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October 11, 2004

in-licensing drives innovation

from CNet news.com:

An increasing number of companies in sectors ranging from consumer products to high technology are discovering what companies in life sciences already know: The licensing of intellectual property can generate healthy revenue and bolster profits.

A recent cross-industry international benchmarking survey shows that many companies have set ambitious goals both for selling their best ideas and for buying the ideas of others to use in their own research and development.

Unfortunately, though, even companies with the most modest goals may have little chance of reaching them. Fully 57 percent of the survey respondents say that fewer than one-quarter of their recent intellectual-property deals met or exceeded initial strategic and financial expectations. In some cases, the deficit is the result of unrealistic targets: Executives imagine that their organizations can emulate intellectual-property portfolio-management leaders such as DuPont and Microsoft.

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Counterintuitive though it may seem, in-licensing can drive innovation, for successful in-licensors better understand the gaps--ideas or technologies they need to improve processes, create new products, or complement current one--in their own intellectual-property portfolios. These companies also know how to find partners to close the gaps. In addition, in-licensors are more likely than other companies to meet their financial and strategic expectations for intellectual property and to rate intellectual property management as a source of competitive advantage.

Posted by Douglas Sorocco at 02:38 PM.
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