How a Startup Selling Sex Cream for Women Seeks to Rekindle Market Romance
As CEO of a marketing firm and incoming president of the United Inventors Association, Bonnie Griffin Kaake believed she had a sure bet with Volexa - a cream with Viagra-like properties for women. Market research showed vast potential for her female sexual-enhancement product. Physicians lined up to prescribe it to their patients. Top shelf trademark search firm Thompson & Thompson assured her that the name was bullet proof.
However, the day before the U.S. Patent and Trademark Office was to grant her the trademark for Volexa, a European pharmaceutical giant challenged the name. She could have stood her ground, her lawyers said. But a protracted legal battle costing tens of thousands of dollars would have resulted in a Pyrrhic victory. She dropped the name, retrieved and destroyed scores of color brochures, rebuilt her company's Web site and hit restart last year. Volexa is now Lovexa.
Although there's still pent-up demand for her product, re-launching has been financially and emotionally painful.
Kaake's nascent company, TBK Medical LLC, conducted market tests, including double-blind studies a couple of years ago. The cream far exceeded anything on the market, effective in 60 percent of cases, she says. "We felt we had a winner on our hands."
Kaake, 59, has worked with intellectual property issues for years. "I know that you increase your chances of being successful if you take proper channels," she says. "We did professional marketing research, patent searches. We were doing things in a systematic manner. I was practicing what I'm preaching."
And then it all blew up in her face.
Les Laboratoires Servier's anti-depression pill, Valdoxan, wasn't even on the market when TBK Medical sought trademark protection. The French company's product was an oral medication to fight depression, not a topical cream. Yet the pharmaceutical giant insisted that Kaake's product presented significant market confusion.
"They said our product was crossing the line because we had mentioned on our Web site that women who can't get sexually aroused can get depressed," says Kaake.
She and her two business partners, one of whom is a pharmacist, already had spent about $20,000 in attorneys fees in 2005 and early 2006 to wrestle with the trademark challenge. The imbroglio scared off would-be angel investors. The money they spent on lawyers' fees sapped marketing funds.
The upstart business had hoped to bankroll enough cash to begin lengthy and costly trials with the Food and Drug Administration. With FDA approval, the company could begin manufacturing the cream in bulk. As it is, TBK Medical must go through a compounding pharmacist, who under law can make small batches of 30-day supplies. Prescription-only orders are custom fulfilled, paid with credit cards, and mailed directly to customers.
The cautionary tale is a common one in the medical field, where smaller companies with better products and services often end up with the short end of the tongue depressor.
Kaake says she and her business partners used money from their other businesses to keep TBK Medical on life support. Because of that, she notes that her consulting business posted one of its worst years ever.
"The bottom line was, we had to give in" to the French pharmaceutical company, says Kaake. "Large corporations put the inventor in an awkward situation. They can spend more money to challenge trademarks and fight someone, even if they're not justified in doing so. They have attorneys sitting around looking for something to do."
Kaake and her business partners conducted their own trademark search and re-launched their product under the moniker Lovexa, available via the Web and through Todd's Harvard Park Pharmacy in Denver (see contact information below).
In retrospect, Kaake says she would have brought a high-level gynecologist from a major university aboard. "That would have added credibility when talking to investors," she says. "This is something inventors need to know - credibility is important. Investors look hard at the team you have. Inventors who don't bring in professionals, they're shooting themselves in the foot."
The sad irony is this: Last year, after TBK Medical had changed the product name to Lovexa and re-branded all print and online marketing materials, a European regulatory agency denied Les Laboratoires Servier permission to market its anti-depression medication Valdoxan. The company filed an appeal.
Todd's Harvard Park Pharmacy
Compounding Pharmacist
950 East Harvard Ave.
Denver, CO 80210
303.733.3755
Lovexa at a Glance
$35 for a 15-gram tube
Good for about 30 dime-size applications
Can keep for six months
Effects last up to 90 minutes
She and her two business partners, one of whom is a pharmacist, already had spent about $20,000 in attorneys fees in 2005 and early 2006 to wrestle with the trademark challenge. The imbroglio scared off would-be angel investors. The money they spent on lawyers' fees sapped marketing funds.
