While the S&P 500 stock market index was up 6.5% for the 4Q 2015, the PIPX (public IP licensing company index) was down 11%.
2015 results were worse with the PIPX down 24.4% vs. the S&P 500, which declined 0.7%. The poor performance is attributed to the weakening of patents and patent values, and the increase in uncertainty, as a result of the American Invents Act (AIA) and several major court cases, including Alice v. CLS Bank.
The PIPX is a capitalization-weighted, price-return measure of the change in value of this segment of publicly traded companies. The performance of more highly valued companies, such as InterDigital (IDCC), Universal Display (OLED), has a more significant impact on the overall index.
Many of those who follow public IP licensing companies (PIPCOs) do so in conjunction with the IP CloseUp 30®, a real-time index of individual company performance in this sector, which also provides up-to-the minute news updates.
The PIPX index, created by Dr. Kevin Klein, former Director of IP Licensing at Freescale Semiconductor, is designed to provide a measure of the market value, and hence a reading of the relative health of the publicly traded intellectual property licensing sector. The index consists of 13 companies with a primary focus of licensing and enforcement of patent intellectual property.
In addition to a focus on intellectual property, the companies must be publicly traded and have a market capitalization greater than $100M. Since being added to the index the market caps of many of the companies have shrunk below $100M. The index was initiated with a value of 100 on July 1, 2011.
For the full PIPX Intellectual Property Sector Index Q4 2015 update, go here.
Image source: PIPX Index