IP-Backed Securities With Smart Contracts for Targeted Investment
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Solution Overview
Problem
Investors lack the ability to target their investments specifically to intellectual property assets within large corporations, limiting valuation and incentivization of innovation.
Innovation Solution
A system and method for securitizing intellectual property assets through intellectual property-backed securities (IPBS) using a distributed networked computer system with smart contracts and a distributed ledger, enabling fractional ownership and automated revenue stream payouts based on monetization events.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If investors purchase equity in a large diversified corporation, then they gain access to a broad portfolio of assets, but they cannot target their investment to specific intellectual property assets or business segments
Solution Approach 1:
The patent segments the corporation's intellectual property assets into distinct, tradeable units. Instead of offering only broad corporate equity, the system creates securities that represent ownership in specific IP assets or business segments, allowing investors to target their investments precisely while maintaining manageable security structures through standardized tokenization.
2Reliability
If traditional equity securities are used for large corporations, then the company can raise capital, but the valuation and incentivization of specific intellectual property assets is limited
Solution Approach 1:
The patent applies local quality by enabling different valuation and incentivization mechanisms for different IP assets. Each segmented security can have its own valuation metrics, payout structures, and performance targets tailored to the specific intellectual property asset, allowing precise incentivization of innovation in particular areas rather than diluting efforts across the entire corporation.
3Adaptability or versatility
If intellectual property is securitized through traditional bonds or loans, then financing can be obtained, but the structure lacks flexibility for targeted investment in specific IP assets
Solution Approach 1:
The patent introduces dynamics into the securitization process by creating flexible, adaptable security structures that can be customized for different IP assets and investment scenarios. The system allows securities to be created, modified, and traded dynamically based on the specific characteristics of the underlying intellectual property, rather than requiring rigid traditional bond or loan structures.
Data Source
AI summary
A distributed networked computer system and methods for managing securitization of intellectual property assets wherein investors are paid from the revenue stream associated with the intellectual property as the revenues are received.