Remember PARC, the place that invented the mouse and the desktop icon? Well, early in the decade, a struggling Xerox Corporation was trying to sell off a stake in its Palo Alto Research Center, which it could no longer afford to support. But with the technology bubble bursting, the price that investors were willing to pay for a piece of PARC, as the center is known, kept going down.
So in 2002, Xerox switched to Plan B: it spun off the center into an independent subsidiary and sought to prove that it could sustain itself by licensing technology and forming partnerships with outside companies.
Today, PARC is announcing a deal that underscores that strategy. It is licensing a broad portfolio of patents and technology to a well-financed start-up with an ambitious and potentially lucrative goal: to build a search engine that could some day rival Google.
The start-up, Powerset, is licensing PARC’s “natural language” technology — the art of making computers understand and process languages like English or French. Powerset hopes the technology will be the basis of a new search engine that allows users to type queries in plain English, rather than using keywords.
In the fall, Powerset raised $12.5 million in its first round of financing from venture-capital firms and individual investors. The challenges facing it are immense, and the odds of success are long. But the PARC technology, which is a result of 30 years of research, is certain to lend it an aura of credibility.
PARC’s natural-language technology is among the “most comprehensive in existence,” said Fernando Pereira, an expert in natural language and the chairman of the department of computer and information science at the University of Pennsylvania. But by itself, it will not guarantee Powerset’s success, Mr. Pereira said.
“The question of whether this technology is adequate to any application, whether search or anything else, is an empirical question that has to be tested,” Mr. Pereira added.
As part of the deal, a leading natural-language researcher at PARC, Ronald M. Kaplan, will join Powerset’s staff of about 40 as chief technology and scientific officer. PARC will also receive an equity stake in Powerset and earn royalties from the company. Additionally, Powerset will sponsor a handful of researchers at PARC.
The specific financial terms of the agreement are not being disclosed. But Mark Bernstein, president and center director of PARC, said: “It’s one of the biggest deals that we have done, and we hope that it grows into the biggest in terms of the length of the relationship and the amount of value we can create together. It represents a commitment of some of the intellectual crown jewels that PARC has created.”
As part of the business model forged when it was spun off, PARC has struck various business relationships with outside firms and organizations.
About half of its research is still sponsored by Xerox, Mr. Bernstein said. But the lab is also conducting paid research for Fujitsu, Dai Nippon Printing and others. Some of its researchers work on federally financed projects, and the lab is working with ipValue, a intellectual-property licensing firm, to commercialize some of its research.
PARC has also formed a partnership with the Scripps Research Institute in San Diego to develop a system that uses laser printing technology to detect cancer cells.
And in the deal that most closely mirrors the alliance with Powerset, PARC has helped incubate SolFocus, a start-up that is developing solar power technology.
http://www.nytimes.com/2007/02/09/technology/09license.html?ex=1328677200&en=86eecf5c76d7eef3&ei=5090&partner=rssuserland&emc=rss
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