Benefits of having an IP strategy (cont'd.)

Licensing and Cross-licensing

Patents can provide value by generating licensing revenue, or by allowing an organization to have access to technology it otherwise could not by cross-licensing. Cross-licensing also offers economy and efficiency by obviating the need to develop specific technologies or to design around a competitor. It can also make it possible to negotiate substantially lower royalty payments than would otherwise be required [6].

A comprehensive portfolio can prevent competitors from designing around you and invading your market. It provides a stronger negotiating position when dealing with potential partners or competitors, and a smaller organization may even be able to gain leverage over a larger one in this way [3].

Perhaps the greatest advantages of a strategically-generated IP portfolio are that it provides insurance and widens your options. At some point nearly every technology-based business will receive a cease and desist letter. This is never good news and sometimes it can be very bad news, indeed. The right IP strategy can lower the possibility of receiving such a letter by making it less likely that you will infringe - and more likely that you can launch a countersuit. The possibility of expensive retribution has a tendency to make an accuser think more flexibly [7].

Flexibility is the approach taken by IBM in its licensing activities, an important profit center generating well over $1 billion in annual revenue. The company carefully monitors technology in its areas of interest [8]. Infringers are treated as potential business partners and given plenty of time to respond and make a case for why they feel they don't infringe. The result is almost without exception that the target company will take a license without litigation. As portfolios fatten in the field of additive fabrication it should be possible for a number of companies in the industry to take a similar tack. Recent news suggests that some already are, although at this point the primary motivation may be operating freedom rather than immediate monetary gain.

Cross-licensing agreements need to be thought out carefully, however. An agreement should precisely spell out the use of the technology and who owns the rights to improvements made by a licensee. It's possible for the licensee to freeze you out of your own market by patenting improvements to your technology [6].

Numerous organizations in the field have IP portfolios substantial enough to use strategically. A selection of a few showing relative sizes including issued patents and published applications. These are only lower limit approximations since many documents don’t indicate assignees, and many companies have access to additional IP through licensing or acquisitions.