The need for businesses to embrace IP licensing & venture building
In today’s economy, driven by innovation, AI, and industry convergence, intellectual property (IP) is a powerful, frequently underutilized asset that can propel growth and market differentiation. While some organizations have IP strategies in place, many businesses are missing out on vital opportunities. Using real-world examples and best practices, this Viewpoint explores how companies can unlock IP value through licensing and corporate venture building (CVB).
With the rapidly evolving, tech-driven landscape, organizations of all sizes are becoming increasingly knowledge- and capability-centric. This shift is generating an unprecedented volume of IP (as illustrated by the growth in patents shown in Figure 1), much of which remains underutilized and untapped. The scale of this opportunity is growing rapidly, yet many companies miss out on potential value by not monetizing their IP effectively.
Successfully capitalizing on IP requires a new approach. By reimagining themselves as dynamic collections of IP rather than just industry-bound entities, organizations can unlock new revenue through licensing, spin-offs, and strategic partnerships.
For example, a bank is not just a financial institution but also a holder of valuable data analytics, cybersecurity, and transaction technologies with broad applications beyond finance. Companies that adopt this broader view can turn overlooked assets into substantial growth opportunities in new or adjacent markets.
Monetizing IP involves a spectrum of strategies, from cautious licensing to higher-stakes CVB, with strategic partnerships as a middle ground (see Figure 2). Choosing the best strategy requires balancing risks, rewards, and organizational capabilities for IP exploitation.
This Viewpoint focuses on licensing and CVB due to their direct, practical, and high-impact pathways for scaling IP monetization. In contrast, joint ventures typically demand significant infrastructure and alignment. They are typically more suitable for larger corporations with established governance frameworks. We explore outbound IP exploitation (how to leverage and monetize existing IP assets). For insights into corporate venture capital as an inbound investment strategy, see our Viewpoint, “Unleashing the Power of Corporate Venture Capital.”
Licensing is a versatile tool for monetizing IP, allowing companies to gain royalties, expand market reach, and diversify revenue streams with minimal risk. As sectors converge and technologies like AI become more ubiquitous, licensing outside an organization’s core industry is increasingly viable. For example, “know your customer” technology from financial services has broader applications in sectors such as travel, healthcare, and logistics.
Additionally, many industries are embracing collaborative innovation models, such as technology transfer and open innovation, which increasingly involve licensing IP between organizations in the same sector as they work together in areas such as sustainability. Currently, the World Bank estimates global licensing activity at nearly US $0.5 trillion.
Licensing agreements vary based on business needs and strategic goals:
Microsoft’s licensing of its flash memory file system IP exFAT enabled global manufacturers to standardize file-transfer protocol across consumer electronics. In parallel, Via LA, a patent pool for video compression and decompression standards, allowed thousands of startups and small businesses to obtain nonexclusive licenses for technologies like H.264/MPEG-4. This supported the rise of platforms like TikTok, YouTube, and Zoom, which rely on standardized media storage and video encoding.
While licensing is an effective external IP strategy, it comes with challenges:
Licensing can be a transformative strategy for companies looking to monetize their IP. However, success requires careful structuring, strong negotiation, and a deep understanding of market dynamics, specialist skills, and diligent evaluation of both short-term objectives and long-term implications, as explained more in the best practice section.
Case study — Establishing IP value
A global chemicals company sought to maximize value from its IP. Working with Arthur D. Little (ADL) in partnership with Symbiosis IP, the company evaluated multiple licensing opportunities. The challenge was determining appropriate royalty rates based on various factors such as technology maturity and marketconditions.
As shown in Figure A, a range of factors affected these outputs. ADL and Symbiosis IP used a combination of comparable deal analysis and financial modeling to refine the valuation and create data-driven licensing strategies.
CVB offers a powerful way to unlock IP value by creating agile, high-growth businesses, unlike licensing or partnerships, which typically generate incremental value. CVB enables the creation of entirely new businesses that can generate significantly higher returns:
Unlike licensing, which monetizes a portion of an asset’s value, CVB builds entirely new businesses with the potential for exponential growth. CVB outcomes typically fall into two categories:
CVB can be used by companies of all sizes to multiply their valuation by unlocking IP in both existing and adjacent sectors. Although more complex than licensing, CVB shifts the focus from transactional deals to building scalable businesses with market valuations potentially reaching millions or even billions. Examples of successful CVB include:
While CVB offers significant opportunities, it requires specialized capabilities and presents several challenges:
Case study — Building a scalable AI venture from proprietary IP
TÜV SÜD, a global certification leader, leveraged its expertise in AI quality and risk management, building on its established track record in auditing and certification across industries like healthcare and automotive. While this proprietary methodology positioned TÜV SÜD as a thought leader in the emerging AI space, it remained largely a knowledge asset, used primarily for content creation and client discussions. Without targeted investment and a clear monetization strategy, this unique capability risked becoming outdated, as the market for AI risk management tools expanded rapidly.
To capitalize on this opportunity, TÜV SÜD partnered with FutureLabs Ventures, forming a joint venture–building team. In under nine months, the team validated market demand for AI risk management solutions, confirmed the uniqueness of TÜV SÜD’s IP, and transformed the methodology into a scalable, tech-enabled product. This led to the launch of AIQURIS, a new business focused on AI quality and risk management.
Within 12 months, AIQURIS was spun off as an independent venture, securing $4.2 million in funding, establishing a clear market valuation, and partnering with clients across diverse industries and geographies. This move allowed TÜV SÜD to enter the AI domain — a new strategic vertical — while rapidly monetizing its IP through equity value and ongoing revenue generation. Additionally, AIQURIS served as a catalyst for attracting top AI talent, positioning the company at the forefront of the growing AI risk management market.
For companies with strong R&D and innovation portfolios, a well-rounded external IP exploitation strategy can unlock significant value. However, for many organizations, this is uncharted territory, and they may lack the experience to know where to begin. To maximize opportunities while minimizing risk, companies should follow these four best practice considerations:
In a world of low economic growth and increasing global uncertainty, companies must look for new ways to drive growth. A strategic, proactive approach to IP can unlock transformative value, whether through low-risk licensing or potentially higher-impact corporate ventures. In many cases, a hybrid approach that combines both can deliver the greatest returns.
As industry boundaries continue to blur and digital foundations become increasingly intertwined, IP innovations can be deployed across different sectors, opening up new revenue streams that were previously not possible. Success in this new landscape, however, depends on making IP monetization central to your business strategy and operations. By taking a more strategic and proactive stance on IP, companies can not only safeguard their innovation but also turn it into a powerful engine for growth.
Turning underutilized IP portfolios into growth drivers requires shifting focus
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