All business should have an intellectual property(IP) strategy that reflects the prevailing business issues. The cleantech sector is no exception, particularly taking into account the number of diverse industries involved and the trend towards convergence of technologies and sectors. This article examines some key considerations when developing a cleantech IP strategy.
The cleantech sector is already well established and has seen a lot of R&D over the past 10 years. With R&D comes heavy patenting activity. This has certain IP implications:
- It is critical to conduct freedom-to-operate searching early in the R&D project 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 obtain formal patent protection to clarify what you bring to the table. Businesses need to prepare for these types of relationships by ensuring they have clear ownership of their inventions, 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 improvements to established technologies that provide advantages such as reduced price, increased scale, or enhanced convenience, usability or reliability will be important. Don't underestimate the ability to patent improvements, or assume an 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 combination of known pieces of technology into a new product. It is important to understand the synergies of technology combinations and ensure patent claims cover them. There may also be opportunities for patent protection in the areas of convergence of a core technology with other technologies.
- There may 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.
Time to Market
Cleantech can sometimes be charactised by relatively long gestation periods from proof of principle to market traction. 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 may have ample time to reverse engineer your technology and usurp your first-mover advantage.
Need for Investment
The path to market for cleantech is very capital intensive and, for many businesses, angel and/or venture capital may be required. Investors need to see strong protection, typically through patents, to establish credibility and confidence. Patents play various roles for cleantech businesses including:
- 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; and
- 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. Recent years have seen a global 'green rush' around marks containing elements such as 'green', 'eco', 'earth' and 'enviro'. The modern knowledgeable consumer demands substance to the use of such marks – if you call yourself ‘green’ you need to be able to support that claim.
With the ubiquity of such marks there is a good argument that a new cleantech business would be better off adopting a different branding strategy to stand out from the crowd. The brand name and logo is often the first contact anyone has with a business so the impression it creates is important.
Cleantech in New Zealand
New Zealand has a worldwide reputation for having a clean, green environment but we need to constantly strive to maintain that reputation, which has been brought into question on several occasions in recent times. Leading the world in clean technology is a sure-fire way to keep New Zealand at the forefront of environmental excellence. Through the astute management of IP, businesses can lead the way.
This article was co-written by Jonathan Lucas, Senior Associate and Simon Rowell, Partner, James & Wells Intellectual Property. Their IP expertise covers a wide range of technology sectors including the growing cleantech industry.
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