From Idea to Intellectual Property – Season 1 Episode 3: Cleantech: The role of IP in building a sustainable future

Lisa Leong:

Have you heard about clean tech? No, it’s not about disinfecting your keyboard, we’re talking electric vehicles, green steel, and solar batteries.

Hello, I’m Lisa Leong. This is From Idea to Intellectual Property, a podcast about today’s big ideas and the IP considerations behind them.

Dr. Gareth Dixon is principal at Spruson & Ferguson. He made the jump from organic chemist to clean tech a few years ago, and he’s not looking back. Now by the year 2030, it’s estimated the clean tech market will have surpassed the value of the oil market and could be worth just shy of a trillion dollars.

So, Gareth give me the clean tech elevator pitch. Why is it growing so quickly?

Gareth Dixon:

There’s a couple of reasons it’s growing so quickly Lisa. Number one, there’s no universally accepted definition of clean tech because of that, it’s interpreted very, very broadly. The way I interpret clean tech is that it’s anything that’s cleaner than what’s out there already.

The best example of that is I think cement manufacture, it’s one of the most environmentally destructive commercial processes that’s out there. And let’s face it, the global demand for cement isn’t going to go down anytime soon. So, inventors are sort of scrambling for new and improved ways of making cement that does less environmental damage.

Gareth Dixon:

So, if somebody was to come up with a cement manufacturing process that was slightly less destructive than what’s out there already, to me, that’s still clean tech. It’s that broad definition in conjunction with people’s ever increasing environmental consciousness, the feel good factor because it is a good industry to be involved in and it’s actually nice as a patent attorney to be involved in a feel good industry. So, all those three things I think in conjunction mean that clean tech is actually booming. It is taking off, it’s becoming a headline technology, whereas as previously, it may not have been.

Lisa Leong:

And what are some common examples of clean tech that we might have exposure to?

Gareth Dixon:

A couple of really good ones that are right up my alley as a chemist, hydrogen and batteries. Anything that you know can be used in an electric vehicles.

Lisa Leong:

Let’s use electric vehicles as a case study. So, what aspects of intellectual property are relevant?

Gareth Dixon:

The full spectrum I think Lisa, anything from inventing to protection to licensing to tech transfer, compulsory licensing is a big thing. I don’t know if you heard of that, that’s where the government can step in and commander a patented technology if society’s demand for that technology isn’t being met. Good example of that is somebody gets a patent for a [inaudible] being clean tech convention, but they don’t really have the commercial means to exploit it or to put it to its full use. A third party can petition the government or the patent office for what’s called a compulsory license, the government steps and says, “You will license this technology to this person, but in exchange you will actually get an appropriate royalty.” So, it’s just a government’s way of ensuring that these really, really beneficial inventions actually are able to be exploited.

Lisa Leong:

And what’s a specific example of that in the clean tech space?

Gareth Dixon:

The best example of that is something that actually never happened. It goes back to what was called the COP 15 Climate Change meeting in Copenhagen, I think was 2009. China basically wanted blankets compulsory licensing, so that they could exploit clean tech for electric vehicles and never actually happened because the rules of that particular summit were that there had to be unanimity. And there were a couple of dissenters, I think India dissented, of course, probably some of the large US corporations.

Lisa Leong:

The ones who owned patents.

Gareth Dixon:

Exactly.

Lisa Leong:

What are the trends in relation to patents and electric vehicles?

Gareth Dixon:

The trends are that the number of patents being applied for and granted is just increasing exponentially. That’s true, whether you’re Elon Musk type Tesla or whether you’re a Toyota or even if you’re just a university lab doing research. So, the overall trend is that it’s taking off exponentially. All the projections are that it’s going to continue that way. And with that, it stands to poke and prod the patent system in ways that potentially we’re never actually envisaged. So, it’s going to be an interesting few years I think.

Lisa Leong:

In what way is it poking and prodding?

Gareth Dixon:

I think it’s all to do with freedom to operate. The more patents that are out there, then the more potential pitfalls any third party wanting to innovate in that space has to negotiate before they can actually commence. Of course, if a new startup comes and wants to be active in the clean tech space and they’ve got a budget of X and it’s going to take them 90% of their budget just to actually work out what patents are out there, what they can and can’t do, then there’s actually only 10% of their original budget left for actually innovating in that space. And I don’t think that that’s actually in the industry or actually in society’s best interests.

Gareth Dixon:

That’s probably a pretty good example of the way that the patent system actually stands to stimi innovation in the clean tech space. Of course, the flip side is that by offering a 20 year monopoly for a clean tech convention or indeed any other invention that that’s incentive to innovate. So, the different sides to the same coin I think. Like anything it’s a balancing act, that there are issues out there and people are aware of them and looking at ways to circumvent them.

Lisa Leong:

I was really surprised and interested Gareth when I read that Tesla actually has not many patents.

This is because Elon Musk, apparently his view is that patents do stifle progress.

What is your response to that? What’s your experience?

Gareth Dixon:

Response to that, if you’re Elon Musk, you can probably do what you want. So, you can adopt whichever attitude you like I think. Wonderful if you can still innovate in that area and put those innovations in the public domain, fantastic. That’s the way that Saudi’s going to get out of this environmental bind that we’re in a little bit. On the other hand, not everybody is in that position that Elon Musk is in. Innovating in this space, you have to be able to protect what you’re doing otherwise, competitors can come in, undercut you. I mean that this is patent 101. You have to re-coop all your R&D costs. So, you have to charge a premium for what you’re doing. And if a competitor can come in and undercut you in the markets, you’re going to go out of business very, very quickly.

Lisa Leong:

Now Gareth, I’ve got a really exciting idea. It’s for a wireless electric motor vehicle charging station for corporate fleets. And I’ve decided to call it Battery Buzz for busy business bodies. I’ve just come to see you and I kind of want to know at the start, how much money do you think I need to put aside for this Gareth? Because I’m going to seek patents in relation to my amazing invention. And I want to know how long it’s going to take because I feel like I’ve got in early to be honest.

Gareth Dixon:

Okay. So, it sounds like you might have a bit of a patentable idea there, Lisa in conjunction with a trademark. So, in terms of your budget, how long’s a piece of string? Look, the patenting process and one of the criticisms that’s been leveled at it across the globe is that it does sometimes take a long, long time. I don’t know if you ever watched the program Suits.

Lisa Leong:

Yes.

Gareth Dixon:

But there was an episode where Harvey one morning drafted a patent application, filed at the US Patent Office, and had it granted by lunchtime.

Gareth Dixon:

If only, I mean these things do take years and years and years. There’s these horror stories of patents that were once filed in the European Patent Office that as we mentioned, in patent last 20 years. These patent applications had expired before such time as that they’d been fully examined. That’s the exception obviously, but I mean the process does typically take a long time out.

Lisa Leong:

How long we talking here? Is it like a year or is it more?

Gareth Dixon:

Some countries are faster than others, Australia you can if you really, really push it from filing to grant, you can do it in less than a year if you really want to. I would say that in some of the larger offices, the US Patent Office, European Patent Office, Japanese Patent Office, four to five years is probably about average.

Lisa Leong:

And is there a tension there given how quickly this whole space is developing? That seems like it’s out of kilter with the pace of these technological advances.

Gareth Dixon:

Yeah, a hundred percent. But clean tech’s probably not your best example in that respect. I mean the short lived, ICT and tech based technologies that are sort of being built iteratively upon every day, those are the technologies that really suffer from the slow turnaround. Clean tech does suffer in that regard because you want certainty as third parties, you want technologies being published and disseminated. So, third parties can potentially experiment around them or design around them, but those types of things. So, you don’t want bottlenecks in industries that you want to be progressing very, very quickly and clean tech’s a good example in that regard.

Lisa Leong:

And for my invention, what are some of the other considerations I might have when I’m even thinking about whether or not to patent it?

Gareth Dixon:

Other considerations obviously there’s budget, there’s your potential market downstream, who are you going to sell it to? How are you going to not just get your money back that you spent on R&D, but actually make a profit. That there’s the potential patent scope. You might eventually be able to get a patent, but if that patent itself isn’t broad enough to stop competitors working in the same space, then again, you’ll be the one to go out of business very quickly because you need to recoup that R&D cost by charging a premium. And if they can do essentially the same thing, even though it may not be infringing your patent, they’ll be the ones that win in the marketplace. That’s a big consideration. We always say patenting is just one piece of a very, very complex jigsaw, and I think it’s only getting more and more complex as time goes on.

Lisa Leong:

And how much coin am I going to put aside for this patent application?

Gareth Dixon:

Just add a zero I think.

Lisa Leong:

Keep on going.

Gareth Dixon:

Keep on going. There’s no hard and fast rules because if you have a patent application that goes through one examination report and you can get it granted or allowed fairly quickly, obviously that’s going to be a whole lot cheaper than one that you tied up in examination, extended examination processes, such as the RCE and the US and appeals, all that sort of thing. And you may go through 10 or more examination reports over four or five years to get the patent allowed. So, by and large, it comes down to how easily you can get the patent across the line. And as we just alluded to previously, very often that’s a function of how broad you want to go. Very, very easy in theory to get a very narrow patent granted very quickly. But as we talked about before, if it’s not of any commercial use to you, then arguably it’s money down the drain.

Lisa Leong:

Now I’m thinking about my product Battery Buzz for busy business bodies. And I’m wondering whether there’s any certification system, so that I could be certified as clean tech. I’m thinking about my marketing already.

Gareth Dixon:

I’m sure there is, but I don’t know how credible or how universally accepted it would be. I mean, I’m sure there are any number of bodies out there that are willing to sort of certify it as a clean technology, but quite what it means, I’m not sure. I could be wrong here, I’m not sure if Australia has any universally accepted standard for clean technology. Again, based on the fact that there’s no universally accepted definition, I’d be surprised if there was.

Lisa Leong:

And so, the techy part of me wants to know, is it really a marketing and branding ploy, the category of clean tech?

Gareth Dixon:

Again, it’s one piece of the puzzle. If you go out there and you market yourself as clean tech, obviously that feel good factor that goes with it. And you’ve got to think that in a commercial sense, people are going to get on board with that for just general feel good reasons as one piece of the marketing strategy. Yeah, seems like it’d be very, very worthwhile.

Lisa Leong:

And then talking through the landscape, what are some of the other major or critical obstacles facing Aussie companies like mine, trying to get into the clean tech space?

Gareth Dixon:

I think one of the biggest obstacles that Australian companies have is the distance that we are from the rest of the world. For instance, you’re a California clean tech startup, most of you target marketers on your doorstep sort of thing. Whereas, we’ve got that extra distance that we’ve got to travel in. And with that comes regulatory barriers, cultural barriers, financial barriers, exchange rates, all those things that make it just that little bit more difficult for an Aussie clean tech startup to actually go global.

Lisa Leong:

Gareth, you’ve been in this area for yonks. What excites you the most about this space?

Gareth Dixon:

I think I mentioned the two technologies that I can really get my head around, hydrogen and batteries and the benefit that they can bring. We’re been talking about decreasing emissions from cars. There are other cool new technologies, for instance, the use of seaweed and cattle reduce the methane emissions from cows by up to 90%, that’s an amazing clean technology. Anything that can just reduce the harm that some of these processes are doing to the environment.

Lisa Leong:

Gareth, I just had this image of these cows wrapped in seaweed just then. Is that how it works?

Gareth Dixon:

Maybe it is. Apparently, the cows don’t actually have to eat much of it. I mean, not a big fan myself. Sushi bars and alike, but.

Lisa Leong:

Our partners will be encouraging us to eat seaweed, so we have less methane in their layers, ozone layers.

Gareth Dixon:

Exactly. But it is, methane is cows is an enormous polluter. Again, people tend to concentrate on the damage that humans are doing through industrial processes like cement and the like. But I mean, nature has a way of polluting as well. So, the clean tech industry is such as broad enough, so that we are sort of innovating in all those areas to try to mitigate a lot of the damage that’s being done.

Lisa Leong:

Now Gareth, I was very intrigued about your background as an organic chemist because I did science and law, and I was in the area of intellectual property and my major was organic chemistry, but I was terrible. But tell me about why you decided to become or sort of get into the area of intellectual property and being a specialist in patents from being an organic chemist?

Gareth Dixon:

To me, being a research chemist was a little bit up and down. When experiments were working, that’s all the motivation you need to get up early and get into the lab and stay late. When [inaudible] weren’t working, it was the opposite. You’d just pull the covers over your head in the morning and sort of spend as little time as possible in the lab. And very often there was no real rhyme, no reason that I could think of why things were or weren’t working. So to me, it was a little bit up and down and I was just looking for something a little bit more flat line. It doesn’t come much more flat line than patent law, so.

Lisa Leong:

You went to the flattest flat line.

Gareth Dixon:

Yeah

Lisa Leong:

Just joking.

Gareth Dixon:

But it was also a good way of applying the science that I’d learnt, and perhaps what’s not a classical vocation for scientists, so.

Lisa Leong:

And then what would your superpower be in relation to being a patent attorney with this organic chemistry background, do you think Gareth?

Gareth Dixon:

My superpower would be the ability to look into a crystal ball, the same one that everyone would love to have.

Lisa Leong:

I love that. And Gareth what’s coming down the line then for clean tech? Let’s put you on the lin.,

Gareth Dixon:

An iterative advancement of the technologies that are out there now. We’ve got solar, we’ve got wind, we’ve got wave and ocean power, just finding ways to address the energy crisis that we’re currently in by means of sort of using these natural resources that we have to produce clean energy. All the tools, the fundamental building blocks are in place. It’s really just matter of dreaming up the science now that’s going to connect the dots there.

Lisa Leong:

And where’s the trend going? Is it hydrogen? Is that the future?

Gareth Dixon:

I wouldn’t necessarily say it’s hydrogen as such, because hydrogen obviously is as an energy source, is obviously competing with batteries, et cetera. So, they’re all sort of competitive clean technologies. It’s going to be interesting over the next few years to see which one predominates, perhaps EV is actually the flavor of the month at the moment. It seems like that there’s an awful lot of innovation, a lot of publicity, press toward EVs rather than hydrogen powered vehicles for instance, that might be one way it’s going to go at the moment.

Lisa Leong:

It’s like the VHS call of the which one will have that huge take up and the other one falls away.

Gareth Dixon:

Yeah, still can’t believe Peter lost that one.

Lisa Leong:

That’s right. And don’t listen to me because I was the one who said in 1993, the internet it’ll never catch on.

Gareth Dixon:

Never catch on, no chance.

Lisa Leong:

When I first saw it at university, I announced everyone and everyone still reminds me. Oh Leong, you’re the one who said the internet will never catch on. Thank you so much Gareth.

Gareth Dixon:

Thanks Lisa.

Lisa Leong:

That was Dr. Gareth Dixon, Principal at Spruson & Ferguson.

Thanks to our producer, Kara Jensen-Mackinnon.

This podcast is brought to you by IPH, Asia Pacific’s Leading Intellectual Property Services Group, helping you turn your big ideas into big business. I’m your host, Lisa Leong. Bye for now.