vrijdag 22 januari 2016

Patent tip: License out your technology! An offshore technology example why to do so.

Superior technology

Some technologies are overturning an entire existing market, just because they are superior in at least one aspect. If a technology is superior in a number of aspects, the overturning can be very rapidly. Let me introduce one of such overturning technologies, one that is still in its infant years. This technology is invented by Antoon Buitenhuis, who is the founder of the company Siron B.V.. His invention concerns a new and improved way of testing open type fire extinguishing systems, especially for the offshore, hydrocarbons producing industry. Typically these fire extinguishing systems are equipped with a number of open spray heads, a distribution net, a pump and a seawater intake. Once a fire is registered, the pump switches on and the entire installation is showered in seawater. It may be no surprise, that these systems are known as deluge systems. 

Until recently, these deluge systems were tested on a regular basis, as prescribed by safety standards, with seawater. This testing however poses quite some problems: by this testing, corrosive seawater is introduced in the system, leading to corrosion and blockages as is illustrated in the following image.

The clogged interior of a real life, no longer safe, fire extinguishing spray head 

This is a true the nightmare of any site operator: a safety system, that is no longer safe. By conventional testing, equipment, production and most important the lives of the staff aboard is at risk.  

The idea

By testing with specific, dense smoke, the corrosion and blockage problem is eliminated. Furthermore, the on site equipment is no longer unnecessary exposed to corrosive seawater. this means that with this technology, expensive shut-downs for deluge system testing virtually belong to the past. The smoke testing has obviously been baptized "dry deluge testing". One very important aspect is that testing according this technology is in full conformity with the NFPA standards for testing open fire extinguishing systems. The NFPA is globally accepted as the leading standards institute for this specific industry and is recognized by most jurisdictions.  

Blocked spray heads can be individually identified and replaced.

Commercial aspects

Till today, some seven sites have been tested with the dry deluge testing system, and another ten are projected for 2016. Now there is a first licensing partner selected in the UK, and from other countries, more and more licensing requests poor in. Even outside the offshore industry major interest is received form nuclear power plants, where the wet testing poses considerable threats as well. A first mayor British nuclear power plant has successfully been inspected in 2015 with the dry testing system, more will follow soon.

So how does the future look?  Well from the yet early data and a global estimate of a market size of 1470 relevant producing offshore production platforms, an S-curve can be calculated. The data, as currently available, predicts an contagiousness of 0,703 per year, leading to an estimated 97% saturation of the market in 2031, the year in which the patent expires. The time span in which the technology is protected, thus covers a market penetration of 97% in the current model.  

If we discard the effect of licensing on the number of platforms, a contagiousness of about 0,451 can be deduced, leading to a market penetration at the year of patent expiration of less than 43% market penetration.   

To license or not to license, that is the question

So in this situation, a single patent will cover the time span from start until predominantly the entire market is provided, a scenario almost to good to be true. Yet key to this rapid deployment is a clear licensing strategy. The size of Siron B.V. makes it impossible to service all these rigs without partners. So the choice to license was relatively easy made.  

Thus it becomes evidently clear from this neat example, that without proper licensing, it is impossible to sufficiently rapid expand the business to full scale and to seriously loose potential. Yet in most offshore related companies, licensing is seen as a no go area. This case clearly proofs the opposite can be true and urges a strategical reconsideration of technology commercialization.

I can only say: check your technologies and see if you can expand your business by licensing!

I wish you all happy inventing!

Hendrik de Lange
Dutch and European patent attorney

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