Owning the Landscape: The Importance of Intellectual Property Rights in Engineered Biofuels

By David Fournier, Chair for Patent Prosecution and Portfolio Counseling, Perkins Coie LLP

Special to The Digest

Biocarbons are experiencing significant investment and growth as a drop-in replacement for fossil fuels in energy and metals production.  As companies move from found fossil fuels to engineered biofuels, intellectual property rights will invariably have a significant impact on overall market dynamics.  Patents relating to the production or use of biocarbons will simultaneously reward innovators, deter copycats via the chilling effect of potential enforcement as well as incentivize the search for new and different technologies.

National Carbon Technologies’ (“NCT”, an industry leading developer and producer of biocarbon products) recent acquisition of Cool Planet (a biocarbon technology company with a focus on agricultural applications) intellectual property combines the patent portfolios of two of the most sophisticated innovators in the global biocarbon marketplace.  Both companies have built impressive teams comprised of researchers and thought-leaders from the bioenergy and bio-products industries to develop and advance new biocarbon process and product technologies.  All told, the two companies have spent more than a decade and more than $100MM researching and developing biocarbon production methods, biocarbon products, and new applications for biocarbon in energy, metals production, and agriculture, as well as building extensive patent portfolios covering these technologies.

NCT’s patent acquisition strategy highlights the importance of engineered bioproducts in the future global market and is reminiscent of what has occurred in other markets as transformational technologies have emerged.  In the wireless phone space, for example, major industry players made substantial investments acquiring and enforcing intellectual property portfolios (e.g. the “Smartphone Wars”) as they worked to build and maintain market share. Similarly, through its own organic research and development program and, more recently the acquisition of Cool Planet’s intellectual property, NCT has built a leading exclusivity position in the biocarbon market.  As with other technology-intensive sectors, winners and losers will emerge based not only on the strength of their underlying technology and ability to successfully bring products to market, but also on the strength of their exclusivity positions.  Through its successful history of innovation and recent acquisition of Cool Planet’s intellectual property, NCT has positioned itself as a leader in a growing market with estimated global annual sales potential of more than $1 trillion.

As companies like NCT continue to innovate and build intellectual property portfolios in the biocarbon space, all market participants–investors, manufacturers and end users–will need to become intimately familiar with the intellectual property landscape and find ways to navigate it.  That landscape is continually growing in scope and complexity and careful diligence will be required to ensure that new products brought to market enjoy freedom to operate.  Failure to adequately assess the intellectual property landscape and to proceed with appropriate diligence will likely create significant enterprise risk.

About the Author

David Fournier is a Partner and the Firmwide Chair, Patent Prosecution and Portfolio Counseling with the global law firm Perkins Coie LLP and represented NCT in its acquisition of Cool Planet IP.