Over the years we have published a number of reports on the monetization of intangibles assets, especially patents. (See “Commercialization of University Research – Using Intangible Asset Financing”, “Intangible Assets in Capital Markets”, “Intangible Assets: Innovative Financing for Innovation”, Intangible Asset Monetization: The Promise and the Reality and Maximizing Intellectual Property and Intangible Assets: Case Studies in Intangible Asset Finance.) One of the barriers identified in those reports has been the difficulty in determining exactly who owns the asset.
A new paper Who Owns the World’s Patents? takes a fresh look at the problem. And the finding are not good:
The most basic information about this emerging asset class [patents], information as to ownership, is deeply
uncertain and inaccurate.
Various estimates from very well informed sources – including an assessment made by Yo Takagi, an Assistant Director-General at WIPO, on the basis of WIPO’s technical assistance projects, and David Kappos, former Undersecretary of Commerce for Intellectual Property and Director of the US Patent and Trademark Office – suggest that as much as 25% of the world’s patent ownership data may be inaccurate.
. . .
These inaccuracies in the global patent record have significant and far-reaching consequences. The resulting inefficiencies, elevated costs and risk uncertainties create huge cost barriers to innovation, barring meaningful entry to all but the richest, most powerful corporates, depress the market for licensing transactions and increase the risk of litigation.
To address that problem ORoPO (Open Register of Patent Ownership) is creating a open, voluntary global patent database.
As we pointed out, the inability to verify who exactly owns a patent and who has a lien against that patent are barriers to fully using patents as debt collateral. ORoPO seems to be going after the first half of the problem. It does not seem to recognize the second. But the issue of prior liens is a serious as ownership. Imaging trying to get a loan when the bank can’t tell whether someone else has first call on the collateral.
Thus, I wish ORoPO the best in setting up their system. I also hope they will extend it to not just who controls the title to the asset but to any encumbrances on that title as well. Both are needed for a functioning market.
UPDATE: one of the points I failed to mention earlier is that such a registry also serves as a guide to technical expertise. By searching patents, one can find those individuals, companies and organizations that have specific technical knowledge that can be tapped via a patent license, a consulting contract and/or a collaborative agreement. See this IAM video on the subject.