The world over, transitioning to cleaner and more sustainable sources of energy is a key focus of governments, corporations and consumers alike. Analysing the ways in which such a focus has impacted the inception and development of businesses, McKinsey & Company has produced an article which states that US $2 billion has been invested in sustainability-themed start-ups all over the globe since 2018. With North America and Europe currently placed as the leading continents with regard to investment size, McKinsey & Company predict that Asia could increase its start-up activity ten-fold over the course of the next three to four years. With such a dramatic increase in the number of new ventures expected to commence throughout Asia predicted, it would appear that a dramatic increase in the number of innovators seeking intellectual property protection is fast approaching.
In recent years, both technological and governmental developments have been undertaken with the energy industry in mind, in order to combat the climate crisis. Certain sub-sets of the energy industry in particular have played a role in shifting towards more sustainable practices, namely the power generation, shipping and road transportation industries. In order to facilitate such a shift, operators within the aforementioned industries have adopted practices the successes of which are inextricably linked to effective intellectual property protection.
Such practices include, for example, entry into new partnerships and the initiation of new ventures in order to build those capabilities needed to be able to transition from the use of fossil fuels to the use of more sustainable sources of energy. Such partnerships are being formed throughout Asia, a region which historically has seen approximately half of all renewable energy investment located in China, India and Australia, with small pockets in Taiwan, Vietnam and Thailand. Japan and South Korea are also slowly emerging as renewable energy hubs.
With Indonesian Indika Energy having formed a joint venture with Indian Fourth Partner Energy just last year – aimed at providing Indonesia with solar power capabilities; and Philippine AC Energy Group having announced a joint venture with Hong Kong’s NEFIN – aimed at producing rooftop solar power capabilities, the whole of Asia’s energy sector looks to be united in its dedication to the energy transition.
Of course, in forming such partnerships, it is important for each participating party to be fully aware of the intellectual property-related implications of entering into an industry which may differ slightly, or significantly, from its own. If a participating party already boasts a well-developed intellectual property portfolio, it is important that said party ensures said intellectual property is applicable within the new industry into which it has entered. If not, said party may have to begin the process of gaining additional intellectual property protection, before they can begin to operate effectively within their newly formed partnership.
Prior to the commencement of any work in the interest of such collaborative innovation, it is vital that prospective partners agree upon a cooperation agreement, in order to resolve any issues which may arise regarding the ownership of intellectual property generated through collaborative innovation. Common areas known to present intellectual property-related issues for joint owners of intellectual property developed collaboratively include licensing, divestment, warranties and patent litigation for example. Also noteworthy is the variation of those laws governing intellectual property – and interpretations of them – dependent upon the jurisdiction within which an enterprise takes place. Each country enacts its own unique intellectual property legislation, therefore parties to a collaborative effort operating in different countries may have different expectations of their IP rights – not to mention the issues which arise as a result of different rules applying to each country within which patent or trademark protection is registered. Accordingly, it is vital that such issues be addressed as part of the formal agreement composed prior to the commencement of collaboration, in order to ensure an unproblematic and mutually beneficial partnership.
In addition to the Asian energy sector’s drive to develop sources of renewable energy, a surge in the region’s production of electric vehicles (EV) can be attributed to the recent energy transition initiative. From 2010 to 2019, the EV industry has grown approximately tenfold, with 2019 to 2020 alone witnessing EV-related investment activity double.
Currently, China is at the centre of such rapid development, with upwards of 90% of the investment for both original equipment manufacturers and components being located in the country. External to China, fledgling brands in countries such as Thailand, Vietnam and Indonesia aim to replicate the success of their Chinese counterparts. In mounting such efforts to replicate the success of competitors, an acute awareness of said competitors’ intellectual property rights will be essential, to ensure such brands do not encounter both legal and financial struggles whilst still in their infancy. Furthermore, as operators within the petroleum-vehicle value chain seek to explore electrification as a defensive hedge, earlier mention of intellectual property awareness upon entry into an unfamiliar industry is once again relevant. A prime example of such electrification exploration is provided via Thai oil giant PTT’s recently announced development of an EV assembly facility, in the interest of which a joint-venture agreement with Taiwanese Foxconn has been signed – to facilitate the local development of components.
With the cost of renewable energy technologies having fallen by 90% over the past ten years, with a similar decrease in cost having been noted in relation to EV battery technology, numerous forms of technology capable of effectively enabling the energy transition are set to become far more affordable – technologies such as those related to the use of hydrogen as a source of energy, batteries and energy storage, recycling, carbon markets and offsets as well as carbon capture, utilisation and storage (CCUS). The newfound affordability associated with such fledgling technologies is sure to attract innovators in Asia – as well as the world over – to progress their development, a process which cannot help but involve the registration of intellectual property, in order to protect such developments from exploitation by competitors, and in order to aid said innovators in realising commercial success.
In short, an undeniable growth of green business globally is currently underway, with prime opportunities to replicate – and benefit from – said growth being rife throughout Asia. Such rapid growth has been spurred on by the shift of governmental, corporate and consumer focuses the world over towards the energy transition, leaving fossil fuels behind for more sustainable sources of energy – a shift made necessary by the global climate crisis through which the population is currently struggling. Such a shift has settled its focus on the energy sector, with operators initiating new ventures, partnerships and technological developments in response. As highlighted above, such responsive actions are inextricably linked to a keen awareness of intellectual property protection. No new venture can be initiated without a keen understanding of the intellectual property rights of those already operating within the prospective industry. No partnership can be formed without a keen understanding of one’s own intellectual property rights, as well as those of the prospective partner. And, of course, no new technology can possibly be utilised or commercialised safely without effective intellectual property protection.
Furthermore, in light of the above consideration regarding potential intellectual property pitfalls which may arise when parties to collaborative innovation find themselves to be joint owners of the resulting intellectual property, it is advisable that one considers their background – existing – intellectual property ahead of any initial discussion or collaborative agreement with a potential partner. Furthermore, it is vital to consider the background intellectual property of the potential partner in the same manner, as well as any freedom to operate considerations which may hinder any prospective collaboration. Finally, one must ensure that a collaboration agreement is firmly in place in advance of the commencement of collaboration, ensuring that said agreement includes suitable intellectual property clauses which clearly define the ownership of any foreground intellectual property developed throughout the partnership.
As green business growth progresses, we at Marks & Clerk are primed to offer our expert services within the realm of intellectual property protection to those innovators set to drive said progression. With Marks & Clerk’s patent and trademark attorneys alike having acquired widely varying technological and legal expertise throughout years of study and legal practice, we as a business are extremely keen to facilitate the ongoing energy transition, and are fully capable of doing so.
