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The routine securitisation of IP assets could come a step closer today, June 11, when Aistemos, which has designed tools to aggregate, analyse and visualise the value and risk associated with patent portfolios, launches the beta version of its Cipher IP risk and valuation tool.
To date, there have been several issues of bonds backed by intangible assets such as IP, including the issue in 1997 of securities backed by the current and future revenues of the 25 albums that singer David Bowie recorded before 1990. However, they still remain rare.
In a report commissioned by the UK Intellectual Property Office (IPO) last year, IP was described as an “under-appreciated asset class”. The report published a series of recommendations designed to enable small and medium-sized businesses to use their assets to secure the finance they need for company growth.
“Every time [banks] try to rush into this they get it wrong. The first step is good-quality information,” Aistemos founder and chief executive Nigel Swycher told WIPR ahead of the launch. He is hoping that by September this year the company will have all the data needed to make Cipher a viable commercial product.
However, he accepts that there could be stiff competition. “If others copy me then I know I’m right. The market opportunity is massive,” he said.
Since Aistemos was founded in October last year, Swycher has been working with a pilot group of companies, banks, lawyers, patent agents, insurers and consultants to develop its product portfolio, and a prototype of Cipher was released earlier this year.
The IPO has said that in 2014/15 it will focus on improving the ability of IP-rich businesses to secure access to growth finance by building an understanding of IP in the business and financial services communities. To do this, it will enable a more productive dialogue between businesses and lenders, and build greater confidence in the value of IP assets as collateral.
A similar problem was identified by the European Commission in the final report of its Expert Group on Intellectual Property Valuation, published in November 2013, which concluded that as IP plays an increasingly important role in corporate strategy, the accurate valuation of IP remains a major obstacle to its emergence as a tradable asset class.
Swycher is hoping that Cipher will be a catalyst in the process of solving these problems, which will also be the subject of an Oxfirst webinar next week in which Professor Stefano Zambon of Italy’s University of Ferrara will discuss corporate reporting and valuation issues in IP and intangible capital.
“There is a universal consensus that intangibles are important, if not crucial, for competitiveness and growth, but at the same time we do not have shared and commonly accepted criteria for managing and reporting on these resources, for properly and systematically informing shareholders and other stakeholders on them, for putting a value thereon,” Oxfirst said.
Aistemos; Cipher; securitisation; patents