#92 Intellectual property models in GreenTech

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00:00:24: this episode which explores how IP is used In green tech from research to commercialization features content From Pratibha Vimalnath and Frank Tito.

00:00:35: If you want to basically open source a climate saving technology, the data suggests that the absolute worst thing is just give it away for free

00:00:46: right which sounds completely counterintuitive especially in this sector like green tech that publicly prides itself on radical collaboration.

00:00:54: The baseline assumption as always that maximizing access Is the fastest route To maximize impact.

00:01:00: Yeah Just get out there

00:01:01: Exactly.

00:01:02: But when you actually look at the empirical data on how these green technologies survive, that transition from a lab bench to actual global industrial implementation.

00:01:13: The narrative just flips entirely it

00:01:15: does.

00:01:15: saving the world actually requires highly sophisticated rigidly controlled approach to IP rights

00:01:22: And that structural paradox really is the focal point of our deep dive today.

00:01:26: We are looking directly at a twenty-twenty two paper published in The Journal Of Cleaner Production by Perthiba Vimalnaath, Frank Tates and their colleagues.

00:01:35: Yeah

00:01:35: it's a fascinating study.

00:01:36: It

00:01:37: really is.

00:01:37: they did this rigorous multi phase analysis of fifty seven highly successful green innovations That were nominated for the European Inventor Award just to set the stage here because we are speaking directly to practitioners today.

00:01:51: You know, IP managers patent attorneys R&D leaders that tech focused investors We're completely bypassing The basic definition

00:01:59: and we're not explaining what a patent is Today

00:02:00: right no?

00:02:01: No you already out there.

00:02:02: managing complex portfolios navigating FTO landscapes structuring joint development agreements.

00:02:08: Our objective here is to really dissect the underlying mechanisms of how these elite organizations dynamically sort-of mutate their intellectual property strategies across the entire technology life side.

00:02:19: And a central finding from Vimal Nath and her team, it basically completely dismantles this static IP mindset.

00:02:25: Yeah What they found was that the degree of openness in IP sharing Is almost never affixed doctrine.

00:02:30: Instead The openness increases along innovation pipeline.

00:02:35: But And this is the crucial part, that specific trajectory depends entirely on the underlying asset base and the manufacturing capabilities of the entity holding those rights.

00:02:46: So depending who you are?

00:02:47: Right whether your dealing with a venture backed startup or research university Or massive heavy industry incumbent That dictates entire strategy.

00:02:56: But the starting point for all of those actors, though is surprisingly unified.

00:03:00: It really

00:03:00: is yeah?

00:03:01: If you look at the genesis of the technology life cycle... The research phase that data is pretty staggering!

00:03:08: During this initial R&D window, eighty-one percent of these highly successful green innovators adopt a strictly closed IP model.

00:03:16: Total lockdown.

00:03:16: Total

00:03:17: lock down total patent protection or strict trade secrecy with basically zero proactive sharing

00:03:22: And the mechanism driving that behavior, it really comes down to early stage incentive structures.

00:03:27: Though this strategic rationale shifts depending on who's actually doing the innovating.

00:03:31: so consider the new ventures in the data set for a startup.

00:03:34: A closed IP model and research phase is rarely about blocking specific competitor market because well There is no market yet.

00:03:43: Yeah,

00:03:43: they're just trying to survive

00:03:45: exactly.

00:03:45: it's entirely about controlling the perimeter of the asset To survive.

00:03:49: technical due diligence

00:03:51: which fundamentally alters how investors value those intangible assets.

00:03:56: A broad foundational claim scope in that early phase, it isn't a weapon.

00:04:01: It's literally the underlying currency that justifies the

00:04:04: valuation.".

00:04:04: That is precisely the dynamic we see with Esben Beck and Stingray Marine Solutions—that's a case they highlight on their research.

00:04:10: Oh yeah!

00:04:10: The laser robot?

00:04:11: Yeah so Beck develops this highly complex submersible robot that uses lasers to optically identify and then shoot parasites off of harvested salmon

00:04:20: which wild technology.

00:04:23: That's amazing, but he filed his foundational patents aggressively early around twenty ten and the strategic purpose of those closed rights was basically to serve as a prerequisite for raising over four million euros because investors needed to know that technological sandboxes were legally enclosed before they would ever finance Physical prototypes.

00:04:42: and universities are playing a very similar game in this early phase, but for a totally different audience.

00:04:47: I mean they aren't trying to satisfy a venture capital term sheet.

00:04:51: They need to attract heavy industry partners.

00:04:53: For leader stage scale

00:04:55: up right the co-development angle.

00:04:56: Yeah exactly there's this really revealing insight into research from Professor Mark van Lüstrecht at Delft University.

00:05:04: He is the mind behind the narrator wastewater technology, right?

00:05:08: And he points out that without a closed patented baseline, no private engineering firm would ever seriously commit to a co-development partnership.

00:05:16: Because that is a critical mechanism of technology transfer.

00:05:19: I mean an industrial partner's not going allocate millions in CAPEXs to build a pilot facility for university technology if there is no exclusivity?

00:05:28: Right why would they

00:05:29: exactly?

00:05:29: the University has to lock down the foundational IP so the industry partner as a legally shielded commercial environment operate within.

00:05:37: yeah Now, if we look at the established firms —the incumbents— they're also using closed models early on.

00:05:44: But for classic reasons... They need to protect their sunk R&D costs and establish a defensive perimeter against direct rivals.

00:05:53: The Arima Group in Austria is prime example of this.

00:05:56: Right!

00:05:56: The plastics recycling

00:05:57: Yeah…they developed an advanced countercurrent technology for recycling patented core mechanisms And just kept it entirely in-house as pure barrier entry.

00:06:06: I hear that and it makes sense on paper, but looking at current industry trends this is exactly where a lot of R&D directors would express some heavy skepticism.

00:06:14: Oh absolutely!

00:06:15: I mean half the panels at green tech conferences right now are entirely devoted to building open innovation ecosystems in collaborative platforms.

00:06:22: so if the ultimate goal is integrating your tech into massive global supply chains locking up your foundational IP in total secrecy seems i don't know legally toxic to collaboration.

00:06:33: yeah doesn't that rigid closed model essentially create an absolute bottleneck right out of the gate.

00:06:39: I mean, that skepticism is super common but it misses the transactional reality.

00:06:51: If you were an agile startup sitting down at the negotiating table for a joint development agreement with some massive multinational manufacturer...

00:07:02: Right.

00:07:02: A huge mismatch in power!

00:07:04: Huge?

00:07:04: You need absolute clarity on intellectual property brought into that room.

00:07:08: Oh, I see logic Because if the baseline isn't closed and legally delineated The transaction costs of determining who owns this subsequent foreground IP.

00:07:18: You know, the actual improvements made during the partnership it just becomes impossible to untangle.

00:07:22: Right!

00:07:22: The deal just collapses under the weight of IP contamination risks.

00:07:26: Without a closed baseline... ...the legal departments on both sides will kill the collaboration before engineers even share single CAD file.

00:07:34: Wow So the paradox here is that this strictly-closed model in research phase Is actually structural prerequisite that enables open sharing at later phases.

00:07:43: That's fascinating.

00:07:45: But securing that background IP really only gets you so far.

00:07:49: A patent portfolio doesn't pour concrete or build international distribution channels,

00:07:54: obviously not

00:07:55: the moment The technology passes technical validation and hits That development and commercialization threshold.

00:08:01: a massive strategic divergence takes place in the data And the causality here is super interesting.

00:08:07: the ip strategy suddenly splits entirely based on whether the innovator actually possesses internal manufacturing capacity.

00:08:15: Yeah, this is where the structural realities of a physical market just force a shift.

00:08:19: Established incumbents.

00:08:21: for the most part they maintain their closed posture

00:08:24: because they can't...

00:08:24: Because they can!

00:08:25: They already possessed the supply chains-the manufacturing footprint and regulatory clearance to bring a product to market-they don't need a partner's infrastructure.

00:08:33: so they'd just rely on in house commercialization expertise.

00:08:36: The

00:08:39: paper illustrates this with that German engineer Stefan Lenert, who invented a highly efficient ETFE plastic roof and cladding system.

00:08:48: He doesn't just sit on his portfolio he actively wields patent enforcement in the explicit threat of litigation against potential customers who might try to engineer around.

00:08:57: is tech for an incumbent with a factory the IP's just tool to maintain absolute market power

00:09:03: which brings us face to face with the Green Patent Paradox.

00:09:06: Right, Kate's concept from twenty-twenty

00:09:08: Exactly!

00:09:09: Which gets heavily debated in policy circles.

00:09:12: The paradox essentially argues that patents while designed to incentivize innovation often actively throttle the diffusion of critical climate technologies because the patentees just refuse share implementation rights.

00:09:25: Yeah, and you see that argument used constantly to attack the patent system as a whole.

00:09:30: The claim is if an incumbent has technology cut global industrial emissions by forty percent but they lock it up only to deploy within their own limited manufacturing capacity?

00:09:41: The planetary impact is artificially restricted Exactly!

00:09:44: Restricted by the monopoly.

00:09:45: But what the Vimalnaf analysis does so brilliantly here Is contextualize that paradox.

00:09:52: The data reveals that this bottleneck effect is primarily valid only during the specific commercialization phase.

00:10:00: And it predominantly applies to those established incumbents holding onto their rights, to protect legacy market share.

00:10:07: It's not a universal truth of the patent system itself Because while incumbents are busy building these fortress walls The resource-constrained actors, universities and startups.

00:10:18: They're being forced to pivot

00:10:19: And the numbers back that up dramatically.

00:10:21: The study shows that sixty percent of universities shift in this exact phase to semi open models.

00:10:27: Specifically, they start executing exclusive licensing agreements.

00:10:31: They are compelled to pivot because they face a massive structural deficit.

00:10:34: Universities and early stage ventures generally lack commercial manufacturing lines right?

00:10:39: And critically...they often lack the freedom to operate To bring a complex physical product-to-market without tripping over hundreds of peripheral implementation patents held by other players in the sector.

00:10:50: The Cupid podcast from the Polytechnic University Valencia perfectly illustrates this mechanism, I think.

00:10:57: They engineered these highly specialized concrete block design for coastal breakwaters that significantly reduces material waste.

00:11:06: but a university is obviously not going to capitalize on global concrete casting and logistics operation?

00:11:12: No, of course not.

00:11:13: So they utilized an exclusive license to a heavy construction firm called CEDO.

00:11:18: And then CEDo developed the reusable industrial molds and went on to win massive government contracts To deploy the tech.

00:11:25: yeah or you consider I am The Nanotech Institute in Belgium.

00:11:28: Oh right They developed a breakthrough cost-effective solar cell production method and they immediately licensed it exclusively to a targeted spin off just to bridge that gap into the market.

00:11:39: Because the exclusive license is the exact legal vehicle, which transfers the immense CAPEX requirement and commercial risk from inventor-to-manufacturer.

00:11:48: It kind of reframes core analogy we usually use in IP industry For a massive incumbent.

00:11:55: A patent portfolio is a fortress wall Right?

00:11:58: it keeps competitors out while you exploit territory inside.

00:12:02: But for university or new venture in this commercialization phase The patent is actually a bridge.

00:12:09: I like that,

00:12:09: however the toll to cross That Bridge Is the exclusive license?

00:12:14: That exclusivity is the only way To ensure the manufacturer on the other side has A completely protected commercial sandbox.

00:12:21: Right because they simply will not spend tens of millions Of euros crossing that bridge to build a factory if They're forced to compete with generic implementations the very next day Exactly!

00:12:31: So that framing aligns perfectly With underlying mechanics.

00:12:34: here The fundamental utility of the patent claim changes dynamically based on the physical asset base of the entity holding it.

00:12:41: But,

00:12:41: and this is a big but an exclusive license to a single manufacturing partner in one geographic region doesn't exactly solve global warming?

00:12:48: No It does not!

00:12:49: The exclusivity that successfully got the tech out of the lab And built the initial market eventually becomes A localized bottleneck itself.

00:12:57: when the mandate Is planetary impact you have To hit the diffusion phase.

00:13:01: Scaling-approven technology globally requires navigating dozens of regulatory environments, securing unprecedented capital.

00:13:09: How do these innovators break out their local footprints?

00:13:12: Well the empirical data shows a massive strategic realignment.

00:13:15: during the diffusion phase The overall reliance on strictly closed models drops to just forty percent.

00:13:21: Wow so huge drop!

00:13:22: Yeah and simultaneously, forty two percent of studied cases adopt semi open models.

00:13:28: And the critical mechanism here is the dominance of non-exclusive licensing.

00:13:32: Of all the licensing arrangements they observed, seventy seven percent became nonexclusive at this stage.

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00:14:25: Yeah, they created a mycelium-based biomaterial that acts as direct replacement for toxic petroleum based packaging.

00:14:33: But if your strategic goal is to actively displace the global plastics industry building one successful facility in upstate New York doesn't really move the needle

00:14:41: at all.

00:14:42: so they decoupled their IP from their physical manufacturing footprint.

00:14:46: They utilize non exclusive licensing To expand into Europe and Asia

00:14:51: because it allows them to achieve global market penetration without the crushing requirement of raising the capital to build proprietary facilities in every single international territory.

00:15:03: And this dynamic is actually giving rise to a highly specialized business model, The Virtual IP Firm.

00:15:10: I wanted to ask about this.

00:15:12: Yeah, these are organizations that operate purely as R&D engines and licensing clearinghouses.

00:15:17: They completely bypass physical production.

00:15:19: The whale power example in the paper highlights This perfectly there a Canadian firm That analyzed the biometric design of humpback Whale Flippers And then applied those aerodynamic principles To industrial Turbine blades to massively increase efficiency.

00:15:32: But they don't pour fiberglass or assemble turbines.

00:15:35: They solely manage an enforce A web Of non-exclusive licenses.

00:15:40: or even more striking is Laundra in the UK.

00:15:43: They engineered a revolutionary blade compressor technology.

00:15:46: rather than attempting to build a global industrial pump manufacturing empire from scratch, to compete with the incumbents they licensed the tech non-exclusively to Sultzer

00:15:56: In an arrangement reportedly valued at around seven hundred and seventeen million euros

00:16:00: right?

00:16:00: Yes it's massive

00:16:01: because they are essentially operating as intellectual property holding companies.

00:16:06: By executing these non-exclusive agreements, they leverage the existing depreciated manufacturing bases of global giants to defuse green tech at a speed that could never achieve independently.

00:16:18: But

00:16:18: evaluating this from risk management perspective brings up major concern.

00:16:21: The paper references Chen and Dimitrov's twenty seventeen research regarding threat of imitation.

00:16:27: Oh

00:16:27: yeah!

00:16:27: The Imitation Risk Right...

00:16:30: If you are an R&D focused startup And your primary strategy relies on licensing your core technology non-exclusively to massive global manufacturers.

00:16:40: You are essentially opening doors for followers, you're handing over your deepest trade secrets and tacit process.

00:16:45: know how companies with infinitely more engineering resources... Yeah Don't the giants just learn the underlying mechanism, design around your claim scope and then cut you out of the market entirely?

00:16:56: I mean that imitation risk is the central calculation every IP strategist has to navigate.

00:17:01: But in this specific context of green tech... The variables for those calculations are weighted a bit differently.

00:17:06: How so?

00:17:07: In environmental technologies rapid-market substitution and geometric scale Are the ultimate metrics of success.

00:17:13: A resource constrained entity simply cannot achieve global footprint before the technology lifecycle inevitably moves on to the next iteration.

00:17:20: So it's a race against the clock, not just or race against competition?

00:17:24: Exactly and that alters this strategy.

00:17:26: retaining stripped legal control of core foundational patent while willingly disseminating specific application rights non-exclusively It becomes most viable pathway to scale Right.

00:17:38: Yes The risk for partner eventually engineering around claims is real.

00:17:43: But the opportunity cost of moving too slowly, both economically and environmentally is devastating.

00:17:49: You're actively trading absolute long-term monopolistic control for immediate massive global scale in the resulting revenue generation.

00:18:00: The foundational patent holds the line just long enough to establish market dominance.

00:18:04: So if that underlying goal is sheer speed and rapid substitution That raises a structural question about the necessity of the transactions themselves.

00:18:11: If we are moving toward wider sharing and non-exclusive diffusion anyway, why navigate the intense friction of licensing negotiations at all?

00:18:19: Why don't the innovators just release IP to public domain?

00:18:22: let global supply chain take over.

00:18:23: Well that assumption leads perhaps most sobering data point in entire Vimal Math study.

00:18:28: The researchers found fully open models strategies like open source hardware proactive royalty free patent pledges basically giving the IP away.

00:18:38: they were practically nonexistent as proactive strategies among these highly successful European cases.

00:18:45: The data basically indicates that fully open IP only really occurred passively when the twenty-year patent terms naturally expired.

00:18:52: Right!

00:18:53: The paper directly addresses the high profile failure of the EcoPatent Commons initiative.

00:18:57: to explain why this happens.

00:18:59: For those who don't remember, This was a heavily publicized corporate platform where major multinationals pledged various environmental patents to the public domain totally royalty free And

00:19:09: it essentially failed to generate any meaningful technological diffusion Really?

00:19:13: None!

00:19:13: NONE.

00:19:14: When researchers analyzed the initiative, they found that companies generally avoided pledging their highly valuable foundational patents.

00:19:21: They pledged peripheral claims or end-of-life technologies...

00:19:24: Sort of leftovers?

00:19:25: Yeah

00:19:25: exactly!

00:19:26: But

00:19:26: even beyond the quality of the patents pledged there is a core transactional mechanism missing there.

00:19:33: Why did free access fail to trigger commercialization?

00:19:37: Because a patent document alone is practically useless for commercializing.

00:19:42: A highly complex green technology, right?

00:19:44: Filing a pattern requires disclosing the invention sure but it doesn't require disclosing The manufacturing tolerances the supply chain integration protocols or the accumulated engineering trade secrets required to actually build the Technology at a profitable scale.

00:20:00: The eco-patent commons provided legal freedom to operate But zero technical support

00:20:05: huh.

00:20:06: So a patent claims document isn't a recipe, it's just the menu.

00:20:09: Exactly!

00:20:10: It tells you what the dish is but doesn't give you the tacit knowledge of chef who cooks

00:20:13: it.

00:20:14: That was perfect way to put it

00:20:15: Which highlights why this semi-open targeted licensing we discussed earlier Is so effective.

00:20:20: A well structured license does not grant illegal right.

00:20:23: It serves as framework for actual technology transfer.

00:20:27: The licensee is paying for the tacite knowledge and how too that intentionally Isn't written in public patents?

00:20:34: Because the financial transaction of a license creates a vital alignment of incentives.

00:20:39: Since the licensure's revenue is tied to royalties, they have a vested economic interest in deploying their engineers to ensure that the licensees factory actually gets up and running efficiently.

00:20:49: A free public patent pledge creates absolutely no incentive for critical knowledge transfer

00:20:55: Which leaves an open question about end-of-the life cycle.

00:20:58: If patents eventually expire and giving them away for free early doesn't work, how do these highly successful firms extend their market dominance once the diffusion phase ends?

00:21:08: And the core mechanisms legally enter the public domain.

00:21:12: The research identifies a heavy reliance on strategic IP combinations.

00:21:16: as the core patents approach expiration and the underlying technology inevitably begins to commoditize...the sophisticated firms shift their defensive posture.

00:21:25: Oh

00:21:25: they pivot again.

00:21:26: Yeah They transition away from relying on the patent claims and heavily leverage their trademarks, brand equity, and accumulated trade secrets.

00:21:34: So they basically use a twenty-year patent runway to build insurmountable brand trust... ...and then just let that trademark capture value when it falls away?

00:21:43: Precisely!

00:21:44: The patent provides initial exclusivity required to prove reliability By the time it expires, the firm's trademark represents a level of proven de-risked execution that a new generic entrant simply cannot replicate on day one.

00:21:59: Wow!

00:22:01: Analyzing this entire trajectory—the mandate for IP professionals listening is pretty clear.

00:22:06: Treating your intellectual property strategy as static inflexible doctrine will actively hinder your ability to scale green tech?

00:22:12: Absolutely the data demands dynamic adaptation.

00:22:15: You generally must start strictly closed in the research phase to establish an unassailable background IP baseline, survive technical due diligence and secure capitalization.

00:22:24: as a technology clears the commercialization threshold you must selectively open the perimeter often utilizing exclusive licensing.

00:22:35: And finally, to achieve genuine planetary impact during the diffusion phase you transition toward non-exclusive licensing decoupling your IP from physical constraints to leverage the vast footprint of established global incumbents.

00:22:49: It requires a highly deliberate constantly evolving orchestration of legal rights.

00:22:55: You're shifting from pure defensive protection to structured strategic collaboration as the asset matures

00:23:01: which really presents a profound challenge to how we structure the broader innovation ecosystem.

00:23:06: The paper points out that current macro-level policy initiatives, things like fast track examination procedures for green patents.

00:23:13: they focus almost exclusively on the exclusivity phase

00:23:16: right?

00:23:16: They optimize this system to help innovators secure the closed rights faster ex ante.

00:23:20: but the empirical evidence clearly demonstrates during the semi-open diffusion phase.

00:23:29: Exactly, we are optimizing at the beginning of a pipeline while largely ignoring friction in the end.

00:23:34: Right.

00:23:35: so if true value transferred is not just patent claims but tacit engineering knowledge and proprietary trade secrets as saw with failure open pledges reliance on strategic combinations.

00:23:49: maybe R&D leaders need paradigm shift.

00:23:53: I think so.

00:23:54: If you're managing an advanced green tech portfolio Perhaps you shouldn't just be auditing your granted patent claims.

00:24:00: Perhaps, you need to figure out how to audit your engineer's brains?

00:24:03: How do you systematically package value and license the tacit trade secrets that walk out of your facility every

00:24:09: evening?".

00:24:09: Because if data is right... That invisible know-how was actually key for saving

00:24:19: a planet!