What “the Dropout” series teach entrepreneurs about IP (intellectual property)?
“Dropout” is a tv series covering the reality based story behind the rise and fall of the infamous biomedical startup Theranos. Not only it is a fascinating story (which you can discover yourself), the series provides some important takeouts for the startups regarding intellectual property. Some of my brief takeouts:
- Patent application is instrumental instrumental in attracting investors, team and partners. For investors a printout of a patent application gives an impression of value of the technology. Having filed a patent an entrepreneur communicates that the investors may rest assured that the technology is unique and proprietary. For the team a patent application gives a sense of an opportunity to work with cutting age technology. For partners a patent application demonstrates that you have done your homework and took steps to protect the technology before talking to anyone.
- Even though the patent is the cornerstone of the technology, most of the value is hidden in knowhow and knowledge within the organisation. The patent application is published. Knowledge on how to put the patented technology into practice must remain protected as trade secrets and NDAs. In the case of the series’ story the knowledge of why technology does not work is worth several years of trial and error research.
- Patent does not guarantee that the technology will work. The patent is granted when patentability criteria are met, in most countries these are novelty, non-obviousness and industrial application. A patent is not a seal of approval for commercial potential of the technology.
- Your unique technology does not exist in vacuum. Most certainly, in order to apply this technology commercially, you might need to have access to someone else’s IP. So you need to always give additional thought to how your technology would be used by customer. Which other products, systems and processes they might need to incorporate in order to achieve the full value of my technology? The same statement may be equally right for your competitors working in close technology field.
- Joint inventorship is tricky, in theory all the contributors to the patent own it equally. So always make sure a) all the inventors are included and b) all the inventors have formally assigned their rights to the company. The best case scenario is to have inventor-ship and ownership sorted out during the time when the application is being filed.
- Intellectual property continues to live its own live even when the company no longer exists. That is why it is called “property”. IP can be owned by any other person or organisation or become available to general public.