Announcing the RocketCap Intellectual Property Stock Index

Posted on June 17th, 2011 by admin in Intellectual Property, Market Indexes, Technology

Up to now, people have had severe difficulty placing a monetary value on any particular form of IP. The fundamental reason is that there is no liquid market for IP transactions, in spite of numerous attempts at making such markets. However, it turns out that while we cannot individually track specific transactions for IP (e.g., selling a patent or licensing a particular chip design), we actually can track the real time value of certain IP portfolios in their entirety.

Here’s the key insight: there is a small number of publicly traded firms that get almost all their sales from directly exploiting IP designs or patents. This is their business model. Even though any particular form of IP the firm licenses to a specific customer has a non-observable (private) value, the whole firm has a public value. Thus, the market value of the firm is the same as the value of its IP in toto.

This observation has enabled us to create a stock market index for measuring the value of a certain important category of intellectual property. We call the index the RocketCap Intellectual Property Stock Index (RIPSI). We have added a new tab to the navigation bar above to focus on our two stock market indexes. Check this out to begin exploring our new index, or see the changes in our older index for Smart Grid technology players (RSGSI).

The RIPSI tracks the IP eco-system for design engineering companies in the architectural, electronics, industrial, and mechanical industries.

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