IP and clean technology: Tips for companies focused on resource recovery in a circular economy | Smart & Biggar
As the world accelerates its transition to a circular, low-carbon economy, Canadian companies developing resource recovery models must think about how to integrate intellectual property protection into their overall strategic plan to thrive in this increasingly competitive global marketplace. C-level executives need to consider the strategic business role of intellectual property and understand how to build an effective IP strategy in the context of the infrastructure in which they operate and which is appropriate to the technological solutions they offer. Companies that focus on resource reclamation also face a long road to commercialization that requires a forward-looking IP strategy.
This article outlines three key IP tips to help Canadian cleantech innovators better protect and leverage their intellectual property as they develop technologies that are geared towards resource recovery.
Resource recovery and innovation explained
Among the many approaches to implementing a circular economy, one key strategy is to maximize the useful life of materials and other resources through resource reclamation. This refers to the extraction of useful materials or other resources from compositions that might otherwise be waste. Resource reclamation is a broad field that encompasses innovation both in the form of incremental improvements in widely used technologies and fundamental technical breakthroughs with broad applicability. Both forms of innovation have the potential to generate significant commercial value.
1. Build a license-free patent portfolio
First, clean technology innovators should always keep monetization in mind when building their patent portfolios. A well-structured patent portfolio can generate valuable license income for its owner, in addition to market exclusivity and minimizing the risk of infringement. It may enable licensors to access a licensee’s manufacturing capacity and expertise in markets that would otherwise not be available to the licensor, thereby enabling licensors to maximize the value of patents that they may not be able to exploit directly. Licensing can be especially important for resource recovery innovators looking for growth in global markets to grow.
A successful patent licensing strategy requires innovators to have a thorough understanding of their own intellectual property. Innovators should at least consider the strength, quality and scope of their patents; and whether these patents relate to their own current or proposed commercial activities. It is also important to identify related patents that are suitable for licensing as a package. License revenues can be maximized by providing licensees with layered protection from multiple patents that cover multiple aspects of their business.
Understanding and prioritizing potential markets is also critical to targeting the most attractive licensees. In particular, innovators should consider whether their portfolio can provide value to companies outside the innovator’s immediate industry sector. If so, patent applications should be prepared considering potential applications beyond the innovator’s current operational reach.
Once innovators have identified the strongest aspects of their patent portfolio and the most promising markets, they can move on to assessing and prioritizing target licensees. Factors to consider include the likelihood of breach of the innovator’s portfolio by the target company’s products and activities, as well as a more general understanding of the target company’s commercial goals, timeframes, and risk appetite. These factors will guide the selection of the most suitable licensing structure for marketing towards the goal.
2. Take advantage of patents and trade secrets
The second consideration is to ensure a balanced protection of intellectual property using both patents and trade secrets to maximize market exclusivity. The market exclusivity granted by patents requires the public disclosure of the patented inventions and has a limited term, usually 20 years from the filing date of a patent application. Business secrets, on the other hand, can keep intellectual property confidential for an unlimited period of time. However, the protection of trade secrets requires systematic, enforceable and continuous Measures to maintain confidentiality. In addition, the loss of confidentiality of trade secrets can lead to an irreversible loss of IP rights.
Another consideration when choosing between patents and trade secrets is the durability of a technology. In general, if a technology is not expected to last longer than the typical patent term of 20 years, patent protection can be a safer option than trade secrets. On the flip side, there are some famous examples of trade secrets (e.g., Coca-Cola syrup and KFC’s original recipe) that have been around for much more than 20 years.
For logistical reasons, innovators in the field of resource recovery often need to set up geographically separate locations. In certain circumstances, innovators can also work with regional companies that have an existing infrastructure. These are some of the operational reasons that make it difficult to process intellectual property as a trade secret. It therefore makes sense to protect the processing of intellectual property with patents, which can also serve as an attractive licensing tool.
On the other hand, various chemical formulations used in commercial operations can be another important IP component for innovators. If the manufacture and supply of these formulations can be controlled by innovators, it may be better to protect them as trade secrets than as patents, provided they cannot be replicated.
It is important to remember that a decision regarding the form (s) of intellectual property protection, like any other business decision, is not permanent and needs to be reassessed if terms and conditions change.
What happens to the trade secrets and know-how generated in the exercise of the licensed intellectual property by the third party when processing patents are licensed to a third party partner? For example, operating manuals can be updated as a process is refined. Is the licensor or the licensee the owner of the updated operating instructions and can the confidentiality of the information contained therein be preserved? Who also owns all of the data that is generated during processing?
For formulations that are protected by trade secrets, is it more advantageous to protect the general scope of the formulations with a patent while keeping the exact formulations as a trade secret? Pure trade secrets will not prevent competitors from developing their own formulations, but patents can.
In summary, finding the balance between patents and trade secrets is not an easy task and cannot be done without a deep understanding of all IP sources as well as commercial operations.
3. Protect more than just the recovery process
The third tip is to acquire patents that go beyond the core technology – in this case, resource recovery – to maximize protection from potential infringers.
As mentioned above, many resource recovery innovators focus on patenting the processes they have invented. In comparison to product claims, however, method claims have a number of restrictions. First, it is generally more difficult to prove a violation of a process than a product. This is because, while an infringing product available on the market can be directly compared to a patented product, many details of a potential infringing process may not be available to the public. Second, in a patented process with more than one step, there is always the possibility that not all steps are performed by the same party. In a scenario where one party is performing some, but not all, of the steps in a patented process and the remaining steps are to be performed by another party, it may be necessary to determine that at least one of the parties is infringing. Although the right to induce an infringement differs in different legal systems, it is usually more difficult to establish incitement to infringement than to justify direct infringement.
If the product obtained at the end of an innovative process is not new (e.g. a metal obtained from waste material) and cannot be patented, the patentability of the intermediates produced during the process can be considered. Similar to a process claim, a claim to an intermediate product can be difficult to enforce if the intermediate product is not readily made available to the public. However, if infringement is suspected, it may be useful to patent intermediates if intermediates can be shipped from one party to another for further processing.
Another possibility is that the product recovered at the end of an innovative process is a mixture of what is to be recycled and other components such as impurities or chemicals that are added during the process. Such a mixture can be new and can be characterized by its chemical and / or physical properties. If the innovative process leads, for example, to a higher purity of the material to be recycled, the mixture can be characterized by a minimum purity which is higher than in the case of products that are manufactured using the state of the art.
If patenting of intermediate or end products is not possible or practicable, innovators should nevertheless consider how the product recovered at the end of an innovative process is to be used commercially or how raw materials that are used at the beginning of an innovative process are obtained. When known steps are added to a patentable process, the combined process often remains patentable. Therefore, under certain circumstances, the extension of patent protection beyond an innovative process to further upstream or downstream processing steps can offer an additional license lever in negotiations with raw material suppliers or buyers of the recovered product.
Conclusion: A future-oriented IP strategy that aligns with business goals is essential for companies with a focus on resource recovery
While these IP tips will help clean tech companies consider some key considerations about protecting innovation while reclaiming resources, the key takeaway is how important it is to have a clear IP strategy and implementation plan when using your Scale companies. In addition, early advice from qualified IP consultants with relevant industry and technology experience ensures that you secure and use the relevant IP rights and avoid costly mistakes.