Technology Development

 Technology Identification:
 Technology know-how in products, processes and
management practices
 Current status within and in industry
 Technology Addition Decisions:
 Internal developments (make)
 External acquisitions (buy)
 Partner to co-develop
 Technology Development
 Commercializing Decision: (How to transfrom kno-how
into revenues?)
 What to sell and in what form?
 Ongoing Management:
 Intellectual Property Issues
 Modularity
 Platforms and derivitives
 Developing services
 Dumping projects
 Technology Development
 “What to sell” decisions – Possible Options:
 Sell or license know-how only
 Sell “proof-of-concept” after building proto-type or pilot-plant
 Reduces technological uncertainty to buyer
 Sell commercial grade components to OEMs
 Sell final products or systems with all essential components for
others to assemble
 Sell a complete, end-to-end solution
 What Decision Makes Sense?
 Sell know-how, when:
 Technology does not fit corporate mission
 Insufficient financial resources for deployment
 Window of opportunity is less
 License, when:
 Market characterized by demand-side increasing returns
 Offer complete solution,when:
 Components incompatible with industry standards
 License & Commercialize, when:
 Offering technology to competitors helps to set industry standard
 Technology Transfer
 From small companies and inventors (R&D Labs) with
support from:
 Angel and venture capitalists
 State funds
 Funded by large firms as a part of supply chain relationship
 Transfer consideration is arrived at by balancing
innovation value and investment risk
 Protection of IPR for the inventor and licensing
/purchasing company
 Product Architecture
 Modularity
 Information about how the sub-system should work together is
visible or shared
 Design information of each sub-system is hidden
 Automobile, computers and software use this method
 For significant breakthrough individual components and
subsystems have to be higly dependent and inegrated
 Product Architecture
 Platforms and Derivitives:
 Product platform is a common architecture based on single design
and technology
 Platform products represent different technologies to create
“gaps” in market place
 Generally platforms are created with improved performance,
capacity, capability and features (convergences)
 Derivitive products meet specialized needs of customers
 Generation products refer to substantial breakthroughs in platform
products
Product Architecture - Intel

Platforms Derivitives Mhz Year

486 SX 16-25 1991
SL 20-33 1992
DX2 50-66 1992
Pentium I 60-66 1993
+ MMX &
Xeon series
II 233-300 1997
III 350-600 1999
Celeron 266 266 1998
300 300 1998
533 533 2000
Itanium 3400 2003
 New Product Development
(NPD)
 Need for cross-functional product development teams
 Team's ability to integrate info across individual members
 Develop overall team identity
 Team's encouragement of risk-taking leads to innovative
products/processes
 Include customer's influence to build quality during development
 Effective reward systems
 Caution for Dumping NPD
 A change in direction of thought is resisted; more so when
direction is 'reversed'
 Project reviews should be dispassionate to discuss
dumping issue
 Evaluate alternative courses of action
 Prepare stakeholders of NPD for impending decision to
withdraw
 Use different decision maker to carry out decoupling
process
 Developing Services for High
Tech Products
 Service complexity
 Skill/knowledge requirement
 Can customers manage through self-service
 Training investment
 Intangibility nature
 Increases anxiety in customers with perceived risks
 Offer product demonstration, extended warranty, free
trials, training and technical support
 Developing Services for High
Tech Products
 Inseparability nature:
 Companies to build service capabilites close to
customer centers
 Develop independent outside capability which can be
outsourced
 Protection of Intellectual Properties

 Intellectual Property refers to original works

 Legal system protects a creator's right to enjoy due
economic returns
 Intellectual property includes inventions, designs, material
etc
 PATENTS

 Patent confers the owners the right to exclude others

from making, using, offering for sale or selling the
invention, for a specific period of time
 An invention is patentable if it is:
 Useful and beneficial to society
 Mechanical and electrical arena products meet no resistance;
products in chemical, bio-technology, nuclear are subject
scrutiny
 Novel – should not have any prior disclosure
 Nonobvious – there is no implicit or explicit suggestions in earlier
inventions
 PATENTS

 Most inventors use a patent agent or attorney to prepare

and file patent application
 The patent agent or the attorney act as representatives
before the Patent & Trademark Office (PTO)
 Patenting procedure and costs
 World Intellectual Property Organization
 Types of Patent Application:
 Provisional
 Utility
 Takes 2 to 3 years to get patent awarded
 PATENTS

 Diadvantage of using Patents

 Since patents are published information, within 18
months of filing applications, the patent information is
published
 Competitors work around them and come with
differentiated products (about 60% of patents get
modified and introduced by competitors)
 Patent owner has to keep a watch on competitors that
they do not 'infringe' the patent
 PATENTS

 Changes in Patent Laws

 Business methods patents on e-commerce methods
 Criticism on common methods (amazon.com's one-click
shopping cart, Priceline's auctioning on internet etc)
 With technology changing so fast, some patents may
become obsolete by the time that patent is awarded
 Patents and monopoly deliberations
 Intel and Microsoft issues with Federal Trade
Commission of US
 Copyrights

 Similar to patent but for artistic creations like music,

literature etc
 Copyright infringement involves reproduction or
distribution without permission of the owner
 Term of copyrighted works
 Individual authors: life of author + 70 years (US)
 Employees for their employer: 95 years from the date of
application or 120 years from the date of creation of work (US)
 Net writings protectd by Fingerprinting Binary Images
 Trademarks

 Words, Names, Symbols or such devices used by manufacturers to

identify their goods and distinguish from others
 Prevents others to trade on the goodwill and reputation who confuse,
deceive and milead customers
 If product is not patented, others can still manufacture and sell as
long as they disclose who is manufacturing
 In many countries, others just change few letters and market
products
 Trade Secrets

 Proprietary Information
 Contractual obligation with respect to proprietary information
 Nondisclosure agreements
 Noncompete agreements
 Invention assignment clauses
 Knowledge Ownership
 The employer or the employee
 Doctrine of inevitable disclosure
 Patents or Trade Secrets

Description Trade Secret Patent

Lifetime As long as information is secret 20 years from date filing
Property Prevents unauthorized use by a Excludes others from making,
Rights person who acquired secret using, offering for sale or selling
improperly
Scope No protection for reverse prevents invention and
engineering or someone having equivalents thereof
same idea
Makes Sense Secret is not eligible for patent Product has long market life
When protection: like pharma products
way of doing things Product can be reverse
life of < 2 years engineered
Difficult to detect like coke To attract investments, to
composition encourage professional growth
of employees
Patent protection is enforceable
Managing Intellectual Property

 Patents can be tapped as revenue source

by licensing
 Maintenance fee of uneeded patents can
be eliminated by donating patents to
universities for a tax write-off
 Patents can be packaged to attract
investors