Nanostellar once made powders. Now it specializes in patents.

The company – which has created a line of catalysts for reducing tailpipe emissions – was   initially focused on making the catalysts and shipping them to customers. This summer, however, Nanostellar shifted from making chemicals to licensing its intellectual property companies to large chemical manufacturers, said CEO Pankaj Dhingra.

So far, one large European car manufacturer has signed on to adopt Nanostellar-created catalysts made by someone else.

"We are purely an IP company," he said.

The shift largely came about because of the realities of the automotive market place. Automakers need large quantities of almost all of the materials they consume. They also generally like their supply contracts to last for years.

"We are a startup. What if we have a fire in the factory? A whole manufacturing line of luxury cars is stopped," he said. "They don't like that."

Nanostellar's shift, however, could be the glimmer of a larger trend in the green world toward licensing. Some companies – Gordon Murray Designs (car designer) and Genomatica (chemicals) – are based around the IP business model, but most green companies aren't, and VCs in general don't encourage it. Green chemistry specialist Hycrete and Bright Automotive are two examples of companies that have said they want to build products rather than take the licensing route.

Some biofuel companies like Qteros plan to license processes, but the larger and more visible ones like Amyris and Zeachem are gearing up to build refineries to sell fuel on their own.

IP can often be easily copied, critics argue. Selling a complete product, potentially, allows companies to garner more revenue from a single sale. Besides, these companies can avoid many capital expenses by outsourcing manufacturing. (In an IP company, a company collects a royalty. In outsourcing, the company sells the product and then pays the outsource manufacturer.)

Nonetheless, the capital crunch could make the business model more popular by default. Companies that outsource manufacturing have to build large sales and marketing teams, and often engage in some level of manufacturing.

"A lot of this stuff looks great in the lab, but how do you impact the market," said Stuart Soffer, who runs iPriori, an intellectual property consulting firm."It is probably a logical consequence."

How this will work out is anyone's guess and ultimately will likely depend on the segment of the market. In the IT world, if you tell someone you work at an IP company, one of the first questions you will get asked is how many people you've taken to court.

Despite a few companies like England's ARM that have dodged mountains of litigation, a good portion of IP companies have ended up in court battles. Rambus, a memory designer, remains ensnared in several multimillion dollar lawsuits. Tessera only began to see licensing revenues and deals come through the door in large numbers after it won some high profile cases.

Meanwhile, it's the total opposite in biotech. Large companies amicably license patents from startups all the time. The historical and cultural divide is one of the big reasons you see pharma and semiconductor companies lined up on different sides of the patent reform argument.

Among large companies, there's often a split personality. Companies such as Hewlett-Packard, Microsoft and IBM have publicly complained about being sued by patent trolls. At the same time, all three companies have beefed up their licensing departments. IBM's in many years counts for more than $1 billion in revenue.