Sydney partner Jackie O’Brien and special counsel David Wilson discuss the importance of intellectual property to mining companies.
This article was originally published by the Mining Journal and is reproduced with permission.
Intellectual Property – The Unmined Resource
By Jackie O’Brien and David Wilson
Miners have not traditionally been known for their adoption of innovation and new technologies, leaving that to the actual tech companies. But partly arising from digital disruption and partly through the drive to innovate, miners are now exposed to use all sorts of technical wizardry which can increase production, raise productivity and fight ever-tightening margins in a more difficult economy.
All this technology means that more than ever, miners are now in contact with intellectual property, whether their own or belonging to others. If they haven’t already, they now need to step up to play in this space, alongside tech companies that have been doing this for a long time.
The futuristic stereotype
Picture the high-tech mine of the future. Drones monitor the mine and other infrastructure, offering a perspective not previously available, and getting into previously inaccessible or dangerous locations. They conduct aerial surveillance and mapping, undertake environmental assessments, ferry out tools and equipment, collect samples and transmit data.
The data collected is sent up to the cloud, and is then the subject of predictive analysis by artificial intelligence. Analysts and controllers sit in a remote centre thousands of kilometres from the mine site to review the output in real time, and remotely operate the equipment.
After algorithms calculate just where to dig, autonomous drills operate to efficiently increase ore recovery. Autonomous haul trucks carry the load up out of the pit, giving higher utilisation of equipment. Driverless trains take the haul to the port.
Renewable energy, both solar and wind, is being used to power the site and lower energy costs and environmental impact. 3D-printing will allow spare parts and tools to be manufactured on site.
And it’s not only the bottom line. New technology is making workplaces safer, with devices able to access otherwise inaccessible or dangerous areas, monitor workers’ health and attention, and help lower the risk of incidents.
These technologies are being layered upon one another to create ever-increasing efficiencies and competitive gains, all with the aim of further progress toward maximum throughput and minimum disruption.
Until only recently, all of this would all have seemed very far-fetched. But these technologies are available in the present, and are steadily being advanced.
The actual situation
Despite all this talk of high tech progress being made by miners, some recent statistics still show a different picture. Miners are often not the creators or the owners of the intellectual property that they use and when they are (which is more often than they might think) they are not always capturing and protecting it.
IP Australia, the government body which administers intellectual property in Australia, earlier this year commissioned a report on innovation trends and the ownership of intellectual property in the mining sector[i]. The report found that over a 17 year period from 1994 to 2011, there were some 6,539 mining inventions that were the subject of patents in Australia. This is from a pool of over 19,009 mining patent applications across that time, with an exponential rise in the number of patents in more recent years.
The majority of the technologies covered by these patents related to dredging and soil shifting equipment including draglines and bucket cars, conveying equipment on dredgers, super structures for shifting soil, booms and teeth for buckets. Not to understate the importance of these, but they are certainly not the digital disruptive technologies that are causing all the headlines.
The ownership of mining-industry related patents was also illustrative. Of the 6,539 inventions, 4,934 (or around 75%) are not owned by mining companies, but instead by various mining equipment technology service providers. The report found that miners only owned 863. The balance were owned by government or academic organisations. A significant number of the patents have foreign owners. The report also notes that there has been a decrease in research and development budgets by operating miners.
Contrast this, however, to the total number of patent applications, not just those related to mining. The data published with IP Australia’s annual report about intellectual property for 2015[ii] shows that for the past 10 years, there have been somewhere between 23,000 to 29,000 patent applications filed in Australia annually. That’s more each year than the 19,009 applications filed in the mining industry over a 17 year period. The most common International Patent Classification for these applications in 2014 was “human necessities”, which will cover the most prolific inventors and patent applicants, pharmaceutical companies and makers of therapeutic medical devices. This category nearly doubles the second place category, described as “performing operations, transporting”.
Perhaps this is not a totally fair comparison, as patents are not the only form of intellectual property protection, and new digital technologies are probably not being categorised as inventions with application only to mining. But if the patent statistics are anything to go by, the above comparisons show that innovation in mining is not being captured at nearly the same rate as other industries, and mining companies themselves are not the ones innovating. Therefore, miners must be using technologies created by others, whether mining technology service providers or innovators outside the industry.
Interacting with other sectors can drive innovation by itself. Using and adapting existing technologies in new ways might be the innovative spark that drives invention.
Making the most of intellectual property
All businesses own and use intellectual property, even if they don’t realise it. With emerging technologies affording competitive edges and greater efficiencies, miners will find that there are distinct advantages in understanding their intellectual property.
After all, intellectual property is “property”. It provides a legally enforceable set of rights that can be used against those who use the property without permission. It can be bought, sold and licensed. It can be valuable – even if not to one company, it might be for another. It should be included on balance sheets.
Generally, there are two things to gain from owning intellectual property. The first is the ability to use the technology, and gain a competitive or efficiency edge by doing so. A technology which increases efficiency might be the difference in keeping profit margins higher than competitors.
The second is the revenue stream that can be derived from licensing others to use the technology. This is how the mining technology service providers use their intellectual property and earn money, but miners could do likewise depending if it suits their strategy and the acceptability of giving others access to that technology.
Even if miners are not persuaded by the potential of intellectual property to generate competitive advantage or revenue, the need to avoid infringing the rights of third parties is critical. Acquiring new equipment and technology to use and perhaps adapt on site is only useful if there is freedom to operate. Being aware of third parties’ intellectual property rights is a must when introducing new technologies into a business.
Conducting an intellectual property audit is the first important step in understanding what intellectual property is owned and used in a business, and miners should embark on this exercise now. Capturing and uncovering unknown intellectual property is the first step toward unlocking intellectual property for its value or the revenue it might generate, and is an important management exercise in lowering the potentially very costly risk of infringing third parties’ rights.
Other industries, particularly pharmaceutical and electronics, have been playing in the intellectual property space for some time. They are very good at not only innovating, but also capturing those innovations and managing the resulting intellectual property. What can mining companies do to emulate them? Cultural adjustment is key.
Mining companies need to educate their workforces about intellectual property, and find better ways to capture the creativity of their employees. They will need to become agile to respond to emerging technologies, and be collaborative with other industries which can offer ideas and innovation.
As mining companies become more sophisticated in engaging with intellectual property protection (in particular, patents) they will also need to become more sophisticated internally in relation to record keeping regarding innovations. Areas of importance include identifying the time of conception of the invention, the identity of the inventors and their contribution to an invention. Companies which are more engaged with the patent system have strong internal record keeping processes which help identify these issues (eg. inventors’ journals).
Similarly, mining companies will need to gain a better understanding of the process of invention and identifying the point at which they have created something protectable is before commercialisation and reduction to practice. Omission to do this might result in loss of an otherwise protectable invention or innovation.
Miners solve complex problems every day. Each solution is likely to be underpinned by intellectual property (the miner’s or a third party’s or both). Understanding how those rights come into existence and then making an informed decision about whether or not to capture and then commercialise that IP makes good business sense. And that’s before we get to the issue of branding and co-branding – but that’s a whole other article.
Jackie O’Brien is a partner and David Wilson is a special counsel at global legal practice Norton Rose Fulbright. The writers would like to acknowledge the assistance of associate Rebecca Tisdale.
[i] Francis, Emma: “The Australian Mining Industry: More than Just Shovels and Being the Lucky Country”, published by IP Australia, 2015
[ii] “Australian Intellectual Property Report 2015”, published by IP Australia, 2015