Climate change: opportunities and challenges for patent owners

Although there is often talk of the challenge posed by climate change, it also presents an opportunity. With the policy objective of reducing emissions, the Garnaut Climate Change Review recommended that this could be most efficiently achieved by implementing an emissions trading scheme (ETS), rather than an emissions tax (often referred to as a “carbon tax”) (Interim Report to the Commonwealth, State and Territory Governments of Australia, February 2008). The introduction of an ETS in Australia from 2010 will create a new emissions market in which government-created permits may be exchanged between sellers and buyers. According to the review, the trading of permits will enable:

“their movement about the economy to their highest value (or most economically efficient) use, while ensuring the integrity of the volumetric control (the emissions limit) imposed in order to satisfy climate change mitigation policy objectives.” (Garnaut Climate Change Review, “Emissions Trading Scheme Discussion Paper”, March 2008, page 12.)

Under the proposed scheme, the market would establish the price of permits. No doubt these permits will impose a cost on traditional, coal-based electricity generation, but they will also present a significant opportunity to the renewable energy industry.

Wind power has been the world’s fastest growing energy source for several years, with an annual growth rate of around 30 per cent over the last decade. According to a 2006 Global Wind Energy Council report, most of the growth has been in Europe (three-fifths of the world’s installed wind power), North America (one-sixth) and the Asia Pacific region (one-seventh).

Over the past decade significant sums have clearly been spent, particularly in Europe, on research and development relating to wind power technologies. One indicator of such research is the number of patent applications filed. An inspection of the records of the World Intellectual Property Organisation reveals a dramatic increase in international patent applications filed under the Patent Cooperation Treaty (PCT) for wind turbine technology from 1999 onwards (as defined by Class F03D of the International Patent Classification). For example, in the decade prior to 1999 fewer than 30 applications were published each year. In 2000 there were 69, in 2005 there were 143 and in 2007 there were 252.

Since 1999 21 per cent of published PCT applications have originated from Germany, 13 per cent from Denmark, 13 per cent from the United States, 9 per cent from Japan, 5 per cent from the United Kingdom and 5 per cent from Spain. Australia is presently in 14th place at 2 per cent.

Wind turbines began to grow, both in physical dimensions and power output, approximately 10 years ago, such that the largest turbines now have rotor diameters of over 120 metres and power outputs exceeding 5,000 kilowatts. Thus, their impact on the electricity grid started to become more significant, leading to increased pressure on wind turbine generators to conform to the power quality and grid connection standards normally imposed on large, conventional power generators. Indeed, many of the patents now being accepted by the Australian Patent Office relate to methods of operating wind turbine generators to meet those standards. Unsurprisingly, given the financial implications of such patents, their validity is being hotly contested in opposition proceedings in many countries, including Australia.

The number of wind turbine patents granted in Australia shows a similar growth pattern to the number of PCT applications filed. Prior to 1999 only a few patents were granted each year. Since 2004 the average is more than 30. At the time of writing, 224 wind turbine patents are pending before the Australian Patent Office, in addition to many PCT applications which have not yet entered the Australian national stage (there can be a delay of up to 30 months between the PCT filing date and the Australian filing date).

While the focus of European research has been on large wind turbines, often for offshore use, research in Australia focuses on small turbines with power outputs of up to 50 kilowatts and rotor diameters of up to eight metres. To date, these turbines have primarily been used in rural and remote locations but are beginning to gain greater acceptance (especially in the one to three metres range) within urban environments. Australian inventors are now filing patent applications throughout the world and, within this segment of the wind industry, are challenging the European wind industry.

With an emissions trading scheme almost upon us, businesses and inventors are already starting to apply for and secure patents for innovative methods of trading emissions, as well as for clean, energy-efficient technologies. For example, in the United States several patents have already been granted for ways to trade residential emissions (eg, see US Patents 7343341, 6904336 and 7133750). Similar patents are expected to be granted in Australia.

So, while climate change does indeed present a challenge to industry and the community generally, Australian innovators are well placed to seize the opportunities presented.