Article by Forbes: Rachel Wolfson
The world’s first patent blockchain network, IPwe, announced today that they have successfully tracked five thousand patents using a combination of artificial intelligence (AI) and IBM’s Blockchain Platform for Multicloud.
Patents, the license to monetize an idea, are becoming increasingly bought, sold and traded. Today, there are 20 million active patents from 200 national patent offices, yet there is no central registry to easily track ownership. As a result, the patent market has become increasingly complex as paperwork intended to track patent owners and determine value continues to build.
According to IPwe, it’s estimated that just two percent of patents are ever transacted. By eliminating friction from these transactions, the company aims to unlock the value of the remaining 98 percent, providing instant liquidity to innovators and entrepreneurs, ultimately creating a new asset class.
By leveraging AI and IBM’s blockchain platform for multicloud, IPwe has built an automated and transparent Global Patent Registry (GPR), intended to help organizations gain liquidity from patents. Since December 2018, five thousand patents or assets have had their ownership verified on IPwe’s GPR, a platform consisting of over $50 million in patent sale or licensing programs.
IPwe’s first patent transaction was an international sale of more than 100 patent assets, selling for over $3 million. By using blockchain, the transaction time was cut by nearly 70 percent and costs were greatly reduced.
IBM is the largest originator of patents in the technology world. We understand that patents only come into effect when someone wants to license and use them. When we discovered IPwe at our Columbia accelerator program, both of us understood that blockchain technology could help solve many of the challenges facing today’s global patent market,” Saket Sinha, global vice president and blockchain leader for financial services at IBM, told me.
In order to help companies manage their IP as strategic and financial assets, IPwe recognized early on that three key elements were required. First, market transparency and automation was needed to determine if a patent actually exists and what its valuation was. Access to a global network of technology was also necessary for connecting parties together to drive innovation and create a higher rate of global transactions. Finally, a new marketplace was needed to better leverage the value of patents as an asset class.
To meet these requirements, IPwe began exploring how AI and blockchain could be applied simultaneously to create an automated marketplace where companies, patent owners, law firms, service providers and global patent offices could connect and transact across a single, unified platform.
By leveraging blockchain and artificial intelligence, IPwe has created a unique marketplace that allows buyers and sellers to trade complex assets. Rather than having humans go through and read thousands of patents, IPwe uses AI algorithms to analyze patents and create a narrative that people can easily understand. The AI has been deployed in the IBM blockchain platform for multicloud, which helps with the buying and selling of the patents,” explains Sinha.
Ultimately, the application of AI removes the barriers to understanding the critical aspects of information found in patents. AI allows anyone to have a basic level of understanding of what a patent is about and its key attributes. For instance, executives can gain high-level ratings and profiles that can inform better decisions. For internal IP professionals, this improves their efficiency and permits them to focus on high value issues.
Once decisions are made, IBM’s blockchain technology facilitates substantial reductions in cost and unlocks commercialization and financial opportunities, without requiring additional corporate resources.
“A common industry problem is when no one knows who owns a patent. We create the registry, we verify using blockchain and then it becomes a tradable asset. However, we don’t manage the patent. Once clients go through the process of acquiring a patent, IPwe facilitates records and uses Smart Contracts to enforce agreements,” Dan Bork, CTO of IPwe, stated in a company blog post.
While IPwe’s global patent registry has already proven to be successful, Sinha from IBM points out that a network similar to what IPwe has created can extend across a number of industries where complex assets can be traded.
“The intent of solutions like the one demonstrated by IPwe is to drive global adoption. I feel like we are planting a seed that can be nurtured to grow into something much larger in the future,” notes Sinha.