I recently attended a hydrogen event at which the experts talked about the chicken and egg question. Hydrogen applications and standardisation are not really getting off the ground yet because there is not much of a market for them. There is not much of a market for them yet precisely because they are not really getting off the ground. From a patenting perspective, which is my particular area of expertise, I see opportunities for innovative entrepreneurs, especially in the area of standardisation.
Make sure you stay ahead of the field
Hydrogen is a promising industry which has a great future ahead of it. However it is also a complex industry which calls for collaboration between lots of different areas of expertise. The technology is there, but is not always compatible yet. What is really needed is a whole ecosystem that covers the entire hydrogen chain from production, storage, transport and user applications. So who is going to take the first step to invest heavily in it? Who will be brave enough to start when customers are not exactly queuing up for it yet? It is hardly surprising then that people are tending to adopt a wait-and-see attitude.
Innovating in standardisation offers opportunities. Take phone chargers or electric cars, for instance. These are now virtually universal. The inventors of these are doing well for themselves and are earning lots of money from licence fees. So why not look for these opportunities within the hydrogen industry and take the lead in this sector. Standardisation connects the links of the hydrogen chain.
The investment will pay for itself
Some developments have already taken place when it comes to standardisation. The pressure of filling stations (350 bar for trucks, 700 bar for cars), for example. A purity standard is also being worked on. As a hydrogen entrepreneur it would be a good idea to innovate in areas that everyone will have to use in the long run. Take, for example, the standardisation of the leakage properties of pipes and fittings. There are already standards in place that define how much a pipe should be allowed to leak. However a fitting has to properly fit onto someone else's pipe to avoid the need for all sorts of adapters. There is still room for standardisation there. If you fill that void, either alone or together with another entrepreneur, you will be ahead of the market. You will also need to apply for a patent on this solution. When your innovation subsequently becomes the standard, the investment will pay for itself via licence fees.
Hydrogen applications rely on many different system components. This requires knowledge that not every company has in-house. One company will know all about fuel cells while another makes pipelines and yet another is an expert in electrolysers. To make progress it is therefore advisable to seek collaboration. If you are good at filling nozzles you should seek collaboration with a company that makes tanks and see if together you can come up with the ultimate filling hose that will become the standard in the future.
Standard Essential Patent
When collaboration leads to an innovation that is chosen as the official standard, the patent on it is referred to as a Standard Essential Patent (SEP). These are patents that are essential for meeting a certain standard. For example, if there is an SEP on a pipeline fitting, then everyone will need that particular fitting. This makes it a technology the market simply cannot ignore. Companies that want to set a standard together collectively determine which patents are essential for that standard. An organisation is usually set up for this purpose. It is in the participating companies' interest to be involved in this and also to have as many of their patents declared essential as possible as that will generate more licence fees.
To prevent cartels and keep competition fair, there are FRAND licences. FRAND stands for Fair, Reasonable And Non-Discriminatory. These licences ensure that no competitors are excluded and that reasonable licensing conditions are applied for parties that want to use the technology covered by an SEP. In this way, there is a good balance between patent protection and promoting innovation and applying technical standards.
Such constructions are common in, for example, the telecoms industry, where inventors in areas such as chips, receivers and transmission protocols all contribute to the pool of SEP patents and agree FRAND licences among themselves. This way everyone gets their share of the cake based on their contribution to the SEP pool. Then everyone, including parties who do not contribute to the SEP pool, can work with the standard based on FRAND licences.
Innovating requires guts
In short: innovating requires a healthy amount of courage. Especially in an industry like hydrogen where the path is not yet paved. By working together and coming up with smart patentable solutions for standardisation, hydrogen entrepreneurs can get a market edge. In doing so, they contribute to new standards and pave the way to a sustainable future.