It’s not NBA Top Shot or Beeple, but IBM makes proprietary NFTs

If there’s one way to take the fun out of the craze in non-replaceable tokens, IBM may have just found it: patents.

But that doesn’t mean that news from the tech about using the blockchain to support corporate patent NFTs isn’t a major development in the digitization of just about everything.

IPwe, an intellectual property specialist who has been working with IBM on a blockchain solution for the patent industry for years, announced Tuesday that it will represent patents as non-replaceable tokens (NFTs), or digital assets, in an agreement collaboration has been announced. with IBM.

IBM’s blockchain group is already working with corporate clients on technical endeavors such as tracking food supply chains using the blockchain. Now it will provide the infrastructure to represent valuable patents like NFTs and store the information on a blockchain network.

“Intellectual property (IP) tokenization will help make patents easier to sell, trade, commercialize or otherwise monetize and bring new liquidity to this asset class for investors and innovators,” the companies said in a joint publication.

The companies said the NFTs will be stored and shared on the IPwe platform hosted on IBM Cloud and powered by IBM Blockchain.

For IPwe, founded by Erich Spangenberg, who became known as a successful “patent troll” in the technology boom of previous decades, the NFT effort is just the last step in its multi-year goal of bringing the entire world of patents to market. blockchain.

He has cited the fact that only 2% to 5% of intellectual property in the patent market is valued and that there is likely a $ 1 trillion more chance if the patent market can find a better way to identify, authenticate the IP address and trade. even at the level of only 10% of the total existing market.

“The lack of transparency is a huge problem, whether it be about who owns or is patented, it is so complicated to do business,” said Spangenberg.

IPwe already offers the Global Patent Marketplace, a patent ecosystem to acquire and trade, buy, license, finance, sell, research and commercialize patents that it developed with IBM, where it was accepted into an early incubator program for blockchain projects, via Spangenberg tells CNBC it hasn’t gotten off the ground as it hoped, although the NFT moment may be a turning point.

IPwe is betting that corporations, governments, universities and small and medium-sized enterprises (SMEs), as well as a wider range of financial institutions, insurers, corporations and other patent stakeholders, will use and exchange tokenized patents, with a trial of the new NFT system set for the second quarter.

“Enterprise wouldn’t even look at blockchain a few years ago. … We are now in that adoption phase. … The first business asset is not a Dorsey tweet or Beeple image, but a business asset that is starting to dissolve. need, “he said. If the NFT effort is successful, IPwe will render existing global patent registration irrelevant,” thus consuming what we’ve built in less than two years, “he added.

But the underlying approach to using the blockchain and technology as a new way to embody the unique nature of a patent is the same. “A patent is unique. It was a patent token and now just an NFT,” said Spangenberg. “IP affects every business. Most successful business units operate with ROI of 10% to 15% and IP should be the same.”

Jason Kelley, general manager of global strategic partnerships at IBM Services, said the ‘digitization of everything’, which has only intensified after the pandemic and wider adoption of a new technology-centric way of life, fits perfectly into the world of patents, where verification, validation and trust are so crucial.

“If you can provide a platform that enables that in an exchange of value, that’s exciting. The symbolization of patents opens up markets … You can value different patents and trade with more competence, validity and confidence,” he said.

Kelley described the patent market as “sub-optimized”.

IBM’s own patent company has found it more difficult in recent years to monetize its war chest of IP in recent years, according to Bloomberg, although the current effort with IPwe is less about its own IP than about enabling the digitization of all IP that exists with its clients. using the blockchain and NFTs.

“We think we only have $ 180 billion left on the surface. We are a global company with customers in many industries,” he said.

Company officials declined to say whether IBM patents would be specifically made in NFTs.

Shyam Nagarajan, executive partner at IBM Blockchain Services, said that the fact that each patent can have its own way of licensing or transferring the IP makes it interesting for NFTs and is really an extension of the coding boom. of smart contracts and contracts. terms, license terms, and revenue streams. “NFTs make it possible to get liquidity that is normally on the corporate shelf or on the balance sheet,” he said.

A patent is unique by nature. It wouldn’t be granted if it wasn’t supposed to be.

“A patent is one of a kind, like a work of art, sporting highlights,” said Kelley. “What we are talking about is the uniqueness of that one trading card or that one patent.”

The factors that IBM appears to be developing in this market are the blockchain’s ability to identify the assets, assign provenance and also tokenization.

“Those things overlap, whether it’s food in a supply chain or shipping on a particular container ship going from one place to another, or as recently as vaccines,” said Kelley, noting the unique nature of a health reference. “We see uniqueness as the differentiator in this thing we call the blockchain. The NFT is just floating home what we’ve been working on for years.”

Spangenberg said it could also become an easy way to verify a title between parties, a “title assurance” that ensures the NFT is owned by the entity identified as the owner.

Don’t think of ‘trading’ as buying or selling the patent (the NFT) – it now includes a really easy way to fractionalize the ownership of patents, carry out much more standard licensing and funding – the NFT and the tokens that go with it hearing it underneath (eg used to confirm license rights) makes this much easier, “he wrote in a follow-up email to CNBC.” Truly the history of value. At some point, the entire history of the patent will rest on the NFT – not just who owns it, but who licenses it, who commercializes it, who funds it – this information will be used by researchers, analysts, companies. and others to confirm value. “

While most companies have so far shied away from holding cryptocurrencies on the balance sheet, the digital currency market comes from the central bank, and ultimately the concept applies to both physical assets and intellectual assets, and in any function where there are ‘people, processes and paperwork, ”said Kelley.

This can go beyond patents, but also property registrations and land rights and mineral rights. “A birth certificate for assets,” said Kelley. “Whether the assets a company owns are physical assets that have been active for a long time or something that they exchange in a transaction … it’s similar in the fact that you’re going to assign a value and trade those assets later. is certainly the same possession, it is unique. “