The Biz

Research and development is part of every technology business, however not all organizations document the progress in a manner that will protect them in the future. Today I'll pose a number of questions that will generate thought on your own Intellectual Property Strategy.

Intellectual Property Related Questions

What role will IP have in your company?
Will your company generate IP?
Will you company in-license IP?
Will you company license IP to others?
Will your company commercialize IP?
Will you seek Venture Capital financing for your company?

Intellectual Property is All About Value

Generate New IP > Development IP through technical, regulatory and business milestones > Commercialize or License-Out
Define Business Plan
Ensure that the IP goals and business goals are aligned
Create an IP strategy for the business
What would you like to have exclusivity on?
What IP is required to practice your business?
What IP will be created by the business?
What IP would maximize the value of the business?
Maintain a focus on using IP to create value for the business IP may be the most valuable (intangible) asset in a company.

Research & Development

R&D Program should be aligned with the business plan
The R&D Program should be to take a product from concept to commercial application and generate revenue
Ex: Product development in biotech company
Ex: Product development in an engineering company
R&D Program should have milestones

What IP is required to practice your business?
Compositions, uses, methods of manufacture (technically superior, easier to use)
Overcome blocking patents

What IP will be created by your business?
Maximize the scope of your claims
Ex: Use for a family of products

What IP would maximize the value of your business and take it to the next level?
Extend patent life on existing products (PTE)
Extent market exclusivity
New uses for the existing product, new combinations
Improved methods of manufacturing
Improved second generation products

I trust that the items covered above will help you define your own Intellectual Property Strategy.

Footnote: Speaker: Colin Macaulay during the Intellectual Property sessions at the Ivey School of Business

To continue the discussion on entrepreneurship, we'll explore the topic of "intellectual property" and the various forms it takes on. Learn all about patents and why you should apply for a patent for your business.

Forms of Intellectual Property

Patent - Protects how something works; things, workings and methods
Industrial Design ( Design Patent ) - Protects how something looks
Trademark - Protects how something is known in commerce
Copyright - Protects how something is creatively expressed. Literally means the right to copy

Features of a Patent

- Converts an intangible idea into property
- Can be bought, sold or used as collateral
- National jurisdiction
- Time limited monopoly of 20 years from the filing date
- Monopoly excludes others from practicing within that territory

How to Read a Patent
Here is a brief outline of the parts of a patent
- Title, abstract: high level overview
- Background: set out problems in the art and the state of the art
- Summary of Invention: parallels the main claims
- Detailed descriptions and drawings
- Claims - The claims define explicitly the scope of the patent being held
- Ownership - Assignee or applicant field lists corporate owner. If none present, then inventor is owned

The Reasons Why to Get a Patent
Protect invention from others
- Early state, protection from “friends” ( e.g. industrial partners, collaborators, suppliers, customers)
- Later stage, protection from “competitors”
- Attracting funding
credibility and security for financiers
- Marketing cachet (“patent pending”)
on products and promotional material
- Building value in the company
especially as patent family grows around key technologies
Source of licensing revenue
particularly for research companies and institutions

What are your first steps?
- Idea collection
- Many ideas are patentable, however not all ideas are worthwhile
- Need to communicate in standardized way
- Need to decide which to pursue
- Careful forethought

What makes an idea patentable?
In Canada, must be an “...art, process, machine, manufacture or composition of matter...”
Thinking of a “better way”
Must be new, useful and non-obvious
- New: features not disclosed in a single document ( anywhere, anytime )
- Non-obvious: features not disclosure in a combination of documents
- Changes of size, substitute of materials, automation of a known process are typically not patentable

Certain categories of non-patentable subject matter
- computer programs
- algorithms or calculations
- methods of doing business
- algorithms or calculations

Software patents
“software” not patentable per se
Instead: method of doing something using a computer
Focus usually on end-user: care when drafting
Internet methods: international jurisdiction
- Where is software hosted?
- Where is the end user located?
- Where is transaction completed?

Ultimately when deciding whether or not you should file a patent, first ask yourself, "what are the business goals and is it worth pursuing"?

For more information on patents, visit:
www.uspto.gov
ep.espacenet.com
www.cipo.gc.ca

On that note, we'll leave it for today, and pick-up the rest of the discussion tomorrow.

Over the past few weeks, I've been participating in a course at the Richard Ivey School of Business on the subject of entrepreneurship. The first session discussed the importance of having a business plan. Here are some of the highlights.

What is a business plan?

* A critical document that clearly describes your idea
* A document that others will judge your business upon
* A living document that will change over time
* A tool to increase your chance of success

Why do you need a business plan?

* Test feasibility of your idea or business concept
* Helps you measure short term / long term profitability
* Prepares your business for the future – plots a course, aligns goals, account for resources, implementation plan including benchmarks, milestones and with dates your working towards
* Communicates your vision to key enablers ( e.g. management team, establish credibility among investors, bankers and advisors )

When should you start a business plan?

Start researching the idea immediately. Engage in two types of research.
1 . Primary research ( networking, customers, surveys and focus groups etc…)
2. Secondary research ( Internet, associations, magazines etc…)

The Business Plan

Executive Summary
Keep it short, punchy, succinct, leave the reader wanting more

Company Profile
History, Key management team, subject knowledge, operational knowledge, business acumen and skills

Product Overview
What pain does it solve for the customers? Current solutions ( the traditional model ), secondary products

Market Opportunity
How big is the market? Who is the target market? Can you segment the market? Who are the key customers you’d like to go after?

Sales and Marketing
Revenue model, sales cycle, web sales cycle, sales channels

Operations
Equipment, skills, human resources, identify holes in personnel and how you’re going to fill it.

Financials
Income Statement, Statement of Cash Flows, Balance Sheet, Funding Needs

Appendix
Biographies of the management team

To wrap-up, you can find plenty of samples of Business Plans on the Internet, however remember they are just that, templates. There is no standard business plan, so be sure to customize the contents of the plan to accurately communicate your vision for your business.