By building the world’s first blockchain-enabled global patent marketplace for research, evaluation, and transactions, IPwe is a rising star shaping the decentralized future of intellectual property. This article discusses the behind-the-scenes story of how IPwe distributes the chain-of-title issue through AI and blockchain-driven technologies, and existing challenges and opportunities to pave the next mile toward success.
Replacing the Traditional: IPwe's Mission
Founded in 2018, IPwe specializes in IP transactions through licensing and acquisition through patent poolings in various niche industries. With business spreading across Europe, China, and the U.S, the company was founded with the end goal of unifying the intellectual property ecosystem through proprietary AI and blockchain technologies. In doing so, their products have given rise to a competitive marketplace in which digital IP assets can easily be bought and sold.
Transacting in the traditional IP marketplace is known to be complex, labor-intensive, and predominantly restricted to those with access to sophisticated legal counsel. As a result, such barriers to entry have historically led to an understanding of intellectual property as a relatively alternative asset placed in a deeply low volume and inefficient market. In order to expand transaction volume, one of the first necessary steps is to increase accessibility for new non-lawyer entrants into the market, such as university partners, financial and accounting departments of enterprises, and financial analysts. Building with this in mind, IPwe began its journey by supporting such organizations to build capacity around understanding asset management in intellectual property.
For instance, IPwe helps universities in the process of technology transfer and innovation, and the financial departments of different enterprises to conduct budgeting. The company's IP database also lends great help to financial analysts to estimate intangible assets on balance sheets, giving them access to data points to determine a company's valuation.
"We want patents to transact more. Because most of us come from law firms, we think this process is very inefficient in the IP space. This asset group is in the wrong hands. So we want to help non-lawyers understand this and make it more transactable," said Jonas Block, the Head of Product Development at IPwe.
To exemplify some existing challenges in IP asset management, Block revealed that one of the biggest challenges lies in the unavailability of patent data due to the lack of disclosure by the patent offices around the world. As IPwe achieved a large degree of harmonization on the legal side from the global patent markets, the company has well-rounded legislative procedures for IP transactions while ensuring a high level of production for customers.
A Behind-the-Scenes Look at Enabling Technologies
Another noteworthy milestone is IPwe's integration of AI and blockchain technologies. In April of 2020, IPwe acquired ClearAccessIP to consolidate the AI and machine learning technology applicable to the patent market.
Originally founded in 2013, ClearAccess AI is a Silicon Valley tech firm focusing on patent analytics and IP asset management. In comparison, IPwe AI specifically targets patent data and algorithms in tech mining. Block is the company representative overseeing the integration between two companies' AI technologies and expressed firm confidence in AI-driven patent management. For enterprises, they could save a considerable amount of budget by hiring lawyers to proceed with a long-term in this field.
"It is very difficult to understand a patent written in an abstract way. What AI does is that it helps us to do landscape and look at a specific portfolio and how many patents work" said Block.
Apart from AI technology, Block says that blockchain technology plays a pivotal role in facilitating the transformation of the IP space. At present, the company uses blockchain technology to store data and build auditable records in the IP space, including trademarks, buying and selling, and other tracks. In this way, IPwe provides an immutable and future-proof record to identify whether a patent is licensed or not.
How high-tech functions in the IP space are no longer limited to geographical locations. The President of China Operations at IPwe, Henry Wang, indicated a fast trend ramping over the country that serves as a strong incentive to boost the market growth potential of IPwe in China.
"In China, the government thinks the blockchain technology should be treated as infrastructure and important technology for future development of various economic sectors. Based on the recent conferences in China, such as CPCC, the premiere of China reported that the country should invest heavily in blockchain technology," said Wang.
In light of the technology awakening in the IP space, IPwe has developed three smart pools in the digital link, metaverse, and blockchain to identify any IP-related assets.
"Specifically, in these emerging technology areas, we have a lot of players at the eye level. For companies, they contribute different patents to our pools and we can share implementation information on how enterprises can use these technologies," explained Block.
Block gave an example of the digital link smart pool as a tool to monitor the patent license and operate the whole IP execution process. To be exact, the digital link is essentially a barcode storing consumer information. What IPwe utilizes the smart pool is to assist companies to obtain a patent license and build a product in this specific field within a relatively short period of time.
"We think that the smart pools are very good ways to accelerate the time from ideas to products, with the whole stream of IP licenses that have attached to that," said Block.
Meanwhile, the smart pools are designed to reduce litigation risks by being transparent in the patent licensing process. Block indicated that IPwe clarifies to the customers that they only can give them licenses to the extent that we’re in contact with the patent while trying to get as many patents as possible into the pool so that customers can be less concerned about the litigation risks. This way is especially helpful for small enterprises to obtain licenses.
"If you are not in the smart pool, it is basically impossible to get licenses. Big companies will only grant licenses if you have enough revenue volume for them. Otherwise, they’ll simply ignore you. Then you will have litigation risk. If you grow without licenses, sometimes you will become a target," said Block.
However, there are some minor differences between the smart pools in the Western market and China. Wang explained that China has another popular term for describing a smart pool, namely an industrial patent pool. These pools are commonly built around certain industries in recent decades, including new materials and new energy, inspired by state guidelines.
"IPwe moves the traditional patent pool to a higher level," said Wang, "Eight months ago, in places like the districts of Shenzhen and Beijing, the local government launched their industrial patent pools. Most of the ideas are similar to smart pools in the U.S. and Europe, but they are built around some key industries in China."
A New Wave is Hitting: Tokenization of Intellectual Property
Non-fungible tokens (NFTs) have erupted in popularity as a way to trade in the digital space dictated by its underlying blockchain-based environment. Their non-physical existence has not stopped growing them into a multibillion-dollar industry. This new wave started to hit the world in 2013 when people came to realize a new goal of trading assets from a smart contract layer in cryptocurrency.
Nearly a decade later, NFTs have showcased explosive popularity with the adoption curve of new technologies. In 2021, IPwe partnered with IBM to release the non-fungible token (NFT) marketplace for patents and constructed three smart pollings, individually focusing on blockchain, digital link, and metaverse, to outline the cloud-based business landscape. The company aims to design a one-stop-shop to reduce the litigation risks of acquiring patent licenses in the tech markets, with a thorough service chain ranging from market analysis, patent assets, revenue streams, and more interrelated corporate resources with a high level of transparency.
With existing experience in using digital technologies to liquefy IP products, IPwe has spotted the opportunity of developing NFTs in digital assets. But this business service has only operated in the Western countries. "Our focus on NFTs is on the Western team. It is not something politically accepted in China because we do not have the legal environment to develop it," said Wang.
The use of NFTs signifies IPwe's evolution in creating new interactive ways with IP, as well as brings tremendous benefits to both large companies and small-and-medium enterprises. This platform consolidated IPwe's services in the global patent marketplace allowing patent owners to commercialize their rights and engage with other members. One of the challenges for patent NFTs is the risks for enterprises, Block explained. As a new technology, companies see this digital business asset as a potential risk. However, IPwe is inputting many efforts into making the user experience in the field the same as a corporation when consumer data privacy will be highly protected.
"Ultimately, we have many patent offices willing to work with us. They don't want to grant patents in an original way anymore and want to put random assets to NFTs because it is so much easier to maintain," said Block. He further expressed an optimistic view that China will eventually adopt NFTs as a result of technological development.
"For patents, they are unique and blockchain-recognized. What to do with these NFTs is like a vehicle. We put all the relevant information inside and contextualize it related to a certain asset," said Block, "If China wants to develop more blockchain technology, I think eventually it will go down to NFT as another different blockchain object."
Asset safety is always the number one priority for IPwe as the company constantly ensures a secure environment. Potential risks in NFTs, like stolen information or money, have alerted the company to construct a protective shield on digital assets. As an innovative solution for patent assets, one of the growing markets also grants patents with a valuation that allows companies to request loans from banks where NFTs will consistently push it in the long run.
As one of the largest economies in the world, China is a country where the exploration journey of NFTs will most likely start. Block indicated that China has a high probability of taking the lead in this space because of the country's strong execution ability in standardization. Wang also highlights the importance of China's state regulations that encourage patent commercialization in the country, with a generic term called patent operations.
"Many patent agencies in China are working on the creation side on patents and trademarks from zero to one. For us, if a company already has many patents, they do not know how to fully leverage them and they can come to us. We can dig into the valuation and commercialize these patents," said Wang, "I am really confident that patent NFTs can make a big success in the West first, then quickly into China."
IPwe is at the forefront of transforming the traditional IP asset management industry to a more digitalized and smart approach. Its historical momentum partnering with IBM to launch its patent NFTs fastly accelerates the transaction and commercialization of intellectual property by bringing new monetization opportunities for its investors and customers. Some of its iconic services, including smart pools, have engaged the global IP ecosystem with fast and effective transactions, research, and financing. With future growth potential, IPwe is expected to further expand by leveraging AI and blockchain-based technologies to distribute to the IP patent market.