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IP Blog / IP and startups: entrepreneurship in a sustainability-focused world

IP and startups: entrepreneurship in a sustainability-focused world

For startup companies looking to raise funds, it is more important than ever to be able to demonstrate sustainable aspects. Investors, like consumers and employees, are increasingly paying attention to the United Nations' 17 Sustainable Development Goals (SDGs), at least in spirit, if not by name. Intellectual Property (IP) rights and innovation can be an effective way for growing companies to apply this new consciousness to rise above the competition and get a head start in business.

No better example of this can be found than in the clean energy sector. According to a recent report from Tracxn, there are over 2,700 startups working in renewable power generation alone. Overall, companies operating in this area have received more than $35.5 billion USD in investment, a quarter of it in the past three years.

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But sustainability is not just about being green. The SDGs encompass a variety of societal and environmental ambitions, from tackling poverty and hunger to promoting education, gender equality, peace, public health and access to justice. Taking this more expansive view, companies of all industries and sizes can contribute to the SDGs through the ways that they work and the priorities they set.

Patenting trends

For technology-based organizations in particular, demonstrating a record of securing patents can provide a cogent indication of sustainable innovation — a contention supported by official statistics. In a 2022 joint report on IPR-intensive industries and economic performance in the European Union, the European Union Intellectual Property Office (EUIPO) and European Patent Office (EPO) noted the marked acceleration in green patent applications. Those filings at the EPO related to climate-change mitigation technologies grew from around 2,000 in 2001 to 6,500 in 2019. The report also found that the greatest number of these applicants came from Germany, followed by France, the Netherlands, Denmark and Sweden.

To facilitate clean energy innovation further, the EPO launched a platform in November last year with the mission of supporting researchers and decision-makers. This initiative specifically targets technologies that contribute to SDG 7, "Ensure access to affordable, reliable, sustainable and modern energy for all," and provides a selection of around 60 ready-made smart searches covering energy supply, carbon-intensive industries and enablement systems. Users can quickly identify innovation gaps and spot opportunities for future development, in turn, putting their green credentials on show as patent applications and grants.

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Whether still pending or granted, green patents are an excellent demonstrator of intent. In addition to showcasing a startup's vision, these IP rights relate to technologies that are highly desirable to consumers and investors alike.

Building partnerships

Another consideration for startups that want to leave a bigger innovation than carbon footprint is technology exchange and licensing. Here, too, small companies find support, this time courtesy of the World Intellectual Property Organization (WIPO). WIPO GREEN is an online platform that links developers with those who wish to invest in or market the cutting edge of sustainable solutions. The project currently has more than 2,500 users worldwide and upwards of 128,000 technologies, needs and experts in its database. With a network of over 150 partners, the project has already facilitated more than 1,000 connections.

Several IP offices also provide additional support for patent applicants presenting sustainable inventions. At the United Kingdom Intellectual Property Office (UK IPO), for example, accelerated processing of patent applications is available where there is a reasonable assertion of environmental benefit. So far, nearly 3,500 patent applications have taken advantage of this Green Channel. Similar schemes have been, or are, offered by IP offices in Australia, Brazil, Canada, Chile, Israel, Japan, Korea and the United States. Other offices, such as the Philippines, offer cost savings whenever green tech is concerned, per a recent WIPO report.

Companies in the sustainable technology sector should be aware of these opportunities to reduce costs and acquire IP rights sooner.

A new breed of trademark

Not to be overlooked in the push toward greener, more environmentally aware products and services is the contribution made by trademarks. Being able to display environmental benefits directly to the buying public is its own reward: A favorable perception on the part of customers readily translates into boosted sales and can even rationalize higher asking prices.

Registering a green trademark is, therefore, strongly incentivized, meaning the eligibility standards are commensurately strict. False or misleading claims of environmental preferability would dilute the usefulness of these marks and diminish consumer trust. Thus, applicants must design their branding elements extremely carefully and with an eye to the relevant trademark law to have the best chances of registration.

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Acquiring a green trademark is a creative process in itself. In order to be eligible, registrants must craft their ideas in such a way as to indicate a product or service's sustainability without merely describing it. 

Taken in isolation, a green trademark, such as one recorded by the EUIPO, is a powerful marketing and rights enforcement tool. But to communicate an unambiguous message, and one that is even more difficult for competitors to assail, a startup can seek official certification marks. The Global Ecolabelling Network is a non-profit organization that aims to uphold quality and dependability among certifying bodies. Comprising 37 members from around 60 territories around the world, many prestigious marks are represented, including Germany's "Blue Angel," the United States' "Green Seal" and the "Nordic Swan."

To be accredited with one or more such labels is a huge boon for any business, highlighting that its sustainability ventures are effective and carried out in good faith.

Awards and prizes

Aside from granting patents and registering trademarks, IP offices are also playing a role in increasing the visibility of sustainable innovation. In March this year, the United States Patent and Trademark Office (USPTO) introduced a new category for green energy to its Patents for Humanity Awards Program. The scheme recognizes innovators who meet global humanitarian challenges with revolutionary technologies. Winners benefit from expedited proceedings at the USPTO as well as public recognition, which can help raise their profile among potential investors.

Across the Atlantic, the European Inventor Award introduced a new category for young inventors who are working toward solutions for the SDGs. The top awardee receives a prize of €20,000, with the second- and third-placed finalists receiving €10,000 and €5,000, respectively. This year, first place went to the Kenyan inventor of an affordable light system to protect livestock from predators. In 2022's inaugural ceremony, the prize was shared between the inventors of two AI tools: one a waste management system and the other an app to detect the early indicators of Parkinson's disease.

Achieving awards such as these can enhance visibility and lead to additional financing for early-stage companies. And there are a number of high-profile accolades in the sustainability area not directly associated with a particular IP office. For example, the five annual winners of the Earthshot Prize, founded by Prince William in 2020, each receive £1 million (€1.16 million), while all 15 finalists are offered support in building upon their innovation. This includes IP advice provided through the UK's Chartered Institute of Patent Attorneys (CIPA).

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Eco-awards provide more than just a morale boost. Prize money, specialist IP support and other windfalls can help raise small companies and independent creators to the next level of their business development.

Monitoring sustainable innovation

Both registered IP rights and awards can be invaluable in helping startup companies demonstrate their sustainable credentials. However, it is vital for these same businesses to plan their green innovation and monitor the immediate IP ecosystem to ensure that opportunities are not missed.

One way to do this is with Dennemeyer's Green Patent Analysis, which enables portfolio owners to evaluate their assets for sustainability contributions, search for ecological inventions and benchmark competitors. This tool can help with reporting on green activities, attracting investors, navigating prior art and exploring commercial opportunities. Visual markers reveal at a glance which patents meet sustainability criteria defined by the International Patent Classification (IPC) and the Organisation for Economic Co-operation and Development (OECD). At the same time, dynamic charts give an overview of how a portfolio is performing in a given industry.

The Green Patent Analysis is also integrated into many of Dennemeyer's other solutions, including DIAMS iQ management software, the AI-driven patent search and reporting tool, Octimine, and IP Consulting services. Regardless of company size or complexity, extracting the maximum potential from green patents requires a holistic strategy that accounts for the entire IP life cycle.

Tomorrow's foundations are laid today

The bearing of sustainability and sustainable innovation will only increase for companies in the coming years. This means businesses, investors and entrepreneurs will need to find ways to measure and record data on how they deliver on SDGs and similar environmental targets. Metrics on relevant applications and grants for patents and trademarks, as well as awards, prizes and other recognition, will play a notable part in this.

Successful startups will be those that explore various means, such as a Green Patent Analysis, to demonstrate their bona fides to satisfy investors, stakeholders, regulators and, ultimately, consumers. Dennemeyer's suite of world-class software and consulting solutions provides growing companies with the technical resources and specialist knowledge needed to secure a vibrant business future.

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