Surgeon’s New Instrument Line Licensed for Business Development

by Area Technology Commercialization Firm

Millennium Marketing Group Sets Up Allied Surgical Instruments to Market and Manage Business Development for Dr. Christoudias’ Versatile™ Laparoscopic Instrument System

Outsourcing Technology Product Development Goes One Better: Structuring the Deal

Overland Park, KAN. - In setting up a company that licensed Dr. George Christoudias’ newly patented instrument that enables surgeons to perform laparoscopic surgery faster and easier, Scott Norman and his team are showing how intellectual property (IP) holders can make the most of their patents’ financial rewards while minimizing the risks of bringing their products to market.

“Instead of selling a patent outright or struggling to assemble the costly, risky, and time-consuming manufacturing, business, and marketing chores of a start-up, the better choice is for individuals and small companies may be to license their IP assets,” says Mr. Norman, founder and president of Millennium Marketing Group (MMG) (www.patentmovers.com), an international technology brokerage firm based in Overland Park, Kansas. “However, how the licensing agreement is structured will make the difference in the licensors’ revenue stream for years to come.”

According to a 2006 ipPerformance survey, “Licensing third party innovation will be central to business strategy and R&D plans over the next three years” while Ernst & Young predicts that patent licensing alone should soar from the $110 billion it generated in revenue in 2000 to $500 billion by 2015.

Licensing patent or patent-pending product or technology demonstrates how IP holders can commercialize their products or technologies profitably without investing costly resources and the risks involved in a start-up or missing out on revenue streams down the road. “Companies and investors are always on the lookout for innovative, commercially appealing technologies, but products need a track record of successful sales to fully realize the patent holder’s returns,” observes Mr. Norman. “A sound licensing arrangement will have built-in milestones among other details that will increase its attractiveness to licensors.”

Mr. Norman points out that the median profit to IP holders in an acquisition is 2%, outright licensing of an unproven product nets about 5%, while a patent with a two to three year sales history can be licensed for an average 8% gain. “A properly structured short-term licensing agreement is a better deal for patent holders.”

In addition to IP licensing and acquisitions, Mr. Norman’s business team also provides asset management, market research, sales and marketing, negotiations management, data mining and database management, and development of prospectus and offering memorandums.

MMG manages one of the handful of portfolios making venture capital funds available exclusively for new products and technologies protected by solid IP patents. While MMG licenses industrial, marine, auto, and safety products among others, a separate division specializes in proprietary medical technologies, either from individuals or those of small companies, guiding the patented product from market development to ultimate technology transfer, depending on the situation. In other deals, Mr. Norman brought in investors and brokered acquisitions of existing companies with IP assets.

In the case of Dr. Christoudias Versatile™ Laparoscopic Instrument System, MMG created Allied Surgical Instruments LLC (www.alliedsurgical.net) to license the Teaneck, New Jersey, surgeon’s three patents. Angel investors were gathered to fund the company. Just now being introduced to surgeons, the Versatile™ System offers multiple operations with one hand, a vast improvement over other laparoscopic instruments that require instrument-swapping to carry out operations and more operative time. The Allied Surgical business team handles  finance, marketing, and sales.

“It’s obvious getting a product to market is very expensive for inventors and IP holders to do on their own these days,” says Mr. Norman. “The smarter choice is to choose a technology transfer partner that has the capabilities to structure a licensing agreement that works for the licensor and licensee.”