Green Building Patents - ABA YLD 101 Practice Series

By Michael R. Vieira & Zachary J. Antalis

According to the United States Green Building Council, green and environmentally-sustainable construction currently supports more than 2 million jobs and generates more than 100 billion dollars in gross domestic product and wages.  By 2013 green construction is expected to generate an additional 554 billion dollars in gross domestic product.

Several factors contribute to the expected increase in green building: expanding consumer demand, increased government funding and incentives and growing acceptance of environmentally-sustainable building practices.  In addition, one of the leading factors in increased green building is the innovation of new sustainable building materials and practices.

With innovation comes the need to secure intellectual property rights of inventors and companies.  Patents grant property rights to inventors or their assignees and are issued by the United States Patent and Trademark Office (USPTO).  The limited monopoly conferred by the utility patent theoretically permits the patent holder to exclude others from making, using, offering for sale, or selling the invention as claimed in the patent in the United States or importing the invention into the United States.  Generally, the term of a new utility patent is 20 years from the date which the patent application was filed with the United States. 

The increasingly competitive green building industry recognizes the need to protect and ability to profit from environmentally-sustainable technologies.  More than 1700 patents are filed each year with respect to environmentally-sustainable technologies. The patented inventions range from low flush toilets to lumber made from materials that reduce the need for insulation, to rainwater harvesting technology. 

By granting inventors the right to control and profit from the use of their inventions, patents foster research and development investment in green technology innovation, ideally permitting a new technology to be brought to market and licensed to other inventors who may improve on the invention. 

In order to decrease time to market and maximize the enforceable post-issue patent term, a patent must be issued in a timely fashion.  Typically, patent applications are considered in the order that they were filed.  It is common that a patent application will take more than three years to obtain a final decision. 

Due the Obama administration’s backing of job creation in part through green technologies and a global emphasis on greenhouse gas reduction, the USPTO launched a Green Technology Pilot Program providing accelerated examination of patent applications relating to environmental quality, energy conservation, renewable energy resources or greenhouse gas emissions reduction.  The program aims to reduce the time it takes to obtain final decision on a green patent application by about a year.

While the USPTO pilot project seeks to expedite review of green patent applications, some countries are pushing for compulsory licensing of green building technologies through international agreements.   A compulsory licensing scheme would require a patent or trade secret holder to grant the use of its technology to the government or to others.  Proponents of compulsory licensing argue that developed countries have an obligation to share green building technology with less-developed nations. 

Opponents to compulsory licensing contend that requiring inventors to share technologies with others absent an express agreement erodes the intellectual property rights that drive commercial efforts to innovate.  If inventors could not levy a fee on others who exploit their invention, there would be less incentive for inventors to invest in research and development.

While compulsory licensing of green technology is not currently mandated, federal courts have stepped away from traditional notion that a patentee can altogether exclude others from using patented technology.  Instead, federal courts are exercising their discretion to award monetary damages to the patentee where the patentee does not directly compete with the alleged infringer.  Is this a judicially created compulsory license?

In Paice v. Toyota, 1 a patentee of hybrid technology sued Toyota for manufacturing vehicles that allegedly infringed its patents.  Toyota was ordered to pay an ongoing royalty for use of the patented technology.  Initially, the patentee was awarded $25 for each hybrid Prius manufactured by Toyota, a small fee compared to the large profits obtained by Toyota for each hybrid vehicle sold.  A patentees’ once seemingly absolute right to injunctive relief to prevent infringers from using patented technology is no longer good law.  Courts now take a four factor equitable approach to injunctive relief as set forth in the U.S. Supreme Court’s decision in eBay v. MercExchange, 2 severely limiting the application of absolute injunctive relief.
           
The number of green inventions is growing.  At the same time, competition is increasing dramatically in the green building industry.  Due to these increases and growing demand for green technology, attorneys will continue to play an essential role in assisting clients navigate patent laws and secure necessary rights and technologies.


1 Paice, LLC v. Toyota Motor Corp., 609 F.Supp.2d 620 (E.D.Tex.,2009).
2 eBay, Inc. v. MercExchange, LLC, 547 U.S. 388 (2006),

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