Take a look at the different elements of a patent, with some advice for materials-based inventions.
In my article published December 2017, I looked into the threat of lab-grown diamonds to big miners and how patents may play their part. The article proved to be somewhat timely, as it was only a few months later that big miner De Beers announced its entry into the lab-grown diamond gemstone market via a new subsidiary company, Lightbox Jewelry.
It’s reported that these lab-grown diamonds are to be sourced exclusively from Element Six — another De Beers subsidiary — that, until now, has only produced diamond materials for industrial and technical applications, while steering clear of the lab-grown jewellery market (for obvious reasons).
To many in the industry, this came as a surprise. For years, De Beers has taken the position of not entering the synthetic diamond market, as this would “cannibalise” the natural diamond market. One industry journalist described the announcement as “dropping a bomb” on the diamond jewellery world.
However, with hindsight, perhaps the writing was on the wall. At least one industry expert had predicted that it was only a matter of time before De Beers would enter the synthetic diamond market, pointing to the portfolio of patents that Element Six has been constructing since the early 2000’s to cover gem-grade single crystal diamonds of varying quality and colour.
This portfolio had laid relatively dormant until some recent skirmishes, including opposition proceedings against Sumitomo and, perhaps more significantly, a patent infringement action launched against synthetic diamond company IIa Technologies in 2016. The action seems to have taken significantly longer than might have been expected, which may indicate how complex a case it is. For example, it’s reported that IIa Technologies has cited seventy pieces of prior art as invalidating the Element Six patents.
Towards the end of 2017, the court requested for IIa Technologies to provide a detailed analysis as to which specific combinations of prior art disclosures are being relied on to invalidate each claim of the Element Six patents. Interestingly, Element Six resisted a corresponding request from IIa Technologies to provide further details of the commercial success of its patented diamond materials. Of course, this preceded De Beers’ entry into the synthetic diamond market and it remains to be seen how commercially successful this will be. Given the reported low pricing strategy being implemented by De Beers, it seems likely that it will rapidly take a significant market share in the sector. To counter this threat, as reported last month, the lab-grown industry has filed a complaint with the U.S. Federal Trade Commission (FTC), accusing De Beers of price dumping and predatory pricing.
While I previously reported that the outcome of the patent litigation case would be keenly followed by lab-growers around the world, I’d suggest that this will now be even more pertinent, given De Beers’ entry into the market. While the immediate threat to competitors may be perceived to be its low pricing strategy, De Beers, via subsidiary Element Six, has also now shown a willingness to use its single-crystal diamond patents against other lab-grown diamond competitors. As such, I’d reiterate my previous advice — that it would be wise for companies and investors to consider the patent landscape and freedom to operate issues, with the aim of developing a patent strategy to protect their interests.
As a more general point beyond freedom to operate issues, this case study also illustrates just how important it is to have a good knowledge of your competitors’ patent filings. This can give some useful insight into their medium- and long-term commercial strategies, and provide useful information to aid your own strategic thinking to avoid unpleasant surprises down the line.
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