Many people think of ideas for products that would fill a need or make life easier or better for consumers.
Fewer people have the initiative to act on that idea with research and develop a prototype.
Fewer still have the gumption to secure a patent for their idea or the resources to bring it to market. Even then, logistics such as financing, marketing, branding, manufacturing, networking and legal advice become formidable obstacles.
“Successful inventors and successful business people have inherently different personalities and views of the world,” said Carlos de la Huerga of Mequon-based Telaric Ideas LLC. “To an inventor, their latest invention is like a child, a precocious and priceless joy. To a company, it might be viewed as a fly-by-night idea with one chance in a hundred for success. Where an inventor sees unbridled profits, an investor might see two years of development expenses, manufacturing tooling to be bought, new marketing programs to be paid for and an investment in a sales force.”
Michael Kunde of Oconomowoc is among that rare breed (see accompanying profiles of Wisconsin inventors). Kunde is an inventor and a start-up business owner. Since he was a child, Kunde has been nicknamed, “The Inventor.” He was always fashioning objects together around the house to solve a problem, including the installation of a butler bell when his mother was ill.
After 20 years in the long-term care industry as a medical device salesman, Kunde had an understanding of business operations and continued to use his innovative instincts to perform his own research and development when a nursing home could not afford the device it needed.
So when side rails on beds in long-term care facilities became a detriment to the health and safety of residents, Kunde immediately set out to find a solution.
Many patients in long-term care facilities have cognitive and mobility problems. The side rails, which were installed for support during movement, have in some cases been the direct cause of deaths by entrapment when patients become caught underneath or within the side rail. Because they were trapped and unable to call for help, they suffocated.
In 2005, after three documented deaths in Wisconsin, the state government ordered side rails to be taken off beds in long-term care facilities unless a resident was assessed and determined to need one or want one, Kunde said.
“The government wants to eliminate restraints and anything that causes entrapment, and to prevent falls in long-term care facilities,” Kunde said. “(But) without the side rails, there is an increase in bed sores and pressure ulcers from residents staying in one position without being readjusted.”
Kunde’s first commercial invention is the Halo Safety Ring, a product similar to a rectangular side rail for a bed. However, the Halo is circular and prevents the accidents and deaths caused by side rails.
He founded Kunde Health Care Services Inc. and introduced the Halo Safety Ring to the market in 2005 after beta testing with Newton, Mass.-based Five Star Quality Care Inc., a national nursing home chain with about 70 locations.
Five Star Quality Care signed a contract to be an exclusive buyer of Halo Safety Rings, along with some Wisconsin long-term care facilities, including Alexian Village in Milwaukee and Brookside in Kenosha.
In 2006, Kunde sold 2,330 Halo Safety Rings. So far in 2007, he has sold 1,650, and he has plans to exceed 4,500 units sold by the end of the year.
“My mission is to help the elderly,” Kunde said. “I plan and wish to eliminate entrapment in all Wisconsin nursing homes.”
Kunde works through a manufacturer in Franklin and an exclusive catalog network, in addition to his own sales of the Halo Safety Ring. He has negotiated with companies including Milwaukee-based Direct Supply Inc.; Bolingbrook, Ill.-based Sammons Preston Rolyan; Mundelein, Ill.-based Medline Industries Inc.; and Atlanta-based The Home Depot Inc.
Kunde set up a telemarketing network with Duluth, Minn.-based Horizon Healthcare Supply Inc., which will employ 30 telemarketers to call on 250 nursing homes nationwide per day.
His plan is to grow slowly and to come to the market with four other niche products for the long-term care industry over the next five years.
“I always thought when I would develop a company that I would create a company that would not need a sales force, that I would use the industry as the product’s voice and legs,” Kunde said.
Everyone pays to play
Wisconsin inventors have multiple resources to turn to when they want to move forward with an idea they have been kicking around. However, consulting with experts can cost some inventors their life savings. This realization is a turning point for many.
“People come in not realizing the cost, and they are not prepared to pay,” said Thomas Wilhelm, a patent attorney and owner of Wilhelm Law Service S.C. in Appleton. “We don’t turn them away, but we don’t encourage them. We discuss how long it will take and how much it will cost and then determine if they still want to talk to me. It is very costly.”
Wilhelm works with independent inventors and small businesses on patent laws. He will draft and apply for a patent for a client, and once the patent is granted, he will litigate if that patent is infringed upon.
Wilhelm’s services run between $20,000 and $25,000 at a minimum for a patent application.
He is currently working on patenting a new product for a $2 million company in northeastern Wisconsin. He declined to disclose the name of the company.
The market that the company sells in is a $30 million market, and with the company’s new innovation, if protected correctly, the company will increase its revenue to $10 million in three years, Wilhelm said.
Because of the highly competitive market, the company is filing for at least six different patents on one product because they know a competitor will immediately attempt to copy the product. That means that once the product hits the shelves, the company will have to start research and development again to improve the product while continuing to file for new patents on it, Wilhelm said.
Just the initial process will cost between $35,000 and $40,000, Wilhelm said.
To date, Kunde has invested $235,000 of a combination of his life savings and financing from friends to bring his Halo Safety Ring to market.
“If a company is saying that this product is their crown jewel, and if they give me the freedom to spend the money, we can build a fort,” Wilhelm said.
Individuals with ideas should also be fairly far along in the process of how an innovation would work, even if no prototype was attempted, before approaching a consultant who charges hourly, he said.
Some are not prepared.
“A guy came in a couple weeks ago who wants a patent for an alternative fuel for cars, trucks and buses. The idea is so different than what we currently use that it blows your mind,” Wilhelm said. “The law requires a written description of the invention in enough detail that a person of ordinary skill in that art can make it and use it. He has not disclosed how he will get the fuel to the car, transport it in the car, move it from the tank to the engine, get it into the cylinders, exhaust the combustion gases, what the exact composition of the fuel is. He has not answered any of these questions, and he has not built it, has not tested it, so he does not know if it works, really.”
Inventors who are in the early stages of kicking around an idea can head to Telaric Ideas or the Wisconsin Innovation Services Center (WISC) at the University of Wisconsin-Whitewater for help before applying for a patent.
Telaric Ideas offers an Invention and Business Building package for $225, in which Huerga or one of his partners, Allen Oelschlaeger or Scott Kroeger, will review an invention summary and any other materials submitted by an inventor. Telaric Ideas will also review a patent portfolio if there is one, offer a one-hour phone consultation and a follow-up e-mail summarizing the recommended critical next steps for the inventor.
One of the most frequently used tools at WISC is the new product assessment (NPA). For $595, inventors who want to test the waters can hand over their information and sketches to WISC. A group of college students with a major similar to the proposed product will evaluate the technical feasibility and the market feasibility of the product.
“Why spend $10,000 to $50,000 on a patent when there is either no market for it or it is already being swallowed up by many competitors?” said Bud Gayhart, director of the WISC. “We hope to provide small businesses or the inventors, as they start off, ways to take some of that indecision out of the processes and give them something that helps them make a truly informed decision going forward.”
Once an inventor creates a prototype and finishes testing the product, the inventor will need to invest at least $20,000 for product design, branding and marketing services, said Lee Sucharda, president of Racine-based Design North Inc.
Design North specializes in branding, packaging and point-of-sale tactics for companies selling in the retail industry. Although the minimum investment is $20,000, Sucharda said, larger companies spend hundreds of thousands of dollars to differentiate their product on the shelf from first glance.
“Recent research suggests that as many as half of the brands in a given category are not even noticed. If you aren’t noticed, you won’t be purchased,” Sucharda said. “We believe that packaging design must be strategic, appealing, inspiring and dominating. You must get noticed in the ever increasingly competitive environment and once noticed, give the customer a compelling reason to select your brand over the competitive brands.”
Design North offers situation analysis, including store and packaging audits, design brief reviews, positioning, point-of-difference, design exploration and refinement services.
To patent or not to patent
Successful inventions usually have turning points in their life stories.
Five Star Quality Care reviewed Kunde’s prototype and agreed to beta testing. Once Five Star signed a contract to exclusively purchase Halo Safety Ring, Kunde worked with Brookfield-based patent attorney Don Ersler to apply for his patent.
Kunde said he patented the Halo Safety Ring because he knew it would become an industry standard.
“The Halo Safety Ring was institutionally designed from the beginning to meet numerical dimensions and requirements to avoid the seven zones for entrapment,” Kunde said. “The Halo Safety Ring encourages bed mobility and function but prevents a good percentage of rollouts and falls.”
Forever the inventor, Kunde now plans to bring his next product, the Halo Back4All, to market. The Halo Back4All is a series of Velcro straps that replace the traditional back of a wheelchair. The straps can be adjusted so an individual with almost any physical condition can sit comfortably, including those with hump backs and obesity.
“I see Kunde Health Care Services being a niche product oriented company with 5, 10, 20 niche items that are 50- to 100-percent less expensive than anyone on the market and that are my designs,” Kunde said. “I want to continue to be a supplier with the fairest deal, which is why I have had 20-year relationships with every long-term care facility in Wisconsin and Illinois.”
