Corporate Managers: Are You Failing to Obtain Maximum Value from Your Energy Savings and Green Innovations by Ignoring Patent Issues?

In this world of ever rising energy costs, your company likely has one or more teams of people working to reduce energy consumption and improve the efficiency of your company's processes. Your company is also probably working diligently on ways to make your operations more "green." For example, if your company exhibits a large carbon footprint in its manufacturing processes, someone in your organization is likely thinking about ways to reduce your carbon emissions in advance of the possible adoption of government-mandated carbon cap and trade system directed to fight global climate change.

However, because the external forces of energy costs and possible governmental regulation are driving these and green innovations inside your company, it is quite likely that these efforts are occurring outside of normal R&D channels. That is, your company's Manufacturing, Operations and Logistics personnel are likely responsible for developing and testing these potential new innovations, and for bringing them on-line as soon as possible.

I have found that when such non-R&D personnel are responsible for corporate innovations, a company often misses out on opportunities to obtain patent protection for such valuable proprietary advantages. This is due to the fact that non-R&D personnel typically do not think of themselves as "inventive" and/or they operate under the radar of the company's in-house or outside patent counsel. As a result, when these personnel develop innovations, they often do not possess the knowledge to recognize that a patent should be pursued to keep competitors from benefiting from their company's innovations. And, even if they do know about the importance of patents, corporate patent resources may not be readily accessible to them.

I believe these problems result from structural impediments existing at many companies. For example, as a senior in-house IP counsel at a large consumer and wood products manufacturer, I found that few opportunities existed for me to learn about innovations occurring outside of the confines of the R&D department. Indeed, patentable innovations were considered to be the province of the "real scientists" who resided in the corporate R&D facilities. Consequently, non-R&D people were generally not considered to be "inventors," and R&D personnel were almost exclusively granted corporate patent resources. In short, due to the siloed nature of the company, there was virtually no way for me to capture and protect innovations developed outside of the officially- recognized channels.

Now that I am an IP Business Strategist and Consultant (more info here: www.jackiehutter.com), a leading provider of IP strategy and consulting services, I have the opportunity to work outside of a siloed corporate environment. This allows me to introduce corporate managers to the concept that protectable innovations can come from anywhere in an organization.

For example, if, like UPS, your company developed a method to save 3 million gallons of fuel a year and to cut carbon dioxide emissions by close to 69 million pounds, shouldn't your company strive to protect that innovation regardless of whether it was developed by the "real scientists" in your R&D division? I do not know if UPS has tried to patent this valuable "no left turns" innovation (although they may have, because they are a prolific filer of patent applications). However, I do know that if they do not obtain a patent on this innovation, Federal Express or any other company will be able to use this method to save on energy costs and cut its carbon emissions without having to make the same investment in innovation that UPS did.

I am guessing that this substantial innovation by UPS did not result from a large R&D project where "real scientists" worked in a R&D silo after being directed to come up with an invention to save gas. Rather, I expect that someone on the UPS logistics team was trying to make a left hand turn one day and thought "I would save lots of gas if I didn't have to sit at this light so long" and he or she brought the idea to the team for consideration, with the idea growing from there. Alternatively, the idea could have emanated from one or more UPS drivers who noted how much time and gas was wasted when they made left turns, and that idea made its way to the logistics team for consideration.

Unfortunately, in many companies, the team responsible for developing and implementing an energy savings innovation such as UPS's might not know that the company even had a patent attorney. Such a valuable innovation would therefore be brought on-line without first considering whether patent rights should be investigated. In this type of environment, I have typically found that the opportunity to obtain exclusive rights on a valuable innovation can be lost forever because the patent application is not filed by the government deadline. When this happens, the innovation can be used freely by a competitor, which results in a net competitive loss to the innovator. (This net loss occurs because the competitor did not have to make the same investment to obtain the benefit of the innovation.)

In this day of intense corporate efforts to obtain energy savings and green innovations, I strongly believe that it is more important than ever for companies to educate employees at all levels about how patents can help provide their company with an advantage over competitors. It is therefore necessary for C-level management to develop and nurture what I call an "IP infrastructure" within the corporation. When personnel outside of the R&D and legal divisions understand and appreciate the need to bring potentially patentable innovations to the attention of management, your company will achieve more success in maximizing corporate asset value. Put another way, the US Patent Office does not ask if a "real scientist" developed the idea before granting a patent on an invention such as UPS's, and neither should your company's management.

I think we are on our way to getting there because, as demonstrated by surveys showing the growing importance of IP management at the C-level, corporate management is becoming more cognizant of the need for IP to be managed at the business level. However, in order for your company's executives to successfully execute on their plans to maximized the value from your organization's IP assets, it will be imperative for them to make sure that each and every employee in your company recognizes the value of IP generally, and patents specifically, to the creation of corporate value and profits.