Wednesday, March 21, 2007

Patent philanthropy

Companies have so many patents they are giving them away. And, no, this isn't about open source production. This is philanthropy for economic development. And the companies no longer benefit from tax incentives, as Congress pulled the plug on that tax break back in 2004.

An estimated 90 to 95% of all patents sit idle, according to the National Institute for Strategic Technology Acquisition and Commercialization. Business incubators and economic development departments around the country are working hard to match available patents to entrepreneurs who can turn the intellectual property into companies and jobs. The San Francisco Chronicle ran this story on a retired food-manufacturing expert who took advantage of a patent on instant yogurt to build the company Yokit, which will make and market the product to troops overseas and to vending machine companies. The State of Delaware has hundreds of patents from the DuPont Company which it markets to entrepreneurs through a website called the "Patent Portfolio."

States and nonprofits are not the only game in town. "Patent trolls" is the unsavory term used to describe companies that exist to do nothing but sue others for patent infringement can be the bain of start up companies.

The world of technology transfers - from companies to entrepreneurs, universities to companies, inventors to corporations - is a marketplace for knowledge assets. And, like other markets, there are commercial enterprises and investors, not-for-profits, and public sector players, cooperating and competing with each other.

We've seen some wonderful philanthropic developments within these markets - specifically the creation of the Institute for One World Health which takes pharmaceutical research through the testing and approval process to produce drugs for diseases widespread among the world's poor. Foundations - whose ability to research social challenges and innovations, and document successes - is what best separates them from other charitable options should think seriously about how they could contribute to these markets. If foundations do, in fact, have useful knowledge, there are markets for it.

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