Protecting and Playing Your Most Valuable Assets
by Stephen Thomas
Let’s face it, the business world hasn’t really changed much from the old days. The tools have changed, maybe, but not the goals. We want to increase our market share, we need to attract funding. We want to drive profitability and reduce risk. If we were truly honest we would admit that reducing our competitors’ presence is high on our list of things to accomplish. The tools we utilize to achieve our goals may be complex, but the goals themselves are simple. One key attribute of successful ventures in today’s environment is reliance on a solid intellectual property (IP) portfolio. Tough businesses know this, but how do they pull it off?
Learning from Others Is Always a Good Idea
We have some fantastic examples right here on the Space Coast. Dr. Robert P. Scaringe, who heads Mainstream Engineering Corporation, built from scratch an R&D company that focuses on transitioning advanced energy conversion technology into high-quality and cost-effective commercial products. Dr. Scaringe holds over 30 patents in various energy conversion technologies and has won numerous awards such as the Blue Chip Enterprise Initiative Award, SBA’s Tibbett’s Award, State of Florida Governor’s New Product Award, NASA Certificate of Recognition and SBA’s Small Business Prime Contractor of the Year® in the Southeastern U.S.
Dr. R.J. Scaringe, CEO of Rivian Automotive, is creating ultra-efficient yet exhilarating vehicles through innovation in platform and manufacturing technologies. In 2011, the White House recognized him as a “Champion of Change” for the advocacy and advancement of efficiency in the automotive industry. He was also selected as a State of Florida Entrepreneur of the Year by the Governor’s office.
And, fortunately for us, they will both be featured speakers at an upcoming Founders Forum event (see sidebar) during which they will give their own account of successes and failures building their IP hands. Some of the topics for discussion are:
Leveraging IP in the Fight for Funding. Companies in just about all market areas these days are capital-starved. This is especially true for green-tech and bio-tech companies, but is also true in most other industries – even those whose development costs are somewhat lower (such as info-tech). The most commonly asked questions by venture capitalists are: 1) Who is your management team? and 2) What is your IP portfolio? Answer these two questions well, deal in a good business plan based on realistic market predictions and … voila! A winning hand. But leave out the IP portfolio and you may find there is simply no interest.
Erecting a Barrier to Competition Using IP. Your IP assets give you a tremendous advantage if properly protected – they give you a right of exclusion over anyone wishing to use your asset to compete with you in the marketplace. Which means you can create a discriminator in your market, protect it, and keep the competition suppressed while you build market dominance. Very few assets do this like IP. “I’ve always wanted to own and control the primary technology in everything we do.” – Steve Jobs.
IP as an Ace-in-the-Hole. It’s late in the game. You have watched your stack of chips dwindle. The VCs weren’t interested. You are absolutely certain you have a winner with solid IP protection, but you have not been able to amass the resources you need to address the market. It is time to play that ace you have up your sleeve – an ace you created for yourself when you began developing your IP portfolio. Go license the darn thing. You may find that the paradigms under which you have been operating are now turned on their heads. For instance, your competition may turn into your best teammate. Smart licensing takes into account numerous issues such as setting up market silos, stepladder royalties, claw back provisions in case sales are not met, IP enforcement strategies, etc. But the point is that someone else may be better suited to commercialize your technology in a particular market. And … you will still come out the winner.
Stephen C. Thomas is a partner and registered U.S. patent attorney with the law firm of Hayworth, Chaney and Thomas PA (321)253-3300.