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The Emergence of IP Finance: A Bright Future Lies Ahead

By Marc Lucier and Michael Milani
June 28, 2005

A recent search of Amazon.com generated more than 2200 publications related to intellectual property. The publications covered a broad array of subjects including law, valuation, licensing, finance, management, and globalization. While this finding is illustrative of an expanding interest in intellectual property, the area of IP finance in particular is rapidly evolving and has the potential for significant growth.

There are several reasons to be optimistic about the future of IP finance including an increasing appreciation for the value attributable to IP, the recognition of IP as its own asset class, enhanced access to better information, and a more receptive finance community. In spite of these positive trends, the number and size of IP finance deals has been limited due to the unique nature of IP and the challenges associated with realizing its value. Recently, however, several new IP-focused initiatives and transactions provide evidence of an evolving marketplace that is adapting to overcome the challenges that have historically faced IP-based finance transactions.

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