pv magazine: There has been a recent increase in patent lawsuits in the global PV industry. What are the main factors causing tensions between module manufacturers?
Jeffrey Saltman: Success often brings patent litigation. And that’s been true in all technical fields, not just PV. Another contributing factor is the industry’s coalescence around TOPCon technology. And just like when other industries adopt a dominant technology or standard, like 5G in cellular communications, patent suits covering that technology increase too.
Do you believe that global overcapacity and very low margins have contributed to most of this?
It’s possible. Patent cases are some of the most costly civil litigations in the United States. So those costs combined with low margins will discourage some from bringing cases. But at the same time, low margins can encourage competitors to use patent cases as a way to increase market share. So, at this moment it’s hard to draw a direct line between margins, overcapacity, and the increase in cases. Any such analysis would really need to be done on a literally case-by-case basis.
Do you think patent cases in the solar industry will increase or decrease in the future?
Solar is a big part of the future of energy. And patent cases have historically followed the energy industry. Fossil fuel-based patent litigation is as old as some of the first wells being sunk into the earth. So solar is likely the next area to see an increase. We’ve seen this with First Solar’s sending patent notice letters to several of its competitors. Cases related to solar technology may begin in Europe and the United States, as we’ve already seen, but may eventually include cases brought in China and other markets where solar products are manufactured and sold. And that is because the coverage of European and US patents ends at European and US borders.
Are these patent cases detrimental to the development of the solar sector, or are they a sign of dynamism?
That answer depends on if you’re looking at this as the innovator or the infringer. Patent litigation is often a lagging indicator of innovation in any field. Patents being litigated today were often first applied for five or more years ago, with the development of those patents maybe even dating back 10 years. But patents do generally spur more patents as inventors and marketplace players look for new and different ways to do things than the way already existing patents do things. We’ve seen this in industry after industry, from wood-burning stoves, to light bulbs, to semiconductors, to monoclonal antibodies, and everything in between.
Do you believe geopolitical tensions will play a role in future scenarios?
There is no such thing as a global patent, it’s up to each country to set its own policies and enforcement approaches. Yes, there is some cooperation between certain nations, but even there, the ultimate decision about patent policy rests with each government. These policy decisions often split down the line of a country’s general levels of development, and if they are a net importer of technology or a net exporter of technology. It is very likely that countries that are net importers of solar technology will not see any societal benefit by having their patent system cover solar technology, and in turn adjust their own regime accordingly. This approach is often seen in the area of pharmaceuticals, where net importing countries only perceive a strong patent system on that technology to be a form of a tax on their own citizens.
Do you expect these patent cases to disrupt the PV industry, or do you believe their impact will be limited?
At this point, it’s unlikely that any single patent case will disrupt the PV industry. PV products contain many foundational technologies all layered on top of each other, and patents will typically only cover one, or a part of one, of those technologies. History teaches that companies will continue to innovate, whether faced with patent infringement cases or not, and seek protection for those inventions through the patent system.
What is pushing manufacturers to file patent lawsuits?
When deciding whether to bring patent litigations, market competitors must weigh many scenarios, including the possibility of getting counter-sued for patent infringement by the company they are suing. Such large litigations between competitors often lead to cross-licenses of the companies’ entire patent portfolios. So, companies have to evaluate their chances of success, their competitors’ patent portfolios, and the chances that they may be counter-sued whenever deciding to pursue patent litigation.
Most recent patent cases in the PV industry are related to TOPCon technology, which is relatively new but already dominant in the market. Do you expect such patent disputes to decline as the technology gains more market share?
Patent cases often focus on the most dominant technology in an industry. That’s unsurprising since that technology will be included in the majority of sales in the solar industry. So, as long as TOPCon continues to be the dominant technology in the PV industry, patent cases will likely continue to swirl around it.
Are intellectual property issues in the PV sector similar to those in other industries? What are their specific characteristics?
They are similar. As sales and revenues in an industry grow, patent litigations often follow. As the market becomes more mature, competitor cases tend to plateau after the major market players have litigated against each other or entered into cross-licenses with their rivals that cover both parties’ patents. Though cases between competitors will never be eliminated, indeed, that’s the essence of competition.
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