By Renu Bala and Swaraj Singh Raghuvanshi
IPwe and IBM aim to Convert Corporate Patents with Next Generation NFTs Using IBM Blockchain
IPwe and IBM, two tech giants, have joined hands for monetizing patents by trading patents as non-fungible tokens (NFTs) or as digital assets. IPwe seeks to digitize patents by working hands in hands with IBM by creating an infrastructure using IBM cloud and IBM blockchain required for representing patents as NFTs on its platform. The tokenization of intellectual property (IP) will help patents be more easily sold, traded, commercialised, or otherwise monetized, as well as bring new liquidity to this asset class for investors and innovators.
What are NFTs?
NFT is a data stored or posted in a digital ledger, and that data holds certain representation in particular. For example, an NFT can represent a work of art, a music album, or numerous other types of digital files as well. NFTs are essentially tokens that are simply proof-validations of the existence, authenticity, and ownership of digital assets. When any entity purchases an NFT, it is essentially purchasing a digital record linked to that token, which can then be transferred to a digital wallet.
Erich Spangenberg, CEO of IPwe, elaborated on how he believes IP tokenization will make patents more accessible for sale, trading, commercialisation, and financing as well while bringing new liquidity to this asset class for investors and innovators. Further, Spangenberg explained on the agenda for collaboration of IPwe with IBM as “When you look at the balance sheets of corporations, a huge percentage is made up of intangible assets. We need to help to create a better understanding of what these intangible components are, and that can be done by NFTs. When we talk to finance practitioners, they visibly cringe when you mention patents. As IP professionals we need to make it easier for them to embrace IP and understand it.”
Tokenization increases transparency while making related transactions simpler and more cost-effective. While NFTs have already been used to represent digital art, sports memorabilia, and even iconic Tweets, adoption of IP-based NFTs could usher a shift in how inventors and enterprises handle intellectual property.
For the past three years, the two companies have collaborated to apply IBM’s deep expertise in blockchain and artificial intelligence to the IPwe Platform to help protect ownership information, generate patent and portfolio analytics, facilitate transactions, reporting and advancements of the next intelligent generation of patent pooling – an agreement among multiple patent holders to jointly licence their Intellectual Property.
IPwe announced its partnership with IBM on April 20, 2021 for representing patents as NFTs. IPwe also partnered with CasperLabs for creating a chain of custody (CoC) Solution by using the Casper public blockchain to store, secure, and trace patent data for verifying patent ownership. Patent NFTs are stored and shared on the IPwe Platform, running on the IBM Cloud and Blockchain services such as the Casper Network. It is anticipated that IPwe platform will soon be available for commercial use.
What impact will NFTs have on IP, and what does this mean for lawyers?
Only under NFTs so much information can be stored at one place rather than being dispersed; this is a fantastic opportunity for standardisation. Back in 2017, when blockchain technology was the most talked about, lawyers were anticipating that all the intermediaries would be put out of business but it didn’t happen. If a leap is taken towards the future, high-value service providers, particularly transaction and prosecuting lawyers, will become even more important in this system as they add their high-value services and have more work than ever. This will open up more opportunities for people who specialise in these fields, particularly attorneys.