Innovation in the Energy Industry – Do You Have Freedom to Operate?

The energy transition has brought unprecedented change to the energy sector. Whilst change can bring uncertainty and challenges, it also brings opportunities.

Many companies have already seized on the opportunity to progress and succeed during the energy transition, and have invested heavily in their R&D. This is illustrated by the fact that almost 45,000 international patent applications for renewable energy technologies were filed in 2022 alone. Solar energy leads the charge, accounting for 54.4% of applications filed between 2020-2022, followed by wind (19.4%), fuel cells (13.2%), hydro (11.4%), and geothermal (1.5%).

Securing robust intellectual property (IP) protection is vital to protect your R&D. Essentially, if your technology is not patented, it is open season for your competitors to copy and sell it at will, without payment and without restriction – and ultimately benefit from your time, expertise, and money spent in developing the product and bringing it to market. Therefore, patenting your invention can differentiate yourself in the market, by enabling you to stop your competitors from doing what you do.

But here’s the crucial question: Do you know if you are infringing your competitors’ intellectual property?

Understanding the increasingly dense patent landscape of the energy sector is not just advantageous, it’s essential for strategic positioning and future success. This is especially true during the energy transition, as companies are developing new technologies at a remarkable rate and are also repurposing old technology for new uses.

If you do not know what IP your competitors have, you run the risk of IP infringement. You may have to withdraw your product or process from the market, and you may be faced with a substantial claim for damages or a requirement to pay over the profit that you have made from the infringement. In addition, the time and money spent in developing your technology and bringing it to market might be wasted; it may have a knock-on effect on contractual obligations with third parties; there could be reputational damage; and you may have to spend time and money resolving the dispute, taking you away from running your business.

One way to help you to understand your position in the market, and to mitigate the risk of infringing, is to conduct a freedom to operate (FTO) analysis. At its core, a FTO analysis evaluates whether a product or process infringes existing intellectual property.  This analysis is particularly important in the energy sector, where, for example, a single power system, turbine, or battery solution could incorporate numerous patented components. Furthermore, investors and partners typically require assurance that a company can bring its product to market without restriction. FTO assessments can help provide this certainty, making it easier to attract funding. For startups and established companies alike, FTO is essential in protecting your R&D investment.

And don’t forget trade marks – if you infringe a third party’s trade mark rights, you could be faced with a costly and time-consuming rebranding exercise. The cost of searches to identify and avoid potentially problematic third party trade mark rights before you have committed to using a new trade mark is normally a fraction of the cost of resolving a dispute, particularly if rebranding is required.

As the world transitions to cleaner energy, the race to protect and leverage IP intensifies, making comprehensive IP awareness a critical component of any energy company’s business strategy. The increasingly complex patent landscape in the energy sector means ensuring that you have freedom to operate is more important than ever. Companies that prioritize FTO early in their development cycles are better positioned to innovate with confidence, minimize legal risk, and attract the investment necessary to succeed.

This article was prepared by Partner & Patent Attorney Nick Manley, and Patent Attorney Jillian MacCormack.