UK cleantech start ups warned over IP time bomb

UK and European cleantech firms are consistently failing to adequately protect their intellectual property (IP) and are risking losing funding and compromising their competitiveness as a result.

That is the stark warning from one of the UK's leading IP advisory firms, which claims that as a still emerging sector the cleantech industry has largely failed get to grips with the concept of legally protecting their innovations.

Speaking to BusinessGreen.com, Andrew Watson chief executive of IPVA, said European cleantech firms were lagging far behind their US counterparts in their approach to IP protection, adding that many were failing to file sufficient patents, filing poorly worded patents and failing to identify trade secrets.

"We've seen several horror stories where investment and licensing deals have almost fallen through, because the other company has looked at the IP and found the protection lacking," he said. "There was one company where if it was a US firm it would have filed 100 different patents – in fact it had filed one patent and it was very weak."

Ensuring IP is legally protected is particularly important to cleantech firms, according to Watson, as much of their value is based on research innovation as opposed to products. "A lot of early stage cleantech firms are developing ideas rather than products, and where they do develop products, they license the manufacture out to larger partners," he explained. "As a result, the IP is hugely important to the value of the company, but many firms don't realise this."

A failure to protect IP through patents and trade secrets can also put start ups at a disadvantage when looking to license products to larger manufacturers. "Larger companies will have legal teams who know how to structure licensing deals to benefit them," he said, adding that those companies that did not have a clear IP strategy were at risk of being exploited.

Watson advised cleantech firms to assess their current state of IP protection and develop a strategy to ensure they keep better track of patents and trade secrets.

"A lot of it is cultural," he observed. "In Europe, there is a sense that you have to have developed some seminal science and almost won a Nobel Prize to bother getting a patent. But IP is any idea of value that helps you do things a bit better and you should protect that in the same way you'd protect other areas of competitive advantage."