Often derided as “patent trolls,” non-practicing patentees (NPPs) – individuals, patent-holding companies and other non-practicing patent holders – do not commercialize their patented technology but instead generate revenue through licensing. They approach firms they believe to be manufacturing or selling embodiments of their patented technology and typically use the threat of infringement suits as a stick in negotiations.
An initial round of major NPP patent litigation hit the clean tech industry in the mid-2000s. There were two significant instances of this activity. The first was a series of lawsuits brought by a hybrid power train startup called Paice against Toyota, accusing the automaker of infringing some early patents on gas-electric hybrid vehicle technology. After a five-year battle, Toyota ultimately licensed all of Paice’s 23 patents.
The second was Columbia University Professor Gertrude Neumark Rothschild’s enforcement of a pair of patents relating to pioneering LED production techniques against many major targets, including Toshiba, Panasonic, Sony Ericsson, LG Electronics, Motorola, Samsung, Sanyo, Sharp, Philips Electronics According to her attorney, Rothschild has reached settlements or licensing agreements with more than forty companies generating more than $27 million.
Clean tech is now in the midst of a second wave of NPP litigation. Leading the charge is Sipco LLC (Sipco), an Atlanta, Georgia-based developer of wireless mesh technology. In August 2009 Sipco sued Florida Power & Light Co. and FPL Group Inc. in federal court in Miami, alleging that the wireless network technology in the utility’s smart grid system infringes three Sipco patents relating to smart grid technology. Sipco struck again in November 2010 suing such smart grid companies as Energate, Ecobee, Rainforest Automation, SmartSynch, AMX Corporation, SimpleHomeNet and CentraLite Systems.
In solar, a small patentee called Solannex recently began targeting major thin-film photovoltaics players with a patent directed to interconnect structures for PV cells. In the last few months Solannex has sued Miasolé and Nanosolar for patent infringement. If you’re operating in smart grid or thin-film, or developing technology to enter the space it would be prudent to be aware of the Sipco and Solannex patents.
Big Oil Proxies – Enforcing Green Patents
With just about every major oil company involved in renewables on some level, particularly biofuels, one recent patent infringement suit may mark the start of a trend. In February Butamax Advanced Biofuels, a Delaware-based biofuel joint venture between BP and DuPont sued Gevo, an Englewood, Colorado, advanced biofuels company, for infringement of a patent directed to Butamax’s biobutanol production technology and recombinant microbial host cells that produce the biofuel.
As far as I know, this is the first instance of biofuel patent litigation involving a major oil company. With the oil majors increasingly involved in biofuels startups via research funding, buyouts, and JVs like Butamax, it won’t be the last. Energy companies are no stranger historically to patent litigation in technology, as evidenced in the 1990s by Unocal’s lawsuits over its MTBE patents and the long running patent fight by Energy Conversion Devices, backed by Texaco, over nickel metal hydride battery technology.