"A patent is a critical part of an innovation company, but it cannot shield the business itself. It's only a license to sue, and that's only understood when meeting the challenge. If you understand this point when registering a patent, you may be able to avoid a lawsuit in the first place." Medinol Ltd. chairman and CTO Kobi Richter said today at the Innovations in Cardiovascular Interventions (ICI) conference in Tel Aviv. His lecture was entitled, "Can innovation in Israeli cardiology become an industry?"

Richter personally tested his comment when Medinol sued Boston Scientific Corporation (NYSE: BSX) for breach of contract over Medinol's stents. Boston Scientific settled the case aid paid Medinol $750 million.

Richter's position is clear. Speaking to cardiology entrepreneurs, he said, "It's much easier to make an exit than to hold onto a company for 15 years, but it's very important to build a company, manufacture in Israel and market from Israel. That's the only way to build an infrastructure and circle of accompanying services. These things will greatly facilitate subsequent start-ups. I'd like for the goal of each of you to ease the lives of the entrepreneurs who will follow you."

Richter cited the example of Medinol, which he co-founded and built into a large firm, on the proper way to manage a life sciences start-up. He is also an investor in cardiovascular drug developer Biorest Ltd., whose product is in clinical trials.

Richter said, "Medinol developed its innovations on its own, and Biorest is based on a discovery made at Hebrew University. Medinol is already a successful company, and Biorest may become a shining success, or it may be a flaming failure, but there are similarities between them."

Richter said that the first stage in both companies is basic research, but that the applied R&D to develop the concept into a prototype is more intensive and greater. Development of the manufacturing process comes next.

"Even if your product is the best on the market, if its production is inefficient, you may be able to penetrate the market or survive," said Richter. He noted that Medinol had an important edge in production.

"All cardiology companies thought in terms of stents. That's logical; they always have thought that way. We came from the electronics industry, and we thought in terms of processes similar to the manufacture of printed circuit boards and semiconductors. That's why our product is flat during manufacture, which gives us an edge in price and quality," said Richter. This flatness also gives an edge in drug-coated stents.

Published by Globes [online], Israel business news - www.globes-online.com - on December 8, 2009

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