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Steel Technology Licensing

When discussing steel technology licensing, I think it is best to begin by talking about a specific innovation in the steel industry beginning with R&D in the 1920s. E.S. Davenport and Edgar Baine, two researchers at the United States Steel Corporation Laboratory in New Jersey, wanted to develop new forms of steel which maintained high levels of hardenability, toughness, and strength (Revolutionizing Steel). Their R&D led to the discovery of bainite steel which met these characteristics. However, it was not until 30 years later that the development of air-cooled bainite steel using a natural element called molybdenum would allow them to manufacture this steel to meet their hardenability, toughness, and strength qualities. A university in China, Tsinghua University, under the leadership of Professors H.S. Fang, Y.K. Zheng, and B.Z. Bai, discovered that manganese (Mn) was more effective than molybdenum and more effective in producing bainite steel with the desired characteristics at a cheaper price. Without the ability to introduce this steel innovation into the marketplace, Tsinghua University decided to license Mn-series bainite steel.

In 1988, Tsinghua University licensed all of its IP for $250,000 to Beijing Bainite Steel Co., Ltd. (Revolutionizing Steel). The university decided that it needed to “increase the commercialization capacity of Mn-series bainite steel,” and to do so it needed to “enter into agreements with more than one license.” (Revolutionizing Steel). In 2007, the International Technology Transfer Center of Tsinghua University found a company in Italy that decided to enter into “service and licensing contracts with the inventors for the assessment of developing bainite steel for seamless pipes.” (Revolutionizing Steel). From here, the technology has been licensed to companies in the rail, mining, transportation, and construction industries in many countries. These licenses have been used in furthering R&D on bainite steel, and it has been reported that these licenses have developed Mn-series bainite steel products such as wear-resistant cast steel, anchor bar steel, high strength and water-resistant steel plates, and high strength finishing rolling rebar. (Revolutionizing Steel).

As you can see from this one example with the steel industry in particular, these licenses can be important assets that provide lucrative freedoms for further R&D on the particular innovation. Licensing can be a way to produce an innovated product into the marketplace for further development to meet the licensed owners’ needs. It is an interesting concept to think that before licensing, the product is thought to be finalized but once sold, the license owner can choose to further manipulate the product to their own needs.


  1. Wyatt Devine Wyatt Devine

    Good info on the history and current developments in the steel industry, Hugh. What do you think the future holds in terms of further developments and alternative uses for the Mn-series bainite steel? So many different industries now have licenses to the technology, so one would imagine that new uses for the product will present themselves quite regularly.

  2. Do all major steel companies have their own “bainite” steels? In other words, are these licenses to mid-tier (or local Chinese) firms that don’t have the resources to invent around a particular process?

    Of course it’s now 20+ years since the initial IPR license, though trade secrets never expire … they just stop being secret. So to what extent have these researchers been able to continue with incremental improvements?

    Finally, and likely impossible to get data, firms may well license on a volume basis, e.g., you pay xxx per ton sold. Is bainite steel a big market? Is their Mn version a big part of it?

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