Like most corporate giants, Procter & Gamble Co. (P&G) and General Electric Co. used to guard their patents, trademarks and other intellectual property more closely than the crown jewels.
But now, under pressure to fatten revenue, they and other companies are offering everything from prized research-and-development secrets to sharp in-house information technology systems for sale at new online intellectual-property exchanges.
The buyers are other big companies looking to slash R&D costs by buying the fruits of others’ research.
About 20 such exchanges, including Cambridge, Mass.-based Yet2.com and Pasadena, Calif.-based The Patent & License Exchange Inc. (http://pl-x.com) have either been announced or are up and running. This week, St. Cloud, Minn.-based Global Commerce and Communication Inc. leaped in with NewIdeaTrade.com, a free online forum for buyers and sellers of inventions, trademarks and patents.
Also this week, in a slight twist on the same theme, Mountain View, Calif.-based 2000Ideas.com launched what it calls a “people-to-business marketplace,” where individual consumers and others can submit ideas and technologies to the people within companies who are responsible for new product development. The Coca-Cola Co., DaimlerChrysler AG, International Paper Co. and S.C. Johnson & Son Inc. are among the marketplace’s inaugural corporate members.
What the business-to-business marketplaces offer, users say, is a fast, efficient and extremely low-cost way to transfer technology and build revenue on inventions that otherwise might not have seen the light of day.
“A year and a half ago, we did a survey and realized we were spending $1.5 billion on research and development, but we were using less than 10 per cent of it in our own products,” said Jeff Weedman, vice president of global licensing and external ventures at Cincinnati-based P&G.
The consumer goods giant that holds 27,000 patents has changed its intellectual-property philosophy dramatically. Now, all its patents as well as other technologies are available for licensing, sale or joint ventures, Weedman said.
So far, Yet2.com has signed up 56 members worldwide, including P&G, Toyota Motor Corp., Royal Dutch/Shell Group, Siemens AG and NEC Technologies Inc.
Companies pay about $10,000 per year to post an unlimited number of offerings on the exchange, according to Yet2.com CEO Chris DeBleser. After that, royalty fees on the sale of products incorporating a technology or patent range from 0.5 percent to about three percent. The exchange collects a finder’s fee of 10 per cent of the royalties. Some subscribers, including P&G, have also invested in the exchange itself.
P&G has not closed a deal in the four months it has been a member of the exchange, Weedman said, but it has been introduced to several potential buyers far afield of the consumer goods industry.
One example is a contact-lens manufacturer interested in licensing a biodegradable enzyme that P&G developed and uses in one of its flagship laundry products, Tide. As it turns out, the same enzyme that is effective in removing oil from laundry may make an excellent nonabrasive lens cleaner.
