Are incentives for green inventions the way forward for New Zealand?

By Mike Biagio

2 comments

Posted on May 4, 2010.

Green EarthThe United States is providing incentives and tools to help US companies progress ‘green’ or ‘clean’ technologies (also known as cleantech).  The payback could be significant. We stand at the dawn of a new era—but will New Zealand also be smart enough to make the most of it?

At the end of December 2009, the United States Patent and Trademarks Office (USPTO) launched its Green Pilot Program.  Under the Green Pilot Program, the first 3,000 patent applications that qualify as ‘green’ patent applications will receive special status for examination.  If special status is granted, the green application will be advanced ahead of all other unexamined applications 

that have not received such special status (ie, the vast majority of unexamined applications).   This can allow green applications to leapfrog others by up to 5 years.

To qualify as a green patent application, the application must be for an invention of a specific type. For example, applications that materially enhance the quality of the environment of mankind by contributing to the restoration or maintenance of the basic life sustaining natural elements (ie, air, water, and soil).  Patent applications that also meet the specified ‘green’ requirements are those that materially contribute to the:

  • discovery or development of renewable energy resources,
  • more efficient use and conservation of energy resources, or
  • the reduction of greenhouse gas emissions. 

This incentive should be applauded for its forward thinking.  At the moment, a patent application at the USPTO takes an average of 30 months before they are examined and an average of 40 months to receive a final decision.  And if the final decision is no, and the patentee wants to appeal the decision, then they will have to wait another 14 months.

The incentive scheme will be great for patent applicants looking for investors to invest large amounts in a green venture, as having a granted US patent is non-negotiable and a powerful tool in helping raise investment funding. By cutting down on delays, the USPTO is ensuring that green technology inventions are getting to the economic workface faster.

 

Why is this important now?

As set out in his book, Solar Trillions, author Tony Seba calculates that current global energy capacity needs to (conservatively) more than double by 2050 if the current rate of growth is sustained. Currently most of humankind’s useful energy is provided by unsustainable coal, gas, oil and their by products.

There are also a number of factors pushing the world towards more sustainable energy generation.  These include reduced reliance on imported fuels, global warming, and the prospect of a steadily increasing oil price.  

As world opinion sways towards greenness, so does investment.  Tony Seba has calculated conservatively that energy revenues from 2009 to 2050 can add up to a staggering US$382 Trillion!  A significant percentage of this can be expected to come from clean technologies.  A surge of investment can be expected in green technologies over the next few decades.  From this investment, new global players can be expected to emerge.

 

The big question is: what will we do?

A single multinational company can change the fortunes of a small country like New Zealand (for example, look at what Nokia did for Finland).  But in order to improve the chances of a New Zealand firm emerging as a global sustainable energy giant for the future,  we need to ride the worldwide surge to greenness by having incentives for, and investing in the development of new green technologies.  Then we need to make sure that we can leverage these ideas for profit by filing patents for them.  

The Intellectual Property Office of New Zealand (IPONZ) is relatively efficient, does not have the backlogs that the USPTO has, and cannot be said to be holding up investment.  But the cost of filing and prosecuting patents at an early stage of an invention’s life (before it brings in revenues) can hinder a business’s expansion.  A well-managed and responsive green innovation funding system and a green intellectual property grant or funding system will help New Zealand companies get their green ideas into the marketplace and in front of global investors as quickly as possible. 

Perhaps the technology being developed in a Kiwi backyard today could lead to a sustainable future and global leadership tomorrow.

Mike Biagio is an associate at AJ Park.

 

 

 

2 comments

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Nigel B. 237°

Great article Mike - and a very good question.

I was lucky enough a couple of months ago to spend a couple of hours with Tony Seba at Stanford in Palo Alto. He told me about the cleantech revolution that is sweeping through silicon valley, and the shear amount of intellectual grunt, and venture capital funding happening today. At the time I was there, Bloom Energy had just launched their product to the world and the place was buzzing.

I was over in the US investigating smart grid developments, which is an area that is receiving a staggering (by NZ standards) amount of stimulus and utility funding. Approximately $7bn USD in the US, and ~$7.3bn USD in China. Numbers that we simply cannot comprehend in Aotearoa. But most of this is going into the power/electricity layer of a smart grid/world future. And I struggle to see how NZ can compete in this space. Bloom Energy for example had received over $400m USD and they hadn't sold a product yet. I'm not saying that we shouldn't continue to tinker, just that given the VC money available here versus the US and China, it's a hard graft.

And the next layer of the smart grid, the network layer, is where companies like Cisco are going to compete, and I don't think that's where little old NZ can compete either.

Where I do think we can have a good crack is the application layer of the smart grid future. Just like the internet, companies are currently building the infrastructure (servers = connected power plants/sub stations/pole transformers etc) and the communication networks (fibre = mesh networks/WIMAX bubbles/fibre etc). The next layer is the smart applications (like Facebook, Twitter, iphone apps etc) that go across the foundation layers. Focusing on the development of smart grid applications which can work across the deployments occurring in China and the US, now that's where I think we can compete.

As for building renewable technologies, whilst I love the concept of the Kiwi battler building solar panels in his backyard, I think we are better placed to forge strong relationships with foreign technology companies, and accelerate getting this technology back to NZ. And to get our smart people focused on the applications that will really turn on smart grids.

Written in May 2010

Mike Biagio

Thanks for the comments above Nigel.

However, I think that you are taking a limited view of it. At the very start of the information age, nobody would have believed that three men and a dog in a garage (MS) would rule the world. When there si massive change and money ebing thrown about, anything can happen, and development of a small but significant piece of technolgy can change the world.

at this stage, we should be making usre that our best minds are focussed on developing this new tech at university level and at startup level. And smoothing the way for this tech to be given the international attention it deserves.

I am sure Nokia could ever have dreamed of their success at international level. But they had the right tech and took good decisions at the right time. Like they say: you have to have a line in the water first to catch a fish.

Written in May 2010

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