The role of IP in accelerating innovation and diffusion of renewable energy technologies: business practices and policy options

CambridgeIPThe role of IP in accelerating innovation and diffusionof renewable energy technologies: business practicesand policy optionsUK Energy Day: Sustainable SupplyCentre for International Business and SustainabilityLondon Metropolitan University, London11 April 2011Ilian Iliev, CEO © 2011 Cambridge Intellectual Property Ltd. All rights reserved

Outline • CambridgeIP‟s work in renewable energy • Primer on IP, innovation and tech. diffusion • IP and cleantech • Policy options 2

CambridgeIP - a provider of actionable patent-basedtechnology intelligence• IP Landscape® informing IP, R&D and investment strategy: – Our global IP databases, proprietary methodologies and consulting provide unique patent landscape coverage, highlighting technology “white space” and informing your own FTO due diligence efforts• Competitive intelligence: – Database-driven analysis and custom reporting on who the competitors are, where they are located, when they became active and who they are partnered with• Identify prospective partners, acquisitions, clients: – Information on top corporate, university and governmental partner/acquisition candidates operating in your area of interest, or could leverage your technologies• Technology foresight: – Foresight on emerging technology patterns, technology hotspots and investment strategy• CambridgeIP‟s technology platforms – www.boliven.com Industry leading patent search platform – IP Landscape® report standard – Proprietary software analytics and workflow platform 3 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

CambridgeIP and open innovation Fact-based technology intelligence through science literature analysis and expert interviews Identify key players  Identify key players, R&D relationships and their intensity  Find relevant technology examples, diagrams and descriptions  Understand trends by technology, geography, application and other factors  Confirm freedom to operate and identify expired/abandoned patents  Inform IP and technology valuations Expert partnering, M&A and IP acquisition advice and contacts derived in over 120 major technology scouting and technology mapping projects  Expert in decomposing products into their component parts and identifying technology ownership, overlapping technology areas and cross-over technologies  Rapid identification of IP-related strengths and weaknesses that can be exploited/plugged with open innovation techniques  Our understanding of the technology trends and activity of key players helps inform your open innovation and partnering strategy  Due diligence on external partners and technologies CxO compatible materials, workshops and seminars  Accelerating internal communication  Facilitating effective technology transfer Which technology components are you ready to license out? Which ones should you acquire? 4 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

Selected team members Quentin Tannock Ilian Iliev Dr Robert Brady Mark Meyer Ralph Poole Vladimir YossifovChairman & co-founder CEO & co-founder Non-Exec Director Business Development Boston Geneva Representative Manager Representative North America Arthur Lallement Helena van der Merwe Dr Phil Coldrick Sarah Helm Yanjun Zhao Senior Associate Senior Associate Associate Consultant Senior Associate Associate 5 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

IP Landscape ® reports: informing IP, R&D andinvestment strategy CambridgeIP‟s IP Landscape® report standard Inventor and collaborator networks informs: • IP strategy development and execution • Development of Freedom to Operate (FTO) and White Space analyses • Investors‟ due diligence and strategic overview of a space • Identify prior art in a spaceDecomposition of complex products and processes drives an intelligentpatent research program Needle Free Pen Shape Electronic Prior art analysis helps identify key IP risks in a space injector AutoInjectorDisposable x xCartridge x x xDrug Mixing x x xSingle dose x x xMulti Dose x xNeedle x x xRetractable x x x Drug reconstitutionShield x x xPiston x x xSpring x x xHigh Pressure x x x DesignPump x x xAir Jet xDisplay x x xLCD Screen x x xMechanical x x xAuto-Activation x x x ElectronicMechanic x x xSensor x x xData Storage x x xMechanic x x xElectronic x x xDose control x x xMechanic x x xElectronic 6 x x x Needle Monitoring © 2011 Cambridge Intellectual Property Ltd. All rights reserved

Cleantech and energy focus areas Wind Energy Nano Devices Fuel Cells Systems & Materials Advanced GeoThermal Biomass Refrigeration Energy Systems Clean Coal Photovoltaic & Carbon Capture Component CO2-EOR Refineries, Technologies Power Gen, Marine Co-Gen. Concentrated Transport Consortia & Solar & Other Smart Research Energy Storage Grid Alliances Systems 7 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

Types of IPRs A modern and complex technology product is protected by different forms of IPRs Patents: ability to prevent others from using your technology e.g. patents around turbine transmission systems Trade secrets: non-disclosed and commercially valuable information e.g. production or installation methods Trademark: protection of the word/symbol denoting the origin of a good Copyright: protecting the form of expression e.g. control software written by/on behalf of company 9 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

IPRs as a way of promoting innovation • IPRs are a state-created mechanism allowing inventors to capture a return on their investment by giving them the rights to decide how their invention will be used • At the heart of IPRs is a trade-off between static efficiency (best use of today‟s knowledge) and dynamic efficiency (creating tomorrow‟s knowledge) 10 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

Close relation between IPRs and R&D financing • Various studies have shown a relationship between levels of R&D and inventiveness and patenting trends 11 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

How are IPRs used in practice? The IPR mechanism/arrangement used at each part of the technology innovation chain can determine next stage options for technology transfer/diffusion The full range of stakeholders have an influence on how IPRs are used, from investors to competitors to governments Product R&D/commercialis In-house ation Channel Choice of Collabo- ration Services Licensing Licence Spin-off Role of IPRs in Each Part of Innovation Chain Multiple business models and ways of using IPRs, depending on industry history, ? ? ? ? ? ? economics, inherited business models, norms, etc. Investors/Shareholders Value Chain Partners/Collaborators Competitors © 2011 Cambridge Intellectual Property Ltd. All rights reserved. 12 12 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

Patent pools and technology standardsPatent pools and technology standard bodies are a powerful mechanismfor accelerated technology deployment and innovation: •Decreased risk of litigation •Savings from duplication of R&D effort/building on others‟ mistakes •Decreased barriers to entry for newcomers •Specialisation and value chain diversification •Unexpected and novel uses of technology • Patent pool backed technology standard, started by leading ETSI telecom equipment manufacturers and operators • Resulted in mass diffusion of GSM/GPRS/3G standards • Holders of patents on new ARV drugs and related technologies may license their rights, in exchange for royalties Unitaid Patent Pool • Allows generic companies to combine multiple drugs in a pill (Fixed Dose Combinations) • Voluntary patent pool scheme WBCSD’s Patent • Royalty-free access to contributed patents Commons • MNEs and governments donate patents into the patent pool 13 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

„Alternatives‟ to IPRs to incentivize innovation: innovationprizesInnovation prizes are gathering increasing interest from the public and private sector as an „alternative‟ mechanism for generating solutions to major technology problemsExamples: X-Prize, Innocentive, NASAOpen innovation is a widely adopted corporate approach to sourcing technology outside of the in-house R&D, and sharing technologies more widelyExamples: IBM patent licensing support of open source, Unilever open innovation program Open source : peer-based production, free use in exchange for sharing of improvements; protected by GPL Extremely successful in the software industry, backed by IBM and other computer and telecom industry giants 14 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

Outline • CambridgeIP‟s work in renewable energy • Primer on IP, innovation and tech. diffusion • IP and cleantech – Overall patenting trends – Wind energy case – Renewables and water treatment • Policy options 15 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

IPRs and cleantech: increasingly complex and rapidlymaturing environmentDifferent studies all show accelerated patenting in low-carbon energytechnologies 16 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

…accompanied by accelerated deployment oftechnology in the market place Wind Solar PV 25000 1600 Annual PV shipments Annual Wind shipments 4500 1600 Annual patents Annual PV shipments (MWp) Annual patents 4000 1400 1400Additional installed capacity (MW) 20000 3500 Patent filings 1200 1200 3000 Patent filings 1000 15000 1000 2500 800 800 2000 600 10000 600 1500 1000 400 400 5000 500 200 200 0 0 0 0 6 8 0 2 4 6 8 0 2 4 6 8 0 2 4 6 197 197 198 198 198 198 198 199 199 199 199 199 200 200 200 200 6 7 8 9 0 1 2 3 4 5 6 7 199 199 199 199 200 200 200 200 200 200 200 200 Hence an increased need and urgency to understand the role of IPRs in technology development and transfer of climate-related technologies, and implications for policy makers Source: CambridgeIP – Chatham House (2009) „Who Owns Our Low-Carbon Future‟ 17 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

Case study: wind energy technology• Wind is projected to continue significant growth over the next two decades• The wind energy industry has already seen significant levels of patenting... and patent litigation – GE – Enercon (1997; 2004) – Enercon – Vestas (2006) – GE – Mitsubishi (2009)• Technology ownership was a key driver behind key M&A Wind Energy - Low-Carbon Energy Average (6 fields): 1976-2007 1,600 1,400 1,200 1,000 800 600 400 200 0 6 Fie lds - Ave rage Wind © 2011 CambridgeIP. All rights reserved.. 18 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

Wind energy: key components and applications Wind Energy: Composition by Technology Components and Application Areas Components or 7 ,000 application level 6,000 5,000 analysis can help 4,000 us identify core 3,000 areas of 2,000 1 ,000 innovation, or 0 where new or gs d e s n te activities are ag in at em ai la /W er or Tr re st en st Sy e e re G ad riv gy emerging ho ol er Bl D tr ffs En & on O ox /C rb e ar ea ftw G So © 2009 There are significant overlaps between some of these sub-spaces: revealing patents with multiple or systems-level claims 20 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

Top assignees: overall and by technology component Technology ownership of value chain can differ from market share: showing underlying composition of industry value chain Gearbox & Drive Train Generator Wind - Overall Field Assignees # Patents Assignees # PatentsAssignees # Patents GENERAL ELECTRIC CO 116 ENERCON 227ENERCON 612 VESTAS WIND SYSTEMS A/S 95 GENERAL ELECTRIC CO 213GENERAL ELECTRIC CO 525 ENERCON 81 MITSUBISHI 125VESTAS WIND SYSTEMS A/S 316 NTN CORP 76 HITACHI LTD 90MITSUBISHI 239 HANSEN TRANSMISSIONS INTERNATIONAL 53 VESTAS WIND SYSTEMS A/S 80LM GLASFIBER A/S 171 Blade/Wings Assignees # Patents ENERCON 318 GENERAL ELECTRIC CO 283 VESTAS WIND SYSTEMS A/S 208 LM GLASFIBER A/S 159 MITSUBISHI 83 Energy storage Assignees # Patents GENERAL ELECTRIC CO 41 ABB AB 22 VRB POWER SYSTEMS INC 19 HITACHI LTD 18 CANON KK 8 Software/Control Systems Offshore related Assignees # Patents Assignees # Patents GENERAL ELECTRIC CO 52 ENERCON 43 ABB AB 47 AERODYN ENGINEERING GMBH 36 VESTAS WIND SYSTEMS A/S 17 GENERAL ELECTRIC CO 29 SIEMENS 16 ABB AB 19 REPOWER SYSTEMS AG 10 21 VESTAS WIND SYSTEMS A/S 18 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

Renewable energy and water treatmenttechnology 2 Renewable energy sources are also used to drive energy intensive industrial processes, such as water treatment • E.g. most desalination plants today use fossil fuels, such as coal, diesel; or use energy from the grid • New technologies mean that desalination can be driven by low-carbon energy, and frequently this will be off-grid 22 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

Renewable energy and water treatmenttechnology 2 Renewable energy can be integrated directly to drive water treatment processes, or indirectly via electricity generation. Thermal ENERGY STORAGE? Geothermal Energy Thermal Driven Electricity Technologies Thermal Concentrated Energy Renewable Energy Solar Thermal Solar Electricity Electrically PV Driven Thermal waste heat Technologies Wind Electricity Pressure Pressure Driven Technologies Wave Electricity 23 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

Case study: solar and desalination (SwissINSO –Krystall) • Krystall Technology developed by SwissINSO • Uses solar PV for desalination of brackish water and water purification • Installed in several locations in Africa • Up to 50,000 m3 p.day of water output 24 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

Case study: solar and desalination: IBM and KACST- UHCPV• IBM and the King Abdulaziz City for Science and Technology (KACST), Saudi Arabia‟s national research and development organization, • Research collaboration aimed at creating a water desalination plant powered by solar electricity, which could significantly reduce water and energy cost.• Technology: plants with Ultra High Concentrated Photovoltaic (UHCPV) 25 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

Policy options around renewable energy and IP • Most policy options related to IP are around facilitating private sector investment and technology, such as: – Fast-tracking patent filings – Improved access to patent information for developing countries – Support establishment of patent pools – Support capacity building – University – industry tech. transfer • Important that any policy measures should be developed in the context of industry-specific factors 27 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

One example: steps to identifying appropriate IPRtools for different technologiesSome examples of specific technologies that may be appropriate for patent pool or technology standard arrangements Tech. field Location within technology Possible IP measures system Solar power Underlying technologies/production Cross-license agreement, similar to processes (e.g. in nanotech) semi-conductors Cleaner coal High-end IGCC technology Cross-license and technology standards, allowing entry of larger number of suppliers Wind energy Transmission systems, energy storage Technology standards, allowing component interoperability and retrofitting of key components Smart grid Transmission protocols Technology standards, similar to ETSI (initiatives already underway) Smart meters Inter-operability, common interfaces with Technology standards (initiatives appliances already underway) 28 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

…and finally… Sign up to our newsletter and visit our blog to get regular IP Intelligence and technology strategy insights Thank You ! Ilian Iliev, CEO E-mail: ilian.iliev@cambridgeip.com GSM: 077 863 73965 Tel: +44 1223 778 846 29 © 2011 Cambridge Intellectual Property Ltd. All rights reserved

The role of IP in accelerating innovation and diffusion of renewable energy technologies: business practices and policy options

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