By Bill Poovey
Published Sept. 17, 2015
Growing and marketing patents and intellectual property offer economic development opportunities that S.C. business recruiters should be using to attract foreign-direct investment, the head of the McNair Law Firm’s intellectual property group said. Attorney Douglas Kim said foreign prospects have been far more likely to merge with or acquire businesses, in many cases grown from intellectual property, than to make “green-field” investments, which involve starting a venture from scratch in a foreign country.
“We have a lot of resources in the Upstate, and if there was a more coordinated effort to strategically utilize them, I think we could become more attractive or economic development, as well as foreign-direct investment,” Kim said before speaking at an Upstate SC Alliance event.
Douglas Kim, head of the McNair Law Firm’s intellectual property group, said at an August Upstate SC Alliance event, “If you look at foreign-direct investment in South Carolina, about 87% of that was through mergers and acquisitions, not new companies coming in.” (Photo by Bill Poovey)
“Come on in. Look at this company. This will give you a footprint,” Kim said. “Come look at Clemson University, University of South Carolina, Furman, whoever, and say come partner with us. We’ll give you a footprint. Go to (Clemson University International Center for Automotive Research). Here’s an office space. You can partner with this company. Make a footprint.”
“That’s what I think we can do,” Kim said.
Records show about 1,320 patents were issued to entities in South Carolina during 2014. Among companies with locations in the state, General Electric led with 264 patents, followed by 125 issued to individuals, 28 to the University of South Carolina, 25 to Michelin and 18 to Kemet Electronics. Kim said some patents and intellectual property developed by individuals, businesses and universities are being left on shelves He said they could be marketed.
While GE has locations in multiple states, Milliken & Co. received 14 patents in 2014 and 97 from 2010 to 2014, and are “truly S.C. inventions,” Kim said. He said Milliken is the “No. 1 patent-acquiring entity in South Carolina.”
“Surprisingly the No. 2 body of people who are getting patents are individuals,” Kim said. “Those two make up about 40% of the patents issued in 2014. So there is one company, a bunch of individuals and then some other companies.
“Why we have a handful of companies that are getting the most patents is the same reason everyone talks about South Carolina being as a place for manufacturing, not corporate headquarters. Milliken’s R&D is here. Everybody else’s plants are here. The R&D is happening here for Milliken whereas for the rest of them it is not. It is wherever their corporate headquarters are or their research facilities are.”
Kim also said South Carolina needs to be less provincial within the state in competing against North Carolina, Georgia and other larger states.
“We have a relatively small state with a small population compared to our neighbors, Georgia and North Carolina, Virginia, Florida,” Kim said. “We have the Upstate, the Midlands and the Lowcountry. Greenville has downtown, the east side. We are too little to have sides. Let’s start acting like a state. Act less like a regional, siloed Greenville-Spartanburg.”
Kim said the Upstate and South Carolina have a lot of resources and if there was a “more coordinated effort to strategically utilize them I think we could become more attractive for economic development, as well as foreign-direct investment. Putting all those pieces together is not the easiest task.”
Alliance President and CEO John Lummus said the alliance as a participant in the Brookings Global Cities Initiative is promoting the region’s intellectual property and will be expanding the effort.
“We are looking to implement this as part of that and try to figure out how we can better get foreign-direct investment from the interested companies that want to come to the U.S., and intellectual property is a big piece of that puzzle,” Lummus said. “This is revolutionary in economic development. This is where we need to be.” He said the data that shows 13% of companies making a green-field expansion and 87% lured by mergers and acquisitions tells him “we need to be in that 87%, and this is a big part of that.”
Lummus said alliance legal partners and “universities are a big part of this.”
“This is part of our strategy moving forward,” he said.
Kim said that unlike 20 years ago, when intellectual property was the domain of research and development and engineers, “today, it is mainstream business conversation.” He said the McNair firm has had successes linking prospects with intellectual property companies, branding companies and software design companies.
“We are moving from an industrial society to an information age, and intellectual property is what we use to define and capture and monetize it,” Kim said.
Reach Bill Poovey at 864-235-5677, ext. 104