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Lucrative in the Long Run

Although Myhrvold’s overall concept for the Invention Factory may sound eminently workable, observers who have not been privy to the details of the plan have their doubts. Ronald J. Riley, an independent Michigan inventor of numerous factory assembly-line technologies and the president of the Professional Inventors Alliance, a nonprofit educational group, warns that it would be risky for one organization to try to license patents and protect intellectual property across a variety of industries. “I’m not saying it can’t be done,” Riley says. “But it is difficult because different industries require different sets of skills and different sets of contacts.” In the past, Riley adds, others firms have tried to form patent enforcement funds, in which investors fund patent preparation fees and litigation in return for a share of future profits. “The trouble,” Riley says, “is that the average time frame for making any money from a valuable patent is five to 10 years”-requiring investors with abnormal patience.

Myhrvold could also run into resistance from inventors themselves, who tend to be a fiercely independent folk. “Inventors have big egos, and I’m no exception,” says Riley. “I know inventors who are flat out incapable of working with other people.” Secrecy can be another thorny issue, notes Arthur Molella, director of the Smithsonian Institution’s Lemelson Center for the Study of Invention and Innovation. “A lot of independent inventors have been burned in the past,” he says. “They may be reluctant to share their ideas.”

But a few ventures similar to the Invention Factory in one respect or another have succeeded, at least for a time. Before its demise in 2000, Interval Research, the Silicon Valley lab established by Microsoft cofounder Paul Allen in 1992, spun off companies such as Purple Moon, a children’s gaming company based on the ideas of computer game developer and theorist Brenda Laurel. Battelle, the nonprofit lab in Ohio, and the now struggling Cambridge, MA, consulting firm Arthur D. Little have for years evaluated other companies’ inventions, nurtured them and helped license them to corporations and government agencies-in addition to coming up with their own inventions. “The lone inventor is not something that belongs in the age of dinosaurs,” says Jules Duga, an expert on the economics of research and development with Battelle. “I’m a firm believer that people can do something with their technology without being affiliated with large corporations.”

And a small Boston-area partnership of four inventors called Invent Resources has been in business for nearly a decade, typically working on a contract basis for corporations. “We develop intellectual property and approach companies with our ideas,” says company president Richard Pavelle, “or they come to us with a problem, and we come up with a solution.” The partnership, which has so far generated more than 100 patents, from a quiet electric pencil sharpener to a superfast rest room hand dryer to a tornado-warning system, retains all patent rights to its inventions, while its corporate clients typically purchase options on projects they back and then license the innovations that suit their needs.

If Nathan Myhrvold can manage to sign up enough inventors, obtain enough funding and work through all the legal ramifications, his Invention Factory would likely run in a similar fashion-but on a larger scale, and with his inventors scattered across a far greater geographic region. Myhrvold is both enthusiastic and realistic about the challenge. “This wouldn’t have a quick payoff,” he says. “The more powerful the invention, the longer it often takes to have a big impact. So this is not a get-rich-quick scheme; but in the long run it can become unbelievably lucrative. What a great time this is to come up with new ideas!”

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