Louis Foreman, the producer of the Emmy Award winning PBS television show Everyday Edisons, as well as the CEO of the design firm Enventys and publisher of Inventors Digest, recently announced the launching of a $25 million Innovation Fund, the proceeds of which will be used to bring innovations to market. In an interview with Foreman (see below) he explained to me that he is looking for inventions and ideas for all kinds of products, and not just the consumer products that Everyday Edisons has become known for. Foreman explains that medical devices, military and law enforcement technology, social networking innovations and even software are all desirable ideas/innovations for the Innovation Fund.
To help what might be the best ideas and inventions percolate to the top Foreman has created what he refers to as a “Patent Attorney Referral Program.” This program is designed to benefit patent attorneys and patent agents whose clients submit innovative ideas and concepts. This isn’t one of those unethical referral programs though, so no worries there. If a client of a patent attorney or patent agent is selected and accepts the offer of assistance from the Innovation Fund then the patent attorney or patent agent representing that inventor will be retained by the Innovation Fund to provide the legal services required to pursue patent rights.
On average Foreman expects to file between two to five patent applications per invention/idea, with an additional $150,000 to $200,000 being invested to develop the invention. So patent attorneys and patent agents will be able to help their clients find money, a significant portion of which will go to funding patent work to be done by the patent agent or patent attorney of the inventor.
So why create a $25 million fund? Foreman explains that when looking for inventors for the TV show they are limited to picking ideas and early stage inventions that have a short gestation period given the desire to have the product on store shelves by the end of the TV season. Pulling together a $25 million Innovation Fund allows Foreman to assist inventors with more sophisticated inventions and ideas. As he explains, no matter how much he might like a medical device innovation it simply isn’t workable for the TV show because such a product needs a gestation period of a few years.
With this initial $25 million Foreman hopes to fund 100 ideas/inventions, spending roughly $250,000 per idea/invention. He explained to me that if the project proves successful you can anticipate he will raise additional funds to keep assisting inventors. With a longer time horizon than a typical TV season he can pursue great ideas and inventions, and even consider forming a company around certain technology and not merely looking for licensing deals.
Without further ado, here is a portion of my interview with Louis Foreman, which took place on Wednesday, May 4, 2011.
QUINN: Let’s talk about the $25 million fund. That’s going to be for supporting more inventions and inventors through idea to product development? I mean, let’s just throw it out there, what is this $25 million?
FOREMAN: So the first, if you look back at how I got into this business, you know, being an entrepreneur, being an inventor, what frustrated me was the lack of accountability, the lack of resources out there for inventors. And so Enventys, which is the company I started ten years ago, provided fee based services for companies and inventors to bring their product to market and in many cases we were willing to put some skin in the game. We were willing to take a little bit of equity in exchange for some of our fees.
That was not very scalable. So we created the TV show Every Edisons where we could help ten inventors every season get their product to market. From there we realized that helping ten inventors wasn’t nearly as uplifting or gratifying as helping dozens more. And so we created Edison Nation as a way to work with the largest consumer product companies and retailers, find out what they were looking for, post it on line and then if an inventor had a solution to one of their problems, make that match. The problem with that is if you’ve got a great invention that is a medical product and I’m running a search for Mattel for toys, or for Pyrex® for kitchen products, or for Clorox® for bathroom cleaning products, I don’t really have any way to help you because you’ve got a medical device. So you would have to either sit and wait until I ran a search for medical devices, or if I never ran a search for medical devices I wouldn’t be able to assist you.
And so the model was let’s go out there and raise some dollars, my dollars included, and put in place a fund that would invest in anything we’re not running searches for. So this way if you have a great medical device I would look at that medical device, I would determine whether or not it was something that was worth pursuing, and then we would put our own dollars, you know, a couple hundred thousand dollars per invention into the project to file the patents, reduce the concept of practice, get it where it’s demonstrable, and then using the contacts that we have license it to a company and then share in the proceeds 50/50 with the inventor.
QUINN: So you’re looking probably at, what, a 100—125 inventions probably—
FOREMAN: Yeah, with the initial $25 million fund that we put in place, theoretically we can fund somewhere around a hundred ideas. Anticipating that we’ll invest give or take $250,000 per product to get it to the point where it can be licensed.
QUINN: And you just used the medical devices as an example, which isn’t typically what you would associate with with Everyday Edisons, the TV show or Edison Nation. So is this going to be not just the type of thing that you characterize as “Seen On TV” type of things, you know, like the Emery Cat. It sounds like you are looking for any kind of good idea, any kind of good invention that you can help move forward.
FOREMAN: We’re actually much more competent in those types of products — medical devices, military and law enforcement products — than you would imagine. The reason why the products on Everyday Edisons seem somewhat simple is that we only have a nine month gestation period. So from the time that an inventor shows us an idea at a casting call, we’ve got about nine months to turn that idea into a product so when the happy ending occurs on the TV show they walk into a store and there’s their product. If someone brought me a surgical device at a casting call, as much as I would love it, there would be no way that we’d be able to get that product to market in the nine months that we have to produce the show. So as a result we really can’t take those types of products on for the show. The fund is an opportunity to look beyond the typical consumer products. So we’re working very closely with universities, with researches, with the venture community out there because we want to attract — yes, we want to attract consumer products, but we also want to attract products in energy, in life sciences, in social networking.
FOREMAN: Software as well.
QUINN: Okay, that’s interesting to know.
FOREMAN: We’ve been typecast, sadly, because we produce this TV show, it’s like the guy who is always the heartthrob or always the villain, it’s kind of hard to imagine him doing anything else. But the fact is is that we’ve got a really talented team engineers and designers on staff that understand these technologies. And so we want to pursue those as well.
QUINN: And you’re a business guy. So if it makes sense to pursue potentially it can make money and it’s a good invention you would pursue it regardless of the area.
FOREMAN: That’s correct. I mean, we’re going to look at the product based on its ability to generate a return on investment. And keep in mind, you know, from the inventor’s perspective it’s our dollars that we’re risking. So we’re not going to spend whether it’s $100,000 or $250,000 if we aren’t confident that there is a very, very high probability that we’re going to see a return on investment. If we make money, the inventor makes money.
QUINN: And there’s not a lot of products you couldn’t participate in if you have $250,000, because that’s a pretty decent size initial fund, right?
FOREMAN: Yes. We figure we’ll file on average two to five patents, and then we’ll invest another $150,000 to $200,000 in reducing the concept to practice. Get it to the point where it’s demonstrable so you can sit in front of someone at a major medical product company, consumer product company, energy product company, show them the value of what you’ve got. You’ve got a working prototype, you’ve got a portfolio of IP, and then you’re trying to structure a deal.
QUINN: I also know that you’re announcing, or just have announced, that you’re looking for patent attorneys and patent agents to let you know about their clients who might be interested in participating in the $25 million fund. So you are calling on patent attorneys and patent agents to submit inventions that could benefit from your assistance.
FOREMAN: Yes, you know, when we started looking at how do you get the information to the inventors, we realized that there was a common thread here and that is patent attorneys, and patent agents. In that they have a client who has brought them a great idea. And in many cases that client doesn’t have the resources to either pay the attorney to file the patent. Or maybe they have paid the patent attorney to file the patent but they don’t have the money to continue the prosecution or even commercialize or license the product. So what we thought is we’re going to spend the dollars to file the patents anyway. We don’t have in-house counsel. We work with a number of different patent firms. So what we decided to do was create this patent referral program where if a patent attorney or patent agent sends us a client for the fund we will use that patent attorney or that patent agent to actually do all the patent work. That attorney or agent is going to be more intimately aware of what the invention is, better qualified to file the IP, and we don’t have any reason not to use that attorney or agent.
QUINN: Right. And it would seem like if you get the information from the patent attorney or patent agent, it’s probably going to be articulated in the way most likely to highlight that value proposition.
FOREMAN: Yes. Patent professionals are going to be very well suited to objectively communicate what the invention is without a lot of emotion. What we wanted to do was make it really easy for the patent professional to participate in this. So initially what we asked the patent professional to do is just register. Just go online to Edisonnation.com and get a code number from us so we know who you are. And then just when you’re talking with a client who you think might be a good fit, introduce them to this program, give them your code number so then this way if we get a submission from one of your clients, and they’ve indicated they work with you, we’ll immediately use you to do the legal work.
QUINN: And can they submit on behalf of the client?
FOREMAN: They can, but the documents require the inventor to sign off on. So they would have to get their clients to agree . Again, we wanted to make it real simple. So we would just register a patent professional with a unique code number and then every time they passed along our information their client just needs to use that code number and then if we end up using that—if we move forward with that inventor we will use that law firm.
QUINN: I suppose one thing that patent attorneys or agents could do is get that code number, go in as they’re the client, fill out all the information, and then tell the the client go here, check the terms, click this box and submit.
FOREMAN: Yes. At the end of the day what we’re trying to do is we’re trying to help independent inventors who have great ideas get those ideas to market. And what we have found is that the number of inventors in the U.S. represent about 11% of the working population. Those people understand risk reward, they’re willing to kind of cash in the 401k to pursue a great idea. But that means 89% of the population work for somebody else. And it’s not that they don’t have great ideas. In fact, I would say that they probably have brilliant ideas. It’s just that when they get a great idea they don’t have the skill set or just the willpower to pursue their idea. I think there are probably some amazing ideas that never get to market because the obstacle is the cost. We’re willing to put up our dollars to get those ideas to market. It’s a very transparent process. We split it 50/50 with the inventor. You supply the great idea, we’ll supply the financial resources and the expertise, and hopefully we’ll all make money.
QUINN: Everybody makes money.
FOREMAN: But if we don’t, we’re the ones who lose, not you.
QUINN: Now, what if an inventor did file the provisional application? A lot of times life gets in the way, money problems get in the way, unanticipated expenses come up and they can’t move forward from there. Would that be something that would be interesting to you?
FOREMAN: Yes. This is a great situation, I think, for patent practitioners in the sense that a patent practitioner has a client who maybe has started the process and filed a provisional and now when they are hit with a $10,000 quote to file the utility patent, the client says, ooh, I don’t have that money. Now we can actually pay that patent practitioner to file the patent. We’ll pick up the cost associated with it and the inventor’s going to get the benefit.
QUINN: Right. This sounds just like a great program.
FOREMAN: Well, you know, it’s a test.
QUINN: Earlier you said “initially.” That always suggests that there’s the potential that this is phase one. Is that what you’re hoping here? If there is proof that this works, get some successes, and if it does succeed, then go back and continue to try and raise money and do more.
FOREMAN: Yes. You know, there’s the initial $25 million was what we thought would be necessary to develop products over the next couple years. But it’s scalable. And if we’re seeing a really good flow of great ideas, then we’ll just go out and get more.
QUINN: Do you have any interest in the inventor, or a small business, or startup company that is not interested in licensing but rather in taking steps towards building a company, creating jobs, selling the product or offering the service? Because in some cases, you know, $250,000 could be a huge amount of money for a startup company. That amount could help get to the point where then you go out and you say, okay, we’ve laid all the foundation, we’ve increased value, now we’re going to go a VC round.
FOREMAN: Right. It is not a guarantee that we will license a product. What we’re going to do is we’re going to look at the best way to monetize the intellectual property. And the best way to monetize it may be licensing it or it may be going out and raising even more money to build a company around it, in launching that product.
QUINN: Right. And it strikes me that to some extent you’re like an Angel in a way. But not your typical angel. You’re doing a lot more. I mean—
FOREMAN: We’re pre-Angel.
QUINN: Well, yeah, pre-Angel I guess in some ways. But that kind of money can make an enormous difference on whether or not a company or an invention gets off the ground.
FOREMAN: $250,000 is a significant amount of money to get a product to the point where you can demonstrate that there’s value. But it’s also a lot of money for the average person to come up with.
FOREMAN: So that is a big obstacle for many inventors. If we go through this process and get it to the point where we can demonstrate the value and we determine that the best way to monetize the invention is to manufacture it and distribute it our self, or to build a company around it. Then we’ll pursue that.
QUINN: And you’ll have the vested interest.
FOREMAN: As will the inventor. So we’ll both have ownership.
QUINN: And I point that out, though, because the best deal, or the best money person is a person who has skin in the game and has a rolodex full of contacts. And I think that that’s what you have, right? So if it becomes necessary to go down that path and raise other money, you’re not going to be grasping at straws in terms of who do I call, where do I go. This isn’t your first rodeo.
FOREMAN: That’s correct.
QUINN: You’ve licensed a lot of products and you’re a successful business person yourself. So you know how to go about the various paths that may be required. Is that fair to say?
FOREMAN: That’s an accurate statement.
QUINN: Okay. Good.