PatentBooks Payment Distribution
Assignment of patents to Tier 1 or Tier 2 will be made based on the quantitative scoring via TAEUSworks™. TAEUSworks™ allows PatentBooks to replicate the stratification of patent value. It is widely acknowledged that only a very small percentage (<2%) of patents advance technology in a truly significant manner and that 80% of the value in a patent portfolio is derived from 20% of the patents.
In PatentBooks, the top 2% of patents will be assigned to Tier 1, the next 13% of patents will be assigned to Tier 2, and the remainder 85% will be assigned to Tier 3. There is no charge to the Publisher to list of patents relevant to the product category in the PatentBook. All non-evaluated, published patents will be assigned to Tier 3. Because the distribution of revenue in PatentBooks is heavily weighted towards the highest valued patents, Publishers are automatically motivated to evaluate their best patents to Tier 1 or Tier 2. To do so, the Publisher self-evaluates each of its patents based on the TAEUSworks™ criteria and submits a list of potential Tier 1 or Tier 2 patents to validate the initial evaluation. The Publisher may select a Patent Evaluator, provided that the Evaluator knows TAEUSworks™.
In the event that the initial TAEUSworks™ score is not validated, an arbitration process between the parties is available. The PatentBooks Administrator establishes a single royalty rate to license all patents in a PatentBook, solicits PatentBook subscriptions, collects Subscriber royalty payments, and distributes these payments according to the agreements with Publishers in each PatentBook.
Payments distributed to Publishers are based on the quality and the quantity of the patents they have listed. Of the total payments distributed to Publishers, all patents in Tier 1 share 50% of the distributed amount, Tier 2 shares 35% while Tier 3 shares 15%.
Assume a PatentBook that contains 1000 patents (this would mean 2% or 20 patents in Tier 1, 130 in Tier 2 and 850 in Tier 3). Assume that the total distribution to Publishers in a quarter is $10 million. Consider a Publisher with just three patents, one in each of the three tiers.
|Tier 1||($10M)*(50%)*(1/20) =||$250,000|
|Tier 2||($10M)*(35%)*(1/130) =||$26,923|
|Tier 3||($10M)*(15%)*(1/850) =||$1,765|
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