🤔 Why Is This Research Available For License?

Exploring the paradox of research collecting dust in a world craving innovation

A good friend of mine asked me this question few weeks ago: Why has nobody else snagged this up given the patent was already granted in 2021? I made a mental note at the time that I should get back and address this question in a post because, my hunch is, a lot of us are wondering the same thing. In fact, I would go as far as saying that this is likely a major impediment to more founders discovering and engaging in patent licensing. To be clear, there are many reasons that lead to less than 5% of patents getting commercialized, I just think this assumption is one of them.

Here are my thoughts on why this is the case in no particular order:

1/ Good patents are hard to find (and even harder to evaluate)

Maybe I make this look easy here but in reality, it took me the better half of 2023 to learn about the tools and techniques used to find and evaluate patents. It’s not easy work and it’s part of the reason I’ve started Action Potential, to see if I can make it easier to learn and evaluate interesting research that’s ready to be commercialized.

Just because a patent is available for license, shouldn’t make you think that millions have looked at it and didn’t think it’s worth commercializing. The more likely scenario is that very few (if any) gave it the time of day. My recommendation here is to work back from a problem and then search for patents/research/innovation that can address the problem. When you approach the search with that lens, you end up surfacing multiple competing approaches that are possible to address the same problem. This will make you that much more capable of navigating those patent waters and evaluating the value of each approach.

2/ A good invention can be mistimed

Timing plays a huge role, too. Some patents are way ahead of their time and/or don’t get commercialized because of market dynamics. One famous story here is the invention of digital photography, Kodak actually invented digital photography all the way back in 1975 but failed to commercialize it because management didn’t appreciate the value and promise of it.

3/ Discovery and patents are only half the battle

Building startups is hard. Bringing a patent to life requires more than just a great idea; it needs capital, a dedicated team, and the right strategic partners. Many potential licensees might balk at the upfront investment required, especially if the path to profitability isn't crystal clear.

4/ If the patent is available, it’s likely junk?

A classic human fallacy is that of over-valuing scarce items and under-valuing items that appear to be in abundance. When we hear that 95% of patents don’t get commercialized, our immediate reaction is that a lot of those patents are junk and not worth commercializing. So the thinking goes, the patents we are coming across currently are also likely worthless and not worth licensing.

What makes this challenging is that there’s a good chance that you’re right! For a multitude of reasons, researchers are heavily incentivized to file patents that are often not novel or significant but can lead to hitting critical milestones on their academic journey. The role of the founder here is to evaluate the quality of the lab and the research and if you start with a problem you are motivated to solve, you will pretty quickly be able to tell apart researchers that are truly invested in solving the same problem versus researchers focused on academic career progression. Remember that the value with licensing is not simply to acquire the invention but to partner with the researchers and the lab behind the invention, think of it as a way to accelerate your journey, not to check a box.

🎨 About the artist

Shusei Nagaoka, a prolific Japanese illustrator celebrated for his iconic album cover artwork during the 1970s and 1980s, including designs for Electric Light Orchestra, Earth, Wind & Fire, and Deep Purple.