Dragons’ Den Season 1 Episode 6 Review

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The following is my review of season 1 episode 6. (Note: Descriptions of entrepreneurs are directly quoted from CBC’s site.)

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Mirage Motion Media by Mark Beukers (Note: at press time, the CBC site is missing this pitch. Note to self: Never trust the Closed Caption for spelling of names. Using that wrong spelling wasted 30+ minutest of my time to search for the patents.)

This is a very interesting piece of technology and very very useful to get attention from people therefore it is a great advertising tool. I actually have seen the Subway Tunnel Advertising. But I am not sure if I have seen Mark’s display yet.

The Canadian patent 2504835 and Canadian patent 2298483 are going to be a ton of fun to read and learn from. For the super-patent-geek, here is the World Intellectual Property Organization (WIPO) database entry of this patent.

I am not a lawyer and I have not read the associated patent documents (Canadian, US, and WIPO) in any sufficient details, so readers be warned. But after three hours of research — I now have one fundamental and potentially serious concern. My concern rests with the pair of Provisional applications for patent (60/330,962 & 60/371,424).

In an imaginary world, if

  1. the Provisional Application for Patent, and
  2. the sale of the products before the patent is issued, and
  3. the follow-up of proper patent application

had not all been written and handled in the most careful and appropriate manner, it is possible that some potential missteps could basically render the patent invalid. Again, I am not a lawyer, and my concern and observations should not be taken as any advices as they are just my uninformed guess.

At this point, I would like to thank US patent attorney Ms. Katherine White for her most insightful US patent lecture at UCSD which I’ve learned so much from (and on the potential danger of Provisional Application). And for her reference of the United States Court of Appeals for the Federal Circuit case “New Railhead Mfg. Co. v. Vermeer Mfg. Co. & Earth Tool Co.” Which, in some sense, illustrate the above little imaginary example. Let me repeat, I am not a lawyer. (smile)

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Silastial Glass Inc. by Rick Silas

“This artist from Sidney, B.C. has devised a patented method of bending glass without heat. His technique can be used for commercial applications including art installations and building construction. He wants The Dragons to help him commercialize his technique on a large scale. ”

Basic research before I watch the pitch:

I love arts and Rick’s glass work seems beautiful and the technology seems very cool. Looks like Rick got a cool website for Silastial Glass Inc.. I love Rick’s registered trademark of Silastial (I am guessing — a blend of his last name and the word “celestial”). I will need some time to take a look of Rick’s Glass bending process patent (US patent 6,385,999 & Canada patent 2303778). There should be some interesting things to learn from them. And Rick’s long list of achievement from his resume is truly amazing.

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Actual review:

Well, the deal of $300,000 and a 7.5% royalty in exchange for the US patent and Canadian patent (pending) seem like a good one for both the Dragons and also the artist/inventor. Rick should be happy as he got a pretty good chuck of cash up front and also a good royalty stream.

By the way, Sean said that “… patented process to make use of recycled glass …” I would like to be more specific that the “glass” in question is “tempered glass” as it is stated in the US patent. Incidentally, “tempered glass” are those used in car windshield and phone booths, etc.

I think Rick did a great job pitching and I think he showed a great combination of insight and didn’t let a potential profitable deal get away. Great to see an artist that is an inventor who is also a pretty good business person.

I love this business enough that I am going to look further into this for my own interest.

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Great Canadian Salsa by Dave Promfret

“This Ontario entrepreneur has a passion for making an all-Canadian Salsa that even includes maple syrup in the recipe. He thinks it can be the dominant brand in Canada. An investment from The Dragons will help him ramp up operations.”

The Dragons are pretty right that there is nothing much to stop people from competing in the Salsa business. In terms of the pitch, bringing up the his personal life wasn’t the best idea. By the way, Salsa Dave’s website is under construction at the moment.

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MicroAlpha by Zibby Malecki

“This inventor from Kitchener-Waterloo, Ontario has a line of products that supposedly protect you from electromagnetic frequencies. He thinks his products could be used to kill cancer cells and treat other diseases.”

The Dragons dismissed Zibby’s pitch very rightly and I don’t want to add anything more.

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Restful Woods Pet Caskets by Gloria Fester

When your beloved pet dies… why not give it one final treat? This entrepreneur from Milden, Saskatchewan makes handcrafted caskets and urns for your best friend’s remains. She’s asking The Dragons to invest so she can expand her business.”

This is pretty much a small handy craft business. It is not a business that the Dragons would want to invest.

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Vangro Farm by Mark Van Goethem

“Forget the same old petting zoo! This entrepreneur from Waterford, Ontario wants to build farm-themed amusement park where visitors can learn about rural life. He thinks he can attract people looking for fun, inexpensive family entertainment.”

I think Mark was polite and meant well. But Jennifer was right to say farming is very much different than running a themed-park business.

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The Bug Lab by Jennifer Heron

“Most people squash bugs. But this entrepreneur from Errington, B.C. wants to create an entire museum dedicated to those creepy critters so tourists and visitors can learn about insects and the habitats in which they live.”

Jennifer’s website looks interesting and some of the creepy little critters look cute and neat and potentially educational. But based on where Jennifer is at, it is definitely not at a stage that can be invested in.

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Scaretacular by Scott Perrett

“This Kingston, Ontario entrepreneur has a passion for making people scream. He operates mobile, Halloween-themed trailers to scare the living daylights out of paying customers. He needs an investment to get started on his expansion plans.”

The Dragons have a point, this is pretty much a cash business and not in the scale that the Dragons are interested in.

2 Responses to Dragons’ Den Season 1 Episode 6 Review

  1. John says:

    Maybe you can enlighten me with regards to “royalties”. What does the Silastial® Glass deal (7.5% royalty in exchange for the US patent and Canadian patent) really mean?
    Is that 7.5% of sales revenue? Of gross margin? Of net profit? Of #’s of units? etc
    If it is “sales”, then $1 million would return only $75,000 to Rick Silas.
    And if it is “net profit” (say at 5% or $50,000), then Rick’s royalty is only $3,750.
    These $ numbers don’t seem to be enough for the inventor of this patented technology.
    Of course, projected sales could be $10 million/year or more and “all bets are off”.
    John
    ———————
    Hi John,
    Thanks for your insightful questions. Quoting from a good explanation of Royalties on Wikipedia that gives some good background information,
    “The royalty amount is calculated on a formulation specified in the licence agreement which defines the royalty rate and the base on which it is to be applied. For example, the royalty rate (sometimes also simplified to royalty) may be stated to be 3% of the ‘annual sales value’ of the product sold by the licensee in a territory.”
    Since I am not privy to the exact contract between the Dragons and Silastial® Glass, I am just guessing and speculating here. As all contracts are basically agreements between two or more parties, they can agree to anything (as long as it is legal).
    For me, if I were Rick, I will want the royalties to base on Sales (price x units sold). It will be the easiest to audit, less fuss, etc. In general, inventors agreeing to anything “net” is kind of asking for trouble.
    Hope this answer your question,
    Kempton

  2. ant says:

    this is regarding Zibby Malecki his Micro-Alpha invention….I know of this product through my mother…she has been wearing this device and believe me it works….a woman whom could not get up without the aid of others can do it on her own…for Dragon Den to dismiss Zibby is truly they’re loss…..he has moved on his own and is helping people with chronic pain. My mother was a pharmacy in herself with all the medication she had been taking, now since wearing his device…my mother is medication free….

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