A Bright Idea

• Oct 01, 2001

Today, as well-noted in a recent issue of Environmental Protection magazine, "virtually every business regards intellectual property as a critical asset" and "the environmental profession is no exception."¹ Many environmental professionals are acquainted with the basic idea of a patent, (i.e., that particular form of intellectual property that covers practical inventions in the "useful arts"). However, if asked to think of how patents may apply to environmental innovation, most environmental compliance professionals would likely think in terms of a patent for a new "end-of-pipe" pollution control device or for an innovative chemical method of remediating contaminated soil or groundwater. Since few environmental compliance professionals' job descriptions involve the developing of such "cutting-edge" pollution control or remediation technologies, some compliance professionals may view patents as irrelevant to what they do on a day-to-day basis.

However, environmental compliance professionals do typically deal with mountains of industrial process data and must relate this data to compliance-driven needs, such as toxic material inventories, waste generation figures and compliance dates. By necessity, such information is typically handled on a computer, sometimes using generic database applications or specially designed compliance management software. Any person who has had to manage huge amounts of environmental compliance information on his or her computer and who has thought, "I know I can come up with a better way to do this," might be wise to become acquainted with software patents, business method patents and similar intellectual property protections.

Article I, Section 8 of the United States Constitution provides Congress with the power to "promote the progress of science and the useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." In turn, Congress passed the Patent Act, which provides "whoever invents or discovers a new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore . . . ." 35 United States Code (U.S.C.) § 101.

Traditionally, patents on business methods have been disfavored by the United States Patent and Trademark Office (PTO). However, in State Street Bank and Trust Co. v. Signature Financial Group Inc., 149 F.3d 1368 (Fed.Cir. 1998), the Federal Circuit made clear that under certain conditions, methods of doing business can qualify for United States patent protection. In State Street, the Federal Circuit reversed a lower court decision by ruling that the patent at issue, purporting to cover a computerized business system providing centralized asset pooling to realize various administrative and tax advantages, dealt with material amenable to patent protection under the Patent Act. While it has generated a certain amount of controversy, the idea embodied in the State Street decision that certain "business methods" could be patented has opened a floodgate for new patents and patent applications. In fiscal year (FY) 1998, the PTO received approximately 1,300 business method (typically computer-implemented) patent applications. That number increased to 2,650 in FY 1999 and 7800 in FY 2,000.²

With respect to computer software, numerous patents have been issued for software directed to data processing, application program algorithms, graphical display arrangements, editing and control functions, user interface features, spell checking routings, operating systems and encryption technology.³ While it has been established for some time that software is patentable, the number of software patent applications, like the number of business method applications, has only recently seen a dramatic increase.

As environmental professionals are well aware, the myriad of environmental laws that affect a regulated entity can generate an overwhelming information management problem. Hazardous waste manifests, material safety data sheets, stormwater pollution prevention plans and air permits are just a few of the documents that must be filed, maintained, updated or renewed in accordance with a multitude of confusing and sometimes conflicting local, state and federal regulatory requirements.

Indeed, the use of "information" itself has become an increasingly popular tool for environmental regulation. "Considerable effort is being devoted to developing new informational approaches to regulation" that rely on information generation and disclosure to inform the government of environmentally-related activities, to inform the public "of risks they can choose to avoid," or to create an incentive for a regulated entity to voluntarily reduce harmful environmental effects.⁴ Entire statutory regimes, such as the Emergency Planning and Community Right-to-Know Act (EPCRA) are based upon this theory. While supposedly less burdensome on industry than more traditional "command and control" approaches to regulation,⁵ those in charge of managing these informational burdens can easily become overwhelmed.

As necessity is the mother of invention, it is not surprising that the environmental compliance field has seen an increase in specialized computer software products and other systems designed to ease environmental compliance management. A quick perusal though advertisements in Environmental Protection and other similarly themed periodicals shows that many companies specialize in developing and marketing proprietary methods and systems for managing environmental compliance and related information. Some companies within regulated industries have likewise developed their own such methods and systems.

In sum, the environmental compliance field has been and continues to be an area ripe for innovation. Ultimately, innovation may result in tangible benefits for industry and for society in the form of greater compliance with environmental laws at a lesser cost. If the patent system fosters such innovation, then the ultimate goals of environmental protection laws and of intellectual property laws will be furthered.

Recent Examples of Environmental Compliance-Related Patents

It has not taken long for innovators in the environmental compliance field to catch on to the potential for patenting innovative systems and methods for environmental compliance management. For example:

• Patent No. 5,726,884, issued in March 1998, is for "integrated hazardous substance tracking and compliance," and more specifically for an "apparatus that provides an integrated approach for all management activities for hazardous substances used or generated at a facility, including form generation and compliance with the reporting requirements."

• Patent No. 6,097,995, issued in August 2000, is for a "hazardous materials and waste reduction management system," and more specifically "a user controlled chemical management system for small-, medium- and large-sized organizations for use with a computer. The chemical inventory management system includes a chemical inventory control system allowing a user to manage chemicals from a central station . . . to allow for the tracking of an individual chemical container throughout its life."

• Patent No. 6,163,732, issued in December 2000, is for a "system, method and computer program . . . for determining compliance of chemical products to government regulations." The patent describes an invention in which "the chemical compositions that are present in the chemical product to be manufactured are ascertained. The chemical compositions so ascertained are compared to a stored set of government regulatory standards related to the chemical compositions to determine compliance."

These and other patents can be viewed at the PTO Web site. Under current U.S. law, a patent, once issued, remains in force for 20 years from the date the application was filed.⁶ Holders of valid patents have an exclusive right to make, use and sell the patented invention and can sue infringers for damages.⁷

Obtaining a patent for an environmental-compliance related innovation, or for any invention for that matter, is not necessarily easy. All of the elements of patentability -- novelty, utility and non-obviousness -- must be demonstrated to the satisfaction of the PTO in a process that can be both time-consuming and expensive. Nevertheless, many inventive environmental professionals and environmental service and product providers will devise intellectual property strategies that take business method patents, software patents and the like into account.

The U.S. Patent and Trademark Office (PTO) maintains a searchable database containing full-page images of almost every U.S. patent issued over the past 210 years and can be found at www.uspto.gov/patft/index.html.

A listing of all attorneys and agents registered to practice before the PTO can be found at www.uspto.gov/web/offices/dcom/olia/oed/roster/index.html.

A useful web-portal of patent and other intellectual property resources is maintained by the Franklin Pierce Law Center and can be found at www.ipmall.fplc.edu/.

A study by the Environmental Law Institute on "Research and Development Practices in the Environmental Technology Industry" can be downloaded at www.eli.org/pdf/technlgy.pdf.