Inside Track: Birch bark project comes back to the U

Bark to beauty and health products?

An entrepreneur who once helped the University of Minnesota find business partners to commercialize technology has agreed to take over a university-related concern in northeast Minnesota that is rooted in the chemistry of birch bark.

At the university's request, Brian Garhofer took over what's now called the Actives Factory (www.theactivesfactory.com) in Two Harbors, Minn., after a Utah drug company that bought the rights several years ago from the U abandoned a related drug it was developing to focus elsewhere. He hopes to revive a dormant business that would use birch-bark compounds as natural chemical substitutes for use in pharmaceuticals, cosmetics, vitamins and industrial products.

"We'd like to provide products to the cosmetics industry within one year and I hope to be working with partners on developments for the pharmaceutical industry," said Garhofer, who bought 15 patents from the U. "I'm self-financing so far, but I'm looking for up to $1 million from angel investors. I've acquired the assets, a manufacturing facility in Two Harbors, a supply of birch bark and a finished-compounds inventory."

Actives Factory springs from years of research by Pavel Krasutsky at the U's Natural Resources Institute in Duluth. Birch bark contains anti-inflammatory properties that may reduce cholesterol levels and blood pressure, treat infections and stimulate the immune system.

"Over hundreds of thousands of years the birch has evolved to use chemicals to protect itself from bacteria, fungus, and viruses," Krasutsky said. "Its first barrier of defense is its bark. Use of natural chemicals is well-established in Europe and Asia, but use in the United States is just beginning to develop."

Garhofer, 54, bets that, although more expensive to produce than synthetic chemicals, demand for bark-extracted compounds will grow with consumer demand for natural alternatives and environmental sustainability in the personal care industry. Birch bark is available in large quantities at paper mills.

"Our corporate client list grew by 18 companies [in 2012]," Daly said. "We now serve over 65 companies in the Twin Cities and we added some very prominent names last year ... General Mills, Fairview, Medica, Thrivent and Cargill. We worked with over 200 executives in 2012. ... We don't deliver a three- or six-month program after somebody is separated. We stay with clients until they land their new opportunity. That's the difference with us."

Navigate Forward, which donates nearly 5 percent of revenue to nonprofits, is hosting its five-year anniversary celebration in March at the Woman's Club in Minneapolis. All that growth means it had to move the annual client-and-friends affair out of the Loring Park office.

Home-grown online clinics have expanded to new states, a sign of patients' growing acceptance of and the potential revenue from the new frontier of "telemedicine."

HealthPartners has expanded its Virtuwell online clinic beyond Minnesota and Wisconsin and into Michigan, which means that anyone living or traveling in that state can go online and get 24-hour care and prescriptions.

St. Paul startup Zipnosis operates a similar Web-based health service, available from 8 a.m. to 8 p.m. daily. Zipnosis is available in 11 states -- Colorado, Washington, Alaska, Connecticut, Illinois, Kentucky, Maryland, Massachusetts, New York, Rhode Island and Wisconsin.

JACKIE CROSBY

"Benson" lives on at former Faegre & Benson, albeit not on the new letterhead.

"Benson," dropped from the 2012-merged Faegre Baker Daniels, is the name of the firm's intranet service.

Lawyers "go to Benson" to review job openings or firm updates. The idea came from the new colleagues at merger partner Baker & Daniels.

"Several of them felt bad about [Benson] being left out as we had to consolidate for brevity," said Faegre Baker Daniels managing partner Andrew Humphrey.

"We have also retained the Benson name for our firm pro bono award," Humphrey continued. "This is a big deal in our firm."

And fitting for the man who founded Minneapolis Legal Aid for the indigent.

LEE SCHAFER

Dan McDonald, a Merchant & Gould veteran of the patent-law wars, has written "Protecting Your Company from the New Era of Patent Infringement Suits."

"In recent years there has been a surge of patent infringement cases brought by companies that [buy] patents but do not produce actual products," McDonald said of a group sometimes dubbed patent trolls. "This type of case creates an entirely new dynamic compared to 'traditional' disputes between industry competitors.