Patent Exchange—Logistics of Owning a Share on the Exchange

What if Apple owns shares of a patent asset it infringes?

Q: Should investment in traded patents provide immunity from suit?

No.  If investment in a traded asset provided immunity to infringement, then Apple would be incentivized to buy one share on every technologically-related asset, and freely infringe them  without paying a fair royalty.

Q: Should investment in a traded asset offset damages-related infringement liability?

Investment in a traded asset should offset damages-related infringement liability.  Namely, if Apple owns 10% of the financial interest on a traded asset, due to it owning 10% of the traded assets, shouldn’t it receive 10% of the financial return on the asset when monetizing it through traditional means, even if a portion of that revenue comes from Apple itself?

This seems like a natural corollary to Apple owning 10% of the asset’s financial interest.

This scenario provides an ideal incentivization structure:

From the infringing entity’s perspective, this incentivizes such entities to own shares of assets it believes it is infringing—this would proportionally reduce its own infringement liability.  Further, it would provide such entities with a means to profit as the asset is monetized on its competitors.  Hence, infringing entities are incentivized to own shares of assets it believes it infringes.

From the patent supplier’s perspective, the more shares infringers purchase on the asset, the more revenue the patent will generate directly from those infringing entities.  This provides the patent supplier with revenue directly from potential infringers.

Therefore, offsetting damages-related infringement liability through investment in a traded asset provides an incentivization structure that benefits both patent suppliers and infringing entities.


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