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Why a Patent alone is a Liability not an Asset

Monday, August 13th, 2012

We waved  goodbye recently to a prospect with a really great invention.  Not only was it a great invention, but he’d hired top quality patent lawyers, filed it in half the globe and… maintained it for ten years.

Heaven know what all this had cost him.  North of £100k he said and, as he explained in notably flat tones, his wife was none too pleased.

So what went wrong?  Is this bad luck, just more evidence that the odds are stacked against the little guy?  Well, there’s truth in both of those but the failure is more subtle.  He had simply never understood what a patent actually was.

A patent is a rented monopoly.  And anything you rent is a liability.  Anything you rent out is an asset.  He had the rental all sewn up but no plan for renting it out.   It’s like renting a factory and then wondering why nobody is sending you cheques.

Obviously this is hard to swallow, £100k down, which was part and parcel of why we waved goodbye to each other, but he was far from alone in his error.  Which suggests it’s less obvious than it appears.

Painfully often, a patent becomes a liability.  Proudly awarded the right to rent his monopoly, the patent holder lacks the means to rent it out profitably.  As usual, the answer lies in teaming up with  someone who has what you lack but lacks what you have.  Only together do you have an asset.

And our £100k man? It would be easy to call him greedy, but who shares a £100k asset?  Thinking that was what it was, he held on to the whole liability.

Born Global

Friday, August 3rd, 2012

Last month I took part in a technology commercialisation conference in Spain.  The question furrowing brows (European and north American, mostly) was a very focused and interesting one:  If most science based businesses are ‘born global’ by market niche, how do we enable them to actually go global?

The organisers had sought case studies of explicitly international accelerators and found, revealingly, none.  Which suggests that either everyone’s already integrated a global strategy into their work, or no-one thinks it’s terribly important.   Which it clearly is.

Competing views around the conference emphasised planning to be global from the start, getting customer feedback early, and forming partnerships abroad.  All very sensible and no doubt the answer is a blend of all three. 

The interesting thing was less the answers than the primacy given to the question in the first place.  I’ve rarely seen it so addressed in the UK, which suggests that  UK startup leaders might get off the boat in foreign parts to find that others have already beaten them to it.

Science based businesses are born global.  They need a global perspective from the start.  We know this – and elsewhere they’re working on systemic answers.