Being an inventor in Finland

Document Sample
Being an inventor in Finland Powered By Docstoc
					Being an inventor in Finland
Professor Osmo Suovaniemi, M.D., Ph.D., President & CEO of Biohit Plc

On 18 May 2001, I gave a presentation at the Finnish Inventors’ Association’s 30th anniversary
seminar on a theme that is still relevant today. In the diary of the journal Tekniikka & Talous,
Kauko Niemi wrote on 9 September 2005: "Esko Aho: Society should be whipping out
innovations. Finland has every opportunity to go from being the world's best developer of
technology to being number one in applying it."

Tekniikka & Talous also writes: "The speakers at the Olostunturi innovation seminar, which
began on Thursday, seem to have quite a uniform idea of how Finland could be raised to the
world's top rank. Nobody disagreed with the view that active innovation has great
significance for our country's future."

I began my presentation as follows: "The Finnish Inventors’ Association, KEKE, turns 30 years of
age this year, and I present my congratulations for this and wish every success for the Association,
its members and everyone else involved. It is fitting that I have been shown the honour of speaking
on this occasion as I have been an active inventor and made use of my inventions over this 30-year
period, or since the late 1960s. As a result of this, I now hold the highest number of patents in
Finland. My numerous inventions in the fields of laboratory technology and medicine have resulted
in global business activity and, sometimes, in "blood-curdling" experiences that may illustrate the
position and treatment of an inventor-entrepreneur in Finland." I shall now present the main points
of my 2001 seminar presentation.

Lack of understanding in the 1960s and 70s

In the late 1960s and still in the 1970s, society was not aware of the importance of inventions as one
of the cornerstones of the development and welfare of Finnish society. Cooperation between the
scientific community and the industry was considered almost criminal. The need for such
connections was not understood or accepted, even though it would have been crucial for improving
our international competitiveness and creating a higher standard of living – just as it still is today
( / Company / History / Read more about Biohit and its history from here).

Researchers seldom even thought about applying for patents for the results of their research before
publishing them. Companies had little interest in patenting innovations and making use of them,
and not much ability to do so, either. Neither did they consider aggressively producing innovations
nor having a patenting strategy, which would have been essential for their international
competitiveness and success in the 1960s and 70s, as it is today.

At that time, society valued the traditional factors of production, labour and capital, which become
depleted with use. It was not often perceived that knowledge, creativity, motivation and values are
necessary factors of production, too. These factors only become more productive and refined in use.
It was in this environment that I studied medicine whilst also working as an assistant and
conducting research at the Department of Medical Chemistry at the University of Helsinki from
1966 to 1972.
My first patent applications

It was my difficult and demanding field of research on the structure and function of neuron
membranes and the lack of available measuring devices and other instruments that made me an
inventor. In other words, my inventions were initially produced "to meet customer needs". To
facilitate my research, I made two inventions in the late 1960s, inventing an adjustable single- and
multi-channel pipettor (Finnpipette) and the vertical measurement principle. It was on these two
inventions that I based Labsystems Oy, established in 1972, and the joint venture Eflab Oy which
was established in 1978 in cooperation with the American company Flow General Inc.

Before I established these companies, I had offered my inventions to several large Finnish
companies, but with little success. Only the Ministry of Trade and Industry (KTM) and the Finnish
National Fund for Research and Development (SITRA) seemed to understand the value of my
inventions and supported my product development. Having said that, KTM actually gave only
meagre support for pipettor development. The Ministry’s director Esko Rekola wisely justified this
by informing me that Elias Lönnrot had also accomplished great things in meagre conditions.
SITRA and Jorma Puustinen, a graduate engineer working there, were a bit more generous in
funding the productisation of the vertical measurement invention which resulted in world success
products ( / Company / History / Read more about Biohit and its history from

My pipettor inventions have served as a prototype for several companies whose annual business
activity currently totals approximately USD 700 million. The annual business in measurement
instruments and analysis systems using the vertical measurement principle I invented, as well as
associated products, exceeds USD 2.0 billion. These inventions have advanced laboratory work and
research activity and promoted the development of new immunodiagnostic methods e.g. for the
diagnosis of infectious diseases and cancer. In recent years, genetic research has also benefited from
the use of applications based on these inventions. I suspect the annual value of diagnostics and
research-related business activity already well exceeds USD 10 billion.

Currently, hundreds of thousands of measurement devices using my vertical measurement principle
are on the market. They range from manual units to fully automated analysers and analysis systems
produced and marketed by numerous small and large businesses all over of the world: (owner of the Labsystems and Eflab businesses),,,,, (for
more, see microplate instruments, microplate analyzers, microplate diagnostics,
vertical photometry, osmo suovaniemi vertical photometry, vertical measurement and microplates,

A model strategy resulting in success

As a result of my inventions being copied, my companies Labsystems and Eflab adopted a very
aggressive strategy of patenting their innovations as early as in the late 1970s. In hindsight, that
strategy was ahead of its time; it was both a thorn in the side of large businesses and an example to
them. When, in 1983, the periodical Suomen Kuvalehti published statistics on the patents granted in
Finland in 1981, the list both irritated and alerted the readers. It was unheard of that 7 patents had
been granted to a small-turnover company like Labsystems in 1981, while even many large
businesses had obtained a smaller number of patents in the same year.

In 1986, Labsystems had almost a hundred patents and patent applications in Finland and several
hundred abroad. At that time, Eflab had 10 patents and patent applications. According to statistics
reported by Kauppalehti on 5 February 1986, Labsystems had submitted 18 patent applications in
1984, while e.g. Kone had submitted 17, Vaisala 11 and the Orion Group 10 in the same year. In
1985, Labsystems had 19 patent applications. In 1983, Suomen Kuvalehti published a table of the
patents approved in Finland in 1981. Valmet had the highest number, 27. Nokia was in 8th place
with eight, and the ninth place with 7 patents was shared by Ahlström, Labsystems, the Orion
Group and United Paper Mills. Kone had received 6 and Vaisala 5 patents in 1981 (see / Labsystems patentit / Microsoft PowerPoint lecture 02022005, "patents are a
vital force and a foundation for success and our national welfare").

Labsystems’ and Eflab’s international growth and success were based on numerous innovations,
reliable basic and applied research and the entrepreneurial skills of its management.

By 1986, my businesses Labsystems and Eflab, both working in the fields of advanced technology
and biotechnology, were the most rapidly expanded and largest Finnish companies in their field of
business (see the table above and / Company / History / Read more about Biohit
and its history from here).

In spring 1986, the Finnish bank SKOP (Säästöpankkien Keskus-Osake-Pankki) knew that my
companies had considerable wealth and their products had a market potential of tens of billions of
Finnish marks. This was confirmed by professor Heikki Niskakangas, a member of the Labsystems
board until spring of 1986, in the journal Talouselämä (1986/18): "According to Niskakangas'
estimate, the company’s products have an international market potential worth tens of
billions." On 3 June 1986, the journal Kauppalehti reported SKOP bank manager Elias
Sukselainen's analysis of Labsystems: "'We have known the company from a long time, and it is
undeniably one of the world’s leading businesses in its field. For us, Labsystems is also
important for image reasons', Sukselainen explains."

According to the strategy analysis made by physicist Kimmo Pietiläinen, who has known
Labsystem and Eflab products and strategies since the early 1980s, my businesses' products that
were finished or nearing completion in 1986 could have had a market potential of almost 70 billion
marks by 1991, if the markets had been completely developed at that time.

At present, these markets are fully developed, even beyond Pietiläinen's analysis, but due to
SKOP’s actions in 1986, the Finnish advanced technology and biotechnology industry has not
benefited from them as it should have done.

Victim of the catastrophic casino economy in 1986

The development of my businesses was halted by SKOP in the spring of 1986, when it made me an
offer of collaboration. On 23 May 1986, the bank signed a collaboration agreement with me that it
had no intention of fulfilling. Before signing the agreement, SKOP had schemed and calculated in
secret how it would break the agreement and its terms to make "enormous profits" and raise
"SKOP's image" at my and my businesses’ expense. Using my businesses "as the core", it
planned to develop a great cluster of companies (the catastrophe of SKOP's casino economy). To
reach this goal, SKOP forced me against my will to sell my share-based control of Labsystems to
the bank on 14 October 1986.

As a consequence of these actions, which were unsuitable for a bank and which the city public
prosecutor Ritva Santavuori later termed "premeditated, gross extortion, 14 October 1986" in her
charges, the joint venture Eflab Oy based on my innovations and other property ended up under
SKOP management and control. The highly valuable Eflab, which had been based on my
innovations and had flourished under my management, was then destroyed. For the sake of their
own benefits and to obtain "enormous profits" for SKOP, SKOP bank manager, Master of
Exonomics Elias Sukselainen, department chief and Master of Law Heikki Palosuo and advocate
Robert Liljeström as well as Master of Economics Erkki Tikkanen (who became managing director
of Labsystems in violation of the collaboration agreement and its terms) had already fervently
wanted to destroy Eflab as early as in September and October 1986. According to the joint venture
agreement made on 11 May 1978, I had the right to continue working as Eflab’s managing director
and chairman of the board for as long as I wanted. My position in Eflab’s management had been
confirmed in the collaborative agreement I made with SKOP on 23 May 1986. As the Academy
Professor Mårten Wikström told in a statement written under oath on 9 October 1990, Erkki
Tikkanen had told Wikström in September 1986 that he considered Eflab a "cuckoo hatchling"
that "should be killed". Tikkanen was, at the time, the managing director of Labsystems and
Wikström had a leading position in Eflab among other things. According to Wikström’s statement,
Eflab was worth 560 million marks before 14 October 1986.

The "enormous profits", which were in violation of the collaborative agreement SKOP offered to
me and finalised on 23 May 1986, are mentioned in SKOP’s former general manager Christopher
Wegelius' memoirs Minä, Christopher Wegelius [I, Christopher Wegelius]. They are also
mentioned in a written statement given under oath on 8 November 1990 by SKOP director Pekka
Fomin, graduate engineer. Among other things, the sources state that, as the collaborative
agreement offered to me and my family and finalised on 23 May 1986 would be violated, SKOP
would make enormous profits according to its secret calculations.

Without breaking the collaborative agreement offered to me and finalised on 23 May 1986 and
without the above-mentioned actions of 14 October 1986, SKOP would not have been able to
acquire those enormous profits at my and my company's expense. It would also have been unable to
use them to raise SKOP's image and then begin to develop its cluster of businesses with Labsystems
at the centre. This completely irrational development, fuelled with the acquisition of new
companies, later resulted in SKOP’s destruction. As SKOP and the management it installed in my
companies were only out for their own advantage, they did not listen to my demands to cease
Labsystems’ irrational and destructive corporate acquisitions, even though I was still a significant
Labsystems shareholder and skilled in its field of business. These corporate acquisitions later
caused great damage to Labsystems and its shareholders (the destructive "corporate acquisition
gambling" at the expense of others, which I opposed).

On 29 May 1990, I wrote in the investment pages of Kauppalehti: "It is evident that in Finland,
the situation of SKOP, led by general manager Wegelius, will culminate in results similar to
those at American savings and loan banks since 1982 (Uusi Suomi, 29 April 1990): American
savings and loan banks killed by crime and greed".

And that is, indeed, what happened. SKOP collapsed financially and the Bank of Finland was
forced to take control of it in 1991. Due to the activities of SKOP and the savings banks under its
direction, the Finnish government has had to support the savings bank group with 88,104 million
marks of bank support. By 1999, 42,697 million marks of this had been returned (
/ SKOP Suomen Pankin huostaan / Valtioneuvoston selonteko eduskunnalle pankkituesta
16.11.1999 [Government report to the Finnish parliament on bank support, 16 November 1999]).

Does the state of Finland follow the rule of law?

In 1986, I became victim to the Finnish casino economy imitating the criminal traits of the US
savings-and-loan crisis in the early 1980s. My extensive work was destroyed by SKOP, and what
little remained after this destruction was transferred through SKOP to foreign owners in 1993.
According to this experience of mine, private inventors and small businesses seeking and defending
their rights are underdogs. This is due to scarcity of resources among other things ("money talks").

On the basis of my experiences, there is no doubt that SKOP has been spared from paying
compensation for damages by the false statements made in court by SKOP representatives and
individuals testifying on their behalf, by the unscrupulousness of lawyers and by misleading the
courts (the shameful result of the vote, 1-2, is unparalleled in Finnish arbitration courts and based
on false grounds, as each of the three arbiters knew). It is for the same reasons that SKOP's three
representatives have narrowly escaped the sentences of imprisonment demanded by the two
economics experts of the court (city public prosecutor Santavuori's charge was rejected by a 2-2

The work of an inventor requires innate abilities, cross-disciplinary competence and hard work.
Inventors should not be de-motivated by cases like this, where “top surgeon is left with nothing”.
This was the sub-headline in the tabloid Iltalehti’s coverage of the above-mentioned court case
brought by public prosecutor Santavuori (Iltalehti article of 30 November 1995, entitled "Ilkka
Kanerva: Vähän on vaikea valita" [Ilkka Kanerva: It’s a bit hard to choose]).

Many inventors and businesses would have more faith in the impartiality and unbiasedness of our
judicial system – and in working as an inventor – if I and my co-plaintiffs would finally be
compensated for the damage caused by SKOP. Since SKOP still exists (in a state of liquidation) and
is still under state control, the Finnish state could do this and thus act fairly and set an example.
This would be easy and benefit society as a whole, since a just compensation for damages would
also allow me to "whip out innovations" even more than before, creating more high technology
and biotechnology export industry in Finland and thus new jobs.

As I told at the beginning, Esko Aho urged at the Olostunturi seminar that "Society should be
whipping out innovations". This would work best if Finland was not whipping inventor-
entrepreneurs out of the country. Inventor-entrepreneurs who have achieved something significant
are a very rare and precious natural resource in Finland, and their protection, their fair treatment and
attempts to increase their numbers should not be neglected.

Unrecoverable damages for the Finnish high technology and biotechnology industry

If SKOP and its cohorts had not started to abuse and destroy my businesses Labsystems and Eflab
in 1986, these businesses would without doubt have continued to be the biggest and fastest growing
Finnish companies of their field. They would have grown to altogether different proportions than
what is now left of their business after it was effectively sucked dry by SKOP and then transferred
to foreign ownership (see table). The products based on my companies’ numerous innovations are
excellent and the business activities associated with them are very strong. This is illustrated for
instance by the fact that numerous productive and valuable "goldmines" have sprung up from their
ruins and their copies made in different parts of the world (see the examples presented above, e.g.

In an interview with Financial Times, Sir Christopher Bland, chairman of Life Sciences Ltd.,
credited Labsystems for the profitable growth of his entire corporation (Kauppalehti, 2 September
1994). Mr. Costantine, director of Life Sciences Ltd., later expressed his delight of the same matter,
reporting that "his company has been able to strike gold with Labsystems, which it purchased
in 1993" (Kauppalehti article of 9 February 1996, "Niinistö promised investors Finland would
favour work").

The companies I established in the 1970s were high technology and biotechnology companies, just
as Biohit Oyj, which I established in 1988, is now. It should be mentioned that only 5
biotechnology companies were established in Finland between the years 1960 and 1979
How to move forward from here

Undeterred by my experiences, I decided to continue my work as an inventor and entrepreneur in
Finland. For my part, the old adage proved true: "what does not kill, makes you stronger". After
I had recovered from having been smoked out of Labsystems and Eflab by SKOP, I established a
company called Biohit in 1988. This company is based on strong and reliable basic and applied
research, numerous innovations and an aggressive patenting strategy.

As an inventor and an entrepreneur, I have learned lessons from my experiences of the 1970s and
1980s. It is for this reason that Biohit has obtained so many expertise-based patents. In January
2000, Biohit had 16 patents in Finland, while the couple of dozen other new entrants to the stock
exchange had 11 altogether.

Biohit also differed from the other new entrants to the stock exchange in that the EUR 9.0 million
collected from Biohit’s new shareholders in 1999 has been used in its entirety for the benefit of the
corporation and towards its development. The old shareholders did not sell a single share in the
share issue. The old shareholders, including the company’s operational management and the board,
thus demonstrated that they themselves believed in the company, in the rise of its share value and in
what had been told to new shareholders. It is for the same reason that the operational management
and the board arranging the share issue have remained with the company.

Today, Biohit has 30 patents in Finland and a large number abroad. The company will continue to
pay particular attention to the strong development and protection of its cross-disciplinary and
intellectual capital both in Finland and abroad. 96% of the company’s turnover consists of sales
abroad. Biohit products have a high degree of processing and a domestic content of approximately
95%. Biohit’s mission is to advance human welfare and to improve the quality of life through basic
and applied research and with innovations originating from such research and product development.

An aggressive innovation and patenting strategy is the way to success and prosperity

I have been glad to note that, in the late 1980s and throughout the 1990s, many Finnish companies
have embraced an aggressive innovation and patent strategy similar to the one I have applied since
the 1970s. This strategy has brought them great success. Nokia is the best example of this in
Finland ( / Company / History / Read more about Biohit and its history from here).

It took me pioneering spirit, new innovations and entrepreneurialism to establish Biohit in 1988.
For my own part, I can only say that once an inventor and entrepreneur is always an inventor and
entrepreneur. I hope that my "blood-curdling" experiences will not discourage other inventors. On
the contrary, I hope that they and my new success with Biohit will act as an incentive and a spur for
inventorship and entrepreneurialism.

Written by:
Professor Osmo Suovaniemi, D.Med.Sc.
Biohit Oyj
Laippatie 1, Helsinki FIN-00880
Tel: +358-9-773-861

Table. The largest Finnish hospital and laboratory goods manufacturers in 1986, 1998 and
2000 (turnover expressed in million Finnish marks)

Year established   Company                                 1986       1998      2000

1972            Labsystems (FIM 128 million) and
1978            Eflab (FIM 84 million)(1,2)                  212      390     725
1970            Planmeca Group                               120      779     1,546
1960            Perkin Elmer Wallac (formerly Wallac)        120      830     1,000 (4)
1970            Konelab (3)                                  106      130
1965            Datex-Ohmeda (5)                             80       2,331   3,800
1978            Polar Electro                                14       473     630
1988            Biohit (6)                                            100     144

1) In 1986, SKOP took possession of Labsystems and Eflab. In 1993, SKOP sold the business
activities of these companies to Life Sciences Ltd. Life Sciences Ltd. was later acquired by the
American company Thermo BioAnalysis Corp.
2) In 1986, the total value of Eflab Oy was FIM 560 million (calculated using the P/E ratio 14). In
1987, before the Labsystems Oy share issue and option loan, Labsystems Oy had an OTC value of
FIM 427 million.
(3) Labsystems bought Konelab Oy (formerly Kone Instruments Oy), Clids Oy and Bio-Orbit Oy in
spring 1999.
4) The turnover also includes the sales of Wallac subsidiaries. Wallac currently belongs to the
American corporation PerkinElmer.
5) Datex had a turnover of FIM 1,079 million in 1997. Datex bought Ohmeda in 1998.
6) / Company / History / Read more about Biohit and its history from here.