Success for an organization is driven by its ability to anticipate and satisfy its customers’ needs in an efficient, profitable manner. As rapid technological transformation of all industry continues, organizations cannot be expected to possess all the technology or intellectual property required to remain competitive.  A sound, cohesive method for identifying internal technology and/or intellectual property gaps, evaluating the providers of the “gap” technology or intellectual property, performing quantitative and qualitative analysis, and negotiating licensing-in deals could provide an organization with a significant competitive advantage. With the proper technology protected by intellectual property, an organization could strategically enter a new market, add a product to an existing product line, or add features to product it currently sells.

Intellectual property databases, in particular patent databases, possess useful information to source opportunities where internal organic company research and development is not available or appropriate. However, a distinction has to be made regarding in-licensing activities, i.e. between practicing and non-practicing entities. Entities that practice the technology they acquire is the focus of this book. Non-practicing entities can also use in-licensing to obtain some or all of their technology needs, and will utilize many of the same processes discussed below, but when it comes to valuing the amount they should pay for licensed materials the criteria will vary between practicing and non-practicing entities. The following will apply primarily to practicing entities.

There are many different methods to obtain desired technology and intellectual property that an organization needs. These methods include licensing-in, infusing capital into its own research and development programs, buying the technology or intellectual property outright from a patent owner, or acquiring the intellectual property owner’s entire business or organization. These different methods all have their own drawbacks and advantages. An organization should carefully weigh these factors in light of its overall strategy, strengths and weaknesses before deciding on an appropriate approach.

Once an organization identifies that its technology needs that cannot be satisfied in a timely fashion through in-house development, a search must be performed to identify external sources for the required technology. After the searches have been completed, target organizations are contacted, deal preparation analysis is performed, negotiations commence, and hopefully, a business deal is closed. After this occurs, an organization should regularly measure the economic value that is added by its inbound technology and intellectual property arrangements.