Jeffrey Saltman, partner at U.S. intellectual property law firm Fisch Sigler LLP, recently spoke pv magazine about the increasing number of patent lawsuits between manufacturers of PV modules. He said this increase in lawsuits is mainly driven by industry convergence on tunnel oxide passivated contact technology (TOPCon) and noted that the number of lawsuits is likely to increase in the near future.
pv magazine: There has been an increase in patent lawsuits in the global PV industry recently. What are the main factors causing tensions between module manufacturers?
Jeffrey Saltman: Success often involves patent litigation. And that applies to all technical areas, not just the PV field. Another contributing factor is the coalescence of the industry around TOPCon technology. And just like when other industries adopt a dominant technology or standard, such as 5G in mobile communications, patent lawsuits over that technology are also increasing.
Do you believe that global overcapacity and very low margins have contributed to most of this?
It’s possible. Patent cases are among the most expensive civil lawsuits in the United States. These costs, combined with low margins, will deter some from filing a case. But at the same time, low margins can encourage competitors to use patent litigation as a way to increase their market share. So at this point it is difficult to draw a direct line between margins, overcapacity and the increase in business. Such an analysis would really have to be done on a case-by-case basis.
Do you think patent cases in the solar industry will increase or decrease in the future?
Solar energy plays a major role in the future of energy. And patent cases have historically followed the energy industry. Fossil fuel patent disputes are as old as some of the first wells drilled into the earth. So solar energy is likely to be the next area to see an increase. We saw this when First Solar sent patent notice letters to several of its competitors. Cases related to solar technology may start in Europe and the United States, as we have already seen, but may eventually include cases brought to China and other markets where solar products are manufactured and sold. And that’s because the coverage of European and American patents ends at the European and American borders.
Are these patent cases harmful to the development of the solar energy sector, or are they a sign of momentum?
That answer depends on whether you look at this as an innovator or an infringer. Patent litigation is often a lagging indicator of innovation in any field. Patents that are being litigated today were often first applied for five years or more ago, and the development of those patents may even go back ten years. But patents generally lead to more patents, as inventors and market players look for new and different ways of doing things than the way pre-existing patents do things. We’ve seen this in industry after industry, from wood 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 is up to each country to determine its own policy and enforcement approach. Yes, there is some cooperation between certain countries, but even there the final decision on patent policy rests with each government. These policy decisions often look at a country’s overall levels of development, and whether the country is 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 social benefit from their patent system covering solar technology, and in turn will adjust their own regime accordingly. This approach is often seen in the field of pharmaceuticals, where net importing countries only view a strong patent system on that technology as a form of tax on their own citizens.
Do you expect these patent cases to disrupt the PV industry, or do you think their impact will be limited?
At this point, it is unlikely that a single patent case will disrupt the PV industry. PV products contain many fundamental technologies that are all layered on top of each other, and patents typically cover only one or part of one of these technologies. History shows that companies will continue to innovate, whether they face patent infringement lawsuits or not, and seek protection for those inventions through the patent system.
What drives manufacturers to file patent lawsuits?
When deciding whether to file a patent lawsuit, market competitors must weigh many scenarios, including the possibility that the company they are suing will face a counterclaim for patent infringement. Such major lawsuits between competitors often lead to cross-licensing of the companies’ entire patent portfolios. Thus, companies must assess their chances of success, their competitors’ patent portfolios, and the likelihood of being sued when deciding to pursue a patent dispute.
The most recent patent cases in the PV industry concern the TOPCon technology, which is relatively new but already dominant in the market. Do you expect such patent disputes to decrease as the technology gains market share?
Patent cases often focus on the most dominant technology in an industry. That’s not surprising, as this technology will be included in the majority of sales in the solar industry. So as long as TOPCon remains the dominant technology in the PV industry, patent cases will likely continue to revolve around it.
Are intellectual property issues in the PV sector similar to those in other sectors? What are their specific characteristics?
They are similar. As sales and revenues grow in an industry, patent litigation often follows. As the market matures, competition cases tend to level off after major market players litigate against each other or enter into cross-licenses with their rivals that cover both parties’ patents. While business between competitors will never be eliminated, that is indeed the essence of competition.
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