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November 1, 2005
R&D leading to IP Strategy at Corning
As reported by MIT Technology Review, over the last four years Corning focused a significant percentage of its R&D on a new way of cleaning up Diesel exhaust. While dirty, this is does not appear to be a sexy business. Regardless, it does provide an interesting example of a firm willing to dump the status quo, give up a lucrative market, invest heavily, and establish a proprietary position through IP in a growing market.
Although they had reasonable business ($12M/yr) they took an aggressive approach (closed a factory for an old technology, built a new factory ($370M), etc). The net of this bet will be rewarded with near monopoly market share with their improved method. It will be interesting to see how long they choose to maintain this competitive advantage exclusively or if they will license it to their competitors.
You may be wondering why would they even bother licensing. Why not just dominate the market and reap premiums until the patent expires. In what I call 900 level licensing, I bet they will consider licensing their process to their competition with the expressed purpose of forestalling their competitors R&D. In this way they might keep their competitors from developing the next technology and provide them with long term, high margin revenue. They could use this new revenue to develop the next technique and continue to stay ahead of the pack.
Posted by Patent Hawk at November 1, 2005 11:54 AM | Patents In Business