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Protecting Intellectual Property in the Aquaculture Industry

Willem van der Pijl
Apr 2022

For the majority of businesses, their competitive advantage is underpinned by their intellectual property (IP). IP is the proprietary knowledge and expertise that allows a company to offer products or services that are cheaper, better, and quicker than those of its competitors.

For example, it enables a breeding company to select salmon with enhanced resistance to infectious pancreatic necrosis (IPN), or a pharmaceutical company to offer a vaccine for combating streptococcus in tilapia. Unfortunately, IP has a major “flaw”—although it can take an enormous amount of resources to create, once created it’s relatively easy to copy and share. Once you know which marker is linked to IPN resistance in salmon, or that a specific polypeptide can elicit an effective immunological response, then copying or sharing that knowledge, i.e. the IP, is relatively quick and cheap to do. Thinking of this in another way: if all your company’s confidential knowledge was published on a website and freely accessible to your competitors, what would that do to your company’s competitive position?

Protecting Intellectual Property in the Aquaculture Industry

Alphabet (google’s parent company)’s X Development’s IP patent wo2019/147346a1 for its fish biomass, shape, and size determination technology.

Protecting Intellectual Property in the Aquaculture Industry

Alphabet (google’s parent company)’s X Development’s IP patent wo2019/147346a1 for its fish biomass, shape, and size determination technology.

The author of this blog is Dr. Claude Kaplan, CEO of the microalgae development company Kuehnle AgroSystems, and Non-Executive Director of Hatch Innovation Services, who has been helping organizations evaluate, source, manage, and exploit aquaculture IP for over 20 years.

Intellectual Property Versus Intellectual Property Rights

So here is the fundamental issue with IP: it’s highly valuable and expensive to create, but very easy to copy. This is why governments—afraid that inventors would choose not to share their inventions but instead keep them secret, and therefore not make them available to the public—decided to create a number of intellectual property rights (IPR). These IPRs are legal constructions that enable the inventor to share their IP with the promise from governments that they cannot be copied or shared without the inventor’s permission for a specified period of time. Think of it as a Faustian bargain between the inventor and society; the inventor discloses to society how they “did it” and in return society grants the inventor, for a number of years, the right to stop anyone else using that invention.

Over time, governments have created a range of IPRs relating to different types of IP, and these IPRs have become largely standardized across nearly all countries. The IPR that’s most often considered in the development, manufacture, and commercialization of new products or services is patents. Patents provide the owner of an invention (which has been deemed novel and non-obvious) a 20-year monopoly to practice that invention. Patents are termed to be “negative rights:” they don’t automatically allow the owner to practice their invention, but they do enable the patent owner to stop somebody else using their invention without their permission.

It’s a common misunderstanding that there’s such a thing as an international patent. There is an international patent application process but, in the end, patents are granted on a country-by-country basis. A patent granted in, say, France has no bearing on what you can do or not do in, say, Brazil.

The patent system is probably one of the most complex and arbitrary legal constructs that humans have created and navigating it without specialist legal support is near impossible. But for all its faults (of which it has many), it generally serves its function pretty well.

Freedom to Operate (FTO)

So, we have a process by which a company, university, or individual can obtain exclusivity to exploit their invention in a specific territory, and, in so doing, maintain an advantage over their competitors. However, at the same time, competitors may also be protecting their own inventions with patents. Even if you have a patent, if your product, service, or process relies on somebody else’s IPR, then you may lack FTO.

FTO is the ability to offer your product, service, or process without infringing someone else’s IPR. For example, you might have discovered and patented a specific marker for selecting salmon for resistance to IPN, but if to apply that marker you need to use some gene technology patented by a third party, then you have an FTO issue; you can’t use your invention except with the permission of that third party or you’ll infringe their IPR and are at risk from that company taking you to court. In the product development process, patenting is often desirable. However, ensuring FTO is essential.

Aquatech Patenting Activity Is Low Compared to Many Other Sectors

Patenting is the most common way to secure your IP. However, traditionally, aquaculture has had a low patenting intensity compared to the tech industry. While the number of new patents registered for aquaculture grew from around 1,000 in 2011 to about 5,500 in 2020, it’s still pretty low compared to other areas of tech (for example, AI, gene editing, sensors, and big data) where we routinely see over a million patents published annually.

Protecting Intellectual Property in the Aquaculture Industry

Graph 1: Patent applications in aquaculture over the last 20 years (Source: National Patenting Databases)

This is likely a result of different factors, including:

  • the low return on investment for aquaculture inventions (patents are expensive to obtain and maintain, and therefore many aquaculture applications don’t warrant the cost);
  • the tendency or preference of aquaculture tech companies to keep the “secret sauce” confidential (whereas a patent necessitates full disclosure of the invention);
  • the perceived difficulty in enforcing patent rights in certain key aquaculture markets, such as China, Chile, and Central America (what value does a patent confer if you can’t enforce it?);
  • the potential customer dislike of patents and products that are patented (the wounds from patent fights regarding a specific vaccine in the salmon industry still run deep in the psyche of many players in the industry); and
  • the long product lifetimes (if a product has a very long lifetime, why disclose the invention for only 20 years of protection if, by keeping it secret, the inventor can maintain competitive advantage for 40 years?).

Despite the still relatively low number of patent applications in aquaculture, things are changing rapidly, and the upward trend is almost certainly set to continue. A key driver has been the application of tech to aquaculture, and as tech solutions penetrate further into traditional aquaculture, established innovators and new startups are looking to protect their inventions through building a defensible patent position.

Tech solutions generally have broad application and can be easily copied. Historically, there’s also a culture of protecting such tech solutions through building strong patent portfolios termed “patent thickets.” The most active patentees globally count among them the likes of mega-tech companies such as Alphabet (Google’s parent), Microsoft, and Huawei. Current examples of these three companies’ involvement in aquaculture include:

  • X, the innovation lab within Alphabet, is actively involved in ocean research. X is behind Project Foghorn (which successfully produced carbon-neutral fuel from seawater) and Tidal (a project geared toward developing a high-power underwater camera and machine-learning platform to gain better insights into the health and sustainability of the ocean).
  • Microsoft and Nueva Pescanova Group have signed a collaboration agreement whereby both companies will work together to promote the Group’s digital transformation and sustainability, within the framework of its Aquaculture 4.0 Strategic Plan.
  • Huawei is bringing 5G technology to offshore aquaculture, helping to meet China’s government goals of increasing output while also turning the farms into a major tourist attraction.

China: A Driving Force Behind the Surge in Patents for Aquaculture

Interestingly, China is a driving force behind the surge in patents for aquaculture. From a significant but not major player at the beginning of the century, China now dominates patenting in aquaculture. Of the 5,198 aquaculture patents published in 2020, 80% derived from Chinese companies, universities, and individuals. However, the nature of these patents differs vastly from traditional patenting activity: Chinese patents are largely only ever prosecuted in China; they’re often very specific and relate to a bespoke solution that is only being used by that particular inventor (for example, a very specific feed formulation where every ingredient and its amount is specified); and they can be easily circumvented by a minor change to the product or process so as not to infringe the patent.

Generally, these Chinese patents don’t provide any commercial benefit outside of China and rarely create an FTO issue. However, what they do is—inadvertently—muddy the waters for other inventors by creating patentability issues by adding considerable prior art into the market.

Protecting Intellectual Property in the Aquaculture Industry

Graph 2: The share of different countries, the EU Patent Office, and the WIPO as a share of the total patent applications between 2002 and 2021 (Source: National Patenting Databases)

The Future of Patent Activity in Aquatech

To finish, a few predictions about three of the major trends for patenting in aquatech that we expect to see over the coming years:

  • Firstly, we expect to see the overall trend for increased patenting to continue. However, although we predict the traditional patenting areas of feed, therapeutics, and farming systems to continue, the real drivers of growth will be in the “deeper” tech aspects. In particular, the application to aquaculture of AI and machine learning, the exploitation of big data, and advances in genomic and genetics technologies. This will be combined with non-traditional aquaculture players increasingly securing patent protection in aquaculture. Expect to see more patent activity from the likes of Google, Microsoft, Huawei, and other tech companies in the aquaculture space.
  • Chinese patenting activity will continue to dominate the landscape but will become increasingly more sophisticated. While the level of patents originating from China will further increase, these patents will be more focused on the global application of these technologies, and not just on the domestic market. Expect to see Chinese tech companies, supported by strong patent portfolios, increasingly offering new tech products and services to aquaculture markets across the globe.
  • The enforcement of IP rights in aquaculture has traditionally posed issues in several key markets. Enforcement in certain countries and territories has lagged behind the more sophisticated IP courts and procedures commonly found in Europe, North America, and Japan. However, we’re seeing increased success and predictability of courts enforcing aquaculture patent rights in many countries, especially in Southeast Asia. There’s still a long way to go in key markets such as Chile and China, but we do expect the rights of patent holders to significantly strengthen over the coming years.

One thing we can be almost certain of is that with increased patent activity and new players coming into the market plus the growing influence of Chinese-based inventors, the patenting landscape in aquatech over the next few years is set to become increasingly competitive, complicated, and dynamic. I encourage everyone to watch this space!

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