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Sharing the Corporate Crown Jewels
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By David Kline
Spring 2003
Reprint 44312
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Volume 44, Number 3, pages 89-93, 5 pages
Primary Topic: Technology and Innovation
Secondary Topic: Corporate Strategy
SummaryIntellectual property assets now account for 50% to 70% of the market value of all public companies, and corporate America is intensifying efforts to maximize the return on those assets. That explains why a small but growing number of Fortune 500 enterprises are moving away from a strict reliance on the "exclusivity value" of their patents and other intellectual property -- that is, their power to exclude or hinder competitors -- and are instead seeking to tap the often enormous financial and strategic value of their core technology assets by licensing them to other companies, including competitors. The practitioners of this strategic licensing, as it is called, are betting that any loss of market exclusivity that may result from making available their "crown jewel" technologies will be more than offset by the financial and strategic benefits gained. For this article, the author interviewed some of the pioneer practitioners of this emerging approach and got them to explain the nature and degree of the benefits their companies are now reaping. Although patent rights should always remain an important weapon in a company's competitive arsenal, strategic -- licensing initiatives are encouraging managers to rethink what it means to create and sustain competitive advantage in business. |
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