EU Patent Consolidation

Finally...some good news on the patent front for entrepreneurs after the disaster of the decision to change the U.S to the first-to-file system.

It is about to get a whole lot cheaper and easier to achieve patent protection across the European Union countries.  The EU has approved a simplified system whereby an inventor can receive a single patent that is valid in 25 European countries.  This "unitary patent" is set to become effective in 2014. 

This is particularly good news for small and mid-size businesses with limited resources.  Currently, patents must be translated into the language of each country in which it is issued, which is very expensive.

A single patent court is also to be established, so that patent-holders do not have to defend a patent in each country.

The languages to be used in the new patent are English, French and German.  This decision caused Italy and Spain to refuse to participate, which of course will be their loss.

The following information is provided by the European Patent Office in its news release on the subject:

"The unitary patent will provide legal protection for inventors in 25 EU member states through one single administrative step. It will co-exist with national patents and the classical European patent with which it shares the legal basis and the procedure for grant (as laid out in the European Patent Convention), and from which it differs only in the post-grant phase: Under the unitary patent scheme, the EPO will also be in charge of centrally administering the patent, levying the annual renewal fees and distributing them to the participating EU member states. The fact that unitary patents will be treated as a single patent no longer requiring to be validated (including translation) and administered nationally in each and every state, will lead to massive savings in terms of time and costs."

That's a nice Christmas present for us entrepreneurs!

Can Additive Manufacturing Help You?

You may be familiar with the use of 3D printing processes to produce rapid prototypes from various materials such as starch and other polymers. Typically the parts produced are not very strong. However 3D printing can be applied to metals, ceramics and polymers to produce parts that are strong enough to be put into service under stress-producing conditions.

This process is known as additive manufacturing. Pratt & Whitney uses the process to produce vanes & blades for compressors in its jet engines. The process is used to produce hip implants. Boeing is even researching the ability to "print out" entire aircraft wings!

Additive manufacturing is still quite a bit more expensive than traditional methods of molding and machining, but could be useful to produce functional prototypes. It also could be useful to produce commercial quantities of parts that would be impossible to mold or very difficult to machine; for instance, parts with internal cavities or that have complex geometry, including interlocked parts that move relative to each other. You may be able to produce a single part using additive manufacturing that would otherwise need to be produced as two or more parts and later assembled. If so, the overall cost differential may be minimal.

Wikipedia has a good overview if you want to learn more about your options.

Meet Me at TCOMM 2012

Hey, I am proud to be a presenter at the Duquesne University Small Business Development Center's 2012 TCOMM seminar. The event is in Pittsburgh from 9:00 AM to 3:30 PM September 27, 2012. TCOMM is for technology entrepreneurs and covers many important aspects of technology commercialization. If you can make it, I'd love to meet you! I will be presenting important topics from my new book Mastering Technology Commercialization. To register for TCOMM 2012, please go to .

More FB Fallout

Several mutual funds that invest in private companies such as Facebook have taken extreme hits due to the 29% decrease in FB stock price since the IPO. This will likely impact the future investments made by these so-called "business development companies." Media reports show that GSV Capital has a FB allocation of just 3.8%, yet GSV's share price has dropped more than 35% since the FB IPO. Ditto Firsthand Technology Value fund with its 7% allocation of FB and a nearly 32% drop in its share price since the IPO. The drop in FB shares has also impacted other large private companies such as Twitter, down about 15% since before the FB IPO. We should all hope that FB shares recover!

Lessons from Facebook

By now we all have heard about FB's "disastrous" IPO,with the stock price sinking more than 15% since it opened last Friday. Financially, in the short term, FB and its existing investors came out quite nicely in the deal, however. They were able to get 15% more when they sold their stock than what those who purchased it from them can now get for the same item. This is akin to the "Buy low, sell high" mantra of making money, and we all know that works quite well. In the long run, however, FB and the other sellers of FB stock that still retain ownership may end up wishing they had not made so much money off of those who purchased from them last Friday. The very public black eye for the very public company may do far more damage over the long haul than was made on that one day. This will be quite interesting to watch...

Crowdsourcing Drug Development

Crowdsourcing has proven highly effective in bringing many minds to bear on a range of problem to be solved, though often for issues as simple as a logo design. That power of course can be brought to bear on problems far more complex. The National Institutes of Health, following the lead of a program begun in Great Britain, will begin on October 1 providing grants to researchers to allow them to attempt to find new uses for drugs abandoned as ineffective for their original intent by companies such as Eli Lilly, Pfizer, and AstraZeneca. History has shown that some drugs found ineffective for treating the ailment originally targeted can be highly effective against other conditions. The drug AZT is one such drug, originally designed for cancer but now used against AIDS. NIH is making $20 million available in grants for researching new uses for about 20 drugs initially, but hopes to expand the program. Persons conducting this research will have the benefit of millions of dollars already expended by the major companies to determine, for instance, safe dosage levels. Sounds like a win-win-win to me. The program is being run by NIH's new National Center for Advancing Translational Sciences.

FDA Unique Device Identifier

Those of you developing a medical device should, if you have not already, familiarize yourself with the FDA's new "Unique Device Identifier" (UDI) identification number and barcode system for medical devices. The purpose is to enable the FDA to search databases of statistics from hospitals, insurance companies, etc. on failure rates and other problems with medical devices. The FDA's website has more information, including several slide presentations and notice of a public seminar on UDI to be held in Bethesda, MD on September 12th and 13th.

JOBS Act Update

Well, the Jummpstart Our Business Startup (JOBS) Act (Don't ya just love the clever name???) has passed both the House and Senate and Obama has said he will sign it.

One of the most important provisions for entrepreneurs is that it makes crowdfunding legal. This can make it far easier for startups to raise money.

However, I want to reiterate a point I made in an earlier post, and that is this: Just because you can raise money through crowdfunding does not mean you should raise money through crowdfunding. If you are sure that you can raise the entire amount that you will need through this method, then maybe (just maybe) you should consider it, despite the drawbacks. If you will need to later approach sophisticated investors for large amounts of capital, having a bunch of small crowdfunding owners could be like having an anchor tied to you.

Be sure you understand all aspects of raising investment capital before you make the crowdfunding leap!

More Fundraising Changes Afoot?

I have chronicled in the past months several potential important changes to the laws and rules affecting small businesses raising investment capital. It seems as if there is a new proposal put forth every few months lately. One of the latest: In early March, the U.S. House of Representatives passed a bill to raise the upper limit on how much a company can raise without registration from the current $5 million to a new figure of $50 million. The bill must pass muster in the Senate and then be signed by the President to become law, of course. The SEC is doing its best to maintain its stranglehold over your activities, however, with Chairwoman Shapiro sending a letter to senators coming out strongly against the change.

FDA 101

If you are contemplating development of a physical or software product that is in any way used in medicine, you need to immediately determine whether the FDA considers your product to be a medical device. Many entrepreneurs naively wait too long to get this determination. You need to be aware that if yours is considered to be a medical device, even your product development process is subject to regulation, through the FDA's design controls.

The easiest and best way to determine if yours is considered a medical device is to call the FDA's Division of Small Manufacturers, International and Consumer Assistance at 800-638-2041 or 301-796-7100.

Be aware that the use of off-the-shelf software in medical applications is also subject to FDA regulation. You can learn more about this at http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/ucm089543.htm#8

If yours is considered a medical device, the way forward varies from quite easy to extremely difficult, depending on many factors. Be sure to consult with someone who thoroughly knows the process. I do not recommend that you try to figure it out by using the FDA website or googling various topics, as it is far too complex for that.

Be aware that the FDA also regulates devices used in veterinary medicine. You can learn more about this at http://www.fda.gov/AboutFDA/CentersOffices/OfficeofFoods/CVM/default.htm

Oh, and one more thing: Any establishment involved in the production and distribution of medical devices must be registered with the FDA. More information about this is available at http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/HowtoMarketYourDevice/RegistrationandListing/default.htm

Are You an Angel?

We entrepreneurs are a needy bunch. We need money, we need employees, we need legal assistance, we need advice. It's always one thing or another, sometimes even just a bit of encouragement.

However, just because we decided to become entrepreneurs and started needing so much from others, this does not mean that the others all of a sudden stopped needing anything from us!

As an entrepreneur you are likely seeking "angels" such as angel investors to help you or your business, but think about this: Whose angel are you?

What can you do to help others? It does not have to involve money. Have you made some connections or found some resouces that could be helpful to someone else? Do you have a special skill or knowledge to share? Is there someone that you suspect could use a bit of encouragement right now?

If so, deploy that entrepreneurial spirit and go for it.

Another Reminder that Big Companies Flop

Yet another interesting and informative example of a big tech company doing a big belly-flop with a product introduction is Cisco, with its recent decision to pull the plug on its Umi television video-calling system. The Umi device was launched a little over a year ago at a price of $599 plus a $25/month service fee, and allowed users to make video phone calls using their TV as the display screen.

Technically, it worked very well. However, it carried a big anchor in the market. The problem was that anyone to whom you wanted to talk also had to buy the $599 product and pay the $25/mo. service fee.

How many takers would you have among your friends and family?

Recently a new product, TelyHD, was introduced to the market providing the same service but using a Skype account. It costs only $250, with no monthly fee. Although initial reviews say it does not deliver as high-quality video as did the Cisco device, my guess is that it is much more likely to succeed in the market.

Another example of why it is critical to think beyond the technology.

The Angel/VC Lines are Blurring

In the evolution of private-equity investment, the line between angel groups and VCs blurs with what are referred to as "super-angel" groups. These entities behave like VCs in that they take institutional investments and raise funds into the tens of millions of dollars. These super-angels have stepped up investments since the recession began, whereas VCs have slowed down overall. In fact, the amount raised by these super-angel groups (from which they make their investments) is projected to double this year.

These hybrid entities are also referred to as "micro VCs," and an Internet search will turn up several firms that you may want to consider approaching if you meet their investment criteria.

Great Deal Flow Website

It is often difficult for entrepreneurs to find out about recent investing and M & A deal flow and valuations in their niche. Such information is critical in justifying your company valuation to potential investors or buyers. There are several resources that cost quite a bit of money that track deal flow and valuations. However, one free resource has quite a bit of information that you may find to be helpful. This is the NY Times' DealBook website. The preceding link takes you to an example of one of the reported deals. Enjoy!

Fuji and Kodak

Innovators everywhere have good cause to mourn the finality of Kodak's loss of its place atop the technology heap as it filed for bankruptcy protection Thursday January 19, 2012.

Kodak's Japanese rival Fujifilm Holdings Corp., however, it doing just fine. Imagine that... a large Japanese company that outcompteted an American company primarily through innovation rather than by focusing on supply chain, efficiencies, engineering, attention to detail, and all those other typical components of "Japan Inc.'s" competitiveness.

Shigetaka Komori has run Fujifilm as its president since 2000 and as its CEO since 2003, so he was at the helm during the wrenching changes that took down Kodak. But Fujifilm took a much broader perspective on its technology assets, the future, and how to survive their unavoidable fusion.

Whereas Kodak focused primarily on converting its business from film-based to digital photograpy--it was a pioneer in digital technology--Fujifilm tooks its existing technologies and applied them to completely new markets like the ubiquitous LCD panels for devices such as the one you are now using to read this blog post. It even applied its science to cosmetics and health care markets.

"Fujifilm was able to overcome by diversifying," said Komori in a recent interview reported in the Wall Street Journal.

The lesson here is that innovation must be applied to markets and marketing as well as to technolgies if a company is to survive today's and tomorrow's rapid change.

$50,000 Business Plan Contest

Ben Franklin Technology Partners of Central and Northern Pennsylvania recently announced a business plan contest for businesses in their 32-county service area. The grand prize is the tidy little sum of $50,000.

I have assisted companies that have won the grand prize in earlier similar contests, so if you live in the service area, please feel free to contact me via the "Have a Question?" box at the top of my blog for assistance in applying (ask me to contact you). There will be no fee for my services, as they will be provided via my role as a consultant with the Pennsylvania Small Business Development Centers.

Good luck!