The International Herald Tribune writes on Sunday:
“The Dutch brand Philips is found on millions of televisions, stereos and other electronic products in living rooms around the world. Almost as ubiquitous are the products of the French manufacturer Thomson, which is known for its televisions, professional video equipment and TV set-top boxes.
Yet last year, these consumer electronics makers did not profit from making consumer electronics. Instead, Thomson got 75 % of its operating earnings – 325 million of the total of 434 million, or $390 million of $522 million – by licensing its technology to other companies. Philips would have lost money on its consumer electronics business last year if not for 478 million in licensing income.
Squeezed by low-cost Asian manufacturers, niche competitors like Apple Computer and ambitious interlopers like Samsung Electronics, the industry’s historic leaders are increasingly dependent on selling ideas rather than products, and at profit margins that are far wider than in the cutthroat world of consumer gadgetry.
“Intellectual property is playing an increasingly important role for our group,” Rudy Provoost, head of Philips Consumer Electronics, said in an interview. “It’s just a fact of life in our business now that you have to cultivate and protect IP.”
The question is whether the traditional approach of developing, owning and mining patents for revenue has a future in a world where copies and knockoffs are increasingly simple to make, license fees easy to avoid and a certain part of the next generation more comfortable with “sharing” than with owning.
To be sure, the technology industry is still dominated by proprietary manufacturers like Sony, Philips and International Business Machines, which are more aggressive than ever in pursuing patents and patent infringement. This year, IBM is expected to file around 3,250 patents – the most of any company in the United States.”
How satisfied are you with the development of your IP portfolio?