Tonnerre Lombard

FFII’s coordinator for Switzerland

Big crash in the financial market in 2008 due to patents?

Some experts are expecting a major financial crash in the world due to a breakdown of three main pillars of the world financial system: consumer debts, mortgages, and patents.

According to an article by Pieter Hintjens (President of FFII), a lot of banks have given out moneys for patent portfolios based on the assumption that there is a value associated with these patents. These values however are not based on any facts but on pure marketing: something that could be done with the patent. Experts have never liked this idea, which is also the reason why we don’t have the often-called-for patent insurance yet: because insurance agencies rejected patents as uninsurable.

Nevertheless, banks tended and still tend to give out their money freely to companies and other entities that have nothing else to offer as collateral than a patent portfolio. However, starting from January 1st, 2008, banks have to report their risks imposed by intangibles due to the new Basel II regulations which come into force. At this point, fear coming up is to be expected, and the crisis of the financial market, which is already fueled by the burst of the housing bubble, is going to rise even further.