BellSouth Corporation:
Strong Commitment to Licensing

BellSouth Corporation is a Fortune 100 communications services company headquartered in Atlanta, GA, serving more than 46 million customers in the United States and in 14 other countries. The company owns 40 percent of Cingular Wireless, the second-largest wireless company in the US, which provides innovative wireless data and voice services.

BellSouth has two companies dedicated to maximizing the value of its intellectual property, such as patents, trademarks, copyrights and proprietary information. BellSouth Intellectual Property Management Corporation ("BIPMAN") is dedicated to the protection of BellSouth´s intellectual property resulting from its ideas and inventions. BellSouth Intellectual Property Marketing Corporation ("BIPMARK") is dedicated to offering BellSouth´s "know how" and innovations to other industry leaders so they can better serve their customers and better meet their challenges.

Scott Frank Scott Frank Scott Frank is the President of BellSouth Intellectual Property Management Corporation and BellSouth Intellectual Property Marketing Corporation. He is responsible for the identification, development, protection, management, and marketing of BellSouth´s intellectual property company-wide. Prior to joining BellSouth, Scott practiced intellectual property law in Atlanta at Troutman Sanders LLP for 7 years (2 years as a patent agent). At Troutman Sanders, he specialized in telecommunications and software. Prior to Troutman Sanders, Scott was an electrical engineer with Northern Telecom (Nortel) for 5 years, and a computer systems analyst with AT&T for 2 years. Scott received his Bachelors in Electrical Engineering from Georgia Tech, and his Law Degree and Masters in Business from Georgia State University. Carol Beckham Carol Beckham Carol Beckham has been with BellSouth for over 31 years in a variety of positions including customer service, network, and more recently managed the BellSouth Software Acquisition Group, the licensing arm of BellSouth. In September of 1998, she was named Vice President of the BellSouth Intellectual Property Marketing and Management Corporations when they were established as separate entities in BellSouth. Her current responsibilities include negotiating intellectual property rights for BellSouth, overseeing the Marketing and licensing of BellSouth technology and patents to third parties as well as setting and implementing policy and the protection of BellSouth IP. Carol is also an active member of the Licensing Executive Society and serves as the Chapter Co-Chair for Atlanta.

yet2.com recently spoke with Scott Frank and Carol Beckham about IP licensing at BellSouth.

Q: Would you explain your role in licensing at BellSouth?

A: BellSouth is offering its innovations to other companies so they can better serve their customers and meet their challenges. As an industry leader with proven technology and new innovations, we help others save time, money and other resources by licensing BellSouth intellectual property that covers our innovative products and services.

Q: In brief, what is the licensing history at BellSouth?

A: BellSouth Corporation recognized the value of protection and licensing of intellectual property a few years ago. As a result of this insight, two wholly-owned subsidiary companies were formed in 1998 to protect and market the Company´s intellectual property assets. BellSouth Intellectual Property Management Corporation (BIPMAN) manages the mining and protection of intellectual property. BellSouth Intellectual Property Marketing Corporation (BIPMARK) maximizes the value of BellSouth´s intellectual property and generates revenue by licensing IP to other companies.

Our greatest challenge has been to mine the intellectual property out of a company the size of BellSouth, with more than 85,000 employees worldwide. We are pleased with the tremendous success achieved by the outbreak of innovations and the tens of millions of dollars of revenue generated to date.

Our greatest challenge has been to mine the intellectual property out of a company the size of BellSouth

Q: How is your licensing operation set up? For example, are profits from the licensing division shared back with the business units? How large a department is it?

A: The BIPMAN and BIPMARK organizations are made up of a staff of 30+ professionals in the business, marketing, and legal areas. The group is charged with protecting and marketing the wealth of intellectual property assets generated within BellSouth. We began with conservative targets in building our patent portfolio and generating revenues. To date, we have experienced substantial growth in both areas.

Q: With such a widely dispersed organization, how do you know what IP is available?

A: We have to do a lot of digging to find out. We mine for the IP, just like any other large company would. It´s a daunting task, but we´re pretty good at it.

Q: How has your addition of a Director of Technology changed your approach? Is this something that other organizations should consider?

A: Vernon Meadows, Director -- Technology Licensing, and his patent team have been instrumental in focusing on mining innovations for conversion into intellectual property assets throughout BellSouth. This team is responsible for the substantial growth experienced in our patent applications and our patent portfolio by assisting employees in the identification and protection of intellectual property.

Q: Any tips for other groups on how to go about that mining?

A: There has to be some correlation between your patent filings and your licensing efforts. You have to develop strong relationships with your internal clients -- or customers, as we call them. Our Number One strategic objective is to develop those relationships so that they will remember to get you involved early on, and they will support you as you out-license the technologies.

Q: Does BellSouth do much in-licensing?

A: There is a supply-chain group that does technology in-licensing, but BIPMARK and BIPMAN in-license the intellectual property components or patents. The business units contact us to tell us that they need a specific technology.

Q: How long do typical negotiation take?

A: A real long time. There is really no set answer to that, but negotiations can be very time consuming. We´ve finished negotiations in a week, but they´ve also taken months. Negotiating a license for a technology is not trivial. We´re dealing in the millions of dollars; it´s a budget question every time you want to license IP. And the customer must have the money. Because negotiations can take so long, you can be in the middle of the process and the customer´s budget gets cut -- they want the technology but no longer have the funding for it.

You have to develop strong relationships with your internal clients

Q: What changes have you seen -- in general -- in licensing? Where are the trends going?

A: When people remind themselves that corporations are in place to maximize shareholder value, these same people should recognize that licensing out one´s innovations in the form of intellectual property to other companies is part of the value proposition. The trend seems to be that more and more companies are realizing that simply using one´s innovations for internal purposes only, often times does not maximize the value of their intellectual property. Accordingly, many more companies are looking to licensing such intellectual property to others as a way of unlocking additional value and creating new revenue streams.

Intellectual property out-licensing is a tremendous opportunity for BellSouth and for many other companies that have internal development operations. We believe we´re at the forefront of the business.