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May 14, 2006

Patent Payoff

Bruce Bigelow of the San Diego Union Tribune newspaper wrote a well-researched article May 14 about profit-optimizing business strategies revolving around patents, and the concept of an IP community.

The concept ... involves offering licensing deals on reasonable terms to help grow business and to collaborate in ways that advance the technology as a whole. In this way, a company can broaden its sphere of influence by creating a business ecosystem that shares the same technology.

Qualcomm is touted as exemplary. Bigelow notes that Qualcomm is a innovation company, not really a product company. 58% of Qualcomm's $5.7 billion 2005 revenue came from sale of its chips, designed in-house, but manufactured under contract by third parties. 32% of Qualcomm's revenue came from patent licensing.

IBM's vice president of IP strategy, Kevin Rivette, lays out the vision of a maturing marketplace for patents: "We're creating instruments for the transfer of ideas. That's what's really going on. ... At the end of the day, the idea is the product and we need a marketplace for ideas."

Bigelow's article covers considerable ground, describing several companies and their IP focus, and is recommended reading.

Posted by Patent Hawk at May 14, 2006 5:41 PM | Patents In Business