Last week, Andrew Caska of Caska IP Patent Attorneys Sydney
& Newcastle attended the Hunter Innovation Festival. Whilst at the event we took the opportunity to speak with the Regional Manager of AusIndustry
and experienced Angel investors to see how we can better position our Clients’ to achieve grants and investment. Here’s what we learnt.
Government Grants for Inventors
The Australian Government currently operates the Entrepreneurs Programme that includes the “Accelerating Commercialisation” co-funded grant to support commercialisation activities. Further details on the programme may be found here >>> Entrepreneurs Programme
. A co-funded grant requires a dollar-for-dollar matching between the Entrepreneur and the Government.
…we have been informed that a patent is more-or-less essential to obtaining the co-funded grant for technology based projects
One important criteria for award of the grant is the existence of Intellectual Property (“IP”), and in particular, patent rights for any inventions. We assumed that AusIndustry would “like” that a patent has been filed – but, we did not realise the extent and weight that AusIndustry places on the filing of patents, especially standard or international (PCT) patent applications. In fact, the issuing of a standard patent (or the issuing of an early opinion confirming patentability from IP Australia) – carries significant weight and we have been informed that a patent more-or-less essential to obtaining the co-funded grant for technology based projects.
Accordingly, if your investment strategy includes seeking a government grant we do suggest the filing of the standard Australian patent application and/or PCT application, and where possible early patentability opinions should be obtained.
Angel Investment for Inventions
Angel investors are in some ways at the opposite end of the spectrum to seeking grants from the Government. We managed to speak with some seasoned investors about the importance of patents for attracting investment. The response was similar to AusIndustry – a patent is considered more-or-less essential and “just part of what is expected”. However, the angel investors focus quickly changed to market validation. In other words, the angel investors we spoke with want to know if an invention will sell, and will demand proof, before any substantial investment is made.
…make sure your IP is protected before disclosing a product on KickStarter or to third parties
One way we discussed market validation is the use of a KickStarter (or similar crowd funding) campaign that allows persons from the open market to pre-purchase a product. Of course, to get to the stage of KickStarter you do need a prototype and reasonably slick marketing to entice the pre-purchases. One option is to set the campaign target very high (so it most likely won’t be achieved) and using this data as market validation to show angel investors. In any case, the take home message was that angel investors are really after market validation. However, make sure your IP is protected before disclosing a product on KickStarter or to third parties.