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Maybe it’s the threat of global warming or the burden of higher gasoline prices, but to an increasing number of people these days, the development of clean technologies seems like a very good idea. Recognizing that where there’s technology there will be patents, one intellectual property law firm based in Washington, D.C., has launched a practice group focused on the clean-tech industry. Legal Times recently talked to David Cornwell, head of the practice group at Sterne, Kessler, Goldstein & Fox, about this green new world.
Q. What is “clean technology”? A. There are many different definitions of “clean technology.” And how one defines it affects the size of the industry. I prefer to define clean technology as any technology which helps to lighten or diminish the footprint that mankind places on the environment. The most obvious clean technologies reduce our dependence on fossil fuels. Potential clean-energy sources today are many of the same sources that man has known about for thousands of years. The sun provides energy for solar power, the wind provides energy for wind farms, the earth itself provides heat for geothermal energy, and hydrogen is the most plentiful element in the universe. Other clean-energy sources include fuel cells, biomass (grass gas), and photovoltaics. In addition to alternative energy, clean technology covers such things as natural pesticides. For example, by mimicking their scents, the normal mating habits of insects can be disrupted. This allows insect populations to be controlled without the use of harmful pesticides. Genetic engineering of plants is another clean-tech way to limit insect damage. Clean technology also includes manufacturing techniques that better recover scrap materials and that use chemicals which are friendly to the environment. Even many consumer-products companies are looking to manufacture with cleaner techniques.
Q. How big is the clean-technology industry? A. Anyone who tells you that they know the size of this industry is not being truthful. The innovations of clean technology are being developed at universities, by small startup companies, in the federal laboratories, and by large companies. Each of these groups are making contributions, and some have already commercialized products. For example, the hybrid automobile has been commercialized by Honda and Toyota. Although it is not a perfect solution to dependence on fossil fuels, it can certainly be described as clean technology. One way to look at the size of the clean-tech industry is to look at the number of venture capital dollars that have been invested. According to the CleanTech Venture Network, $512 million has been invested in the first quarter of 2006. This is about 8.5 percent of all venture money invested in the United States. Note this about venture money going into clean technology: For the most part, investors are interested in “green” as it pertains to the color of money, but are not as interested in “green” as it relates to the environment. Although there are certainly investors who invest only in socially responsible technologies, most investors want to make money. The influx of venture dollars into clean technology tells me that the investment community believes some of the new clean technologies will be profitable.
Q. Why is there this interest in clean technologies today? A. There are some obvious reasons. Oil is at $74 per barrel, and global warming is on the front page of every newspaper; therefore, clean technologies have become more economically interesting. Of course, the idea of clean tech is not entirely new. In 1982 I was a graduate research assistant at Los Alamos National Laboratory working on the Hot Dry Rock geothermal project. The idea of the HDR project was to drill a hole a mile or so into the earth. The rock near the bottom of the well was then fractured to create a hot but dry “reservoir.” A second hole was drilled to intersect with the fractured rock. Cold fluid was pumped down one well, allowed to heat up, and then pumped out of the reservoir. After the energy was extracted from the fluid, the fluid was sent back down into the reservoir to capture more of the earth’s heat. At the time, I asked my supervisor why this technology was not being used commercially. After reminding me of some of the technical hurdles — like how to control the never-ending growth of the reservoir as cold water hit very hot granite a mile under ground — he told me that HDR could not compete with other forms of cheap energy for at least another 20 years. I had an almost identical experience at the Los Alamos patent department a few years later. In that job I got the opportunity to work on projects ranging from solar energy to fuel cells to “acoustical engines.” Yes, there are engines that convert sound to energy. This invention seemed to have endless promise — for example, you could keep beer cold at a loud sporting event. As with HDR, I inquired about commercial feasibility. But it seemed then that every good energy invention was at least 20 years from commercial viability. Recently, I woke up and realized that over 20 years had passed. In addition, the scientific community has reached a consensus that global warming is real and that man contributes to it. The Supreme Court has just agreed to hear a case in which the plaintiff argues that the Environmental Protection Agency is obligated to limit carbon dioxide emissions from vehicles under the Clean Air Act. The plaintiff reasons that carbon dioxide is a pollutant because it is the primary greenhouse gas causing a warming of the earth. Clearly, the environment is on people’s minds.
Q. It seems that Americans individually are more interested in clean tech these days. Is that playing a role? A. Interestingly, another phenomena has arisen over the past five years. Call it the hybrid-vehicle phenomenon. The business community is waking up to the fact that there is a segment of our society willing to pay for environmentally friendly products. Even though hybrid vehicles are expensive — given the level of power, luxury, styling — they are selling well. Part of this success is due to government incentives, but it is my opinion that a larger part is due to the conscience of the American people. Even traditionally “dirty” industries have recognized that Americans are paying attention to the environment.
Q. You pointed to sophisticated clean technologies being developed in the 1980s. Clean tech is not a new field, I take it? A. Clean tech as a general field is not new. However, today’s clean technologies fuse biotech, nanotech, nanoelectronics, and a whole lot of other technologies that have not been available for very long. In 1899 then-Patent Commissioner Charles H. Duell reportedly declared, “Everything that can be invented has been invented.” Mr. Duell was wrong then, and he would be wrong today. Consider just one term, “solar energy.” About 2,100 patents over the past 20 years have used the term “solar panel.” That use has increased from about 50 per year in the late 1980s to about 200 in the past year.
Q. Has the more recent rise in clean-tech investment led to a more recent rise in patent applications? A. There is always a little lag between investment and patents. The first quarter of 2006 was a good one for clean-tech investment. I would expect those dollars to turn into patentable technology as companies protect their investments. The last few years have certainly been good ones for innovation in fuel cells, biomass, wind power, and solar power. I expect patent applications for these innovations to continue to increase.
Q. Patents are made to be exploited. What do you suggest companies do? A. The clean-tech patent landscape is already cluttered. Expired patents can be a rich resource for ideas. Many technologies developed during the 1970s and 1980s are still useful today. Unexpired patents can be a rich resource for licensing opportunities. Companies must also exercise due diligence with existing patents. Too often, an honest, innovative company introduces a new product with a particular infringing feature which is simply not a necessary part of the product. Perhaps a solar panel has a coating with a particular polymer. The coating makes the product infringe; however, a different, noninfringing coating could have been substituted if the company had only known about the patent. Instead it has produced a lot of coated solar panels, which may be impossible to “uncoat.” The company is left with unsalable inventory because it failed to examine the patent landscape. Of course, innovative companies should be patenting their own ideas. A company that fails to protect its inventions might as well send money to its competitors. Patents, therefore, should be sought for any new clean technology that is core to the company’s product. But companies should also seek patents on revolutionary ideas. Not all inventions can be quickly commercialized by their inventors. But later the company will be in a position to collect royalties from someone else who can make a salable product. And companies should not neglect patents for more evolutionary ideas. An evolutionary idea can be the innovation that makes a product salable. Equally important, evolutionary patents are often used as cross-licensing fodder. They give a company the currency it needs to negotiate with its competitors.
Q. Are there patent opportunities in clean tech overseas? A. Besides applying for their own foreign patents where appropriate, companies can take a look at foreign patents for exploitable technology. Oftentimes a foreign inventor will fail to file a patent application in the United States. Likewise, just because a patent application was filed in the U.S. does not mean that an application was filed abroad. There are huge markets for energy and environmental inventions around the world.
Q. Are there any particular advantages to pursuing clean tech in the Patent Office? A. Long ago the U.S. Patent and Trademark Office recognized the importance of inventions that help the environment or ease our energy problems. Patent Office guidelines say that patent applications relating to clean technology will be examined ahead of other applications. All the applicant has to do to benefit from this special treatment is file a simple petition.

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