On the reality television series "Shark Tank," venture capitalists like "Mr. Wonderful" are much more eager to invest in companies that have a patent or patent-pending innovation. "Why can’t I just go make this myself?" is a question often asked by the "sharks." These savvy businesspeople know that Intellectual Property protections are a necessity for any business hoping to make a profit from an original idea or invention. Without it, they risk competition from larger outsiders who may steal their idea in hopes of getting a piece of the pie (or the whole thing).
Small business owners fuel economic growth in America, and IP is necessary to protect them from larger, often foreign, competitors that have the resources to undercut the little guy. Shark Tank illustrates that IP is often a necessity for small businesses to secure the funding and capital needed to grow an idea into a full-fledged, profit-earning business.
As an inventor and CEO, I know first-hand the value of intellectual property rights. What started as an idea my Junior year of high school has morphed into a company, Atlas Energy Systems LLC, which has developed a novel device to turn nuclear waste into energy, all thanks to IP protections.
As an undergraduate, I worked with the Indiana University IP clinic to secure provisional and utility patents for my original ideas, leading to my $10,000 investment at Purdue’s Burton Morgan Business Plan Competition and later the Indiana State Clean Energy Business Plan Competition. The ability to say “patent-pending” on stage at these competitions is what secured the funding necessary to get my company off the ground and fund original experiments and research to further develop my energy-converting device.
I sought additional funding from the US Department of Energy’s Argonne National Laboratory’s Chain Reaction Innovations program, where I pitched my idea to venture capitalists. For them, having a secure IP was a must, not an option. Had I presented my ideas without another provisional patent, one which I secured merely one hour before the competition, these ideas would have entered public domain and I would have lost the rights to them, and to any future profits. Once again, being able to say “patent-pending” in front of a panel of reviewers allowed me to win entry to the program where my business partners and I have had access to funds, equipment, tools and facilities to further develop and commercialize the energy conversion device, which is the hallmark of our business.
My story is the perfect example of the impact IP protections can have on securing the funding that small businesses need to thrive. And businesses that rely on IP are at the heart of Indiana’s economy. In fact, IP supports 1.7 million jobs in Indiana alone — a full two-thirds of the state’s private sector employment. This is significantly higher than the national medium of 46 percent.
The jobs created by IP boost incomes for families across the state. Wages for IP workers are 28.3% higher than for non-IP workers in Indiana, and total private sector sales in Indiana from direct IP and IP-related companies make up 85% of our state’s $575 billion in total private sector sales. Additionally, IP protections encourage research and development (R&D) investment, to the tune of $8 billion. R&D helps transform ideas like mine into innovative new products and processes and is an important way for states to increase economic growth.
Without IP, I likely would not have been able to turn an idea I had in high school into a successful company. There’s no question that I have strong IP protections to thank for much of my success and the success of my company, but the numbers show that the state of Indiana and many of its workers do as well.
Ian Hamilton is chief executive officer of Atlas Energy Systems LLC.