Let Others Wring Value From Intellectual Property

British Telecommunications expects a bigger return from its R&D discoveries under an arrangement that essentially outsources licensing of its intellectual property. Under a six-year deal, a company called ipValue Management will take over licensing technology covered under BT's 14,000 approved or pending patents in the United States, Canada, and Japan.

IpValue was formed late last year with a $30 million investment from iFormation, a company created by Boston Consulting Group, private equity firm General Atlantic Partners, and investment bank Goldman Sachs to help major companies capitalize on emerging technologies. IpValue will focus on the telecom and IT sectors.

How big an opportunity is licensing? IpValue estimates BT's technology can generate at least $17 million a year in licensing revenue during the six-year deal, while ipValue president and CEO David Pecaut says intellectual-property licensing is a $150-billion-a-year business worldwide that's growing 30% annually.