Power and pitfalls : Patent guidelines in the biofuels market

2008-01-01

POWERANDPITFALLS:PATENTGUIDELINESINTHEBIOFUELSMARKET

JEREMYLAWSON*
LEGERROBICRICHARD,
LLP
L
AWYERS,PATENTANDTRADE-MARKAGENTS

Biofuelsaregatheringsteam.Thetechnologiesthatmakethemaswellastheregulations
andeconomicfactorsthatencouragethem,havealsogainedmomentum.TheCanadian
biofuelindustryhasdevelopedinthepastdecadebutstillhasawaystogobeforebio-
derivedalcohol,hydrogenorbiodieselblendsarecommonlyfoundatthepumps.
Itiswidelyagreedthatefficient,competitiveandsustainabletechnologiesarepivotalforthe
continueddevelopmentandstayingabilityofthebiofueleconomy.
Accordingly,patentsareofcrucialsignificanceinthisfieldwhereR&Disinfullbloom.
Patentsinthemoderneconomy
Nowadays,intellectualproperty(IP)isacornerstonetoanybusinessinanemerging
technologyfield.Apatent,whichisonetypeofIP,confersanexclusivemonopolyrightfor
aninventioninagiventerritoryandthusenablesthepatentownertoexcludeothersfrom
making,using,sellingandconstructingtheinventionforamaximumoftwentyyearsfrom
thepatentapplicationfilingdate.Tobepatentable,however,theinventionmustsatisfythree
basiccriteria:novelty,non-obviousnessandutility.
1
Apatentableinventionismorethanjustadesiredresult,butmustincludethetechnical
elementsofhowtheresultisachieved.Inexchangeforthepatentrights,theinventorhas
todisclosetheelementsandcharacteristicsoftheinventionthatenableittofunction,sothat
aftertheexpiryofthepatentthegeneralpubliccanfreelyuseandbenefitfromthe
technology.
Patentabletypesofbiofueltechnologies
Biofueltechnologyisextremelyrichintermsofthemanydifferenttypesofinventionsthat
maybeprotectedbyapatent.Fromfeedstocktocombustedfuel,biofuelproductioncycles
havemanystepsandbottleneckswhereimprovementsaresorelyneeded.

©CIPS,2008.*OfLEGERROBICRICHARD,LLP,amultidisciplinaryfirmoflawyers,andpatentandtrade-marks
agents.PublishedintheJanuary2008issueofCanadianChemicalNews(ACCN).Publication
62.045.
1InCanada,thePatentActandPatentRulesprescribepatentcriteria,proceduresandformalities.

2
Primarymaterialssuchasplantvarietiesthathaveafastergrowingcycle,highersugar,
starchortriglyceridecontent,orbetterpestresistance,couldenablehigheryieldsperacre.
Forinstance,severalsoybean-relatedpatentshavebeenobtainedintheU.S.fornew
cultivarsandvarietiesthatcanbeusedasamoreappealingbiodieselfeedstock.
Superiorprocessingtechniquescouldalsohelptiptheprofitabilityscalesofbiofuel
production.Processescanbeimprovedatmanydifferentstages:pre-treatmentof
feedstocks,reactionstepssuchasmicrobe-assistedfermentationortransesterificationand
separationmethodstoisolatethebiofuelfromunwantedby-products.Suchimprovements
couldcomeintheformofeffectivecellulose-convertingenzymes,up-scalablemethodsfor
producingethanoloroilsfromalgaeormembrane-aidedseparation.
Novelfuelcompositionsthatresultinbettermileageorfeweremissionsarealsoindemand
alongwitheconomicalanalyticaltechniquesanddevicesforensuringqualitycontrol.
Asmostbiofuelscombustdifferentlythangasolineanddiesel,newcombustionenginesand
relatedapparatusescouldalsohelphighbio-contentblendsburnsafelyandefficiently.
Strategiesforbiofuelcompanies
Giventhatintellectualpropertyisacornerstonetotechnology-basedbusinesses,how
shouldbiofuelcompaniesusepatents?Thoughstrategiesshouldultimatelybedetermined
onacase-by-casebasis,therearesomegeneralguidelinesandnotionstohelpcompanies
protecttheirbusinessoperationsandgarneracompetitiveadvantageinthemarket.
Patentlandscapeawareness
Ontheonehand,companiesinvolvedinproducing,blending,distributingorresearching
biofuelshouldbeawareofwhatispatentprotectedintheirfieldandwheredevelopmentis
available.Itisoftenusefultoseewhetherpatentapplicationsarebeingfiledataprolific
rate,inwhatcountriestheyarebeingfiledandwhoisseekingprotection.Biodiesel
technology,forinstance,hasseenasharpspikeinpatentapplicationfilingsinCanadaover
thepastdecade.
2
Ontheotherhand,companiesnottraditionallyengagedinthebiofuelindustryshould
evaluatewhethertheyownanypatentedtechnologythatisbeingusedinthisfield.Patents
coveringtechnologies–transgenicmicrobes,catalyststructures,separationtechniques,
chemicaladditivesoranalyticalmethods,forexample–thatweredevelopedforother
applicationsmaybeprofitablyexploitedthroughlicensinginthebiofuelindustry.
Canada’srelativelylateemergenceintotherealmofbiofuels–GermanyandtheUntied
States,forinstance,havemorematureindustryinfrastructures–whileimplyingcertain
disadvantagesisnotwithoutitsbenefits.Oneup-sideisthatmanytechnological
developmentshavebeenmadeandpatentedabroadwhileprotectionwasnotsoughtin
2Lawson,Jeremyetal.«TheBiodieselPatentLandscapeinCanada»,BiofuelCanadaMagazine,
Vol.1,October/November2007.

3
Canada.Patentsarepublisheddocumentsthatareenforceableonacountry-by-country
basis.ByconductingpatentlandscapestudiesintheUnitedStatesandGermany,Canadian
playerscanobtaininformationaboutbiofueltechnologywithouttheR&Dinvestment.Itis
neverthelessimportanttomakesurethatcorrespondingpatentsdonotexistinCanada
beforeexploitingsuchtechnologies.If,however,thereisnoCanadiancounterpartpatent,
thenproducersmaybefreetousethoseinventionsinCanadaoratleastbuildoffthemto
conjureupimprovements.
Patentsascompetitiveassets
Patentsnotonlyhavetheabilitytoprotectcoretechnologiesfromcopy-cats,theyalsocan
bebought,soldandlicensedliketangibleproperty.
Inbourgeoningmarkets,competitioncancomefrommanyfrontsandaone-dimentional
R&Dapproachmaynotbethemostsecurewayofprotectingtechnologyoroperations.
Giventhemanystepsfromplantoranimaltothepump,protectingone’sresearchand
operationsatmanylevelscanprovideamoresolidIPposition.IogenCorporationofOttawa,
Ontario,hasdonethisbyfilingforpatentsforenhancedexpressionofproteinsingenetically
modified(GM)fungi,GMmicrobesforbetterproductionofcertainenzymes,upstreampre-
treatmentprocessesforfeedstocksanddownstreammethodsofprocessinglignocellulosic
feedstocktoproduceethanol.
Tobesure,companiesholdingcoretechnologiesintheproductionofbiofuelscansolidify
theirpositionbyreinforcingtheircorepatentsbypatentingcomplementarytechnologies.
BuildingastrongpatentportfoliocanbeaccomplishedbyinternalR&Dbutalsobyacquiring
patentsfromotherentitiessuchasUniversitiesandfirmswishingtodivestthemselvesofa
givenbusinessunit.
Companieswithpatentedtechnologyinneighbouringindustriesmayalsowantapieceof
thepie.PerkinElmer,aleaderinanalyticaltoolsandaprolificpatentfiler,claimstohave
planstomoveintothebiofuelbusiness,whichhasexperiencedqualitycontrolissuesat
times.
3AgriculturalgiantslikeCargillandArcherDanielsMidlandhavealsotakennoticeand
aredevelopingtheirIPportfoliosaccordingly.And,ofcourse,traditionalplayersinthe
petroleumindustrywillneedtoevolvebymovingtowardrenewablefuelsandpatent
penetrationisapotentialtacticforIP-savvyfirms.Suchcompaniesmayexpandintothe
biofuelfieldwithbeachheadpatentsbasedonadjacent,practicaltechnologies.
Whateverthebusinessposturinginthebiofuelbusiness,ifcellulosicethanolproductioncan
beperfectedoralgaecanbeharnessedtoitspotential,thepatentsonsuchtechnologymay
aswellbealchemicasfarasturningR&Dintoprofits.
Canadianbiofuel-conclusions

3Ebert,Jessica«A60YearService»ChemistryWorld,September2007,Vol.4No.5,p.64-67.

4
Canadiancompaniesshouldbeawareofthepowerandpitfallsofpatenting.BiofuelR&Dis
infullbloomandsignificantpatentactivityisbeingobservedinCanadaaswellasinforeign
jurisdictionssuchasEuropeandtheUnitedStates.
InCanada,R&Dandpatentingeffortsshouldbeespeciallygearedtonativebiomassto
solidifyCanadianownershipandexpertisewithregardtoCanadianresources.
Wider-reaching,coretechnologiesdevelopedinCanadashouldbepatentedinjurisdictions
wherethebiofuelwillbeproducedorsold,ratherthanlimitingprotectiontoNorthAmerica.
Collaborationwithforeignownersofkey,complementarytechnologiescouldalsoaccelerate
Canadianproficiencyandestablishfutureinternationalrelationships.
Patentsareakeycomponenttothemodern-dayeconomicmachinery,especiallyin
technology-keenindustries.Companiesinthebiofuelindustryshouldassesstheir
intellectualpropertystrategyasthescienceandeconomicsofbiofuelscontinuetomotor
along.

5
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