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Buying bitcoin led patent mega-millionaire to an even bigger investing idea


IPwe’s research on the ownership side of patent records shows it to be no better at being accurate. As much as 30 to 40 percent of patent ownership records are currently not identifiable or misidentified. Putting licensing and acquisition transactions into a private blockchain registry — an effort that Spangenberg said will require chief financial officers to see the value in sharing deals details and as a result may take time to be embraced — will ultimately provide all buyers and sellers in the IP market with a better infrastructure for dealmaking.

There are multiple blockchain-based efforts to manage intellectual property rights, including a surprise announcement this week from Kodak about a blockchain system for photography.

“Right now patent transactions are primarily bilateral, and that almost certainly is high cost and non-transparent,” Schankerman said. “There might be other buyers out there who haven’t been contacted. It’s not a competitive market with transparent prices.”

“Transaction history is an important signal,” Karypis said. “You have an intelligent party making a rational decision to do something.”

Once the registry is complete, IPwe will consider giving it away to governments, among others, to get economies of scale. “Someone will want it, some consortium. Our model is that as more transactions occur in the space, we will grab a piece of the transaction value. We have to take the $180 billion occurring today and get it up significantly.”

IPwe plans to launch its platform on February 1.

How long it will take, if efforts like IPwe are successful, is a forecast few experts want to make, especially with slow-moving governments reluctant to make major changes. But Spangenberg seems to be in it for the long haul.

“I am sure ’20 years’ is what ‘patent people’ say. Patent people tend to be conservative and linear in their thinking. Those are extremely valuable attributes for some applications, but not for unlocking the value of an asset class that has been poorly managed for over 100 years,” he said.

“Maybe he is getting more mellow,” said Schankerman, who has has spent a lot of time discussing his research on reforms needed in the patent system with Spangenberg. “He obviously still wants to make money and is good at it, but he wants to improve the system. I think he does care about that.”

The London School of Economics professor said true reform in the patent world won’t come from technology alone. It will also require policy changes to lower the cost of litigation. He said the most effective way to blunt trolling is to make it less costly to see patent litigation through to court so companies will not feel pressed to settle claims quickly. In addition, there needs to be a way to make it more costly for those who file weak patents to maintain them without incurring costs. “He is not pushing that yet, the front end policies, and we need to push on two fronts,” Schankerman said.

Schankerman said that Spangenberg is asking the right questions: What is happening with all of these patents, and is the patent system generating bang for its buck? IPwe and other efforts to apply technology to patents may be able to democratize the patent trade. “Right now it’s hard because we don’t have the information.”

“It’s not that I’m getting more mellow,” Spangenberg said. “My mind is expanding. This is a much bigger opportunity than being a patent troll.”

“As opposed to bitching, I wanted to do something. We can come come up with a better system. There’s a fortune in the fortress of patents, and every now and then someone jumps in and makes money. I want to be able to talk to any asset manager and say, ‘If you understand the patent asset class better, would you deploy capital?’ We can make it possible for a normal human being to understand what patents are doing.”



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