Academics In Business
by John R. Sedivy
This morning the New York Times published an article called “The Academic-Industrial Complex” which focused on a growing trend of university presidents sitting on the boards of public companies. This subject was of interest to me, because as of late I have had the chance to sit on a couple of private company advisory boards as well as have the opportunity to possibly sit on additional boards.
Potential Benefits
Increasingly university presidents are being asked to sit on the board of directors for major public companies; there are least a couple benefits to a company.
The first potential benefit to the company is that the university representative is bringing an outsider perspective to the business. Anyone who has spent any time consulting understands that this is a huge benefit. Employees, or other members participating within an organization tend to get tunnel vision over time. A person advising the firm from outside the normal routine or industry may help get the organization unstuck. Of course the reverse also holds true, the board member may bring back lessons learned to academia as well.
A second benefit to the company is reputation. Americans trust universities and academics, the Times article actually references academia, especially Ivy League academia, as one of the last few trusted segments in the current economy. By having a president of a respected institution on a company board, the company is in essence adding the perception of prestige, respectability, and integrity to the board, and ultimately the company – the last of which is invaluable these days to running a company in the current environment.
Potential Problems
On the surface this may seem like a good thing, and of course there are benefits, but there are potential problems with this arrangement.
The first and most important is perception. Sure the perception of the company by having a trusted academic on their board of directors has merit, but it may draw a critical eye as well. With a university president potentially earning over $300,000 in salary and millions in stock per year for sitting on a major corporate board – there may be an appearance that a company is attempting to purchase their positive image. For the university, the downside is the potential that they will lose their independence, especially if the president sits on multiple boards.
A second potential problem area is time. On the surface a board position may only appear to require a dozen or so hours a month, but the commitment may actually run much deeper. “The Academic-Industrial Complex” article estimates a total time of 240 hours per year for each board – this includes actual board duties as well as prep time. A large amount of this time could occur should the company run into problems as more board decisions and involvement will be required during tough times.
In start-ups I have found that good times require just as much (if not more) attention. When momentum is built and the potential for more money to be made, things move fast and require increased involvement. In addition to a university president’s time serving in their primary capacity imagine their involvement in several boards – and you can see how an individual may be quickly overwhelmed and their primary duties diluted – someone is going to get the short end of the stick.
Potential Solutions
This is really just a simplified overview of a complicated, yet interesting topic. I imagine that much has to do with the individual university president and how they manage perception and their overall workload. There is something to be said for knowing your limits and imposing a certain amount of self-discipline – this is beneficial not only to the individual, but to the organizations being served as well.
“The Academic-Industrial Complex” article did provide at least one good solution – limiting university board involvement to two positions. This would essence set a forced limitation and ensure some amount of focus and limit the potential for abuse of the system.
In my experience another good solution may be to have each university president occupy an “advisory” position on the company’s advice board. This would strictly be a voluntary position, or an option where any proceeds are referred to a third party charity. In start-ups I have witnessed some highly capable people occupy boards with compensation limited to coffee and donuts. The motivation of these voluntary board members was their desire to see the company succeed and/or to assist a fledgling management team establish themselves as a group.
Of course this a complicated matter which will take time to resolve. It will be interesting to see how the role of academics evolves in business and how this partnership will play out in the evolving new economy. For additional reading on academics and corporate boards refer to “Money For Nothing” by John Gillespie, a book I plan on checking out in the near future.
Patent Requirements
by John R. Sedivy
Yesterday in “Patent Overview” I had discussed some patent basics discovered upon my review of HowStuffWorks (HSW). Today I will continue with this discussion by delving into patent requirements. Do you have a great idea that warrants protection? Then you should review these items to see if your idea falls within these guidelines.
Patent Requirements
According to HowStuffWorks there are three requirements that must be met in order for an invention to be patentable:
1. Novel - The invention must be “substantially unlike anything that is already patented, has already been on the market, or has been written about in publication.” It appears that you cannot even patent your own invention if it has been on the market or discussed in publications for more than a year!
2. Nonobvious - “A person of standard skill in the area of study wouldn’t automatically come up with the same idea upon examining the existing invention.” This aspect mainly applies to modifications to existing devices – HSW provides an example of modifying a toaster to handle more pieces of toast – this would fail the nonobvious test.
3. Useful - The invention must serve some purpose and actually work. HSW provides examples of time travel and random patterns of gears not being useful, although time travel may be purposeful it won’t work, at least as far as I’m aware. In addition, the random pattern of gears is not purposeful and will not work if not arranged in a meaningful way.
So now you meet the three requirements of being novel, nonobvious, and useful; next let’s discuss the types of items you may and may not patent.
Patentable Items
As you may recall, patentable items include but are not limited to hardware (machinery), software programs, and business/manufacturing processes among others. Here are a few guidelines for patentable items as outlined by HowStuffWorks:
1. Things that don’t exist yet
2. Standard technological machines and machine advancements
3. Certain computer programs
4. Industrial processes
5. Unique designs (tire or shoe-tread patters)
6. Items that may not be new, but are combined in a unique and innovative way
What I found interesting is that scientists cannot patent discoveries in the natural world, for example new species of animals or plant life. Although there are exceptions being made due to advances in genetic engineering – if it’s created in a lab, it just may be patentable. This doesn’t apply in our case, but it’s interesting nonetheless.
Interesting Facts
While reviewing patent information I found some interesting facts. First, it turns out that Thomas Edison is the inventor with the most patents in U.S. history – with over 1,093 patents to his name. Incredibly after setting up his lab in Menlo Park he set a self-imposed schedule of one small invention every 10 days and one major invention every six months!
Another interesting tidbit is that IBM is the company with the most patents, with over 2,000 patents as of 1999; this number has likely greatly increased since that time. It’s astounding to think that by the end of his life Edison had roughly half the patents that a large organization such as IBM has!
Anyone who has ever tried to invent something can attest to how difficult coming up with a new viable idea can be. It’s simply amazing the type and amount of innovation that occurs within the United States – surely a driving force for the great things we have achieved.
Patent Overview
by John R. Sedivy
Yesterday our Analytica team made the decision to pursue the development of a new product. We’ve have some products already, but all are based on packaging a service around an existing product, such as social media. This endeavor marks us developing our first physical product based on cultivating an idea within our team. This makes sense given that our team has a strong background in product development and have developed numerous high-tech, complex products outside of Analytica, so why not do it within our own company?
So far we’ve built some pretty strong momentum, having whipped up a quick prototype and developed an Idea Overview document which outlines in general terms our overall idea and our approach to bringing it to market. With that being nearly complete I have moved on to investigating patents as our idea does have some secret sauce.
How Stuff Works
I found a good overview and refresher at HowStuffWorks – for those who haven’t been to that site before, I had discovered it in engineering graduate school where it served as a useful resource. The site has since been expanded to cover the operation and process of nearly anything you can think of. Definitely worth a stop if you need to find out how something works.
How Patents Work
Here is a basic overview of patents and some interesting information that I had turned up, some of which I already knew, and other information which was new.
Patents basically provide protection of something newly invented that did not previously exist, basically it protects intellectual property (IP) of an individual inventor or company. A patent does not guarantee protection from IP infringement, it basically just sets up your defense and provides the groundwork for which to defend your claim to the invented idea. It is the inventor’s or company’s responsibility to pursue any patent infringement. A patent can protect newly invented hardware such as machinery, software programs, or even processes of which something is accomplished or manufactured.
This patent protection lasts up to 20 years in the U.S., but it is up to the inventor/company to pursue infringement of said patent. HowStuffWorks discusses an interesting example – Jerome Lemelson who essentially invented the camcorder or significantly contributed to it’s invention – yet he had to spend most of his life proving it, he finally won, but in terms of significant cost of time and money. So, to reiterate, contrary to popular belief, patents do not guarantee protection, they just give you a leg to stand on so to speak.
There are many instances of claimed IP infringement from large companies allegedly stealing ideas from individual inventors – under the assumption that they do not have the time or money to defend their patents. Refer to one of my previous articles, “Inspiration Strikes” for an example of such a case. Many companies claim that they had the idea under development simultaneously under secrecy. This may or may not be true depending on the circumstances – given the level of protection that companies protect their product development efforts it is feasible. Who can say for sure?
I have also heard from others within the New England business community that the 20 years of protection is optimistic at best. It is said that a patent must be continually refined every couple of years or so to ensure that others do not design around the patent or find some other loophole. So don’t think that you can file for your patent, have it granted, and just file it away!
Tomorrow I will discuss patent requirements and the types of items that are patentable.
