Five Ways of Delivering Value for Clean Technology Innovation Through Intellectual Property

Last month, I had the honor of being one of five speakers at a seminar in San Francisco sponsored by the Global Innovation Forum and ACT’s Innovators Network where invited guests included Bay Area senior executives from clean technology companies and principals from the investment community.  The seminar, titled “Delivering Value for Clean Technology Innovation Through Intellectual Property,” considered the role of intellectual property (IP) within the clean-tech SME community for business valuation, attracting private equity investment and winning public partnerships with the U.S. Government.  The seminar’s panel of speakers included the Deputy Chief IP Counsel for the U.S. Department of Energy, a leader in the Silicon Valley private equity community, a senior clean-tech IP attorney, and a senior officer from Stanford University’s Office of Technology Licensing.

I now share with you my “Top 5” IP-focused insights from the seminar:

1. The more things change, the more they stay the same! That is, we have seen a boom in biotech in the 1980’s, followed by software/e-commerce in the 1990’s, and now clean-tech in the early part of the new millennium.  Protecting innovation through the diligent pursuit of IP rights, however, remains fundamental to an SME’s long-term success.  Thus, the use of non-disclosure agreements, the use of employee and consulting agreements with IP assignment clauses, the filing of patent applications early and often, and the other good IP-related advice that you’ve heard in the past are still applicable today.
2. Prepare before you speak. Further to my first point above, SMEs in the clean-tech space should take care to get their “IP house in order” before seeking joint venture partners, consultants, board members, financiers and other outside help.  That is, an SME would not seek to enter the clean-tech space if they did not have an idea for a better product or service.  The hard work of taking that idea and turning it into a prototype or a fully-baked plan should be protected by at least a provisional patent application fully describing how to make and use the invention – the filing fee is currently a mere $110 – before approaching any outsiders for financial or any other help.
3. The genre is not well-defined.  “Clean-tech” can come in many different forms and can include inventions in power generation, alternative fuels, carbon sequestration, environmental technology, transportation, IT systems to store and distribute energy, and even business methods to facilitate emissions trading and the like.  Thus, SMEs seeking government or private funding, participation in innovation contests or the like specifically aimed at “clean tech” should broadly define their innovations to ease the determination of eligibility.
4. Reconsider where you go abroad. After applying and/or securing patent and other IP rights in the United States, SMEs should think globally.  After all, the problem of reducing carbon emissions and the adoption of clean technologies is more serious in the developing world as those increasing populations seek more sources of energy to fuel their expanding economies.  Thus, the decision process of where to foreign file for U.S.-originated clean-tech innovations must be based on the where such innovations would have the most potential sales.  Countries such as India, Brazil and China – where in the previous e-commerce/software boom would be unheard of to file for IP rights – must now be considered for foreign filing.  SMEs must work with their U.S.-based IP counsel to understand the domestic IP laws in such jurisdictions and the budgets for the costs associated with such filings, such as government filing fees and translations.
5. Know your KSR. In 2007, the U.S. Supreme Court decided a case titled KSR Int’l Co. v. Teleflex Inc., which raised the bar for inventions to clear the “obviousness” hurdle in order to be granted a patent.  This is relevant because many experts agree that the clean-tech space is one where IP value will lie in incremental improvements over the prior art.  This is because many clean tech innovations are based on well-known, prior inventions. This is distinguished from the pharma space where there are many billion-dollar, blockbuster drug patents!  The KSR case allows the Patent Office to reject a patent application on obviousness grounds if the claimed invention is no more than the predictable use of prior art elements according to their established functions.  Thus, SMEs working with their patent attorneys should take care to draft patent applications that contain as much anti-obviousness evidence as possible knowing that the U.S. Patent Office will look at interrelated teachings of multiple patents, the effects of demands known to the design community or present in the marketplace, and the background knowledge possessed by a person having ordinary skill in the art, all in order to determine whether there was an apparent reason to combine the known prior art elements in the fashion claimed by the patent at issue.