.
F or,ula 2:

EI WI W 1A!PV ij x 11 where, as + Y? 6s , and : are '`-weight ng factors represen'tin'g:

a. scope of excl , t r of the irrtelieetual property rights-P: estimated period of the exclusivity;

y: Proximity of cone eting intellectual proper-tyT not held by the 1 Aggregator 2 8: extent of trade secrets, kno-w-how, an'd or confidential information tr. i,sferred to the [P :Aggregator 20 from the OwIler geographic score of the e cl si.vity (e.g. eextent of foreign intellectual property rights included :n tt eirt.,lle..tuaa . operty rights transferred to t1 e la' Aggregator 20 by th... IPO v nier 10);

relative enforceability of the ti Iles t niil property rJ bts transferred to the [P A gregator 20;

< extent of commercial opportunities available for license or sh e o the int 1_ _t 1: 1 p:ro er- y 1-01d by the 3P Aggregatcjr to Acquirer 30 indi i t ?cr Licensee/ ury er 40; and 1: = the number of separately valued intellectual property rights held by tape IP Ag gic, ur 20.

r; Ã The weighting actors may be positive or negative, such that any individual EIPV
may be greater than or less than, the average A PV whereAL V/zi is the average AIPV. Other Weighting ,factors may be applied in the determination of EIPV; by, for example, the manager of the III Aggrc Batt r 20. 'he we:ghti.ng facts rs may also change over time to represent a change in weight in any one or more weighting factors due to, for e~ e. ? e, tl>e k ,,-e Dale intellectual property rights, c dvc -ices iii science, technology or business made relative t. i-w iatelllea ual property right being valued, or the acquisition of other intellectual property rights by the IP
Aggregator 20 which impact the value of the intellectu propert right being valued. EI Vi may alters aÃiv2ely be determined by now known or later developed accounting and/or economic methods for determining the value of intellectual Property rights Such other methods may include consideration of the value placed on similar- intellectual ;property rights in transactions and/or tõ -z-, on as an estimate of a value the relevant `>tmaaiketwill bear, a prospective income available from a defined transaction involving the intellectual property rights, or a ie oti ti 3 3 with a prospective Acquirer ')':0 or Other Licensee/Buyer 40.

[00039] As provided herein above, initialization of tl e .change I occurs with the first acquisition of into lectual property rights by the IP Aggregator 20 from the IF Ow er 1O. 'Upon initialization, ALPV equals IPV for the first acquired intellectual property rights minus the Out-Payment "b" made by the IP Aggregator N to tl e Owner 110 The initialization values for 'IPV, AIP , i.'`) and Out-Payment `If' are represented by formulas -1 and 4.

For ua 3 ELF V0 O t- ayi errt `gib",, LPG ii it ula. 4:

ALP V0 .... a,'F IP iF(3 In Forinulae 3 and 4, the subscript 0 indicates the initialization, coridifion. As provided herein above, in tla initi: liLatio of the Exchange 1 the tit c ,c{4 #al property rights, iai ay i 3 do a single intellectual property right or a plurality of hats 1,rec,tua.l property [000401 Each Ei V, ,,-fray he re-calc slated when the AI ' is updated.. As provided herein above, as the [P Aggregator 2 0 acquires additional intellectual property rig its from. Owner 10, -Pk the AIPV may be updated to account for the nti.~ai acquired IPA', payments made and received by theIP Aggregator 20 and other value measures considered by the manager of the '[P
Aggregator 20. The A+' V may also he updated to account fo any added value created due to Technical Expertise 70. Alternatively, each EIPV: maybe re-calculated at the discretion of the manager of the Aggregator 20. in the preferred embodiment of the present invention, each _E1_WVi is fie-calculated when the AIPV chan es by a significant amour t. The significant amount may, for exan ple, be related to a percent-age change in the AIPV In some embodiments o the pr'esennt invention, each E[P v is re-calculated as market conditions, such as demand for intellectual property rights by Acquirer 30 or by hither- Licensee/Buyer 40, change.

[00041] Figure 2 l ~``t a _es one embodiment of the compute-implemented method of the Exchange I. of the present invention, wherein the. method is performed on one or more computers or computer systems. The computer implemented method it :strattted in Figure 2 use's patents as an exemplary intellectual property right. However, the intellectual property right of the method s may also ia~clude cop "i'.i ht, trade secrets. ?i #ow-'i ' and confidential info oration solely or in combination. In a database 80, data on IF Owner 10 is ,cc;u :elated and maintained. The data stored in database 80 may include information on each F Gvirae. 1.0 such as adi `.,ess, con: a>t information for each [' Owner 10, identification of the intellectual. property of each IP Owner 10, and other information pertinent to a tia. sactiona relationship between IP
Owner 10 and I

Aggregator 20. In a databsse 90, a description of each patent :right tri ns ev'e~i ~ >1"? U? Owner 10 to IP Aggregator 20 is accuinu ated and .riaint lncd, Each descnlpt o. } of a patent in database 90 includes identification of the corresponding ' Owner 10, titleint.ormation on the ownership of the patent, the expiration date of the pat cat. the existence of counterpart as plications flied i. the United States, the exiatelre of foreign counterpart applications and/or patents, and ndic a .Ã:. w tie scope of the clai_ ts, pro .imity of competing intellectual property and other factors which may from time-4o-ti m.e be pertinent to valuing the patent or transactions involving the patent and in some embodiments may include weighting factors as de sci`ibed herein abc)-'.,-e.
Databases 80 and 90 are kelp' and maintained by the T Aggregator 20 either directly or by contractual arrangement with atthiid-party provider of database serv.1ces.
Databases 80 and 90 may be kept and maintained as separate databases, or they may comprise different data fields in a single database, [00042] The Ag re e'or 20, by, accessing databases 80 and 90 can determine which patents to associate with a transfer of rights to an Acquirer 30 oo,r Other LicenseeiBuyer 40. Data on Acquirer 30 is kept and maintained in database I3t and such data includes name of Acgi,.:r 30, contact informati, n. for Acquirer 30, and the patent or patent,,-. from diatabase 90 associated w~Wh Acquirer 30. Database 30 rna also include the terms of the Transfer Out "c," and the nature and value of 1r Payment "d." Database 130; may further include information on the interest Acquirer 30 has in different fields of technology or business or In certain intellectual.
property rights, Data on Other Licensee/Buyer 40 is kept and maintained in database 140 and such data includes name of Other L censeeSuyer 40, contact information fo.
Other Licensee/Buyer 40, and the patent or patents from database 90 t ssoci ated with Other Licensee, B y er 40. Database 140 may also include the terms of theTratisfer Out "e"', and the nature and value of Other lit-Payment f" Database 140 ,may further include information on the interest Other Licensee/Buyer 40 has it diferent Ãold. of technology or business or in certain intellectual property rights. Databases DO and 140 are kept and maintained by the I

Aggregator 20 either direct. y. or by con a tf al arrangement with a third-party provider of database services. Databases 1 0 and 140 may be kept and. maintained as separate databases, or they may comprise different data fields in a single database Databases 130 and 140 may a] so comprise different data fields in databases 80 and 90 either separately or as part of a single database combining all of the data of database, W; 90, 130 and 140.

[000431 Database 150 contains d2.ata an Investor 50 and such data includes lame of Investor 5C), contact information for Investor 50, number of shares of stock or other security held b Investor 50 and the value of Stock Payz ze.nt "h!' Database 150 may also ir:clude such . tital information relating o Stock Purcb se "g" as required from, time-tot' `:i y 1e securitieslazvs of the United States or tl~e legal ;tsf ~.-fiction i wh ch.
the 111 Aggregator 10 is opera.tin . Databases 13 x, 140 and IS() may also co p se different data fÃelds in databases 80 and 10 either separately or a.s part of a single database combining all of the data of databases 80, 90, ; 30, 140 and 1:50. Ir somtte e nbodiments, the i:nfor ation contaÃned within databases 80, 90, 130, 140 and 150 t.e diferent data sets stored wit :.in one or no.e of t: e computers Or C mpuÃer [00-04] A vva uation mod-ule 100 receives data f ori+ databases 8 , 90, 1 3 , 140 and 150.
Included in the data is t'he .value of Othez I wo e "f:;" the value of in-Payment :`d," anc the Value f Stock Payment "h." Within valuation m dule 1 0,, t:he inilividual T
V,'s wre d terÃtmined using any of the Methodologies previouslyj described he'ein. ccordingl y, a3-t external in:sut 1comnrSsing a database of is for Lati n, provides relevant cost or market data to the valuation .,.

module P D0, `i`1 e database of extern & input 160 aor tZ, ns data pelt ne:ott. to any one or more of the cost approach, ...~r' proacl?, income approach or other ztite..::: a 1 property valuation i ethod known to those skilled in the art of valuitn ntell . t l ; ti.- r, .
8y way of exs" ~ ~e onlyt, the data of external input 160 may incly2de the cos i 5ti pone 1 5 calculaS:ing i reproduction or replacement cost for he paten``. The data of external input 160 may also, or alternatively, include market data on the cost of comparable pant&. The data of external input 160 may also, or alter, at velyT, include estimates or, future income streams and discounted cash lows [0,0045] Within valuation 1-nodule 100 the Y isdeterrnined, in one embodiment, a cordi to Form l 1. Other n;eth ds fit talc i atin ,'V may bek-nown or develop d from time-to-time are within the scope of the present invention. For example, the A[PV of the present invention may be determined - si.na data different from or in addition to I -,Payment "d," fah; r Jn Pa yr unt ``f,'= Stock ayment " ' aana O;. t-lam - n en "b. ' The AiP\' i k 'F t and niaintaÃE ed in a database associated with valuation module 100, As the variables of 1, for example, change from time-to-time the AIPV for fpAggregator 2 oll be updated. Updating the AIPV
may be done on a scheduled basis or as needed "l c ioost recently updated :
PVi:, referred to herein as the current AIPY 170.

000146] The current ,WI ; 170 is an input from the Valuation module 100 into the appor ~, .,nt:ent module 115, The valuation, module 100 also counts find stores the number of individual intellectual. properties -val Ãed in ter t al. anon module 100 arid identifl---da': Ii in Formula 21. The Ii is an input from. the valuation m `L _..i. 100 into the apportionment module 115. Apportionment factors 18C), in some embodiments, is a database containing the weighting factors used to adjust the average AlPV in For ula 2. and other indicia of used by the manager of [P :Aggrecxat or 20. For patents n, which database 90 includes information on the expiration date of the patent, the existence of cc u t, rn applications filed in the United States, tile: existence of f ireig is ceunte-qpart application it ? Patents, and u dicia relating to the scope of the clauns, proximity of cor petit g intellectual property and other factors which may from time-to-time be pertinent to valuing the patent or transactions involving the patent, such data is inputted from database 90 intoapporttionment factors 180. A.dditio l.ly, apportionment fac zrs 180 may include weighting factors not contained in database 90 such as, in the embodiment e:sented herein, a weighting factor representative of the extent of trade secrets, know-now and:'or confidential information. transferred to the [P Aggregator 20 froxim, IP Owner 10 and a weighting factor representative of the el~t:we enforceability of the .intellectual property rights transferred to the IP Aggregator 20.

[00047] The weighting factors kept and maintained in apportionment factors 180 may be assigned a:s relative values on an arbitrary scale. For example, a weighting factor representati'v'e of relative enforceability, .m .y be indicated by a value from 0 t o 0 1, with 0 representing a. patent that has very limited eà for'cea bility. aqd 0, l represent ng a patent having the cs level of enforceability. Similar arbitrary scales may be estaMisled for other weighting factors, [00-048] The output from the apportionment module 180 are the individual E1PV
's which establish Out-Payment "b" to each fP Owner 10 that transfers a patent right, by license or sale, to IP Aggregator M

[00049] F ure 3 :illustrates the method of the present invention in some embodiments wherein 'l echnicai Experti.se 70 develops Augmented Inno',-ation. 200 which is aà y egatea via -24-.

flow path j' by the Aggregator 20. In this example, the IPAggregatorM receives a tray sxe of intellectual property rights, either sale c?r l.c ens fr: rn tl t _ y ner lid. The transferred i . lectcral prc?l?e t rF is require additional research and development effort before bin e c loprn t o r~3a.}>
acceptahle fcr trar sfer z Acqu. r'e, 300. The additional research and necessary because although the intellectual property nights transferred to the IP A -uregator'40 are suitable for application in one market, they may not be suitable for application in a. market of interest to Acquirer 30. Therefore, Technical Expertise 70 receives information or data on, the intellectual property rights transferred to IAggregator 20) along flow path i.
Technical Expertise 70 then provides the additional research <.nJ development rec uired to create Aug ented nnovatà ?ri 200 Augmented Innovation 2.80 is itself protected by intellectual property ri lit which are aggregated with the intellectual property rights, uir by 20 forma IF Owner 10 for transfer to A cquirer 30 along the flow path Out ti " gareg receives ` '" õ .
seats r _payment #orrCrrR\ser at via In-dab 1.~LeraL "`.l " described herein above, [001 50 Figure 4 r.llust ates the i ne-thod of the present invention in some etnl?,~,t_me s wherein Technical Expertise 70 assists i~ Aggregator 20 to i entify new markets for existing s intellectual property rights held by .IF Aggregator 20. In the example, intellectual property rights held by lP Aggregator 20 may be in use in a market "A," but could have uses in a different market "B." Technical Expertise 70, receives information or data on u e intellectual property rights held by IT Aggregator 20 along flow path s, develops information or data which would allow the application oft :e intellectual property tights in market "B," and provides the in orma.tion or data to IF Aggregator :0 along flow path"- IF Ag regaÃor 20 then transfers the intellectual property rights to Other Licensee/Buyer 40 via flow path Other Transfer Out"" " lI

Aggregator 20 receives payment for the transferred intellectual p .,pe-, y rights via Other In-Payment "T"

[00051] It will be appreciated by persons s. isied in the art that the present invention is not limited by what has been particularly she?-pan and described herein. the.r, the scope of the present inventions defined only by the claims which folL .

Claims (20)

1. A method for creating a publicly traded security in an intellectual property aggregator that operates an intellectual property exchange, the method comprising:
transferring-in a plurality of intellectual property rights from a plurality of intellectual property rights holders to the intellectual property aggregator;
calculating an aggregated intellectual property value for the plurality of transferred intellectual property rights;
determining an exchange intellectual property value for each of the plurality of intellectual property rights, the exchange intellectual property value being determined by apportioning the aggregated intellectual property value among each of the plurality of intellectual properly rights;
transferring-out a portion of the plurality of intellectual property rights to one or more acquirers of intellectual property rights;
receiving from each acquirer of intellectual property rights a payment, the payment equal to the exchange intellectual property value for each of the intellectual property rights transferred out to each acquirer, and calculating an updated aggregated intellectual property value to account for each payment received; and

2. A method for creating a publicly traded security in an intellectual property aggregator that operates an intellectual property exchange according to claim 1 further comprising issuing a plurality of securities, each security being purchasable for a price, the price being representative of the updated aggregated intellectual property value.

3. A method for creating a publicly traded security in an intellectual property aggregator that operates an intellectual property exchange according to claim 1 wherein the transfer-in of at least one of the plurality intellectual property rights is by sale of the intellectual property right from the intellectual property right holder to the intellectual property aggregator.

4. A method for creating a publicly traded security in an intellectual property aggregator that operates an intellectual property exchange according to claim 1 wherein the transfer-in of at least one of the plurality intellectual property rights is by a license from the intellectual property right holder to the intellectual property aggregator.

5. A method for creating a publicly traded security in an intellectual property aggregator that operates an intellectual property exchange according to claim 1 further comprising:
using technical expertise to affect an increase in the updated aggregated intellectual property value;
wherein the technical expertise is selected from the group consisting of: know-how, directed acquisition of new intellectual property rights, and development of new intellectual property rights.

6. A method for creating a publicly traded security in an intellectual property aggregator that operates an intellectual property exchange according to claim 1 further comprising:
making investment research, a result of the investment research comprising a valuation parameter, the valuation parameter representative of at least a portion of a value of one or more of the plurality of intellectual property rights;
wherein the result of the investment research is used in calculating the aggregated intellectual property value.

7. A method for creating a publicly traded security in an intellectual property aggregator that operates an intellectual property exchange according to claim 1 wherein the security is a share of stock in the intellectual property aggregator.

8. A computer-implemented method for operating an exchange based on rights in intellectual property comprising the steps of:
aggregating a plurality of intellectual property rights from a plurality of intellectual property rights holders in an intellectual property aggregator by transferring in a first transfer the intellectual property rights to the intellectual property aggregator;
storing in a first database a first set of information describing each of the plurality of intellectual property rights holders;
storing in a second database a second set of information describing each of the plurality of intellectual property rights, the second set of information comprising an intellectual property value for each of the plurality of the intellectual property rights;
storing on a third database a third set of information describing a plurality of acquirers of a portion of the plurality of intellectual property rights, the third set of information comprising payment information for each acquirer for each payment made to the intellectual property aggregator for a second transfer of the intellectual property rights to the acquirer ;
storing on a fourth database a fourth set of information describing a plurality of investors, each investor being a purchaser of an equity interest in the intellectual property aggregator, the fourth set of information comprising investor information for each investor for investments made to the intellectual property aggregator;

inputting into a valuation module information selected from the group consisting of: the first set of information, the second set of information, the third set of information and the fourth set of information;
calculating a value of the aggregated intellectual property rights in the valuation module to account for the information;
determining an exchange intellectual property value for each of the plurality of intellectual property rights, the exchange intellectual property value being estimated by apportioning the aggregated intellectual property value among each of the plurality of intellectual property rights; and calculating an updated aggregated intellectual property value to account for each payment received;
wherein the payment received for a intellectual property right equals the exchange intellectual property value for the intellectual property right.

9. A method for operating an exchange according to claim 8 wherein the first transfer of at least one of the plurality of intellectual property rights to the exchange is by sale of the intellectual property right from the intellectual property holder to the intellectual property aggregator.

10. A method for operating an exchange according to claim 8 wherein the first transfer of at least one of the plurality of intellectual property rights to the exchange is by a license of the intellectual property right from the intellectual property holder to the intellectual property aggregator.

11. A method for operating an exchange according to claim 8 wherein the second transfer of a intellectual property right to an acquirer is by sale of the intellectual property right.

12. A method for operating an exchange according to claim 8 wherein the second transfer of a intellectual property right to an acquirer is by a license of the intellectual property right.

13. A method for operating an exchange according to claim 8 wherein at least one of the plurality of intellectual property rights is a patent.

14. A method for operating an exchange according to claim 8 wherein at least one of the plurality of intellectual property rights is a trade secret.

15. A method for operating an exchange according to claim 9 wherein the intellectual property rights holder receives one or more shares of stock in the intellectual property aggregator for the sale.

16. A method for operating an exchange according to claim 10 wherein the intellectual property rights holder receives one or more shares of stock in the intellectual property aggreagtor for the license.

17. A computer-implemented method for creating a publicly traded security in an intellectual property aggregator that operates an intellectual property exchange, the computer-implemented method comprising:
maintaining a first data set describing a plurality of intellectual property rights transferred from a plurality of intellectual property rights holders to the intellectual property aggregator;
calculating an aggregated intellectual property value for the plurality of transferred intellectual property rights;
estimating an exchange intellectual property value for each of the plurality of intellectual property rights, the exchange intellectual property value being estimated by apportioning the aggregated intellectual property value among each of the plurality of intellectual property rights;
maintaining a second data set describing a portion of the plurality of intellectual property rights transferred to one or more acquirers of intellectual property rights;
maintaining a third data set describing a receipt from each acquirer of intellectual property rights a payment, the payment equal to the exchange intellectual property value for each of the intellectual property rights transferred out to each acquirer;
calculating an updated aggregated intellectual property value to account for each payment received; and issuing a plurality of securities using a web-based system, each security being purchasable for a price, the price being representative of the updated aggregated intellectual property value.

18. A method for creating a publicly traded security in an intellectual property aggregator that operates an intellectual property exchange according to claim 17 wherein the transfer-in of at least one of the plurality intellectual property rights is by sale of the intellectual property right from the intellectual property right holder to the intellectual property aggregator.

19. A method for creating a publicly traded security in an intellectual property aggregator that operates an intellectual property exchange according to claim 17 wherein the transfer-in of at least one of the plurality intellectual property rights is by a license from the intellectual property right holder to the intellectual property aggregator.

20. A method for creating a publicly traded security in an intellectual property aggregator that operates an intellectual property exchange according to claim 17 further comprising:

using technical expertise to affect an increase in the updated aggregated intellectual property value;
wherein the technical expertise is selected from the group consisting of: know-how, directed acquisition of new intellectual property rights, and development of new intellectual property rights.