Carrot or Stick?

Topics: Patent, License, Integrated circuit Pages: 4 (1347 words) Published: December 25, 2012
Tessera was an innovative developer company for the miniature technologies which were widely used in the production of consumer electronics devices. Company’s inventions mainly focus on advanced chip packaging for microelectronic devices and image capturing devices. The company practiced what intellectual property attorneys referred to as “ carrot licensing”. Carrot licensing is a model where a company invents and patents a new idea. Then the company is licensing the idea to other companies with the trade secrets and know-how, and helps them to implement the innovation to the production. The opposite model to carrot licencing is the “stick licensing”, in which a company used either the threat of or actual litigation to extract license from target companies. Tessera used to use carrot licensing but they were forced to use the stick a bit more. Tessera had been successful in the semiconductor packaging area as it could managed to persuade the global semiconductor supply chain to adopt its technology. Company made the key integrated circuit manufacturers like Intel to recognize their technology and then selling license to them. On the other hand for silent air-cooling technology there were many other small companies which could adopt the technology but they were manufacturing in China. The second and third tier manufacturers had a significant effect in the marketplace as they put price pressure on first and second tier sellers. Most of those manufacturers were ignoring the intellectual property rights to deliver at lowest cost and price. To compansate the new silent air cooling technology with those manufacturers is a big challange for Tessera. After Tessera was founded, the founders focused on the challenge of packing tiny silicon chips more densely and reliably. After the explosion of portable consumer electronics some additional innovations were needed. Multichip modules had been experimented by some companies and Tessera developed a very...
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