There is ‘green’ to be made on Green: Business opportunities in green patents in Latinamerica.
April 20th, 2012 by Danny Grajales Pérez y Soto
Since 2008 the intellectual property market has witnessed an impressive surge in the green patents sector, which has been largely influenced by concerns about climate change, the energy crisis, the increasing pollution of the air and seas, and the failure of the Copenhagen summit on climate change of 2009. Latinamerica is just catching up with this global trend, providing a unique opportunity for investors looking for both profit and meaningful investments for solving current global issues.
The very creation of the concept of a “green patent” shows how the environmentally sound language has penetrated the intellectual property market. A green patent, according to several IP Offices around the world, is defined as a patent that addresses issues such as energy efficiency, alternative fuels, agricultural efficiency, wind, solar, tidal/wave and nuclear energy, energy storage, waste disposal and recycling; among many others. IP Offices have knowingly adopted a policy allowing the broadest possible interpretation of what ‘green’ is, with the purpose of keeping an open door to any ground-breaking patent that could address environmental issues in ways previously unknown.
The leading countries in patenting green technologies are Germany, Austria, US, Japan, South Korea and Spain. But they are being rapidly challenged by the emerging markets of Asia and Latinamerica, which had been utterly ignored until now. The growth of the green patenting sector is 110% against the 20% rate of the overall patent market in recent years.
Opportunities for investment in green patents come from different sources:
1. The creation of vast databases for green patents.
The most notable of these, is the IPC Green Inventory, a project by the World Intellectual Property Organization (WIPO) based on the United Nations Framework Convention on Climate Change. This database contains all of the international patent applications that have used the Patent Cooperation Treaty (PCT) and have been classified as green technologies.
Another database worth mentioning is the one created by the European Patent Office (EPO) in Munich, Germany. The database, known as esp@cenet, contains around 600.000 clean-energy patents, in a joint effort by European countries to make valuable environmental information available to the world and ease the transfer of knowledge to developing countries.
Intellectual Property offices around the world have also created their own databases, such as the U.S. Patent and Trademark Office (USPTO) and –quite recently- the National Institute of Industrial Property (INPI) of Brazil, among many others.
These databases aim at promoting a significant increase in the licensing of green patents, and creating and incentive for R&D in green technologies. It’s all about reducing the transaction costs created by a highly specialized market.
2. The implementation of fast-track and preferential procedures for the patenting of green technologies.
Brazil is the latest country to join this trend. On April 17, 2012, the National Institute of Industrial Property (INPI) launched a pilot program to reduce the time needed for granting a patent on a technology that falls into one of these categories: alternative energy, transportation, energy conservation, waste management and agriculture. It is estimated that this fast-track process will reduce the examination period in over 3 years for 500 domestic filings, creating an important incentive for entrepreneurs and researchers.
This pilot program is not unlike those of Australia, Israel, Canada, Japan, South Korea and the UK. The United States had a similar initiative created by the Obama administration, but the 3.500 patents targeted have already been granted, and the program is officially closed since February 27, 2012.
These special procedures create opportunities for the fast patenting of technologies through any of these countries. An applicant in possession of a potentially green technology, could initially apply to one of the fast-track procedures in the countries mentioned above, and after that patent is granted use the Patent Prosecution Highway (PPH) for the filing on the second office. Therefore, he would have his patent protected in record time in places like the European Union (Since the European Patent Office does not provide any kind of special procedure for green patents).
This is a trend sure to be followed by other Latinamerican countries in the coming years. The creation of special incentives and procedures for these patents is a recurring issue in political summits, such as the Summit of the Americas. Investors must stay on the lookout for these golden opportunities.
3. The marketing opportunities of having green patents.
The ownership and use of green patents is one of the smartest ways in which a company can market itself as being ‘green’. Giants such as Honda, GE, GM and Samsung have exploited this marketing resource and have established a reputation as the leaders in the green technology sectors.
Finally, as a report by the Midwest Intellectual Property Institute explains, these emerging markets pose new challenges for lawyers and investors. The most notable of them is the requirement of not only explaining what the patent is, and who made it, but also why you made it, and why you made it the way you made it. It also requires knowledge about environmental issues and addressing issues such as: ¿Is the new environmentally-friendly invention manufactured in an environmentally-friendly way as well?. IP firms will have to address such issues in assisting their clients, who will undoubtly take advantage of a market strongly influenced by the current political agenda.
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