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

Additional Growth via Effective Policy Changes

The success of the CCM project earned the Global Licensing group a right to play—at least for a while longer. They still needed to establish an ongoing portfolio of projects, though, and faced some serious challenges. First, they were continuing to collect revenue from IP that was owned by other business units. And while they were gaining internal champions, they still had not secured legitimization from top P&G leadership.

But in 1999, things began changing in the group’s favor. First, the company streamlined and consolidated its financial reporting structure, which meant that the small unit would no longer be a profit center. Thus, any value the team brought in would now flow back to the owner of the intellectual property and/or whoever had contributed to the external commercialization of those assets.

The second change that helped the group was a policy statement from the CEO outlining a new patent policy that included a call to institutionalize out-licensing of intellectual property as a legitimate option for value creation. Specifically, the policy said that a business had exclusive patent rights for three years from first commercialization, or five years from when the patent was granted. If the business failed to develop commercial value within that time, the patent became fair game for other P&G units (such as Global Licensing) to seek other opportunities for monetization. The reasoning behind the policy change was simple. Durk ...