The intellectual property portfolio of a company is an excellent source of potential value. In addition to the value an organization can achieve by using intellectual property in its own products and services to generate excess profits, intellectual property can also create value opportunities outside of a company. These strategies a company can use to generate value from its intellectual property are: sale, license out, cross license, joint venture, strategic alliance, spin out, develop new business ventures, donate and take a tax deduction, satisfy offset obligations.
An important aspect of value realization is the appropriate strategy for particular set of intellectual property assets, given the broader business and intellectual property strategies of the company. In other words, can the company extract additional dollars from its intellectual property without harming its current competitive position or adversely affecting its longer term business goals?
For example, if a company concludes that a particular technology is non-core and sees no possible future use of the technology, that technology may be an ideal candidate for sale or licensing to a third party. If a technology is deemed to be a core technology of the future, and the company would benefit from additional resources to develop the technology, the situation may be ideal for joint venture. A spin-out may be a good value realization option for technology that is non-core, but would contribute substantial value as a stand-alone business venture. On the other hand, if the technology is immature, and the company is not interested in developing the technology further for strategic reasons, the technology maybe candidate for donation to a nonprofit research institution or university.
When a company is investigating extracting value from its intellectual property the most discriminating dimensions found for making such a dimension were (1) the duration of the contract, (2) its implications for risk-sharing between the parties, (3) the type of resources exchanged and (4) the associated contractual safeguards. The “Two Most Discriminating IP Transfer Dimensions” figure shows how two segmentation axes relate these four elements. The “Five Classes of Contracts” figure shows how common contracts and intellectual property transfers map under the discriminating dimensions. When considering which form to use for extracting value from intellectual property, a company can compare its business strategy elements with these discrimination elements to determine which type of intellectual property transfer will best serve their business needs.