By Winston K. Robbins, Ph.D.
In the July 2011 issue of the Carmagen eNews, George Swan introduced the use of Competitive Technology Intelligence (CTI) as an important element in developing a good business plan. That article focused on patent searching and systematic (computerized) evaluation of technical threats to a commercial position. Consideration of patent timing, intensity, and focus can lead to a “map” of competitor Intellectual Property (IP) strategies. This article continues to examine CTI tools focusing on the use of non-patent sources to determine how IP fits into competitor strategies.
Every company operates differently using equipment, process conditions, and practices that allow it to successfully participate in a market economy. Collectively, the underlying concepts represent a company’s IP that can be protected in three ways: patents, published papers, or proprietary practices. An IP strategy combines these tools with the objective of maximizing a company’s competitive advantage as part of an overall strategy.
Evaluation of competitive IP strategies begins with recognizing the role of each type of IP:
A company strategy incorporates not only technical concepts but also business needs. In the petroleum industry, IP concepts are applied to meet specific goals that are driven by factors such as cost and availability of feedstocks, market-determined product slate, refinery complexity, and governmental regulations. Typically, a company will develop different IP strategies for several technology areas contributing to its business success.
Competitive IP strategies can be discerned when information databases covering technical and business practices are evaluated in concert. This begins with the development of the taxonomy of the technology, i.e., a framework that can put technical concepts in business context. With this taxonomy as a guide, scientific, engineering, and business databases can be searched. Statistical and filtering algorithms may be applied to make sense of a vast and apparently chaotic body of information that this generates. Sub-searches of references in each area of the taxonomy can identify active competitors, key personnel, intensity of effort, and history of involvement. If the taxonomy is well constructed, it will include “enabling technologies” and areas with potential as “game changers.” A taxonomy is created that included technology and business factors.
CTI assigns a strategy on the basis of taxonomy information for each competitor. This requires experienced industry experts who can apply their deep knowledge of petroleum technology and business worlds. Superimposed on the individual portions of the taxonomy is the overarching arena of research where the IP strategy comes into play. Protection of the technology that can give a competitor an advantage should be included in an overall strategy.
As an example, consider CTI for refinery naphthenic acid corrosion in the 1990s. New acidic low sulfur crudes from the North Sea, West Africa, and China were being introduced. Since these crudes were corrosive in pipestills and caused unusual product qualities, these “high TAN” crudes were being offered at deep discounts. IP strategies for practices related to refining high TAN crudes appeared to include proprietary activities for all competitors. Published reports by individual competitors, joint industry programs, vendors, and suppliers revealed a few specific areas of emphasis among competitors. Consequently, CTI was sought to determine how IP fit into the overall strategies among various domestic and European refiners.
Basically, there were four contributing areas affecting competitor strategy: the crude market, refinery alloys, flexibility in crude blending, and options for TAN processing (Figure 1).
The result of the information taxonomy allowed identification of companies with interest in running corrosive crudes.
Strategies for fully integrated oil companies differed from refining companies. With upstream interest in marketing high TAN crudes, integrated companies were active in researching new options in blending or TAN conversion. On the other hand, independent refining companies limited their activities to field testing inhibitors and instrumentation that facilitated blending. By combining the business and technical activities, it was possible to construct an IP “intensity profile” for competitors (Figure 2).
It was clear from this analysis that refiner strategies were largely based on blending with vendor support in inhibitor and instrumentation application. A very limited number of independent refiners used alloy equipment to handle high TAN crudes, while a number were capable of blending the crudes at high dilution. On the other hand, integrated company strategies differed.
As noted earlier, applying CTI to determine the role of IP in a competitor’s business plan requires experienced industry experts. Literature searches and taxonomies can be generated from keywords, but a deep knowledge of petroleum technology and the commercial world is needed to distinguish between “breakthroughs” (game-changing technology) and “breakdowns” (revelation of “good science” rejected as technologically impractical). This expertise often resides in consultants with years of experience in related research.
Figure 2 - High TAN Crude Corrosion Activity Intensity Profile