**2. Literature review**

#### **2.1. Patent information**

A firm's innovation strategy is the central to fostering innovation competence, which in turn leads to the development of new products and technologies [11]. However, innovation is characterized by a high level of uncertainty, given the difficulties in forecasting the performance and costs of a new technology, as well as the reaction of users to it [12]. As such, the logic behind the patent system assumes that firms invest in risky R&D activities in order to generate innovative technologies or products. As a consequence of the huge investments associated with the development of new technologies or products, it is certainly fair to assume that this investment should somehow be protected [13–15]. In this way, patents can be perceived as legal instruments providing exclusive rights to enable innovative firms to prosper in a challenging, risky, and dynamic business environment [10, 16]. Hence, these firms are able to protect their investment in new technologies by filing a patent in a Patent Office [17–19].

As consequence of the central role played by oil in our society, which was consolidated primarily from the second half of the twentieth century onward, the need to identify new reserves of this non-renewable fuel in order to ensure a reliable supply of this resource became a critical necessity worldwide [4]. As such, the combination of an increasing demand for oil and the growing technical challenges associated with the remaining oil reserves found in remote locations has motivated robust technological investments by oil firms that are constantly

In recent years, Brazil has emerged as a relevant offshore oil producer with extensive proven reserves yet to be explored [6]. More specifically, in 2007, the Brazilian Federal Government announced the discovery of a huge oil and natural field in the pre-salt layer of the country's Southeastern coast. This discovery was accomplished by Petroleo Brasileiro S.A. (Petrobras) and was considered to be one of the world's largest in recent years [7]. However, despite the evident economic benefits associated with this huge oil discovery, substantial resources will need to be put in place to address the operational challenges coming from the ultra-deep

Given the promising prospects generated by the pre-salt discovery, firms operating in the oil and gas industry rapidly perceived that the operational characteristics of the pre-salt reserve would generate a huge demand for technology-intensive services and equipment. As such, as pointed out by Cavalheiro et al. [9], there was a boom in patent filings in Brazil in response to the market opportunities for new upstream technologies to enable the development of the pre-salt fields. Increasingly, market opportunities associated with technologies determine the propensity of firms to file patent applications [10]. However, despite the awareness of the increased interest of firms in protecting innovative upstream oil and gas technologies in Brazil,

extant literature remains silent on the most critical technical areas protected by firms.

Consequently, this study provides a contribution for understanding the most critical technological areas associated with the pre-salt exploitation by examining patterns of patent filings in Brazil regarding upstream oil and gas technologies. As such, this paper is aimed at improving understanding of the specific technological trends regarding the exploitation of

This paper is structured as follows Section 2 provides a literature review on patent information and examines the context of the oil and gas industry in Brazil. Then, Section 3 describes our research method. Section 4 examines the patterns of patent applications in Brazil concerning upstream oil and gas technologies. Finally, in Section 5, our conclusions are put forward.

A firm's innovation strategy is the central to fostering innovation competence, which in turn leads to the development of new products and technologies [11]. However, innovation is characterized by a high level of uncertainty, given the difficulties in forecasting the performance

investing huge sums to find and exploit new reserves [5].

water environment of the largest subsea project in the world [8].

the pre-salt reserves.

2 Drilling

**2. Literature review**

**2.1. Patent information**

Fundamentally, a patent can be regarded as packaged knowledge that delimits and draws boundaries around a set of technical characteristics [20, 21] and concedes an effective instrument to prevent imitation by competitors [22]. Additionally, the value of a patent is dependent upon a number of factors such as the potential for licensing to other businesses, the quality of the patent [23], the importance of the market covered by the patent [15, 24], and the effectiveness and stringency of patent enforcement [25]. Moreover, as stated by Davies [26], technologies are subject to a life cycle that suggests a decreasing rate of innovation and economic value as technologies gradually become obsolete.

As a direct consequence of the growing number of protected technologies, various authors stress that the patent system is characterized by an increasing level of complexity [23, 27, 28]. Accordingly, it is common to have single products, like smartphones and tablets, incorporating hundreds or even thousands of patents, thereby creating legal disputes involving a large set of patents, rather than just one. Hence, the costs involved in negotiating and licensing the relevant patents is continuously increasing [29].

The international patent system gained significant importance toward the end of last century. Due to many significant technological developments associated with the Second World War, a plurality of innovative technologies was developed in fields such as computer science, materials, telecommunications, biotechnology, and nuclear energy [30]. As stated by Galini [29], the large-scale adoption of these technologies has transformed society into a knowledge-based society that generates an increasing amount of inventions needing to be protected against unauthorized copy. Moreover, given the fact that innovative firms are becoming increasingly dependent on their patent portfolios to remain competitive, patent information has become an evolving and important research area.

Alongside with the rapid growth of available patent data, modern information technologies have revolutionized patent information practice in terms of both speed of access and information comprehensiveness, thereby motivating the development of sophisticated patent analysis tools. As stated by Abbas et al. [31], currently, there are several IT-based patent analytic tools capable of performing tasks such as strategic technology planning, detecting patent infringement, determining patent quality, and identifying technological hotspots. Additionally, Ernst [20] pointed out that patent information can also be used for competition monitoring, R&D portfolio management, and identification of potential sources of technological knowledge. In order to analyze patent data from dynamic, heterogeneous, and scattered information sources, researchers in this realm count with increasingly sophisticated solutions, such as patent landscape, text mining, and digital mind mapping tools to address large data volumes [32, 33].

Given the tremendous advances in patent analytic tools in recent years, patent information can be used to support a wide range of analyses in different industries. For example, Huang [34] examined the evolution of the patent portfolio of mainstream firms of the cloud computing industry. Moreover, Dubaric et al. [35] employed patent application figures as performance indicators representing evolution and level of maturity of wind power technology. Huang and Cheng [11], in turn, proposed a patenting behavior framework to identify the primary factors determining the propensity to file a patent application. Beyond examining patent applications filed by firms, there are also relevant studies addressing how universities are protecting their inventions through patents. Accordingly, Drivas et al. [16] assessed patterns associated with the licensing process of university patents, while Siegel et al. [36] developed a framework to describe the transfer of scientific knowledge from academicians to practitioners. More recently, Arunagiri and Mathew [37] demonstrated the possibility of identifying relevant business and technical patterns by assessing patent classification of implant technology patents.

In order to explore this huge oil field, substantial effort will be required to develop and integrate innovative technologies to address the challenges coming from operating in the ultradeep water environment of the largest subsea project in the world [8]. However, until the present, total oil production in Brazil has been increasing at a small pace in recent years, as

Proposing a Patent Information Approach for Identifying Technological Trends in the Brazilian…

http://dx.doi.org/10.5772/intechopen.75377

5

In practice, exploring the pre-salt reservoirs is a massive technical and organizational challenge that generates significant need of investments in new technologies. The distance between the surface of the sea and the oil reservoirs under salt layer can be as much as 7000 meters [7]. Consequently, exploration and production of hydrocarbons located in ultra-deep offshore waters require a plurality of innovative technologies destined for hostile, hard-to-

Prior to examining patent applications related to upstream oil and gas technologies, it is also worthwhile to assess the trend regarding patent applications regarding all fields of technologies in recent years in Brazil. In this regard, we have opted to examine the total number of Brazilian patent applications between 2001 and 2013. Clearly, **Figure 2** displays a small and

Although a small and continuous increase in patent applications in Brazil can be observed in recent years, this growth started prior to the pre-salt announcement. However, when it comes to upstream oil and gas technologies, Cavalheiro et al. [9] pointed out that the pre-salt announcement motivated increased interest for protecting upstream oil and gas technologies in Brazil. In this respect, the IPC subclass E21B covers a wide portion of technologies associated with upstream oil and gas exploration, such as earth or rock drilling obtaining oil, gas, water, soluble or meltable materials, or a slurry of minerals from wells. Clearly, the growth of

**Figure 1.** Brazil's total oil production by type: 2008–2014 (source: U.S. Energy Information Administration [45]).

reach environments characterized by extremely high pressures and temperature [46].

continuous increase in patent applications, which started in 2004.

illustrated in **Figure 1**.

**2.3. Patent applications in Brazil**

As a result of improved capabilities for analyzing patent information, policy makers started to rely on the number of patent applications as a critical performance indicator for patent office attractiveness [38], global level of economic activities, and the effort level on R&D activities [18, 24]. However, Boldrin and Levine [39] stress that there is no empirical evidence indicating that patents serve to increase innovation or productivity but rather to demonstrate power in a highly competitive environment. Despite the clear benefits associated with the current international patent system, there is also criticism regarding its current configuration. Although, scientific and technical communities in different countries are currently more connected than they used to be [40], nations that lack the capacity to innovate globally tend to consider intellectual property protection as nothing more than tax.

In addition, various scholars point out structural factors hampering firms in developing countries in generating revenue from patents, which include the limited quantity and intensity of links between firms and universities [40, 41], low rate of industrial technological accumulation in industry [13], public policy makers with limited understanding of intellectual property [42], as well as a partial lack of understanding about the consequences of academic engagement for scientific and economic objectives [43].

#### **2.2. Brazilian context: pre-salt discovery**

Brazil has already accumulated a long experience with the discovery and production of oil. As a matter of fact, the first oil discovery in Brazil was accomplished in 1939 in the State of Bahia, while the first offshore extraction project started in 1968 [44]. However, despite the history of oil production activities in the countries, for several decades, Brazil imported large amounts of oil to complement its internal production to supply the internal demand [8]. However, in 2007, the Brazilian Federal Government announced the discovery of huge oil and natural gas resources in the pre-salt layer of the country's Southeastern coast. This discovery was accomplished by Petróleo Brasileiro S.A. (Petrobras) and created the possibility of turning the country into one of the largest oil producers in the world [7].

In order to explore this huge oil field, substantial effort will be required to develop and integrate innovative technologies to address the challenges coming from operating in the ultradeep water environment of the largest subsea project in the world [8]. However, until the present, total oil production in Brazil has been increasing at a small pace in recent years, as illustrated in **Figure 1**.

In practice, exploring the pre-salt reservoirs is a massive technical and organizational challenge that generates significant need of investments in new technologies. The distance between the surface of the sea and the oil reservoirs under salt layer can be as much as 7000 meters [7]. Consequently, exploration and production of hydrocarbons located in ultra-deep offshore waters require a plurality of innovative technologies destined for hostile, hard-toreach environments characterized by extremely high pressures and temperature [46].

#### **2.3. Patent applications in Brazil**

Given the tremendous advances in patent analytic tools in recent years, patent information can be used to support a wide range of analyses in different industries. For example, Huang [34] examined the evolution of the patent portfolio of mainstream firms of the cloud computing industry. Moreover, Dubaric et al. [35] employed patent application figures as performance indicators representing evolution and level of maturity of wind power technology. Huang and Cheng [11], in turn, proposed a patenting behavior framework to identify the primary factors determining the propensity to file a patent application. Beyond examining patent applications filed by firms, there are also relevant studies addressing how universities are protecting their inventions through patents. Accordingly, Drivas et al. [16] assessed patterns associated with the licensing process of university patents, while Siegel et al. [36] developed a framework to describe the transfer of scientific knowledge from academicians to practitioners. More recently, Arunagiri and Mathew [37] demonstrated the possibility of identifying relevant business and technical patterns by assessing patent classification of implant

As a result of improved capabilities for analyzing patent information, policy makers started to rely on the number of patent applications as a critical performance indicator for patent office attractiveness [38], global level of economic activities, and the effort level on R&D activities [18, 24]. However, Boldrin and Levine [39] stress that there is no empirical evidence indicating that patents serve to increase innovation or productivity but rather to demonstrate power in a highly competitive environment. Despite the clear benefits associated with the current international patent system, there is also criticism regarding its current configuration. Although, scientific and technical communities in different countries are currently more connected than they used to be [40], nations that lack the capacity to innovate globally tend to consider intel-

In addition, various scholars point out structural factors hampering firms in developing countries in generating revenue from patents, which include the limited quantity and intensity of links between firms and universities [40, 41], low rate of industrial technological accumulation in industry [13], public policy makers with limited understanding of intellectual property [42], as well as a partial lack of understanding about the consequences of academic engage-

Brazil has already accumulated a long experience with the discovery and production of oil. As a matter of fact, the first oil discovery in Brazil was accomplished in 1939 in the State of Bahia, while the first offshore extraction project started in 1968 [44]. However, despite the history of oil production activities in the countries, for several decades, Brazil imported large amounts of oil to complement its internal production to supply the internal demand [8]. However, in 2007, the Brazilian Federal Government announced the discovery of huge oil and natural gas resources in the pre-salt layer of the country's Southeastern coast. This discovery was accomplished by Petróleo Brasileiro S.A. (Petrobras) and created the possibility of turning the

technology patents.

4 Drilling

lectual property protection as nothing more than tax.

ment for scientific and economic objectives [43].

country into one of the largest oil producers in the world [7].

**2.2. Brazilian context: pre-salt discovery**

Prior to examining patent applications related to upstream oil and gas technologies, it is also worthwhile to assess the trend regarding patent applications regarding all fields of technologies in recent years in Brazil. In this regard, we have opted to examine the total number of Brazilian patent applications between 2001 and 2013. Clearly, **Figure 2** displays a small and continuous increase in patent applications, which started in 2004.

Although a small and continuous increase in patent applications in Brazil can be observed in recent years, this growth started prior to the pre-salt announcement. However, when it comes to upstream oil and gas technologies, Cavalheiro et al. [9] pointed out that the pre-salt announcement motivated increased interest for protecting upstream oil and gas technologies in Brazil. In this respect, the IPC subclass E21B covers a wide portion of technologies associated with upstream oil and gas exploration, such as earth or rock drilling obtaining oil, gas, water, soluble or meltable materials, or a slurry of minerals from wells. Clearly, the growth of

**Figure 1.** Brazil's total oil production by type: 2008–2014 (source: U.S. Energy Information Administration [45]).

**3. Research method**

approaches can be very synergistic [49].

during of the data collection phase of this study.

**4. Results**

Fundamentally, we adopt a qualitative and quantitative approach based on a combination of literature review and empirical analysis of patent filings. As a matter of fact, adopting a pure quantitative approach is not feasible, as the extant literature does not offer clear conventions for analyzing patent information related to upstream oil and gas technologies, such as the widely accepted and well-known rules of algebra through which the validity of mathematical deductions is known [47]. A fundamental characteristic of a qualitative approach, in turn, is that researchers may have less a priori knowledge of what the variables of interest will be and how they will be measured [48]. Accordingly, qualitative researchers are sometimes disposed toward causal determination of events but more often tend to perceive events not simply and singly caused (Stake [50]). Consequently, the combination of qualitative and quantitative

Proposing a Patent Information Approach for Identifying Technological Trends in the Brazilian…

http://dx.doi.org/10.5772/intechopen.75377

7

In practice, we collected data representing the patent applications in Brazil for the period between 2001 and 2012. The choice for this period was motivated by the research objective of this study, which is aimed at improving understanding of the major technological trends associated with the upstream oil and gas industry in Brazil. Additionally, given the fact that the Brazilian patent legislation establishes that a patent application must be published 18 months after the filing date in combination with administrative delays to classify patent applications, patent data concerning the years 2013, 2014, and 2015 were not completely available

The figures regarding Brazilian patent applications were retrieved by executing queries within a system named "Sistema Integrado da Propriedade Industrial" (SINPI). SINPI regards an internal information system that processes administrative information for "Instituto Nacional da Propriedade Industrial" (INPI), which is the Brazilian national patent office. The queries concerned patent applications with filling dates between January 1, 2001, and December 31, 2012. These queries specified the patent applications classified with the International Patent Classification (IPC) scheme in the technical area of E21B, as this particular area covers a wide portion of technologies associated with upstream oil and gas exploration, such as earth or rock drilling obtaining oil, gas, water, soluble or meltable materials, or a slurry of minerals from wells. Accordingly, E21B was selected for being a highly representative IPC subclass for the upstream oil and gas industry. The collection of patent information on patents describing technologies used in the upstream oil and industry, which are classified as E21B, was analyzed based on patent classification listed in the documents. More specifically, we have examined the total number of documents further classified in terms of the groups that belong to the E21B subclass. This decision enabled us to identify the most active technical fields within the E21B subclass.

After examining the characteristics of the patent system and the context associated with the pre-salt discovery, we take up the patent applications in Brazil for the period between 2001

**Figure 2.** Brazil's total patent applications: 2001–2013 (source: WIPO Statistical Country Profile, Brazil, 2015).

E21B patent applications is much stronger, than the growth in both oil production and total patent applications in Brazil. Accordingly, E21B was selected for being a highly representative IPC subclass for the upstream oil and gas industry. As such, **Figure 3** displays a strong increase in patent applications in Brazil concerning the E21B.

**Figure 3.** Patent applications related to upstream oil and gas technologies in Brazil: 2001–2012 (source: adapted from [9]).
