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Creating an Open, Free-Market Patent Exchange (Part 8 of 8)

How do we actually structure an open, free-market patent exchange?

(1) How would patent assets be placed on the exchange? (2) How would they be classified? (3) How many shares would be attributed to a given patent within a technology class? (4) How would we initially value them? (5) What market forces would affect value of the patent shares? (6) If I own a technology share (used interchangeably with patent share), what exactly do I own and what can I do with it? (7) What would incentive trading on the patent shares? (8) What would incentivize collaboration amongst market players?

In this post, I’ll be discussing (8) collaboration amongst market players.

Licensing activity and its resulting revenue are key driving factors behind patent valuation.

Instead of using litigation or its threat as a first resort to licensing discussions, how can we incentive companies to take licenses from one another, without the threat or use litigation?

Let’s take Apple and Samsung as a case study—according to my sources, they hate each other.  Let’s say Apple takes agrees to take a license and pay royalties into Samsung’s mobile-device technology class.

What will this do for Samsung’s technology class?

Demand would skyrocket because it has a license from one of the market leaders and is generating royalty revenue.  This will increase the value of Samsung’s technology class.

How does Samsung repay the favor?

It can likewise take a license and pay royalties into Apple’s mobile-device technology class–this will increase Apple’s share value of its technology class.

Hence, we have a scenario where two market players are incentivized to help one another by taking licenses to each other’s respective technology classes.  By aligning incentives in such a manner, we can create a collaborative culture of licensing, rather than antagonistic approach currently employed today.

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