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3M´s Charles Dennis
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Charles Dennis is Director of 3M´s Strategic Intellectual Asset Management department, and is responsible for finding new ways of generating value from 3M´s intellectual property. He has a bachelor of arts degree in physics from Carleton College, and a law degree from Northwestern University.
In addition to practicing intellectual property law for many years, Mr. Dennis has been Business Development Director in the Data Storage division of 3M spin-off Imation, and general counsel-treasurer of an international business development consulting firm.
The following is based on a presentation given in Boston, Massachusetts on April 23, 2001, at the yet2.com Executive Conference by Mr. Dennis
Getting Started = Internal Marketing
Charles Dennis, Director, Strategic Intellectual Asset Management, 3M
My job this morning is to tell you how to get an old-economy company involved in this kind of business: intellectual asset exchange via the Internet.
While 3M is very well-known for innovation, at its heart it is a manufacturing company. It is very diversified, with 44 divisions globally. But it is, fundamentally, an old-economy company, concentrating on its manufacturing business; and while -- again -- it is very well known for innovation, 3M has traditionally thought of intellectual property the way people historically did, as "a way to keep people out of my market." That´s been the main use of IP historically at 3M. I want to talk today about how to change that mindset.
As I think about the process we´ve undertaken, we´ve dealt with three essential questions within 3M. I´m sure these are the sorts of questions that other companies have needed to deal with as well:
- What is the corporate mindset? Any corporation has a distinctive mindset, a way of looking at the world. In 3M, when we started talking about licensing technology, the first question I got was generally an incredulous "You want to do what?" This was a big concern, because licensing was very much out of the comfort zone within 3M.
- How do you make licensing part of the corporate comfort level? Because, when you´ve got 44 divisions, the first question that comes to mind is: "Do we even know what we´re using where?" With a company this diverse, we could license someone in direct competition with ourselves without even realizing it.
- Lastly, how can we get other people in the company to help us? There are only three of us in my department right now -- we can´t possibly do this by ourselves. To be successful, we need help from other people.
I´m going to walk through each of these questions individually, discussing the problems and how we´ve tried to address them.
You want to do what?
Post-it® notes are legendary at 3M as an example of why a company would want to hold onto a technology it wasn´t using. But the world has changed since the 1970s...
It´s Not 1970 Any More
The relatively new practice of patent portfolio management means that a fallow technology is often abandoned. Taking a technology outside of the organization can be a means of preserving it for later -- as well as a way of obtaining revenues now.
Call In the Consultants
What other asset besides IP do corporations kill off when a few fees increase? McKinsey pointed out to 3M that they were throwing away valuable corporate assets. So 3M began to conduct technology reviews of their IP.
The Process of Finding Licensable Technologies
Communications is the most important part of finding licensable technologies within the organization. Well, that and answering the inevitable question from managers: "Why should I help you?"
Pay Them!
Loaning out a technologist during a licensing transaction can return millions of dollars to the bottom line of the loaning division. 3M finds that paying managers to help in the licensing process certainly works for them.
Summary
Return on investment, commercially feasible, and ready to scale up. 3M has been quite successful.
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