Page 53 - EE Times Europe Magazine – November 2023

EE|Times EUROPE 53

Filing Patents Is Important for Green Energy Development

PATENTS CAN FACILITATE promise applies only to patents used “in good on fossil fuels in circumstances where other
COLLABORATION AND INDUSTRY faith.” It sounds innocuous, but that means green energy sources cannot be used (e.g.,
DEVELOPMENT that if a competitor sues Tesla for patent shipping, aviation). Water is the only
Patents are often seen as the enemy of col- infringement while itself using Tesla’s pat- by-product of such use.
laboration, enabling companies to sue others ented inventions, Tesla can still sue back. It’s A recent report authored by the IEA in
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and prevent them from selling products with a clever policy to spur an industry while still collaboration with the European Patent Office
a patented invention. But this is a blinkered giving Tesla value from the patents (we won’t concludes that innovation in the production
view. Patents can enable companies to collab- sue you as long as you don’t sue us). The data and storage of hydrogen is accelerating,
orate and share technology more effectively. of U.K. patents currently marked “license of although further investment is needed “to
For example, when a company enters a right” shows a surprising number of auto- unlock new applications of hydrogen.” Inno-
joint development agreement or provides motive patents, including those from Toyota vative companies will invest significantly in
consulting services to another company for and Honda, demonstrating how the strategy finding creative solutions that overcome the
R&D, patents can define the technology that seems to have influenced the industry. current barriers to wider adoption of green
was developed before the collaboration began. But surely collaboration is better if all hydrogen. As explained earlier in this article,
This enables more effective collaboration, as research is published and available for all for patents are a vital tool to drive this innova-
existing work can be shared in the knowledge free without limitations? Yes, but outside of tion and allow companies investing in the
that the collaborators cannot later claim that philanthropy, why should a business invest R&D required to protect that investment. The
work as their own. in R&D if the results are then available to report says that “more than 80% of later-stage
Companies can hold patents without the anyone without any R&D spend? Patents can investment in hydrogen startups [went] to
intention of blocking others from the market. enable companies to invest and collaborate companies which had already filed a patent
Patents can be licensed, and the license fee while protecting their investment. application, indicating the importance of
can be set at a level that is fair. Imagine a patenting … in this area.”
technology that improves the efficiency of PATENTS CAN HELP COMPANIES BENEFIT The report also gives an insight into where
energy conversion in wind turbines by, say, FROM TAX BREAKS investment has been targeted over the last
1%: If applied widely, this can have a signif- Many countries operate schemes to reduce 20 years. Throughout this period, there
icant impact, and a reasonable license fee corporation tax for companies with patented have been many filings related to distribu-
would allow this. With the fee set at a level inventions. In the U.K., this is known as the tion infrastructure and the storage of pure
where the extra 1% efficiency pays back more “patent box,” and it reduces the corporation hydrogen, with the number of filings per
than the license fee, the licensor sees a return tax rate to 10% on profits attributed to a pat- year growing. Progress in this area looks to
on its R&D and the licensee sees increased ented invention. Effectively, this is a subsidy be focused in the U.S., and most applications
profits overall, compared with not including on innovation. The patent office acts as a have been filed by large, commercial entities
the technology. gatekeeper to the scheme—a granted patent (rather than SMEs or universities), which may
is required, so an independent third party has be a sign that the technology is relatively
examined the invention and considers it to be mature and innovations are incremental.
Patent protection can play an new and not obvious. Filings relevant to liquid storage and vehi-
Depending on the stage a company is at,
important business role and the patent box may be useful. Successful cle refueling are also increasing year on year.
Established players in the hydrogen market
drive a company’s growth, companies do not necessarily make a taxable are active here alongside, unsurprisingly, the
whatever its size. profit, especially in the early stages. But the automotive sector (and the Japanese market
in particular). Most applications in this field
large tax savings can allow the cost of a pat-
ent application to be recovered many times are general, but some target the specific use
over through reduced taxation, and payback of the technology (e.g., hydrogen storage at a
Many countries, including the U.K., let periods can be less than a year. fuel station or in a marine vessel).
you declare that your patent is available for U.K. government statistics show that about So patents are already playing an important
“license of right,” making it clear that the £1.2 billion (about €1.38 billion) was claimed role in the development of green hydrogen
owner is open to licensing and will not sue under the scheme in the tax year 2020–2021. 3 technologies. Innovative companies investing
for an injunction to force competitors out Small companies using the scheme (as defined in R&D that are not already patenting are
of the market. In return, the renewal fees to by the EU, so under €10 million turnover and likely missing out, even if they never intend
maintain the patents with this declaration in under 50 employees) each claimed about to sue anyone. ■
force are halved. As of Sept. 28, 2023, some £40,000 (€46,000) each year; mid-sized com-
9,778 patents are marked as License of Right panies (under €50 million turnover and under REFERENCES
in the U.K. alone. 250 employees) each claimed about £119,000 1 International Energy Agency. (September 2023).
Tesla caused a stir when it announced in (€137,000). These are significant sums, and “Net Zero Roadmap: A Global Pathway to Keep the
2014 that its entire patent portfolio would be much more the typical cost of obtaining a 1.5 °C Goal in Reach.” tinyurl.com/2ynd83cd
available royalty-free to spur development. granted patent in the U.K. 2 Musk, E. (June 12, 2014). “All Our Patent Are Belong
Elon Musk’s blog post, “All Our Patent Are To You.” Tesla. tinyurl.com/mshcmvcd
Belong To You,” is still online (The CASE STUDY: HYDROGEN DEVELOPMENT 3 HM Government. (Sept. 28, 2023). “Patent Box
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grammar is a gamer’s inside joke—Ed.) and The bulk of the world’s hydrogen is currently reliefs statistics.” tinyurl.com/mrv5bft4
says, “Tesla will not initiate patent lawsuits generated from fossil fuels. Carbon-neutral 4 International Energy Agency & European Patent
against anyone who, in good faith, wants to production routes are available, but their Office. (January 2023). “Hydrogen patents for a clean
use our technology.” higher cost has slowed the adoption of energy future.” tinyurl.com/bdhc2evu
This might seem crazy—Tesla is giving so-called “green hydrogen.” Hydrogen can act
competitors carte blanche to copy their as an energy storage/carrier (akin to a battery) Laurence Brown and Tim Belcher are both
inventions. But that’s not quite the case. This and thus has the potential to reduce reliance partners at EIP.

www.eetimes.eu | NOVEMBER 2023