Edison in the Boardroom Revisited: How Leading Companies Realize Value from Their Intellectual Property, Second Edition

Beyond Make and Sell

In the mid 1990s, a P&G vice president proposed that the company test a potential new revenue stream by licensing selected pieces of P&G’s IP assets to external parties. Additionally, the company could direct that income stream back into additional innovation, which would give rise to more IP.

Leadership was intrigued and agreed to fund a small pilot team to test the idea. In the summer of 1996, the company appointed an experienced P&G vice president and general manager, Jeff Weedman, to head what was to be called “Global Licensing.”

Weedman quickly built a team of about half a dozen people, understanding that they had only two or three years to prove that out-licensing could work for the company. The first key milestone was to generate more revenue than the team was costing in overhead. Next, Weedman knew they needed to generate a large enough income stream that out-licensing would become an attractive new business opportunity for P&G.

“It was an interesting proposition. But we faced some sizable hurdles right at the start,” said Weedman.

First, the group was established as a profit center, meaning that any income the team generated by out-licensing a business unit’s intellectual property would be credited to Global Licensing, not to the business unit holding the intellectual property. This made it difficult to sell the proposition to business units. “In essence, we were trying to convince them to let us sell their children off the back of the truck—and that ...