Green Patent Blog

LynxStreet.com is a new  web site that serves as an online intellectual property (IP) exchange for environmentally-friendly technology.  The site provides a “virtual trading floor” that links inventors with investors, venture capitalists, governments and others who can provide the resources to commercialize and implement green ideas and technology.  (see the LynxStreet page on Squidoo)

The site is divided into three trading floors:  patents, patents pending and “conceptual,” where inventors can offer their ideas for sale or license.  A prospective buyer can browse such categories as air quality, greenhouse gas reduction, radioactive contamination and waste reduction & recycling.  The site even has want ads so people searching for specific green IP can post their particular needs. 

A one-year membership costs about $50 for either a patent buyer or a patent seller.  LynxStreet charges a $1,090 flate fee for a successful licensing agreement and takes a commission on any successful sale starting at 10% for a sale of up to $1,000 and diminishing as the sale value increases.

LynxStreet’s success may depend on the network effect, i.e., the site will be useful to people only if enough other people use it.  Assuming it does take off, with LynxStreet and the launch of the Eco-Patent Commons (Commons) earlier this year, patent owners now have the tools to either sell their clean technology or donate it while those seeking green ideas can either browse the free green IP through the Commons or search the pay-to-play listings on LynxStreet.  It will be interesting to see which model proves better at implementing clean technology.

A study by the Heslin Rothenberg law firm shows that the number of clean energy patents granted by the U.S. Patent & Trademark Office (PTO) decreased in the first quarter of 2008.  The newest installment of the firm’s Clean Energy Patent Growth Index (CEPGI), published quarterly, found that 220 clean energy patents were granted in the first quarter of this year, compared to 228 in the first quarter of last year and 227 in the fourth quarter of 2007.  (see the Greentech Media article)

Among the report’s findings are that patents for wind power, tidal/wave power and geothermal energy went up relative to the last quarter, while fuel cell patents, hybrid/electric vehicle patents, biomass/biofuel patents and solar power patents were down.  However, fuel cell technology remained by far the most represented, with 124 patents, or 56% of the clean energy patents granted in the first quarter.  Wind power patents were second with 35 patents granted, with 23 solar patents and 19 hybrid/electric vehicle patents.

The leading clean energy patentee in the first quarter of 2008 was Honda, with 16 patents, followed by General Electric and General Motors, each with 11.  The top ten list includes other automotive companies Nissan, Toyota and Hyundai.

As the Greentech Media piece points out, the CEPGI data may indicate the hot areas of research and development in clean energy but doesn’t necessarily measure innovation or commercial success.  For instance, the article notes that, despite the relative dominance of fuel cell patents, fuel cells are not a particularly lucrative market. 

Another question CEPGI doesn’t answer is why there was a first quarter dip in granted clean energy patents.  Is it due to fewer applications being filed or fewer applications being granted?  Is the PTO become tougher on clean energy patent applications or perhaps tougher in general?  One way to investigate this would be to search the PTO’s published applications database in addition to searching issued patents.  A quarterly tally of the clean energy applications would shed some light on clean energy patent filings and might provide a fuller picture of what is happening in clean energy innovation.

Last month the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy announced millions of dollars of available funding for clean energy development, including grants for biomass to biofuel research, biomass pyrolysis research, hydrogen storage technology and concentrating solar power research.

An important question when the government provides funding for private development is who owns the intellectual property fruits of such research.  If an invention is conceived or built as part of federally funded research or development the government probably will have some rights in the patentable technology.  The rights enjoyed by the government can range from a non-exclusive license to the innovation to full ownership of the patent rights and depends on the amount of government funding involved and which agency provides the funding.

These issues are governed by the Bayh-Dole Act of 1980, titled “Patent Rights in Inventions Made with Federal Assistance” and the Federal Acquisition Regulation (FAR).  The Bayh-Dole Act and the FAR permit a private contractor to retain title to patented or patentable subject matter developed using federal funding so long as the entity, within a specified time period, discloses to the federal agency the existence of the subject invention and makes a written election to retain title.  The private entity must also diligently file a patent application on the subject invention.  Failure to take any of these steps gives the government the opportunity to obtain title in the subject invention.

FAR also contains three patent clauses that provide the basic building blocks for delineating patent rights in government contracts.  FAR 52.227-11 is a short form clause generally applicable to small businesses and non-profits that provides for retention of title by the contractor.  FAR 52.227-12 is a long form clause, generally used by the Department of Defense, that provides for retention of title by the contractor.  FAR 52.227-13 is typically used by the Department of Energy and NASA and provides for acquisition of title by the government.  The determination of which clause applies depends on both the agency involved and the size and nature of the private entity, including whether it is a large business, small business or non-profit organization.  An entity entering into a funding agreement with the federal government should pay close attention to which patent clause is included in the contract.

Even if the contractor complies with the disclosure, election and patent filing requirements to retain title, under any of the patent clauses, the government nevertheless acquires a non-exclusive license to practice the subject invention or have others practice it on behalf of the U.S.  That means not only the government, but private entities, even direct competitors of the patent owner, may be able to practice the subject invention.  So although federal funding can be important for development of clean technologies, companies looking for federal dollars should weigh the high price of taking advantage of it.

IP consultant Nancy Edwards Cronin has an interesting suggestion for the Eco-Patent Commons (see my previous post on this new initiative to share patents having environmental benefits).  In her Strategic Thinking column on Greenbiz.com (which the editors at Blawg Review brought to my attention through this post on Securing Innovation), she recommends expanding the Commons beyond donated patents to include “enabled invention disclosures,” written descriptions of inventions having the same level of detail as patents, inventions which companies wish to practice but do not want to patent because of the expense of the procurement process.  In her article, Cronin explains enabled invention disclosures this way:

Many companies successfully use enabled invention disclosures as part of their intellectual property (IP) strategies. Companies frequently have inventions that they do not wish to patent because the patent process is so expensive, including invention development costs, legal preparation and patent prosecution fees. However, companies also wish to prevent competitors from patenting those same inventions.

By using enabled invention disclosures to publish the invention, companies accomplish both goals: they save the cost of patenting but they also establish a “prior art bar” to obtaining the patent and make it impossible for competitors to claim it the invention as their own. Several Web site forums exist for publishing inventions, including www.ip.com and www.researchdisclosure.com.

Adding these disclosures to the mix, she says, would address what she sees as a critical shortcoming of the Commons, i.e., patented technology is no longer ”cutting edge” by the time a patent issues because of the lengthy application process in the U.S. Patent & Trademark Office (PTO).  Of course, this observation has ramifications for all patents, not just those in the Commons repository, and she has a point that much patented technology becomes less relevant over time.  But I’m not sure I buy the premise that issued patents become substantially de-valued during the admittedly long journey through the PTO.  Patents often retain their value throughout the patent term and beyond.  Indeed, many patents are successfully enforced against infringers at the tail end of the patent term. 

Whether or not you agree with her argument about issued patents, her idea of adding invention disclosures to the Commons would almost certainly benefit the initiative and its participants by increasing the value and utility of the available green technology.  Of course, no independent or targeted donations to the Commons would be necessary because enabled invention disclosures are by definition in the public domain and available to everyone.  Instead, to make the technology available to greentech firms, it would just need to be made accessible via the Commons.  Broadly, Cronin’s idea could be implemented in one of three ways.  Either companies who publish environmentally-beneficial technology in these disclosures could provide the publication information or citations to the Commons, the Commons itself could monitor the disclosure publications, or the publications could alert the Commons of relevant published disclosures.  However it’s done, I can’t argue with increasing green idea and technology sharing.

Last month IBM, Sony, Pitney Bowes and Nokia started the Eco-Patent Commons, a new initiative to share patented technology that protects the environment.  Each company has donated at least one patent to the Commons, which is administered by the World Business Council for Sustainable Development (WBCSD), a Geneva-based organization that promotes sustainability in business.  Companies choose which of their patents to contribute, and the Commons selects for inclusion those patents that provide a direct or indirect environmental benefit.  To be selected, the patents must also relate to a technology field on the Eco-Patent Commons Classification List, which the WBCSD has selected from the International Patent Classifications.  As of now, the Commons has 31 patents, the vast majority of which were donated by IBM. 

The patents are identified on a searchable web site hosted by the WBCSD, and the technology is available to anyone, including both members (those companies that have contributed patents) and non-members.  The idea is to allow easy access to environmentally-friendly innovation so that anyone well positioned to implement the technology can do so.   One major advantage of the Commons is the cross-industry nature of the patent pool.  While cross-licenses within industries are common, they are harder to come by between different industries, and the diversity of the pool facilitates cross-industry use of the technology.

Members (known as “pledgers”) sign a nonassert pledge promising not to enforce the donated patents against those who use the patented technology to achieve an environmentally beneficial result (known as “implementers”).  However, the donated patents technically are not in the public domain because the Commons allows pledgers to retain a defensive termination option.  That is, the pledger may terminate its promise not to sue as to implementers who assert their own patents against the pledger. 

At this point the Commons rules get a bit complicated:  the power of termination varies depending on whether or not the implementer asserting its patent against the pledger is another pledger.  A pledger may terminate its nonassert against another pledger enforcing an unpledged patent only if the unpledged patent has a classification on the Commons Classification List and the accused products provide an environmental benefit.  That is, one pledger may sue another pledger for infringement of a patent outside the field of the Commons without losing its rights within the Commons field.   A pledger may terminate its nonassert against a non-pledger who asserts any patent against the pledger.  

There are more posts to come on the Eco-Patent Commons.  Subsequent posts will discuss some of the patents available through the Commons.