IP Exchanges

December 1, 2000

Some of the big name corporations that have guarded their trade secrets with their lives are now letting down some of the barriers and joining forces with their competitors on an IP exchange. One of the new businesses in the dot-com world is establishing intellectual property (IP) exchanges where companies can buy and sell secrets, trademarks, patents, etc. with other members of the exchange group. The benefit is that companies that have not been making money from their patents can gain a royalty fee. This new supplemental path to profit can effectively decrease the costs of research and development because competitors can purchase their competitors’ research.

There are several of these exchange groups that are evolving, and although no one has announced a great profit from the exchanges yet, the potential exists.

In order to join an exchange a company typically pays a $10,000 membership fee annually that allows the company to post as much or as little as is desired in a year. The exchanges also make profits by way of a finder’s fee for any royalties that are made.