A growing number of firms are specializing solely in the generation and licensing of intellectual property (IP). These "intellectual property vendors" are not traditional suppliers, since they do not engage in production or sales. Their business model is based on licensing out the rights to their inventions to other firms, who further develop the inventions commercially. Three examples provide a glimpse into the world they inhabit: 1. Orbital Corporation of Perth, Australia, invented an environmentally friendly fuel injection system for 2-stroke engines in the 1970s. For nearly four decades, it has existed mainly by earning license fees. While the invention has not been commercialized in its original target market (the major automakers), Orbital identified new buyers, such as the manufacturers of marine and recreation vehicles, and has now morphed into a corporation that "provides research, design, development, and testing services to many of the world's powertrain producers, regulatory authorities, and research institutions."
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