Another Dragons’ Den series is coming to a close and in a week which included the romance of Valentine’s Day, I wonder if we will see the Dragons feeling warm and fluffy towards tonight's entrepreneurs?
Get your teeth into it
This week’s show opened with a trio of international entrepreneurs ready to flash the Dragons their best smiles and dazzle them with their app based business, Playbrush. After battling with my own children every day to brush their teeth properly, Playbrush was something which immediately caught my attention. The software device connects toothbrushes into a smart game to help encourage children to brush their teeth thoroughly. Something parents across the land must be crying out for.
I wasn’t the only one who thought the idea was a good one, with all Dragons keen to find out more and understand the potential for investment. Deborah Meaden was especially keen to hear more about the licensing agreement which had already been established with Unilever.
A licensing agreement is a way to work with others in order to maximise intellectual property (IP). While you may have invented the next best thing, you may not have the equipment to manufacture the product or the know-how to distribute and sell it. In these instances, you may choose to ‘license out’ your IP to another company in return for a fee. Alternatively, you can ‘license in’ someone else’s IP to help develop your business or product. In either case, the licence acts as a contract and outlines the terms and conditions of the agreement, including who owns what in terms of IP. Our IP Basics animation on licensing and franchising is a great place to start to learn more:
In the case of Play Brush, Deborah could see that the licensing agreement with a company like Unilever was a lucrative one for the future of the company. It was this potential for recurring revenue for the business which was a driving factor in getting her to bite with an offer for investment. The other Dragons weren’t going to be brushed away easily though and the trio found themselves spoilt for choice with offers. The only thing standing in their way was the percentage of the business they were willing to give up for the offer of investment. The Dragons felt that the £100,000 investment warranted a higher percentage than the 1% stake that was on the table. In the end it was this inability to give the Dragons a bigger bite of the business that meant that Play Brush was left without snapping up a Dragon investor.
Back to Basics
As the tech savvy trio left the Den, coming in to take their place were 2 business owners of a different kind. Shane Murnhan and Mike Fisher had, what seemed to be a really innovative and interesting product, which they were claiming was set to revolutionise the way people treat back pain. With back pain being reported as one of the biggest causes of work place absence in the UK, the pair certainly seemed to have identified an issue with a large potential market. They claimed their product Gravity helps treat back pain for people while they simply rest on their backs.
When questioned about their IP the duo were solid in their responses, talking about the patent they have pending and the designs they have registered on the product. We have talked a lot about both patents and designs in many of our previous blogs. Quite simply, patents protect new inventions and cover how products work, what they do, how they do it, what they are made of and how they are made. Designs protect the overall visual appearance of a product. Our IP Health Check tool will help you understand what IP you own.
While they had their IP covered, what the duo hadn’t taken in to account was the need for reassurances the product had been tested and approved by the medical profession. This was to prove to be the biggest stumbling block to the pair getting investment. When we advise small businesses on the importance of protecting IP, we emphasise it should always be considered as part of a wider business strategy.