Investing in Intellectual Property Rights: Beyond Patents

In a knowledge-based economy, intangible assets are becoming the most valuable parts of a business—and intellectual property (IP) is at the center of that shift. While patents receive the most attention in tech and biotech, savvy investors are now exploring a broader spectrum of IP rights, including copyrights, trademarks, and trade secrets.

This blog explores how IP rights function as investable assets, the key opportunities beyond patents, and how to evaluate their role in a diversified, forward-looking portfolio.

What Falls Under Intellectual Property Rights?

1. Patents: Protect inventions, processes, or designs

2. Copyrights: Protect creative works (books, music, films, software)

3. Trademarks: Protect brand names, logos, and slogans

4. Trade Secrets: Protect proprietary processes, formulas, or data not publicly disclosed

Each type of IP has different legal structures, economic characteristics, and investment potential.

Why Investors Are Paying Attention

1. Recurring Revenue: IP rights can produce predictable income via licensing or royalties.

2. Asset Protection: IP enhances business defensibility and enterprise value.

3. Scalability: High-margin monetization across markets and geographies

4. Non-Correlation: IP income is often independent of market cycles

5. Tax Efficiency: In some jurisdictions, IP income is taxed at favorable rates (e.g., innovation boxes)

IP Investments Beyond Patents

1. Music and Media Royalties

• Purchase rights to song catalogs, film scores, or streaming residuals

• Platforms: Hipgnosis, Royalty Exchange, SongVest

2. Brand Licensing and Franchising

• Invest in companies monetizing brand IP through strategic licensing (e.g., Disney, sports leagues, fashion brands)

• IP as a moat for consumer-facing businesses

3. Trade Secret Valuation

• Participate in or back startups where proprietary formulas, data sets, or algorithms are core assets

• Often bundled into venture capital or private equity

4. Copyright Funds

• Pooled vehicles investing in books, software, digital art, or educational content

• Offers exposure to recurring cash flows from B2B/B2C licensing

Risks and Considerations

• Valuation Complexity: IP value is hard to measure and often subjective

• Legal Enforcement: Rights must be defensible and actively enforced

• Obsolescence Risk: IP must remain relevant to retain value

• Concentration: Some assets (e.g., one hit song) may lack diversification

• Market Transparency: Private IP transactions lack standardized data

How to Evaluate an IP-Backed Investment

• Clear chain of title and ownership

• Historical royalty or licensing revenue

• Legal protections in place (registered rights, litigation history)

• Usage rights, geographic scope, and exclusivity terms

• Projected market trends tied to the IP’s relevance

Raziel enables investors to tag and track IP-linked investments across categories and structures.

With Raziel, you can:

• Benchmark royalty income against other yield strategies

• Monitor IP exposure across music, tech, brand, and media rights

• Track contract terms, renewal rates, and legal protection status

• Integrate intangible assets into broader portfolio allocations

IP as an Asset Class for the 21st Century

From software to soundtracks, brand equity to proprietary know-how, intellectual property is reshaping how we think about value creation—and value capture.