Archive for the ‘Policy & Initiatives’ category

In Defense of IPR: The Timing of the Tesla Move will Diminish The Company’s Value

June 19th, 2014

Guest post by Philip Totaro, Founder & CEO of Totaro & Associates

 

In the early stage of an industry, the long term may seem like it’s too far away.  Penetration of electric vehicles (EVs) has not yet reached levels where it is displacing significant market share from conventional gas-powered automobiles, in spite of the popularity of EVs in some regional markets around the world.

A recent move intended to inspire further EV adoption, announced in a blog post by Tesla CEO, Elon Musk, to “not initiate patent lawsuits against anyone who, in good faith, wants to use our technology,” seems to be quite popular so far.

While this is a noble and well-intentioned move, unfortunately, this thought process represents a widely held misconception about intellectual property: that it is only a legal matter, rather than a commercial one.

Patents are not just about hitting the ‘litigation lottery’ as Mr. Musk put it.  Patents are the codification of innovation and they represent the investment of time and effort from the innovative and creative people who have their names on them.  Making the investment in intellectual property protection in the first place presumes that you are willing and able to enforce your rights.

In any market there will be those who are driven by greed, and we have seen the exploitation of intellectual property by so-called “patent trolls.”  Mr. Musk appears to be frustrated with this exploitation of intellectual property, stating that:

…too often these days [patents] serve merely to stifle progress, entrench the positions of giant corporations and enrich those in the legal profession, rather than the actual inventors.

I choose not to be so cynical about the process of protecting innovation and intellectual property rights (IPR).  While many things are inefficient about the patent and trademark protection process, we live in a time when IPR are more respected around the world than they have ever been, notwithstanding the specific cases of misuse which we have become aware of in recent years.

Simply put, IPR create jobs and shareholder value for the companies that invest in innovation.  The legal profession around protecting and litigating IPR has arisen because of the increase in innovation, not because of a desire or need to line their pockets at the expense of companies who misappropriate the IPR of a competitor.

“Open sourcing” one’s patent portfolio reduces the ability to obtain value in return for that investment in innovation.  There is also value in holding a portfolio of IP assets on a diverse set of technologies because IPR creates a mechanism by which you can cross-license your technology and that IPR in case litigation comes your way, even if you don’t intend to initiate it.

Perhaps the big carmakers aren’t fully embracing EVs yet, but they certainly have the resources at their disposal to overwhelm Tesla if they wanted to.  Interestingly, Tesla doesn’t seem to understand another important aspect of IPR, which is that IP litigation between practicing entities only typically arises when their market share is encroached upon.  I suppose that if Tesla were making more of a dent in the car market, they wouldn’t be forced into this type of public relations stunt.

The timing of this also affords us the opportunity to discuss another widely held misconception about intellectual property, which is that there is more to IPR than just patents.  Typically, being first to market with a product in a new niche market matters more than having the most patents on that technology.

The inevitable action of competition that has the resources to invest in competing with an early market leader will be to duplicate their technology with improvements of their own in an effort to replicate the market leader’s commercial success.

A comment on the Tesla blog which first announced the intention not to litigate on their patents highlights some of the main concerns with this plan:

TeslaFan2014

4:42AM | JUN 14, 2014

Mr. Musk:

Great News for those interested in your company’s technology!  Can you please back up this press release with actual details/procedures?

Can you please direct those that are interested in practicing your company’s patented technology a contact where they can receive a royalty-free, perpetual license to practice your company’s technology, as the release suggests? No company will start [to] willfully practice another company’s technology without assurances they will not be sued (a press release does not cut it).

Can you have your IT folks upload a perpetual, royalty free license like the one above, signed by you, so that it can be easily downloaded and signed by companies that want to practice your patented technology?

Can you specify which patents you are actually talking about? Does this mean all of Tesla’s patents? In any country?

The spirit behind this press release is great. Now, we need details.  

Thank you again for such a generous thing that you are doing.

 I, and others, look forward to seeing how you are actually going to get this done.

In Tesla’s case, this move will hurt them in two ways longer-term:

 

Undercutting the future commercial value of the company

IPR precludes duplication of one’s technology by competitors.  Even if I don’t have Tesla’s drawings, if I have engineering and financial resources, I can still reverse engineer what they’ve done and improve upon it at a potentially faster rate than Tesla can innovate.

If Tesla is informing their competitors they will not enforce their IPR, how do they expect to effectively deter competition from penetrating the market with potentially better technology than theirs in the future?

Savvy companies tend to study the IPR of their competitors and spend time and resources designing around or improving upon the current state of the art.  Tesla’s move does address one of Mr. Musk’s pain points in that it will lower the commercial barriers to competition in the EV market, rather than using proprietary rights to “stifle progress” in the industry.

However, giving away key aspects of your technology without a license fee inherently diminishes your investment and makes it easier for your competition to leapfrog you.  So, when the EV market does take off, Tesla’s competitors will be in a better position to gain commercial advantage and more market share than Tesla.

Tesla will still be a takeover target, given their entrenched position commercially and technologically, but with a significantly lowered valuation resulting from this move.

 

Spares Sourcing

Tesla has been involved in several lawsuits and state legislative efforts to enable the company to have direct sales of their cars to consumers.  The car dealers in many states are of course unhappy because it undercuts their ability to generate sales revenue since they are bypassed by Tesla.

Providing a royalty-free license in their patents will exclude Tesla from preventing their sub-component suppliers to directly sell spare parts to consumers or independent repair shops.  This will bypass Tesla and curtail its ability to generate aftermarket and services revenue.

Since the EV market is immature and Tesla’s fleet of cars is relatively new, one can presume that this consequence was simply a strategic oversight on behalf of the company.

The move may garner some good PR value and potentially achieve greater market penetration of EVs and Tesla EVs, but it lacks foresight.  Tesla is a company beyond Elon Musk, and the passion and dedication of hundreds of employees and investors who made the commitment to work with the company in the early days deserves recognition and reward resulting from the commercial success of the company.

This noble attempt at changing the paradigm of technology development in a key industry of the future is ultimately short-sighted for Tesla, unless it has commitment from its competitors that they will follow suit and open their portfolio of IPR to the industry as well.

The open source software industry has been successful over the past 25 years because there was a community of companies who all agreed to play by the same rules.  So far, only Tesla is playing by these open source rules, and it appears unlikely that other major automakers would be willing to follow their lead.

Unfortunately, we don’t all live in the world of Gene Roddenberry’s Star Trek where money has been abolished and people want for nothing because nobody wants more than what they really need.  But until we achieve that utopian paradise, if I were a Tesla employee, I’d be furious right now that my company will be less valuable in the future than it could have been.

If Mr. Musk would be willing to redistribute his wealth to the employees and investors who made the commitment to create value for the company in the first place, then this move to open source their patents during the formative stages of the EV industry might make more sense.

 

*Philip Totaro is the Founder & CEO of Totaro & Associates, a consulting firm focused on innovation strategy, competitive intelligence, product development and patent search.  To find out more, or get in touch please visit www.totaro-associates.com.

Elon Musk Launches the Tesla-Patent Commons

June 14th, 2014

About six years ago, a handful of tech companies launched the Eco-Patent Commons.  This initiative to share environmentally friendly patented technologies is administered by the World Business Council for Sustainable Development (WBCSD), a Geneva-based organization that promotes sustainability in business.

Last week, of course, Elon Musk, CEO of Tesla Motors, made quite a splash by announcing on the company blog that the EV maker would “donate” its entire patent portfolio.  To be precise, what Musk said was “Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.”

Although Musk’s move is very much in the tradition of the Eco-Patent Commons, it is more significant and likely to have a greater impact.  The significance of the brand new Tesla-Patent Commons is best understood by comparing and contrasting it with the Eco-Patent Commons before it.  This comparative analysis reveals both major relative strengths and some flaws.

The greatest distinction between the two is in the nature, quality, and breadth of the available patents.  The Eco-Patent Commons is comprised of tiny random slices of technologies developed by an eclectic mix of donating companies.  An entity that wishes to commercially exploit technology in the Eco-Patent Commons would have to locate a donated patent directed to an important innovation, and any business opportunity would have to logically flow from that patented innovation.

Commercial success in this way seems unlikely for two reasons.  First, aside from patent “troll” activity and similar secondary market business models, businesses do not flow from patents.  It works much better the other way round:  innovate, start a business around the innovation, and then, if possible, patent the innovation.

Second, the patents in the Eco-Patent Commons are those which the donating companies had little interest in exploiting themselves (or licensing to others) so the odds are slim that they are directed to important innovations that will be worthwhile for others.

Tesla’s patent portfolio, on the other hand, is large in scope, holistic in its breadth (i.e., supporting established commercial products) and presumably includes the crown jewels of the company.  Everyone knows the technology areas, product areas, and business ventures Tesla’s patents can support.  One can easily envision a number of well-defined businesses successfully selling electric vehicles, advanced batteries, and charging systems based on the freedom to operate provided by the Tesla-Patent Commons.

Keep in mind, though, that no commons can provide 100% freedom to operate.  True, if you manufacture and sell EVs, batteries, or charging systems employing innovations that are entirely coextensive with the claims of Tesla’s patents you won’t be sued by Musk.  However, these are complex technologies.  What if your EV includes Tesla-patented innovations along side other technical features patented by another less commons-y patentee with enforcement proclivities?

Perhaps the possibilities are not so limited.  Maybe instead of the need to match the features of their products to the donated patent claims, budding Tesla-tech businesses could copy the EV maker’s actual products, e.g., manufacture the Tesla Model S under another name.  After all,  the company has been around for a while and, to my knowledge, hasn’t been sued for patent infringement.  So it seems Tesla has the freedom to operate for its existing product lines.

Then the question becomes whether there are any mechanisms besides its patents that confer upon Tesla this freedom to operate.  For example, does Tesla license any of the technologies in its vehicles from other patentees?  If so, a budding Tesla-tech business might need to ask Musk if he would consider assigning the rights under any relevant license agreements to which Tesla is a party.

So the Tesla-Patent Commons is very significant, and unlike any prior (small “e”) eco-patent commons, but the commercial and legal realities of dealing with patents and positioning technological businesses to be free to operate are always extremely complex.

Ultimately, the impact of Musk’s decision may turn on to what extent other such players will be motivated to invest in manufacturing vehicles, batteries, etc. using Tesla’s patented and patent-pending technology with the obvious upside being the proven innovation that technology brings and the down side being no exclusivity, instead of investing in their own R&D and patent protection where the upside may be exclusivity and the down side may be inferior or unproven technologies.

Only time will tell, and I’m sure this author and many other commentators will be watching this closely.

As FTC Revises Rules for Fuel Economy Ads Green Guides Can Guide

May 8th, 2014

A piece published this week on Green Car Reports starts this way:

No one wants to buy a brand-new car, only to find out that its real-world fuel economy doesn’t match the numbers on the window sticker.

It struck me that this statement describes the plaintiffs in a number of greenwashing lawsuits filed (and covered in this space) over the last several years.  The suits against Ford, Hyundai and KiaToyota, and Honda are notable examples where the actual miles-per-gallon allegedly did not match the sticker and/or the advertising.

Turns out the Federal Trade Commission will be  revising its fuel-economy advertising guidelines and is seeking comments relating to ”information that helps marketers avoid deceptive or unfair claims,” among other things. Entitled the “Guide Concerning Fuel Economy Advertising for New Automobiles,” the guidelines were first issued in 1975.

One specific issue the FTC will consider is whether marketing material that makes a ”general fuel economy” claim should include a specific mile-per-gallon figure.  Another question is whether an ad that specifies the fuel-economy rating in one EPA category or lists a specific mpg rating without specifying the category is deceptive.

For anyone familiar with the FTC’s Green Guides, these questions will be very familiar.  The Guides for the Use of Environmental Marketing Claims were first published by the FTC in 1992 and have undergone at least three revisions, most recently in 2012.

The Green Guides states that claims of general environmental benefits are deceptive:

It is deceptive to misrepresent, directly or by implication, that a product, package or service offers a general environmental benefit.

Why?  Because, the guides explain:

Unqualified general environmental benefit claims are difficult to interpret and likely to convey a wide range of meanings.  In many cases, such claims likely convey that the product, package, or service has specific and far-reaching environmental benefits and may convey that the item or service has no negative environmental impact.  Because it is highly unlikely that marketers can substantiate all reasonable interpretations of these claims, marketers should not make unqualified general environmental benefit claims.

It would be logical, I think, to extend this rule and its rationale to general fuel economy claims.  Fuel economy ratings fall into different categories.  They can be broken down into city and highway driving, for example, and many factors, such as how the car is tested, can determine the results.

Also, the Green Guides provide that marketing statements about recycling, for example, must specify exactly what percentage and which element of the product (the product itself, the packaging, or both) is recyclable or made from recycled material.

This required granularity should lend itself to rules that marketing statements about fuel economy benefits need to specify, among other things, the EPA category being touted.

Of course it was inevitable that regulators in particular fields would contemplate promulgating or revising their rules to take into account deceptive environmental marketing claims.  They are fortunate to have the Green Guides to guide them.

 

 

San Diego Clean Tech Open Biz Briefing to Highlight Eco-marks and Green Patent Perspectives

April 7th, 2014

If you’re in or around San Diego this week be sure to check out the Clean Tech Open Business Briefing this Thursday, April 10th.

The Cleantech Open is a non-profit organization that runs the world’s largest cleantech accelerator.  The Business Accelerator fosters promising startups in cleantech fields through a six-month program that includes cutting-edge entrepreneur training and mentoring (including in IP!), client and partner opportunities, and funding connections.

The business briefings bring together Clean Tech Open members and staff and early-stage clean tech start-ups and entrepreneurs.  Attendees will get an overview of the Cleantech Open and the Business Accelerator.

I will be speaking on some broad themes about the role of patents in the clean tech industry.  Entitled “Green Patents and Green Branding:  Global Perspectives and News You Can Use,” my talk will cover a range of big picture stuff and practical info on green patenting and protecting eco-marks.

The event will be held at the World Resources SimCenter in downtown San Diego from 6:00-8:00 PM.  You can find more information about the event and register here.

In Legal Industry First, GLA McKenzie Long & Hugeo Opens Antarctica Office

April 1st, 2014

GLA McKenzie Long & Hugeo announced today the opening of an Antarctica office.  The new office is the firm’s 683rd location, following yesterday’s opening of an outpost in the Kufra basin and oasis group in the Sahara desert.  GLA is the first law firm to open an office in Antarctica.

Located in the prestigious Coats Land region of East Antarctica, the office will provide the firm’s clients and staff with easy access to the Shackleton Range, the Filchner Ice Shelf, and of course, the South Pole.

The office will be headed by Winchell Cooke, a partner in the firm’s Environmental Law practice group who will relocate from Nuuk, Greenland.   Cooke, who billed 198 hours in 2013 and has $207,412.51 in A/R from the last two years, could not be reached for comment.

“We are extremely pleased to be the first international law firm to open an office in Antarctica,” said GLA Managing Partner Thaddeus “Chip” Buckley.  ”Our Antarctica practice has grown substantially over the past few weeks, particularly in the areas of environmental law, climate change, maritime law, and dogsled expedition law, and having GLA lawyers in Coats Land will allow us to more efficiently and effectively serve both our locally based clients and our international clients doing business in Antarctica.”

“Our firm offers its clients unparalleled global reach,” he added.

GLA has had a vibrant polar practice for more than two weeks.  With at least three lawyers who do cross-country skiing (including one associate also adept at snow-shoeing), the firm offers a talented and deep team of ice-ready attorneys.

 

“Unparalleled Global Reach”

This is likely to be just the first step for GLA in Antarctica, the fifth-largest continent in area after Asia, Africa, North America, and South America.  Buckley said the firm is looking to add another office in West Antarctica very soon, and is scouting locations in Palmer Land along the Antarctic Peninsula.

Don’t rule out the North Pole either, Buckley said.  The combination would fit well with the firm’s culture because many GLA lawyers exhibit behavior that is “clinically bipolar.”

GLA Managing Partner Chip Buckley and members of the firm’s Strategic Growth Committee visit potential office space in East Antarctica.

GLA is the world’s largest law firm, with over 80,000 lawyers worldwide, and has gone on an explosive growth spree in the last few years, acquiring more than 450 smaller firms.

We caught up with Buckley as he concluded a conference call with GLA’s 692 practice group chairs.  He told Green Patent Blog that the recent expansion by GLA highlights a major advantage of the firm:  its “unparalleled global reach.”  According to Buckley, that has been very attractive to clients as GLA has been able to maintain and add thousands of clients during its recent period of rampant acquisitions.

 

“A Dizzying Array of Options for Getting Around Conflicts”

While mergers and acquisitions often create conflict problems that lead to lost clients and missed engagement opportunities for global law firms, Buckley said GLA has been able to avoid those issues.  The solution for GLA has been to organize the firm under an innovative Bulgarian corporate structure called a Melaeighn (pronounced “malign”).  With 19 offices in Bulgaria, GLA has the legal right to operate as a domestic Melaeighn.

Advantageously for GLA, a Melaeighn allows all of the firm’s offices to be governed by Bulgarian legal ethics rules.  While those rules allow lawyers substantial flexibility in resolving conflicts between and among client matters handled by different offices, the key advantage, according to Buckley, is that the Bulgarian legal ethics rules have a liberal choice of law provision that allows the law firm to operate pursuant to the most lax legal conflict rule of all the jurisdictions the firm is operating in.

“With nearly 700 offices in over 180 jurisdictions, our attorneys have a dizzying array of options for getting around conflicts.  We basically have license to do anything we want in terms of representing adverse parties, even in concurrent litigation and transactions.”  Buckley said.

“It’s like Christmas every day!” said a partner in the firm’s highly lucrative Intellectual Property department who did not wish to be named.

While the flexibility in avoiding conflict issues is a boon for GLA lawyers, some legal industry analysts questioned whether clients might be displeased with the prospect of their counsel suing them on behalf of their direct competitors.

Buckley brushed off the concern.  ”We’re confident that current and prospective clients will conclude that the advantage of being represented by the largest and most prestigious law firm in the world outweighs any potential loyalty issues.”  He added that GLA has “unparalleled global reach.”

 

“Informed Consent Through Our LAWDICK”

“Besides,” Buckley said, “we provide full disclosure and always obtain informed consent through our legitimate advance waiver of disloyalty-induced conflict contract (LAWDICK) provision, which I ordered to be inserted into all of our engagement letters.  The LAWDICK is a neat little trick we picked up from the legal conflict rules in Zimbabwe,” where GLA has nine offices.

Standard in GLA engagement letters, the LAWDICK requires a client to waive any conflicts that would arise by the firm taking engagements adverse to the client and applies both retroactively and prospectively.

Buckley was coy about the language of the LAWDICK provision, but Green Patent Blog was able to obtain a copy of the firm’s standard engagement letter from an unnamed source.  (Literally.  For administrative efficiency, GLA has stripped its associates of names and identities in favor of an internal numbering system.  The engagement letter was provided to us by Associate No. 52,961).

An excerpt of GLA’s cutting edge LAWDICK is reproduced below:

GLA McKenzie Long & Hugeo is a law firm of tens of thousands of lawyers and non-lawyer professionals in over 180 jurisdictions around the world and is involved in all kinds of business dealings, negotiations, and disputes with other clients of the firm.  In consideration of GLA’s acceptance of this engagement, the Client agrees that GLA may, in the past, present, or future, and throughout all time, anywhere in the Universe, represent existing or new clients in any matter relating to the Client, including, without limitation, litigation against the Client, negotiations directly or indirectly adverse to the Client or the Client’s interests, even if substantially related to this representation or any other matters GLA has had, currently has, or will have with the Client.  The Client further agrees that GLA may represent direct competitors of the client in matters directly or indirectly adverse to the Client or the Client’s interests and/or may represent employees, officers, affiliates or subsidiaries of the Client in matters directly or indirectly adverse to the Client.  The Client waives any and all rights to object to any such matter as described above.  This waiver notwithstanding, the Client agrees that GLA is completely and utterly loyal to the Client and will always act as a zealous advocate for the Client (unless of course another engagement comes along that could generate higher fees for GLA than those generated by working on matters for the Client).  Any questioning of GLA’s loyalty to the Client by the Client will be deemed a material breach of this agreement and will be grounds for termination of this agreement.

In any event, it seems clear that GLA will continue to grow and will be the largest international law firm for a long time to come.  Buckley told us that he is committed to exponential growth as he emphasized the firm’s “unparalleled global reach.”

He views the expansion as a major part of his legacy as managing partner.  ”That, and the firm LAWDICK inserted at my insistence.”

Even with 682 other locations, Buckley said he is particularly proud of the new Antarctica office and summed up its significance for the firm:

“These days there may be other international law firms that can say the sun never sets on their offices, but GLA is the only firm that can say the ice never melts on our offices.”

“Plus,” he added, “GLA provides unparalleled global reach.”

Green Patent Fast Track Opens in Taiwan

March 11th, 2014

It’s been a while since a national intellectual property office has seen fit to open a fast lane for green technology patent applications.  So the recent announcement out of Taiwan is welcome news.

The Taiwan Intellectual Property Office (TIPO) now includes green technology as a new category of application or invention eligible for expedited examination under TIPO’s existing Accelerated Examination Program (AEP).

TIPO is defining green technologies broadly (as I have argued is important for boosting participation in these programs); the application is eligible if the invention is:

  • related to energy saving, new energy or automobiles powered by new energy;
  • related to energy saving and carbon reduction

One drawback of TIPO’s fast track program is its publication requirement; to qualify for the AEP a patent application must have published before the applicant makes the AEP request.

Because Taiwan is not a PCT contracting state (i.e., it does not participate in the international patent application system), non-Taiwanese applicants must file their applications in TIPO within one year of their original home country filing date.  And because patent applications typically publish 18 months after their original filing date, that means non-Taiwanese applicants must wait an extra six months or so after filing their application in Taiwan to request expedited examination there.

The TIPO fee for accelerated examination of a green technology patent application is NT$4000 (about $134 USD), and the applicant need only submit a written request explaining that the invention in the subject patent application relates to green technology.

The time saved under the AEP is substantial.  According to this article, it takes about 29 months to receive a first office action during ordinary examination in TIPO; under the AEP TIPO issues a first office action in about nine months.

U.S. Trade Agency’s China Focus Good for Green Tech Companies

February 11th, 2014

The Office of the United States Trade Representative (USTR) is the federal agency responsible for conducting trade negotiations and developing and coordinating U.S. trade policy.

As it did last year, the USTR will again make intellectual property rights (IPR) a top priority in trade relations with China in 2014.  While Hollywood movie copyrights and drug patents may be the first IPRs that come to mind, IPR in green technologies could also be heavily impacted by the USTR’s attention to China.

The copyright and trade secret dispute between American Superconductor (AMSC) and Sinovel (see, e.g., previous posts hereherehere and here), a Chinese wind turbine manufacturer, highlights the risks of doing clean tech business in China and provides an indication of what is at stake for green IPR holders.

In that case, AMSC accused Sinovel of unauthorized use of its turbine control software source code and the binary code, or upper layer, of its software for certain power converters used in its 1.5 MW turbines.  AMSC alleged that Sinovel illegally used the source code to develop a software modification so Sinovel could circumvent the encryption and remove technical protection measures on the power converters.

The U.S. government – not the USTR, but the Department of Justice – got involved when it filed an indictment in federal court in Wisconsin alleging that Sinovel, two of its employees, and a former AMSC employee conspired to commit trade secret theft and criminal copyright infringement.  According to the indictment, AMSC was cheated out of $800,000,000.

By tying IP to trade, The USTR may be able to obtain tangible improvements such as tougher laws and improved enforcement measures.  Hopefully, this could cause a larger shift in attitude in China toward one of respect for IPR, a change that would help both US and Chinese clean tech companies.

Of course, the USTR’s bailiwick extends beyond IP, and the clean tech industry benefits from its other activities as well.   Most notable, perhaps, was the joint effort of the USTR and U.S. Customs and Border Protection to enforce trade duty orders against Chinese solar panel makers engaged in unfair trade practices.

US-Chinese relations are a hot topic in clean tech.  Indeed, one of the panels at this year’s UC Hastings Cleantech Roundtable is entitled “Beyond Trade Wars:  Enhancing US-China Clean Tech Relations.”

Guest Post: Matthew Rimmer on Fossil Free Patent Law

January 21st, 2014

Patent law has a dirty history. A legal mechanism refined in the industrial revolution, patent law has sought to encourage manufacturing and industry – the ‘Progress of Science and the Useful Arts’. Patent law has provided incentives for research and development for a wide range of polluting technologies, such as oil, coal, gas.

The world’s largest oilfield service providers have built upon a large portfolio of patents to protect their research and development. Baker Hughes obtained 138 patents in 2012 and 368 patents in 2013. Schlumberger’s patents rose to 588 in 2013 from 235 in 2012. Halliburton’s patents rose to 301 in 2013.

Halliburton was awarded more than $35 million in damages after winning a federal trial in Dallas in February 2012 against Weatherford International Ltd. over a patented tool used in well bores.

The major fossil fuel companies – Chevron, ExxonMobil, Shell, BP and ConocoPhilips – have also built large portfolios of intellectual property, relying upon patent law, trade mark law, and trade secrets.

There have also been efforts to patent new techniques and strategies in respect of ‘fracking’ – hydraulic fracturing. Daniel Cahoy and his colleagues argue that Fracking Patents have emerged as a means of Information Containment. 

Increasingly, environmental groups and climate activists have challenged investments in fossil fuels.

Bill McKibbin of 350.org has emphasized that oil, coal, and gas companies are radicals because ‘they’re willing to alter the chemical composition of the atmosphere to make money.’ He maintained that such companies should lose their social license and respectability: ‘If it is wrong to wreck the climate, then it is wrong to profit from that wreckage’.

Accordingly, 350.org has organised a fossil fuel divestment movement. The organisation has encouraged university and educational institutions to divest themselves of fossil fuel stocks. Cities such as Portland, Seattle, and San Francisco have pushed ahead with fossil fuel divestment policies in relation to city pension funds. Superannuation funds and sovereign funds have been encouraged to engage socially responsible investment.

It is only a matter of time before environmental and climate activists challenge the validity of fossil fuel investments in respect of intellectual property.

Recently, there has been much debate about the limits of patentable subject matter in the courts. The Supreme Court of the United States has sought to narrow and limit the boundaries of patentable subject matter in a trilogy of cases – Bilski v. Kappos; Mayo v. Prometheus; and Association of Molecular Pathologists v. Myriad Genetics.

There is a growing debate whether there should be limits in respect of patentability in respect of polluting technologies. Article 27 (2) of the TRIPS Agreement 1994 recognises that ‘members may exclude from  patentability inventions… [in order] to avoid serious prejudice to the environment’.

Professor Estelle Derclaye from the University of Nottingham has argued that ‘patent offices could either not grant patents for any invention which emits CO2 or make a cost-benefit analysis in terms of the value of the invention for society and the levels of CO2 emitted.’ Examining European law, she suggests: ‘Applying these principles to global warming, it could mean that the cost-benefit analysis test could be used only if there is evidence that a specific invention causes actual damage or disadvantage to the environment.’

In the past, there have been civil society groups and activist movements which have sought to challenge the patentability of controversial subject matter. Thus, there has been a concerted push by the free software movement to prohibit patents in respect of software. There have been demands to abolish business method patents particularly in light of the Global Financial Crisis. Organic farmers, consumer rights’ activists, and environmental groups have protested over the granting of patents in respect of genetically modified crops.

In the field of health, there has been concern in respect of the patent eligibility of methods of human treatment, genetic testing, and stem cells. Greenpeace has been particularly active in challenging patents in the field of biotechnology. There has been much concern about the problem of biopiracy – particularly amongst developing countries and least developed countries. Futurists like the ETC Group have worried about the grant of patents in respect of emerging technologies – such as nanotechnology, synthetic biology, and geo-engineering.

It is inevitable that environmental groups and climate activists will push for a ban on patents in respect of fossil fuels – such as oil, gas, and coal. It is also likely that civil society groups will engage in patent-busting, and challenge the validity of individual patents held by fossil fuel companies.

There will also be a further push to reform the patent regime to encourage the development of clean technologies and renewable energy. Francis Gurry, the Director-General of the World Intellectual Property Organization, has commented:

Human activity, including decades of technological development, has damaged our planet. Wide-spread pollution and spiraling consumption of the world’s mineral and biological reserves have put unprecedented stress on the environment. Climate change is one of the greatest threats ever faced by society: glaciers are disappearing; desertification is increasing; in Africa alone, between 75 and 250 million people will face increased water shortages by 2020.

Gurry has maintained: ‘As human activity caused the problem, so too can human activity find the solutions’. He has insisted: ‘Green innovation – the development and diffusion of technological means to tackle climate change – is key to halting the depletion of the earth’s resources.’

There is a need for patent law to become fossil fuel free, and support research and development in respect of clean energy.

 

*Dr. Matthew Rimmer is an Australian Research Council Future Fellow, working on Intellectual Property and Climate Change.  He is an associate professor at the ANU College of Law, an associate director of the Australian Centre for Intellectual Property in Agriculture (ACIPA), and a director of the Australian Digital Alliance.

WIPO GREEN Launches Interactive Marketplace for Green Technologies

December 10th, 2013

 

A previous post, written by guest blogger Tim Stirrup, discussed the World Intellectual Property Organisation’s (WIPO) WIPO GREEN platform, an initiative that recently launched after operating for a while in pilot and test mode.

WIPO GREEN helps to match green technology innovators with commercialization partners by providing an interactive marketplace including a searchable database and a service network.  Innovators can upload their green technologies into the database and make contact with potential partners via the network to explore potential licensing or partnership agreements. 

The database also enables users to input specific green technology needs with calls to innovators to meet those needs with environmentally sound technologies.

The service network component of the initiative facilitates partnerships through a list of partners and descriptions of their businesses, a registry of service provides, and a list of potential funding sources. 

According to WIPO’s article on the launch, the pilot and testing phase saw about 1,000 uploads of green technologies, inventions and patents into the database, and the program has 35 partners including the Association of University Technology Managers, the East Africa Climate Innovation Network, and the Japan Intellectual Property Association.

Licensing of any intellectual property relating to the green technologies is governed by individually negotiated agreements between the parties involved.

Giving the WIPO GREEN database a brief spin reveals 548 hits in the alternative energy production category, 263 in waste management, 112 in energy conservation, and 29 in transportation.

WIPO Director General Francis Gurry said the organization’s ”growing network of partners and innovative collaborations with major global technology databases” should further its goal, i.e., ”for WIPO GREEN  to become a go-to-platform for green technologies” and facilitate the role of “innovative green technologies  . . . in addressing climate change.”

Solar Surge: CEPGI Q2 Report Shows Solar Patents in Top Spot

November 19th, 2013

The Clean Energy Patent Growth Index (CEPGI) recently released its Second Quarter 2013 Results.  Researched and published by the Heslin Rothenberg law firm, CEPGI is a quarterly report on green patents issued in the United States.

CEPGI has been tracking green patent trends by technology sector, assignee, and geography since 2002.  Throughout all of that time, fuel cell patents have topped the charts for every single quarter.

The big news in the Q2 2013 results is that solar patents beat out fuel cell patents for the first time, surging ahead with a jump of 29 granted patents relative to the first quarter of the year.  All told, there were 246 solar patents granted in the second quarter, with fuel cell patents in second place at 209.  Year-on-year, solar patents were up 35.  According to CEPGI:

Solar patents’ quarterly win makes clear that innovation in this sector continues at a rapid pace despite the failures and consolidations of solar firms across that board that dominate cleantech media reports.

Wind patents were in third place with 141, and hybrid-electric vehicles took fourth place with 94 patents granted in the quarter.  Biofuel/biomass patents dropped one from the first quarter to 47 while tidal patents were up three to 22.

The top green patentee for the second quarter was Toyota, which had 48 patents granted, mostly in the field of fuel cells.  General Motors was in second place with 45 granted green patents, 35 of which were fuel cell patents.  On the strength of 22 wind patents, General Electric was in third place with 26 granted patents, while Samsung took fourth place with 22.  The rest of the top ten included Honda, Ford, Mitsubishi, Siemens, Hyundai, and SunPower.

CEPGI also breaks out its data by jurisdiction, looking at the countries and individual U.S. states of green patentees.  Japan was the Q2 leader with 147 green patents granted.  California took second place with 86 patents, followed by Michigan (72), Korea (51), and Germany (39) in the top five.  New York and Taiwan each had 35 granted green patents in the second quarter, followed by Texas, Massachusetts, Denmark, Colorado, France and Canada.