A Bright Idea
It was several years before CDT started to go in a direction that appealed to Burroughes. That was in March 1996, when Danny Chapchal came on board. Chapchal, in his 50s and trained as an accountant, had a track record of, as he puts it, “turning around sick companies in the software business.” But, he recounts, “within about three days of arriving, I thought that I must be mad. These are people with a great idea who are hell-bent on suicide and certainly don’t want managing.” It was the company’s completely unworkable business plan that upset him, especially when he was asked to put his name to it. This called for CDT first to raise $6.5 million, followed by a further $11.5 million, with the idea of manufacturing displays and flat screens. “That was a recipe for suicide,” says Chapchal.
His answer was to turn CDT into a licensing company. It would develop its own science and technology, and enter into partnerships with large companies that had the money needed to create a new industrial infrastructure. In a business model that has become common in the biotech sector, CDT would share intellectual property rights in a number of joint development efforts.
Chapchal’s strategy quickly paid off (see “Polymer Partners,” p. 71). The first breakthrough was a licensing deal with Philips. “We had only a few months’ money left. We went to Philips for two reasons,” explains Chapchal. “They had lodged an opposition to the patent, so we knew that they were interested. And we knew that they had a team working on it.” The agreement with Philips, in September 1996, did three things for CDT, says Chapchal. It gave the company “a little bit of money that we desperately needed. When I arrived we had six months of money.” The Philips license also ended the electronics giant’s challenge to CDT’s patent. Perhaps most important, “we got publicity like you would not believe,” says Chapchal. “Within days, we had people banging on our doors saying Can we invest?’”
A second patent dispute was settled when the company signed a licensing deal with Uniax, another LEP startup based on technology developed at the University of California, Santa Barbara. With no outstanding challenges to its original patent, CDT had an asset that could be worth millions. “One of the things we have turned out to be good at,” says Friend, “is patent writing.” The core patent covers a series of claims and is, he says, “a bit like having a patent on silicon.”