Haley Marie Keith was studying for her MBA when she realised that a patent-pending technology at the university had extraordinary application opportunities. She and her partner Kevin worked out the technology could help a Boeing 787 aircraft shed 48,000 lbs of weight. Just that one application of the functional additive would save millions in fuel costs and gigatons in emissions.
The idea – part of an assignment to create a workable business model – depended on finding commercial partners that recognised the value of the Keiths’ intellectual property, such that they would pay good money to utilise the invention.
Less than a decade later, MITO Material Solutions’ proprietary chemical process powers scalable manufacturing processes in sectors like automotive, sports, and infrastructure to name a few. CEO and co-founder Haley and CTO Kevin remain in control of their innovation, with their company now 9-strong and venture-backed.
I share this as, too often, founders will maintain a narrow, product-focused mindset limiting their patents to a single use. While it’s important to have a clear vision for your innovation, being too rigid can limit its potential. To supercharge business growth, founders should explore a more versatile approach and the various applications and markets for their IP. This vital adaptability involves considering multiple commercial applications for your innovation and embracing collaboration to support business growth, revenue and opportunities.
Although they can be seen as tedious and expensive to obtain (and are often viewed as a means of defence or protection for startup founders), patents can be so much more. Yes, they safeguard innovations, and investors will often look for a robust patent portfolio during the due diligence process. However, the value of patents extends beyond protection and can strengthen the commercial case for investment. Patent portfolios can, separately to their inherent monopoly or use in litigation, be a significant source of revenue, which can help founders bolster cash flow and sustain business growth while continuing to develop their broader vision.
In today’s challenging funding environment, where startups and scaleups alike are pressured to show market traction and revenue before investors consider investing, innovative strategies to self-fund and extend the runway are essential. How can founders leverage their IP (Intellectual Property) portfolio more effectively and strategically to navigate difficult waters and tough funding environments?
Leveraging your IP portfolio for revenue beyond protection
MITO Material Solutions aims to revolutionize materials by making them lighter, stronger, and more durable. MITO’s patented technology transforms substances like graphene and biomaterials into hybrid additives that enhance the performance of fiber-reinforced composites and thermoplastics. MITO is the only company globally recognized to produce Verified Functionalized Graphene, a process that chemically modifies graphene’s surface to enhance its compatibility. Using solid carbon and special chemistries, MITO creates these additives and distribute them into the thermoplastics and composites industry to strengthen and lighten materials, resulting in reduced emissions. This enables their customers to improve the mechanical properties of Fiber Reinforced Composites (FRCs) and reduce carbon fiber usage in components, leading to cost savings and increased sustainability without compromising performance.
Although the Keiths always understood aerospace would benefit from MITO’s technology, they first started to realise the commercial potential of their innovation through a partnership with Folsom Custom Skis in 2022. The ski company discovered that MITO’s additive significantly improved the performance of its skis, both in the lab and on the slopes. Since then the technology has been deployed in sports equipment from bikes to bats.
The point here is that founders will often have an initial vision for where their innovations may take the business and where their technology may be applied for maximum effect. That should not, however, stop them exploring as many adjacent commercial applications as possible. MITO’s example may be one where the model for exploitation of its intellectual property (licensing and collaborative development) may remain broadly similar as the company grows, but a revenue generating collaboration could equally take a business in unexpected but beneficial directions.
Balancing focus and diversification
This is not to say that founders should immediately diversify all of their patented assets. Maintaining a delicate balance between focus and diversification is crucial. While some investors may prefer a single-minded approach, others may appreciate the versatility, and this should be taken into account. As a founder, sound commercial decision making and market knowledge must be applied to ensure IP strategy aligns with a commercially astute business plan.
By regularly reviewing patent portfolios and assessing the potential of each patent, founders can uncover the untapped potential of their innovation. This can provide additional potential revenue streams to support founders in unstable funding conditions and environments. By adopting a comprehensive strategy, embracing a versatile mindset, and appropriately balancing focus with diversification in exploitation strategy to meet commercial goals, founders can unlock the full potential of their patents and improve their chances of achieving business growth even in challenging markets.
Dave Holt is a Partner at IP law firm, Potter Clarkson. He specialises in non-contentious intellectual property law, with experience in significant contentious patent matters. Dave specialises in the biotechnology, synthetic biology and cancer therapeutics sectors, with a major part of his practice focussing on novel therapeutics.
