Chicago-based Intellectual Property Exchange (“IPXI”) plans to offer its first patent family for purchase via what IPXI calls unit license rights. Any entity will be able to purchase unit license rights that allow it to use the patent technologies — in this case, a portfolio of approximately 600 patents — a set number of times. The portfolio is expected to raise $35M based upon unit license right sales. For more on IPXI, check out this New York Times DealBook article.
This is an interesting idea in that it removes, at least initially, the litigation component from monetizing a patent portfolio (at least a legitimate one), and it allows for a secondary market in which initial purchasers can sell their unit license rights to entities later accused of infringement at prices presumably below the cost of a litigation-based settlement. Furthermore, it may allow original patent-holders (including original inventors/assignees) to monetize their patents and get them out to their industries without resorting to selling to patent trolls.
But litigation would still be required to enforce the patents against entities that did not purchase unit license rights, started allegedly using the technology after the rights sold out on the exchange, or simply did not believe they required license rights. So, it may insert additional, unnecessary complexity and expense into an already complex and costly system.
And it also raises a concern for retailers. By investigating portfolios offered by IPXI, retailers (any company, in fact) run the risk of creating actual knowledge of the alleged infringement and exposing themselves to claims of willful infringement. So, while I am skeptical as to whether it will actually reduce transaction costs and benefit retailers, I look forward to seeing how IPXI works in practice.