Anette Hegner, IP manager for NKT Research and Innovation: "Patents are extremely important for start-up companies!"Anders Bjarklev was one of the pioneers of a technological blockbuster – the optical fibre amplifier used to transfer high-speed data over the Internet. Unfortunately, the professor from the Technical University of Denmark never earned a cent from it. Why not? Because he never patented his early ideas. He learned a valuable lesson though, and in the late 1990s, when he and two of his PhD students came up with another bright idea concerning optical fibre technology, he made sure he patented it. Today, Mr Bjarklev and one of those former students, Jes Broeng, are at the helm of Crystal Fibre, a Danish company with 22 employees and customers in the US, Germany, UK and Japan.
Patents protecting a unique technology
Crystal Fibre supplies photonic crystal fibres (also known as microstructured or “holey” fibres), which are highperformance optical fibres used in lasers, telecommunications, defence, metal machining and entertainment. The company is a small niche player in a massive market dominated by giant companies such as the US firm Corning and the Japanese-owned company OFS Fitel. Crystal Fibre’s main advantages in this huge and competitive industry are its unique technology and the patents that protect it.The Technical University of Denmark, where Professor Bjarklev worked, helped pay for the first patent application. That patent not only protected the basic technology; it also formed the basis for founding Crystal Fibre and raising capital from NKT, a Danish industrial group.“ Patents are extremely important for start-up companies,” Anette Hegner, IP manager for NKT Research and Innovation, explains. One year after filing the first patent application, NKT made a full commitment to the start-up company, and NKT now owns around 90%. Professor Bjarklev, Dr Broeng and the Technical University of Denmark, which continues to be a partner in research and development, share the rest.
Important lessons in patent management
Crystal Fibre is more fortunate than most start-ups. Unlike other companies of its size, which tend to hope for the best when it comes to patent strategy or rely on the help of an external patent attorney, this little company has access to a team of lawyers and patent specialists from NKT, who also serve 16 other companies including 7 NKT subsidiaries. With the help of this team, the management of patents has played a key part in Crystal Fibre’s business strategy. In 2004, for example, Crystal Fibre bought the assets of BlazePhotonics, a UK competitor. Before doing so, Crystal Fibre opposed two of BlazePhotonics’ important European patents to put BlazePhotonics under pressure, since both companies were creating crucial IP in the same area. Dr Broeng explains that the UK competitor had filed patents on basic production processes that his company had also invented at an early stage but chosen to protect by keeping them secret rather than patenting them. If Crystal Fibre had not bought BlazePhotonics, it risked being prevented from using these processes, which are keys to production.Other important lessons included filing patents too broadly in markets it was not necessarily competing in. Such decisions are difficult early on when it is not clear how important a patent will become, much less which markets a company will ultimately focus on.“ In the beginning, we were in a race to protect everything we could,” says Dr Broeng. “Faced with the cost incurred by this early patenting-everything patent strategy, we learned to select our patent investment more from a business point of view than from a technological point of view.”
An effective filing procedure
Today, Crystal Fibre has 45 patent families in a variety of countries. Its filing procedure is generally well thought out. Normally, Crystal Fibre files the basic or the first application in Denmark and/or US. Only if the technology is truly promising, however, will the company make a broad PCT filing. In general, the minimum criterion is filing in the main market and the country of a main competitor.Although a subsidiary of a large company, budgets are still tight and the company exercises discipline when it comes to managing these patents, especially those that do not contribute to the bottom line. Patents are periodically eliminated. Non-core technologies, for example, may be licensed to other companies.
Only patents that can boost the bottom line are prosecuted. The guiding principle is that the potential market must cover the expense of filing and maintaining protection. When a patent would only protect incremental additions to a pre-existing patent, other means of protection are considered. The company aims to have many applications in a few key countries rather than a few applications in many countries. Ultimately, it is not about the number of patents, but about their impact. Small companies have little choice. Patenting everything can leave a company broke. “You’ll soon discover that your bank account is empty,” says Dr Broeng.
Scanning files for new ideas
Dr Broeng spends a lot of time scanning the Delphion patent database, searching by keyword and industry. This exercise helps him keep an eye out for filings by competitors, aggressive moves that might infringe upon Crystal Fibre’s business. Every now and then such a search also inspires a new idea. For example, Dr Broeng once spotted a US filing by a competitor for a new technological procedure related to high-powered fibres for lasers. It was a market in which Crystal Fibre saw great potential. After further research, the company filed an improvement to the patent and then, with the leverage of the further patent, acquired a licence for the US company’s underlying technology. Today, high-power laser fibre is Crystal Fibre’s primary market and only it and its licensing partner have the technology.
Individual industry business centres would be useful
Dr Broeng says that small companies are hampered by patent attorneys’ sometimes limited knowledge of specific industries. Building a patent strategy early on that matches a company’s business goals is difficult. He suggests that business centres for individual industries would be useful. Over time, they could provide the kind of expertise small companies need. He also says that the high translation costs paid by small companies to obtain patents are a serious burden. Finally, large companies filing and obtaining broad, unclear patents concern him. Large firms can use such patents to dissuade smaller companies (that cannot afford to litigate the patent) from entering a market.
Crystal Fibre’s main advantages are its unique technology and he patents that protect it.
Product facts
Crystal Fibre designs, manufactures and markets photonic crystal fibres (PCFs). Photonic crystal fibres are a new range of optical fibers offering significant new possibilities and functionality within a broad range of applications. Crystal Fibre launched its first product in the summer of 2000 and has since then expanded its product range considerably.
The company is today the biggest commercial supplier of photonic crystal fibre solutions and offers a diversity of specialty fibers within nonlinear fibers, large mode area fibres as well as high NA and UV optimized fibers
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