Waterloo Tech Highlights for August 2021
Our goal is to provide you with a monthly primer on significant news events from private Waterloo-based technology companies in 5 minutes or less.
Axelar raised US$ 25M from Polychain Capital and a number of other parties to build out their Blockchain decentralized applications. Missed this story from July.
RainStick announced that they’ve raised over $1M in a round led by Red Thread Ventures and some angel investors.
DigitalEd raised an undisclosed amount from Providence Strategic Growth.
Vena Medical is in business. They earned their first purchase order this month in advance of regulatory clearance.
RideCo now powers on demand transit in Las Vegas, and Leduc putting them in more than 30 cities/towns.
Equator has seen people from 174 countries use its platform in 2021 with sessions up 11x from last year.
Plum is looking to hire a head of Sales.
Local Line launched a partnership with ChefTorial, enabling their customers to host their own cooking classes.
NERv presented its new device and a number of findings at the Society of American Gastrointestinal and Endoscopic Surgeons (SAGES) as "The Next Big Thing" in surgery.
Vidyard released a cool study that shows how our brains react to a (novel) video message vs. (yet another) email.
The Friends Who Kill You
If there are two confusing areas in life where being naive can cost dearly it's taxes and intellectual property.
While looking through some diligence information recently I came across an agreement between a local MedTech startup (I'll call "David") and one of the largest global medical companies (I'll call "Goliath").
Goliath runs an award program and allows startups like David to apply. The “prize” David received was prestige, a plaque and some time in Goliath's labs - there's no cash. The evil-genius part is this: In order to even receive consideration, David signed away their first born, agreeing that:
a) Goliath would have no liability to David if they copied any of David's ideas or inventions.
b) Goliath will never be liable for patent infringement against any patents that David receives related to the award.
c) David can never seek an injunction against Goliath. (Common in patent infringement cases where the infringer won’t pay.)
d) Goliath can apply for any patents from David’s inventions if David doesn’t apply quickly enough.
e) adding insult to injury, if David ever manages to break through all these constraints and successfully sue, the total damages they can claim are capped at about $10,000.
The language is buried in a legal agreement that I wouldn’t expect David’s management to really read or understand. But, the interesting part is that at least four significant VC firms have gone through David's data room and David has received coaching and guidance from a local incubator and none of them flagged the issue or noticed the agreement until now. David has a patent lawyer who is happy to collect fees to file patents but didn’t note or flag this either. The failure here isn’t just David’s, it’s larger and more systemic.
Two take aways from this:
This is nothing less than an evil-genius scheme and kudos to Goliath for creating it. They get patent coverage and no risk of injunction against potential future competitors with little risk of the startups getting in their way once ideas gain a foothold. It’s the ultimate freedom-to-operate ticket.
This story isn’t a one-off and highlights the dark side of inviting companies like Goliath into our incubators or getting too close to them without understanding what’s going on. Our young entrepreneurs need freedom to operate, not encouragement to sign up for a sham prize program. Multi-national tech giants understand the playing field for intangible assets and how to engineer the game and many of our small and mid-sized companies don’t. Small and divided gets our companies picked off one-by-one but recognizing our common vulnerabilities and working together, we have a chance to level a systematically tilted playing field.
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Chris Wormald @cwormald