Intellectual Property And Open Innovation On The Smart Grid

Written on August 27, 2009 by

Will the smart grid develop through proprietary intellectual or open innovation? To what extent can both contribute to the smart grid's growth? The answers to these questions will have a huge influence on how the smart grid works and what it ultimately does for energy efficiency. In this post, I offer a few thoughts on these issues.

Visions Of The Smart Grid

Clean Tech Open recently hosted a seminar on smart power. Warren Jenson, CFO of Silver Spring Networks, conceptualized the smart grid as using intellectual property to seamlessly connect people and devices that generate, distribute and use energy. Silver Spring's solutions for building the smart grid are grounded in many patents.

By contrast, Dr. Erfan Ibrahim of Electric Power Research Institute advocated an open innovation approach to developing the smart grid. Dr. Ibrahim argued that standardization should drive the smart's grid growth, and that open innovation is the best way to achieve standardization. Standardization promotes compatibility and connectivity across the smart grid.

While John Skinner of Intel and Steve Vassallo of Foundation Capital agreed with the need for standardization, they took the position that intellectual property is necessary for the smart grid to mature and reach its full potential.

Intellectual Property Versus Open Innovation?

Is there a tension between intellectual property and open innovation on the smart grid? No, the two complement each other.

Consider IBM's approach. IBM recently announced that it will defensively publish details of a large number of smart grid related patents. David Kappos, assistant general counsel, explained:

“We’re putting an emphasis on areas that we think will be most beneficial to developing the open standards that [the] world needs to address the problems that we face.”

At the same time, IBM will protect what it believes are big technological advances by obtaining and asserting intellectual property rights.

The strategy is to first accelerate and standardize smart grid technology. Standardization will reduce competition among formats and enhance compatibility. IBM then hopes to use its protected intellectual property to capitalize on the standardization. In this model, open innovation paves the way for startups and established companies to leverage their intellectual property for profit.

Douglas Y. Park
Twitter: @DougYPark

9 Comments - Leave a comment!
  • http://InnovationFatigue.com Jeff Lindsay

    One of the keys to the smart grid could be the Virtual Power Plant concept developed by CEO Neal Verfuerth of Orion Energy Systems (Orion is one of the major case studies in our recently published Conquering Innovation Fatigue from John Wiley & Sons). Good combination of innovation in technology, business methods, and relationships with government. Nice example of Green Capitalism. Companies on the Orion system can receive requests to cut back on power to meet demands elsewhere on the grid, and when they trim lighting or other sources of power consumption (wireless tech, control systems and sensors help here), they are rewarded for the power reduction which in essence returns power to the grid. Nice approach!

  • http://InnovationFatigue.com Jeff Lindsay

    One of the keys to the smart grid could be the Virtual Power Plant concept developed by CEO Neal Verfuerth of Orion Energy Systems (Orion is one of the major case studies in our recently published Conquering Innovation Fatigue from John Wiley & Sons). Good combination of innovation in technology, business methods, and relationships with government. Nice example of Green Capitalism. Companies on the Orion system can receive requests to cut back on power to meet demands elsewhere on the grid, and when they trim lighting or other sources of power consumption (wireless tech, control systems and sensors help here), they are rewarded for the power reduction which in essence returns power to the grid. Nice approach!

  • http://www.dypadvisors.com Doug Park

    Thanks for reading Jeff. I will check out Orion.

  • http://www.dypadvisors.com Doug Park

    Thanks for reading Jeff. I will check out Orion.

  • Pingback: Twitter Trackbacks for Intellectual Property And Open Innovation On The Smart Grid — Strategy x Law Blog [dypadvisors.com] on Topsy.com

  • http://collaboratetoinnovate.blogspot.com/ Jayesh

    Hi there, I would be very intrested to understand the issues and solution for a enterrprise opting for a open innovation and a innovator doing the innovation for this enterprise. What are the legal angles and how these can be taken care.

  • http://collaboratetoinnovate.blogspot.com/ Jayesh

    Hi there, I would be very intrested to understand the issues and solution for a enterrprise opting for a open innovation and a innovator doing the innovation for this enterprise. What are the legal angles and how these can be taken care.

  • http://www.dypadvisors.com Doug Park

    Hi Jayesh,
    Thanks for your comment. I will discuss the business, management, and legal issues around open innovation in future posts.
    Doug

  • http://www.dypadvisors.com Doug Park

    Hi Jayesh,
    Thanks for your comment. I will discuss the business, management, and legal issues around open innovation in future posts.
    Doug