That most excellent gatherer of statistics, IPRIA hosted a seminar with the above title. Other hosts were the Australian Institute for Commercialisation (AIC) and the University of Melbourne.
First up was Prof Peter Andrews, Queensland Chief Scientist. He had some hard-hitting comments to make. These included the need for a cultural change, particularly in the universities with their penchant for publishing as opposed to protecting. Australia apparently only has half as many patents per capita compared to be remaining OECD countries.
One of the gripes he had was with the government continually stopping and starting investment programmes. An example of this is the stopping and starting of the Commercial Ready program. I have felt that in my practice, with potential clients not being able to go forward because that particular program was dropped. There is such a morass of governement schemes out there that my clients often have to pay some consultant a fortune to figure it all out.
Also, it appears that venture capital generally dries up far too soon and the start-up company is forced to go IPO. In the US, the situation is significantly different way of venture capital funding is repeated during a number of cycles, generally until the company becomes a viable concern.
He pointed out three things that we need to deal with:
1. We need to increase investment in innovation, this includes superannuation funds and other private investment bodies in addition to the government.
2. We need to take the lead and increase investment as soon as possible.
3. Government and other investment bodies cannot afford to stop investing. This is a 10 to 20 year programme, not a short-term thing.
And then it was Prof Bronwyn Hall's turn. This exuberant speaker dropped one or two nuggets. These included the fact that from 1985 to 2000 all growth in the filing of patent applications at the USPTO was due to patent applications in the ICT sector. There has actually been a drop off in the filing of patent applications for pharmaceuticals.
Prof Alfonso Gambardella had an interesting speech, if you live in Europe. It's probably not worth going into much detail. However, it may interest some people to know that more than two thirds of the patent applications filed at the European patent office belong to "big" firms.
The talk was very statistical. I'm always sceptical of statistics. It usually only takes one faulty assumption and the whole house of cards comes tumbling down. However, economists, like the professor, need statistics otherwise there wouldn't really be much to say.
Apparently, most inventors are motivated by the need to increase the performance of the firm, to achieve a sense of satisfaction that comes with knowing that something is possible, prestige, money and career opportunity, in that order.
Oh, apparently the average value of a granted European patent is €6000. Of course, that's completely meaningless because, in my experience, most applicants don't expect to be "average". Furthermore, provided they have been correctly advised, they are aware of the risk-return principle.
This would appear to fall in line with the next meaningless statistic in which it was found that the average applicant believes that his or her patent is worth €300,000.
Associate Prof Beth Webster from IPRIA titled her presentation "What's Happened to Australian Inventors?". A very good question indeed, considering our performance here in Australia.
Apparently there is an annual average growth rate of 4% in the filing of patent applications by companies. The value is -1.3% for individuals and 3.2% for public research. The top subject matter categories are "mechanical engineering" and "other".
Rowan Gilmore of AIC spent a good portion of his allotted time plugging AIC. Given that the vast majority of the attendees would never make use of AIC, this was probably wasted time. In any event, he generated five thoughts:
1.Filing a patent application is never a condition for success.
2. There are horror stories when patents don't exist.
3. There are horror stories even when patents exist.
4. Brand equity should be built through trade marks and trade secrets.
5. Intellectual capital and the capability to execute is just as important as any other factor.
Mr Karl Rodrigues, the investment portfolio manager for the CSIRO had a number of good points to make. The following requirements should be met for successful commercialisation:
1. A problem.
2. A good team for execution.
3. Working capital.
4. Opportunity and luck.
5. Innovation - Creativity, Cool, Science, Art.
6. Cash Is king. Get cash flow as soon as possible.
7. Venture capitalists assume that 9/10 ventures will fail and therefore look for a tenfold return on investment.
Glenn Wightwick from IBM was up next. As some of you might know, IBM has the largest patent portfolio in the world.
This portfolio gives IBM a significant advantage when negotiating with other parties. It also gives them a voice in IP reform. According to the speaker, IBM is filing an increasing number of technical disclosures. The reason for doing so is simply to evidence that they are the authors/inventors of various technical developments. This is considered an effective way of heading off potential patent infringement lawsuits.
Apparently IBM is filing applications for about one third of what it invents.
The next speaker was Malcolm McBratney from McCullough Robertson solicitors here in Brisbane. I found his presentation useful in that it pointed out a number of common mistakes made by innovators. These are:
1.Failure to investigate whether or not there is freedom to operate.
2.Premature disclosure or publication.
3.Not securing intellectual property from contractors.
4.Not conducting a thorough intellectual property due diligence.
5.Failure to take into account joint ownership of intellectual property.
6.Not registering a trademark.
7.Not obtaining appropriate warranties and indemnities in relation to licensed intellectual property.
8.Not documenting intra-group licenses.
9.Non-compliance with the franchising code of conduct.
10.Not complying with the Privacy Act 1988.
Doctor Mark Rogers from Oxford University discussed statistics he had generated in connection with small businesses in the UK and their use of intellectual property, in particular patents.
In one study, he documented 7638 small firms that had technology that could have been patented. In general, 60% of these firms survived. However, 83% of those firms that obtained a patent protection survived. Furthermore, he found that patentee firms had between 0.5 and 12.5% higher average growth rate than similar firms.
Doctor Paul Jensen, a senior research fellow from the University of Melbourne carried out a survey of 108 inventors sourced from the University. Of those, 50% received funding from the public sector and 20% through private funding. When attempting to commercialise the inventions, in 22% of the cases, no one looked at a contract, in 44% of the cases only one person looked at a contract and in only 9.6% of the cases two parties looked at a contract.
Doctor Dean Moss, who is the general manager of life sciences at Uniquest Pty Ltd discussed some issues relating to licenses. He spoke about some characteristics which should be present in an appropriate licensee. These included "financially sound" and "motivated". He also mentioned that it is important that when dealing With a potential licensee company, that the most appropriate person in the company be selected as a point of contact.
What followed supposed to be a case study discussion concerning the development of a new software product for managing real estate. However, it degenerated somewhat when Bronwyn made it known that her son had developed such a product. Initially, the panel questioned the use of patents. However, after some haggling with the crowd, they conceded that it would be a place for patents particularly when it came to raising funds.
I find this particularly frustrating because these people sitting on the panel are those that are often the first point of contact for inventors. If they are telling developers of software products not to pursue patents, I think they are doing those developers a disservice, particularly when it comes to raising funds in the United States.
There was some discussion of Bilski, but not at a very deep level, mainly because the panel were not directly involved with patents, in a legal sense.
Overall, the seminar was partially useful. However, I think that there is an over-emphasis on statistics. Given that each invention is, by definition, unique, it is simply pointless to apply statistics, unless for general interest.