In October, 2016 Aker filed suit against Chinese firm Luhua Biomarine and its US distributor Infiniti Nutraceuticals. In the suit, filed in the United States District Court for the District of Nevada, Aker BioMarine claimed that Luhua’s krill oil infringed a patent issued to Aker BioMarine earlier in the year covering the company’s novel krill oil compositions and concentration technology.
Aker CEO Matts Johansen said the case points out the double-edged sword that is the patent system. It offers protection and exposure in equal amounts.
“Our processing technology and novel compositions were made public by patenting starting almost a decade ago. That is the trade-off of the patent system; the inventor agrees to publish his findings against the promise of 20 years of protection against copycats,” he said.
Supply Side West lockout
Aker won an immediate temporary restraining order against Luhua, which blocked the company from exhibiting at the Supply Side West trade show in Las Vegas last fall. After considering their options, Luhua and Infiniti have now agreed to permanently cease and desist from manufacturing or selling in, or importing into the United States Luhua’s krill oil products.
“Since its inception, Aker BioMarine has invested significantly in R&D, followed by patenting and now patent enforcement, all with the aim of driving growth in the industry while making sure that newcomers do not merely copy our innovations. The outcome of this lawsuit is nothing but a consequence of this long-term strategy,” Johansen said.
Johansen said that copycats will always be a feature of the dietary supplement industry, but companies in the krill oil sphere are protected to some degree by the high capital costs inherent in the business. Most of the patent fights have been among the established players, and that battle is now over for the most part.
“We see Chinese companies trying to enter the US market without respect for established patent rights. But aside from that, the market has consolidated around the established players. Being in the krill business takes significant resources, not only with regard to patents, but also considering regulatory approvals and sustainability, and the main volumes are therefore handled by these established players, with Aker Biomarine as the leading company,” he said.
Protecting the cost advantage
Johansen said the IP protection Aker has extends to some hard-won improvements in processing technology. As already mentioned, harvesting krill and extracting the oil is a very expensive game, so every cost savings counts.
“Our patent rights are defined by the claims in our numerous patents, covering not only krill oil compositions, but also the most cost efficient way of extracting krill oil. Other extraction methods giving other types of compositions would not infringe on our patents, but it would be hard to compete cost-wise with such production technology,” he said.