When setting intellectual property strategy it pays to have a solid understanding of the prevailing business issues. In cleantech there are a number of diverse industries involved, with a trend towards convergence of technologies and sectors.
Many cleantech sectors are also well established and have seen a lot of R&D over the past 10 years with heavy patenting activity. Such issues have intellectual property implications:
- It is very important to conduct freedom-to-operate searching early in the R&D project. Care must be taken to ensure third party rights are not infringed. There may also be key patents in fields that are converging with your core technology that you may need to access before you can launch a commercially viable product.
- Cleantech involves a relatively high level of collaboration and licensing transactions, so it's important to have formal patent protection to clarify what you bring to the table. Businesses need to prepare for these types of relationships by ensuring they have established clear chain of title to their inventions; their employment contracts are solid with confidentiality obligations and reasonable restraints of trade; and non-disclosure agreements are utilised with all potential collaborators from the outset.
- Obtaining patents around sets of improvements that reduce price to consumers, increase scale, enhance convenience, usability or reliability will be important. Don't underestimate the ability to patent improvements, or assume your improvement is too insignificant for protection. Even narrow patents in the bottleneck of the path to market may be valuable.
- There may be opportunities to gain patent protection for the individual technology pieces, as well as the combination of those pieces into a solution. It is important to understand the synergies of the technology combinations and ensure patent claims cover them. There may also be opportunities for patent protection in the areas of convergence of your core technology with other technologies.
- There may also be opportunities within universities or Crown Research Institutes to link together scientific research and bundle technologies with your own to create a more valuable offering.
There is often a long gestation period from proof of principle to market traction for cleantech solutions. This time delay, again, has some IP implications:
- Consider looking for intellectual property in the areas where your technology 'plugs in' to the existing conventional production, delivery and distribution infrastructure.
- The long time to market may have implications for the timing and content of patent filings. For example, you may consider delaying your initial filing until the technology is closer to market, to ensure you have sufficient patent term remaining to return your investment. This of course risks a third party filing a blocking patent in the interim. You may consider filing for the base or core of the technology early, and then stagger your filings for improvements.
- The 'first to market' approach may be unsafe without patent back-up. A well resourced competitor will have ample time to reverse engineer your technology and usurp your first-mover advantage.
The path to market for cleantech is very capital intensive and it is almost inevitable that angel and/or venture capital will be required. Such investors will want to see a strong patent portfolio to establish credibility and confidence. Patents play various roles for cleantech businesses including:
- 1. Establishing credibility and confidence with investors
- Establishing exclusivity and a strong defensive position in the market
- Acting as leverage for licensing and partnering deals
- Increasing acquisition valuation
- Building a patent portfolio for horse trading during cross-licensing negotiations during litigation or collaboration.
Finally, the role of trade marks should not be underestimated as public perception plays a strong role in marketing environment-related products. We have witnessed a global 'green rush' around marks containing elements such as 'green', 'eco', 'earth' and 'enviro'. So there is a good argument that a new cleantech business would be better off adopting a more distinctive mark to stand out.
This article first appeared in Unlimited Magazine and was written by Simon Rowell, a Partner in the Auckland office. To contact Simon please email him on email@example.com or phone 09 914 6740.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
James and Wells is the 2010 New Zealand Law Awards winner of the Intellectual Property Law Award for excellence in client service.