The Sun and IP: A Recipe for Socio-Economic Development


PV systems is the world's fastest growing energy technology
(Photo: Rob Baxter)

Background

Every day, the sun radiates down onto the earth a thousand times more energy than we could ever use. The demand for technologies capable of tapping into that energy is booming as pressure mounts to find solutions to finite resources, climate change and sustainable development. Solar photovoltaic (PV) systems – which convert energy from the sun into electricity – produce no greenhouse gases, have no moving parts, require virtually no maintenance and have cells that last for decades. PV systems are not new. The science behind them was discovered in 1839 and advancements were made with the development of solar cells and the dawn of the space age in the 1950s, but high production costs translated into a small market for commercial applications. It was not until the development of grid-connected PV systems in the 1990s that the industry finally started to take off. Since 2002, it has become the world’s fastest growing energy technology, with global PV production increasing by an average of 48 percent per year.

One of the world’s leading companies in this industry is the Spanish company Isofoton S.A. (Isofoton). The company was originally created in 1981 as a spin-off company of the Polytechnic University of Madrid to develop and produce patented bifacial solar cells invented by Professor Antonio Luque. Bifacial solar cells collect solar energy from both the front and back faces of the cell. High development and maintenance costs prevented early adoption of bifacial solar cells, and the company had to revert to traditional solar cell production to stay afloat. The international solar power industry languished in the 1980s, but despite financial challenges the company never gave up on its philosophy of strategically backing innovation. In the late 1990s, Germany decided to invest heavily in solar power. Isofoton was able to take advantage of this, supplying fifteen percent of the German market. This staved off further financial turmoil and enabled the company to commercialize many of its research and development (R&D) projects.

Today, Isofoton manufactures solar cells, PV modules (a number of solar cells electrically connected to each other and mounted in a support structure), solar trackers, inverters, regulators, lighting, batteries and pumping systems, and develops new products and processes for attracting, transforming, storing and using the sun’s power. It has a commercial presence in over sixty countries, with subsidiary offices in Algeria, Bolivia, China, the Dominican Republic, Ecuador, Italy, Morocco, Senegal and the United States.


Isofoton aims to generate and own all its IP
(Photo: Isofoton)

Research and Development

In the PV industry, there are two broad categories of companies: those which develop technology, such as Isofoton, and those which tend to buy technology, such as energy companies. Because Isofoton is a technology developer, R&D is intrinsically linked to its business strategy. Mr. Jesus Alonso, Isofoton’s R&D Director, describes the reasoning for the company’s strategy by noting that “Any good scientific book will tell you how to make a solar cell. What is complex is the know-how required to make it efficient, at a lower price, in higher quantities, and with a better quality.” 

The strategy of the company is to therefore innovate and own all of its intellectual property (IP) through internal R&D so it can remain independent and stay ahead of the competition by developing new technologies and applications. However, being the first to develop a technology will not be beneficial if it is not capitalized on. Recognizing this, Isofoton’s guiding principle is to take advantage of being the first to create a new technology (or market an already developed technology) and then to use IP as leverage to give it a competitive edge. This strategy has allowed Isofoton to become a pioneer in solar energy technologies.

One of Isofoton’s major R&D innovations resulting from this strategy was its development of a solar concentration system, which uses optical technology to magnify solar energy by one thousand times and concentrate it on one point of a solar cell. Isofoton was working on this technology since its early days and initiated trials for a PV module built with solar cells made from gallium arsenide, an element that acts as a much more efficient semiconductor than silicon, which is used in conventional solar cells. Combining these new solar cells with optical systems, the level of light concentration on a solar cell can be magnified by one thousand times. As a result, the solar cells can be extremely compact, which drastically reduces production costs. Because fewer PV modules are required for a specific application, they are also very cost-effective. The company also developed a unique material (substrate) which the solar cells are assembled on, enabling efficient thermal dissipation so that the solar cell and the substrate are electrically associated, forming a compact electric power generation unit.

Isofoton’s R&D department currently has three main active research streams: PV generation in urban environments; PV systems for pumping, treating and distributing water; and solar trackers, which track the sun to keep PV modules in the best position for maximum energy absorption. In addition to its internal R&D, Isofoton also works in collaboration with universities and research centers. In 2010, it had six major collaborative research programs focusing on different subsets of PV technologies and development processes. All of the company’s R&D streams have one common goal of innovating technologies that take better advantage of the sun’s energy.

IP Management

As a company driven by innovation, IP is central to Isofoton’s business and R&D strategies. The company’s IP management strategy depends on what is going to be protected and why. On one hand, for specific products already in the development phase, and above all, in the application phase, securing IP rights (IPRs) becomes crucial. On the other hand, IPRs are not necessarily used to protect the development of new technological processes within the company. Isofoton believes that it is sometimes better to focus on protecting know-how than spending resources protecting processes. Technological know-how, after all, is one of Isofoton’s most important assets, and protecting its trade secrets costs considerably less than securing IPRs, which gives the company more resources with which to develop new technologies and processes.

Because Isofoton has a strong international presence, determining where to seek IPRs is very important. Decisions as to which applications should be protected where are linked to the specific type of technological application and the markets in which it is used. To facilitate a smooth decision making process, the company divides its strategic markets into two segments. The first segment is the market for PV applications connected to the electric grid. This is mostly in Europe, Japan and the United States. In this segment, Isofoton takes a broad approach, seeking IPRs for everything related to its technologies and their applications.

The second segment represents the market for isolated PV installations. This is a strong and rapidly growing market, especially in developing countries, and is an area where Isofoton aims to reach markets before its competitors. Many of the company’s developments and R&D projects are well ahead of its competitors and are adapted to meet the local needs of these countries, specifically those technologies related to water pumping and lighting systems. Because Isofoton’s technologies are the first to be applied in many developing countries, it can secure a long lasting competitive advantage in these markets. In such markets, determining whether or not to secure IPRs depends on the basis of actual and potential local use of each application, with the aim of maintaining a competitive advantage and facilitating further expansion. Countries in North Africa, for example, represent a strategic market for Isofoton where all of its technological applications and the associated R&D that went into creating them are used and therefore require IPRs.

Isofoton carries out a significant amount of collaborative R&D, and therefore a strong IP management strategy in this area is also needed. In its R&D contracts with external partners, Isofoton works with two models of IPRs ownership:

  • Specific Technology Development: In this model, Isofoton contracts with universities or other companies to develop a specific technology. Isofoton insists on retaining one hundred percent ownership of IPRs in order to have first call in any subsequent exploitation. The company does, however, leave open to its partners the possibility of exploiting the development themselves, provided this does not cut across Isofoton’s own strategic interests. Such possibilities are subject to Isofoton’s prior consent.
  • National or European Union Research Framework Programs: In this model, Isofoton undertakes R&D in the context of national programs or under the European Union Research Framework. For innovations resulting from R&D under these programs, Isofoton requests free access to any IP generated for its own R&D purposes, but not necessarily for direct use or licensing.

The PV manufacturing process is comprised of the manufacturing of the solar cell and that of the PV module. Because these represent the company’s leading products, it is a fundamental strategic policy for Isofoton to retain complete control over its solar cell technology innovations through protecting know-how and other IP.

Isofoton’s products represent cutting-edge technology, and the company’s IP management strategy sits at the crossroads between its innovations, marketing and financing. All IP related decisions are therefore handled collectively by the management board, which includes the directors of all company departments, from engineering and technology applications to marketing, commercial operations, financing and R&D. “Having been born as a spin-off,” Mr. Jesus Alonso stresses, “an IP-oriented mindset comes naturally within Isofoton. IP is at the heart of the company culture.”


Isofoton's patent application for its photovoltaic
concentration module and device
(as submitted in PCT application
PCT/ES2008/000104, PATENTSCOPE® search)

Patents and Trademarks

In line with the company’s IP management strategy, it has made use of the Patent Cooperation Treaty (PCT) system. In 2009, it filed an international application for its innovative PV concentration module and device. It also made earlier PCT applications in 2001 and 2008 for a PV generator coating and a solar tracking method, respectively. The company also has filed eight regional applications with the European Patent Office (EPO) and has filed eleven national applications with the Spanish Patent and Trademark Office (SPTO).

In addition to its patents, the company also has registered trademarks for its company name, logo and various product names. Isofoton holds six trademark registrations with the SPTO and one registration with the Trademarks and Designs Registration Office of the European Union (OHIM) for its name and logo.

Licensing

Depending on the specific project, Isofoton may license in or license out technology. Licensing in technology usually comes from joint R&D programs, and in such cases it is paramount for the company to have its own personnel directly involved in all phases of R&D. Doing so will give the company the option of continuing R&D beyond the specified project objectives in order to develop technologies independently from the original partners.

While Isofoton never assigns its IPRs to third parties, it does license out technologies for manufacturing its PV module. This is an option that the company would normally adopt in markets in which it does not yet have a strong presence. Isofoton takes this approach to licensing out its technology to build a strong local partnership with the licensee so it can secure a dynamic presence in these markets.

Partnerships

In addition to its internal R&D, Isofoton partners with universities and research centers. One such partnership occurred in September 2009, when it partnered with Solar Edge, another leading solar energy company based out of Israel, to develop an integrated solar power harvesting solution that will maximize power generation while reducing costs. Combined with its internal efforts, partnerships such as this represent the company’s strong commitment to innovation through R&D.


A solar PV roof top installation by Isofoton
has cut costs at the Torelli Pierluigi cheese
factory in Parma, Italy (Photo: Isofoton)

Social Issues

Isofoton believes that developing sustainable energy technologies is not only an obligation toward future generations, but is also key to boosting development in a world where, according to a 2009 International Energy Agency estimate, 1.5 billion people worldwide have no access to electricity. To help lower this number, Isofoton has many rural electrification projects in developing countries, such as installing over 34,000 PV energy systems in remote villages in Morocco, bringing electricity to over 10,000 homes and a PV powered water plant to a rural community in Senegal, supplying 17,000 homes, schools and health centers in Bolivia with PV electricity, and bringing electrification to rural communities in Ghana. Isofoton’s technology is not only sustainable and environmentally friendly, but it can make a significant contribution to socio-economic development.

Business Results

Although Isofoton nearly went bankrupt twice in its early history, its IP management strategy has fostered continued innovation and commercial success. In 2010, the company completed a 3 megawatt PV power plant in Miltenberg, Germany, which is expected to generate 3.1GWh of electricity per year. As of 2010, Isofoton is one of the top ten producers of PV solar cells in the world. It is the largest company of its kind in Spain and has enjoyed revenue increases each year since 1997. In 2007, it produced 180 megawatts of PV solar cells and recorded nearly 300 million Euros in total sales.

Harnessing the Power of the Sun and IP

Through developing an IP strategy for specific markets and both in-house and collaboratively developed innovations, Isofoton has maximized its R&D potential and maintained a competitive advantage, allowing it to grow and enjoy success. It has also resulted in the development of sustainable technologies that can reduce our reliance on limited and environmentally unfriendly resources, bring electricity to developing countries and create a greener and brighter future.