Intellectual Property: Protecting your Jewels
Our November 2017 Business Breakfast, arguably the most lively one in recent memory, addressed “Managing IP’s Complexity to Create Value as Small and Large Companies Interact.”
Our two speakers, David M. Deems, CEO of Cellaria Biosciences, and Daniel Shores, CEO of Shores & Oliver, neatly represented two main views of the IP issue, namely the lawyer and the entrepreneur/inventor. Details about each of our panelists can be found at the event announcement, or by clicking their photos to visit their websites.
Dan, a lawyer with broad experience in corporate IP, began the session by clarifying four key types of IP and their optimal use cases, listed here in descending order of relative cost to obtain, maintain and protect:
- Patents – pertaining to product or a process; typically a 20-year “quid pro quo” arrangement where, in exchange for publishing the details of your utility, design or plant invention, you retain property rights and can charge others licensing fees to make use of your patented property;
- Trade Secrets (example: a recipe, especially common in Biotech) – this protection can last forever if you take prudent steps to maintain secrecy;
- Trademarks and Service Marks – useful for protecting your brand and logo;
- Copyrights – used by authors to ensure nobody can copy your work; even your website can be protected if your content is unique and original
In protecting your IP, legal fees could be quite high, especially for a smaller company.
What Should You Protect?
The presentation turned quickly to a discussion between the presenters as biotech CEO David began to underscore the importance of understanding the value of the IP to the business. “Is this important to your brand?” he asked. “Is this just about the ‘recipe’, or is it tangible end product?” And what impact does this IP have on your core identity as a business and on market differentiation?
Applying for a Patent: What Can You Claim?
When you apply for a patent, the claim you make is kind of like drawing a boundary around a plot of land. How many “acres” are you planning to protect? Dan and Dave both stressed that it’s not just about the acreage. You need to determine how this differentiates your product. Seek the broadest claim you can, but make sure it’s something you can defend, in terms of time, money (legal fees), and that it will support your business goals. “A patent protects you for 20 years,” David said, “so you have to think 20 years out, and sometimes I have trouble just including the whole week.”
Hand Raisers Rule
Dan had invited the audience to raise questions during the presentation rather than wait for a Q&A session scheduled at the end of the hour. Within the first 5 minutes of the session, a hand went up, setting the scene for the rest of the hour. Dan and David’s presentation was shaped almost entirely from that time on by questions from an engaged and interested audience. Clearly, many entrepreneurs attended, posing numerous particular questions, all deftly and humorously handled by our panelists with anecdotes from their experience.
The discussion moved through many topics. One was how the large company IP strategy can differ from the small ones: “The large ones,” Dan pointed out, “have IP portfolios. The smaller ones more likely have a very small number they need to protect.” Larger companies can set up their IP portfolios like “picket fences” which make it very hard for anyone to get into their territory.
Licensing: It’s All Negotiable
Dan and David stressed the importance of creating relationships among companies which could lead to cooperation and coordination. This naturally led into a discussion of negotiation, a key to successful IP management. In the end it returns to making the right business decisions. Doing a good job can result in FTO – “freedom to operate.” You could, for example, grant a particular partner a license to operate within certain boundaries, which could be defined by geography, industry, time period, or application/use case. Here, clearly defined KPIs can help clarify and support the interests and outcomes to all parties in the deal.
Over to You
Are you an entrepreneur, inventor, or simply someone with an idea worth testing? This morning’s topic was clearly important topic for our audience. We would be delighted if the discussion might continue in this blog’s commentary. What has your experience been? Can one of our experts field a question? Your comments are welcome.