Intellectual Property – Portfolio Management
Licensing and Royalties
Company E owns a patent that its materials scientists are convinced will be the next aerospace composite material. However, the time horizon to yield commercial results is probably ten years, well beyond the investment horizon of a traditional private equity firm. Does the technology have another vertical market to which this patent could be licensed while waiting for the aerospace market to develop?
The IP Assessment pinpointed various business classifications that have assigned patents using similar technology. Among the list of classifications that one would expect to find – metal treatments, metallurgy, fusion bonding – is "Games Using Tangible Projectile," a patent class covering sporting equipment manufacturers. These companies might present ideal licensing candidates for Company E's patent. Sporting equipment competitors could license the aerospace technology for their next-generation golf clubs or tennis rackets, enabling Company E to realize profit during the R&D phase of the aerospace business.