The most efficient license is to take whatever is offered. The next most efficient is to dictate the terms and ignore everyone until someone takes your deal as is. Either way, the point of efficiency is not to be bothered. There are ways to get a deal done quickly, or effectively. Efficiency doesn’t lead one to how to do this. Efficiency in licensing is a cruddy starting point for building relationships. Still, it is good to be efficient. It’s just not as good as other things.
Yeah, efficient friendships, efficient idea creation, efficient prayer. Just get on with it. There’s something so utterly simplistic about it, it hurts. Why, if innovation could just be more efficient, then well it would be less wasteful, and it would be simple, and it would be manageable. From this one might believe that people want efficient movies, efficient novels, efficient church services, efficient play, efficient research, invention-making, invention-reporting, and especially efficient licensing for money, lots of money, money, money.
Right, uh-huh.
The problem for licensing lies in the dichotomy of efficiency vs. waste. Sure, value engineering is a good thing. Take unnecessary steps out of the sequence. Make work stations better designed. But all this depends on knowing what to do and how to do it and being in control from start to finish. Take buying a winning lottery ticket (since that’s what patent licensing largely is). One can be more efficient about buying tickets–having one’s money out, already knowing what sequence of numbers to choose. But the efficiency of winning is dictated by odds. One might improve one’s odds (such as perhaps buying a lot of tickets for a single drawing), but not one’s efficiency.
Or take third down efficiency in football. How often does a team convert a third down play into a new set of downs? One can look at “efficiency” here. Some teams, statistically, do it “better” than others. But even with a knowledge of efficiency, there’s no way to reason from the statistic to how to play the game. There’s not even a meaningful connection between all third down plays and getting another set of downs… it is just a correlation. Winning a game does not mean improving the efficiency on third down. One might win games by not getting to third downs very much at all, and doing more work on first and second down plays. The point is, one cannot reason from efficiency to anything meaningful about practice if one doesn’t control everything about practice. Efficiency at this point is just an accidental waste product of accounting statistics. A coach of a football team learns nothing from an efficiency measure for third down.
Where efficiency matters in football might be in the footwork. Learning a blocking stance or how to manage a five-step drop. There, it’s muscle memory. It’s repetition to eliminate bumblingness. Doing something again and again until it becomes efficient–if you are practicing properly, then what’s efficient is also potentially effective. Then again, one can be smooth as one might be with the footwork and be bowled over by someone with more strength or more speed or more determination. So much for being efficient. It’s only a piece of the action. It can provide an advantage, but only in the context of the overall situation. One might say, efficiency becomes important when you know what to do and are in complete control of doing it from start to finish. Like moving your feet, but not like feting your friends.
An efficient licensing activity has to know its goals and how to get there. But it cannot control the entire process. One has to decide whether waste is the biggest problem one has, and if so, whether the waste is in the organization’s response to a proposal for a licensing relationship, or in the relationship itself. If the latter, then setting a licensing agreement with fixed terms is a great way to do it. Take it or leave it. Like open source software licensing. But if the problem is in the organization, and how it forms relationships that are not commodity, then making things efficient has to do with review processes, delegation of authority, and priorities for forming relationships. It doesn’t have to do with the particular terms of the agreement.
If one isn’t going to take whatever is offered, and isn’t going to impose terms until one finds a taker, then the deal is inherently wasteful. But there are reasons for being wasteful, if by that we mean taking the time to be responsive to the needs in building a technology development relationship rather than conceiving of such relationships as commodity activities.
When I hear about a new, efficient licensing program, I’m looking to see teamwork, delegation of authority, great use of judgment, and ability to respond to the working needs of one’s business partners. I’m not looking to see another take-it-or-leave-it standard exclusive patent license trying to turn one’s research outputs into commodity relationships.