Keeping a close guard on new ideas and innovations has been a long tradition for many companies who are fearful of giving away potential competitive advantage. However, recent academic research on the concept of 'Open Innovation' has shown that sometimes a less guarded approach can pay dividends.
Fundamental to the emerging idea of Open Innovation is the external sharing and evaluating of knowledge that would otherwise be proprietary to an organisation, in the hope that something greater may come of it.
BT has taken this concept to heart across its organisation, particularly in the technology licensing team, which is overseeing a growing number of licensing arrangements with external organisations that not only offer additional financial returns for BT, but also help fuel another generation of innovative products and developments.
Liz McGoldrick is head of business development, IPR Licensing, at BT. She is part of a team of 17 responsible for proactively licensing BT technology (including BT’s patents) to outside companies.
She says: "BT is very committed to Open Innovation. We strongly believe in the sharing of what we have developed. Key to that belief is the understanding that where we have new innovative technologies, we will actively seek to license them to other people to productise, unless there are good reasons why we shouldn't."
To raise the profile of the programme, BT launched a website last summer that explains to organisations the process for getting access to a BT technology. The site, www.bt.com/licensing, is principally targeted at reaching smaller companies and start-ups, which have little or no access to research and development programmes of their own and are probably not a formal BT business partner already.
Since launch, the site has already generated a number of opportunities that are currently being developed. A few examples of the kinds of technologies potentially available to license are listed on the website, including: web services, e-commerce, next generation networks, peer-to-peer, mobile video, billing systems, text-to-speech and location based services. Any company interested can also contact the licensing programme at licensing@bt.com.
BT has around 8,000 patents, about half of which are already granted and half in application. Behind these formal patents, however, there is often software or other know-how that can also be of significant benefit to other organisations. While some innovations must remain confidential for commercial reasons, many fall outside BT’s core business or areas of expertise and may otherwise not be fully exploited.
McGoldrick says: "We have to think carefully about what we might license - there is a full consultation process with the business on each technology. However, there are a lot of innovations which we would really like to see become reality, so it is in our interest to take them to external companies. As a general rule BT does not manufacture products, so through licensing we can work with external companies to build them for us. In return, they are licensed to sell the developed product to other potential customers with the key advantage, in some cases, of BT acting as an anchor client for what has been developed.
"We win because it speeds up the time to get products out there and the partner company wins because they are getting new technology to the marketplace faster than they would have done by themselves."
In addition, BT is also building up a revenue stream from licensing its technologies. McGoldrick says: "You can plant a lot of seeds through technology licensing, but you do not know which will ultimately bear fruit. Our goal is about sharing the innovations with others."