This blog post is the second of two blogs written by Rob Saron, speaking on Living an MBA Class.
MegaDyne is a company based in Utah that brought a coated electrode to the hospital market and I always thought this should be taught in an MBA class. While I don’t particularly like MegaDyne, they were the first company to drag me into Federal Court on a patent infringement charge. I suppose it would not be out of line for me to complain about the fact that I sighted their now expired patent and actually had a patent of my own that they were suing me over. The US Patent and Trademark office looked at the two products and allowed my patent, and I still got to see the inside of a courtroom. Ultimately, the judge trying the case made what I considered a VERY wide interpretation of what about three mills meant…but wait, this isn’t the point of this blog, so let me get back to the point.
"The Best Story Always Wins"
MegaDyne introduced a coated electrode that really didn’t cut as well, cost about ten times as much, but cleaned up easier. The end result was the surgeons liked being able to wipe the blade off and continue with the surgical case. Think about selling anything that doesn’t work as well as the original, and costs ten times as much…how many could you sell? Well they hit on something. It turns out, as my good friend Scott Fanning says, “the best story always wins”. Over time they became the dominant player in this market. They also had the foresight to realize that eventually their patent would run out. To protect themselves further they got a registered trademark on the color green. The coating they were using was green. They didn’t do anything special to make it green, it just came that way. So the result was, when you saw a coated electrode, the user would know that it is a MegaDyne product. If it was blue, black or whatever other color it might be, then you knew it was from a different company.
We ended up settling the case and leaving the market for a period of time, but today we are back. Every time we sell a coated electrode I know it is coming at the expense of MegaDyne. I have made back all of the money, and then some, but it was one of those learning experiences that life hands us from time to time.
Today's Take-away...
I still don’t like MegaDyne, but I admire them for what they accomplished. As a follow up MBA class, we could discuss the missed opportunity for the shareholders of this company by not selling it when it was at its height in the market, but that is for another day.
Feel free to reach out or leave a comment below.
J. Robert Saron
President, Bovie Medical Corporation
Image courtesy of jannoon028 / FreeDigitalPhotos.net
