Patent Buckets: Questions and Answers

A plain-language guide to how patent funding works on Liana Banyan.

Q1: What is a Patent Bucket?

A Patent Bucket is a group of patents that share a single economic pool. When any patent in the bucket earns license revenue, 10% of that revenue flows into the bucket and is shared by everyone who funded that bucket (via Credits or Marks).

You’re not betting on just one patent. You’re buying a share in a curated group.

Q2: How is this different from the Global Sponsor Pool?

The Global Sponsor Pool is portfolio-wide:

• It gets 10% of license revenue from every patent in the existing portfolio.
• If you buy into it, you get a very small slice of everything.

Patent Buckets are more focused:

• Each bucket holds a subset of patents.
• If you fund a bucket, you get a bigger slice of that bucket’s patents, but nothing from others.

Think: Global Sponsors = index fund. Patent Buckets = themed funds.

Q3: What if my bucket underperforms?

We don’t lock you into one static bucket forever.

At regular snapshots, we:

1. Measure how much license revenue each patent has generated.
2. Look at per-stake performance for each bucket.
3. Regroup patents into new buckets so that, as much as possible, each bucket’s per-stake returns stay in the same ballpark.

If a patent in your bucket is lagging badly and another is racing ahead, the next snapshot may see:

• The fast patent grouped with slower ones.
• Your bucket’s composition changing to rebalance performance.

Our goal isn’t to make every bucket identical, but to keep one unit of stake in any bucket roughly comparable in expected return over time.

Q4: How often do you rebalance buckets?

We use snapshots instead of constant churn.

At each snapshot (for example, once a year), we:

1. Compute performance.
2. Recompute bucket groupings.
3. Publish the new buckets and reasoning in a public log.

We may adjust the interval:

• Shorter intervals are more responsive but noisier.
• Longer intervals are more stable but slower to correct.

If we discover that “quarterly for high-activity buckets, yearly for others” works best, we’ll document that and treat it as a rule, not a surprise.

Q5: Can buckets change in number?

Yes.

The number of buckets is not fixed. At each snapshot we can:

• Merge buckets if they’re too small or too similar.
• Split buckets if they contain patents with wildly different performance.
• Adjust the number of buckets to achieve more even per-stake outcomes.

Buckets are a tool, not a sacred number.

Q6: What happens if a single patent explodes in value?

If one patent in your bucket suddenly takes off, two things happen:

1. The bucket’s next distribution is higher, so you benefit.
2. At the next snapshot, that patent and others may be regrouped so that:
   • Buckets are rebalanced.
   • Per-stake returns don’t stay permanently skewed.

We also apply a $10M per-stake cap:

• Once a particular stake has earned $10M in payouts, it stops earning and its slot is reopened for new participants.

This prevents one early buyer from capturing every future dollar.

Q7: How does the $10M cap work?

Every external capital stake — whether in the Global Sponsor Pool or in a Patent Bucket — can earn up to $10,000,000 in cumulative payouts over its lifetime.

When a stake hits $10M:

1. That stake is retired from further payouts.
2. The economic capacity it occupied is made available again at the current fair value, so new sponsors can step in.

We also split stakes when they become very valuable, so ticket sizes don’t drift out of reach.

Example:

• You buy a stake for $1,000.
• Years later, its fair value is $20,000.
• We split it into 20 smaller stakes worth about $1,000 each.
• You own all 20 initially, and can keep or sell them as you like, up to the $10M per-stake cap.

Q8: Does this cap apply to my work (Joules, wages)?

No.

The $10M cap and Patent Bucket mechanics apply only to capital positions:

• Global Sponsor units.
• Cash-based Patent Bucket stakes (Marks).

Labor-based contributions — your work, your Joules, your role in the cooperative — are compensated through wages, patronage, and governance, not through the capped capital pools.

Q9: How does the Founder’s share fit into this?

The Founder keeps 20% of the patent economics for the existing portfolio — the same kind of share any creator on Liana Banyan can choose under our Three-Tier IP Control Framework.

Key points:

• The Founder’s 20% is not enough to change the rules alone; 60% belongs to the Platform.
• For new patents, the Founder chooses Tier A, B, or C just like any other creator.
• If a new patent is derivative of internal LB IP and is used on the platform, it must follow LB’s economic rules; any outside licensing can happen under separate, clearly separated contracts.

Q10: I don’t want to think about buckets. Can I still help?

Yes.

If you don’t want to choose buckets:

• You can support the platform via the Global Sponsor Pool and get a tiny slice of everything.
• You can also just be a member, build and run your own business on the platform, and let others handle the IP underwriting.

Buckets are for people who want to aim capital at specific kinds of IP. They’re optional.

The Big Picture: 60/20/20

For every patent license in the existing portfolio:

That 20% External IP Pool is split:

• 10% → Global Sponsor Pool
• 10% → Patent Buckets

Three-Tier IP Control (For New Patents)

When creators bring new IP to the platform, they choose their control level:

More control = less money (smaller pie, all yours).
Less control = more money (bigger pie, shared).

See Three-Tier IP Control Framework for full details.

Further Reading

• Full Academic Paper: Patent Sponsorship Model — The complete technical explanation
• Patent Economics One-Pager — Investor summary
• I Built an Aircraft Carrier to Launch My Plane — Founder’s perspective
• Three-Tier IP Control Framework — Control vs. Payoff choices

Questions? Contact us at Support@LianaBanyan.org