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Bishop Technology Group - the power of patenting
Arthur Bishop's greatest contribution to Australian life may not be his inventions, but his proof of a very simple proposition: that exporting Australian knowledge can be just as valuable as exporting our manufactured products.
Bishop's Sydney-based company produces ideas in the form of designs. It employs a team of engineers and encourages them to think and experiment. It uses patenting laws to protect the devices they invent. These devices are developed as products and licences granted for their manufacture. The company also develops new machines and industrial processes to build these new devices, patents the machines and earns royalties on each machine as well as each product made. Engineers in the company are taught about the process of innovation and patenting.
Bishop's key inventions are variable-ratio steering technology and a rotary valve for power steering. Both produce safer and more precise car steering and handling and are used in over 11 million new cars each year. Yet none of them are made by Bishop's company - they are all made under licence or in joint ventures with car makers. Bishop's patent royalties are worth A$14 million a year. Some element of technology developed by Bishop is used in 20% of the passenger cars made in the world each year.
Arthur Bishop (1917-2006) has been described as a 'modern-day Leonardo da Vinci'. He was one of Australia's most creative inventors. His productive engineering career began after he completed an engineering diploma and an auto engineering apprenticeship. At the start of World War II he was employed as a process designer with the Department of Aircraft Production, where he was required to redesign sections of the landing gear for Beaufort and Beaufighter aircraft.
Arthur's major aircraft innovation was a variable-ratio nose wheel steering and damping mechanism that eliminated wheel vibration or 'shimmying'. After WWII this invention was taken up in the UK and US, and Arthur began making money from his patent royalties.
Confident that this aircraft invention could be used in cars, Arthur travelled to Detroit, USA, to convince the big car makers that his method was better than the traditional technology for steering a car. He set up a research laboratory employing several people, but failed to convince the car makers to take up his ideas.
Arthur also approached European car makers to use his ideas. Without a satisfactory method for manufacturing the designs, his bids were not successful and he returned to Australia.
Back home, Arthur was able to further refine his ideas. In 1970 GMH pioneered Bishop's power steering in the HQ Holden Kingswood using a patented 'hourglass' shaped worm gear to provide variable steering response. Ford Australia followed suit a year later on their Falcon range of vehicles.
Both companies changed to rack-and-pinion steering in the early 1980s and called on Bishop to design a variable-ratio rack-and-pinion arrangement to match the hourglass worm design. After gearing experts and manufacturers claimed it would be impossible, Bishop's development team figured out how the variable-ratio system would work, and how to mass-produce it.
Use of variable-ratio steering in Australian cars gave Bishop the proving ground he needed to eventually succeed overseas. Arthur Bishop was recognised internationally as the originator of the variable rack-and-pinion steering concept.
Bishop steering technology
The mechanical system used to steer a car is usually one of two basic types. The most common type of steering mechanism is the rack-and-pinion system. The steering wheel is connected to a pinion which, when rotated, moves the horizontal rack that controls the movement of the front road wheels. For more information about car steering systems see http://www.howstuffworks.com/steering.htm
The steering ratio for a car is the ratio of how far the steering wheel must be rotated to how far the front road wheels turn. A higher ratio means that the steering wheel must be rotated further to turn the front road wheels, but less force is required to do so. By making this steering ratio vary with the angle of turn, Arthur Bishop created a system that was stable when driving at speed on the highway but also easy to turn slow corners or when parking a car.
Several people had tried to develop such a system before, but had concluded that it was not geometrically possible. Arthur and his team not only developed a practical variable-ratio steering system, but also created a new warm forging technology to manufacture the components. At each stage of the development process, Arthur and his team patented their ideas. This included the process for making the components and the mass production machinery used in manufacturing.
The Bishop Technology Group, founded by Arthur Bishop in 1985, introduced numerous steering system innovations to the automotive industry. The company's team of engineers, designers and intellectual property experts ensured that Bishop's steering technology was taken up in the North American, European and Asian markets. By 2002, Bishop Technology Group had three sections, specialising in steering technology, manufacturing technology, and innovation respectively.
Using intellectual property
'The patent system plays an essential role for the innovator in preventing others pirating his ideas before he has had time to perfect them.'
Arthur Bishop, BRW, 31 July - 6 Aug, 1982, p 34.
Since he applied for his first patent in 1943, Arthur Bishop has developed many related patents. He has created a 'pyramid' or 'fence' of patents to protect his ideas, all potential uses, other similar ideas and even the machines that turn his ideas into products. This makes it difficult for other companies to copy his ideas, and encourages them to buy a licence to use them legally.
When he developed the variable-ratio steering mechanism he patented not only the device, but every variation and application he could imagine, and also the machines and processes that make them. This gave him time to perfect the idea and profit from its use in millions of cars.
'It's important to patent other ways of accomplishing the same object, but also to find and cover the best way to manufacture, or the best process associated with that new idea. And so you build up a matrix or pyramid of protection around the idea. That makes it much more invulnerable to challenges by other manufacturers who very often have resources which go far beyond the innovators.'
Arthur Bishop, 1992.
Arthur Bishop's approach to the protection of his intellectual property has seen his patents argued over in courts in the UK, Japan and Germany.
'We have to be very vigilant about defending our patents. If an inventor or innovator is perceived as being weak in defending his industrial property in the marketplace, that market will walk all over him.'
Dr John Baxter, Joint Managing Director, Bishop Innovation, IP Australia, Bishop Case Study
The Bishop Technology Group has continued to innovate based on Arthur's model of creating layers of patents around a product. By carefully wording patents and strategically planning intellectual property development, the company can deter competition.
'It's like you're Hansel and Gretel dropping the white stones. You're dropping patents into the system all the time and basically your competitor never gets a chance to pick up all the stones because you're always dropping new stones in front. There's a strategy in there of laying down a network of interlinked patents? All the information is there, but intellectually it is very hard for somebody to come along later and unravel it.'
Dr John Baxter, Joint Managing Director, Bishop Innovation.
The Bishop company's main product is intellectual property that relates to transport engineering. The company creates intellectual property and then licenses it to other companies.
'The model we have to use in this country is more based on intellectual capital rather than actual physical capital, and intellectual property is all about intellectual capital. The business model that Arthur has expounded for years has really been building on intellectual capital, and licensing is a very good model for commercialising that resource.'
Dr John Baxter, Joint Managing Director, Bishop Innovation.
After first patenting his ideas, Bishop initially exclusively licensed the steering technology. Once the technology and products were accepted in the marketplace, the licenses were re-negotiated as non-exclusive. By patenting both the product, the manufacturing process and the manufacturing equipment, the income from licensing fees is maximised. The money earned from the licensing activity is returned to the company, so research and development can continue.
By setting license fees at a suitable amount, the Bishop Group encourages companies to license its technology rather than attempting to develop their own solutions. The company has its own equipment manufacturing division in Sydney called Bishop Manufacturing Technology. Foreign companies often purchase the equipment from this Bishop division rather than taking up the licence to make their own equipment.
Through joint ventures, the Bishop Technology Group can develop intellectual property while ensuring the technology has commercial applications. It can use partners' knowledge and facilities to assist in creating intellectual property. It can also participate in manufacturing the products without having to outlay all the necessary capital costs.
'A joint venture is a very good way to leverage your way into in-house manufacture. You have a strategic partner put up half the capital and also they often give you volume and an initial market for the product.'
Dr John Baxter, Joint Managing Director, Bishop Innovation.
The Bishop Group teaches its employees about the process of innovation. Seminars about patents and commercialising technology help develop employees' knowledge. Creative thinking is encouraged and enthusiasm is directed into strategic areas. Arthur's approach to innovation and intellectual property has become an integral part of the company.
The process of innovation at Bishop begins by creating intellectual property. The company reviews all the prior patents and intellectual property in its field of interest, including car magazines and other publications. To create very novel patents or further strengthen existing patents, the company files provisional patents based on new intellectual property. Prototyping and refinement of the idea then progresses until the completed patent is filed 12 months later.
'One thing about the business of building a patent fence around something like this is that you really have to explore every possibility. Having been laying this patent pattern since 1955, I'm pretty confident there isn't another way around this tricky problem.'
Arthur Bishop, Wheels Magazine, April 1981, p 61.
After 50 years as a professional inventor, Arthur Bishop has created hundreds of separate innovations. His company, Bishop Technology Group, has expanded to employ over 220 people in Australia, USA and Germany and has generated over 350 patents or patent applications. Bishop's innovations in steering technology are used in one in five cars produced around the world.
Bishop's model of selling ideas and intellectual property is unique in the area of steering technology. The strategic development and protection of intellectual property has been critical to Bishop's success.
Links and references
Bishop Technology Group http://www.aebishop.com/
Patent example http://www.ipaustralia.gov.au/patents/ex_bishop.shtml
Technology in Australia 1788 - 1988, ATSE http://www.austehc.unimelb.edu.au/tia/883.html
Bishop Austrans http://www.austrans.com
IP Australia Bishop Case Study http://www.ipaustralia.gov.au/strategies/case_bishop.shtml
Digital image of variable-ratio rack-and-pinion http://www.zakgear.com/Rack.html
How car steering works http://www.howstuffworks.com/steering.htm
IP Australia http://www.ipaustralia.gov.au/
World Intellectual Property Organisation http://www.wipo.int/
Institute of Patent and Trademark Attorneys Australia http://www.ipta.com.au/
The Intellectual Property Society of Australia and New Zealand http://www.ipsanz.com.au/
Links to IP resources http://www.ipmenu.com/
Australian Academy of Technological Sciences and Engineering, Commercialising Innovation - 'The Second Step' Workshop Proceedings, Sydney, 10 May 2001.
Aust inventor a modern day Leonardo da Vinci, ABC 7.30 Report, 30 Jan 2002, http://www.abc.net.au/7.30/content/2002/s469910.htm
C Brown, 'Driven by ideas: the story of Arthur Bishop, a great Australian inventor', UNSW Press, Sydney, 2003.
BRW, 31 July - 6 Aug, 1982, p 34
J McKeogh and A Stewart, Intellectual property in Australia,' 2nd edn., Butterworths, North Ryde, 1997.
Office of the Chief Scientist, Department of the Prime Minister and Cabinet, The role of intellectual property in innovation; Strategic overview, Volume 1, Australian Government Publishing Service Canberra, 1993.
Powerhouse Museum, unpublished interview with Arthur Bishop and John Baxter, 12 June 2002.
D Rudder, Arthur Bishop Biography, Powerhouse Museum dhub (online) http://www.dhub.org/articles/56
Wheels Magazine, April 1981, p 61
Dr Arthur E Bishop, Life President and Director, Bishop Technology Group Limited
Mr Bruce Grey, Group Managing Director, Bishop Technology Group Limited
Dr John Baxter, Joint Managing Director, Bishop Innovation Limited
Mr Klaus Roeske, Joint Managing Director, Bishop Innovation Limited
Mr Ken Palmer, Group Finance Director, Bishop Technology Group Limited
First published by the Powerhouse Museum on the Australia innovates website, 2001-2002
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