Category Archives: guest posts

Life Science Entrepreneurs Still Shaking the MoneyTree

medtechthursday
Guest Post by:
Mike Schmitt, MD
Life Science Analyst and Editor of the Florida BioDatabase
Mike can be reached at [email protected]

moneytree
Ok, enough already! Amidst all the economic “doom and gloom” from the daily news feeds—I actually do have something encouraging to share (well, at least for the moment until the Dow plunges another 10%).

The National Venture Capital Association along with Pricewaterhouse Coopers released their VC funding update in its recent Moneytree Report for Q3 2008.  PWC’s MoneyTree is a great site for info on VC investing trends on the national as well as regional levels with the capability to search by industry. Even better yet—it’s free with a simple registration.

It seems that on a national level, VC investments have remained relatively stable (naysayers look out!) through the 3Q of this year at $7.1B. The biotech industry, which had fallen to 3rd place in the 2Q (first time that had happened since 2003) once again reclaimed its top position inching out software by a narrow margin of $1.35B to $1.34B.  The medical device segment placed 4th at $864M, giving the overall life science sector (biotechnology and med device combined) a relatively strong $2.21B (and represented a 10% increase from the 2Q). This brings the 2008 total for all categories (through 3Q) to $21.6B and is on track to be in the same ballpark as 2007 when VC investments were $29.4B for the year.

The life science industries do tend to be more resilient in difficult economic conditions—after all, people don’t stop getting sick and we still need to treat their illnesses.  But in this market—anything can happen. When the ultra-conservative stock of Berkshire Hathaway moves up or down by more than 25% in a single day—you know we are not in ordinary times—and no company is immune to the current market conditions.

Can we expect more good news or will VC investing get hammered by year end?    PricewaterhouseCooper’s managing partner, Tracy Lefteroff does not expect funding to dry up. “VCs have slugged through difficult times before and this one should be no different.” Personally, I’m not so sure.  Stay tuned for the 4Q follow up in February 2009. It’s difficult to predict at this point, but I’m putting my bets on a tough market ahead.

Dan’s Note: Short answer, if you can avoid raising a VC round in 2009, do so.  Good deals will get funded, but given the increased macroeconomic and financing risks, valuations will take a hit — particularly during the next 6 months of uncertainty.  The added creative innovation to bootstrap your runway to 2010 will also pay long-term dividends for your business.

An Inventor’s Quick-Start Guide to Patenting Your Invention

patent
I always like those Quick-Start Guides you get with a new computer or software. I learn what I need from one or two pages, and rarely ever read the full instruction manual — I learn best by doing.

This Guest Post follows the same principle. Inventor, Mona Singh, has learned by doing with over 50 patents filed and was kind enough to share an inventor’s perspective on the decision to patent and the drafting process.

To Patent or not to Patent, that is the question
by Mona Singh, Ph.D.

Over the years I have run across a large number of entrepreneurs and the one thing that’s common among all of them is their passion for their idea. The passion sometimes translates into an urge to patent the idea. And inevitably, as soon as the word patent is uttered the focus shifts to finding a patent lawyer and the money to pay them.

More often than not the question of a provisional patent comes up to muddy the waters.

Having been in several situations centered around patenting and having been the inventor of over 50 patent filings I finally have some opinions and lessons to share.

Do some research: The first piece of advice I have for entrepreneurs with great ideas is to do a thorough search on the USPTO patents database (www.uspto.gov). Keep searching till you find at least one patent that comes really close to your idea. If you find nothing then you need to modify your search. Make sure you have searched both the issued and published patent databases.

Write your own claim: this will help you figure out what your invention really is about. You may have a very broad concept in your head at this point but you need to convert that into a specific method. I did not realize this for a really long time.

Patent attorneys will take what you give them and create a claim for what *they* think is patentable – that may not be very close to what you think your core invention is. You as the inventor need to be able to point out exactly what is novel and non-obvious about your idea, and why. Remember *you* are the subject matter expert!

Be the devil’s advocate: Spend some time (read that as a lot of time) thinking about all the ways that someone can get around that method. Refine your claim. If you can’t do that, get a friend to try and pull it apart. Look for prior art that kills your idea! Make sure you don’t get emotionally attached to it. Remember, there are always more where your current idea came from; chances are your next idea will be better than this one.

Create a business justification for yourself: Ask yourself your business goals are for getting a patent. Remember that after 18 months all filed patents are published on the USPTO site. So in a sense, your competitors will have more insight into your idea. Do you really want that? A lot of companies (e.g., Google) don’t patent the methods they want to protect the most.

How will you be able to tell if someone is infringing on your patent?

Get a prior-art search done: Once you have the main claim down and you are convinced that you do want to patent your idea, get a professional search firm to do a prior-art search. Some firms also do a patentability analysis. A number of these search companies are run by ex-Examiners. The results they produce are usually quite valuable. When you see the results, you should refine and expand on your original claim.

Find a Patent Attorney: When *you* are totally convinced that your idea is novel, valuable, and if someone infringes on it you will be able to detect it, that’s when you a ready for a patent filing. The value of provisional patents is arguable. A patent attorney will charge about the same amount for a provisional as for a utility (real) patent filing. So, it is better to get a utility patent.

Read the draft: So, you find a good patent attorney and he sends you this draft that is full of legal language and looks really overwhelming. You are obviously busy with everything else that relates to your business. Well, no excuse is good enough! You have to go through the draft with a fine-toothed comb. Make sure the claims are not too broad and not too narrow. Question the choice of words in the claims. Make sure you have properly “enabled” the invention – that is, figured a way to implement it. The enablement should be precise enough that if someone were to build what you are patenting they will be able to do so without experimentation.

Once the patent has been filed, you’re patent pending!

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