Abstract
In this chapter, we describe the history of development and commercialization of RO membranes at Nitto Denko. The president of the company in the 1970s envisioned a corporate growth strategy that defines the membrane business as one of its main pillars. The company thus developed not only RO membranes, but also various other membranes for a wide variety of applications. We illustrate that, in the 1980s, the company expanded its business to overseas markets by acquiring Hydranautics. We also depict that Nitto Denko began full-scale business development in the seawater desalination market after overcoming a patent dispute with Dow Chemical.
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Notes
- 1.
Suzuki (2004), p. 14.
- 2.
From the authors’ interview with Hideki Yamamoto at Nitto Denko's head office on August 29, 2014.
- 3.
From the authors’ interview with Hideki Yamamoto referenced above.
- 4.
From the authors’ interview with Keisuke Nakagome on April 11, 2014 at Hitotsubashi University (interview) and September 23, 2014 (e-mail).
- 5.
From the authors’ interview with Yoshiyasu Kamiyama at Okayama University on August 25, 2014. The text in parentheses was added by the authors.
- 6.
The patent was invalidated by objection from Kurita.
- 7.
From the authors’ interview and e-mail with Keisuke Nakagome. The text in parentheses was added by the authors.
- 8.
From the authors’ interview with Kenichi Ikeda at Research Institute of Innovative Technology for the Earth (RITE) on December 27, 2013. The text in parentheses was added by the authors.
- 9.
From the authors’ interview and e-mail with Keisuke Nakagome, as referenced above.
- 10.
From the authors’ interview with Keisuke Nakagome at Hitotsubashi University on July 23, 2014. The quality and flow rate of the permeate water depends on the quality of the feed water, module configuration, and operating conditions. Based on his experience during his water treatment days, Nakagome promoted the development of software, which is important for designing RO membrane systems, and was one of the first to provide it to water treatment equipment manufacturers.
- 11.
From the authors’ interview with Noriaki Yoshioka at Nitto Denko's head office on August 29, 2014. The text in parentheses was added by the authors.
- 12.
Nikkei Sangyō Shimbun (October 1, 1982, p. 15; August 7, 1984, p. 7).
- 13.
Nikkei Sangyō Shimbun (August 7, 1984, p. 7).
- 14.
This was because when NTR-7250 was produced at the Shiga Plant, the desalination rate increased to 90%, and the name was changed to NTR-729. This episode illustrates the difficulty of manufacturing RO membranes and the importance of establishing membrane production technology. The importance of this can be inferred from the fact that Hydranautics was not able to make products with its high-performance composite membrane, as described below.
- 15.
At that time, Yoshioka was assigned as a researcher to Membrane Technology and Research (MTR), which had been established by Baker, and later moved to NDT.
- 16.
The president at the time of establishment was Katsuhiko Murata.
- 17.
From the authors’ interview with Hideki Yamamoto referenced above. The text in parentheses was added by the authors.
- 18.
U.S. Patent 4,872,984; 4,948,507.
- 19.
Each performance is based on a product catalog, and the operating conditions differ slightly. Therefore, intercompany comparisons should be interpreted as a rough positional relationship.
- 20.
Ikeda and Tomaschke (1994).
- 21.
Kamiyama was appointed the head of the Department in April 1992.
- 22.
From the authors’ interview with Yoshiyasu Kamiyama at Okayama University on August 25, 2014.
- 23.
Nitto Denko's first RO membrane module based on cross-linked fully aromatic polyamide was launched in 1991. In 1992, Nitto Denko began operation in the Spanish Canary Islands at a capacity of 6,000m3/day.
- 24.
Based on Ryūkyū Shimpō (April 10, 1997). The total project cost is about 34.6 billion yen, of which 85% (about 29.4 billion yen) is subsidized by the government (Okinawa-ken Kankyō Seikatsubu Seikatsu Eiseika (Okinawa Prefecture Department of Environment and Living Standards, Living Sanitation Division), 2012).
- 25.
It should be noted here that low pressure is not necessarily a strong differentiating factor in the seawater desalination process itself. This is because a high osmotic pressure of about 2.5 MPa is applied between seawater and freshwater, and it is necessary to apply a higher pressure to cause RO phenomenon. In general, the operating pressure in desalination must be much higher than 5.5 MPa. Therefore, since the operating pressure is high, even if there is a slight difference between companies, it is unlikely to be a strong differentiating factor.
- 26.
From the authors’ interview with Yoshiyasu Kamiyama referenced above. The text in parentheses was added by the authors.
- 27.
Nihon Keizai Shimbun (February 15, 2003, p. 13).
- 28.
Nikkei Sangyō Shimbun (February 24, 2003, p. 6; October 19, 2005, p. 3; September 14, 2006, p. 12) and Nihon Keizai Shimbun (May 18, 2007, p. 11). Note that 7.9 billion yen in FY2002 is equivalent to 28% of the global RO membrane market of 28.2 billion yen.
- 29.
SWC5 MAX's sales target for 2009 was 2 billion yen.
- 30.
The sales targets for each element were 2 billion yen for PROC10 (FY2008) and 500 million yen for PROC20 (FY2009).
- 31.
The only difference was that the temperature at which they were dried was lowered from 130 °C to 100 °C.
References
Denko, N. (1986). Shiga kōjōannai pamphlet (Shiga plant information brochure).
Hirose, M., & Ito, H. (1996). Ultra-low pressure type composite reverse osmosis membrane module ‘ES series.’ Nitto Technical Report (nitto Gihō), 34, 38–47.
Ikeda, K., & Tomaschke, J. (1994). Noble reverse osmosis composite membrane. Desalination, 96, 113–118.
Kamiyama, Y. (1990). Gyakushintō maku (Reverse Osmosis Membranes). Sen-i Gakkai shi (Journal of the Textile Machinery Society of Japan), 43, 523–532.
Nihon Keizai Shimbun. February 15, 2003; May 18, 2007.
Nikkei Sangyō Shimbun. (Nikkei Business Daily). October 1, 1982; August 7, 1984; February 24, 2003; October 19, 2005; September 14, 2006
Okinawa-ken Kankyō Seikatsubu Seikatsu Eiseika (Okinawa Prefecture Department of Environment and Living Standards, Living Sanitation Division). 2012. Okinawa ken no suidō gaiyō: Heisei 23-nendoban (Outline of Okinawa prefecture's water supply: FY2011 edition).
Suzuki, F. (2004). Sekai ni ‘Anzen de anka na mizu’ o teikyō suru membrane jigyō (Membrane business providing ‘safe and affordable water’ to the world). Nitto Gihō (Nitto Technical Report), 42, 85, 11–15.
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Appendix: Patent litigation concerning RO membranes (FilmTec vs. Hydranautics)
Appendix: Patent litigation concerning RO membranes (FilmTec vs. Hydranautics)
In May 1990, Nitto Denko was troubled by a patent infringement lawsuit in the U.S. District Court for the Southern District of California, in which FilmTec sued Hydranautics for patent infringement. Since FilmTec had been acquired by Dow in 1985 and Hydranautics had been acquired by Nitto Denko in 1987, the case was essentially Dow versus Nitto Denko.
FilmTec claimed that Hydranautics was infringing on patent 4,277,344 (filed Feb. 22, 1979, published July 7, 1981), owned by its co-founder Cadotte. FilmTec also sued another RO company, Allied Signal, for patent infringement. Cadotte's patent, commonly known as the ‘344 patent because of its patent number, was important to RO companies working with polyamide-based materials. And if it was found to have been infringed upon, this would have been a lawsuit gravely affecting not only Hydranautics and Nitto Denko, but other RO companies as well.
In August 1991, the U.S. District Court for the Southern District of California ruled in FilmTec's favor (Case No. 90–563 GT(M)). Hydranautics immediately appealed to the United States Court of Appeals for the Federal Circuit. In the appeal, Hydranautics challenged the origin of the invention reported in the ‘344 patent, which, although filed in 1979, was based on experiments conducted on February 23, 1978, which, in turn, were similar to experiments conducted on November 17, 1977.Footnote 31
The date November 17, 1977, was significant because it was before Cadotte moved to FilmTec. The experiments conducted in November 1977 were conducted at the Midwest Research Institute (MRI), where Cadotte had previously worked. Cadotte left MRI on December 31, 1977.
In receiving government support for RO research, MRI had entered into a contract with the Office of Water Research and Technology in 1976. Under that agreement, inventions made by MRI between July 15, 1976 and January 15, 1978 belonged to the government. In other words, Hydranautics argued that the experiment from which the inventions of the ‘344 patent originated was performed on MRI on November 17, 1977, and that the ‘344 patent therefore belonged to the U.S. government, not FilmTec.
FilmTec's objection was to the difference in performance of the RO membranes obtained in the two experiments: the performance of the RO membranes obtained in the November 1977 experiment was 12.7 gfd and 9.5 gfd in water permeability and 95.0% and 88.5% in desalination. In contrast, the performance obtained in the February 1978 experiment was improved to 13.1 gfd and 11.0 gfd in permeability and 98% in desalination. FilmTec argued that this performance difference indicated a discontinuity between the two experiments. The arguments of the two sides were in direct conflict. The industry's attention was focused on the outcome of the decision.
On March 18, 1993, the U.S. The Court of Appeals for the Federal Circuit affirmed the continuity of the experiments and ruled in favor of Hydranautics. As a result, the ‘344 patent became the property of the U.S. government, which was a great relief not only to Hydranautics and Nitto Denko, but also to many other RO companies.
The series of lawsuits over the ‘344 patent were serious lawsuits that had the potential to wipe out many RO membrane companies. While the companies watched with bated breath, the Hydranautics/Nitto Denko filed an appeal, and the case finally ended with the reversal that the patent belonged to the U.S. government.
Patent infringement litigation ruling:
Case No. 92–1091 (982 F.2d 1546); Case No. 98–55274 (204 F.3d 880).
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Fujiwara, M., Aoshima, Y. (2022). Nitto Denko: Development Under Earnings Pressure. In: Mechanisms for Long-Term Innovation. Advances in Japanese Business and Economics, vol 31. Springer, Singapore. https://doi.org/10.1007/978-981-19-4896-1_9
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