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Texas instruments reported USD 391 million in licensing revenue in 1992 and was thought to have earned around USD 800 million a year by the end of the decade (Rivette and Kline, 2000), Microsoft Corp.
changed its IP management approach to reduce its reliance on copyrights and secrecy in favour of greater reliance on patents, due to the emergence of the Internet and the resulting need for greater openness and transparency in software. Its new intellectual property policy, announced in 2004, is more open to outward licensing of its inventions, which should offset somewhat the costs of inward licensing, which stand at around USD 1 billion.

Table 1

Reported Licensing Revenues Millions of USD

Japanese and European firms also profit from licensing, especially in the ICT sector. In recent years, Sony Corp and Canon Inc. earned roughly JPY 29 billion and JPY 20 billion per year, respectively, from their patent licensing activities (Baba, 2003). NEC already earns more that JPY 29 billion annually from patent licensing (Baba, 2003); to increase its licensing activity, it launched in 2003 a searchable database listing patents that are available for licensing to third parties as part of its open innovation strategy.

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* Contributed by: -
Prof. (Dr.) R.P.Verma,
MASD (USA), MRES (London),
Ex. H.O.D & Dean,
Faculty of Commerce,
Ranchi University, Ranchi,
Dr. Arabinda Bhandari, MBA, Ph.D.
(Strategic Management)