Patent Licensing Benefits Both Sides

The first was Apple Computer's decision to license Amazon.com's 1-Click shopping cart technology, which lets a customer complete a Web transaction in a single mouse-click. Then online auctioneer eBay said it plans to license its technology that will let third-party developers access eBay, presumably allowing other e-businesses to run eBay listings on their sites.

Apple is especially noteworthy because it's the first company to license Amazon.com's technology--arguably one of the keys to the retailer's top-notch service--despite Barnes & Noble.com's lawsuit challenging the patent's validity.

It's anything but certain, however, that Apple's decision will open the floodgates for others to license 1-Click, as many legal experts believe. Apple is merely furnishing technology, rather than royalties, for its license. Since the nature of the technology transfer has not been disclosed, a good measure of skepticism is in order.

Did Amazon really obtain tangible assets in return, or did it go easy on Apple just to get a license under its belt?

Meanwhile, eBay, whose plans are still not fully fleshed out, similarly stands to benefit by taking in license fees for its technology. Of course, it remains to be seen whether eBay will find any takers.

Whatever their ultimate impact, these licensing efforts put a tangible value on e-business assets. As such, they deliver three important lessons to IT: you must look to protect the technology assets invented at your company, using the patent system where appropriate; those assets may represent additional revenue to your e-business in the future; and if there's proven, patented technology in the market that applies to your business processes, licensing may be cheaper and faster than reinventing the wheel.

Whether your company is licensing or inventing technology, that technology conveys strategic advantage to your e-business. A proactive approach to these issues will separate the dotcom winners from the losers.