Are Patents Joining the Trending NFT Market? – Intellectual property
United States: Are Patents Joining the Trending NFT Market?
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Jack Fonss and his consulting firm, True Return Systems LLC, are auctioning U.S. Patent No. 10,025,797 (‘797) on the NFT OpenSea Marketplace. Auctions for the patent, which would be the first to auction as a non-fungible token (NFT), starts at around $ 7.5 million. An NFT is a single unit of data that can be stored and tracked on a blockchain and bought or sold, and the technology has caused a stir in the sports, music and arts industries in recent months. While NFTs are generally viewed as digital collectibles with little or no substantive rights to the underlying object, the NFT representing the ‘797 patent includes a self-executing contract that automatically grants the buyer all of the rights to the underlying object. patent rights, including the right to sue for infringement. Others are also entering the space, with startup IPWe, working with IBM, announcing plans to represent patents as NFTs and store digital records on a blockchain network. He believes that this “tokenization” of patents will allow them to be more easily sold and that the representation of patents as NFTs is an essential next step in making transactions simpler and more profitable. Proponents believe that an intellectual property-focused NFT marketplace will provide another platform for owners to market their patents to potential licensees and could be particularly attractive to companies with large patent portfolios, like IBM, who wish to license. licensed their inventions. Connecting the blockchain to patents can also create more transparency in patent transactions, which are often an opaque process, said Ian McClure, associate vice president for research, innovation and economic impact at the University of Kentucky. “Blockchain is a key component in helping IP transactions and management run more efficiently,” said McClure. Blockchain serves as a public ledger, where different users can verify information about the asset and, in effect, hold others accountable. The blockchain is also an immutable record, which means that it generally cannot be changed or changed. A blockchain-based patent data registry could provide “a participatory public information database that helps us better understand and trust the probabilities of this patent,” McClure added. This, in turn, could create “better predictability and better, or more, transactions.”
The application of NFTs to patents is not without its skeptics. Some question the value of patent representation as NFTs, noting that the technology is somewhat redundant, with the patent office already maintaining public records with the patent assignment and other information. There are also fears that a public procurement may trigger additional lawsuits from non-practicing entities (NPEs). IPWe is led by Eric Spangenberg, who has made a name for himself suing companies for technology patents, and some predict that markets could create new libraries of patent assets for NPEs. NFTs can also offer fractional ownership opportunities, where small investors buy fractional pieces of the tokens, providing another way for NPEs to raise the capital needed to enforce their patents. Other uncertainties regarding NFT patents in public markets exist, such as how public platforms will handle transaction confidentiality and royalty flows, which are often prized in patent transactions. There are also questions about whether fractional sales of NFT could risk violating securities laws, and there are concerns about anti-money laundering regulations that arise when patents are presented as NFTs on a market.
Read the full article on Bloomberg Law here.
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