How To Invent: Tips on Global Technology from Patrick Ennis of Intellectual Ventures (Part 1)

Why can’t big companies invent? How should inventors handle their intellectual property? And what are countries around the world doing on these fronts? I recently stopped by Intellectual Ventures in Bellevue, WA, to get the scoop from Patrick Ennis, IV’s global head of technology. Ennis was a venture capitalist with Arch Venture Partners in Seattle for 10 years before taking his current post in early 2008. (Between jobs, he took some time off and, among other things, chopped wood full-time for a week.)

Back in October, Xconomy reported that Ennis is heading up Intellectual Ventures’ expansion in China, Japan, Korea, India, and Singapore. The invention company, which is led by founders Nathan Myhrvold and Edward Jung, currently has some $5 billion under management, 450-plus employees, and 160 university partnerships around the world. I wanted to get a deeper sense of Ennis’s philosophies on invention and intellectual property on a global scale.

Ennis organized his thoughts loosely around a talk he gave last month at the Ready To Commercialize 2008 conference, run by the Office of Technology Commercialization at the University of Texas (which happened to be IV’s 100th university partner). In Austin, he spoke on game-changing approaches to commercializing inventions. The conversation we had over lunch in Bellevue was free-flowing and touched on everything from anatomy and antibiotics to Sumerian culture and the Renaissance.

I was particularly intrigued by Ennis’s take on the current state of global competition and its historical context. “It’s a complicated world,” he said. “Leonardo da Vinci could do what he did because the world was not as complicated. Leonardo could not be a Renaissance person today—there’s too much to know.”

A few more highlights from Ennis, in his own words:

On doing business at Intellectual Ventures: “We want to create a market for invention. We want to reward inventors, perfect the process of invention, and make invention respectable…We don’t ask for exclusive deal sourcing agreements, we like to earn our business a deal at a time, the old-fashioned way. All organizations, if they succeed, have to fight the hubris thing. You see that with all big companies. IBM had it, Microsoft had it, and Google, quicker than any other startup, got it. It’s amazing how the hubris seeped into Google real quick. And the backlash is coming—you see it in the EU and, to a certain extent, in the States.”

“We’re a collection of individuals, and business is always done personally, one on one, whether you work for a 10-person company, or 450, or 4,000,” Ennis says. “That’s when companies lose their way, when they somehow think their success is their own, when it’s really coming from this grand platform.”

On why most companies have trouble inventing: “They aren’t as interdisciplinary as we are. Companies have to focus. If you’re a big company, you can’t invent something that’s going to cannibalize your revenue stream. That’s a rational decision. There’s an opportunity for people like us. We’re not held captive to existing revenue streams.”

Other factors get in the way, too, Ennis says. “I was humbled by being a VC for 10 years. It’s hard to build a company. What’s the limiting factor in building VC-backed companies? It’s management and entrepreneurs—full stop. There’s plenty of inventions for venture capitalists. So if it’s a shortage of management, why don’t you let us focus on invention, and let others focus on entrepreneurs?”

On the differences between product development, research, and invention: “When people say there’s basic research that’s ready to commercialize, they’re usually wrong,” says Ennis. A physicist by training, he tells the story of being at the 1987 American Physical Society meeting in New York where high-temperature superconductors were first talked about. Because of all the excitement, the meeting was dubbed the “Woodstock of physics.”

“At that conference, even the most conservative people said that within five years, the world’s going to change, and everything was going to be high-temperature superconductors. They talked about having high-tech ‘Star Trek tricorders’ that could diagnose medical ailments from afar. Twenty-one years later, there’s been some niche products and a public company that Arch built [Illinois Superconductor], but by and large, nada, nothing.” And why? The materials were brittle, expensive, and difficult to maintain. “People assumed that away: ‘Oh we’ll give it to the engineers. We’ve done the physics, we’ve got the Nobel Prize,'” Ennis says. “At the Woodstock of physics, if they had some real inventors in the room, they might have said, ‘Let’s be cautious about making claims.’ It’s the same thing with fusion power, the same thing with an AIDS vaccine…The engineering is not so easy.”

On the need to look for inventions globally: “If you’re a large corporate lab with 300 PhDs, or MIT, with a couple thousand professors, that’s still nothing compared to ‘every university in the world.’ Go to Tsinghua University or Peking University, they’re huge. There are some top-notch folks there. It’s not like the old days…where all my friends from Asia came here at 21 to do their PhDs, and they said, ‘I don’t want to go home, I want to stay here.’ Now, the middle class has risen, there’s a lot of wealth in Asia. I can have a good life in Shanghai, or Seoul…It’s going to happen with or without us [Americans]. We’re blessed, pretty much all of us came from somewhere else, so if there’s one country that can continue to look out and open our borders, it’s us. Every other country is going to have trouble doing it. We need to get out there. And if we’re not on board, the train’s going anyway.”

“I don’t think the U.S. has ever been afraid of competition, and I know China’s not afraid,” Ennis says. “So let’s all work together and invent.”

Stay tuned for Ennis’s thoughts on intellectual property protection and other topics in Part 2—Eds.

Gregory T. Huang is Xconomy's Editor in chief. E-mail him at gthuang [at] Follow @gthuang

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