The Cleantech sector is a rapidly growing field encompassing a diverse range of technologies which aim to mitigate climate change and reduce the world's carbon footprint. With the introduction of a carbon tax imminent in Australia, the message is clear that the time to reduce carbon footprints and develop innovative clean energy solutions is now. However, a difficulty which many entrepreneurs and startups face, is how to turn an innovative idea into a commercial reality. Often, one of the most important early steps in achieving such an outcome is protecting the intellectual property (IP) in the technology.
Cleantech technology that is patent protected maximises the value of a start-up's business. A patent is an asset that offers its owner many advantages if leveraged properly. A patent protects the core functionality of the technology, the way it works, and a well drafted patent should make it difficult for a competitor to easily work around. In one sense therefore, a patent is designed to make it difficult for competitors to piggy-back a technology developed by the patentee, and offers the patentee a temporary legal monopoly ("the first mover advantage") to exploit and reap the reward of their time and financial expenditure.
Patent Offices around the world have also recognised the importance of patents in cleantech by initiating programmes to fasttrack examination of patent applications relating to green technology, such that examination of these patent applications may now occur within months from filing rather than several years. Amongst the Patent Offices offering a green technology fast-track program are those of Australia (IP Australia), the United States (USPTO), the United Kingdom (UK Intellectual Property Office), Korea (KIPO), Japan (JPO), Israel and Canada (CIPO).
The ability to fast-track patent applications for green technology innovations through Patent Offices may be beneficial to cleantech start-ups in particular, as patent rights will be created much sooner which will send a positive signal to the market and potential investors. Whether or not a technology is patent protected, often influences a venture capital or private equity firm's decision on whether to invest in the technology. The ability to obtain patent rights earlier rather than later may therefore be enormously valuable in attracting such critical investment. Further, having patent protection in place is seen as adding value to the goodwill of a business and, moreover, can demonstrate a maturity of approach, according to Geoff Thomas, Managing Director of Private Equity investor Paragon Private Equity.
While patents may help initially to secure vital capital needed to commercialise new green technologies, strategic leverage later on down the track through licensing should also not be forgotten as this may help future revenue growth of the business. Effective patent licensing can also generate revenue in new markets, thereby maximising the value of the technology. For more information on fast-tracking green technology patent applications or leveraging existing IP, please contact a member of our Greentech group.
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