Michael Wyrsta tells us why the key to the success of his company has been giving intellectual property away to their customers
Could you tell us a little more about your role at Panavation?
“I started Panavation in 2006; we’re a service R&D company. What that means is we embed ourselves into client companies, helping them innovate anything from processes, materials, chemistry, strategy, and design; we do a lot of different things. Primarily our work is in the tech and chemical/materials space.
“I’ll give you an example, we had this one client who made innovative materials and we embedded ourselves into their group and completely redesigned their entire process. Along the way, we were able to invent some new chemistry, materials, and processes, which we patented through them.
“We’re inventors here, but our clients file for the patents, then we assign the patents to them. That’s a huge part of our deal; we always agree to assign any IP that we’ve developed with our customers to them. Our business model is different than other companies that do similar work to us, some patent it themselves and then try to license it back to their clients. It’s apparently a viable model and works for other companies. For us it seems that licensing patents back to the client creates a barrier between the client and us, people can get suspicious, and can start trying to claim patents which can be contentious.
“From our point of view, most patents have no value. I have a lot of them myself, and they’re not worthless to do and have, but statistics show that if you file for a patent, you’re most likely not going to get a return on it. I understand the need and usage of patents, but why hold our clients hostage under a patent, especially as in a lot of cases, they have taught us a lot as well during the project.
“So, we try and get that out the way at the start. We make the prices of our services clear and reassure our customers that we’re not going to rip them off. For example, if we came up with a killer app during the project, we’re not going to take the fee and then try to license the technology back to them.
“This approach has been successful for us. It gets rid of the tension patenting can cause.”
As a company, what are some of your key focuses for the next couple of years?
“Everything is running smoothly at Panavation at the moment, so to be honest, there are no real plans for growth or change at the moment.
“We’re working with a couple of clients at the moment, one being on a plant design for a large corporation, and the other we’ve been doing engineering work for a new material process.”
What are the typical challenges you’ve come up against within your industry? As a business or you personally?
“With startups, it’s always about getting money and traction in the industry or business field you’re in, that’s still the primary concern.
“For Panavation, I think we structured the business model in a way that makes sense. Our unique assignment of IP upfront and the style of R&D work we do was just a good idea and worked. It was a challenge to convince people that it was real. However, it’s pretty easy to argue. In the past, we’ve licensed IP from universities, and it can be a real pain. People get greedy and often think their intellectual property is a lot closer to the market, or more valuable than it is. That’s a big perception issue we’ve noticed.
“However, in my other companies, IP is our lifeblood. So sometimes I’m on the other side, and we’re trying to convince people of the value of their IP. I’m on the other side of that. A challenge can arise because how do you accurately value IP? There are so many things that come into play. Not just industry, business or marketability but also freedom to operate and strategic importance.”
How has PatSnap been able to add value to your work?
“For Panavation, PatSnap’s toolset is very useful, and intuitive, and has depth and breadth to it which is great when you’re doing things like claims analysis.
“One example, we had some office actions on some intellectual property we had filed with one of our clients, and we were trying to figure out where we landed in that whole analysis, and we used PatSnap to dissect the intellectual property we were attacking.
“Through PatSnap, we did a claims analysis, exporting large data files that had a lot of patents, as well as doing a patent landscape analysis. It helped us put together a package that the lawyers and other outside intellectual property consultants looked at and were impressed with the quality of the work that we were able to do. PatSnap helped speed up the process of getting a sound argument in place for us to argue for our IP.
“We use it more in the background than directly with our clients as lists of patents we’ve been looking at can be covered in analysis notes. Often with us, we’ll do something, and it’ll get intense, and then we won’t touch it for a while. Then, when it becomes a problem, we’ll go back to it again.”
Why did you decide to choose PatSnap?
“I’ve always been a legacy IP platform user. The reason is, in one of my startups, I discovered a piece of intellectual property, where we had surrounding IP, and we managed to develop a bit of IP that inserted between theirs and ours and eventually led to the company being sold for tens of millions of dollars, all as a result of that one piece of IP. So that’s why I always have that kind of software service around, because when you need it, Google just won’t cut it, when you need to do more than just a patent search.
“PatSnap’s refinement tools are a lot more intuitive, and you get a much higher quality of results when doing an analysis. It covers a lot more ground than previous tools I’ve used.”
How did you get into this kind of work?
“When I started Panavation, I had opportunities to do some consulting, and I got a couple of other people together, and I said we’re stronger doing this as a team than we would be individually trying to consult. I’d also just generated business with some firm clients, and it took off. There was a lot of demand, our customers had a lot of needs and still do.”
