patent owners to license their technology in a non-discriminatory way to a variety of interested parties. The pricing mechanisms of ULR contracts are complex and described by Malackowski 2010. The contracts provide potential buyers with a host of important purchasing information relating to the technology offered, the initial target price, and the quantity of contract units offered. Buyers of ULRs must report consumption behavior to IPXI, which acts as the central monitoring and enforcement agency for the marketplace. The administrative responsibilities of IPXI, and the exchange platform facilitating the sale of patent rights commoditized through the ULR contract, reduce inefficiencies in bilateral technology transfer resulting from time, financial costs, redundancy problems and uncertainty of outcomes. ULRs may become an important liquidity alternative to normal equity and thus aid the monetization of patent rights.

Firms in the developing world are in a strong position to use such an exchange platform to monetize their patent portfolios. The exchange permits them to interact with potential licensees that they may never have encountered within their own operating markets. This allows them to efficiently monetize their patents while the independent arbitration of the exchange by IPXI means firms benefit from reduced legal costs, avoid forced cross-licensing, outsourced marketing, auditing and enforcement capacities and regular audits on licensee behavior. Innovating firms in the developing world can rely on the expertise of IPXI and its affiliates and focus their energies on innovation. This distribution of labor improves patent monetization and expands the market for new technologies. While the success of IPXI’s exchange platform cannot be assessed yet because it is still in the process of being established, various exchange models are being introduced all over the world. The experience of other exchanges should serve as a learning experience for these initiatives. While online portals may be currently headquartered in developed economies, there is nothing stopping actors in the developing world from leveraging these digital platforms to their own benefit. The recent founding of the Shanghai Silicon IP Exchange (SSIPEX) in China and the TAEUS patent book project – albeit slightly different from IPXI - suggest that this model is gaining popularity and could be a valuable means for patent owners to monetize their rights through a secondary market.

SSIPEX offers a range of IP consulting services and analytics software but its main offering is to act as a center for the transfer of IP related to semiconductors. It serves as a distribution channel for semiconductor technology owners and a demonstration center for local firms in order to help them assess which, if any, technology is suitable for their next product (Chesbrough 2011). It works with owners of semiconductor technologies in order to aggregate databases of manufacturing design tools, reference designs and other information. Foreign companies own 70% of the IP made available through SSIPEX and domestic firms own the remaining 30% (Chesbrough 2011). Chinese companies are invited to assess the technology and SSIPEX brokers a license agreement if the Chinese firm wishes to integrate the technologies into new products. Crucially, SSIPEX is open to all members and does not discriminate according to which foundry is eventually used in the manufacturing process. Revenue comes from membership fees charged for access to the IP databases, fees charged for displaying IP on the exchange, and fees for transaction brokerage between members and IP owners. A laboratory was established in 2006 inside SSIPEX to manufacture prototypes based on design brought by members. Functioning as a type of innovation black box, it prevents members from seeing exactly how the output was manufactured and it prevents them from reverse-engineering it. This enables prospective buyers to get more information relating to the IP while still protecting owners’ rights (Chesbrough 2011).

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