January 17, 2019
Ductor, a biotech company, wishes to solve the big challenges the world is faced with: How to stop climate change, manage the ever-increasing waste problem, and secure food production in the future. IP partner Kolster has collaborated with Ductor from the very start and is now managing the company’s worldwide technology patents.
The man behind this world-class mission is Ari Ketola, the founder and CEO of Ductor. At first, he was a successful entrepreneur in the fashion business, but the work no longer felt meaningful to him. He decided to do something for the good of the world.
“The most significant challenges for mankind are food production, increasing population, and climate change. It is estimated that by 2050 the world will have close to 10 billion people. How do we make sure there is food for everyone? Could we find a biological method of recycling the enormous waste masses created by food production, such as manure and offal, for the production of renewable energy? This is the type of pondering it all started from,” Ari Ketola describes the early days of the company.
Kolster’s patent agent, biochemist Nina Virolainen worked as a researcher at Ductor when the company’s process development started. She was a member of a research team that developed a biological method for significantly boosting biogas production and circular economy. As one of the inventors, she also got to participate in drafting the first patent applications by Ductor in 2012. At Kolster, she now contributes to prosecution of the international technology patent families of her client, Ductor.
“The research team solved a major challenge”
Ductor started as a cleantech startup company in 2009, and set its goal to finding out how raw materials with high nitrogen content, such as poultry manure, could be utilized in production of biogas. Extensive use of these materials has not been possible in the past because nitrogen causes problems in biogas production.
“Because of this, huge land areas in, for example, Germany and North America, produce energy maize, soybean, and sugar cane for biogas plants. These energy crops are a direct competitor to food production,” says Ari Ketola.
At the Viikki campus of the University of Helsinki, Ketola met up with researchers who were interested in solving the nitrogen problem of biogas production. He set up a privately financed research group at Ductor to develop a method by which nitrogen could be separated from the raw material.
“The team of researchers had to find a way to totally break down biological material to its smallest parts, and then to get nutrients out of it. This is the problem we set out to solve ─ and succeeded in it. We established an efficient microbial population,” biochemist Nina Virolainen proudly describes the invention that the core technology now extensively patented by Ductor is based on.
“By 2013, we had a complete and working small-scale process in our laboratory. That was the starting point from which we began to test the process and scale it up one step at a time, Ketola describes the determined product development and the beginning of the cooperation.
“We wanted to have extensive patent protection”
The core of Ductor’s technology consists of two basic patents, one of which protects the microbial population that was developed, and the other the biogas production process in which raw material of a high nitrogen content may be used.
Drafting Ductor’s patent applications awakened Nina’s interest in patenting and IPR.
“I felt patenting and the protection of a specific invention was tremendously interesting. In the spring of 2017, I got the chance of moving on from my work as a researcher to Kolster to be trained as a patent professional. The cooperation with Ductor now continues in this new role,” Nina describes her own career path.
Ductor’s biogas technology is protected worldwide in an extensive selection of countries in Europe, the Americas, Asia, and South America.
“I don’t know any other Finnish startup company in the cleantech sector with as large patent families as those of Ductor – they are exceptionally extensive.”
The CEO Ari Ketola explains the extensive protection to result from the fact that there is an immediate worldwide need for the technology.
“In addition, we are from three to five years ahead of our competitors. The implementation of our technology is only slowed down by political energy decisions and the permitting process of biogas plants.
The company now wants to grow fast.
“We do not foresee any patent mines by the competitors – this means we possess something unique. Because getting permits for plants is slow in Europe and the USA, for us Far East is a most interesting region with a lot of poultry production, an immediate environmental need for a technology utilising poultry manure, and fast permitting processes.
“The world’s leading circular economy company”
Refined nitrogen and phosphorus fertilizers are produced as valuable by-products of the fermenting technology developed by Ductor. This markedly enhances the profitability of biogas plants. All biodegradable side streams of food production, such as food waste, agricultural waste, and offal, are suitable raw materials for biogas. The technology also works as an add-on to existing plants using energy crops.
“The technology makes circular economy possible in its entirety. From waste is produced traffic fuel, electricity, and heat, and as a bonus, fertilisers for food production, which are able to compete with fertilisers produced by the chemical industry. And what’s best: with zero emissions,” Ketola explains enthusiastically.
Ductor is on a fast track to growth. The technology is being introduced into use in biogas plants around the world – starting from Germany, North Carolina in the USA, and Mexico.
“We have the potential to grow into the world’s leading biogas and circular economy company who licences a technology around which an entire ecosystem may be born,” says Ketola.
Ductor already has four delivery agreements with German biogas plants and approximately 70 active ongoing agreement negotiations in Europe, Asia, and the United States. Their total value amounts to over EUR 300 million. Ductor’s technology supports solving major climate and environmental problems.
“IP partner helps the vision to materialise”
Ductor has several investment rounds under its belt, and the company is currently preparing for a new round to introduce the technology into extensive use at biogas plants. The patents and the protected Ductor® brand have played a big role in all the financing negotiations.
“We have already gathered a capital of EUR 15 million for the company. In the negotiations with investors, the question always pops up: what patents have you got and what stage are they at? If the investors choose to invest, they definitely will check out our IPR in their due diligence evaluation. The bigger the investment, the more closely it will be examined.”
Ketola considers patents not only securities for the investors, but also a guaranteed cause for disputes in any field when the financial interest and business opportunity increase high enough.
“However, patents are a vitally important protection for the capital and the investments made in the company over the past years.”
Investments in the technology and IP protection will continue. Ductor also employs its own in-house patent attorney, Pekka Vartia, a specialist in process technology. He sees to it that the further development relating to the best practices as well as the related instrumentation will be protected.
“If the new patent applications proceed as desired first in Finland, they will later move on to Kolster’s international distribution with strategic country selections,” explains Pekka Vartia.
Both Ari Ketola and Pekka Vartia appreciate IP partner Kolster’s international expertise in patenting and worldwide partner network also in potential conflict situations when patents need to be defended.
“We have grown into a global actor and managed to develop something really big. We are now faced with the situation where the competitors start to react. This tells us that we possess valuable patent property. Kolster’s international network and experience provide good support in defending our intellectual property.”
Ductor’s CEO, Ari Ketola, and biochemist, Kolster’s patent agent, Nina Virolainen.