Neglecting Policeability
Process and method innovations are difficult to protect. Because most companies’ production operations occur behind closed doors, it is often impossible to tell whether a product was made using a particular process technology. That gives firms leeway to copy the new method or technology with impunity and avoid paying license fees. This was the problem facing Robert Kearns and his windshield wiper technology. Had Robert Kearns been able to enforce his IP sooner, the outcome would most likely have been much different.
Ideally, an inventor will build markers for a production technology or method into the product itself. A case in point involves a new process for extracting flavonoids (a compound found in red wine, purple grape juice, and other extracts that protects humans and animals against heart attacks) from waste product discarded by wine growers. The inventors of the process found a way to give their extracted flavonoids a unique chemical thumbprint, so if anyone used their process, a simple test of the final compound would reveal it.
Another way to protect the IP of a process innovation is to turn the process into a product. One inventor team linked to our TTO came up with a method for studying stem cells in vitro while simulating conditions similar to those in vivo. Although the commercial applications for researchers and biotechnology firms were immediately apparent, it was equally clear that it would be hard to police unlicensed use of the technology. The inventors’ solution was to turn the method into a kit that could be sold as a product. With a diagnostic product readily available, users would have little incentive to make their own devices.
If marking products and turning processes into products are not viable options, inventors can also approach a producer of a larger system to see if their new processes can be embedded under license into an existing tool or platform. This transfers responsibility for policing to upstream producers that are better equipped to monitor the use of a technology.
This was the approach taken by Charles Mistretta and his research team, who in 2003 pioneered a 3-D imaging technology that captures multiple, real-time images of an afflicted area of the body and displays them dynamically. The new technology allows doctors to view vascular obstructions in even the tiniest of blood vessels. To commercialize this breakthrough, Mistretta licensed the technology to GE Healthcare, which incorporated it into its MRI machines.