Turn Your Science into a Business

Commercial success with a new technology usually depends on the exclusive ownership of a critical asset or capability. But to create the technology, an innovator draws on knowledge from many different sources. Inventors who mismanage that tension often fail to successfully commercialize their innovations.

The average adult human body holds about 40 liters of water to support its metabolic processes. Burn victims can lose nearly 37 liters of water a day because of the damage to their skin. Traditional treatment of burn patients involves painful surgery and often a grueling series of follow-up operations. After witnessing a procedure on a severely burned farmer, Lynn Allen-Hoffmann vowed to find a way to help these patients. She embarked on a decade of research and conducted more than 1,000 experiments, and in 1999 she patented a skin substitute derived from normal-tissue cell lines.

Allen-Hoffmann is now the CEO and chief scientific officer of Stratatech, a company that develops skin substitutes for therapeutic and research purposes. The firm holds over 20 U.S. and worldwide patents, and in July 2013 it received a $47 million contract from the U.S. Department of Health and Human Services to complete the FDA approval process for its flagship StrataGraft skin tissue product. The outlook for future burn victims treated with StrataGraft is promising: In one clinical trial, 19 of 20 patients avoided the need for painful follow-up surgery after being treated with the new technology.

It’s a great story: A scientist makes a discovery and then forms a company to create a lifesaving product from it. But not all scientific endeavors progress so smoothly from discovery or invention to commercial enterprise. Compare Allen-Hoffmann’s experience with that of Robert Kearns, the inventor of the intermittent windshield wiper used on most cars today. Kearns struggled for almost 30 years to receive recognition and financial rewards for a technology that he designed, created, and patented in the 1960s.

At the outset, Kearns understood the commercial implications of his invention, and he attempted to sell the technology to Chrysler and Ford. He was turned down. Then in 1969, Ford introduced a car with intermittent wipers, and other automakers soon followed in the 1970s. Surprised to see the wipers on even foreign cars, Kearns disassembled a wiper system that his son had bought from a local Mercedes dealer and discovered that it contained the very same technology that he had developed and patented. So he sued.

Despite his patent, Kearns had to fight hard to recoup any financial reward from his invention. Chrysler and Ford argued that he had not invented any new components and that any expert could easily repeat the enhancements he had made. The invention was thus “obvious” in their view, meaning that his patent was not valid.

The courts ultimately sided with Kearns, who eventually received $30 million from Chrysler and $10 million from Ford, but the process took a huge amount of time and effort, and the rewards were far lower than they should have been for a technology that is used in millions of motor vehicles.

In this article, we’ll explore seven common intellectual property traps and offer strategies for avoiding them.


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