Clean-energy Patent Suits on the Rise
- Apr 14, 2016 8:30 pm GMT
THE GROWTH OF clean-power generation has fueled a big increase in clean-energy patents -- as well as a rising number of patent violation lawsuits.
The number of clean-energy patents issued each year is still relatively small, but it has grown dramatically, especially of late.
The number of U.S. patents issued for clean-energy technologies last year was 3,609, according to the Clean Energy Patent Growth Index compiled by the Cleantech Group of Albany, part of New York-based Heslin Rothenberg Farley and Mesiti.
That figure is more than triple the 1,125 such patents issued in 2009.
While on the upswing, intellectual-property attorneys don't expect the types of patent wars that have long raged in the information-technology industry to break out among clean-energy patent holders.
"There will be patent litigation. (But) I don't know that there will be major battles like with the iPhone," said Eric Lane, whose San Diego practice is called Green Patent Law.
In part, that would appear to be the case because there are far fewer clean-energy patents (3,609 last year) than those for information-technology patents (about 55,000).
Still, patent litigation in the clean-power field is definitely on the rise.
For the record, Heslin Rothenberg defines clean-energy patents as those dealing with solar, wind, hydroelectric, tidal/wave and geothermal energy; hybrid electric and electric vehicles; fuel cells; biomass/ biofuels; and other clean, renewable energy.
That leaves out lithium-ion batteries, except for those related to hybrid electric and electric vehicles. "We haven't figured out a good way to track energy storage yet," said Victor Cardona, a partner with the law firm.
The start of the recent leap in clean-energy patent activity coincided with the American Recovery and Reinvestment Act of 2009, which included more than $90 billion in funding for "strategic clean-energy investments," according to Joseph Aldy, an assistant professor of public policy at Harvard University's John F. Kennedy School of Government, who published a paper on the act's clean-energy package in 2012.
The growth continued in part because of oil prices, which hit record highs in 2008, fell due to the recession, then rebounded to hit new highs in 2011. Also, many clean-energy technologies were starting to prove their usefulness, causing investors and others to take notice.
"Some of the uptick can be attributed to an increased pace of research and development being put into clean-energy power sources," said Constance Rhebergen, the head of technology and intellectual property for the Houston law firm of Bracewell & Giuliani.
That's certainly the case with solar power. As the technology has proved useful and cost-effective, patents for solar technology have moved atop the Clean Energy Patent Growth Index and stayed there. There were 1,238 solar patents issued last year, the most granted to any one clean-energy segment in the index's history. Fuel cells had the second-most patents, 880, and wind was third with 623.
Given all of that activity, it's no surprise to see clean-energy technologies as the subject of a growing number of patent disputes.
A design that reduces the cost of attaching solar panels to rooftops was the cause of one between Westinghouse Solar Inc. (now San Jose, California-based Andalay Solar Inc.) and the Zep Solar LLC subsidiary of San Mateo, California-based SolarCity Corp. The companies settled that case in 2012.
Lithium metal phosphate battery chemistry was at the heart of a patent dispute settled in 2011 that pitted Livonia, Michigan-based A123 Systems LLC against the University of Texas, which is located in Austin, and Montreal-based utility Hydro-Québec.
And in a move right out of the IT industry's patent wars, Petaluma, California-based Enphase Energy last year bought two patent portfolios from Kadoma, Japan-based Panasonic Corp.'s Sanyo Electric Co. Ltd., then sued SolarBridge, which has since been bought by San Jose-based SunPower Corp., for infringing on a patent from one of the portfolios, as well as other patents.
Despite the uptick in litigation, IP attorneys don't see full-fledged patent wars breaking out in the clean-energy space any time soon, and not just because the number of clean-energy patents is still relatively small.
Many clean-energy technologies are quite old and haven't been commercialized because the demand for them didn't exist until recently, explained David Suter, a principal at Troy, Michigan-based Harness Dickey.
As a result, he said, by the time they're ready to go to market, "some of the basic technology patents may have already expired."
Also, as Green Patent's Lane said, the cleanenergy industry doesn't have many "blocking patents," named so because they cover intellectual property that is necessary to make a product and therefore can't be worked around.
A blocking patent that did exist was one that Fairfield, Connecticut-based General Electric had on technology used in variable-speed wind turbines. The patent was the subject of multiple court battles, including one between GE and Tokyo-based Mitsubishi Heavy Industries Ltd. that was settled in 2013, but, as proof of Suter's point that much clean-energy technology isn't new, it expired in 2011.
Patent wars also seem unlikely to rage in clean energy the way they have in information technology because of the absence of what are known as patent trolls, at least active ones.
Patent trolls get their name because they do little other than hold patents and threaten legal action against companies marketing products or services that might infringe on their patents, in the hope that the companies will settle rather than fight them in court.
In the IT industry, many of the initial dot-com companies were able to garner lots of patents quickly but unable to make their businesses succeed. That left them with no assets except the patents, which patent trolls, as well as big, successful IT companies, could then scoop up, often quite cheaply.
That situation is unlikely to be replicated in clean energy, said Jay Rafter, a partner in the intellectual-property group of Stoel Rives, who works out of the firm's Portland, Oregon, office.
Not only are there far fewer clean-energy patents than IT patents, many clean-energy patents are held by giant companies unlikely to go out of business any time soon.
The top 12 assignees of clean-energy patents from 2002-2014 are giant multinationals, including eight car companies, according to the Clean Energy Growth Patent Index.
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