Maximizing Value of Inventions/Entrepreneurship By ‘Dialing in’ to Strategic Intellectual Property Planning
By Jennifer J. Johnson - Principal, Johnson & Company
In 2006, Nate Alder, then an undergraduate student at BYU, said he thought the noble gas Argon was "a character from Lord of the Rings." Almost three years later, the 27-year-old inventor-entrepreneur is exploring how to tame Argon, as well as other inert gases, to provide insulation in parkas and other outdoor gear.
Alder's company, Klymit, is changing the discussion in the outdoor apparel market. Besides having been credited with a technological breakthrough, inventor-entrepreneur Alder now presides over a growing company that is pursuing numerous licensing opportunities with outdoor recreation giants such as skiing equipment providers, government military operations, as well as many other market opportunities.
Nothing is more important to entrepreneurs than unbridled determination. However, significant seed capital is critical as well, and the successful entrepreneur is rarely bashful in pursuing funding. In Alder's case, this infusion came from one of Utah's own angel investing treasures, Alan Hall-who provides wide-ranging support and investment funding for research and development facilities in Ogden. Now housed right alongside the likes of Amer Sports (parent company to Atomic and Solomon), Descent North, Nidecker, Scott, inventor-entrepreneur Alder rubs shoulders daily with many of the big-league names that he may one day seek to license his visionary product.
The emergence of Klymit is a story that intellectual property (IP) attorneys love: A thoroughly unique idea, benefited by defendable, patentable technology. Alder and his company recognized the value of intellectual propert to the long term growth of the company. That recognition is as essential to long-term success as the invention itself. A seasoned IP professional should be an indispensable partner in navigating the long and challenging road from invention to marketable product to cash register.
Utah entrepreneurs can take a lesson from Klymit about the need to approach their investments in IP as essential, strategic business commitments. Not doing so could result in permanently stunting the growth of the company's value and any commercial vehicle chosen to exploit it.
One of the most venerable figures in modern intellectual property circles, the late Judge Giles Rich of the Court of Appeals for the Federal Circuit, provides a telling example. Herbert Spencer invented "an excellent invalid chair, and, thinking to give it to the world without recompense to himself, did not patent it. The result was that no manufacturer dared risk undertaking its manufacture. Each knew that, if it succeeded, competitors would spring up and rob him of most or all of his profits, while, on the other hand, it might fail."
Sadly, these intellectual property shortcomings are not that uncommon. In recent years, a number of promising developments have failed because of the lack of attention to the IP aspect of business.
From the outset, Utah entrepreneurs should think about their inventions' potential from a "field of dreams" perspective-"If you build it, they will come." Translation: If an entrepreneur has a good idea, competitors, both small and large, will vigorously attempt to appropriate it. The solution? From the outset, seek to protect intellectual capital through strategic IP.
One of the most refined legal skills is to properly claim an invention and steer it through the patent office. There are many cases where inventions have been claimed too narrowly and enterprising "copyists" have been able to circumvent the patent protection. Misguided changes in patent applications in the long course through the United States Patent Office can thwart an inventor's ability to glean the full fruits of an invention. The patent process is extremely complex and requires the most careful attention in delivering an inventor the level of patent protection so that "copyists" cannot steal the idea.
Today's climate of patent reform and ready access to global markets demands an increasingly sophisticated outlook to not only prevent IP mistakes, but to intelligently leverage IP for long-term positive yield.
This April, Workman Nydegger celebrates the firm's 25th anniversary. That experience serves them well as today's patents are put together quite differently than those in the firm's early days. In fact, today's sophisticated patent structuring is very different from that practiced even five years ago.
Recruiting seasoned IP counsel well versed in knowledge of IP cases is crucial to becoming "dialed in" to the ever-changing IP landscape. Failure to do so is simply poor business judgment. Ideally, inventors should seek the learned, experienced counsel of attorneys who actively participate on policy committees, refining patent legislation and have close relationships with the U.S. Patent and Trademark office. (To put it simply, if your firm does not spend a significant time back in Washington, D.C., they're probably not the best counsel to protect your dream.)
Today's turbulent IP landscape exists within the larger economic environment. Recessions tend to encourage entrepreneurial opportunity. When more traditional work opportunities are either unavailable or unattractive, many entrepreneurially-minded individuals trade negative circumstances for fulfillment of a lifelong dream of starting businesses. Small business startups are a primary engine of economic recovery and lasting vibrancy.
One of the very first questions potential investors ask an entrepreneur's is whether their technology is patented or en route to patent protection. Solid IP strategies are essential to a venture capitalist's or angel investor's interest. Investors will not only want to know the status of the patent, but the qualifications of the IP advisors to the entrepreneur. Count on it. Embrace the notion that not only IP protection from the outset, but an ongoing, strategic IP-centric outlook evaluating future protection guidelines and even recognition of additional patents is intrinsic, not discretionary, to long-term business success.