With the global economy, businesses realize that innovation and protection of Intellectual Property (IP) rights is getting more and more critical. This is true for most sectors of the economy, and particularly the shale oil and gas industry where innovation plays a key role with the continuous development of unconventional and advanced extraction techniques.
Interestingly, the Canadian Intellectual Property Office (CIPO) has published very recently a comprehensive report providing an overview of the patenting activity in the shale oil and gas subsector of the oil and gas industry.
The present article summarizes this report and its principal findings.
I. A global overview
According to the patent landscape report published by CIPO, the number of patent filings in the shale oil and gas sector has increased dramatically over the last decade. From 2000 to 2012, the number of patent families in this sector has grown at an impressive rate of 188% to reach about 4000 published patent families worldwide. These patent applications were filed by over 3500 different applicants.
Most priority filings originated from China, the United States (US) and Japan, these countries accounting for over 83% of all patent filings worldwide while only 2% of the priority filings were from Canada. During the 2000 to 2012 period, overall patent filings in China has shown a staggering increase of over 2000%.
Chinese, American and Japanese companies clearly dominate the top 25 applicants worldwide, the top 3 patent applicants including the Chinese company Sinopec Ltd with 371 patent families, the Japanese company JX Nippon Oil & Energy Corp with 209 patent families and the American company Exxon Mobil Corp with 141 patent families.
Country priority data illustrates that major applicants tend to have a majority of their first filings in their respective country. Furthermore, 95% of applicants have less than five patent families and 73% of applicants have only one patent family, therefore illustrating a strong competition in research and development (R&D) among many small companies.
R&D data suggests that American firms tend to actively file patents in exploration technologies while Chinese, Japanese and Dutch companies are more focused on development and production technologies. Moreover, collaboration data shows that the Chinese company Sinopec Ltd and the Japanese company JX Nippon tend to collaborate intensively primarily with other companies from their own country while major US companies, for example Schlumberger Ltd, collaborate with foreign subsidiaries, suggesting a different R&D and patent strategy.
II. The Canadian patenting activity
Out of the approximately 4000 published patent families in the shale oil and gas sector, only 100 (about 2.5%) are from Canadian applicants. Even though there are a relatively low number of filings every year, there is a clear upward trend between 2000 and 2012. The top four Canadian applicants include Trican Well Service Ltd with seven patent families, Envirollea Inc. with six patent families, GASFRAC Energy Services Inc. with six patent families, and Flo-Dynamics Systems with five patent families. These companies are all headquartered in Calgary, Alberta.
III. Patent filing activity at CIPO
From 2000 to 2012, patent filings at CIPO in the shale oil and gas sector have generally increased over the years with, however, important levels of variation. During these 12 years, a total of 284 patents relating to the shale oil and gas sector were filed with CIPO, these filings originating from 158 applicants from 12 different countries. The top patent applicants in Canada were two major US companies, namely Halliburton Energy Services Inc. and Exxon Mobil Corp.
The shale oil and gas sector is rapidly growing and will likely remain a thriving industry in the coming years. Innovation will continue to play an important role since there is always demand for improved extraction techniques that can provide access to sources of oil and gas that are increasingly difficult to reach. There is also a need for improved extraction techniques having a lesser impact on the environment.
CIPO’s report emphasizes the fact that today China, the US and Japan clearly dominate the patenting activity in the shale oil and gas sector. Therefore, in order to stay competitive, it is of the outmost importance that the Canadian companies active in this sector continue to innovate and, most importantly, that they secure their innovations through patent protection. It is also essential for Canadian companies to stay promptly informed of the patenting activities of their competitors to be aware of the new technologies and to avoid risks of litigation.