From the gradual appearance of reserved parking spaces for hybrid vehicles to Canada’s anticipated outright ban on incandescent lightbulbs, the current trend in environmental sustainability has clearly taken the direction of increased regulation by governments at all levels and increased competition for market share among the purveyors of “green” products and services. As a result, companies are finding the need to be innovative while they seek out IP, particularly patents, to protect their effort and investment.
Technology developers on the front line. For businesses that produce a technology perceived by the market as environmentally “friendly” (or “friendlier”), patent protection and an understanding of the boundaries created by patents held by others are vital. In an increasingly competitive marketplace, the exclusivity provided by patents has many benefits, not the least of which is to allow the patent owner to charge a premium price for the product. The regulatory backdrop also needs to be taken into consideration as it can be a key or a bar to success. Government regulations can have a significant influence on the supply/demand equation by forcing consumers to make certain “choices” sooner than if open market tendencies were left unfettered. The ideal scenario for a patent holder is when the patented technology becomes approved, endorsed or even required by a regulatory authority. For example, consider the advantageous market position of a company that develops and patents a lawn irrigation system that is adopted as a standard by numerous municipalities, and which consists of underground sprinklers requiring activation by the municipal authorities, in order to reduce water consumption. On the other hand, it would be a questionable business decision to make a heavy investment in patent protection for an alternative to, say, incandescent bulbs that uses a cheap but imminently blacklisted chemical.
Corporate citizens. Some companies may not be as concerned with developing environmentally friendly technology, as they are with minimizing the impact of their operations on the environment while preserving, or even improving, their bottom line. For industries that are heavy consumers of fuel (such as transportation), economies in fuel consumption lead directly to environmental benefits while reducing costs. Computer software developed to assist in optimizing route selection, for example, can be a highly valuable corporate asset. Efficiencies in consumer product packaging also tend to translate into a favourable impact on both public and profit. While innovations of this nature are generally patentable, the question of whether it is better to protect them by way of a patent or a trade secret needs to be carefully considered in view of the company’s business objectives and competitive position.
New services. Yet a third class of companies or, more precisely, business models, has arisen as a direct result of the public’s concern for the environment. These include services consistent with an environmentally friendly value system, such as eco-conscious investment strategies, carbon offset purchasing and trading schemes, and novel recycling programs. Perhaps somewhat surprisingly, some of these innovations, if truly new and non-obvious, may also be patentable as “business methods” in some jurisdictions, notably in the United States.
Regardless of which of the above categories best characterizes a given business, product or project, it is important to realize that as environmental sustainability acquires an increasingly mature role on the corporate agenda, the effect of our society’s intellectual property laws will become more evident in this arena. The best-in-class companies will use patent and other IP rights to their advantage. The alternative is that, despite a company’s laudable intentions towards the environment, it may be left to suffer the fate of the old lightbulb.