Thank you all for attending this

presentation. Dearest thanks to WIPO

& the ICC for inviting me to speak.

Faveo ®

Dr Joanne Morgan
Chief Executive
© Faveo Limited 2008 joanne.morgan@faveo.co.uk
 Case Study: Intellectual Property in
Business & the Role of Government
Support

Faveo ®

Dr Joanne Morgan
Chief Executive
© Faveo Limited 2008 joanne.morgan@faveo.co.uk
Presentation Overview

 History of Faveo®

 Use of Intellectual Property (IP)

 IP based business are important for economies
 Driving the “Knowledge Economy”
 UK Government Support for Faveo ®

 Issues facing businesses wanting IP Rights (IPR)

 Issues for businesses seeking government support
 Practical guide for governmental support for an IP
based knowledge economy
 Why are IP Based Early Stage
Businesses Important?
 The brilliant aspect of IPR is that those rights can be largely global, giving
the owner a global monopoly
 This is rather like have a resource such as gold or oil which you can
export to other countries safe in the knowledge that not every country
can produce what you have
 For countries with dwindling resources, few resources, a high cost base or
those wanting to harvest another resource of value – the brains of its
people is well worth the investment
 If a country produces new inventions that have a global appeal, then
undoubtedly that economy will benefit because these businesses will be
worth a lot of money & will employ people
 In the early stages it is hard to know which invention will succeed, so it is
risky, but the value of a successful innovation is likely to be so great this
will compensate for any investment in ideas that fail
 It is a fact that very few large businesses invent & innovate & that in
reality great ideas brought to market by big businesses have been
developed by small companies & then sold to big business, so small
businesses need to be able to grow big enough to either be bought or to
become successful, either is great for an economy
History, Dr Joanne Morgan

 I am very lucky to have the background that I have because without it

I doubt that my company Faveo® could have done so well with the
product that I invented. I believe this because government advice in
the UK for private individuals wanting to commercialise an invention is
almost none existent in my opinion
 I feel UK government support & advice for public institutions like
universities & the NHS is extensive & largely very well done
 I learned to file & commercially exploit IP from the public sector.
 I learned my skills through NHS Innovations (www.em-nhs-hub.org),
The Universities of Nottingham (www.nottingham.ac.uk) & Sheffield
(www.sheffield.ac.uk) IP exploitation departments & a venture capital
company called FusionIP (www.fusionip.co.uk)
 Academic Qualifications:
– BSc Biological Sciences
– MSc Oncology
– PhD Medicine & Health Science
History, Dr Joanne
Morgan – IPR training

 The training for IP commercialisation I received was through a 1 year

full time Medici Fellowship (www.midlandsmedici.org)
 Formal training from patent agents, public & private sector
practitioners, finance institutions (venture capitalists, private
investors, banks), inventors, entrepreneurs, academic lecturers,
management consultants, accountants & more.
 On the job training with a mentor from the University of Nottingham
working on live cases of IP that had been generated from academics
& the route to exploit & commercialise the IP
 Group discussions & advice from colleagues on individual cases
 The opportunity to do all parts of what is involved: from filing a
patent, raising finance, writing a business plan, starting a business,
marketing a business & taking a new product to market, with learned
knowledge & on the job experience
 This then ‘qualified’ me to begin to give advice & work with public
sector institutes in order to exploit IPR
Eureka! to Market – The
Key Steps

 General over view of the development process, but not an exhaustive

list
 Eureka!
– This is having the idea & (usually) making crude prototypes, doing very
early experiments or really thinking around the idea & it’s feasibility
 Proof of concept (P-of-C)
– Prototypes are made to show the idea would work on a small scale in
practice – important things are learned about the invention here
– Not necessarily tested on a large number or people, or in systems that the
final product would be used in (e.g. tested in mice for medicine, on 5
women for a bra, tested on small scale model not in situ for engineering)
 Manufacture Ready Prototype Ready for Market
– Tests that the product can be produced using full scale manufacture & is
ready for the market it is intended for
– Tested on a significant number of people (e.g. 200 women for a bra), or
in the correct system (in people for medicine) or in full scale and/or in situ
(e.g. for engineering)
 Eureka! to Proof of Concept (P-
of-C) for Faveo®
 I had a Eureka moment whilst working for the NHS: I had discovered
what I thought was a new method of breast support that worked very
differently to how bras normally worked
 I knew what to do due to my training & experience, I:
1. searched the patent literature (it took approximately 100 hours)
2. obtained advice from a retailer & manufacturer in the market, they said
the product would have a good future
3. engaged a patent agent with experience in this field & filed a patent
4. did top level, global market research (used £6,000 worth of marketing
reports free from the British Library) – told me market size
5. wrote a business plan to gain investment to do proof of concept work
6. Started a limited company: Faveo Limited
7. Got investment from friends & family
8. Secured the work of a designer & advisor in return for shares in the
business & began the proof of concept phase
9. Filed a PCT after 12 months adding more to the patent found during the
R&D phase that is part of the P-of-C
 Eureka! to P-of-C: Grants &
Government Support
 P-of-C was 18 months-because we didn’t have enough money
 Grants were hard to access & advice not available
– Grants in the UK only pay a percentage of what it costs mainly 30-50%
– At that time it took a long time to get approval (6 months) & the chances
of getting a grant were low
– There were different grants for different things, a separate grant for
patent fees for instance
– The rules for each grant were different
– There was not 1 over all strategy of funding help that would see IP &
prototype manufacturing costs as 1 problem, & addressing 1 grant often
meant you couldn’t apply for the another
– Prototype grants often only helped if you made a plastic product
 Due to my experience I knew there were 2 grants that were worth
obtaining at the time
– £3,000 towards patenting costs from a local council
– £1,000 to buy materials to make prototypes
 In total the proof of concept phase cost £40,000 (no salaries)
 I worked a salaried job 4 days a week to survive financially
 The Invention & Market
Conclusions after P-of-C
 After P-of-C I realised that the invention could revolutionise the
lingerie industry as this new method of breast support could be used
to change the way bras work & are manufactured
 Few are aware that bras use complicated physics to create their
familiar appearance
 Just as an aeroplane wing looks simple, it is indeed complex & relies
on high-tech design & fabric combinations to work
 Designing the wings of larger-heavier aircraft is infinitely more difficult
than for smaller-lighter craft; demonstrated by the Wright brothers
who did not deign to design a Jumbo Jet as their first attempt
 Bras are like no other type of clothing; women need bras to support &
lift up their breasts, so bras are technically precise garments
 Larger-heavier breasts are more difficult to lift & support because of
the inherent cantilever bra design
 Our innovation actually reduces the influence gravity in the design,
making size & weight much less important- designs can be prettier,
more efficient, effective & comfortable
IPR Conclusions after
P-of-C
 Patents
– vital to secure investment due to R&D
– countries that will manufacture or sell
– Only the EU has determined that the original patent is actually more than one invention
so that a divisional must be filed
 Registered Designs
 Trademarks (GB & Worldwide)
 Copyright, Unregistered Design Rights
 Know-how or trade secrets
– Few really understand how & when to use a trade secret in a business; manufacturing
processes for instance, should often be kept as a trade secret because they are usually
very difficult to police & filing a patent tells the whole world how to do something-
however, the product to be produced should always be trademarked in order that the
manufactured product or component is synonymous with quality & performance
 This layered approach to intellectual property means that value can be added
to the business as it grows. There is usually an additive effect whereby one
form of IPR adds value to another – for instance, patenting a product &
disclosing that is one thing, but knowing the most cost effective way to
manufacture can be an important trade secret adding value to the patent
 P-of-C to Market Ready
Prototype & Product Launch
Date
 The next stage was to turn a product that was only tested on a
handful of women to something that was tested & developed for a
world wide audience & then to launch the product to the market
 We used manufacturing techniques that had never been used before
so this need to be tested using mass manufacturing processes.
 I knew what to do due to my training & experience, I:
1. wrote a new business plan looking for £650,000
2. wrote a grant application to received £200,000 in grant funding
3. started pitching to private investment organisations
4. found that they wouldn’t approve the grant until I had the funding
5. found that the funders wouldn’t give me investment without the grant
6. found that the funders wanted to give the money in tranches & wanted us
to move to the West Midlands (30 miles away) because they were part-
government funded & couldn’t invest in the East Midlands
7. found that we couldn’t have the grant if the funding was in stages or if we
moved to the West Midlands
8. Found that funders did not understand a business with a female oriented
product
 P-of-C to Manufacture Ready
Prototypes- GRANTS
 In the end, we had to turn down a grant of £200,000 because we
couldn’t fulfil the strict criteria
– The main problem was that the grant was agreed by the East Midlands
local government but the West Midlands local government could not
honour the same agreement
– The other big problem was getting proof that we had £600,000 to cover a
project that would cost us £400,000 because the grant should be paying
for £200,000.
– This is almost impossible unless you are a big business or have a public
sector organisation to say that they back you when ever you need money
– This is a silly thing to have to prove, clearly who ever determined this is
not a business person because in reality any grant is paid retrospectively,
all invoices are checked, proof of payment from bank statements are
required & an accountant has to support the claim – so we couldn’t claim
for what we could not pay for at any point during the process
 However, when I spoke to the Chamber of Commerce, Business Links
& other government organisations, they said just how brilliant these
grants were & how easy & useful they were. The advisors had no real
understanding of the obstacles or processes.
 Private Equity Finance
 Local government advisors were definitely not trained to help on this
front. It was clear that their knowledge was rudimentary & text book.
They didn’t even have any way of sign posting to someone that did.
 Fortunately, I knew what to do but wanted advice because being a
private company rather than large public sector organisation affects
how investors evaluate the business
 I knew a great website: www.thefunded.com which listed funders &
each funder had been commented on by people that had received
investment from them or had attempted to engage them- it was a
practical guide to investment
 What I knew did not prepare me for the problems we encountered
during this process & nobody was qualified to help from support
organisations
 I often wished that I had started a property development company,
shop, café or service based company- lots of people advised here
 Female Inventors &
Finance
 Investors were not comfortable investing in a product that they didn’t
understand because of their gender
 Using all of my teams experience we still encountered a fundamental
gender problem – men were embarrassed by the subject matter or
else treated the sector as a trivial, low-tech sector
 They did not understand how to evaluate the product potential,
without exception turning to their wives rather than industry experts
to gain market insight & product information
 One such experience was feed back from a VC that told us that: a
company called Bravissimo was a massive competitor, had been in
business for 10 years & therefore we could not possibly usurp them
because they were a fast growing, successful company
– he freely admitted that how he had assessed the opportunity- he had
asked his wife for advice, but unfortunately she had confused Bravissimo
as a competitor when actually they were a potential customer
– the fact that their business was fast growing was great news for our
product, if they bought & sold it
– he refused any further dialogue on his wife’s advice
 Private Equity Finance &
Government Support
 Business support organisations should be a voice to feedback
problems facing an industry or sector
 Often, financing is not understand by support organisations in the
context of IP based businesses – they understand about bank loans
which are rarely applicable to these business models
 Without finance, IP & innovation goes no where because of the high
cost; getting this right is integral to success
 Support & governmental intervention can influence financial
institutions with incentives, allowing innovation to flourish & thrive
 I estimate that it costs on average £100,000 - £500,000 to get most
inventions through the P-of-C phase which takes 1 – 3 years. £40,000
is likely to be patent costs
 This depends on the type of business, it takes longer & costs more in
medicine/life science, engineering can vary depending upon the
market & consumer based products vary enormously depending on the
sector (this may reflect relative costs depending on the country)
 Few private individuals have the resources to fund this amount
themselves
 The Faveo® Product
Launch to Market
 The investors, whilst supportive decided that we should cut down on
our testing phase & launch 6 months earlier other wise they wouldn’t
invest
 The launch went extremely well but like any new invention, the
audience was sceptical & took a lot of convincing
 It is common that new inventions take 1 to 3 years before the market
accepts & embraces them, & contrary to popular opinion, I do not
believe that the market is prepared to pay more for an innovation (this
might work for a big corporates with huge marketing budgets but not
for small businesses launching a totally new idea)
 The launch was intended to prove that we could achieve the
previously impossible so that our other more valuable innovations
could then be licensed to global brands – it would make them take us
seriously & demonstrate the impact that using our innovations & their
market presence could produce
 Because of the reduced testing phase, we have decided to change our
marketing material but not the product. This is very common!
Faveo’s First Product to
Market

50% smaller busted 50% larger busted

Fashion Dictated by
Lingerie

Sources: www.kays.com www.bravissimo.co.uk www.finestlingerie.co.uk

Competing Products

Only for smaller sizes: A B C/D

Faveo : C D DD E F FF G GG H
®
Faveo® DD+ Perk-Ups

Moulds into shape

Moulding a heavy breast is
the same as moulding a
light breast….. But lifting a
heavy breast is harder than
lifting a lighter breast
How does it work?

Same lift
as a
normal bra

AGE: 54
Size: 38F
How does it work?

Same lift
as a
normal bra

AGE: 54
Size: 38F
Press & PR for Faveo®

 New inventions get press!

 UK press: News Papers & Television
 We gained ca £300,000 worth of
advertising with a PR budget or £50,000
 From a business point of view, a good
return on investment
Future Potential of Faveo®
 Having taken our product to market & proven that sales are possible,
we have signed up a global distributor to take the product world wide
 We expect to secure a licence agreement with a large global brand for
applications in a broader context during 2008/2009
 We expect to launch new products through partnership with a global
lingerie brand in 2010
 We have challenges ahead that include
– Ensuring the integrity of our IP
– Ensuring the integrity of our brand image
– Monitoring our licence agreements post launch
– Maximising the applications & territories of the licence
– Continuing to develop & grow as a business

 We continue to learn & experience new things & have a team of multi
skilled individuals to help us along the way
KEY QUESTIONS FOR YOUR
CONSIDERATION

 I had 1 year full time a Medici Fellowship that gave me a sound

insight into what IPR was & how it could be utilised to add value to a
business. Skills: Legal, commercial & marketing

Questions for those addressing this presentation:

Question 1: What level of knowledge are you going to expect your staff
members to have if they are going to:

 compile literature in order to educate others (will they have the right
skills to find the right experts to prepare the document?)
 advise others about the value of IPR & how to exploit those rights
 put funding or grants in place in order to support the use of IPR

Question 2: if they aren’t experienced, how will know whether they are
putting in place the right processes & putting forward the most
appropriate information?
 Helpful Grants
 Should not be regionalised like in the UK where you reside influences
what you have access to: anyone that can innovate should be
encouraged
 Grants should be overseen by public sector workers that have
experience or independent/experienced private sector organisations
 Governmental organisations need to employ people with experience in
order to put new structures in place, all to often grant schemes are a
practical waste of time & cost more money to implement than actually
help where it is needed
 Grants should be carefully overseen but not to the extent that they
stifle innovation because of red tape
 Grants should not have silly rules attached to them- in the UK if you
begin to export too much or a big company buys your business out
within 3 years you need to pay some grants back! Silly.
 Governmental organisations need to feed back to the funding bodies
to help implement good schemes by having case studies & practical
experience
 Conclusions
 The path from Eureka! to market is easy to map for those with
experience, regardless of the market sector i.e. there is a process &
way to go about turning an idea into a product on the market so
giving advice is possible, if you have experience
 Real inventions need a lot of money (this is true of the vast majority of
inventions & possibly the reason why so few patents are ever taken to
market)
 Public sector organisations that support small businesses need to
employ expert advice before putting across support for businesses to
ensure what they offer is relevant, helpful and supportive. The legal,
marketing & business aspect of inventing a product and bringing it to
market need to be included – simply getting a patent agent in to do a
talk or to give 1 hrs free advice to companies is not enough
 Investing in a knowledge economy will be worth the investment
 There are a lot of schemes operating very well, so learning from these
will save a lot of effort
 Thank you for your attention
www.faveo.co.uk

joanne.morgan@faveo.co.uk

© Faveo Limited 2008 joanne.morgan@faveo.co.uk