Patent Layout of the Big Three of Titanium Alloy Industry in the US Part I 08-04-2016

As the biggest producer and consumer of titanium products, the US, with its three magnates of Timet, RTI, and ATI, took up the monopoly position in the market and thus has had significant impact on the development of the titanium industry.


The three enterprises, who are more concerned with the quality rather than the quantity of the patents, are active in promoting the layout of patents. In terms of the emphasis of the layout, the enterprises paid more attention to the layout of core and fundamental patents, and the techniques were mostly concentrating on the midstream of the industrial chain. In terms of the phase of development, the layout has still been in the phase of combination and construction, and therefore there’s a very obvious intention to complete and supplement the patent portfolio through commercial acquisition. In terms of the strategy of layout, the areas of patent layout were highly consistent with the target market.


Due to the highly complex techniques for the titanium melting, there are only four countries--the US, Russia, Japan, and China--mater the integrated techniques for processing titanium, among which the US was the pioneer of the industry.


The titanium alloy industry shows an obvious characteristic of oligopoly and dependency. The production of the major three of the industry - TIMET (has already been purchased by PCC with no marked changes in its business direction), RTI, and ATI - have accounted for about 90% of the total output in the US, and thus it is these companies that determined the technological level and development direction of the titanium alloy industry in the US.


As time went on, these three companies have still been on their way to increase the market share. With the oligopoly and dependency turned more and more intensified, the magnates of the titanium alloy have an obviously stronger influence to the industry than that of other industries.


Profiles of Three Magnates of Titanium Alloy Industry in the US


1. Timet


Established in 1990, Timet has been one of the dominant producers of the titanium products with its headquarters located in Dallas, the US. At the same time, Timet has also been the biggest producer of the titanium sponge and the recycler of the titanium defective materials in the US with the principal products of titanium sponge, casting products, rolled products and finished products. As civil aviation department is the major customer for Timet, the company formulated its long-term development strategy as maximizing its value in the core airline business and, at the same time, expanding the utilization in non-aviation market and developing new products.


2. RTI International Metals

With the headquarters located in Niles, Ohio, RTI is an old-brand and professional producer of aeronautic titanium products and high-end titanium manufactured products with glorious history of more than 50 years. The company, whose predecessor was RMI (the top two titanium manufacturer in the US), devoted itself to the producing and selling of aircraft-grade titanium alloy slab and has been the major supplier for Boeing, Airbus, and BAE systems.


3. ATI (Array Technology Industry)


ATI, with the headquarters located in Pittsburgh, Pennsylvania, is the biggest producer of special steel across the world and the third producer of titanium products in the US. ATI is a regular supplier for the titanium products of aviation and biomedical fields. The major products of the company can be categorized into: flat rolled products, high-performance metals, and engineering products.


Analysis on Patent Layout of Timet


1.Profile of Timet’s Patent Layout


Timet started very early in applying global patents. The company focused more on the quality rather than the quantity of the patent. Timet began to apply the patent relative to the titanium ally since 1966, as shown in the Fig.1, however, the companies had not deliberately applied the patents to protect its scientific results before 2000, so we can see there’s a vacancy in Fig.1.


Fig. 1 Application Profile of Timet’s Global Patents over the Years


Source: Espacenet Patent Search of European Patent Office (EPO)


Timet has laid more emphasis on the patents application since 2000. However, generally, the patents of Timet was not characterized by the high quantity, since there were only 35 patents Timet applied in global titanium alloy industry up to September 2014, with the highest annually application of 5.


The more revenue the company gained from an area, the larger share of patents layout it would allocate in that area. For example, there were 24% of the patents in the US and 9% of the patents in Canada, and thus 60% of company’s revenues came from North American market.

AS European market took up 31% of company’s revenue, it has been the second target for the patent layout, among which Timet submitted 12% of the patents application to European Patent Office and 6% in Germany. Besides, Timet also quite valued its third market of Japan, in which the company submitted 12% of the patents application.


Although the proportion of the revenue from China’s market was not very high, Timet allocated 8% of patents in China, prior to Russia and Germany. That’s to say, with the development of China’s civil airline business and opening up, China has been a very promising market for Timet and the company has already prepared itself in the level of patents to enter China’s market.


Fig.2 Geographical Distribution of Timet’s Global Patents Application


Timet has very comprehensive categories in patents with the layout in upstream, midstream, and downstream of the industry chain, while the focus of the layout laid on the midstream areas involving the processing techniques of the titanium alloy. In terms of the patents of Timet applied in China since 2003, all remains valid but one doesn’t.


Up to September 2014, there were 8 valid patents for Timet in China. In terms of technology structure, only one patent was for the manufacturing method of titanium alloy, the other seven were all for the research of new titanium alloy. In terms of the technology characteristics, Timet’s patents mainly emphasized on the processing techniques involved four aspects -- anti-corrosion, high strength, thermostability, and low cost.


1. Strategy of Timet’s Patent Layout and Its Characteristics


(1)    With the characteristics of multicore, low aggressivity, and low costs on the application and maintenance, the patents layout of the Roadblock Pattern was adopted by Timet. The patents concerned the characteristics of titanium alloy, each of which was not very closely linked with the others.


From 1960s to 2010, Timet has always kept the above-mentioned layout in terms of patent application. With the help of company’s comprehensive and accurate grasp on the globally advanced technology and the correct cognition to the innovative ability of its competitors, the layout of Roadblock was good at fighting against the competitors in the titanium alloy products.


However, there’s still a space for competitors avoiding and finally breaking through the roadblocks by the means of Design Around. More importantly, it would give competitors inspiration in their research and thus reduce the R&D costs.


(2)    The recent tendency of patent layout can be summarized as two aspects: strengthening the patents layout on the low-cost characteristics and weakening the layout on the processing techniques. Timet started its development on the low-cost titanium alloy from 1993, which was relatively late compared with others, and the company then applied three low-cost patents in 2011, 2012, and 2013 respectively.


Contrarily, most of the patents concerned processing techniques were applied in early stage of Timet, for example, the US2985747 was applied in 1961, US3239440 was in 1966, all of which are invalid as there’s only 20 years of the term of patent protection. The nearest application was in 2005 from its purchased company Axel Johnson.


In the recent years, Timet intended to improve the producing and processing ability by the means of internal extension, long-term third party agreement, and potential joint-venturing and purchasing so as to meet the requirements of the promising titanium market. After gradually purchasing most of European titanium enterprises, including IMI of the UK, CEZUX of France, TIMET of Germany, and VALINOX of France, the Timet itself was purchased by a downstream enterprise – PCC -- in the US at the end of 2012 and transferred to be an important department of the first phase of industry chain of aviation.


*This article is edited and translated by CCM. The original version comes from China Invention & Patent.


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