Green Patent Blog®

Earlier this month I attended the CleanTech 2008 Summit and Exhibition in Israel.  The trade show focused on renewable energy, conservation technology, and, not surprisingly given the country’s climate and neighborhood, water technologies.

One company that stood out was Hydropath Holdings Ltd. (Hydropath), a British water treatment firm who was exhibiting its technology through its Israeli marketer, Waterpath (itself a division of Pazgas, an Israeli gas company).  Hydropath’s technology cleans limescale in commercial, industrial and residential water systems without the use of chemicals by a device that attaches to pipes and generates electric fields in the water flow.  According to Hydropath’s web site, 1 mm of limescale deposition can reduce the efficiency of a residential boiler by 10%.

Limescale deposits occur when positively and negatively charged ions such as calcium carbonate and bicarbonate exceed a maximum concentration and crystalize out of solution onto pipe surfaces.  Crystallization can be either homogeneous (the initial “seed” crystals are formed by oppositely charged ions of the dissolved substance) or heterogeneous (the initial seed crystals are formed by ions on an alien substance such as a pipe surface).  This latter type of crystallization leads to scale deposition on pipes.  Homogeneuously-formed crystals, on the other hand, are carried through the pipe without impeding water flow.

Hydropath owns several patents and applications in the U.S. and abroad, including U.S. Patent No. 5,667,677 (677 patent) and two applications, International Pub. Nos. WO 2007/045824 (’824 application) and WO 2008/017849 (’849 application).  As described in the ‘849 application, the electric field produced by Hydropath’s device orients the molecules so all of the positively charged ions are aligned and traveling in one direction, and all the negatively charged ions are aligned and traveling in the opposite direction.  This increases the odds of collision between particles of opposite charge, and leads to increased growth of the benign homogeneous crystal clusters.  It also decreases the saturation level of the solution, so existing limescale deposits can re-enter solution and flow out.

The ‘824 application discloses using the electric field to provide a more energy efficient desalination process.  The electric current causes water to re-orient into a thin layer of molecules with positive poles on one side and the negative poles on the other side.  This “hydration” layer excludes other molecules and contains substantially pure water, which can be extracted using less energy than other desalination methods.

Hydropath’s patented technology has many applications, including boilers, heat exchangers, swimming pools and fuel pipes, and according to the company’s web site, can be used to combat bacteria, algae and other substances in addition to limescale.

The Biodegradable Products Institute (BPI) is a New York-based organization that promotes the use and recycling of biodegradable polymeric materials.  BPI has a labeling program to certify plastic products that will safely and completely biodegrade and compost in accordance with the group’s standards.  Companies apply to BPI to have their products reviewed and, if they pass muster, they can affix BPI’s label to them.

In 2003, BPI got a federal registration (reg-no-2783960.pdf) for its COMPOSTABLE certification mark (pictured above).  Certification marks differ from ordinary trademarks in that they certify that goods or services meet certain quality or manufacturing standards instead of indicating the commercial source of a product.  Certification marks are owned by the organizations that set the standards and used by companies that meet the standards and earn the certifications. 

Earlier this month BPI sued several individuals operating EcoVision Alternatives (EcoVision), a Burlingame, California company that makes biodegradable bags and food containers, in federal court in Los Angeles for federal and state trademark infringement, counterfeiting and unfair competition.  The complaint alleges that EcoVision infringed BPI’s certification mark by selling bags and containers that display the COMPOSTABLE mark and by stating on its web site that its products are “BPI certified” when EcoVision never applied to BPI’s labeling program and the products were not certified.

According to the complaint (biodegradablecomplaint.pdf), this is not the first instance of infringement by the EcoVision crowd.  The complaint states that EcoVision wrongfully used BPI’s certification mark earlier this year when the company was operating under the name Biosphere Alternatives (Biosphere).  At the time, BPI contacted Biosphere to ask them to stop using the mark and subsequently sent a cease and desist letter.  BPI alleges that EcoVision is acting now with full knowledge of its wrongdoing and malicious intent and therefore accuses the company of willful infringement.

The counterfeiting claim is a bit unusual for a certification mark infringement suit; counterfeiting is more typical where the infringing goods are high end consumer products like Rolex watches or Gucci handbags.  But the motivation for the claim is clear - in the case of willful use of a counterfeit mark, the federal trademark statute provides for a minimum damages award of $1 million.

A recently-published patent application filed by Apple Computer (Apple) is making a splash and fueling speculation that the computer and electronics giant will soon be launching solar-powered mobile devices, including a sunny version of the super-trendy iPhone. 

U.S. Patent Application Pub. No. 2008/0094025 (’025 application) published in late April and is entitled “Solar Cells on Portable Devices.”  The ‘025 application is directed to processing systems coupled with solar cells and methods for connecting solar cells to portable devices. 

The basic idea of connecting solar cells to portable devices is probably obvious in both the colloquial and patent law sense (non-obviousness is one of the main criteria for patentability, and a combination of known elements must be non-obvious to be patentable).  With the ‘025 application, Apple seems to be betting that its solution for maintaining a consistent voltage and sufficient power output with a small number of solar cells, even when some of the cells are obstructed (e.g., because of a user holding the device), is worthy of patent protection.

The ‘025 application describes a way to arrange solar cells so that some cells will continue to function while others are blocked from sunlight.  The system involves networks of cells connected both in series (end to end so the current flows in a single path) and in parallel (the current flows through each component, providing the same voltage across all components).

In one example disclosed by the ‘025 application, two individual solar cells of a first type (”A1″ and “A2″) are connected in parallel, and two individual solar cells of a second type (”B1″ and “B2″) are connected in parallel.  These two pairs of cells are then connected to each other in series (i.e., A1/A2 is connected to B1/B2).  The pairs are arranged in an alternating checkerboard pattern so A1 is diagonally opposite A2 and B1 is diagonally opposite B2.  According to the patent application, this arrangement provides more consistent power output in the event of obstruction of sunlight.

No word yet on whether Apple will be launching its solar electronics, when it will do so, or which products will be getting the solar treatment.  But this is a patent application everyone will be watching.

British Columbia based Xantrex Technology (Xantrex) makes advanced power electronic products that convert electrical power into other forms of energy.  One of Xantrex’s major markets is renewable energy, and the company is a world leader in production of solar inverters (pictured below).  Solar inverters convert DC power captured by solar panels into AC electrical energy.  The energy is then provided directly to customers or to a utility or electrical grid.

In November 2007, Xantrex sued Advanced Energy Industries (AE) and Christopher S. Thompson in federal court in Colorado, alleging, among other things, breach of Thompson’s employment agreement (against Thompson), misappropriation of trade secrets under Colorado law (against Thompson), breach of fiduciary duty and aiding and abetting such breach (against Thompson and AE, respectively), tortious interference with contract (against AE) and violation of the federal Computer Fraud & Abuse Act (against Thompson and AE). 

Last month Judge Wiley Y. Daniel denied the defendants’ motion to dismiss (based on a forum selection clause in Thompson’s employment agreement) and granted Xantrex’s motion for a preliminary injunction (PI), ordering that Thompson could not work for AE as Vice President and General Manager of Solar Inverters (or work on solar inverter technology for any other North American competitor of Xantrex) for a period of one year (xantrexorder.pdf).  Thompson and AE were also ordered not to use or disclose any Xantrex trade secrets.

Xantrex’s complaint (xantrex.pdf) alleged that Thompson breached his employment agreement by leaving Xantrex and immediately starting employment with AE (the non-compete provision prohibited Thompson from working for any competitor within one year of leaving Xantrex).  Thompson worked on solar inverter technology at Xantrex, and AE entered the solar inverter market shortly before Thompson joined AE. 

While at Xantrex, Thompson was Vice President of Engineering and Product Development and had access to the company’s confidential information.  According to the complaint, Thompson had played a leading role in acquiring and integrating certain cutting edge solar inverter technology into Xantrex’s products. 

The complaint also alleged assorted shenanigans by Thompson shortly before he left Xantrex, including downloading and transferring confidential Xantrex documents from his laptop, attempting to delete files to cover his tracks, and using Xantrex’s confidential market data to create market plans for AE.

Judge Daniel found the PI factors (likelihood of success on the merits, irreparable harm to Xantrex, threatened injury to Xantrex greater than harm of a PI to AE, and effect of PI on public interest) weighed in favor of granting the PI.  The irreparable harm is that AE would get a head start into the solar inverter market based on Xantrex work, money and trade secrets if Thompson were permitted to take a position at AE nearly identical to the one he had at Xantrex.

As to success on the merits of the trade secrets claim, Judge Daniel found enough evidence that the confidential information accessed by Thompson prior to leaving Xantrex rises to the level of trade secrets (e.g., solar inverter product development information and data on the benefits of various product features).  The court also found that Thompson’s rapid accessing of trade secret documents just before leaving Xantrex was of particular concern because his ready recollection of possible trade secrets would make their use by AE possible without him actually telling anyone.  In other words, Thompson’s mere knowledge of the information would make misappropriation likely.

The court also found Xantrex would be likely to succeed on the breach of contract claim.  Interestingly, Judge Daniel analyzed the non-compete provision under Canadian law, which strongly disfavors such restrictive covenants.  The court therefore took a “blue pencil” approach and modified the clause so the geographic restriction, which was global in scope, only covered North America.  With this modification, Judge Daniel found the breach of contract claim likely to succeed under British Columbia law. 

Recently, four more electronics companies - Sony, Sanyo, Exceed Perseverance and Lucky Light - took licenses from retired Columbia prof and LED innovator Gertrude Neumark Rothschild.  These four were recently targeted by Rothshild in the U.S. International Trade Commission (ITC) in a complaint that named over 25 respondents.

These licensees join Epistar, Toyoda Gosei, Osram and Philips Lumileds, so now eight different companies have taken a license under Rothschild’s U.S. Patent Nos. 4,904,618 and 5,252,499.  The patents relate to methods of doping semiconductors, which means adding impurities to increase the number of free charge carriers.  Rothschild’s patented process made high spectral range LEDs, such as blue and green, commercially feasible. 

Rothschild is quickly becoming the Ronald Katz of LEDs and perhaps the first such phenomenon in clean technology.  Katz was an innovator in the field of automated telephone call center technology and is the named inventor on over 50 patents (full disclosure: I worked on litigation on behalf of Katz for about six months while I was an associate at a previous law firm).  

Katz is now in the business of collecting licensing fees from various companies through both negotiation and litigation.  He has been staggeringly successful in this regard:  more than 200 companies have licensed his technology, and he has made hundreds of millions of dollars.

There are some notable parallels between Katz and Rothschild, including that they are both true innovators of important technology, they are both named inventors on the patents they assert (which some people believe insulates them from the patent troll label) and they are now in the business of collecting license fees instead of practicing their technology. 

Perhaps the most important similarity is that their technology is ubiquitous across many different industries, so there are loads of potential infringement targets.  Companies from many industries including credit cards, pharmacies and utilities use automated telephone calling technology for sales and customer service.  Similarly, LEDs are used by the billions in a wide array of applications from instrument panels to traffic lights to cell phones as an energy-efficient substitute for incandescent bulbs.  It is probably for this reason that Rothschild has initially been so successful following in Katz’s footsteps, and she is likely to end up as filthy rich.