If you've got it, patent it
Applied Nanotech CEO Dr. Zvi Yaniv, a liquid crystal display pioneer: It’s only a matter of time before a 100-inch flat screen TV becomes affordable.
Applied Nanotech is a subsidiary of Nano-Proprietary Inc. (OTCBB:NNPP), where Yaniv is also president and COO. It is basically an intellectual property factory that produces usable patents. The company relies on revenue from the sale of patent rights and strategic cooperation agreements with major manufacturers, rather than on production of products derived from its patents.
Yaniv has been active in the US high-tech arena for decades. He has been directly involved in over 200 patents and uncountable technology inventions and improvements, from which he earns royalties. He learned from experience that this was a long-term business model, on the condition, of course, that the patents are properly protected. Considering the heavy cost in setting up production lines, Yaniv did not hesitate in selling Applied Nanotech’s manufacturing division, preferring to leave production to the giants. Preferring patents and strategic cooperation agreements to manufacturing also guided Yaniv when he was a fresh-faced entrepreneur.
His field of expertise, advanced active matrix liquid crystal, was dominated for years by Asian manufacturers who did not fear to spend huge sums in the battle for domination in the television manufacturing industry. “Americans realized they could not match the huge investments necessary to set up a television manufacturing infrastructure,” says Yaniv. “That’s why television manufacturing disappeared there and moved to the Far East.”
Good timing, or maybe just coincidence has greatly helped Yaniv’s career. Born in Romania, he emigrated to Israel at 16. He was a co-founder of the Negev Academic College of Engineering (now the Sami Shamoon College of Engineering), where he headed its center for the study of physics, optics and mathematics. He went to the US on sabbatical to complete his Ph.D. at Kent State in Ohio. He was curious about the university’s research on liquid crystals, and fell in love with the field, as he puts it.
After a conflict that ended his academic career in Israel, he moved back to the US, this time to Michigan, where he was offered an opportunity to found a start-up it was no coincidence in the field of liquid crystals. Founded in 1983, Optical Imaging Systems Inc. (OIS) rode the advanced active matrix liquid crystal applied technology wave for computer and television screens.
“The liquid crystal has been around for a long time,” Yaniv points out. “But only in the 1970s did it begin to come into use for the development and production of screens. The technology was primitive. Screens at the time were very slow and the displays unstable.”
It turned to be necessary to install a transistor on every point of a glass screen, which therefore required a transistor that can be produced at lower temperatures than transistors on silicon. The solution was found by combining know-how of amorphous semiconductors, the subject of Yaniv’s B.Sc. at the Hebrew University of Jerusalem, with his new expertise in liquid crystals acquired in the US. “A lot of groups had developed a variety of solutions, but I was at the right place at the right time, and developed unique patents at the company, which I was able to integrate in the production processes of huge companies like Samsung and Sharp.”
Kinetic art and flat screens
OIS also made screens for combat aircraft. The company went public in 1986. Yaniv also co-founded Unipac (now AU Optronics Corp. (TAIEX:2409; NYSE:AUO), following its merger with Acer), Taiwan’s largest maker of screens.
In the early 1990s, glassmaker Guardian Industries acquired OIS, and changed the companies goals from those set by Yaniv, and he left the company. OIS went bankrupt a few years later. Yaniv is convinced that the collapse was due to strategic errors by Guardian Industries. “They simply didn’t understand market dynamics,” he said. “They built a factory that was too big for the US market, and too small for the global market. They also sold 10% of AU Optronics for only $1 million. This holding is now worth over $200 million.”
Meanwhile, Yaniv was contacted by Elbit Medical Imaging Ltd. (Nasdaq:EMITF; TASE:EMIT), then run by Emanuel Gil, to build a flat screen factory in Israel, which it would finance. For almost a year, Yaniv alternated every two weeks between Israel and the US, learning a lesson that ultimately led to the collapse of the venture. “I was unable to overcome the opposition of the guys in Israel,” he says. “They didn’t want to cooperate or to listen to someone with experience. Every time I came back from the US, I’d discover that everything I built on my previous trip had been destroyed. I work with Chinese, Japanese, Indians, Canadians and Americans, but with all the goodwill in the world, it’s hard to work with Israelis.”
Yaniv has continued to this day to develop patents and improvements for liquid crystals, selling rights to various manufacturers. He even founded a new venture that combined his professional experience with his love of art. The result was new kinetic and dynamic art, which combines creativity on canvas or sculpture with thin screens that display video clips complementing the original piece. He offers rights to this invention to artists, and operates Digital Windows, dedicated to the subject.
Yaniv also co-founded another venture, Kent Displays Inc., which develops plastic signs and screens that do not need power sources. Yaniv also publishes professional articles from time to time he has about 300 to date and edits “Nano Express”, an industry journal.
In 1996, Yeniv received an offer he couldn’t refuse from Applied Nanotech, which was in bankruptcy proceedings. The offer involved moving from Michigan to Austin, Texas. Yaniv didn’t think twice.
“I had already concluded that solutions to the world’s scientific macro-technology problems would depend on processes derived from the molecular level. I know that nanotechnology has a number of definitions, based on size. I assert that if the problem is molecular interaction, you’re working in nanotechnology,” says Yaniv. “Nanotechnology will work wonders in every field. New materials will serve next-generation electronics and replace semiconductor processes. Examples include organic polymers for LCD color screens. Manufacturers are switching to organic materials, which lowers production costs. A 30-inch LCD television will ultimately cost $300-400.”
5-8 patents a month
Applied Nanotech currently employs 25 scientists who are developing future nanotechnologies for niche industries: Electron emission from carbon nanotubes for large televisions; new nanomaterials with novel properties; nanomaterial sensors; and nanoelectronics.
“The key is to look ahead and identify what the world will need in three, six, nine, or twelve years. We sense what to develop, and what intellectual property to defend. It’s necessary to understand intellectual property, and implement the right strategy to control it. We register five to eight patents a month, but it’s also sometimes necessary to buy a patent.”
New inventions will lead to revolutionary products, in particular products that will solve difficult problems in markets worth $5 billion each. Uses range from consumer electronics, such as televisions, to sports products, long-lasting paints for ships, home medical devices, such as sensors that send diagnoses to doctors via wireless, and the defense and energy industries.
Despite Yaniv’s failures with various entities in Israel, he praises Israeli nanotechnology developments, and would be happy to collaborate with Israeli scientists. However, he does not spare criticism about the failures of academic institutions over intellectual property strategy. He relates the tale of an invention at the Technion Israel Institute of Technology for the development of DNA-based transistors, a field in which Applied Nanotech is active. “This was an excellent invention for using living material to built electronic equipment. I met the professor who developed it, and discovered that because of a lack of $20,000 to register the patent, Technion preferred to sell all rights to the invention to a US company for pennies. There are uncountable similar examples, and it pains me that this serious mistake harms Israel’s scientific and technological future,” says Yaniv.
This missed opportunity prepared Yaniv for new opportunities, paving the way for initial success in a new company founded by Professor Joe Rosen of Ben Gurion University of the Negev on the basis of a revolutionary medical patent. “The invention,” says Yaniv, “uses lasers to look two inches into the body without the use of x-rays. It has both medical and security applications. The university didn’t want to finance registering the patent, so I did so, and we jointly founded a company in the US.
Published by Globes [online], Israel business news - www.globes.co.il - on August 18, 2005
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