Business Impact

IP Cleanup

Rembrandts in the Attic: Unlocking the Hidden Value of Patents

Perhaps you lack Jim Clark’s knack for coming up with profitable new ideas. Not to worry-your company may have plenty of old ones lying around. According to the authors of Rembrandts in the Attic, it pays to root around in your company’s patent portfolio and dust off drawings and formulas you thought you’d never look at again.

David Kline is a former war correspondent who now consults on business strategy. Kevin Rivette is co-founder and chair of Aurigin Systems, a company seeking to develop “intellectual property (IP) management solutions.” The two are attempting to convince CEOs to manage their firms’ IP just as carefully as they manage operations and finance. Surprisingly, it seems that many companies underestimate the worth of their own patent portfolios. And in an era when successful companies are set apart more by their ideas than by their resources or equipment, that can be a costly oversight.

A patent needn’t be turned into a commercial product in order for it to pay off, Kline and Rivette advise. Dow Chemical, for example, once suffered from patent schizophrenia,with each division asserting its own patents in different ways. But after an “IP audit” in the early 1990s, Dow began to coordinate the licensing and commercialization of the firm’s 29,000 patents (see “In Search of Innovation,” TR November/December 1999). The firm immediately saved $50 million in taxes and administrative costs by abandoning or donating unneeded patents, and watched licensing revenues grow from $25 million in 1994 to $125 million in 1999.

This story is part of our March/April 2000 Issue
See the rest of the issue

Other encouraging examples fill the book, and executives looking for ways to exploit their patents will find many options. But much of Rembrandts in the Attic is just advertising for “IP landscape maps,” “patent citation trees” and other tools used by Aurigin Systems to show how a company’s patents overlap, complement or infringe those of competitors. And the authors sidestep the ongoing debate on the morality of the patent system, especially when it comes to the patenting of broad concepts such as Dell’s continuous-flow sales and distribution model or of scientific knowledge such as a gene’s sequence.

In Owning the Future (reviewed in TR, May/June 1999), Seth Shulman argued that today’s patent practices boil down to “an uncontrolled stampede to auction off our technological and cultural heritage.” (See “Software Patents Tangle the Web,”) Kline and Rivette dismiss this as Luddism. “The expansion of patentable subject matter into new and ever more abstract realms has always met with resistance,” yet scientific discovery and innovation have only intensified, they assert.

This is a book about maximizing profits, not about morals, and on that level it is a success. But inadvertently, it also opens a window on a disturbing world, one where ideas can be bought and sold like chattel and executives would rather sue each other for patent infringement than think an original thought.

The latest Insider Conversation is live! Listen to the story behind the story.

Subscribe today
Already a Premium subscriber? Log in.

Uh oh–you've read all of your free articles for this month.

Insider Premium
$179.95/yr US PRICE

More from Business Impact

How technology advances are changing the economy and providing new opportunities in many industries.

Want more award-winning journalism? Subscribe to Insider Plus.
  • Insider Plus {! !}*

    {! insider.display.menuOptionsLabel !}

    Everything included in Insider Basic, plus ad-free web experience, select discounts to partner offerings and MIT Technology Review events

    See details+

    What's Included

    Bimonthly home delivery and unlimited 24/7 access to MIT Technology Review’s website.

    The Download. Our daily newsletter of what's important in technology and innovation.

    Access to the Magazine archive. Over 24,000 articles going back to 1899 at your fingertips.

    Special Discounts to select partner offerings

    Discount to MIT Technology Review events

    Ad-free web experience

You've read all of your free articles this month. This is your last free article this month. You've read of free articles this month. or  for unlimited online access.