Clarky's Comment - May 2010, RS &T - The Rules are Changing

Professor Sir Peter Gluckman's public lecture at NIWA on 21st April in Auckland is a great read. See: Sir Peter Gluckman public lecture "The New Zealand Science System - into a brave new world".

On 11th May Prime Minister John Key announced $321 million over four years in investment in new initiatives, with the centrepiece being a $234 million increase over four years in support for business research and development (R&D). There are also significant increases in support for talented scientists and science infrastructure.

The changes in science administration are aimed at better aligning our constrained Research Science and Technology spend to the needs of key sectors in which NZ has an international competitive advantage (of which forestry and wood processing is one). Industry is likely to have a greater say in what research is carried out and there is to be greater emphasis on enabling the private sector to make use of the research to generate economic activity and wealth.

The immediate task for the Crown Research Institutes is to get their Statements of Core Purpose drafted and presented to government for review and acceptance - behind this is the belief that the CRIs have been too focussed on their own profits rather than the profits of the sectors they should be servicing.

Meanwhile a core group of forest industry leaders involved in the commissioning and delivery of research have met in Rotorua and worked hard on compiling a Draft Statement on Research Needs for the Forest Industry. Once signed off by the respective industry bodies this will be discussed and fed into the newly merged MORST/FRST and made available to all relevant Crown Research Institutes.

The draft document is seeking to increase the focus on shorter-term research, the results of which can be more quickly applied in our industry, at the expense of some longer-term strategic research. It also seeks to increase FRST investment into solid wood processing at the expense of fibre and bio-composite products. The seven page document clearly articulates the key forest industry productivity, profitability and asset protection drivers and research topics for investment in these critical areas.

RFID Tags in Forestry and Log Tracking

The concept of tracking logs, including, if needed, silvicultural history, using RFID tags has been around a long time. Uptake of the technology has been constrained by the relatively high cost of the tags themselves, and development of appropriate sensors for log measurement. As the cost of RFID tags reduces and there is increasing opportunity to gain efficiency in log measurements and tracking using remote sensing rather than tapes and data loggers, RFID tags will come into their own. 

Most of you will not be aware that in 2002 Weyerhaeuser Inc. (US) attempted to lodge an RFID patent in all the major forestry countries of the developed world. Where successful this patent will give them the rights to claim royalties from anyone using RFID tags linked to a computer-based stand record system for log tracking purposes. Forest owners in US, Canada and Australia were caught napping and the patent application has been granted and is in force in those countries. In New Zealand CHH Forests got wind of the application and opposed it. When International Paper sold its NZ forestry and wood processing interests to Rank Group, Alisdair Woore of CHH Forests handed the ball to NZFOA to continue with the opposition process. Much to our surprise, the Assistant Commissioner of Patents granted the Weyerhaeuser application in January 2009.

A smaller group of forest owners got together and raised funds to lodge an appeal to the High Court. On 31st March 2010 Judge Duffy overturned the Assistant Commissioner's granting of the patent application on the grounds that "the claimed invention lacked inventiveness". Weyerhaeuser has not appealed Judge Duffy's decision. This means firms in New Zealand are free to engage whoever they wish to develop RFID -based technologies, without payment of royalties to Weyerhaeuser.

All NZ forest owners owe a debt of gratitude to Alisdair Woore and to Chris Goulding of Scion and those forest owners that had the conviction to fund the substantial legal costs of the High Court appeal.

Meanwhile the opportunity to reduce costs and improve log-tracking efficiency is to be discussed at a workshop jointly being organised by FFR and SWI in Rotorua on 26th May. My back of envelope calculations is that there is savings of several millions of dollars annually if we can measure and sell logs on the basis of remote sensing and recording. Our customers would probably be delighted as well once they got the confidence to rely on NZ seller data.