Encap Technologies CEO
Encap Technologies, located in Palatine, IL., designs and manufacturers small motors used in a range of products by some of the world’s most notable brands. Those customers however, often broke their contracts and moved business to manufacturers, many of whom were overseas, who incorporated Encap’s inventions without proper licenses. Unfortunately, this breach of contract was very difficult to prove. And in order to guarantee fair royalty payments, Encap had to undertake expensive, complex audits of large and often uncooperative companies.
When Encap discovered infringement, it had to make a difficult choice: Could they financially afford to protect their rights? The company was operating on a different scale than its large customers, and legal action—often costing millions of dollars—required a multi-year commitment of time and resources that Encap simply could not manage. Additionally, the infringement caused a huge distraction for the business.
“IP licensing distracted us from our core mission of creating great products. It was always a roadblock to successful relationships and customers constantly complained the patents were a hindrance,” said Encap CEO Griff Neal.
In Search of a Solution
Unable to adequately address the mounting infringements by its customers, Neal began researching possible solutions and through conversations with others, became aware of Intellectual Ventures. In 2011, he approached IV with an offer to sell Encap’s intellectual property.
After working closely with IV to develop a customized deal, Encap sold its patents to IV in 2012.
“Working with IV has simplified our business tremendously. They provide a valuable service that helps level the playing field for small businesses like us. And because they handle the licensing, we can focus on what we’re truly passionate about—creating great products,” said Neal.
Within weeks of completing a deal with IV, Encap began to see results. The company gained a new level of respect from its customers and saw the demand for their services skyrocket.
“Companies treat us differently now, much better. We’ve even had a few customers bring manufacturing jobs back to us,” said Neal.
In fact, since its partnership with IV, a very large customer who had once moved its manufacturing entirely out of the U.S., returned and signed a significant contract with Encap.
For customers of Encap, they now have choices: buy directly from Encap which has a paid-up license, or license the relevant technology from IV and manufacture anywhere they want.
For Encap, the partnership with IV has provided peace of mind and stability for the business. And things are looking up in more ways than one. As a small business, the sale of their IP has allowed Encap to reinvest in their company in ways not possible before. This has resulted in the development of new lines of business and increased revenue streams, and both Encap and several affiliates have added staff to accommodate the growth.
Confirmed by Neal, “Customers are paying us for our IP now. Encap is growing, adding new vendors, and I’m hiring.”
"Customers are paying us for our IP now. Encap is growing, adding new vendors, and I’m hiring."
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