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IP in renewable energy sector

FACTSHEET

IMPORTANT ISSUES

What is renewable energy?

IP good practicesA. BeforeB. DuringC. After

Relevant information when ente-ring the RE sector in Latin AmericaA. Relevant information when entering the RE sector in Latin AmericaB. Legal Framework & Policy

Aditional information and related links

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4

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2

5 Glossary

Renewable Energy (RE) generally refers to energy obtained from natural energy flows such as wind and solar power, geothermal or hydropower. Widely understood, RE also comprises other sources of energy that come from wastes (biomass or bio gas) or derived from organic matters such as plants (biofuel).

The main difference with traditional fossil sources is that RE sources are endless or their sources have a fast regeneration rate compared to the thousands of years needed for the regeneration processes of fossil sources such as petrol, gas or carbon.

1. What is renewable energy?

Argentina’s target: 8% of renewables in national electricity mix to be reached by 2016

Brazil’s capacity targets:

Hydro - 116.7 GW

Small hydro - 7 GW

Biomass - 8.5 GW

Wind - 6GW

to be reached by 2019

TIPS and WATCH-OUTS!

IP IN RENEWABLE ENERGY SECTOR1

Technologies by renewable energy sector Systems or renewable energy facilities

Bio-fuels Sector

Bioethanol

Biodiesel

Biomass Sector

Gasification

Combustion

Co-firing

Biogass Sector Biogas

Bio-waste Sector

Municipal Waste Management (M$W)

Incinerators for field, garden or wood wasted

Gasification

Ocean thermal energy conversion (OTEC) Sector

Wave

Marine currents

Wind energy Sector

Onshore

Offshore

Geothermal Sector

Electricity generation

Geothermal climate control

Hydro energy Sector Small-scale hydropower

Solar energy Photovoltaics (PV) Sector Photovoltaic

Solar Heating & Cooling (SHC) Sector Solar thermal

Concentrating Solar Power (CSP) Sector

Parabolic cylinder

solar power plants using central tower

Linear tresnel systems

Stirling dish

IP IN RENEWABLE ENERGY SECTOR 2

2. IP good practices

Intellectual Property Rights are very useful tools for companies that research or implement Renewable Energies to benefit from their efforts in R&D since IPRs help:

• To create a new revenue flow by licensing them,

• To attract more potential investors or financial institutions

• To increase competitiveness of the company in the market

• To improve future profitability

• To apply for public loans or grants

Even though some SMEs decide to enter the RE market in Latin America on their own, the most common alternative to get into such markets is by means of agreements with other local or fo-reign companies such as:

• Joint ventures

• Project´s consortium

• Technology Transfer Agreements

• Licensing or cross licensing

This type of cooperation is needed in most of the cases due to the complexity and scope of RE projects that go from development to implementation and require a wide range of abilities within the workforce as well as a sizeable infrastructure.

Brazil has implemented a Green Patent system in order to accelerate RE- related patent applications

Regardless of the chosen alternative, Intellectual Property issues may arise in aspects such as manuals´ ownership, patents over jointly developed processes, use of already patented technologies, trademarks´ use after the joint venture expiration etc.

To avoid undesirable situations relating to IP the Latin America IPR SME Helpdesk offers you a Good Practices catalogue for consideration before, during and after a RE project.

TIPS and WATCH-OUTS!

A. BEFORE

Take into account the IP legal framework under a Technology Transfer approach: R&D, joint ventures, FDI, licenses, transfers, buy/sell of equipment, turn-key plants and/or outsourcing.

Example: Relevant law may differ depending on the chosen business model and while the mere export of machinery will mostly need to take into account already protected patents and licensing, a joint venture will require a previous analysis of the company´s background in order to include it within the cooperation contract.

Identify present and future assets that can be protected as IPR. More information about IP assets identification in our Factsheet Identifing your IP assets.

Define the stakeholders and their interests and rights.

If the project includes or could lead to R&D activities, sign a pre- consortium agreement/ memorandum of understanding that includes ownership attributions of background, foreground and so-called «sideground», confidentiality clauses and other good practices. For more information you can consult our Factsheet on Preliminary Contracts.

Draft an IP inventory with a detailed list of trademarks, patents, designs, layout-designs of integrated circuits, utility models and copyrights over works (e.g. drawings, reports, dossiers, handbooks, software, product catalogues, presentations, brochures, blueprints, calculation logs, books, and webpages).

Define the scope of:

• Public domain knowledge applied to the project (e.g already known technologies)

• Potentially patentable knowledge, which can be patented before or during the project

• Third parties´ rights (e.g licenses needed prior to operate in the country)

• Authorized use of the IPRs by the partners outside the project´s framework (e.g exploitation of a patent outside the project´s framework).

Perform a Freedom- to- Operate Analysis The FTO is a report which analyzes whether the use and commercialization of an IPR (normally a patent) may infringe an earlier right. Today the in-creasing number of patents filed all around the world makes the process of analyzing the freedom to operate for new technologies very complex. Therefore experts in the field should do it for you.

Finally, sign the contracts that deal with the rest of the IPR issues (confidentiality, cooperation, outsourcing, licenses, transfers and others).

B. DURING

Management of IPRs’ catalogue by agreements and external or in-house IP governance.

Register the rights on a country-by-country basis. Take also into account the International Registration systems for trademarks (in countries such as Colombia, Cuba and Mexico) and patents (PCT registration is available in Brazil, Colombia, Chile and Mexico).

Keep the secrecy and limit the disclosure of confidential information:

• Limit the disclosure among the consortium only to those part-ners/members strictly needed.

• Use preventive and safety measures such as limits to access to information, firewalls, passwords, encryption…

• Some national laws limit the scope or the duration of exclusi-vity or non-competition agreements, take this into account.

Establish a «right of preferential licensing option» for the licensor in the event that during the execution of the contract, under a given license, the licensee develops an improvement («cross-license»).

Monitor the changes in legal framework in those countries where the rights are protected regarding, for example, taxation, public funding and Intellectual Property.

Enforce your rights in case of infringement.

C. AFTER

RE businesses tend to be long-term businesses. Therefore take into account the duration of IPRs’ maintenance and ownership, as well as the foreground not explicitly included in the contractual framework.

3. Relevant information when entering the RE sector in Latin America

A. Relevant information when entering the RE sector in Latin America

Renewable energies have experienced an important boost during the last decade and both private companies and public bodies have dramatically increased their investments.

The continued expansion of energy demand has resulted in a shift in the public policies of each country, each at their own pace and according to their needs, natural resources, technologies and re-quirements. This context -in addition to compliance with the Kyoto Protocol- has encouraged the emergence and incentive to find various energy alternatives.

According to the Renewables 2014 Global Report, corporate in-vestment in RE technology research amounted to $ 39,8 billion during the period 2004-2013 ($ 35,2 billion of Government fun-ded R&D), whereas RE project implementation investment in 2014 rises to more than $ 190 billions.

Such strong investment has witnessed a spectacular increase in the protection of IPR related to such fields: during the period 2006 to 2011 the number of patent filings in the RE sector increased by 24% (Source WIPO).

3 IP IN RENEWABLE ENERGY SECTOR

Chilean law in force aims to fulf i l l future energy requirements by developing non-conventional renewable energy sources, such as geothermal, wind, solar, tidal, biomass and small hydroelectric plants. Starting from 2015, the obligation to use RE will be increased by 0.5% annually, reaching 10% in 2024.

TIPS and WATCH-OUTS!

According to the Renewable Energy Country Attractiveness’ Index (RECAI, EY 2014) Brazil (ranked 9th in the world) and Chile (12th) are the two most interesting countries in the region to invest in renewables. “Australia’s loss is Brazil’s gain as it jumps up to ninth place, spurred by sustained high levels of interest in the country’s latest energy auctions and an increasingly strategic approach to developing its burgeoning solar sector. Also in South America, Chile continues its ascent up the index, as it continues to attract me-ga-scale solar and wind projects that indicate a robust outlook for increased generating capacity”.

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Latin America has not been an exception to these trends and is now a very interesting market in which to develop RE related bu-siness thanks to:

• the growing power-interconnection infrastructure, which in the near future will allow the creation of a regional electricity grid.

• the large RE potential resources and its territorial diversity, such as sun hours in the Atacama Desert, wind flows in the Andean Region and the Atlantic and Pacific shores and water flows all around the continent.

• the high level of awareness of the use of “clean” energies.

• the degree of development of RE at policy and regulatory le-vel.

As a consequence, Uruguay is currently a world leader in terms of RE investment, whereas Brazil aims to reinforce its strengths in biofuel and hydropower production with an ambitious plan to in-crease its production of wind power. Mexico has planned to invest $20 billion in wind power R&D and facilities.

Chile is currently betting on photovoltaic energy and has invested $1,6bn in what will be one of the largest photovoltaic plants in the world (698MW) in the Atacama Dessert.

But RE not only offers opportunities in the field of large scale pro-duction but also provides “off-grid” electricity to rural communities in the framework of local development policies.

INTELLECTUAL PROPERTY RIGHTS: KEYS IN RENEWABLE ENERGY PROJECTS

WHAT

Search, collection & analysis Protection, conservation & defence Contracting & relationship

BEFORE

• Search databases• Inventory:

» IPRs » Applicable law » Relevant documentation

• Prior analysis:

» Market » Prior art (novelty) » Freedom to operate (clearan-

ce of technology, patent and distinctive signs)

• Feasibility IP report

• Keep trade secrets:

» Physical protection » Technologic protection measures » Applicable law by default » Non-disclosure agreement

• File IP applications in local market• Registration in local market (patents,

TM) IP offices & custom authorities• Labour / services contracts• Licensing:

» Patents » UM » Designs » Trademarks

• Local /international agreements:

» Stakeholders » Advisers » Legal representatives » Partners » Suppliers

• Licenses

» Licensor/licensees• NDA• Exclusivity• Other agreements

DURING

• Technology watch and compe-titive intelligence (market, IPR, law)

• Inventory

• Enforcement• Renewals • Branding / compliance / reputation• R&D / open innovation

• Local authorities• Suppliers• Licensor/licensee

AFTER• Suitability analysis• Close of technology business

• Renewals • Transfers (e.g. trademarks)• Licensing (e.g. license back)• Data base inventory

• Winding-up pre-operational phase (ongoing operational stage)

• Confidentiality and non-competence agreements in force

WH

ENIP IN RENEWABLE ENERGY SECTOR

B. LEGAL FRAMEWORK & POLICY

Energy markets tend to be highly regulated. Therefore, while plan-ning the entrance into a RE market you should take into account the sector’s legal framework. However, since the relative weight of each RE source varies from country to country, the strategic im-plementation at policy level may also vary.

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European SMEs should evaluate the importance of a certain RE source at policy level in each country since the higher the impor-tance, the more available public funds such as loans, grants or tax deductions.

A special aspect of such policies involving IPR concerns so-called “green patents” that enjoy some benefits compared to patents in other sectors.

TECNOLOGY Argentina Brazil Chile Paraguay Uruguay Venezuela

RM SI GP RM SI GP RM SI GP RM SI GP RM SI GP RM SI GP

BIO-FUELS √ √ x √ √ √ √ • x √ √ x √ √ x • x xINTEGRATED GASIFICATION COMBINED CYCLE (IGCC) √ √ x √ √ √ √ √ x • x x √ √ x x √ x

FUEL CELLS √ √ x √ √ √ √ √ x • x x √ √ x x x xPYROLYSIS OR GASIFICATION OF BIOMASS √ √ x √ √ √ √ √ x • x x √ √ x x x x

HARNESSING ENERGY FROM MANMADE WASTE √ √ x √ √ √ √ √ x • √ x √ √ x x x x

HYDRO ENERGY √ √ x √ √ √ √ √ x √ √ x √ √ x x √ xOCEAN THERMAL ENERGY CONVERSION (OTEC) √ x x √ √ √ √ x x • - x √ √ x x x x

WIND ENERGY √ √ x √ √ √ √ √ x • x x √ √ x x x x

SOLAR ENERGY √ √ x • • √ √ √ x • x x √ √ x x x x

GEOTHERMAL ENERGY √ • x √ • √ √ √ x • x x x x x x x xOTHER PRODUCTION OR USE OF HEAT, NOT DERIVED FROM COMBUSTION, E.G. NATURAL HEAT

√ √ x • • √ √ √ x • x x x x x x x x

USING WASTE HEAT √ √ x √ √ √ √ √ x • • x √ √ x x x xDEVICES FOR PRODUCING MECHANICAL POWER FROM x x x x x √ x √ x x x x x • x x x x

Range of Regulated Market and Policies (RM), Strategic Implementation (SI) and Green Patent System (GP) criteria √ : the criteria are met • : the criteria are partially met X : the criteria are not met-:non-applicable. Source: Legislation in force and politics strategies/WIPO IPC

European SMEs should bear in mind that the Renewable Energies legal framework is not harmonized. Listed below there are some of the main laws and policy information that should be considered when operating in the Latin American market.

Argentina

Promotion of Renewable Sources of Energy for Electricity Produc-tion (Art. Nº 20190) goo.gl/2d6oA1

Implementing Regulation for Law 26.190 (Decree 562-09) goo.gl/ZyXcpr

Brazil

Renewable Energy regulation and policy http://www.iea.org/policie-sandmeasures/renewableenergy/?country=Brazil

2010-2019 Plan for Energy Expansion http://goo.gl/6Rsrqb

Electric Power Auctions Wind: http://goo.gl/akTdkE

Chile

Renewable energy legal framework (in Spanish) https://www.leychile.cl/Consulta/listado_n_sel?_grupo_aporte=&sub=795&a-gr=2&comp=

Non-conventional renewable energy law (Act 20.257) http://www.iea.org/policiesandmeasures/pams/chile/name-24577-en.php

Paraguay

Paraguay: Renewable Energies Overview http://www.renenergyob-servatory.org/uploads/media/Paraguay_Producto_1_and_2__Eng_.pdf

Renewable Energies Book (in Spanish) http://www.ssme.gov.py/vmme/pdf/libroenergia.pdf

Paraguay: Renewable Energies Statistics http://www.iea.org/statis-tics/statisticssearch/report/?country=PARAGUAY&product=renewa-blesandwaste&year=2012

IP IN RENEWABLE ENERGY SECTOR

6

5. Glossary

Find out more about renewable energies and licensing in Latin America. Visit the Latin America IPR SME Helpdesk website: http://www.latinamerica-ipr-helpdesk.eu/

Licensing: Licensing is a contract between two parties, licensee and licensor, where the later authorizes the former to use a protected Intellectual Property Right in exchange of a royalty, while the licensor keeps the IPR ownership.Source: Latin America IPR SME Helpdesk

Trade Secrets: Any confidential business information which provides an enterprise a competitive edge may be considered a trade secret. Trade secrets encompass manufacturing or industrial secrets and commercial secrets. The unauthorized use of such information by persons other than the holder is regarded as an unfair practice and a violation of the trade secret. Depending on the legal system, the protection of trade secrets forms part of the general concept of protection against unfair competition or is based on specific provisions or case law on the protection of confidential information.Source: WIPO

Integrated gasification combined cycle: IGCC uses a combined cycle format with a gas turbine driven by the combusted syngas, while the exhaust gases are heat exchanged with water/steam to generate superheated steam to drive a steam turbine. Using IGCC, more of the power comes from the gas turbine. Typically 60-70% of the power comes from the gas turbine with IGCC, compared with about 20% using PFBC.Source: IEA

Non-Disclosure Agreement (NDA): NDAs are contracts whose aim is to keep the confidentiality of certain secret information shared between two parties, it is also possible to introduce Non-Disclosure Clauses within your employees’ contract. In both cases, penalty clauses can be established for cases of failure to meet the confidentiality obligation. Source: Latin America IPR SME Helpdesk

Biofuels regulation overview (in Spanish) http://www.olade.org/ex-periencias-en-biocombustibles/

Paraguay: Biofuels Regulation (Act Ley N° 2.748/05) https://www.ecolex.org/details/legislation/ley-no-274805-ley-de-fomento-de-los-biocombustibles-lex-faoc060418/

Uruguay

Renewable Energy regulation and policy http://www.iea.org/policie-sandmeasures/renewableenergy/?country=Uruguay

Biofuels Regulation (Act 18.195) (in Spanish) https://legislativo.parlamento.gub.uy/temporales/leytemp4273195.htm

Wind Energy Policy (in Spanish) http://www.energiaeolica.gub.uy/

Venezuela

Venezuela: Renewable Energies Statistics http://www.iea.org/sta-tistics/statisticssearch/report/?country=VENEZUELA&product=re-newablesandwaste&year=2012

Further information, policies and statistics can be found at the In-ternational Energy Agency website: http://www.iea.org/

4. Aditional information and related links

General: International Energy Agency. Policies and Measures. Renewable Energy

Observatory for Renewable Energy in Latin America and the Caribbean http://www.renenergyobservatory.org/en.html

IP IN RENEWABLE ENERGY SECTOR

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ABOUT LATIN AMERICA IPR SME HELPDESK:The Latin America IPR SME Helpdesk offers free of charge, first-line support on IP and IP rights matters to facilitate the expansion of European SMEs (EU SMEs and SMEs from the Associated countries) already established at, or working with entities in Latin America as well as those potentially interested in establishing commercial and R&D activities and ventures in these countries.

SERVICESHelpline: Ask our experts any IP related questions in Latin America! We provide professional IP advice – customized, straightforward, and free of charge. Our Experts will answer your question within three working days.

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MANAGE YOUR INTELLECTUAL PROPERTY IN LATIN AMERICA

For more information please contact the Helpdesk:info@latinamerica-ipr-helpdesk.euhelpline@latinamerica-ipr-helpdesk.eu

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Disclaimer:The Latin America IPR SME Helpdesk is a free service which provides pract ical , object ive and factual information aimed to help European SMEs understand business tools fo r d e v e l o p i n g I P R v a l u e a n d managing risk. The services are not of a legal or advisory nature and no responsibility is accepted for the results of any actions made on the basis of its services. The content and opinions expressed are those of the authors and do not necessarily represent the views of the European Commission and/or the Executive Agency for Small and Medium-sized Enterprises or any other body of the European Union. Before taking specific actions in relation to IPR protection or enforcement all customers are advised to seek independent advice. Neither the European Commission nor the Agency may be held responsible for the use which may be made of the information contained therein.

Last update: June 2017

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