At the MDB Capital Bright Lights conference this week, the teams behind some groundbreaking inventions shared tips for protecting their IP rights.

A blood test for cancer, a device which allows users to play video games with their brains and a sound system which can beam an announcement to a single seat in a packed stadium were among the disruptive technologies – products which have the potential to revolutionise a market –on display at the MDB Capital Bright Lights conference.

The event, which took place in New York on Monday and Tuesday, introduced small companies with ambitious ideas to potential investors with deep pockets and inquiring minds.

Invest in IP

The strength of the IP portfolio relating to an invention emerged as one of investors’ primary concerns. Without adequate IP protection, small companies are vulnerable to having their ideas appropriated by large competitors with multimillion dollar marketing budgets.

Erin-Michael Gill, MDB Capital’s chief intellectual property officer, said that although funds may be limited for start-up ventures, inventors risk losing everything if they fail to secure sufficient IP rights at an early stage.

“Even though you have the least resources to apply to it at that point, without that IP you could end up with nothing,” he said.

Gill said that in order to attract investment or partnerships with larger corporations, it is important for small businesses to build an IP portfolio which makes it difficult for competitors to “design around” their rights. Start-ups should consider potential future uses of their technology and, where appropriate, patent possible applications as well as the invention itself.

“There’s a competing perspective, which says you should stay focused on your core platform and improve that,” he said. “However, the risk of losing negotiating power with potential partners can in some cases be too great.”

Craft quality claims

While investors are concerned with quantity, Gill said that quality is also important. Patent applications should be specific enough to survive challenges without unnecessarily limiting lucrative potential uses.

Life sciences company VolitionRx, one of the businesses presenting at the event, has followed this strategy. The company is seeking funding for NuQ, a test designed to detect cancer by measuring nucleosomes in the blood. At present, there is no screening for cancer in general, and tests for specific cancers can be expensive, invasive and provide too many false results. Clinical trials on NuQ are pending, but early research suggests it could be cheaper and more accurate than existing screening methods.

During a presentation to potential investors, chief executive Cameron Reynolds said the company had taken an aggressive approach to IP protection.

“The strategy is to try to get every aspect that we can think of protected,” he said. “We are the only ones in the space, so we are attempting to make sure we are covered in every way for the shareholders who put up their money.”

Think internationally

In addition to applying for patents in Europe, the USA and other target markets, the company has also applied for trade marks for NuQ, the brand name it plans to use for its test, and key variations.

Parametric, a company which has developed what it calls “a 3D sound system”, has harnessed the complexity of its technology to strengthen its IP protection. Its invention uses an ultrasonic wave to beam sound to a specific point. Listeners inside the wave experience a clear, surround-sound effect, but when they step a few feet away from it the effect is muted and it loses its immersive quality.

Parametric’s executive chairman Kenneth Potashner told investors that the technology could be used in multiple situations where the ability to have different sound zones would be an advantage, including video gaming, sports bars, casinos, retail displays, crowd control and stadiums. Early consumer tests have also suggested it may enable some hearing-impaired users to listen without hearing aids by targeting sound closer to their ears.

Potashner said the company has 21 US patents, two foreign patents and eight patents pending, and is expanding its portfolio both geographically and in terms of volume. He said the patents cover both the technology and a “broad set” of potential applications for its use.

“We think that the sophistication of the algorithms is what will prevent other people getting into the space,” he said.

MDB Capital has developed a computerised system, known as PatentVest, which assesses the strength of a company’s IP portfolio. The system is designed to be used in conjunction with financial information to analyse an investment opportunity. It uses metrics such as historical citations, the compounded growth of a company’s patent applications and whether a key investor has remained with the company to score a portfolio.

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IP tips for technology start-ups

1) Think about it as a portfolio, not a bundle of individual patents.

2) Aggregate your ideas and present them in a very structured way. If I say, “what’s your company’s main invention? Give me a document that shows it”, most of the time it’s somewhere in Bob’s email. Create an inventory.

3) Prioritise the inventions that you have done. You have to have everyone buy in to your strategy. Your CEO needs to be aware of the problems that you have solved and the potential IP that you might have generated, especially early on when you are the most vulnerable.

Source: Erin-Michael Gill, MDB Capital