Patent Pools Securitization Based on Convertible Tranche

Abstract

The securitization of patent pools, especially the introduction of patents from institutions of higher education and research institutes, has always been a difficult problem. It is more difficult to generate cash flow from the early stage patent pools of industrial development. The technical standards have not yet been formed, and the income of patent pools is uncertain. Therefore, cash flow is uncertain. It is necessary to study new incentive compatibility mechanism to generate revenue. The paper, drawing lessons from the design principles of REITs products and method of convertible tranche, propose the method to design patent pools funds. The securitization needs to give a full consideration to the nature of the bond and stock ownership characteristics of the patent pools. This is conducive to the realization of incentive compatibility, so as to attract government and social capital to participate in securitization.