Caterpillar Forms Technology Licensing Group

Maker of mining and construction equipment joins the list of companies, including Dow and Proctor & Gamble, licensing IT innovation.

InformationWeek Staff, Contributor

March 18, 2002

1 Min Read

Most folks associate Caterpillar Inc. with big yellow iron, not with technology assets. But the Peoria, Ill., manufacturer of mining and construction equipment has taken steps to change that perception with the creation of a technology licensing group unveiled Monday at the National Manufacturing Week Conference in Chicago. It includes more than 7,000 patents, many of which are IT-related.

For example, the company owns more than 100 patents related to the global positioning system, a system of 24 satellites for identifying earth locations, launched by the U.S. Department of Defense, says Bill Berlinger, Caterpillar's technology licensing manager. His group is already licensing an engineering-simulation program called Dynasty. Caterpillar used the software to develop its 797 truck, which carries a payload of more than 300 tons, in 18 months. "You don't design a truck that's taller than your house by using trial-and-error mode," Berlinger says. The company's IT patents cover a broad range of business areas, including software that manages a diverse supplier base, and a program called Healthy Balance designed to track employees' health and provide suggestions for improving it.

Technology licensing makes sense for Caterpillar, since intellectual capital comprises nearly 80% of its market capitalization, Berlinger says. He points out that companies such as Dow Chemical Co. and Proctor & Gamble Co. can see anywhere $100 million to $400 million a year from licensing agreements. "We don't know where this is going to go with Caterpillar, but we are seeing heavier-asset industries going in this direction," Berlinger says.

Berlinger used part of the licensing group's initial corporate seed money to take an equity position in Inc., an online marketplace that lets companies license their technologies. Other companies that promote their licensing opportunities through Yet2 include Proctor & Gamble, 3M, and Boeing.

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