Case Study: Licensing

by: Victor Minin, Problem

The company is interested in licensing its product for manufacture and sales in developing countries. They propose to sell the technology and receive royalty payments from the licensees. They were looking for a foolproof method of tracking sales volume to ensure full payment of their royalties. They also wanted to find a way to guarantee that it wasn't feasible to copy their product and equipment technology thereby circumventing the license arrangement.


There were three major components to the project:

In the analysis phase the following tools were used:

** Structural Analysis
** Parametric Analysis
** Functional Analysis
** Streamlining Technique
** Problem Decomposition

For the Solution Concept Generation phase the following tools were used:

** Inventive Principles and Standards
** Effects Database
** Algorithm of Inventive Problem Solving

In the Evaluation of Generated Concepts the following parameters were considered using Theory of Constraints measurements:

** Difficulty of implementation
** Time to implement
** Company resources
** Economics
** Positive and negative side effects


The solution was developed within a two-week period. After detail evaluation of resources ranked in sequence: resources available in operative zone (cross section of product) -> resources available within an assembly operation for A-type production (vulcanization operation) -> resources available within entire plant.

The following types of resources were under analysis:

** Space resources
** Time resources
** Substance resources
** Field resources
** Functional resources
** Informational resources
** Derivative resources

The most powerful results where achieved by the use of ARIZ and streamlining technique.


Twelve possible alternative solutions were generated, ranked in terms of ideality criteria, and presented to management. The most feasible solution was chosen by the management team. The solution chosen met all the needs of the company and was easy to implement for both inclusion in the manufacturing technology and for field detection. Invisible licensing device became a visible company LOGO which is easely to detect during production as well as during inspection of the product in use. Detection method became nondestructive, incorporated three levels of defence mechanism which ensures process control while product is manufacturing.


In the course of the project, the TIPS (Theory of Inventive Problem Solving) Technology Prediction module for the following methods were used to analyze the rubber based product:

** Trends of Technology Evolution
** Streamlining Technique

The company does not want to reveal its proprietary secrets in this case study. They will share the methodology that was used, and the effectiveness of the results, as follows:
During generic search for phenomena we used the TRIZ effect database. The main approach was like this: it would be nice to have three level defence system where the first level would be easily breakable and create the illusion that it is easy to duplicate. After the try, specialists will find that it is doesn't work.

We took some combination of effects, those which usually coexist. After we enforsed them through Inventive Principles to ensure an effective design in the Operative Zone. Then we delegated an additional measurement required to PLC-devices and hid those devices among the others existing ones in the manufacturing process. Fortunately PLC (programmer language controller) requires programming. So a critical part of licencing device system was hidden in the software program which is impossible to reveal. It allowed the rubber company to subordinate quality of manufacturing process to the licensing device indication mechanism.

The result was that component parts of the rubber based product were reduced to 44% yielding significant cost improvement and increased product life. The company feels that the developed umbrella patent will give them the potential to increase their market share by an additional 30%.

Editors note: Readers--please let us know if your are interested in this kind of study. We understand the company's desire to keep its new method secret, but we understand our readers' desire for complete cases, with problem, methods, and solution. Our thanks to Victor Minin of IQ Plus for working with us to present this. Please send us your opinions.