Patents are on the rise and protecting your innovation has never been more important. Figures published on solar photovoltaic, solar thermal, wind energy and biofuel technologies – collectively known as Climate Change Mitigation Technologies (“CCMTs”) – show that the number of patents filed between 2006-2011 is greater than the total numbers filed in the 30 years preceding this. This represents a huge 24% growth in applications which is far above the overall trend towards patenting which saw a 6% global increase across all industries in the same period. More recent figures are yet to be published but the feeling in the market it this trend will continue. So why Patent technology?
What are patents?
Patents are a form of legal ownership that give you a right to stop others from reproducing, exporting, selling or using your inventions. They are territorial rights which means you are only protected in the countries you file in or designate and the requirements vary from territory to territory, however the general rule is that a patent can protect anything from a product to a process so long as it satisfies four requirements. It must be new; inventive; capable of industrial protection; and not fall within a list of specified exclusions. This list of exclusions varies from territory to territory but includes ways of conducting business, computer programs, medical treatments and anything against public policy to name but a few.
Perhaps one of the biggest reasons for the growth in patents filed for CCMTs has been policies geared towards reducing the effects of climate change. This is a massive global issue that has sparked significant investment in the renewable energy sector worth $214bn in 2013 and even higher investment totals in the previous two years before this. CCMTs also have a longer product life-cycle than most other products and processes which acts as a bigger incentive to protect your investment in this area.
Patents are filed at national, European or international level by filing an application to the appropriate patent office. There are different ways to file patents and advice should be sought as to the most appropriate option for your business. On average it takes 2-5 years from the time of filing until grant. A detailed specification must accompany your application which describes exactly what you are protecting and how it works.
Patent filing information has given us valuable insight into innovation and investment and where new opportunities may lie. The figures tell us there has been increased innovation across all four of the CCMTs but the highest levels lie in solar thermal technologies which saw the greatest number of patent applications filed. Solar photovoltaic (“Solar PV”) and wind technologies have the highest rate of patent applications and a growing share of the patent market within CCMT. This perhaps makes them the most commercially innovative and an attractive opportunity for future investment.
The location of patent applications is a good indicator of where innovation is occurring and where technology is likely to be licensed, marketed and produced. China ranks highest for applications made in three out of the four CCMTs and it dominates solar thermal technology where it accounts for 55% of patents filed at the Office of First Filing. 25% of biofuel patents were also filed in China between 2006 and 2011 and it is Asian companies in China, Korea and Japan which take the top spots for technology ownership. In particular, all of the top 20 owners of Solar PV patents were Asian.
Analysis of patent ownership indicates the maturity of different CCMTs and which organisations have been active in developing technologies. It suggests that biofuel technology is the least mature industry with the lowest concentration of patent owners and many universities as assignees. In fact, 50% of the top twenty owners in this area were connected to universities and research institutes compared to 25% for the other CCMTs.
Wind technology on the other hand is perhaps the most advanced CCMT and does not contain any universities or research institutes in the top 20 technology owners. It also has more European owners in the top 20 than any of the other CCMTs. Solar thermal technology meanwhile saw 16 new entrants in the top 20 technology owners between 2006 and 2011. Half these new players being from China. This was possibly sighted as an attractive area for development and diversification for these owners.
What level of protection do you get?
Patents give you a monopoly over your invention and a legal right to stop anyone else from using, making, selling, importing or exporting your invention without your consent. This protection starts from the time the patent is granted and lasts up to 20 years depending on if you choose to renew it.
What are the advantages of filing a patent?
Patents are assets that create value. A patent-protected invention is more easily bought, sold, licensed and charged than an non-patent-protected invention. It can also increase the value of that asset significantly and generate higher incomes.
Patents limit risk and encourage innovation and investment. The renewable energy sector invests heavily in research and development and involves products with longer life cycles. Patents gives investors the confidence to invest and inventors the protection they need against unauthorised use of their work.
Patents create tax benefits. Earnings from a invention patented within the UK can now benefit from the Patent Box tax regime, many other territories have similar regimes.
What are the disadvantages of filing a patent?
Not everything can be patented. Apart from the exclusions already mentioned, there is a high threshold for what is considered a “new” invention and anything disclosed prior to filing an application cannot be patented. Your invention must also be a quantum leap above other inventions and not obvious to someone with skill, knowledge and experience in that field.
Patents can be challenged. Despite your best due diligence, someone, somewhere may have thought of the idea before you and this will leave you without protection and possibly in breach of someone else’s rights.
Patents force you to reveal your secrets. Your application is open to the public and will disclose confidential details about your invention and give your competitors all the information they are likely to need to replicate it after your patent expires. If you hope to exploit an invention for longer than 20 years it may be better to keep it a secret.
Patents are not cheap. In addition to the application fees, there are fees for the legal and technical advice you will need to complete your application, renewal fees, the costs of applying in several jurisdictions and potential enforcement costs to consider.
Patents are territorial. There is no such thing as a worldwide patent and you may have to file in several jurisdictions to get adequate protection that meets your needs.
So why patent?
Understanding what intellectual property you have and how it can be protected, be it in patents or other forms of ownership, is fundamental to business planning. Patents can be a great way of protecting your assets and adding value to your company but you must weigh up the advantages and disadvantages in order to decide if this is the right option for you. The information we receive from patent applications is also a great indication of what is happening in the marketplace today and where the opportunities of tomorrow may lie. The latest data we have on the renewable energy sector is clear and unequivocal, patents are fast on the rise.