Companies look to patents to gain edge

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A growing number of technology companies are trying a more strategic approach to harnessing their intellectual property by partnering with other companies and more aggressively licensing technology to gain an edge.

Eastman Kodak last week said higher royalty income helped lift profits from digital products, reflecting recent efforts to monetise its intellectual property as it transitions from film to digital technology.

Antonio Perez, chief executive of Kodak, cited the company’s new 10-year partnership with Motorola to supply sensors for the handset maker’s camera phones.

“We kept building our IP portfolio and know-how and now we’ve come in with products,” said Mr Perez.

“But it’s not a one-shot deal. We are not trying to just get a bunch of money and get out of here. We are trying to build relationships that will continue to bring revenue and profits to the company for time to come.”

Critics say some technology companies have been slow to take full advantage of their intellectual property as their archives fill with patents that are not commercialised.

Xerox, the US document technology company, is also taking a harder look at intellectual property. It aims to raise the number of US patents it receives by a third over the next three years after becoming one of the 25 largest producers of new patents last year.

Xerox and its Japanese joint-venture, Fuji Xerox, together received 643 US patents last year. The maker of copiers and printers filed 60 per cent more patent applications in 2005 than in 2004 after streamlining internal processes, including clearer guidelines for writing applications and a less bureaucratic approval process.

The IP overhaul begun in 2004 was part of the “Lean Six Sigma” management techniques Xerox implemented several years ago as part of a restructuring that helped it pull back from the brink of bankruptcy.

But David Frazee, an intellectual property attorney at Greenberg Traurig, cautioned that quantity was not as important as quality. “Fewer, better patents is the optimal strategy,” he said.

Mr Frazee added that companies rarely have integrated intellectual property strategies that combine business development, research and development and corporate strategy.

Although the number of US patent applications is rising, patents issued last year fell 12 per cent due to an enormous backlog of filings and their growing complexity, said IFI Patent Intelligence, a database service.

The US Patent and Trademark Office said last November it was receiving applications at a record pace and that many were “submitted on CD-ROM and contain millions of pages of data.”

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