Compared to other options, in licensing reduces the time to market, reduces research and development costs, provides an entrance into a legally protected market, and helps build relationships with potential future strategic partners and acquisition candidates. Once licensing in strategy has been formulated, an organization would undertake the following four steps in order to implement a successful licensing in program:
Step One: Perform a Technology or Intellectual Property Gap Analysis.
The first step in performing a gap analysis is to identify desired products or features that are not currently in an organization’s products or product lines. This can be completed with the assistance of marketing personnel or others within the organization possessing knowledge of consumer and/or market trends.
In order to ascertain whether an organization possesses the technology and intellectual property needed to fill its product or feature gaps, the organization may use a tool such as patent mapping. In this step the organization’s intellectual property and developmental R&D positions are mapped along with all patents related to the desired technology or intellectual property holdings. This step obviously requires the assistance of an organization’s technical and business development personnel to identify the appropriate technology, features, and uses to be searched.
The complete investigation process is shown in the “Evaluation Process for a New Technology” figure. The first two steps of this process will enable an organization to identify its technology and intellectual property gaps. The “gap“ is defined as a technology that the organization does not possess internally or whose internal development will not be completed in time to meet the product or feature target introduction date. At the end of step two an organization should perform a cost-benefit analysis with the assistance of technical, financial, and marketing personnel to determine which opportunities are the most economically viable.
A good mechanism to determine the most economically viable approach is to plot the relative cost versus relative performance (in consumers’ eyes) of the products or services that would be produced for each approach found from the initial screening at the end of step two. Such a plot is shown in the “Value Map” figure. In this figure, patents are placed on the grid one by one, as a pair-wise comparison. The x-axis placement is determined by the relative cost to create and deliver the product. The y-axis placement is determined by the relative performance of the product as perceived by customers. The color of the dot shows presence of patent fences or an IP Shark. Clearly those opportunities in the upper left quadrant represent the best performance and feature content at the lowest manufactured/delivered cost. These are the best opportunities for an organization to pursue. Organizations whose branding is consistent with high-performance and above average cost may also consider options falling in the upper right hand quadrant of this matrix. Those organizations whose branding and image are associated with “value” products and services may also consider opportunities in the lower left quadrant.