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Feb/March 2010 firm newsletter

X-Ray Optical investing in ideas

By Larry Rulison, Business writer for the Times Union Recent $500,000 grant allows East Greenbush tech firm to protect intellectual property EAST GREENBUSH -- David Gibson, president of X-Ray Optical Systems Inc., doesn't worry about bricks and mortar. While many manufacturing and technology companies might use a government grant to secure real estate or move into a new manufacturing facility, Gibson is using a new $500,000 grant from New York state to not only buy new manufacturing and research equipment but also to pay for something less tangible: intellectual property, such as patents. X-Ray Optical currently has more than a dozen patents on its technology -- used in equipment that analyzes materials -- and it is seeking others in the United States, Japan and Europe in an attempt to protect itself from competitors. One of the firm's technologies is used in making machines that measure sulfur in petroleum fuels, which help refineries meet federal environmental standards. Sales of the machines, which cost between $55,000 and $85,000, helped the company turn its first profit this summer. "It's a huge asset," said Gibson, who declined to reveal revenues for competitive reasons. "It's certainly more important than buildings." X-Ray Optical, which operates out of 26,000 square feet of space at the East Greenbush Technology Park and employs 40 people, secured the grant from Senate Majority Leader Joseph Bruno, R-Brunswick. The money also will allow X-Ray Optical to obtain a matching $500,000 grant from the National Science Foundation. The money will allow the firm to add as many as 60 new workers over the next two or three years. Gibson said Bruno and his aides understand how important it is for technology companies to pay to protect their intellectual property and how government can play a role in that. "This is how we protect the ability -- long term -- to keep the jobs here," Gibson said. "They really sort of get it. This is a pretty innovative use." Mark Hansen, a spokesman for Bruno, said the senator knows how important funding can be for technology companies to secure not only materials but also to attract venture capital money, commercialize research and protect intellectual property. "Senator Bruno recognizes that. And he understands how important it is," Hansen said. Patent use in the United States is surging. Last year the United States Patent and Trademark Office received more than 376,000 applications for patents, more than double the applications received in 1992. The agency, which is a division of the Department of Commerce, employs more than 6,500 people. "Patenting is booming," said Gregory Mandel, an associate professor of law at Albany Law School who specializes in intellectual property and patents. Mandel says a patent can cost a company between $5,000 and $50,000, which includes both attorney costs and fees paid to the patent office. The more sophisticated the technology, the more it costs. He guessed that a patent for X-Ray Optical's technology's would be at least in the middle of that range. The real issue with patenting technology, though, is time. The average patent for a technology company takes about three years to process, and, in many cases, that is about how long it takes for some technologies to become outdated, he said. "There's a lot of debate going on about how to speed up the process," Mandel said. But that doesn't mean patenting isn't important, especially for start-up companies. For technology companies, intellectual property -- which generally includes patents, trademarks, copyrights and trade secrets -- is the most important asset, Mandel said. "It's what can set them apart, and it's also what can cause them to collapse" if they don't handle it properly, Mandel said. Arlen Olsen, managing partner at Schmeiser, Olsen & Watts, an intellectual property law firm based in Latham, says many technology companies lack sophistication in protecting their intellectual property while some start-up companies base their entire existence on filing patents. He said X-Ray Optical, which has its own in-house patent attorney, is well positioned in this area. "They're very IP savvy," Olsen said. "They've got some great technology over there." Larry Rulison can be reached at 454-5504 or by e-mail at lrulison@timesunion.com. rg/12/'>lung cancer systoms