“What we do is advanced bleeding edge turbomachinery design… The GEs of the world, the Hitachi’s of the world, could apply billions of dollars to this problem and thousands of engineers at a time, if they understood what we are doing and they were willing to tackle that challenge. So for us, protecting that space through good IP protection is critical and we can’t avoid that cost, even early on.” - Daniel McGuire, founder and CEO, MAPS
McGuire Aero Propulsion Solutions (MAPS) offers a microgrid in a box that provides distributed energy generation supporting a net zero future. The MAPS microgrid is powered by turbomachinery that takes advantage of the company’s unique thermodynamic cycle to generate power where and when needed, at an affordable price point.
I recently had the opportunity to talk to MAPS founder and CEO Daniel McGuire about the company’s intellectual property (IP) journey. Daniel was introduced to IP even before becoming an engineer. His older brother, while working as a co-op student, was named as an inventor on a patent; Daniel remembers his brother explaining that the patent was filed defensively to help maintain the company’s competitive advantage. Daniel’s IP education continued during his engineering studies and in the workforce, and he contributed to a patent and additional patent applications while working at Pratt & Whitney. Thanks to this background, he knew that ensuring his own company’s success would require a proactive approach to protecting the company’s IP.
Daniel acknowledges that for companies relying on their ability to execute a common solution in a more effective or efficient manner, the time and expense required to obtain formal IP may not be worth the return on investment. For companies like MAPS, however, whose novel solution could be executed by large incumbents, IP is critical to maintain the company’s market position.Daniel allocated time and money to create and implement a robust IP strategy to protect its IP.This strategy also allowed MAPS to speak freely about their technology to clients, potential partners and investors.
Daniel stresses that though not all companies need patents to succeed, every company should clearly identify and be able to communicate their core value proposition, and that value proposition should in turn drive the company’s IP strategy. Though this type of strategic thinking takes time and effort, it pays off by helping companies avoid mistakes that could be very costly to undo in the future. He explains:
“As a founder, you have to be deliberate in everything you do. We are always excited to execute on the thing we are good at but… you are also having to do this other work where it really is thinking through the strategic level and not the tactical level. People like doing, they feel good about it… you are delivering something and you can point to it, but…you have to be responsible for the long-term strategy.”
Daniel underlines that having a clear value proposition also helps when negotiating IP clauses in joint partnership and client agreements. Understanding where your company’s IP overlaps with your partner’s or client’s is crucial to ensuring that your IP is protected, while enabling both parties to hammer out a mutually beneficial agreement. It also helps you understand where your company’s strengths and weaknesses lie, allowing you to make better business decisions regarding when to develop IP in-house and when it’s more cost efficient to rely on others’ IP.
Daniel recognizes that pursuing formal IP like patents and trademarks can be both costly and time consuming. He suggests that founders take advantage of startup services offered by law firms and highly recommends building a relationship with a good law firm from the start. In Daniel’s experience, lawyers who regularly work with startups understand their cash flow constraints, and will often offer flexible payment plans in order to help the business succeed, knowing that their early support can result in a loyal client that will continue to work with the firm over time.
When seeking a patent agent, Daniel stresses that finding an agent whose background is aligned with your core product stack is important. It will help save you time and money while helping ensure that you can get the best IP protection. In addition, your patent agent will be able to help you take steps that minimize upfront IP expenditures, as MAPS’ patent agent did by bundling two innovations into one initial international patent application, providing MAPS with more flexibility for future patent filings and spreading prosecution costs over a longer period of time. When dealing with your lawyer or patent agent, Daniel also cautions that if “you show up…without having done all the homework, without doing as much prep for them as possible…your billables are going to be out of control because you are going to basically pay them to get you up to speed… As a founder, if you want to be cash efficient you take on as much of that as you possibly can and minimize their burden because it is faster, cheaper and easier to get [it] done.”
Another tip that Daniel offers to save costs is to be very strategic about the timing of your patent filings, such as tying patent filings according to product development timelines. While doing R&D and refining your design internally, for example, you can delay filing a patent until you need to disclose your invention. Of course this strategy has associated risks; if anyone else discloses the invention in the meantime, you may not be able to obtain a patent. And if you use this strategy, be sure to train employees on the need to maintain secrecy so the invention isn’t inadvertently disclosed by someone on your team. In fact, Daniel highlights that having internal IP processes is important but often overlooked as founders focus on other aspects of their business. In addition to providing employees with IP training and ensuring that employee contracts include IP assignment clauses so that IP belongs to the company, having systems in place to keep track of which innovations employees are working will help you extract the maximum value from the IP they generate. Incentivizing employees to innovate and rewarding them when they do can also be excellent strategies to encourage employees to create and identify IP that can add value to the company. Daniel highlights that even IP that isn’t aligned with the company’s core business may be very valuable if companies in another industry are keen to license it or purchase the patent for their own non-competing use.
With respect to trademarks, Daniel suggests that registering trademarks is particularly important for service-based or software companies whose value proposition is very much intertwined with their brand. Ensuring that the company name and tag lines clearly communicate the company’s value proposition can help clients understand the business at a glance. Daniel acknowledges that the name MAPS doesn’t convey the concept of a microgrid in a box, since the company was originally incorporated as a service-focused business. He suggests that for hardware companies like MAPS, these factors are less important as the company’s value will come from the value that the hardware provides clients. However, Daniel does caution that though hardware company’s brand might be less critical in the early stages, its importance grows as you reach the Series A funding stage. “At that level, you have to look like a company that is worth the valuation you are asking for,” he cautions, “appearing to be what you are selling yourself as.”
Thanks to Daniel’s in-depth understanding of IP and his willingness to put in the time and effort to develop a robust IP strategy from the company’s first days, MAPS now has two granted patents and several more pending. Since its incorporation in 2015 the company has raised~1.27M in capital and currently has six employees.
About Hardware Catalyst Initiative
ventureLAB’s Hardware Catalyst Initiative is Canada’s only lab and incubator for founders building hardware and semiconductor-focused products, enabling the creation of transformative technologies that will power our products of tomorrow. Funded in part by the Government of Canada, through the Federal Economic Development Agency for Southern Ontario (FedDev Ontario), the Hardware Catalyst helps tech companies accelerate their time to market in a sector that normally incurs lengthy entry and scale times, enabling Canadian hardware and semiconductor companies to grow and scale locally, and compete globally.
About ventureLAB
ventureLAB is a leading global founder community for hardware technology and enterprise software companies in Canada. ventureLAB’s initiatives focused on raising capital, talent retention, commercializing technology and IP, and customer acquisition have enabled thousands of companies to create over 5,000 jobs and raise more than $340 million in investment capital. At ventureLAB, we grow globally competitive tech titans that build-to-scale in Canada, for global markets.
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