All That is Patented is Not Gold – The “So What?” Factor

One of the trickiest things to do when working with entrepreneurs, especially technically savvy inventors such as medical researchers or engineers, is to convince them that just because they have a patent, does not mean they are sitting on a billion dollar business. In fact, there’s a really good chance they’re not even sitting on a thousand dollar business.

Let’s face it, I could walk down the hallways of even a mediocre university, and if I bumped into a researcher coming around the corner, chances are three patents would fall out of his shirt pocket. As discussed in my previous post on five places you can license IP from (http://biotechbiz.wordpress.com/2009/01/04/5-places-to-find-ip-to-license/), finding patented technology to license is really not that difficult.

What IS difficult, is sitting down (ideally before you spend tens of thousands of dollars to hire IP counsel) with your technology and asking yourself, “so what?”  My device can diagnose staph infection twenty five minutes faster than the current test on the market. So what? Is there utility in knowing that information twenty five minutes faster? (for the record, I just made this up. I have no idea how they figure out if you have staph infection)

The inventor may have spent the last five years perfecting this technology, but I may show the device to an infectious diseases doctor and in five minutes he’ll tell me that diagnosing staph twenty five minutes earlier doesnt really matter because the infection won’t progress in that short a period. Plus, the current testing costs half as much as the new technology. In five minutes, I determined that our researcher’s PATENTED technology is basically worthless.

Remember, when you get a patent, the US Patent and Trademark Office is not saying you have a commercially viable idea, they are basically protecting your innovation. But innovation does not necessarily translate to commercial viability. It is certainly innovative to be able to diagnose staph infection twenty five minutes faster than the current test. But again, you have to ask yourself, “so what? Does it matter enough that someone is going to buy my technology.” If you can’t answer that yourself, good luck trying to convince a venture capitalist.

Remember, the worst kind of technology, is to have what I call, “Neat Technology.” Neat technology is any technology that a venture capitalist would look at and say, “neat technology, but it’s unnecessary.”  So the next time you are about to form a company around a really cool patented idea, take a second and ask yourself, “So what?” You may save yourself a lot of time and money by answering that simple question.