Friday, October 3, 2008

Inside IP Law

Energy, clean tech and IP: Protecting innovation

While an important component to any technology-based company’s success, intellectual property is especially important for “clean tech” ventures encompassing energy or environmentally related technologies. Clean tech is a broad field with narrow subsectors running from older technologies now being recycled to cutting-edge research coming out of academic or industry labs. Some innovations involve fundamental technology breakthroughs that may warrant broad protection while others suggest an incremental improvement providing an important solution with commercial value. 

Keen observers of the energy/clean tech space note various common themes for clean tech ventures. First, clean tech typically requires a significant interdisciplinary knowledge of scientific and engineering principles, including chemistry, materials science, mechanical and electrical engineering, biotechnology, environmental sciences and IT. Second, clean tech endeavors often take longer to get to market — sometimes more than 10 years — requiring persistence and long-range business strategies. Third, limited routes to market, such as an existing hierarchy controlling some infrastructure, force clean tech companies to consider how their innovations “plug in to” the bigger picture. Also, clean tech can be capital intensive and affected by government regulations and public perception.

IP Tools for Clean tech
Many factors may affect the procurement and effectiveness of patents in a clean tech business. Are patent filings useful to the business primarily to instill investor confidence? Is market exclusivity and a strong defensive position important? Is the IP expected to provide leverage for licensing opportunities? These and other factors help structure patent protection strategies.

There also is an expanded role for partnerships and advisors in clean tech fields, calling for carefully crafted agreements to protect proprietary information. Similarly, trade secrets may provide protection for innovative improvements to existing technologies. Trademarks are also important, as energy policy tends to be an emotionally charged issue, and public perception can significantly affect market value.

For clean tech companies, it’s important to note that investors consider strong IP essential for both first to market companies and those that follow (to protect a key technology for later market entry or licensing/acquisition.)

Those developing a clean tech IP strategy need to understand the technology dimensions involved. For example, appreciable protection may be available for combinations of technologies that lead to innovative solutions and for how the respective technology pieces fit together. Technology convergence warrants increased sensitivity to issues such as ownership.

Areas of research with no connection to each other or to energy and the environment, may become relevant in combination. The synergy between microbe biology and low-power electronics  for fuel cell applications is one example. 

How innovations will be tied in to existing infrastructure is another consideration. IP directed to integration with an existing production and distribution infrastructure may transcend protection of core technologies. Incremental or narrow innovations can be commercially valuable in the clean tech space, so IP protection shouldn’t be ignored if a broad scope of protection appears unavailable. Clean tech innovators often must consider supply/demand issues, environmental impact, and national security, providing solutions that positively impact price, reliability, and scalability. Seemingly trivial incremental innovations that enable solution are likely extremely valuable.

Similarly, don’t dismiss patent protection for clean tech ventures with a long time-frame to market or long technology lifespan. Strategic patent filing approaches may be available in some jurisdictions, increasing patent enforcement life, for example, until the effort reaches a certain state of commercial viability.  It’s also possible to file initial applications relating to core aspects of the technology, then stagger subsequent filings for incremental changes. 

Given the global applicability of clean tech innovation, international IP protection needs to be considered.  Additional sensitivity to international regulations and jurisdiction-specific enforcement issues relating to energy and the environment is warranted.

While no one size fits all for clean tech IP, some general attributes should be considered when assessing possible IP strategies. Being mindful of issues germane to energy and/or environmentally related ventures will invariably help build a sensible model for protecting clean tech innovations.
 

Joseph Teja Jr. and Michael J. Pomianek are co-chairs of the clean tech group at the intellectual property law firm of Wolf, Greenfield & Sacks PC in Boston.