More Green Patent PR: Aphios Announces Grant of Cellulosic Biomass Patent

February 18th, 2014 by Eric Lane No comments »

Readers of this blog know that I have a soft spot for patent PR, particularly green patent PR (see, e.g., here and here).  So I’m always interested in covering announcements by green tech companies about their patents.

Aphios, a Massachusetts company that develops technology for cellulosic biomass conversion, recently put out a press release announcing the grant of U.S. Patent No. 8,540,847 (’847 Patent).

Entitled “Methods and apparatus for processing cellulosic biomass,” the ’847 Patent is directed to methods and apparatus for making ethanol or other biofuels using what Aphios calls its Aosic process.

The apparatus (11) described and claimed in the patent comprises a first vessel (13) for receiving cellulosic biomass and conveying means (15) in fluid communication with the first vessel (13).  The apparatus (11) also comprises supercritical, critical, or near critical fluid means (17), which includes a source of gas, such as gas tank (41), holding carbon dioxide pressurized to form supercritical, critical, or near critical fluid.

The fluid means (17) is in fluid communication with conveying means (15) via conduit (31).  A pump (47) is connected to a heat exchanger (55), which controls the temperature of the supercritical, critical, or near critical fluid.

The cellulosic biomass is loaded into the first vessel (13) and becomes laden with the supercritical, critical, or near critical fluid.  Discharge means (21) is in fluid communication with the conveying means (15) for receiving cellulosic biomass laden with the supercritical, critical, or near critical gas and discharging  the gas to form a disrupted cellulosic biomass.

A second vessel assembly (23) may include a hydrolysis vessel (23a) and a fermentation vessel (23b) for further processing of the cellulosic biomass.  Discharge means (21), including a discharge pipe (71) is connected to a turbine (73), which captures the kinetic energy of the expanding gas.  The turbine (73) is coupled to an electric generator to recover and recycle energy from the process.

According to the press release, contacting the cellulosic biomass with the supercritical, critical, or near critical fluid or gas improves the process by separating the fibers of the biomass:

In the Aosic process, biomass is contacted with SuperFluids such as carbon dioxide with or without small quantities of polar solvents such as ethanol, both sourced from the downstream fermentation process.  Pressure is released and fibers are made more accessible to enzymes as a result of expansive forces of SuperFluids (about 10 times those of steam explosion) and carbonic acid hydrolysis.

The ’847 Patent says the process provides biomass recovery yields between 95 and 99 percent.  Thanks to Biofuels Digest, from whence I picked up the Aphios news.

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

February 11th, 2014 by Eric Lane No comments »

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 by Matthew Rimmer* No comments »

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.

Biofuels Patents Surge; Small Players Drive Solar Lead: CEPGI Q3 2013 Report

January 16th, 2014 by Eric Lane No comments »

 

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

CEPGI has been tracking green patent trends by technology sector, assignee, and geography since 2002.  Until very recently, fuel cell patents were the perennial leader.  But as of the last report for Q2 2013, solar patents took the lead.

Though dropping by 21 in the third quarter, solar patents held the lead, with 225 granted patents in Q3.  Fuel cell patents were in second place (195), with wind in third place with 146.  According to the report, wind patents were down 5 from the second quarter and dropped 24 compared to the same period in 2012.

Hybrid-electric vehicle patents were in fourth place, with 108, up 14 from the last quarter and representing a large year-on-year jump of 27 patents.  The largest surge was in biofuels/biomass patents, which finished with its highest ever quarterly total of 64.  This was a 17-patent increase from the second quarter and a jump of 25 from Q3 2012.

The top green patent assignee in the third quarter was General Motors, with 40 patents, with Hyundai coming in second (31) and Toyota and Samsung tied for third place (27).  Mitsubishi and GE were next with 25 and 21 patents, respectively, both primarily relating to wind.  Rounding out the top ten were Honda, Ford, Nissan, and Kia.

The report notes that cross-referencing the assignee list with the technologies indicates that small entities are more active than large corporations in solar patenting:

[D]espite there being more Solar patents granted in the third quarter than the other technologies, among the top ten clean energy patent grantees, Fuel Cells and Hybrid/Electric Vehicle patents vastly outperformed Solar with Fuel Cells topping Solar by over eight times, at 107 to 13, suggesting that the large patent grantees are not driving the explosion in Solar patents, and instead smaller patent grantees are driving this trend.

CEPGI also breaks out patent grants by country/state of the assignee.  Japan was the leader, with 151 patents granted, with California a distant second place with 70.  Korea was in third place with 69 patents, followed by Michigan (61), Germany (55), New York (34), and Taiwan 31.  Other states and countries with significant numbers of clean energy patents included Massachusetts (18), Texas (16), Denmark (15), Spain (14), and China (13).

 

The Top Green IP Stories of 2013

January 13th, 2014 by Eric Lane No comments »

Before we turn to new green IP issues as they unfold in 2014, here is a look back at some of the top stories from 2013.

 

No. 7:  Green Patent PR

Clean tech is competitive, and PR is one of the tools used to stand out in a competitive industry.  But who would have thought PR around green patents could be so prevalent and contentious?  After DuPont sued Heraeus for alleged infringement of a patent directed to solar paste, the chemical giant put out a press release about filing the suit and the problem of IP theft in clean tech.

Heraeus counterclaimed for unfair competition and later threatened a separate lawsuit over the press release.  DuPont then filed a declaratory judgment action asking an Oregon federal court to declare that the company’s press release and customer letters about its patent infringement suit against Heraeus do not violate unfair competition laws.

My research indicates that clean tech companies engage in a substantial amount of PR around patent matters, with the clean tech industry generating the fifth highest number of patent-focused press releases.  DuPont’s disputed press release notwithstanding, the vast majority of clean tech industry press releases relate to patent prosecution.

 

No. 6:  Boston University Leads LED Lit

LED patent litigation continued to grow in 2013.  Leading the way this past year was the Trustees of Boston University, which sued dozens of defendants including AU Optronics, BlackBerry Corporation, Dell, Fujifilm, HTC, Eastman Kodak, Olympus, Sharp, and Sony.

The patent in these suits is U.S. Patent No. 5,686,738, entitled “Highly insulated monocrystalline gallium nitride thin films” and directed to gallium nitride semiconductor devices and methods of preparing highly insulating GaN single crystal films in a molecular beam epitaxial growth chamber.

 

No. 5:  Criminalizing Greenwashing 2.0

As discussed in this space, a new greenwashing paradigm has emerged where cases are brought by or on behalf of commercial consumers and involve B-to-B communications and misrepresentations (as opposed to advertising of consumer products directed to individual consumers).

In 2013 we began to see a new species of greenwashing 2.0 case:  criminal actions brought by governmental authorities for environmental crimes and fraud (see, e.g., here and here).

In one case a Colorado company called Executive Recycling and some of its officers were sentenced to imprisonment and fines for falsely representing that the company would dispose of all electronic waste (mostly cathode ray tubes) in an environmentally friendly manner in the United States when it instead sold the electronic waste it received to brokers for export overseas to China and other countries.

In another, the feds prosecuted companies for allegedly generating and selling fraudulent Renewable Energy Credits (RINs), and Cargill separately brought a civil action involving similar allegations.

 

No. 4:  Sinovel Faces Criminal Indictment in US

The AMSC- Sinovel copyright and trade secret dispute involving wind turbine control systems was big news in 2012, but legally speaking, mostly civil.

That changed in 2013 when the U.S. Department of Justice 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.

The indictment said the purpose of the alleged conspiracy was to illegally obtain proprietary source code, software, equipment designs and technical drawings relating to AMSC’s wind turbine control systems., thereby cheating AMSC out of more than $800,000,000.

 

No. 3:  Greenwashing Costs LED Maker $21 Million

In an indication of how seriously the American justice system may now be taking greenwashing, a Los Angeles federal court enjoined LED maker Lights of America (LOA) and ordered the company to pay $21,165,863.47.

This followed a decision holding that LOA violated Section 5 of the FTC Act by making false claims about LED lamps replacing certain wattage incandescent lamps and about the lifetime of the company’s LED lamps.

The case was brought by the FTC, America’s competition and consumer watchdog agency.  The FTC was to receive the $21 million, and the court directed the FTC to deposit the money into a redress fund to be used for consumer redress.

 

No 2:  Burgeoning Biofuels Battles

While The Gevo-Butamax litigation was a major story of 2012, notable both for its size and as the first foray of big oil into biofuels patent suits, biofuels patent litigation in general makes the 2013 list.

Not only did Gevo and Butamax continue their “patent war over who can make biobutanol,” with big decisions starting to come down, but Danish enzyme maker Novozymes also was active in the courts, Danisco scored a big summary judgment win against Novozymes, GreenShift expanded its ethanol production patent enforcement campaign, and Neste’s biodiesel patent suits changed direction with the court staying the suits pending reexamination of the asserted patents.

 

No. 1:  Solar Patent Surge

Since the start of green patent history (admittedly a very brief era in the cosmic scheme of things), as recorded by the Clean Energy Patent Growth Index (CEPGI), fuel cells dominated other technologies and perennially led the green patent rankings.

That changed in 2013.  In its first-quarter report the CEPGI noted that the 217 solar patents granted were just one behind fuel cells’ 218, “the smallest differential on record [suggesting] that Solar patents are poised to pass Fuel Cell patents.”

As predicted, the Q2 report showed solar patents beating out fuel cell patents for the first time, surging ahead with 246 solar patents granted in the second quarter, with fuel cell patents in second place at 209.

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.”

 

Correction:  The e-alerts for the previous post announcing the opening of Green Patent Law indicated that they were sent from my old email address.  I think that problem has been corrected.  My new email address is elane@greenpatentlaw.com. 

 

 

 

 

Starting 2014 By Hanging Out My Green Patent Shingle

January 9th, 2014 by Eric Lane No comments »

Happy New Year to you all.  In this first post of 2014, I’m pleased to report that the new year brings a major change for me professionally.

I am very excited to announce that I have started my own firm called Green Patent Law (GPL).  A boutique intellectual property firm, GPL will represent my vision of what IP counseling should be and how a law firm should serve its clients:  each and every client gets individual attention, honest advice, exceptional service, and maximum value.

My goal is to provide the best possible advice and counsel by learning as much about each client’s business as possible and treating the attorney-client relationship as a collaboration. The result will be an individualized intellectual property strategy for each client that aligns with its business strategy and achieves the best possible protection for the client’s IP assets.

While the firm represents clients in a wide array of technology areas, I will of course bring to GPL my expertise in issues at the intersection of IP law and green technology.  To my knowledge, GPL is the only small law firm in the United States with a special emphasis on IP in the clean tech industry.

I think GPL’s value philosophy is also unique, with a focus on value to the client rather than hourly rates.  This value-driven approach represents a philosophical departure from the billable hour orthodoxy of most large law firms.

Specifically, I believe the time has come to apply the concept of frugal innovation to law practice.  Frugal innovation is the art of substantially reducing the cost of products or services while also delivering good value.  GPL’s frugal innovation takes the form of internal efficiency measures and low overhead, which result in savings I pass along to my clients.

More radically, GPL will largely replace IP services billed by the hour with a line of IP “products” delivered on a project billing basis, such as a filed patent or trademark application, a filed response to an office action, a patent search report, or a freedom to operate opinion.

I believe this value philosophy is consistent with the new legal services environment and the changing paradigm in attorney-client relationships that has been emerging in the last several years.

My hope is that these offerings, centering around value to the client rather than hourly rates, will make GPL a go-to law practice for innovative, cost-conscious businesses that appreciate the importance of intellectual property to their growth and prosperity.

Whether in green technologies or other innovative fields, the clients of GPL will gain a long term partner in their IP attorney, one that understands their business goals as well as their financial and market constraints and comes up with a comprehensive, cost-effective solution to meet their needs.

My green patent shingle is up, and I look forward to working with you!

December 14th, 2013 by Eric Lane No comments »

 

 

Green Patent Blog is on vacation.

Happy Holidays!

 

 

 

WIPO GREEN Launches Interactive Marketplace for Green Technologies

December 10th, 2013 by Eric Lane No comments »

 

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.”

On the Present and Future of Green Patent Litigation

December 6th, 2013 by Eric Lane No comments »

Law360 recently published an article assessing the state of renewable energy patent litigation.  Entitled “Clean Energy Patent Boom Sets Stage For IP Wars,” the gist of the piece is that there has been little patent litigation in the renewable energy industry so far, but the substantial growth in patents on renewable technologies in the last decade will soon change that.

Some patent litigators attribute the dearth of renewables litigation to the supposedly early stage of the industry where players are “staking out their territory” in an as-yet uncrowded market.  At this point, they say, patent litigation is premature as the early entrants don’t know how valuable their technologies will be.

The article notes the exceptions of the wind and solar markets, which are more mature, citing one lawsuit in the major patent battle between Mitsubishi and GE (see, e.g., here) and and the Zep – Westinghouse Solar litigation over solar mounting systems patents.

However, the attorneys interviewed for the piece said biofuels and energy storage patent litigation would be “further off,” overlooking two significant and sprawling patent battles in biofuels (Gevo-Butamax, and GS Cleantech) and at least one major advanced battery suit (A123-HydroQuebec).

Since the lawsuit started in January 2011 the ongoing patent litigation between advanced biofuels company Gevo and BP-DuPont joint venture Butamax has grown to encompass at least 17 suits and 14 patents relating to methods of producing biobutanol.

In another major case involving corn ethanol production technology, GreenShift and its New York subsidiary, GS Cleantech, brought a series of patent infringement suits against a host of ethanol producers across the midwestern United States.  The cases were consolidated in federal court in the Southern District of Indiana.

There has been significant advanced battery patent litigation over the last several years, most notably the cases involving A123 Systems Inc. (A123), a Boston area lithium ion battery maker, Canadian utility Hydro-Quebec (H-Q), the exclusive licensee of several patents relating to cathode materials, and the Board of Regents of the University of Texas (UT), the owner of the patents.  There was also a recent lawsuit brought by Celgard against Sumitomo involving separators for advanced batteries.

I think the article’s exclusive focus on renewable energy technologies misses the bigger picture that the broader clean tech industry has seen a number of large and important green patent battles, including Paice v. Toyota over hybrid-electric vehicle patents and Nichia v. Seoul involving LED design patents.

Generally, though, the article is right that given the sustained surge in patenting green technologies over the past decade or so, in green patent litigation the best is yet to come.

 

Optimizing Green Patent Protection: A Study in Energy Storage Service

December 3rd, 2013 by Eric Lane No comments »

 

Stem is a Millbrae, California, startup that sells and leases its battery energy storage system, which is marketed as a way to reduce consumers’ energy bills.  Specifically, the company makes a lithium-ion battery connected to analytics software that determines the best times to draw energy from the battery, thereby reducing electricity demand charges.

As more demand side energy efficiency / smart grid technologies are being offered as services (with leasing of equipment rather than sale), I’ve been thinking about what this might mean for green patent drafting.  One of the things patent prosecutors consider when preparing a patent application is how to draft the claims to ensnare as many different potential infringers in the chain of commerce as possible.

On this score, it is important to keep in mind the acts that can constitute infringement, viz., making, using, selling, offering for sale, and importing into the United States.

In conventional scenarios, the competitors that could be infringers are typically manufacturers that make, offer for sale, and sell competing products as well as the end users of the products.  There could be distributors in the chain too, but these may or may not be viable infringement targets because of the patent exhaustion doctrine, which holds that an unrestricted authorized sale of a patented product “exhausts” the patent holder’s rights to control the use and sale of the product.

Taking Stem’s battery energy storage as a service as an example, the company owns at least one U.S. patent and one pending patent application relating to its technology.  Both are entitled “High speed feedback adjustment of power charge / discharge from an energy storage system” and are Publication No. 2013/0207591 (’591 Application), which is a continuation of U.S. Patent No. 8,350,521 (’521 Patent).

Generally speaking, the ’521 Patent and ’591 Application are directed to smart charge systems and power management methods in which power demand load data and variable generator power data are synchronized in time and used to provide optimal charge/discharge instructions to an energy storage unit.

The simplest infringement scenario, of course, would be competing manufacturers that make and sell products that infringe the ’521 Patent by their manufacturing and sales activities; there also could be end users who infringe by their use.  But what about a competitor that simply leases infringing systems to end users? 

This hypothetical competitor has situated itself at a spot in the commercial chain where it may be able to avoid a charge of direct infringement because it is not making, selling, offering for sale, or importing an infringing product.  Depending on how the claims of the relevant patent are written, this competitor may not be using the product either.  It’s conceivable that the end users may be the only direct infringers in this scenario.

However, the patentee may have a case for inducing infringement against a competing storage as a service lessor if the patent claims are drafted carefully.  Section 271(b) of the patent statute provides that anyone who “actively induces” infringement of a patent is an infringer.  This means that someone who himself does not infringe, but induces another to do so (e.g., by providing a product with advertising or instructions about an infringing use), may be held liable for inducement, a form of secondary liability for patent infringement.

The ’521 Patent (and the ’591 Application) contains both system and method claims:  claims directed to a smart charge system and claims directed to a method of power monitoring and management.  Independent claim 1 of the ’521 patent is directed to a smart charge system including a premise sensor for measuring premise power information, a variable generator sensor for measuring generator power information, an energy storage unit, and a control computer that receives synchronized information from the sensors and energy storage unit and provides charge/discharge instructions.

It’s possible that an end user of the smart charge system might, through use of the system, be a direct infringer of claim 1 of the ’521 Patent and the company leasing the system could be liable for inducing the infringement of the end user.

A better candidate for inducement is independent claim 10 of the ’521 Patent because this is a method claim:

10. A method of power monitoring and management comprising:

providing, at a controller, a desired limit load;

receiving, at the controller, power demand load information;

receiving, at the controller, variable generator power information; and

transmitting, from the controller to an energy storage unit, a charge/discharge instruction based on the desired limit load, the power demand load information, and the variable generator power information.

Even if the end user isn’t using the whole system with all the components recited in claim 1, or if a different system is being used, the storage as a service lessor could still be liable for inducing infringement if it directs or instructs the end user to carry out the method steps recited in independent claim 10.

Having method claims in a patent provides better protection and greater flexibility for enforcement by exposing more players and activities in the commercial chain to potential infringement liability.  As clean tech companies continue to explore new business models, careful green patent claim drafting will become more important to ensure optimal protection.