May 8, 2019
Could an electronic lock work with the electricity generated from the kinetic energy of the key? This pondering gave rise to the Finnish success story iLOQ. The company is a pioneer in its field with its self-powered, programmable and patented lock technology. Kolster has been a long-standing IP partner since the company’s early stages.
Smart and easy-to-use locking solutions are gaining ground on the international markets every year. The undisputed forerunner in the field is found in Oulu: the advanced lock technology developed by iLOQ is transforming traditional mechanical locking into digital access management one lock cylinder at a time.
“iLOQ is an innovative company that was born to change the world”, President and CEO Heikki Hiltunen describes the company founded in 2003. The protection strategy developed in cooperation with Kolster is an important part of the company’s growth story.
“The patent portfolio we have built with Kolster protects the results of our product development work well and in a comprehensive way. The value of our patents has proved to be considerable. We will continue to make sure that our IP assets are further strengthened and diversified”, Heikki Hiltunen asserts.
President and CEO Heikki Hiltunen and Chief Technology Officers Jyrki Kananen (Mechanics) and Seppo Lohiniva (SW & Electronics) from iLOQ.
Mika Pukari, the founder of the company, is the inventor and pragmatic visionary behind iLOQ’s core technology. Before founding iLOQ, he worked as an entrepreneur for ten years, running a locksmith shop with his family in Oulu. During that time, he saw the problems associated with mechanical locking in a concrete way.
Jyrki Kananen, Chief Technology Officer of iLOQ’s mechanics team, says that the first digital lock solutions entered the market in the early 2000s.
“However, all of them required a power source of some kind or batteries to work. Arranging a power supply in building environments was either difficult or expensive, and the problem with batteries was that they would run down. Mika Pukari started pondering whether it would be possible to develop a fully programmable lock cylinder that does not require a power source of any kind”, Jyrki Kananen describes the early stages of the lock invention.
Mika Pukari first presented a research challenge to the University of Oulu. He wanted to find out if, in theory, it is possible to “steal” so much kinetic energy from the key insertion that it could be used to make the lock cylinder work. When the research confirmed the adequacy of the energy, Mika Pukari put his inventor’s hat on.
Through experiments, Pukari succeeded in developing a generator solution that generates energy from the key insertion. The solution is quite similar even in iLOQ’s current products.
“The products that we are selling successfully today still contain those original inventions and core technology patented already during the first years. IP rights are really used for the benefit of our business every day”, Jyrki Kananen says.
According to Kananen, iLOQ is a clear forerunner in self-powered lock cylinders at the global level.
“Thanks to our patents, we have been able to develop and grow our business freely without competition. A similar self-powered solution has not been found around the world. Competitors are about ten years behind us.”
Over the last sixteen years, iLOQ has solved major technical challenges associated with locking and carefully protected the most effective solutions with exclusive rights. Circumventing them without violating iLOQ’s patent rights is a big hurdle for the product development of competitors.
“We do not allow competitors to make similar lock solutions and copy us – we closely monitor, both by ourselves and with Kolster, that our patent rights are not infringed.”
A significant part of the patents is linked to mechanics simply because the company is replacing mechanical lock cylinders with programmable cylinder solutions. However, the patent protection covers a much wider range of systems. Some of the patents are heavily based on software, electronics and usability. Seppo Lohiniva, Chief Technology Officer of the software and electronics team, is responsible for the protection of product development in this area of technology. Locks are developing in a direction where separate keys are no longer needed and instead they can be opened, for example, with a mobile phone. Access rights and user authentication are managed by software.
Chief technology officers Jyrki Kananen and Seppo Lohiniva report that their work on patent management has been greatly facilitated by the fact that Kolster’s European patent attorneys have been involved in protecting the technology of iLOQ since the early stages – longer than they themselves.
“When we start explaining some new idea to Timo or Pertti (Pertti Brockman), they quickly catch on to what it is and whether the invention can be patented”, Jyrki Kananen describes conversations that go directly to the point. The attorneys are also already familiar with patent publications in the technology sector.
Seppo Lohiniva adds that, thanks to long-standing cooperation, Kolster employees also understand the business perspective well as well as the reasons why and what kinds of patents the company should seek.
“It requires in-depth knowledge of the industry and technology as well as all the patent-technical and legal aspects to be able to write the inventions in ‘patent English’ in the right way. It is a language of its own in my eyes”, Lohiniva says.
Both think that having local expert help close by is also a clear advantage. It is easy to visit and consult familiar attorneys whenever necessary.
“Kolster is not just a supplier for us, but a valued partner. When we take things forward together through discussion, we are very open and solution-oriented. Our cooperation is based on trust, and we have received good perspectives and tips on how to proceed with matters.”
iLOQ also utilises the experience of patent attorneys to ensure its own freedom to operate as well as to analyse competitor and patent information.
“Kolster has helped us determine, for example, that we are not infringing the patent of someone else by introducing a new solution for which we do not see it useful to apply for a patent ourselves. We do not want to be surprised by patent infringement charges”, Lohiniva says about cooperation in anticipating potential IP risks.
On the other hand, every new patent in the portfolio also provides more certainty about freedom to operate as examiners from patent offices in different countries have already looked for obstacles against the patenting without finding them.
“With Kolster’s help, we have also investigated whether our competitors have patents in areas where we are heading with our own further development. We have received specific information to support our decisions.”
The entire iLOQ patent portfolio has also been carefully analysed as a separate project. The patents have been found to be strong in terms of their scope of protection, and there are no IP risks in sight from competitors. The patent portfolio has been primed for strong growth.
The company’s main market is still in Europe, but protection has been built for global business. In addition to European countries, the patent portfolio already includes countries important for future business, such as the US, Canada, Japan, India, China, South Korea, Taiwan, Australia and Russia.
In 2017, the company received the Growth Company award granted by the President of the Republic of Finland. Growth continued to be strong last year as well: turnover amounted to EUR 50 million, up 25 % on the previous year.
“Our goal is to be able to increase sales over the next five years as well at a steady annual rate of 25−30 % while the global lock market grows by about 14 % a year”, Jyrki Kananen says.
In taking over markets, iLOQ is proceeding in a controlled manner one country at a time, as lock cylinders and standards are very different in different countries. Moreover, country-specific type approvals are required in each country. For the time being, the company’s turnover is largely coming from two main product families: the Scandinavian oval model and the DIN standard model of the EU market, which is also suitable for the Middle East and partially for China as well. The growth potential is enormous: about 90 % of the world’s locks are still mechanical. Digital lock solutions generate the bulk of the growth in the industry.
The international partner and retail network is already extensive, too. The deal with the end customer is typically sealed by a local locksmith shop that is also responsible for installation and technical support.
In addition to patenting, the IP portfolio has been strengthened with design rights protecting the appearance of products. Design protection provides additional protection against direct product copying. The main brand and product names have also been actively protected with Kolster’s help.
“So far, we have developed technology above all and invested in its protection; now we are also focusing on design and the commercial angle and building the iLOQ brand. We do not want to make products just from an engineering perspective, but are also seeking competitive advantage from usability and brand. They provide us with further competitive edge”, says CEO Heikki Hiltunen emphatically.
At the beginning of the year, Kimi Räikkönen, the most famous Finnish athlete worldwide, became a brand ambassador for iLOQ. Through Kimi, the company has already gained a new dimension with regard to media visibility and earned international attention among Kimi’s 1.6 million Instagram followers and at the pits.
“Kimi is a good fit for us in terms of character as he follows his own path just like iLOQ – we also do things our way as a pioneer in the industry. We create cutting-edge technology that is unique.”
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