Milking Opportunities

Today’s enterprises continue to scale at a rapid pace and functions like IP and Licensing have started playing a very important role in the business. It’s no longer about getting copyrights and ensuring patent protection and preventing infringement. Today’s IP Research teams are the front runners in identifying trends, practices and technological changes that happen on a daily basis.

Not only that, IPR teams are continuously prowling to explore opportunities like IP acquisitions, mergers, takeovers or even an IP Sale. The last decade has seen a major shift in the abilities of an IPR team within an enterprise.

To understand better of how an IPR team can make an acquisition even more effective, lets say a major chip OEM is looking to acquire the technical IP of developing analog power circuits for a new technology like Wi Max. Now either the OEM invests heavily into R&D and their engineers develop what would be called a ‘competing technology’ or their management decides to acquire someone who ‘already has it’.

The IPR team digs through all patent applications and grants to recover the team that owns the IP to the technology like WiMax. Of course with the advent of media, that’s really not going to be a secret. The WiMax inventors also know there are people who would be pursuing them to buy out their hard work. They have all reasons to price their IP as high as possible. So how exactly does the IPR team add value to the acquisition?

By closely studying the patent landscape, a mesh can be identified that gives the OEM a list of all technologies that are needed for the WiMax technology to work. These could be as specific as an analog power supply design. These ‘neighboring’ technologies don’t all make sense to the WiMAX design, but they are required for a WiMAX based product to work. The IPR team identifies these and present to the OEM’s management. The OEM’s management now isolates these individual technology companies and begins to invest in them. Slowly over a period of a month, the OEM has acquired majority stake in most of these ‘neighboring’ technology companies. Only the WiMax owners remain.

Now since the OEM owns all the relating technologies, owning the WiMAX technology doesn’t seem like such a valuable proposition anymore. The OEM will literally squeeze the WiMAX IP out of the inventors. What once was a lucrative invention becomes a scrap sale.

As you can see, the IPR team not only reduced the cost of acquisition, but identified exact players who would contribute heavily to the growth of the WiMAX industry. The OEM in this case, would slowly gain a monopoly since almost all the technologies in the WiMAX space now belong to the OEM.