There are two types of IP Funds. One kind is the “Trading Fund”, which acquires patents that then are sold in a different industrial sector after searching for the right counterparty. The newest fund in the market is the so called “Incubating Fund”, which acquires patented technologies, invests in incubation and commercialises them at a later stage.

The inventor is very much attracted by incubating funds because the inventor has an option to commercialise the IP, the patent and the know-how. The industry partner is also very drawn to the incubating model since it allows for early access to research and development, processes with limited risks and low investments. Furthermore, the industry partner has the option to license or buy a matured and incubated technology consisting of a professional patent portfolio and the know-how of the inventor. The investor finds the incubating model appealing because one can invest in a preselected technology portfolio. In comparison to alternative VCs, investments are made in the core of the technology, in the patent and the inventor’s know-how. The investment is isolated by the management issues typical of start ups. Moreover, the combined probability of success is higher than in start up models. In today’s economy it is also important that there are no correlations with the capital market.

For example, IP incubating is used in the field of direct oxidation of olefins or in the area of renewable energies such as solar collectors.

One example is the mentioned oxidation of olefins. The invention describes a new continuous process for the production of epoxides via direct oxidation of olefins with ozone and nitrogen dioxide in a flow reactor. The reaction is a homogeneous gas-phase process that allows a cost effective production of epoxides from olefins without any catalysts required.

With the new invention, the direct oxidation of many olefins is possible and could even be implemented in a multifunctional flow reactor. The addition of a catalyst is not necessary. Beside the epoxidation of propene to propylene oxide, a number of important olefins could be converted to the corresponding epoxides. Some examples are: ethene, butadiene, styrene, allyl acetate, cyclohexene, methyl methacrylat.

This process allows very high conversion rates and high selectivities; therefore, ozone, nitrogen dioxide (or nitrogen monoxide) and a carrier gas are premixed and passed into a flow reactor with the preheated olefin. With stoichiometric amounts of O3 and NO2, practically no ozonolysis of the olefin can be observed. The sojourn times between 0.1 and 3 ms minimise further decomposition processes of the starting material and the epoxides.

The IP incubation for this innovation includes new patent applications, the conducting of market studies and the co-operation with an engineering office regarding the identification of the process costs. Often the inventor with this special expertise is also included.

For instance, the well-known German bank “Deutsche Bank” offers these funds with an incubating period of 24 to 36 months. By now, three patent value funds have been successfully placed. Having in mind that the first fund started January 1st 2007, it is obvious that the commercialisation phase could not be reached as of yet. Nevertheless, the industrial feedback is very positive and the first licensing agreements are signed.

One trend which is seen in the market is the so called “Open Innovation”. This is a new attitude to innovation, widening the horizon of research and development to include innovation originating outside the firm’s boundary. This enables to widen the companies’ research and development base and makes it possible to bring more innovation to the market. The “Incubating Funds” are instruments combining these benefits and eliminating the risk and the exposure typical of “Open Innovation” collaborations. After the era of “Open Source” also proprietary technologies can be now subject to collaborations, enabling the companies to profit from a new attitude towards research and development.