-(Dow Jones)- As clean-technology investment booms, companies are increasingly finding themselves involved in litigation over their intellectual property.
Industry experts say concerns over intellectual-property protection for clean- technology companies will grow as the sector develops further and employees move among companies.
Already, law firms with intellectual-property practices are seeing an increasing number of clean-technology clients.
(This story originally appeared in VentureWire, a daily email newsletter published by Dow Jones & Co. that covers news about venture-capital and startup companies.)
"I think we're really starting to see just the beginning of it," said Morrison & Forrester LLP attorney , who specializes in clean-technology intellectual property. "There have been cases across the board of different clean technologies' trade-secret litigations and patent litigations filed in the last year or two."
Morrison & Forrester is currently handling intellectual property-related litigation involving companies such as (TM); light-emitting diode companies Philips Solid-State Lighting Solutions Inc. and (LSCG); fuel-cell companies NessCap Co. and (MXWL); (GE); (MSBHY); Tesla Motors Inc.; solar-cell company (DSTI) and Horizon Ethanol LLC.
(POWI), for example, which makes analog integrated circuits used in energy-efficient power conversion, recently filed a patent- infringement lawsuit against (FCS) and System General Corp.
, director of investor relations for , said his company has faced a total of five intellectual-property cases to date. Company officials hope the cases they have won will discourage patent infringement, but they realize that may not be likely.
"Clearly the demand for more energy-efficient electronic products has been increasing," Shiffler said. "That has created some motivation for people to co- opt our technology."
Walters, of Morrison & Forrester, said the large amount of capital invested in clean technologies and the fact that much of the innovation is closely related has companies investing heavily in intellectual-property protection.
"Most of these companies are pretty savvy about investing in IP and keeping a careful eye on the IP landscape, and I think that's what they need to be doing," Walters said.
Employees moving among these companies will cause more trade-secret lawsuits, said , co-head of Wilson Sonsini Goodrich & Rosati's clean- technology practice and a partner with the firm.
"Presently there is a tremendous amount of employee mobility, and with that comes the potential that information employees gain from a prior employer would be the kind of information that prior employer would not want to see in the hands of a new employer," O'Connor said.
O'Connor said intellectual-property litigation will become the most prevalent in whatever clean-technology sectors have the most capital investment, as companies seek to protect those investments. But the real push for intellectual- property protection has yet to come, he said.
"Many of these companies are still sitting on the sidelines to see who the winners and losers are going to be before we see the litigation really start arising," O'Connor said. "Having said that, these companies value IP protection just as much, if not more than any traditional technology company."
, and analyst with Jesup & Lamont Securities Corp., compared what is happening to the information-technology book of the late 1990s.
"Many start-ups and some established companies are pursuing the same endgame ( for example, cheaper or more efficient solar cells) from differing technological viewpoints," Yerger said, "and in that pursuit are discovering processes and trade secrets that perhaps mimic another company's internal processes.
"Once the technology is patent-protected by one company or another, patent disputes erupt as to who developed or created the technology first," he said.
-By , Dow Jones Newsletters; 201-938-2257; sari.krieger@ dowjones.com
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