Archive for the ‘Pollution’ category

Will Patents Hamper Testing of the Environmental Impact of Fracking?

August 12th, 2013

A recent article by three professors of business, energy and economics looks at the role of patents on hydraulic fracturing, or fracking, the process of injecting pressurized water and chemicals into subterranean formations to extract natural gas.

Entitled “Fracking Patents: The Emergence of Patents as Information-Containment Tools in Shale Drillling,” the piece posits that the information-control mechanism of patents will hamper efforts to test the environmental effects of patented fracking technologies.

More particularly, the authors note that there are serious environmental hazards associated with fracking due to the toxic chemicals used in the processes, and assessing the extent of the harm requires field testing of the processes.  However, such field tests would constitute infringement if the techniques or materials used have been patented:

A third party interested in investigating the impact of fracturing fluids on the environment or evaluating issues beyond discrete chemical composition…will need to make use of the patented materials.  Without a license, it is unlikely that any exception in patent law would excuse such activity from infringement. 

Fracking patents, therefore, can act as information-containment mechanisms where the patent owners enforce their rights to shut down the testing activities:

A patentee can assert its rights to control testing and experimentation, and thereby shape the information environment.

The article was written by Daniel R. Cahoy, Professor of Business Law and Dean’s Faculty Fellow in Business Law at Penn State, Joel Gehman, Assistant Professor of Strategic Management & Organization and H.E. Pearson Faculty Fellow at the University of Alberta, and Zhen Lei, Assistant Professor of Energy and Environmental Economics at Penn State.

I corresponded with Professor Cahoy via email, and he provided the following summary of his work on fracking patents:

Based on a general interest in hydraulic fracturing technology and intellectual property rights, my colleagues (Joel Gehman, Assistant Professor of Strategic Management and Organization, Alberta School of Business, and Zhen Lei, Assistant Professor of Energy and Environmental Economics, Penn State) and I wanted to investigate whether patents could have an impact on the natural gas boom.  We first determined that there are indeed many patents that cover fracking technology and the numbers appear to be growing dramatically. That has obvious implications for future market development, pricing, etc.  But we were also curious as to whether patents could impact our understanding of the most controversial question related to fracking: the potential for environmental harm. 

Our first paper is a discussion of the critical information issues in hydraulic fracturing and the manner in which patents can prevent the kind of experimentation necessary to develop that information.  We consider the lingering impact of Madey v. Duke on experimental use and build on the general work others who have considered patents as information limitation tools, such as Professor Brenda Simon at TJLS. We conclude that there are options for overcoming patent information-barriers, most creatively through the use of a public university’s inherent sovereign immunity rights.  This paper was published in 2013 in the Michigan Telecommunications and Technology Law Review and is available for free download at http://ssrn.com/abstract=2065032.

Our future work involves building an accurate, comprehensive database of patents related to hydraulic fracturing for in-depth analysis of trends, ownership consolidation and even the possible influence of patent trolls.  The challenge is the fact that hydraulic fracturing is actually a bundle of technologies and practices (fluids, proppants, service equipment, etc.).  We are working with experts in energy exploration and computer science to help us separate the wheat from the chaff.  We expect to have our initial collection ready for initial analysis in the fall.

Honeywell’s Patent Priority Pitch Prevails in Solvay Suit

January 9th, 2009

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Solvay, a Belgian chemicals and pharmaceuticals conglomerate, owns U.S. Patent No. 6,730,817 (’817 patent), entitled “Method for preparing 1,1,1,3,3-pentafluoropropane”.  The ’817 patent is directed to processes for making HFC-245fa, a hydrofluorocarbon (HFC) that does not deplete the earth’s ozone layer.

The processes claimed in the ’817 patent are commercially important because HFC-245fa is one of a group of non-ozone depleting HFCs that were legislatively mandated in the 1990′s to replace ozone depleting chlorofluorocarbons and hydrochlorofluorocarbons.

In 2006 Solvay sued Honeywell in federal court in Wilmington, Delaware, accusing the chemicals, security systems and aviation instrument maker of infringing the ’817 patent by making HFC-245fa at its Louisiana plant.

Recently both parties filed a flurry of summary judgment motions relating to both infringement and validity of the ’817 patent.  Last month, Honeywell prevailed when Judge Sue L. Robinson ruled that it, not Solvay, was the first to invent the patented chemical process.

The patent law provision at issue in the validity motions was section 102(g).  Section 102(g) of the U.S. patent law governs patent priority disputes. 

It ensures that a patent is awarded to the first inventor by providing that a patent is invalid if the invention was made in the U.S. by someone else before the invention date of the patent applicant.  Section 102(g) also promotes public disclosure of an invention by requiring that the party alleging prior invention did not “abandon, suppress or conceal” his invention. 

A party can prove first invention under section 102(g) by either demonstrating that he was the first to reduce the invention to practice (i.e., the invention is ready to be used for its intended purpose) or he was the first to conceive of the invention and was diligent in attempting to reduce it to practice. 

Honeywell’s summary judgment motion on validity asserted that it was the first inventor under section 102(g) and therefore certain claims of the ’817 patent are invalid.  Solvay’s cross-motion for summary judgment on validity argued that Honeywell had abandoned, suppressed or concealed the invention and therefore could not be the first inventor under section 102(g).

The research on Honeywell’s chemical process (and conception thereof) was conducted in Russia by contracted engineers in May 1994.  Honeywell replicated the work of the Russian engineers and reduced the invention to practice in August 1995 by using certain methods to purify the HFC-245fa, prior to Solvay’s asserted priority date of October 23, 1995.

Based on its August 1995 reduction to practice date, Honeywell argued that it was entitled to summary judgment that it was the first inventor under section 102(g).  Solvay countered that Honeywell could not be the inventor because the conception was in Russia, not the U.S.

Judge Robinson rejected Solvay’s arguments (honeywell_opinion.pdf), finding no support for the contention that conception must occur in the U.S., and concluding that, in any event, Honeywell had conceived of the invention in the U.S. because it “possessed a definite and permanent idea of the complete and operative invention” upon receiving the information and instructions from the Russian engineers. 

Solvay’s summary judgment motion asserted that it was the first inventor and argued that Honeywell had intentionally abandoned, suppressed or concealed the invention.  Solvay pointed to, among other things, a particular invention questionnaire used in Honeywell’s internal policies allegedly to delay patent filings based on potential for commercialization of the technology and Honeywell’s changes in market predictions based on Department of Energy (DOE) regulatory activity.

Judge Robinson rejected Solvay’s suppression arguments, finding that Honeywell’s questionnaire  is used primarily to determine the most appropriate form of intellectual property protection for an invention, not to suppress inventions or encourage delays in patent filing.  The court also found that, in this instance, Honeywell’s monitoring of DOE regulations ultimately led to earlier disclosure of the invention.