Turning Big Ideas into Big Business – IP and Commercialisation

So you’ve got a great idea and you spend years testing, refining and developing it. You know what you’ve got is a big deal, but how do you take it to the next level? The path from innovation to commercialisation, it’s a long one with many unexpected twists and turns. With the right advice and the right financial backers, you can turn your prototype into big business.

But where do you begin? Hello, I’m Lisa Leong and this is season three of From Idea to Intellectual Property, a podcast about today’s big ideas and the IP considerations behind them. David Hughes is a patent attorney at Griffith Hack and Rohan McDougall, who you’ll hear from a little later, is the Director of Commercialisation at Curtin University. Now both Rohan and David know a thing or two about taking great ideas to the next level.

So I’m sure in your time you’ve had a whole heap of excited people with great ideas, prototypes, they come into your office. What are some of the main things that you give them by way of advice in that first meeting, David? What I really like to do is put the whole concept around intellectual property into a bit of context. It’s so easy for people to be so engaged with their technology, and their innovation, and they think they’ve got the best thing.

And I like to sort of like reframe it. And the way that I do like to reframe it is this sort of thing. Okay, you want to sell this business.

What do you think they’re going to buy in the end of the day? So start to think really big. And then as a follow up question on those ones, then we start to say, okay, well, when you’re looking at valuations and how people would value businesses, what people actually look at and what is considered the most important thing is, have you got a sustainable competitive advantage to be able to generate revenue into the future? And David, when you’re having this conversation, how many inventors have already thought about these things? It depends. I think those that have come from a business sense, and there’s probably some great examples, that’s where they start.

And they’re the ones that I think are leaps ahead. The other ones and say, I’ve just got this great invention. I’ve got this great idea.

It’s just the world needs it. I don’t know how, I don’t know what. So I think that framing is really important because it always comes up at the end of the day, the decisions that you’ve got to make in your business, where you’re going to put resources.

And then if you can get that larger context, then you can start to say, right, all that competitive advantage that we’re talking about, that’s actually going to be driven ultimately by your intellectual property. It’s what is your secret source within the organization. So there’s a lot of consideration around that.

And if you start to unpack what we call these value drivers, then you start to say, okay, I’ve got a bit of a roadmap. I’ve now got a broader sense of maybe the opportunities that I’ve got and where I should put effort to be able to build that. I’ve spoken to some early inventors who are worried about overcapitalizing in their invention before they’ve sold a single thing.

So how do you avoid that or at least get that balance right? In the early stages, you might say, you’ve only got a certain amount of money to invest in any one area. And if you just come in and say, well, let’s pour it all into one aspect of our intellectual property, that may not be the best thing to do. If you start to see how am I going to position myself in the best way that I can over a broader things, you might think, look, it’s really, I should invest early on more about building my relationships, getting my supply lines worked out.

And then thinking that, okay, maybe this first iteration of the invention is not where it’s going to be. So maybe I don’t invest so heavily in this first part of the invention, but I’m thinking what’s going to come down the track. So trying to scale it.

There are always problems and difficulties in these, in the sense that you do have to make choices at certain times. And if you choose not to protect something, say through a patent, well, you do lose that opportunity. But at least if you’re thinking within the whole broader spectrum of the business that you’re trying to build, you can make more balanced decisions, which hopefully will be able to keep you going.

What are some other hurdles, big ones that we should be aware of? Every business is built on an idea and capital. So obviously there’s the capital side of the equation. How do you actually get a funded? So I think the number one hurdle is never underestimate how hard that is actually going to be.

But also it’s got to be a team sport. You just can’t have all the skills yourself to be able to do everything at each stage on those. So I think it’s also trying to unpack what are the actual skill sets that we actually need to bring into place and when we need to bring into the place and try to then be able to find those networks which can fill those gaps, which you’ll invariably have.

Do you have an example of a successful project that you’ve been involved with that has gone from R&D to commercialization? I think there’s certainly one and it’s been in the press recently. So I’m sure I can be able to talk about that. And that’s Quad lock.

So Quad lock is the business that is in selling phone cases for active people. So you can basically put your phone on your bike to use it as a GPS and it doesn’t fall off. So there’s all sorts of criterias around there.

And one of the main one is you don’t want to people fall off, but you want to be able to access, you want to be able to have freedom as to how you can actually position it. And if you look at the science of that. And you don’t want to change your case over and over, over in and out.

And this is, I think, is some of the genius in that actual business. Right from the outset, it was design led. You know, it put beautiful products on the market and those products by their design and their innovation within that design.

It was a product which, you know, could scale quite well. It’s robust. You can transport it around the world.

But the beauty in this one was that, of course, with a product, it then becomes a bit of an ecosystem within that product. You have it on your particular phone case, within that ecosystem. You might need to upgrade your phones every now and then.

So you probably need to be able to wanting to be able to continue using them out, maybe with your new phones. And then you want to maybe potentially want to broaden the application from those. But the other really interesting thing, I think, around it is that how that ecosystem then works with the audience.

You’ve got a lot of traction and it’s built traction over those years and they become repeat because they’re working within that ecosystem. But they also then celebrate the product. So the concepts around social proof is really important that, you know, everyone loves the product.

They talk around the product. They refer the product. So it becomes a fantastic community of product around there.

But it’s all innovation going through there. But there’s been a whole lot of other threads that have also worked within that. And part of that, I think, was right from the original conceptualizing of how you could build this business and how we could actually scale appropriately with that product.

So terrific example on those and well done to the team. And it’s funny that you mentioned the niche audience, because I definitely know that if I see another person with, you know, the same case as me, you know, that they’re a cyclist or at least a motorcyclist. Right.

And it actually is, you know, a badge. Yeah, it is. And I know that their community is really important to them and they foster that sense of community.

It’s very much central to the importance of their business, that sense of community. And so it was the second part of what they had to do, then sort of protect their trademark and brand. Absolutely.

There’s an old adage that someone told me is that the main purpose of patents is to support trademark. And I came from a technology perspective saying, hey, hang on, isn’t patents the most important thing? The value ultimately accrues into your brand. And so all the technology that runs along over time, which gets superseded and improved on, you’re building your brand.

What you need to be doing is not just registering maybe where you are just now, but thinking about the markets that you want to step into. And, you know, particular countries, you should be very active in that. I mean, you know, China is a great example of, say, one where you need to be very vigilant and have a very strong strategy around your protections.

So, David, if you did have a wish and you could change one thing that might help our ecosystem here in Australia, what would that be? You keep on seeing the rankings about how we rank. We rank very well on inputs in research and outputs from a research point. From a commercialising, we just don’t rate as well as we should.

So I wish we could build a tighter ecosystem to be able to support these organisations or these great ideas that are coming through to commercialising for the benefit of the technology, which is one of the great things that’s happening. The technology itself can benefit society a lot of times in this. But the other thing, of course, is benefit Australia more broadly as well.

We’d love to see more corporate dollars coming in on R&D. And we know that we’re at historical lows at the moment. But I also think it’s trying to break down the barriers, why companies won’t look to maybe universities as much to be able to bring in ideas, how we can get more flow of knowledge between the academia into industry.

There’s a lot of good work that’s been coming, but I really think that would be a wonderful area to really focus on because it seeds such a wonderful future for Australia if we can actually open up all those channels and get better collaboration across that ecosystem. So where does innovation actually start? According to David, in Australia, it often starts in universities with people like Rohan McDougall. Hi, I’m Rohan McDougall.

I am the Executive Director of Commercialisation at Curtin University in Perth. And I’m also the Director of the Resources, Technology and Critical Minerals Trailblazer. Rohan, in terms of that breadth of innovation that you’ve been seeing, what do you think are some of the big gaps that exist between innovation and intellectual property? To get a successful product to market, you need the idea to begin with.

So you need the innovation capacity. And so that’s the science and technology base that is resident in universities. And you also need the entrepreneurial drive.

So people who can take those ideas and turn them into something that’s economically viable. So you need people who have both the will to do that, but also experience in doing that. You need skilled talent.

So you need engineers and people who are able to take science-based opportunities and turn them into something that looks more like a conventional product. So you need to be able to bring those people in to work for you. So you need workforce.

You need money. So capital to invest in these opportunities. So all of those things really come together in a set of capacity, if you like, to try and bring these new ideas forward.

And where do you find the innovation? We work with the base of the university on the concept side. So Curtin, for example, has four faculties. This is Humanities, Business and Law, Health Sciences and Science and Engineering.

Most of the research capacity at Curtin is in the Science and Engineering Faculty. The sort of things I’m talking about there, because we’re in WA, minerals-related innovations, processing and productivity enhancements in various parts of the operations of mining businesses, software development, medical devices. That’s the spectrum of things that we really have been working on.

And so how do you sort through all of these ideas? Do you then have links into industry and you’re trying to link up what does industry need and what have I got in my backyard? Is that how it works? At Curtin, we talk about the two different types of research activity in terms of curiosity or researcher-driven work, which is that basic fundamental research, which is essential to really groundbreaking discoveries that are things that you may not have been able to predict. And then there’s what we call demand-driven research, where there’s very close interaction with industry operators and companies who direct the sort of things that are challenges for them, both currently and in the medium term, and then develop collaborations with some of the researchers here to try and address some of those. As far as how do we filter through the opportunities, we’ve had now a good system that’s worked well for at least us at Curtin over many years.

It’s a process where we every year launch an awards program, and this is something that’s been very well supported by Griffith Hack, I must say. So we’ve had a great partnership with Griffith Hack on this program over more than 10 years. We call it the Curtin Innovation Awards, and the elements of that really are a couple of folds.

So looking at that as a way for us to engage with research stuff. So we use it as a way to go and talk to people about what they’re doing and encourage them to apply for recognition of their work. And this is particularly work that might have industrial application or may turn into a product or service.

We encourage them to put in applications. We then assess those applications against commercial criteria. We filter those to different levels of maturity, where maybe it’s just an idea and perhaps requires some further development, either in the lab or maybe even some commercial input.

And we can direct people into different programs that we’ve developed over time now that can give them some tools to develop either the commercial or the technical maturity of the opportunity. We then use it as a platform to recognize that this is rewarded and encouraged activity at Curtin. So every year we have an awards event where these opportunities are showcased in front of an external, mainly an external, but also an internal audience of people as a showcase of some of the latest technology and innovation that’s coming out of Curtin.

And we use that as a way to encourage and attract people to come forward who might be able to partner with us on those as well. So it’s a promotion exercise to really give profile to the opportunities from a partnering point of view so that we can try and encourage people coming to the opportunity with the skills and resources that are required for that next phase of development. You’ve seen a lot of ideas get turned into commercial products and services.

In your experience, is there really a big trap that people tend to fall into when it comes to commercialization? We often have research teams who are very optimistic about their ability to progress something to a state that is industry ready. And on the other side of the equation, often there’s an assumption by industry about the level of development the university can progress these things to that probably is unrealistic given the facilities and the focus of the university. It doesn’t really have the capacity to take that next phase of piloting at scale, prototyping and developing products to a robust state that enables them to scale into significant commercial operations.

And that’s a different skill set. So I guess the thing that we see often is that people don’t identify that there are definite skill sets at those different phases of development and perhaps try to move beyond their particular area of expertise. And that’s when you can end up losing direction or wasting resources that perhaps might have been avoided if you had people who’ve been through the process before come to the party at the right time.

And Rohan, is there a tension between academics who are doing research who want to publish and the need to keep it under wraps for intellectual property purposes? It’s not something that we see as a significant issue just because of the nature of the intellectual property process in many respects. The whole point of the patent system, for example, is about disclosure. So there will be publication even if you take the track of formalising and protecting intellectual property.

And those two things can happen in parallel. This is the message that we at least have to researchers is that you can develop, commence the process of drafting a publication that can go into a peer-reviewed journal and that draft can be used as the basis of a provisional patent application that can be filed and establish a priority date from a commercial perspective. Now, so those things can happen in parallel.

The issue becomes just that if you’re thinking about it from a purely commercial perspective, the time frame that you have for the monopoly that you’re really trying to establish with the patent system. So if you’re a real commercial operator, you want to delay filing as long as possible, understanding that there are trade-offs with others are working very closely to where you are in the field, but to try and extend that monopoly for as long a period of time whilst you’re in the market. So pharmaceutical companies, for example, think about this a lot and perhaps when they’re coming up with a new chemical entity, they may not file on the optimal entity until they’re very sure about that.

They understand that there’s probably a 10-year process of getting clinical approval and they’ll have 10 years in the marketplace with patent protection against their competitors. And so they want that period in the marketplace to be as long as possible. Rohan, I have heard that when you have deep expertise, sometimes it’s quite easy to fall in love with your own creation.

And I heard that even in the BlackBerry story, the engineers were adamant, this is the perfect product and the iPhone was definitely an imperfect product and they were poo-pooing it. But of course, there’s something to be said for the consumer who sometimes just goes for that imperfect product. Yes, you have people who are doggedly pursuing a particular approach or technology and persevere in the face of all sorts of adversity.

And in some respects, you need that if you’re going to bring a new technology product or service to market. But at what point is the feedback from the market overwhelming to the point that you think maybe this is not going to work? And so it’s a bit of an issue that we see a lot with some of the early innovators that we work with in that we have a number of programs which are for business concept development, for example, and we have an accelerator program that we’ve just selected the latest cohort on where people come in and they get advice about how they can bring new opportunities to market. And some of the feedback from those teams is often, well, everyone says something different.

I talk to someone and they tell me to do this and I talk to another person and they tell me to do that. And part of the skill of being an entrepreneur is to filter that information and filter what’s right for your particular circumstances, your particular market and your particular stage of development and use that feedback and advice to hone the opportunity. You don’t have to take everyone’s advice.

People are always willing to give free advice, but it is a particular skill to be able to filter the advice to something that’s going to create value for you. And as someone who interviews people and listens to people speak, I would say that if you can, don’t look at what people say, but look at what they do, because that tells the actual story. It’s easy to sit down with someone for five minutes and tell them what you think about their opportunity, but obviously always people are bringing their own context to the opportunity, so they don’t really have the full story that they’re providing and using their biases based on what their knowledge base and bringing that to the table.

You’ve got to be selective about what part of that’s really relevant for what you’re doing. That was Rohan McDougall, the Director of Commercialisation at Curtin University, and earlier you heard from David Hughes, Patent Attorney at Griffith Hack. Thanks to our producer, Cara Jensen-McKinnon.

This podcast is brought to you by IPH, helping you turn your big ideas into big business. I’m your host, Lisa Leong. Bye for now.