Morris Manning & Martin, LLP

IP Newsflash September 2009 : Patents on Green Technology: Get Them While They're Hot Patent Strategies for Greentech Compa


The current business climate is definitely pro-green. Significant funding continues to emerge from both public and private sources for the innovation, development, and sale of green technology. Also known as “green tech,” or “greentech,” and sometimes used synonymously with the terms “clean technology,” “clean tech,” or “cleantech,” green technology can generally be defined as the application of environmental science to conserve the natural environment and resources, and to curb the negative impacts of human involvement. Solar panels and solar cells, wind power generators and regulators, waste recycling and remediation, biofuels, fuel cells, and smart grids are all examples of popular green technologies.

Recent Incentives for Green Technology Development

The greentech industry is a major benefactor of the recent federal economic stimulus package. Signed into law on Feb. 17, 2009, the American Recovery and Reinvestment Act of 2009 includes at least three types of incentives for development of green technologies: direct grants, tax incentives, and loan guarantees. (See Pub. L. 111-5). $16.8 billion of the package is committed to direct spending for renewable energy and energy efficiency, and $4.5 billion is being directed to develop a smarter electric grid. In addition, another $4.5 billion has been earmarked for making the majority of federal buildings more energy-efficient. Through focused recognition of research and development tax credits, this federal initiative allows businesses to use the funding immediately for developing green technologies. With regard to loan guarantees, the recent federal stimulus package has contributed $8 billion in loans for renewable energy products.

Initiatives to encourage greentech research are currently managed by the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy. This office now offers various financial assistance opportunities to investors, businesses, industries, and universities for the development and demonstration of renewable energy. It has also developed collaborative efforts with some state agencies to promote green energy on a more local level. Certain states have even furthered green energy investment incentives by developing their own green initiatives. Investors should consider these developments to be encouraging news that governmental funding for green technology will likely continue to expand over the coming years, as leaders from both political parties have expressed a willingness to fund alternative energy resources and conservation efforts.

The green technology industry is also seeing renewed support from private funding sources. Venture capitalists such as Accel Partners and General Catalyst Partners are part of a new wave of tech-oriented investors focusing on companies involved in developing energy efficiency, energy storage, smart grid, and consumer-oriented green products, among many others. Greentech Media, Inc., an online resource for green technology-related news and market analyses, reported in 2009 that venture capitalist firms invested $836.1 million in 59 green technology deals.

Protecting Innovation in the Green Technology Space

Clearly, innovation is critical to developing the scientific breakthroughs required for further development of green technology and growth of the greentech industry. However, smart investors also realize that innovation requires tremendous amounts of time, energy, and money. A strong system for protecting intellectual property rights is therefore necessary for attracting the investment capital needed for the development and sustainment of commercialized green technologies. Many investors and entrepreneurs recognize that strong patent protection can provide the ability to establish new greentech companies, by restricting the activities of competitors having comparable technology. The U.S. patent system gives an inventor exclusive ownership rights in an invention for a limited period of time, which is 20 years from the date of filing of a “utility” patent application. An “invention” is any useful, novel, and non-obvious process, machine, manufacture, or composition of matter, or improvement thereof. (See 35 U.S.C. §§ 101-103).

The present patent landscape for green technologies is relatively open and available for claimstakers. However, there are signs that valuable patent space in this area may soon be gone and that competition, along with the financial stakes, may significantly increase. The number of U.S. patents granted in the cleantech innovations sector, for instance, has reached a new quarterly high, with fuel cell, wind, and solar patents particularly on the rise. (Greentech Media, Inc.). It is therefore important to recognize the need for pursuing both efficient and effective strategies for securing enforceable patents on green technology innovations.

It can take several years before a patent application first gets reviewed by a patent examiner in the United States Patent and Trademark Office (USPTO). On the other hand, opportunities to generate revenue in the commercial greentech market may have a limited lifespan, meaning that by the time an inventor obtains an enforceable U.S. patent by standard procedures, significant opportunities to enforce the exclusive rights against infringers and to reap commercial revenue through licensing of the patent may have passed. In order to prevent the loss of these valuable opportunities, and in order to take advantage of the current green-friendly financial climate, it would therefore be beneficial to reduce the pending time for a U.S. patent application, i.e. the amount of time between when a patent application is filed and when it issues.

U.S. and International Patent Strategies

Here are several ways to accomplish these objectives under the current patent system:

Skip the provisional and go straight to a non-provisional patent application. An inventor who wishes to file a patent application for a green technology (“applicant”) should consider skipping the stage of filing a provisional application on the invention. In the U.S., provisional patent applications provide a stake in the ground to secure a priority filing date on the invention disclosed, but only for up to one year. Unlike regular “non-provisional” patent applications, provisional applications are not examined by the USPTO and therefore have no inherent potential to be directly issued into an enforceable patent. Accordingly, a green tech inventor should consider preparing and filing only non-provisional patent applications and avoid the delay of a provisional filing. As a word of caution, however, applicants should also be wary of rushing to file an incomplete and/or premature disclosure of the invention, since this risks diminishing the strength of the exclusive rights that materialize once the patent is issued and, even worse, complete rejection of the application by the USPTO.

File a petition for accelerated examination. When filing a new non-provisional patent application, an applicant for a green technology invention should also consider using the Accelerated Examination procedure. Ordinarily, non-provisional patent applications are taken up for examination in the order of their effective United States filing dates. However, the USPTO will advance an application out of turn for examination and process it relatively quickly (in under a year, ideally) if the applicant files a grantable “petition to make special” under the accelerated examination program. This procedure can result in the quicker issue of a patent.

There are two provisions in the U.S. patent laws that make certain patent applications on green technology specifically eligible for accelerated examination. The patent prosecution rules state in part that “[a] petition to make an application special may be filed if the basis for the petition is…that the invention will materially enhance the quality of the environment[or] contribute to the development or conservation of energy resources.” (See 37 CFR § 1.102)(Emphasis added). The USPTO will accord this “special” status to a patent application for an invention that will “materially enhance the quality of the environment of mankind by contributing to the restoration or maintenance of the basic life-sustaining natural elements, i.e. air, water, and soil.” (See Manual of Patent Examining Procedure (MPEP), § 708). Examples of inventions that would fall under this category include developments in fossil fuels (natural gas, coal, and petroleum), hydrogen fuel technologies, and solar energy technologies.

Also, on petition the USPTO will accord special status to a patent application for an invention which “materially contribute[s] to the discovery or development of energy resources, or the more efficient utilization and conservation of energy resources.” (See MPEP § 708.02)(Emphasis added). Exemplary inventions that fall under this category include technologies relating to the reduction of energy consumption in combustion systems, industrial equipment, and in household appliances.

As a caveat, applicants should realize that accelerated examination applications must be (a) filed electronically, (b) contain three or fewer independent patent claims and less than 20 total claims, and (c) directed to a single invention. Also, an applicant submitting a petition for accelerated examination must take great care in preparing the patent application, in order to avoid charges of inequitable conduct for presenting statements that might be deemed misleading. For instance, a “prior art search” for relevant patents and publications must be performed and the results provided in a support document that identifies all of the claim limitations of the applicant’s invention that are disclosed by each of the prior art documents. (See MPEP § 708.02 et seq.)

Seek provisional rights from published applications. The U.S. patent laws also provide a way of protecting an invention against infringement while the patent is still pending, i.e., while the patent application is waiting to be examined and/or during the examination process. Although under U.S. patent law, no infringement action may be started until a patent is issued, “provisional damages” may be available under certain circumstances. The law allows for a patent owner to obtain reasonable royalty damages for certain infringing activities that occurred before the patent’s date of issuance.

Specifically, the owner of an issued patent can obtain retroactive damages against infringers from the date that a patent application was published by the USPTO, as long as the patent holder can show that the infringing activities occurred after the publication of the patent application, that the patented claims are substantially identical to the claims in the published application, and that the infringer had notice of the published patent application. (See 35 U.S.C. § 154(d)). The challenge is to include claims in the patent application upon filing that have a reasonable chance of issuing in a “substantially identical” form as when filed — it may not be an easy task to predict whether a claim will issue without amendment, but making an effort to include allowable claims is a good way to invoke these rules.

Request early publication. Under U.S. patent law, each application for a patent is published “after the expiration of a period of 18 months from the earliest filing date.” (See 35 U.S.C. § 122). Many green technology inventors may consider this wait to be unacceptably long, especially given the rapid rate at which new players are entering the industry. As mentioned above, provisional rights from published patent applications can be obtained under the right circumstances. Applicants can expand the window for these provisional rights by requesting early publication of the patent application. 37 CFR § 1.219 of the U.S. patent laws and section 1129 of the MPEP provide that “if an applicant wishes to have an application published earlier than the date that is eighteen months after the earliest filing date for which benefit is claimed, [the] applicant may submit a request [for early publication].” Through this process, the USPTO will publish the application as soon as possible, as long as it is otherwise ready for publication when filed, e.g., an executed oath or declaration has been filed and the filing fee has been paid. In stark contrast to the 18 month wait required for normal publication, early publication can occur as quickly as 14 weeks after filing. (See MPEP § 1129).

File international patents earlier than the Paris Convention date. Some green technologies will have significant markets outside the United States. Companies with potentially strong market share in other countries will want to seek patents in those countries, if protection is available. Furthermore, some important countries and regions for green technology products (e.g. the European Community and Japan) may be able to issue patents more quickly than a patent can issue in the United States. Generally speaking, in many foreign countries under the Paris Convention, a U.S. patent application filed within one (1) year from the U.S. filing date can claim the U.S. filing date as an effective filing date. But, companies do not have to wait the full year to file internationally — the applications can be filed as soon as a foreign filing license is received. Furthermore, it may be advantageous to file international applications simultaneously with a U.S. filing so as to start the international examination and granting process sooner rather than later.

The following are some additional suggestions for effectively seeking, obtaining, and maintaining patent rights:

  • Search out the competition’s patent filings.
  • Generally keep in mind that that while a business opportunity may be new to the company, that same business opportunity may already be on a competitor’s drawing board — or already subject to patent filings.
  • It is usually wise to have background patentability searches, state-of-the-art searches, and patent clearance searches performed with the assistance of outside counsel before significant investments in R&D or patent filings occur.
  • At later stages or as a company looks to roll out its green technology products to the public, the company may need assistance in developing strategies for navigating the existing intellectual property minefields of third parties, while simultaneously developing protected regions in which it can exclusively operate.

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The strategies listed above are only part of a comprehensive IP strategy for greentech companies that have or are developing valuable and patentable technologies. Morris, Manning & Martin’s Intellectual Property Practice counsels companies and organizations in the identification and protection of their technology through the effective procurement and use of patents, trademarks, copyrights, and trade secrets. In addition, the Green Industry Practice at Morris, Manning & Martin is an integrated team of experienced attorneys from multiple disciplines focusing on the legal needs of businesses in green industries. The Green Practice’s attorneys represent a number of green businesses across a broad array of existing practice areas, enabling them to tap into firm-wide resources and expertise when needed. This multidisciplinary and collaborative approach allows us to provide our clients with comprehensive and efficient service.

If you have any questions about intellectual property and/or green industries, please contact any of the following attorneys, or any of the other attorneys in the Intellectual Property Group and/or Green Practice group at Morris, Manning & Martin, LLP.

Author: Chris Glass at [email protected]

Editor: John R. Harris at [email protected]

NOTE: This article represents the views of the author and does not necessarily represent the views or positions of the firm or of any of its clients. The information contained herein is of a general nature and is not intended to provide legal advice to or address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that this information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on this information without appropriate professional advice after a thorough examination of the particular situation.