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Scrutinising IP with X-rays
KETEK, GERMANY, has established itself as a developer and producer of advanced silicon radiation detectors in a high-end niche. The founder and owner of the company is a world-famous scientist who faces the realities of the marketplace, trying to stay ahead of competitors, protect his ideas and manage costs.
German physicist Dr Josef Kemmer spent years in university laboratories and research institutes creating some of the most difficult technologies in the semiconductor field.
Today, his challenges are more prosaic: learning how to protect and exploit his inventions with limited funds. Yet, as with a lot of small and mid-size companies, intellectual property issues often take a back seat to creating new technologies.“ We need to develop new products,” explains Dr Kemmer. “It is the most cost-effective way to use our time.”
So far, this strategy appears to be working. The
Munich-based company won a significant innovation award, presented by the
consortium of Bavarian Volksbanks and Raiffeisenbanks, making it the Bavarian
Medium-sized Business of the Year 2004. But as Ketek matures and its team
pursues the next generation of its technology, IP issues are becoming more
critical. Ketek’s story shows the challenges a scientist/entrepreneur is up
against when managing IP himself with only a limited budget.
Focused on high-profile applications
Dr Kemmer founded Ketek in 1989. During the early years the company carried out basic research and transferred technology, developed by Dr Kemmer while at the Technical
University of Munich, to various industrial customers and the German Max Planck Society for the Advancement of Science. The key technology is a new type of silicon detector chip used to analyse materials by X-ray fluorescence analysis, applied, for example, to determine the exact material make-up of a painting in a museum in order to date it.
Today Ketek operates as a commercially-oriented venture, producing Silicon Drift Detectors (SDDs). These are sold to original equipment manufacturers such as Oxford Instruments, which makes analytical X-ray systems to analyse elements, and to Spectro, which also produces equipment for material analysis. Selling components is Ketek’s main source of revenue, accounting for 80% of sales. In addition to this, Ketek also sells complete X-ray analysis devices incorporating these SDDs to small companies performing material analysis and to research institutes.
The company focuses on a high-end niche in which there are few competitors, says Dr Kemmer. Ketek has a small number of customers, but its products are used in some extremely high-profile applications. For example, its X-ray detectors are being used to perform soil and rock analysis on Mars as part of the MER-APXS system aboard the NASA rovers Spirit and Opportunity. Scientists at the Vatican used Ketek technology to analyse the age of various artworks.
In 2006, sales were around €4.1 million. There are twenty
employees, half engaged in research and development. German customers account
for 60% of sales. Ketek also sells to customers in twenty countries, including the US and UK.
Relying on his own experience
Ketek is a small company with limited resources. IP, while important, is managed on a shoestring budget. There is no special department devoted to it. Dr Kemmer spends about 10% of his own time writing applications and researching those of potential competitors. An external patent attorney is employed, but used sparingly and mostly to proofread documents and file them.
Dr Kemmer depends on his own experience and know-how in the industry to deal with most IP issues. He has been in this specialised field for over 30 years, knows his competitors, reads trade publications, and attends trade fairs and conferences. His in-depth knowledge of potential competitors in this highly specialised field, as well as his close relationship with the academic sector (universities and research institutes), make monitoring newly filed patent applications significantly easier for him. He typically drafts documents himself and stays on top of the moves of competitors as well as potential infringements of Ketek’s patents.
Indeed, depending too much on an external patent attorney has burned him in the past. During one particularly hectic time – in the middle of production of a new technology and right after the loss of its basic research arm to another company – a patent attorney promised he would file an application for a new patent. Confused by the delay at the German Patent and Trade Mark Office, Dr Kemmer called an examiner he knew there to ask why he had not received a receipt confirming the arrival of the filing. It turned out that the patent attorney had never filed it at all. Ultimately, Dr Kemmer filed it himself, but lost seven months of time due to the patent attorney’s negligence and his own inattention to the issue.
Only filing patents on big ideas
Over the years, his IP strategy has changed. Dr Kemmer used to protect every promising idea he could, filing roughly 70 patents over the past few decades. Now, constrained by the realities of an IP budget of just €20,000 a year, he is much more selective about what he files and where. This is his strategy: he only files new patents on big breakthrough ideas. Individual steps or small improvements are not published or patented because Dr Kemmer fears they will be copied and, with limited resources, there is nothing he can do about it. He makes sure to protect ideas before meeting with potential partners, arguing that otherwise he runs the risk of a partner saying the know-how was known earlier.
For him, patents serve to guarantee the merit of Ketek's technologies to companies with which it cooperates. Finally, he files patents in only those markets with big sales potential.“ It’s not important for a small company like ours to have patents in hundreds of countries,” he says. Of those dozens and dozens of patents filed over the years, only about ten are still enforced.
When it comes to infringement, Dr Kemmer usually turns a blind eye, tolerating offenders rather than pursuing them in court. He cannot afford to act otherwise. In one case, Dr Kemmer’s patent attorney alerted him to the fact that an American company had received an order worth roughly $100,000 to deliver a product that used Ketek’s patented technology. The company’s leader denied he had violated Ketek's patent and Dr Kemmer let the matter go. “It makes no sense for a small company to fight an American company,” he says. “It’s unaffordable if you have to pay $500 an hour to a lawyer in the US.”
Fortunately, he says, the American company is applying a sophisticated technology with less practical use and so far has not proved to be a threat. In any event, Dr Kemmer thinks Ketek is better off concentrating efforts on staying a step ahead technologically. “We don’t like to spend our time quarrelling,” he says. “We spend our time on research.” When he can, he tries to cooperate with potential competitors. This has resulted in a handful of licensing agreements. However, to date, these produce just enough income to pay patent filing fees and ongoing dues.
In the end, money is always an issue and it is here that small companies such as Ketek can run into trouble. Dr Kemmer tries to cut costs where he can. To save money he once used a less expensive translator to rewrite a patent application for the US.When he got it back to proofread, he found that it was not only poorly written but it also contained numerous technical errors. The writer did not know the technical terminology. Dr Kemmer spent the next two days correcting the 30-page document himself. “The company saved money,” he says, "but it cost me my personal time over the weekend.” To minimise the risk of losing patent ownership in the event of bankruptcy, Dr Kemmer files all applications under his own name and subsequently licenses the technologies to his company.
Looking to the future, Dr Kemmer hopes to employ an engineer
in-house who is trained in IP issues. This is important for the company because
the last patent it filed could represent a huge step forward for Ketek and a
large commercial opportunity. Dr Kemmer says that if the patent for its latest
high-quality detector is accepted, it will have enormous influence on his
industry, as well as on the company’s turnover and development. Greater efforts
will be made to protect and enforce this new technology.
Carefully selecting ideas
Dr Kemmer recommends that other companies should be careful in selecting which ideas are worth supporting with IP because costs related to patent attorneys, translations and ongoing fees are high.
Product facts
Ketek offers a wide variety of easy-to-handle detector modules that have proven their reliability and outstanding features in science and industry for more than ten years. In addition to Silicon Drift Detectors (SDDs) Ketek also offers complete X-ray spectrometers.
Together with the SDD detector module they typically include the complete set of electronics the user needs. Gamma Ray Detectors are large area VITUS SDDs that are optically coupled to a scintillator. A scintillator is a material that converts energy lost by ionizing radiation into pulses of light.
Company profile
The Ketek company is an acknowledged world leader in the development and production of advanced silicon radiation detectors. Ketek is managed by its owner and founder Dr Josef Kemmer.
Staff: 20
Sales 2006: €4.1 million
Key products: Silicon Drift Detector and components that analyse materials.
Customers: Original equipment manufacturers such as Oxford Instruments and Spectro.
Ketek GmbH
Hofer Straße 3
81737 München
Germany
www.ketek.net
IP background
Patent protection: Five patent families.
Patent filing order: Germany first, then EPO and US. Sometimes it files directly with the EPO first.
Department: Founder manages IP himself with the help of an external patent attorney.
Budget: €20,000 annually.
Success factors: Superior technology.
Challenges: Costs of filing, renewal fees, translation fees, personal time devoted to IP by the founder and lack of funds to fight infringement.
Recommendations: Companies should choose carefully which patents to file and protect.
Contact
European Patent Office
Erhardtstr. 27, 80469 Munich, Germany
Tel.: +49 89 2399 4636
E-mail: sme@epo.org
www.epo.org
German Patent and Trade Mark Office
Zweibrückenstr. 12, 80331 Munich, Germany
Tel.: +49 89 2195-0
E-mail: info@dpma.de
www.dpma.de