Maximize the Value of Your 3rd Party IP Investment

by Apr 30, 2021Cloud, HUB

Price of 3rd Party IP

The need to get to market sooner has resulted in significant growth in the use of 3rd party IP. This in turn has led to a growth in IP vendors.

While licensing 3rd party IP may lead to reducing the development effort and time, it can potentially be costly and bring upon significant risk. Of course, there is the obvious cost of licensing the IP itself but there are several other hidden costs. Firstly, valuable engineering time has to be spent searching for the right IP from a wide range of choices. Then a choice has to be made from the shortlisted IPs taking into consideration many factors such as design specifications, quality, vendor reputation, and support. This can be a fairly resource and time-intensive task that would involve dealing with multiple vendors at engineering, business, and legal levels. Just the legal negotiations over the licensing agreement can take several iterations and expensive legal resources. Finally, after a choice is made, the IP has to be integrated into the design that may bring its own challenges. Even after all that, there is an element of risk regarding the quality of the IP.

Capturing the Knowledge

In the process of licensing and integrating 3rd party IP, management, legal, and the design team have learned a lot about the IP and IP vendor. This, in itself, is valuable knowledge that should be captured just in case the same IP is needed for a future project in the same design team or a different one. This information could include:

  • Documents with all the research and comparisons done to select the IP including offerings from alternative vendors
  • The license agreement, business terms, and pricing details
  • Resolution to any challenges faced during the integration
  • Issues or limitations identified
  • Quality of the IP, IP vendor, and support

Cliosoft HUB allows you to manage the IP data, meta-data such as foundry and technology, associated documentation and research, legal agreements, and any other limitations or caveats. You can link it to an issue tracking system to manage any issues found and their resolutions. Additionally, it can also keep track of the projects and IPs using the 3rd party IP, hierarchically. As the name HUB implies, it becomes the central repository for all information about the IP.

Maximize Value Through Reuse

When an IP has been used successfully in a design, it is quite likely that it will be reused in future projects or variants by the same design team. Even if memories have faded and designers may have left the team, all the lessons learned from using the IP are readily available in HUB. Project leads can quickly look up any open issues, check if they are critical, make an assessment of the quality, and decide if they want to reuse the IP. Legal can find the license agreements and make sure that the IP can be reused. Designers can look up previous Q&A and other forum discussions to help integrate the IP in the design. By having the foresight to track all the relevant information about the IP in Cliosoft HUB, the design team is able to significantly reduce the cost of reusing the IP.

It is also likely that the company may have acquired other companies that design related products. Therefore it is also likely that other design teams at other sites or business units may need similar IPs. Typically they would research and go through all the overhead of acquiring and learning to integrate the IP. It may even be the very same IP that the company has already licensed. This would be a significant waste of time and money. Often, IPs that a company has licensed are tracked in spreadsheets that are available to only a limited set of people. So, one individual or a small group of people have to be gatekeepers of the 3rd party IPs. Everyone has to go to them with their IP requirements rather than be able to quickly find what IPs might already be available in the company.

Imagine if the IP had already been registered in HUB. The design team at the other design center could first browse and search through the IP catalog in HUB to see if a similar IP has already been licensed. Perhaps there were multiple matches. The team lead could compare the IPs to determine which IP was the best match for their requirements, check for any open issues, find out who else had used the IP, and get feedback from the previous users. Even if they did not find an exact match, they may be able to identify IP vendors that have been used before. This can help qualify IP vendors to narrow down the list. Of course, if the desired IP is found, then the design team is spared all the effort in identifying and qualifying the IP. Management and legal are spared the expense of licensing the IP. Even if additional licensing is required, the overheads are minimized.

Boon for Management and Legal

An often overlooked overhead of licensing an IP is the business negotiation and legal paperwork associated with the process. Additionally, most IP licensing is based on trust and the IP vendor may demand an audit. Without careful bookkeeping, an organization may violate the license agreements which may result in litigation and/or penalties.

Cliosoft HUB can be a very valuable tool to help mitigate both expense and risk. Having a common enterprise-wide catalog of 3rd party IP has many benefits for management and legal such as:

  • Save money by not licensing the same IP multiple times
  • Access to previous legal and business agreements to provide leverage in negotiations and templates for legal agreements and business terms
  • Learn from the expertise and knowledge accumulated across all design centers
  • Ability to broadcast the availability of a new release to all users of an IP
  • Put in workflows that require management or legal approval before a 3rd party IP is used
  • Get full audit reports to identify all IP usage to ensure that licensing guidelines are met
  • Create automated notifications for IP license expiration and renewal

Information is Most Useful When Shared

Typically designers, management, and legal use different systems to manage their data and information. Often expertise and data is confined to a design center or even to a design team. Having information in separate silos leads to inefficiencies and errors. A technical lead may have no idea that they are violating a licensing agreement. The legal department in one business unit may be unaware that the IP vendor already has negotiated legal agreements with the company. Cliosoft HUB breaks down these barriers by providing visibility and access across physical, business and functional boundaries. HUB also helps you manage and monitor access through traceability, workflows and access control features. It helps organizations maximize the value and life cycle of IP assets they have licensed or developed in-house.

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