Intellectual Property Directions

While it’s not quite true that there’s “nothing new under the sun”, it is generally true that most technology developments are built on the foundations of prior art. For the inventor or product developer, this prior-art dependency has serious implications. No matter how innovative you are, no matter how carefully you consider your freedom to operate, the chances are that someone out there has a patent that arguably relates to your work. And argue they will if you represent a threat.

Consider the situation of Nova Biomedical. As described by Joe Kalinowski of Trilogy Associates in his enewsletter, Trilogy Tidings, Nova is getting beat over the head by the patent attorneys from the big guys, Abbott, Roche and Medtronic. Here’s the story as Joe describes it:

———————————————————————————

Forbes.com recently published the fascinating story of Nova Biomedical. That company, a supplier of benchtop clinical lab analyzers and personal blood-glucose meters, has been in a fight for survival since 2003 when they were threatened by multiple lawsuits dealing with patent infringement and trade-secret appropriation by the likes of Abbott, Roche and Medtronic.

I was in the business, developing new products for Corning Medical (now part of Siemens Diagnostics), when Nova Biomedical came into being. From the start the company was very innovative, a disruptive force in the market for sure. Great scientists and engineers. Savvy marketers. Today the company’s sales revenues are about $165 million.

The trouble started when Nova invented and brought to market a blood-glucose meter and associated disposable test strip with performance superior to the incumbents in that $8 billion market. The incumbents did not take kindly to this upstart and unleashed their lawyer tribes, peppering the firm with multiple lawsuits. The good news for Nova is that they have prevailed in every instance in court and with the USPTO so far. The bad news? The owners of the firm have so far spent $31 million, laid off 60 employees, and taken out $15 million in bank loans defending the company. You have to admire their dedication, but some might question their sanity. Will it all be worth it in the end? Who knows?

One can second-guess Nova management’s decisions all day long. Should they have caved in, settled and partnered up much sooner? Should they have taken some short money early on and gone ahead to invent and commercialize other stuff? Should they have avoided such a large market with powerful competitors in the first place? Should they have been more considerate of their employees? The answer to every one of these questions might be yes.

Then there’s the principle of the thing! What would you have done?

——————————————————————————

Yeah, Joe, good questions. What would/should one do in that situation.