Organisations that protect the environment should also protect themselves – Power and Energy Solutions Europe
Jackie Maguire, CEO, Coller IP Management, outlines the importance of intellectual property to sustainable organizations within Europe – and beyond.
Balancing the needs of the environment against those of economics and business has become enormously important in these times of financial austerity and rapidly advancing climate change. Often the goals of improving the environment and succeeding in business seem to be in conflict and this can be thrown into sharper relief in a downturn.
Organisations involved in developing clean technologies know that they need to protect the ecosystem but they also need to make a profit from their inventions and know-how, in order to continue trading. Ensuring that their intellectual property is properly evaluated, protected and commercialised should be a key part of the business strategy.
Not surprisingly, cleantech is becoming a major area of focus for intellectual property. However, there is still a great deal of unprotected know-how in this market. Companies often develop interesting cleantech applications for environmental aims, but do not always protect them with patents, designs or trademarks. This means organizations may not have the protected intellectual assets to act as collateral for the funding they require and are risking their futures by having inadequate legal protection for their technology. Of course, protecting ideas is just as important as protecting products.
When intellectual property is mentioned, people usually think of filing patents, and registering trade marks and designs. But it is not just about patents and other formal IP such as trade marks, designs and copyright. A company’s value is contained in its wider intellectual capital, where know-how, branding, skills, policies and processes all have a role.
Many companies have talented individuals or teams who come up with wonderful inventions. Finding a practical use for these ideas, marketing them and then fully exploiting their potential, however, can require quite different skills, which may not always be found in the same individual, team or even company that came up with the original idea.
Many organisations are not clear on how to value their intellectual capital, to protect their ideas and inventions against theft by competitors, or to make themselves attractive to potential investors or to organisations who might be interested in eventually buying them.
In many businesses there is plenty to worry about to ensure that the day-to-day activities are taken care of, particularly with start-ups – without being concerned that someone might steal your intellectual assets. It is perhaps not surprising, then, that many companies still function without taking even basic measures to protect themselves – and this applies even to some quite large organisations.
However, the good news is that IP is now starting to be taken more seriously in the cleantech sector. The latest returns show that the rate of grant of clean energy patents has risen by 35% in the past few years and that $8.8 billion has now been invested in cleantech companies in Europe, Israel and North America. This trend looks set to continue.
Results from the Clean Energy Patent Growth Index (CEPGI) for the first quarter of 2009 reveal the CEPGI to have a value of 243 granted U.S. patents which, although down eighteen from the fourth quarter of 2008, is up from a value of 220 in the first quarter of 2008. Fuel cells dominated the other components in absolute numbers. As the Clean Energy Patent Growth Index also states, recent litigation in this sector indicates that the technology is becoming sufficiently financially viable to justify patent enforcement.
The European Patent Office, with the European Commission and the Slovenian EU Presidency, made patents and ecotechnology the focus of a European Patent Forum. The EPF was the first major conference to tackle the question of how the patent system needs to be adapted to foster innovation in the climate change sector. Participants included leading experts with contrasting views on the current patent system and the changes needed to face up to one of today’s most interesting and controversial challenges.
At the core of the debate were the questions of cost and access to new technologies. The former is a huge concern for countries in the developing world whose ability to contribute to combating global warming is clearly limited by the cost and availability of green technologies. Key questions include whether patent protection significantly adds to these costs, and is access to green technologies too severely limited by companies holding patents on these technologies? EPO President Alison Brimelow commented that, “eco-innovation may prove the next battleground for the reputation of patents.”
We can all agree, however, that the patent system must not become an obstacle to the development of green technologies in Europe. Initiatives such as Eco-Patent Commons, managed by the World Business Council for Sustainable Development, have already been launched to boost the spread of clean technologies. Companies participating in this project are making available patents on clean technologies free of charge. A slightly different approach was suggested for the “Green Intellectual Property Project,” which would pay a proportion of patent-derived income into a trust fund for supporting the development of patent-protected green technologies.
Cleantech is becoming very interesting to intellectual property practitioners and investors alike and has now entered the VC mainstream. An example of this is Oxford Capital Partners, a specialist investment manager with extensive experience of investing in and supporting technology businesses with high growth potential, on behalf of institutional and private investors. Oxford Capital looks for the best opportunities, backing exceptional entrepreneurs and investing across all stages of development, from start-up to IPO. Oxford Capital’s focus is on emerging technologies in the areas of sustainability, healthcare and communications, and its expertise lies in accelerating businesses with potential for high growth in global markets. As part of its due diligence process Oxford Capital commissioned CIPM to undertake an IP audit of a clean biotech
business seeking funds for its proposed business expansion plans. Our work confirmed that there is an increasing level of activity in the area, encompassing small start-ups through to large multinational corporations. However, the IP being developed in this case occupied its own ‘IP space’ and was sufficiently novel (i.e. the potential for generation of differentiated IP) to have the prospect of producing patentable inventions that would protect and support the commercial goals of the company. We believe that such businesses are the focus for the future of cleantech.
Another example of how cleantech organisations are taking intellectual assets seriously is the work done by the Intellectual Assets Centre (IA Centre) in Scotland. CIPM has been working recently with the IA Centre on Project VIA – Valuing Intellectual Assets in Renewables Companies. The project is open to any business or organization based in the Highlands and Islands and working in the Renewable Energy Sector. CIPM is one of a panel of industry experts who deliver the programme through a series of workshops and masterclasses.
The aim is to help Highlands and Islands renewable energy companies recognize intellectual assets and the role these assets can play in supporting business development and innovation. It offers participants an opportunity to focus on critical business areas, including product development, creation of new revenue streams, marketing strategies and licensing.
Whatever a company’s size and whatever stage it is at – start up or established – it is vital to understand the value of your intellectual capital and have a plan to protect it, to have a clear route to market and understand the competition. This is important at any time, but particularly so in a downturn. The best performers share the characteristics of focus to maximize competitive advantage, have their IC aligned with this competitive focus have an IP vigilance process in place coupled with agility, a robust route to market, a map of the key players in their sector and an understanding of the risks, as well as a plan to manage weaknesses and fill gaps. IC can take years to build – and a second to lose. www.pes.eu.com