Schrodinger’s kangaroos

Sometimes I feel like an eskimo in snowstorm; there aren’t any like-minded souls out there…

This from the Business Insider “The association which represents Australia’s venture capital and private equity firms has come out swinging over today’s Commission of Audit report …AVCAL is worked up because one of the seven bodies the commission has marked for abolition is the Innovation Investment Fund. While the other program AVCAL was hoping to sneak through unscathed, the Commercialisation Australia program, also made the grants to be abolish list.”

Well I have a different view entirely. I think that getting the sick, sick patient (the Australian tech sector) off the drip will either force the patient’s immune system to kick in and we will see a recovery. Or the patient will die and leave room for some new organism to thrive, undistorted by the sins of the past.

I have documented the 30-year failure of government investment in venture capital. Seriously, did they expect the government to spend another decade in attempt to achieve the record of the longest failed experiment in the global history of all experiments in any field of science, technology or business? Actually I think they already have the record!

Just as an aside the longest successful experiment in science, technology or business is also Australian. It was started in 1927 at the University of Queensland. It’s just pitch dropping very slowly from a funnel. Since the experiment started there have been 8 drops of pitch of which only a couple have been observed. Which begs the question did the others really fall? So you see, it’s not just an ignoble experiment in stupidity but a philosophical experiment! Who would have guessed.

I guess the government, directly or indirectly, sponsored both programs, the longest successful and the longest failed experiments in science, technology and business. Which is in itself an interesting philosophical puzzle. Why us?

Commercialisation Australia (CA) on the other hand has had only a brief existence on this planet. It was introduced by one of the previous Labor governments (probably Rudd, after the magnificent 2020 Summit) and pretty much replaced the old COMET scheme. Somewhere in their makeup both of these organizations started with the assumption that (a) startups companies in Australia have great ideas, but (b) our entrepreneurs are babes in the woods, and therefore (c) the COMET/CA selective input of time and money will fix all of their problems and they will go onto to becomes the next global technology giants. Yeah that worked, not!

Whereas I could stomach taking money off COMET (and there is no reason not to take free money off the government if it is on offer) I could never get myself to seriously try with CA. There were simply too many hoops to go through and too many conversations with patronising ‘consultants’ advising me on how to run my startups. Worst of all was the weirdness in the selection process; you had to simultaneously prove that you deserved and needed the money but couldn’t get it off anyone else, but that you had tried. This was some odd version of Schrodinger’s cat in a box experiment, once again proving our government doesn’t mind sponsoring philosophical experiments in the guises of science, technology and business.

Well in this instance, my friends, the cat is well and truly dead!

Photo by bugflickr




Ian A. Maxwell is a veteran Technology Entrepreneur and Venture Capitalist. He is currently CEO of BT Imaging, Chair of Instrument Works and Co-Founder of Accordia IP as well as a partner at Zetta Research and an Adjunct Professor at RMIT. He has a PhD in Chemistry and has either founded or worked at Memtec, Allen & Buckeridge, Redfern Photonics, Sydney University Polymer Centre, James Hardie, Viva Blu, Enikos, Wriota, RPO and Instrument Works. You can connect with him on Linkedin

Enhanced by Zemanta

Raising Capital or Investing? Here is what you need to know about Intellectual Property & Due Diligence

Rob McInnes - Dibbs Barker

Rob McInnes – Dibbs Barker

Rob McInnes is a Partner at Dibbs Barker in their Intellectual Property Group. He advises established businesses, start-ups, research organisations, and investors in matters relating to the commercialisation of novel technologies, and in the intellectual property-related aspects of major projects and transactions. He is a specialist in the structuring and negotiation of patent licences, collaborative research agreements, and other contracts for the development and commercialisation of innovations.

Rob is also the highest ranked Australian attorney in the Intellectual Asset Management Global 1000 – World Leading Patent Attorneys. (Ed: I have used Rob in the past and can highly recommend him)

If you need help with any IP or transactional matters you can contact Rob here

Rob shares what he typically advises investors when considering investments in technology based companies. If you are a startup seeking funding or an Angel Investor investing in technology companies these are the key issues you should consider.

Note: The information in this document, broadcast or communication is provided for general guidance only. It is not legal advice, and should not be used as a substitute for consultation with professional legal or other advisors. If you require advice on your specific situation you should direct them to Rob directly.


The purpose of an IP due diligence review for an early stage technology investment is to seek to identify, using appropriate methodology and at an appropriate cost, material issues relating to defects in the ownership, validity, scope or maintenance
of an IP portfolio.

A due diligence-type review will also be useful in providing confidence in a company’s intellectual property position for the purposes of licensing, collaborative research or other partnering transactions.

An abbreviated due diligence such as that outlined in this document will not identify every material issue that might subsequently be identified in a formal merger or acquisition or IPO due diligence, in which much more resources will be

More detailed due diligence investigations can be scoped and undertaken as appropriate if resources are available.

Reaching an appropriate level of comfort from an IP perspective is critical for any substantial investment in a technology venture, and the scope of the early due diligence should anticipate the type and intensity of due diligence to be expected at the time of exit from any investment, whether it be by trade sale, further investments by third parties or IPO.

Principal questions to be answered

At the broadest, there are four questions that are central to any intellectual property due diligence review. These are:

  1. What technologies and intellectual property rights fall within the portfolio of intellectual assets that will be “sold” to the merger partner/acquirer/licensee etc on exit?
  2. Does the company own those intellectual property rights – or if it does not own them, are the owners of those rights able to grant to the company sufficient rights to commercialise them?
  3. How likely is it that those intellectual property rights will proceed to registration (in the case of pending applications) and are valid (in the case of granted rights)?
  4. Does the company have reasonable freedom to exercise those intellectual property rights and to commercialise those technologies?

What intellectual property rights should be investigated?

This initial phase of the review is required both for the planning and scoping of the review, and for the reliable estimation of likely costs involved in the review.

It involves interviewing key executives of the company to determine its own understanding as to its most important intellectual assets.

It also involves review of publicly available IP registers, past information memoranda (if any), reports to shareholders, investor presentations, web site and other publications, any internal register of intellectual property, and ASIC filings by the company.

From this initial phase of the review those technologies that appear to be material to the operations and value of the company should be identified.

Some of the intellectual property rights relating to the technologies may have been licensed by the company from the owner(s) of the relevant intellectual property (for example, universities or research institutions), under one or more licence agreements that will define the intellectual property rights licensed to the company.

While the licence agreement(s) will set out the licensed IP, they will not answer the question of whether all relevant intellectual property rights generated within the licensor organisation(s), which are necessary to commercialise the licensed
technologies, have been included within the licence(s).

It may sometimes be prudent to assess the research output of the relevant research groups within the licensor(s) of licensed IP, to determine whether any other intellectual property developed by them should necessarily or desirably have been included with the licensed IP and made available to the company. This assessment would be based on the scientific publications and any patent filings of the relevant researchers and their institutions. A particular focus would be to identify additional technologies developed within the research institutions that could effectively compete with or enhance products based on the licensed IP.

Does the company own or have sufficient rights to commercialise the technologies?

Answering this question involves an examination of the registered ownership status of the relevant intellectual property applications and granted rights, but it necessarily goes further than this.

Identifying the correct inventors
Inventorship is important in the case of patents and patent applications. If a person made an inventive contribution to an invention but has not been named as an inventor in a patent application, any resulting patents will effectively be unenforceable, at least in the United States.

Further, in most jurisdictions they will not be able to be validly commercialised through licensing without the consent of the unnamed inventor. We recommend a review of each family of patent applications within the relevant technologies, with a view to determining whether the inventors have been correctly named.

Such a review would ideally involve inspection of all original laboratory notes, but the cost of this inspection (at least where the relevant records are in the possession of licensors and not under the control of the company) may be prohibitive. A reasonable impression as to correct inventorship can be gained by interviewing the inventors and reviewing any published papers arising from the relevant research activities.

Establishing chain of title

Once the inventors of the relevant intellectual property have been identified, it is necessary to confirm the employment status of those inventors, as (speaking in general terms) inventions made by an employee in the course of their employment initially become the property of the employer.

It is then necessary to identify any contracts relevant to intellectual property ownership that may have been entered into by the employer, such as contracts governing the funding of the research that gave rise to the relevant intellectual property.

Determining rights under licence agreements

Having identified any licensed technologies and licensed IP, it is then necessary to determine whether the relevant licence agreements grant to the company sufficient rights in the licensed IP for it to pursue its business plans and strategies, and to
determine whether those rights are sufficiently broad and transferable such that the relevant agreements will not become a disincentive to any potential merger or acquisition partner.

Any issues with title or licence agreements can then be brought to the attention of the relevant licensor(s) and an attempt can be made to renegotiate existing agreements or to put in place new agreements to address those issues.

Validity of the relevant intellectual property

Commonly most or all of the relevant intellectual property is not protected by granted patents, but remains in the form of pending patent applications which may or may not proceed to grant.

It is clearly important for the company to come to a view about the likely prospects for protection of the relevant intellectual property through the grant of patent rights. Any valuation of the company will necessarily be heavily influenced by the likelihood of securing strong proprietary positions in its technologies.

Ideally, any assessment of the prospects for the grant of any patent application and the validity of any resulting granted patent would involve professionally conducted searches in all important jurisdictions, to search for prior art that may result in a pending application not proceeding to grant, or in a finding of invalidity of a granted patent if it is challenged.

However, the cost of such an exercise may not be regarded as justified in an early stage transaction. It may be preferable to limit the proposed review to an examination of the company’s own intellectual property files, and the files maintained by its patent attorneys, relating to the relevant patent applications and granted patents – the so-called “file wrappers”.

These files may contain search results from official searches carried out by Patent Offices around the world, and may also contain the results of searches carried out previously by the company or its patent attorneys, either internally or using external contractors.

It is possible that in reviewing file wrappers relevant to an invention, search results will be found that may impact on the company’s freedom to commercialise the invention, but it is important to recognise that searches carried out to determine whether a patent application should proceed to grant, or to determine the validity of a granted patent, are not directed at finding third party intellectual property rights that impact on the applicant’s freedom to commercialise the invention.

Accordingly, while a “clear” search result indicates that a patent application is likely to proceed to grant, it gives no indication as to whether the applicant will be free to commercialise the invention. Further, searches conducted by Patent Offices in different jurisdictions vary widely in quality, and the fact that a Patent Office was unable to locate prior art relevant to a patent application does not mean that that prior art cannot be used subsequently to attack the validity of a granted patent.

Freedom to Operate/Freedom to Commercialise

Being in possession of technologies protected by intellectual property rights is not of itself sufficient to guarantee that a company will be able to commercialise those technologies successfully.

Obstacles to such commercialisation in the context of an intellectual property review may typically be divided into two types;

  • Constraints imposed by the intellectual property rights of third parties (typically referred to as “freedom to operate” issues),
  • Constraints imposed by contracts entered into by the company, earlier owners of the relevant intellectual property, or licensors of the relevant intellectual property.

Freedom to operate

Typically, in the case of Australian technology companies whose technologies are sourced from the public sector, these latter constraints will be imposed by funding conditions applicable to the various government schemes benefiting either the company, or the public sector research institutions that developed the technologies.

In the case of technologies used under licence, they will also be imposed by the relevant licence agreements.

Lack of freedom to operate can of course have a devastating effect on the valuation and commercial viability of any technology company.

Biotechnology companies are particularly vulnerable given the crowded nature of the intellectual property landscape in this field, and the enormous investments in intellectual property rights made by larger players such as multinational pharmaceutical companies and established overseas biotechnology companies with relatively deep pockets and an aggressive tactical approach to securing intellectual property rights.

Other fields of technology are increasingly affected by freedom to operate issues, as major players and new entrants alike seek to establish or defend proprietary positions.

Early stage companies in areas where patent activity is increasing rapidly, such as ICT and financial services, are now as likely to be threatened by third party patent rights as life science companies.

While the costs of having freedom to operate searches carried out in all important jurisdictions in respect of all the relevant technologies will be beyond the scope of early stage due diligence, it is recommended that the issue of freedom to operate
should not be ignored.

Relatively simple searches on the intellectual property rights of known competitors of the company, and on members of research teams in the relevant research fields identified by the company, can be carried out using free internet searching facilities. Such searches can be limited to the major jurisdictions of the USA and Europe and the Patent Cooperation Treaty application database.

However, such general advice could not be relied upon as a “signoff” as to the company’s freedom to commercialise any particular product – rather, it would set the scene for an informed risk assessment.

Constraints on commercialisation under contracts and funding conditions

Apart from constraints imposed directly on the company under its licence agreements and other contracts to which it is a party, there may also be indirect constraints arising from past conditional funding of the development of the relevant technologies.

For example, the commercialisation of a technology developed with most forms of Commonwealth funding must be carried out “for the benefit of Australia”, and certain requirements for Commonwealth consent apply under many funding schemes.

General review of IP management procedures

Any party carrying out due diligence on a technology company will be likely to form a general impression about the company’s overall intellectual property management procedures.

For more sophisticated merger or acquisition partners the quality of the company’s intellectual property management generally may be relevant to valuation, given that evidence of sound intellectual property management within the company will lead to a lower perception of risk.

In the course of a review, information about the company’s intellectual property management procedures generally should be gathered, and reported at the end of the review with suggestions for improvements.

Non-patent intellectual property rights

The analysis and recommendations above focus primarily on inventions protected by patents or patent applications – these are usually the most important intellectual property rights relevant to a technology company, especially if it has no products on the market.

In the course of reviewing the relevant materials for issues relevant to patent rights it is also useful to advise on issues relevant to non-patent intellectual property rights such as trade marks, copyright and domain names, should apparently material issues arise.

It is recommended that the due diligence should at least involve trade mark searches to confirm the registration status of the company’s corporate trade marks in its major markets, and to identify potentially competing trade marks of third parties.

As a first step a review of the file wrappers relating to any trade mark registrations applied for or obtained by the company
should be undertaken.

Summary of possible due diligence steps

  1. Initial scoping, identification of relevant technologies including licensed
  2. technologies, review of research output of research groups within licensor
  3. institutions to identify any additional technologies or intellectual property
  4. rights that necessarily or desirably should have been licensed to the
  5. company.
  6. Interview inventors with a view to determining correct inventorship.
  7. Review employment agreements and other agreements relevant to title
  8. such as collaboration agreements.
  9. Review licence agreements to identify scope of grant and any unusual or
  10. onerous restrictions on the rights of the company.
  11. Review patent application file wrappers for issues relevant to likelihood of
  12. grant, and patent validity.
  13. Conduct abbreviated freedom to operate searches based on known
  14. competitors and research teams, using free internet searching facilities.
  15. Review any funding agreements or other applicable agreements and advise
  16. on constraints on commercialisation rights.
  17. Review trade mark file wrappers.
  18. Conduct trade mark registration and availability searches.
  19. General advice on intellectual property management procedures.


Enhanced by Zemanta

@Kickstarter now launching in Australia and New Zealand

Kickstarter now in Australian and New Zealand

Kickstarter now in Australian and New Zealand – Credit is now accepting projects in Australia and New Zealand .

People can start building their projects from 14th October with the official launch on 13th November.

Arguably is the company that has helped launch more new hardware and creative arts businesses than any company in the history and in my opinion it is mandatory for testing new business concepts and products, it is one of the cheapest and most effective forms of testing your product and getting your first customers, especially for hardware products.

Just as with every other project on Kickstarter, backers can pledge to support Australia and New Zealand-based projects from all around the world.

Australian projects will be listed in Australian dollars (AUD), and New Zealand-based projects will be listed in New Zealand dollars (NZD). If you are pledging from outside Australia or New Zealand, you will see the approximate conversion to US dollars before you complete your pledge.

The mechanics of Kickstarter (all-or-nothing funding, rewards, etc.) are identical for all projects. When pledging, however, backers of Australia- and New Zealand-based projects will enter their payment information directly on Kickstarter rather than through Amazon Payments. All pledges will be processed securely through a third-party payments processor.

For Australia-based projects:

  • Pledges less than $10 AUD are charged 5% + $0.05 AUD
  • Pledges of $10 AUD or greater are charged 3% + $0.20 AUD

For New Zealand-based projects:

  • Pledges less than $10 NZD are charged 5% + $0.05 NZD
  • Pledges of $10 NZD or greater are charged 3% + $0.20 NZD

If a project is not successfully funded, there are no fees.

You can sign up to launch events in Melbourne on October 27th; Brisbane on October 28th; Sydney on October 31 and November 1; and Auckland on November 5. founder Professor Richard Buckland wins national teaching award

Richard Buckland - Photo credit UNSW

Richard Buckland – Photo credit UNSW

Associate Professor Buckland has been named the 2013 Australian ICT Educator of the Year by the iAwards – a national program recognising innovation and leadership across the ICT industry.

According to a number of his students he is a legend. He and former student Adam Brimo founded Australia’s own MOOC (Massive Open Online Course) in October 2012 which appears to have more than >25,000 students registered.


English: (Photo credit: Wikipedia)

I know a lot of educators are highly critical of MOOCs and I don’t personally think they will replace campus based degree’s, there is still definitely a place for campus life and obviously a place for research, however I love what MOOCs are doing to education of the masses.

In my opinion it is one of the most significant shifts since the printing press.

When you think about the impact you might have as a human being, it really is a function of how many people you can reach with your message, expertise or problem solving ability. A lecturer might get to teach to 500 students a year but if they open their lecture on a MOOC it could very quickly become 10s of thousands. The most popular course in the US MOOC system Computing Science has over

Although accurate timely numbers are hard to find its estimated the 3 main MOOCs in the US have enrolled >5 million students with 100s of courses and yet this is only a very small % of the total number of courses that could be offered and the concept is only a few years old.

When you think the largest single University Campus in the USA has an enrollment of 60,000, MOOCs in the space of a few years have surpassed the largest study body the Indira Gandhi National Open University in India (which I suspect is comprised of dozens of campuses and a TV style of University that has channels) in the world at 3,500,000.

It’s not hard to see that a successful Professor could have a massive global impact and I would suggest that this is more important than perpetuating a closed University model.

Richard Buckland wins ICT Educator of the Year Award -Photo Credit iAwards

Some people think about a University education as achieving a degree, a piece of parchment to hang on the wall rather than a deep exploration of topics that interest you, it seems learning for the sake of learning went out of fashion many years ago. Ask yourself why many of the great leaders now in the 70-80s had Ba on their resume, in my opinion it’s primarily as they took an interest in a general education for the sake of education before they specialised. Specialisation became more popular (and a Ba less popular) as attention was focused to turning out specialised employees.

A University education is a luxury only afforded to a select few % of the world’s population, most people who are in the system forget the majority of the world’s population through no fault of their own are born into circumstances where a University education is not available, wrong country, wrong socioeconomic situation or in some countries wrong sex.

What if the cure for cancer, diabetes, hunger, green energies and a 1000 other pressing world problems is trapped in the mind of a person who can’t get to University.

MOOCs offer anyone who wants to take the time to learn an opportunity to access content that was otherwise locked away for the privileged few.

Congratulations to Richard for winning the award and for having the vision to push open education forward.




Enhanced by Zemanta

Entrepreneurial DNA? Founders Institute Accelerator – Applications for the Spring Intake Closing 4th August

Applications for The Founders Institute Sydney Spring Intake are closing 4th August. The Founders Institute is a global group of accelerators that put applicants through an intensive screening process and training and mentoring.

The Sydney mentor list is top class with quite a few guys that I know over the years and some that have had great exits and also have capital to invest in reasonably serious amounts.

I like the idea that you don’t have to have actually have a preformed business plan, I think there should more of this sort of flexible fluid discovery of new business ideas and experimentation rather than would be entrepreneurs with a fixed view about the world.

I like the numbers too, in a little over 3 years the Founder Institute has helped launch over 650 companies across 40 cities and five continents – making them arguably one of the world’s largest startup accelerators.

They also do great infographics.

Signup now

Information Event

Founders Institute - Entrepreneur DNA


Founders Institute Spring Intake

Founders Institute Spring Intake



Enhanced by Zemanta