First European IP merchant banking

On February 1, 2007 Europe got its first company that will primarily focus on acquisition (and divestiture, for that matter) of intellectual property (mostly patents). IP is a new and valuable asset class. IP merchant services (also “IP merchant banking”) are widely offered for all kind of asset classes, except, intellectual property. Similar to the more widely know asset classes as real estate, precious metals, currencies and stocks, there are other assets one can trade, like permits to emit carbon dioxide and other greenhouse gasses. There are markets for aircraft leases and to buy and sell energy. Yet the buying and selling of intellectual assets, like patents, R&D outputs and knowledge in general often happens mostly outside the public eye. There is no “market place”, at least not a visible or physical one for intellectaual assets. Recently, Ocean Tomo, a Chicago based, US company started patent auctions (see our earlier posts) soon to be followed by the first Europen patent auction by a german company, IPA, to be held in Munich (see upcoming IP events on the right side of this blog) .

The new IPEG company will primarily focus on assisting companies to acquire (or divest) intellectual assets like patents. Several trends, like shortening of time-to-marketand price erosion (mainly in the consumer electronics industry), have caused R&D managers to more closely look into their intellectual property portfolios to see how investment in patents can be organized in such a way that it contributes to the financing of R&D investments, to contribute to P&L, and to provide leverage in cross licensing deals.