Green Business Bureau Blog
Green Tech IP: Know the Lay of the Land
Why does green tech, and the IP that protects it, play such an important part in every-day business decisions? Take the following illustration:
Some years ago, I was lead counsel for a well-known government-related entity (“GRE”) in a “paleo” green tech litigation. Responding to societal and regulatory pressures, the GRE was utilizing a simple and effective technique for removing millions of square feet of vinyl asbestos tile from its facilities. But after commencement of the project, the GRE was sued for infringement of a patent on an invention coincidentally (?) made by an employee of one of the project subcontractors. You may think this sounds a bit fishy; so did we. The suit was ultimately settled for nuisance value.
The point, however, is that the GRE, in seeking to dispose of hazardous material via a green tech method, unwittingly walked into a patent ambush. An opportunistic individual had capitalized on asbestos-mitigation sentiment and got a patent which would ensnare the well-intentioned GRE. It was forced to spend money and time in mounting a defense and conceivably could have been liable for damages under less fortunate circumstances.
To avoid a similar “no good deed goes unpunished” fate, companies must be aware of myriad environmental laws, rules and voluntary standards, and – when complying with them – steer clear of problematic IP, which may actually have been created to capture compliant green tech solutions. On the flip side, to stay ahead of the curve, companies should also be alert so that when they devise green tech solutions to meet applicable laws, rules or standards, the green tech can be exploited through securing IP that covers it. Either way, one must master the regulatory environment to attain business success regarding the planetary environment.
The laws and rules at issue are mandates that leave no choice concerning measures for pursuit of more environmentally friendly products and operations. These are complemented by voluntary performance standards, compliance with which can be promoted for competitive advantage. Of course, the news is full of reports on governmental initiatives relating to green house gas (“GHG”), from clamping down on the amount of GHG emissions, to expanding the group of substances deemed GHGs, to reporting the impact on a company’s business of any perceived climate change, or the government’s response to it. But, there are other recent developments in the field that are flying below the radar, because the coverage of those events is not as intensely publicized as GHG-directed regulation. For instance, the federal government is moving toward:
- requiring testing of a broad group of industrial chemicals even before they have been demonstrated to pose a threat to health or safety;
- governing the amount of acrylamide in foods, adhesives, grout and certain industrial processes;
- managing the use of bis-phenol A, a substance incorporated in a wide range of consumer and industrial products
- instituting even tougher controls on the use, storage and disposal of polychlorinated biphenyls (PCBs);
- tightening requirements on contractors that deal with lead-based paint;
- mandating disclosure concerning hydraulic fracturing fluids utilized in oil and gas production (on the theory they may cause groundwater contamination);
- stepping up enforcement of hazardous waste rules against healthcare facilities; and
- heightening notification requirements in respect of the detected workplace presence of hexavalent chromium.
Not to be outdone, state environmental agencies are also looking to beef up their regulation of substances deemed harmful to the environment, for example:
- a progressive leader at the state level in California has put into place a “Green Chemistry Initiative,” according to which the Department of Toxic Substance Control has authority to designate materials in consumer products as “chemicals of concern” and require the implementation of alternatives that are considered to increase safety;
- California’s EPA is proposing notice requirements for the potential carcinogenic or reproductive harm thought to be caused by acrylamide; and
- even in more industry-conscious Ohio, there is work on legislation that addresses, among other things, recycling consumer electronic devices (such as computers, televisions and printers) and compelling all new buildings constructed using state capital budget money to meet specified green standards.
Furthermore, there are many private sector, voluntary standards by which the environmental friendliness of products and services in the marketplace can be judged. These are used as a supplement to governmental regulations. Meeting these standards typically entitles one to designate products or services “green” or some equivalent, which may well increase sales. Examples are ASTM, LEED, GREENGUARD, GREENROADS, MPI Green Performance and Green Seal.
The take-away is that conforming to governmental regulations and voluntary standards is a reality of modern business. So are the green tech solutions it triggers and the IP rights to which it gives rise. Those rights must be circumvented if owned by others or secured if developed in-house. Ignoring this risks significant exposure and/or forfeiture of opportunities for competitive advantage.
In the next post: what to do, from a “right to use” standpoint, when implementing a green tech solution in response to regulation.