Loophole in Patent Act possible threat to Dutch offshore wind innovations

Walter Hart © EP&C

The Netherlands is known for its innovative strength. This is no different in the field of wind energy. Especially at sea, many gigawatts of power will be installed in the coming years. Innovation plays a major role in reducing the costs of offshore wind. But how well are Dutch technical innovations relating to offshore wind energy protected?

Walter Hart, partner Dutch & European Patent Attorney at EP&C, a consultant and service provider in the protection of Intellectual Property, sends out a warning to those companies and organisations that are engaged in technical innovations aimed at the offshore wind industry.

Offshore wind does not fall within the definition of natural resource
The Dutch Patent Act (Rijksoctrooiwet 1995) provides innovating companies the opportunity to protect their innovations with a patent. In this way, the company has a fair chance to develop the innovations, to market them exclusively and, for a period of 20 years, reap the benefits.

In the Dutch Patent Act, oil and gas are classified as a “natural resource”. Technical innovations in the field of oil and gas production can therefore be protected on the continental shelf, outside the 12 mile zone. But what about the relatively young offshore wind industry?

It turns out there is a loophole. In the definition of natural resources, reference is made to ‘the mineral and other non-living resources of the seabed and the subsoil, as well as living organisms belonging to the sedentary species …… (Chapter 1, Article 1 in the Dutch Patent Act). Offshore wind energy therefore does not automatically fall within the definition. This was also confirmed in 2007 by the court in The Hague in a ruling on a relevant dispute.

Room for copycats
Because this relatively new and rapidly developing technology is not properly protected in the Act, the chance of piracy increases considerably. It seems only a matter of time before copycats, e.g. from China, realise this. Dutch companies may then be confronted on their own Dutch home market with copycats who offer their own innovations, at bargain prices.

And this is alarming, says Hart. Especially because this sector is undergoing enormous development. Dutch companies take a leading position in this development and already have a market share of approximately 25 percent of the total European market. The Dutch government wants to realise 11.5 gigawatts of wind power at sea by 2030. “This involves enormous amounts of capital. With the ever-growing size of turbines, this requires rapid innovation in, for example, transport and installation techniques. A patent makes innovation possible.”

It is the core-business of EP&C to advise its clients on the options available to protect their technical innovations. Hart therefore finds it important that the offshore wind sector is aware of this loophole. The awareness is currently still insufficient, he says. The issue is not well known yet. Although EP&C advises several clients in the offshore wind sector, conflicts on this issue have been settled so far. The case from 2007 was relatively small. However, with the current exponential growth in offshore wind, the chance of major disputes and major damage for Dutch innovating companies has increased sharply.

Offshore wind sector must sound the alarm
The Dutch Patent Act is updated every few years. Earlier this year, a survey was conducted to identify suggestions for adjustments. The change for offshore wind has been included in this. The outcome of the survey now lies with the Ministry of Economic Affairs and Climate. Hart can say little about the chance of success. The current definition finds its origin in an international treaty, the ‘Convention on the Continental Shelf‘. The Netherlands therefore is not the only country with this loophole in innovative offshore wind technologies.

Hart advises the offshore wind sector to exercise its influence and to raise the alarm with lawmakers. In the end, he stresses, the current protection of oil and gas technologies on the continental shelf is the result of strong lobbying by the oil and gas sector at the time. For those parties who are involved in innovation in the field of offshore wind, Hart emphasises that they must obtain good advice.