iPEL, Inc., was formed in 2017 by patent monetizer, Brian Yates, and patent litigator, Rasheed McWilliams, to establish a new paradigm for patent licensing -- the Ethical Non-Practicing Entity (“Ethical NPE™”).
The combined licensing and litigation experience of Mr. Yates and Mr. McWilliams earned the trust of investors, allowing iPEL to raise $200 million in capital to date. Within its first year, iPEL acquired more than 1,000 distinct patent families, covering many of today’s most innovative products and services in key markets such as the United States and the People’s Republic of China.
iPEL plays a positive role in the innovation economy. In furtherance of its Ethical NPE™ principles, iPEL is the first and only NPE to offer completely Free Licensing for Small Businesses and Startups, and truly Haggle-Free Licensing for Larger Businesses.
Brian Yates is the Chief Executive Officer of iPEL, Inc. Prior to iPEL, Mr. Yates served as the President of Prognosis IP, where he successfully completed patent licensing agreements with nearly 1,000 companies across most major industries.
Before Prognosis IP, Mr. Yates spent the first decade of his legal career with prestigious law firms, where he represented technology companies as a patent prosecutor and litigator. Mr. Yates obtained his degree in Chemistry from Whittier College and his JD from Loyola Law School, where he graduated with honors and received numerous awards, including the American Jurisprudence awards for obtaining the highest grades in Constitutional Law, Advanced Legal Writing, Appellate Advocacy, and Trial Advocacy.
Mr. Yates has once again been included in the IAM Strategy 300 - The World's Leading IP Strategists, which identifies the leading patent professionals worldwide.
Rasheed McWilliams is the President of iPEL, Inc. Prior to iPEL, Mr. McWilliams served as the head of the Litigation Practice Group at Cotman IP Law Group in Pasadena, CA, where he tried many successful patent, trademark, and copyright cases in federal district courts across the United States. During his time at Cotman IP, Mr. McWilliams successfully resolved over two hundred patent infringement cases allowing his clients to effectively monetize their patent assets.
Mr. McWilliams’ passion for science led to him majoring in Chemistry at Morehouse College in Atlanta, Georgia, where he obtained a Bachelor of Science, magna cum laude with Department High Honors in 1999. Mr. McWilliams graduated from New York University School of Law in 2003, and spent his entire legal career working as a business, entertainment, and intellectual property transactions and trial attorney with some of the most prestigious intellectual property firms in the United States. During his legal career, Mr. McWilliams specialized in combining legal knowledge with business insight to tailor optimal solutions to the business and legal needs of his clients.
Xiyan Zhang is the Deputy General Counsel of iPEL, Inc. Prior to iPEL, Mr. Zhang served as a Partner at Stratum Law LLC, where he represented clients in patent prosecution, patent litigation, patent licensing, and technology-related commercial transactions.
Mr. Zhang is a native of mainland China. Being bilingual and having a deep understanding of U.S. and Chinese patent law has allowed Mr. Zhang to advise multinational technology companies on how to most effectively protect and leverage their intellectual property rights in both countries. As an entrepreneur and business owner in China, Mr. Zhang learned the nuances of Chinese business culture and the political environment, which allows him to more effectively pursue business goals in cross-border trade, particularly through the exercise of patent rights.
Mr. Zhang obtained a degree in Engineering from Georgia Institute of Technology and graduated with honors from University of Minnesota Law School. He is admitted to practice before the United States Patent and Trademark Office and is licensed to practice law in New York.
iPEL established the Ethical NPE™ paradigm to define business practices undertaken by an NPE working in good faith with potential licensees to achieve fair and reasonable outcomes for all parties in the innovation ecosystem. To be clear, being an Ethical NPE™ does not suggest that other NPEs (past or current) are unethical.
NPEs have unfairly and unjustly been vilified in the past, which we believe requires the industry to seize the moment and define what it means to be ethical, in order to distinguish from the few bad actors that have given the majority of the industry a bad name.
iPEL believes that any NPE that agrees to abide by the following business practices will have the right to call itself an Ethical NPE™:
1. An Ethical NPE™ rewards those operating companies that proactively seek a patent license from the Ethical NPE™.
• If an operating company approaches an Ethical NPE™ about obtaining a license, then the Ethical NPE™ should facilitate an amicable discussion by being open and transparent about its patent portfolio after entry of a non-disclosure agreement.
• The Ethical NPE™ should offer the operating company a license under terms that are more favorable than those it would seek if the Ethical NPE™ was forced to enforce its patents against that company through litigation.
• The Ethical NPE™ provides operating companies with clear economic incentives to avoid the risks and uncertainties resulting from any NPE initiated litigation.
2. An Ethical NPE™ only initiates litigation against operating companies that are provided an opportunity to purchase a pre-litigation patent license.
• Before initiating litigation to enforce its patents, an Ethical NPE™ should make operating companies aware that the Ethical NPE™ exists and invite an amicable dialog to explore licensing.
• Operating companies should be invited to execute an NDA, in order to learn all of the patents owned by the Ethical NPE™ and to assess the value of purchasing a license.
3. If an operating company rejects an Ethical NPE™’s offer to: (1) engage in an amicable discussion, where the operating company can assess the relevance and value of the Ethical NPE™’s patents, and (2) purchase a pre-litigation license on more favorable terms than would be available during litigation, then the Ethical NPE™ has acted according to principle, and should not be criticized for being forced to assert its patents through litigation.
Initial License Offering
In furtherance of its Ethical NPE™ business practices, iPEL is making an “Initial License Offering,” which is an innovative patent licensing program that will only be available through the end of 2018.
The Initial License Offering provides all companies an opportunity to secure a license to iPEL’s entire worldwide patent portfolio, which currently includes more than 1,000 distinct patent families (and is rapidly growing), under extremely favorable terms.
The word “Initial,” in iPEL’s Initial License Offering, conveys the fact that this is iPEL’s first offering to the marketplace, and that the offering is time sensitive - - because licenses under this program must be fully executed by December 31, 2018.
iPEL’s Initial License Offering includes two categories of licensing programs:
- Free Licenses for Small Businesses and Startups
- Paid Licenses for Larger Businesses
Both the “free” and “paid” licenses are unprecedented, and the result of iPEL’s desire to make patent licensing an efficient and friendly process.
The Free Licenses are truly free, with no strings attached.
The Paid Licenses are haggle-free, no-fault licenses, where all companies are treated equally and can easily calculate their price.
Free Licensing for Small Businesses and Startups
iPEL supports and furthers the innovation economy. We believe that startups and small businesses, who most regularly create paradigm-shifting innovation, should start with an open portfolio of patented technologies, upon which they can build efficiently.
Although responsible companies should not infringe on the proprietary rights of others, acquiring the patent licenses necessary to implement new technologies can be cost prohibitive for startups and small businesses. This reality of the innovation ecosystem often requires these companies to design-around each component from the ground up, which makes them inefficient operators and, ultimately, likely to fail.
To some extent, our “open portfolio” concept may sound like “open source;” but, we assure you this is not an open source idea or solution. We believe in the power of proprietary ownership and property rights. We just realize that for startups and small businesses, paying for a blanket license to a large patent portfolio is not financially feasible.
iPEL has significantly expanded the scope of its Free Licensing program for small businesses and startups. The initial launch of our Free Licensing program generated significant initial interest, but also significant skepticism. Some commentators suggested that our intentions were nefarious, and that our program was “too good to be true.” People feared that iPEL was trying to find “targets” against whom we can demand a paid license after the first year. And, that we will raise our licensing rates after the first year and try to extort money from small businesses and startups.
None of those fears and suspicions are correct. iPEL is actually trying to do something positive! We truly want to help small businesses and startups. But, we now see that our initial offering lacked the level of detail and assurances that companies need, in order to feel safe approaching us.
During the process of defining more detailed terms and conditions, we decided that we want to offer the free license to more companies and provide some significant rewards to companies that decide to approach us. We hope that it is now abundantly clear that obtaining a free license from iPEL is safe and prudent for small businesses and startups.
iPEL’s free licensing program now includes the following terms:
- Through June 2019, any small business or startup with current annual revenues of less than $10 million USD (or foreign equivalent) can obtain a free ($0) one-year license to iPEL’s entire worldwide portfolio. This doubles the amount of annual revenue that a company can earn and qualify for the free license.
- The initial one-year license can be renewed for an additional one-year period, for free ($0), as long as the company has earned less than $20 million USD (or foreign equivalent) during the initial one-year license period. This allows a company to grow in size considerably during the initial free license period, and still obtain a free license for an additional one-year period.
- For a company that generates more than $20 million USD (or foreign equivalent) during the initial one-year license period, they are eligible to purchase a license under iPEL’s paid licensing program for 50% of the rates that were published at the time of entering into the free license. For small companies, entering into a free license locks-in the then published rates and provides a 50% discount on the paid licensing rates.
- For a company that renews the free license for an additional one-year period (because it earned less than $10 million during the initial one-year period), iPEL will allow the company to purchase a license, at the end of the second-year, for 50% of the rates that were published at the time of entering into the initial free license. This allows a company to receive a free license for two years and still be entitled to purchase a license for 50% of the published licensing rates that existed two years prior.
- There is no “loop-hole” for larger businesses that have subsidiaries that would qualify for our free license. Specifically, any small business or startup that is owned or controlled by a larger business that has annual revenues above $10 million USD (or foreign equivalent) is not eligible for our free license. iPEL’s license rates will be determined based on the annual revenue of the parent company.
These modifications show that small businesses and startups receive significant benefits from obtaining a free license from iPEL. By securing a free license, a company guarantees itself the right to purchase a license for 50% less than the rates that existed at that time. We fully expect that our paid licensing rates will increase over time, so the most innovative companies are able to mitigate risk at fixed costs, while enjoying considerable savings for participating in an efficient licensing process.
There is zero risk for companies to obtain iPEL's free license. Obtaining the license is not an admission of actually using/infringing any of our patents. And, a company is not “exposing” or “revealing” itself to iPEL. iPEL monitors the marketplace very closely and, therefore, if a company has any meaningful business activities and revenues, then we already know about them!
iPEL’s motivations are simple: iPEL is not a bully and does not prey on vulnerable companies that cannot afford to defend themselves. iPEL wants to be a friend of small businesses and startups, and help them prosper by using our patented technologies. Although there is no legal obligation for companies to thank us, we are hoping that companies will appreciate what we do and decide to give us a simple “thank you.”
To obtain this Free License, a company simply needs to sign iPEL’s Free Patent License Agreement, where they must attest that they meet the stated revenue restrictions. Unlike other groups that have offered “free” licenses, the iPEL license comes with absolutely no strings attached. We want companies to use our patented technologies, in order to grow their companies and someday become paying licensees.
To secure a Free License, please download and sign this Non-Disclosure Agreement (NDA), and email it to firstname.lastname@example.org. After receiving your signed NDA, we will email you the Free License Agreement. Once you email us the signed Free License Agreement, your company can use all of the technologies covered by iPEL’s valuable patent portfolio.
Haggle-Free Licensing for Larger Businesses
For larger businesses that earn more than $5 Million USD annually (or foreign equivalent), iPEL’s Initial License Offering includes Haggle-Free, No-Fault Licenses, under a predefined three-tiered pricing structure: Silver, Gold, and Platinum.
The “Haggle-Free” component of the offering reflects the fact that the pricing is predefined and transparent. It is also non-negotiable. All companies, no matter who they are, will be offered the same pricing options. This avoids the concern of one company getting a better deal than another, and greatly streamlines the process. Indeed, the time and resources needed to separately negotiate pricing with each company would drastically reduce the number of licenses that iPEL could complete before the end of 2018, and result in iPEL having to charge each company significantly more money.
The “No-Fault” aspect of the offering means that every company has the right to purchase the same set of license rights, regardless of the extent to which iPEL’s patented technologies have been used in the past and are used during the term of the license.
Through the end of 2018, iPEL is willing to sell a license to any company that contacts us to purchase a license. We are willing to reward any company that demonstrates its respect for patents and patent owners by seeking a pre-litigation license under our Haggle-Free, No-Fault program. Instead of casting blame and trying to determine the scope of infringement by each company, iPEL is setting a predefined price and letting companies decide whether buying a license makes sense.
We recognize that different companies have different risk tolerances and economic priorities. As a result, we have defined three tiers of paid licensing: Silver, Gold, and Platinum.
Price: 2017 Total Revenue * 0.005
• Ex: 2017 Revenue of $8M * 0.005 = $40,00 (Minimum Price of $50,000)
• Ex: 2017 Revenue of $100M * 0.005 = $500,000 (Price of $500,000)
• Ex: 2017 Revenue of $2B * 0.005 = $10M (Maximum Price of $8M)
Term: Life of iPEL’s existing patents and all patents acquired during the 1-year period after executing the license.
Scope: An irrevocable license to all patents currently owned by iPEL, at the time of executing the license, and a license and Covenant Not to Sue (CNS) to any patents that iPEL acquires during the 1-year period after executing the license.
Price: 50% more than Silver (2017 Total Revenue * 0.0075)
• Ex: 2017 Revenue of $8M * 0.0075 = $60,000 (Minimum Price of $75,000)
• Ex: 2017 Revenue of $100M * 0.0075 = $750,000 (Price of $750,000)
• Ex: 2017 Revenue of $2B * 0.0075 = $15M (Maximum Price of $12M)
Term: Life of iPEL’s existing patents and all patents acquired during the 5-year period after executing the license.
Scope: An irrevocable license to all patents currently owned by iPEL, at the time of executing the license, and a license and Covenant Not to Sue (CNS) to any patents that iPEL acquires during the 5-year period after executing the license.
Price: Twice the price of Gold (2017 Total Revenue * 0.015)
• Ex: 2017 Revenue of $10M * 0.015 = $150,000 (Minimum Price of $200,000)
• Ex: 2017 Revenue of $100M * 0.015 = $1.5M (Price of $1.5M)
• Ex: 2017 Revenue of $2B * 0.015 = $30M (Maximum Price of $24M)
Term: Life of iPEL’s existing patents and any patents ever acquired by iPEL, and the lifetime of the principals of iPEL.
Scope: An irrevocable license to all patents currently owned by iPEL, at the time of executing the license, and a license and CNS to any patents that iPEL ever acquires.
- Unlike Silver and Gold, the Platinum tier extends beyond iPEL and its affiliated companies, and directly covers the principals of iPEL, and any other entity in which those principals ever have at least a 20% ownership interest.
- The Platinum tier is for companies that want absolute certainty that iPEL and its principals will never assert a patent against the company during their lifetime.
We believe it is important to note that each of the three tiers grants far greater rights than any company can ever obtain through litigation. Indeed, no court has authority to grant a license to any patent that has not been asserted by the patent owner in litigation before that court. A court certainly cannot require a patent owner to grant rights to patents that the patent owner does not yet own (i.e., patents acquired in the future). Therefore, iPEL is offering rights that cannot be obtained through litigation, and which iPEL absolutely will not offer to a company if forced to rely on litigation to obtain fair compensation.
When comparing the three tiers, it is worthwhile to consider the fact that iPEL secured $100 million in initial capital in May 2017. Within one year, iPEL built a world-class patent portfolio, which includes more than 1,000 distinct patent families, covering a diverse and valuable array of technologies in the United States and China. And, we are planning to spend at least an additional $100 million USD purchasing valuable patents during the next 18 months. Therefore, it is reasonable to conclude that a license to iPEL’s future patents will be far more valuable than a license to iPEL’s current patents.
For nearly all technology companies, iPEL is confident that the pricing for its Haggle-Free, No-Fault license is a significant discount from the amount that iPEL would seek in reasonable royalty damages in litigation. If a company chooses not to purchase a Haggle-Free, No-Fault license, iPEL will plan to enforce its portfolio through litigation, where it will pursue the maximum potential recovery. And, when resolving litigation, iPEL will not offer a license to its entire portfolio (existing or future).
We are confident that forward-thinking companies will recognize the significant benefits of amicably securing a license to iPEL’s valuable and ever-growing patent portfolio, and avoid the inefficiencies and risks associated with adversarial enforcement.
Within one year, iPEL has built one of the world’s most valuable patent portfolios. Through rigorous technical and legal analysis, we have carefully selected each of the patents in our portfolio, which currently includes more than 1,000 distinct patent families.
iPEL’s worldwide patent portfolio covers diverse and widespread technologies, within established and emerging markets. Some examples of our portfolio’s relevance include: home and business electronic devices, in all categories, from the hand-held to the conference room; networking technologies, ranging from provider to in-home and every tier in between; and digital rights management technologies, in all categories, from streaming to physical products.
Although certain NPEs may own more patents, iPEL has not purchased large patent portfolios or bulk lots of patents through bankruptcy proceedings or distressed circumstances. Those types of acquisitions are typically made without any detailed analysis, and instead are focused on some arbitrary price based on the large number of patents. We do not purchase patents that way.
Our focus is always on patent quality and market relevance. iPEL’s portfolio has been hand-picked, by true experts in patent monetization and licensing. We have the legal and technical skill set to identify valuable patents, and to generate revenue through litigation and licensing. That is precisely why investors have entrusted us with $100 million in capital.
We encourage all companies that have ever been sued for patent infringement and/or are selling products and services that rely on new technologies, to contact us to obtain a list of our valuable patent portfolio. After executing a Non-Disclosure Agreement (which can be downloaded here), we will send you our list of patents, and you can decide for yourself whether a license to iPEL’s portfolio makes sense.
Sell Patents to iPEL
iPEL plans to spend at least an additional $100 million USD during the next 18 months, to acquire high quality patents with established market relevance in China and the U.S.
Although our existing relationships continue to provide us with access to great portfolios, we recognize that great opportunities might go undiscovered if we do not publicize our desire to purchase patents. As a result, iPEL will soon be launching a large-scale buying program.
Our buying program will be similar to some of the prior patent buying programs from companies such as Google and Allied Security Trust, however, unlike those programs, iPEL is planning to spend a significant amount of money to attract the highest quality patents.