IP Marketplaces Help Entrepreneurs Find Technology. (Entrepreneur's Notebook).

KEEPING up with technological advances and staying one step ahead of competitors are constant challenges faced by today's entrepreneurs.

However, staying on the cutting edge of technology can be costly. Research and development expenses continue to increase and there is enormous expense and pressure to bring a product to market faster and cheaper than in the past.

Rarely can a start-up afford the time and cost to develop new technology from scratch. Licensing technology that has already been developed within a university research lab or corporation is an option that entrepreneurs should consider.

Where can you find innovative research? In the past, the process for locating and acquiring intellectual property was time-consuming, fragmented and inefficient, relying on personal networking and inquiries to research labs.

Until recently, the only central storehouse for intellectual property has been the U.S. Patent and Trademark Office, where buyers faced mounds of data and an exhaustive search process. Last year alone, 160,000 patents were issued -- an average of 18 an hour. Despite the explosion in intellectual property, it is estimated that more than 95 percent of patents will remain uncommercialized, according to the U.S. Patent and Trademark Office.

Online IP (intellectual property) marketplaces are revolutionizing the technology transfer industry, bringing new exposure to innovative and valuable technologies, which otherwise may have been left to collect dust. IP marketplaces now give entrepreneurs direct access to thousands of newly developed technologies from around the world that already have years of research and development time and money invested, and in many cases are ready to license.

The exchanges, which list new ideas and innovations across all types of industries, act essentially as matchmakers, bringing together technology buyers and sellers to discuss and trade new products and business ideas.

Technologies such as networking systems, broadband communications, chemical processes, computer technology, medical devices and electronics, among others, are all areas in which licensable properties can be purchased from online technology exchanges.

There are numerous benefits for start-up companies that purchase or license existing technologies, including R&D cost savings, faster time to market, global technology access, an easy and efficient search process, and other value-added services.

The R&D cost savings can be significant for start-up companies that lack the capital to invest in long-term R&D projects. It may take millions of dollars in research and years of human effort to build a technology. Most companies cannot justify the time or the money to invest in core research and development. Thousands of licensable technologies from universities, government labs and corporations are readily available.

Entrepreneurs can save millions of dollars in research and development effort by buying technology already in existence.

Young companies need to offer new competitive products and services at a much quicker pace. The Internet dramatically streamlines and accelerates the process for searching, identifying and acquiring technologies that are available.

Access to rich technology resources from around the world is key to a business' competitiveness and success. IP marketplaces that have formed content-sharing partnerships with different industry and research institutions offer deeper and broader databases, as well as other valuable resources to buyers and sellers. Depending on the type of technology, a small business can have access to new and unique research from many different industries and institutions worldwide.

Offering valuable tools

Using an IP marketplace gives buyers the ability to take advantage of advanced and efficient database searching methods to browse and query. You can usually search by key word, technology type, university, corporation, or most recent postings, and industry.

Searches that result from cross-industry queries are especially valuable and can reveal unexpected finds that may not otherwise have been discovered.

IP marketplaces can offer a number of valuable tools to assist buyers and sellers. Technology transfer news, industry information and events, market assessment tools, consulting, licensing resources and personal assistance can all help the licensing process be as smooth as possible.

Like any shopping trip, you may have to "try on" a few technologies before you find the right fit, due to the many variables that can be expected when licensing a new invention. First, you will need to have a good understanding of the market opportunities. Conduct a market analysis to make sure the property is a good fit with your current products and services, as well as with your long-term business goals.

Once you find a good technology with the best potential, you will need to perform a thorough investigation and fully scrutinize the technology, including its capability expectations, patent, regulatory issues, the potential profit compared with the cost of bringing it to market, and its delivery timetable.

Finally, when you get to the negotiating and licensing phase, you will need to consider license fees, milestone payments, royalty fees, contracts and other legalities that will require professional legal help.

New opportunities and competitive advantages await entrepreneurs seeking cutting-edge innovations.

Craig Zolan is president and chief executive of U Ventures Inc.