RocketCap Intellectual Property Stock Index
RocketCap IP Stock Index
Intellectual Property (IP) consists of patents, trademarks, copyrights, designs and various other forms of intellectual expression and products. IP is now being recognized as a unique investment asset class.
IP in general is an asset class that is difficult to price based on market transactions, even as it is deeply significant in generating economic value. Some forms of IP, such as patents, are extremely important economically and singularly difficult to monetize, and even more difficult to trade on a liquid basis. The great majority of firms gain value from their IP when it is embedded in their own products or services. This IP cannot be readily isolated for measurement of its value since so many other parameters combine to determine the value of the product or service (e.g., marketing and sales competence, operational excellence,…). However, for a certain narrow class of firms, there is a liquid market for their IP.
We have identified a number of publicly traded “pure play” firms. In this special case of public firms with businesses consisting almost entirely of out-licensing their own IP, a transaction value is available from market prices. We use these firms to comprise the RocketCap IP Stock Index (RIPSI). To our knowledge, no one has constructed a stock market index based on pure play IP companies.