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New York State Continues its Push to Reform State Utility Markets

Posted in Renewable Energy

Collage of Power and energy concepts

On May 19, 2016, the New York State Public Service Commission (the “PSC”) released Filing No. 749 entitled “Order Adopting a Ratemaking and Utility Revenue Model Policy Framework,” [Link] which was made in furtherance of the State’s focus on utility operations increasing their renewable sources of energy in the State.  The main element of the restructuring centers on the establishment of financial mechanisms through retail markets for Distributed Energy Resources (“DERs”), which will provide consumers a more integrated way of overseeing their energy use, and consequently, their energy costs.

The PSC’s action is another step in implementing Governor Cuomo’s Reforming the Energy Vision (“REV”) initiative. [Link]  The REV is one of the most ambitious State plans in the country targeted at clean energy, and calls for, amongst other things, New York’s energy generation to be at least 50% renewable by 2030, a 40% reduction in greenhouse gas emission from 1990 levels, and a 23% reduction in energy consumption in buildings.  A series of programs have been instituted across New York to assist in meeting REV goals, including the NY-SUN program (financing solar projects across the State), BuildSmart NY (requiring a 20% reduction in energy use in State buildings by 2020), and the NY Green Bank (public-private financing for clean energy programs).

Under the terms of the PSC’s order, by no later than December 1, 2016 each of the major State utilities will be required to file a system efficiency proposal focused on reducing high-cost energy generation during peak demand times.  Certain other financial benefits are to be offered to utilities for meeting these regulatory changes, as outlined by the PSC’s, and consistent with the REV.

This filing will be considered in conjunction with the already established filing deadline of June 30, 2016 for State utilities to submit Distributed System Implementation Plans (“DSIPs”) focused on DER coordination in the utility markets, and necessary planning activities to ensure proper integration of the same. A supplemental DISP submission is to be developed jointly by the utilities after the June 30 submission, and filed by September 1, 2016.

As a frame of reference, the REV initiative was separated into two specific tracks – Track 1 concentrates on the development of DER markets and utilities as an integrated Distribution System Platform (“DSP”); Track 2 concentrates on reforms to ratemaking and revenue streams for DSP providers to foster and develop the DSP provider network.  PSC’s ultimate goal is that, upon completion of the 2 step process, a stronger and more diverse utility market will exist that is focused more on consumer-based considerations and benefits, and less on utility markets operating in the context of large existing energy production platforms.

Track 2 is expected to be of the most interest to followers of the State energy market, as the intent is to align the financial interests of both the utilities and other interested third parties under a decoupled revenue scheme. Although the intention of Track 2 makes a lot of sense, it may be problematic from an implementation perspective. Such an alignment of interests will necessarily require a great deal of massaging in order to develop standards and incentives that can efficiently do so, and it’s still an open question as to how effective the process will be in that regard.  In furtherance of this process, the PSC has proposed a series of financial reforms to address utility business models in the State via the use of Market Based Earnings (“MBEs”), further ratemaking reforms (including through the use of targeted incentives), and rate design reforms.

Stay tuned for further blog posts discussing the PSC’s actions as this process moves forward.

New York Public Service Commission Issues New Consumer Protection Guidelines for Energy Service Companies

Posted in Renewable Energy

On February 23, 2016, the New York Public Service Commission (PSC) issued an order setting new consumer protection guidelines for energy service companies, or “ESCOs.”

An ESCO is a business supplying electricity and/or gas to a variety of industrial, residential and/or commercial consumers.  These entities regularly market themselves to consumers as a cost-sa
ving alternative to purchasing energy from a utility, and offer a range of pricing options, such as long-term fixed prices and/or variable rates.renewable energy

The issuance of the new regulations was prompted by a rise in consumer complaints concerning questionable ESCO marketing practices, dissatisfaction with the prices charged by ESCOs after no price savings were realized, and unauthorized enrollment of consumers into ESCO products.

Effective March 4th, ESCOs may only enroll new mass market consumers or renew existing consumers in gas or electric services if one of two conditions are met: (1) the enrollment includes a contractual guarantee that the customer will pay no more than if he/she were purchasing energy from a utility; or (2) the enrollment is based on a contract for an electricity product derived from at least 30% renewable energy sources.

ESCOs currently serving consumers via month-to-month variable rate contracts must enroll those customers in a compliant product by the end of the current billing cycle or return them to utility supply services.   If an ESCO customer pays more than he would have had he purchased energy through a local utility, the ESCO is required to refund the difference at the end of the year.

For existing customers in the latter case, the ESCO must obtain affirmative consent from the consumer prior to renewing them from a fixed rate or guaranteed savings contract into a contract that provides renewable energy but does not guarantee savings.  Renewable energy sources that qualify under the second exception include biomass, biogas, hydropower, solar energy, and wind energy, as well as renewable attributes.

The order also set forth certain issues that the PSC promised to further study within 60 days, including:

  • Examining under what conditions ESCOs may enroll mass market consumers on a going forward basis, to determine whether the conditions above should be imposed against ESCOs on a long-term basis;
  • Whether the existing three-day period for customer rescission of ESCO contracts should be extended or modified;
  • Whether ESCOs should be required to post performance bonds or take other measures of demonstrated financial capability; and
  • What penalties should apply to ESCOs that violate the provisions of the order.

With respect to enforcement, the PSC indicated it would proceed via Order to Show Cause for ESCO eligibility revocation (or any less severe action it deemed appropriate) against any ESCO that has a single violation of the requirements prescribed by the Order.

Commenting on the new regulations, Governor Cuomo stated, “We have zero tolerance for these unscrupulous companies, whose business model is to prey on ratepayers with promises of lower energy costs only to deliver skyrocketing bills.  These actions will root out these bad actors and protect New Yorkers from these unfair and dishonest tactics.”

The February 23, 2016 decision is available for download on the docket at the following site:


Fighting Patent Application Rejections with Market Information: More Than Just “Nobody Else Sells This”

Posted in Intellectual Property

An inventor lament that every patent attorney eventually hears is, “I’m the only one selling this, so how can the Examiner think my idea is obvious?”  The argument makes sense from
an inventor standpoint.  If an idea is so obvious, why is no one else making it?  Shouldn’t first to market equate to first to invent?  Unfortunately, the U.S. Patent and Trademark Office (USPTO) generally works based on written references, not based on market research.  Those written referenchessces may not reflect the current state of your product’s market for a few reasons.

First, the Examiner is not bound only to references describing what is sold in the market.  The Examiner can use just about any reference that pre-dates your earliest filing date.  For example, another inventor may have described a similar idea but may have lacked the funding to manufacture anything.  His lack of funding (or connections, business acumen, etc.) has no bearing on the fact that his idea was previously described.

Second, the USPTO searches references dating back more than a century.  I’ve seen rejections using references showing mechanical devices from the late 1800’s.  Products can come and go.  It’s possible for some technologies that someone may have done something similar before your company (or even you) existed, even in greentech.

Third, the Examiner can look at references from other countries.  Some of those foreign products might have been on store shelves, though you may never have heard of the manufacturer or store selling the product.  For example, references from Europe, Japan, or even the USSR can describe something similar to your idea.  That those products never reached American shores does not change that an explanation of them exists in written form.

However, you may be able to get some credit for being first to market or being the only player in your space.  An Examiner will consider a declaration or affidavit demonstrating that a problem existed in your market for a long period of time without a solution, that experts were skeptical your product would work, showing praise from others in the industry, or showing evidence of commercial success of your claimed invention.  These sorts of arguments are referred to as “secondary considerations” of non-obviousness.  Keep in mind that secondary considerations can only help with an obviousness rejection.  If the Examiner presents a reference that shows your claimed invention in its entirety (i.e., an anticipation rejection), secondary considerations will not help.

Secondary considerations need to be reasonably commensurate in scope with the claims.  If you show a long-felt need or praise for an unclaimed feature or a feature only found in a dependent claim, then the declaration will not help with the rejection of the independ
ent claim.  Also, a nexus must exist between the secondary considerations and the claimed invention, especially with commercial success.  For example, the commercial success must correspond to the product that is claimed.  Commercial success caused by unclaimed features or marketing unrelated to the claimed features can weaken your arguments.

Examiners at the USPTO do not search the marketplace to see if your product has competitors or whether you were first to market.  Examiners are more concerned whether your idea looks similar to references from decades (or even centuries) ago.  That’s not to say being first to market or the market leader does not count for anything with the USPTO.  It’s just that the Examiner will not know all the facts about your market or the history of your product’s development.  An affidavit or declaration can be used to provide facts to help show that creating your idea was not as simple as A plus B.  A previously unsolvable problem, skepticism, praise, or commercial success can all demonstrate that your invention is not as obvious as the Examiner alleges.  So you need to argue more than that your product doesn’t exist on the market today.  Try to establish that your product hasn’t existed in any market and point to all the aimless effort, failed attempts, and heaps of uncertainty related to solving your problem.

Do the Evolution: Five Ways to Adapt Your Patent Strategy

Posted in Intellectual Property

CoyoteThe eastern coyote (or coywolf) is spreading across eastern North America. A study showed that coyote DNA dominates, but average eastern coyote DNA is about 10 percent dog (like Doberman Pinscher or German Shepherd) and 8-25 percent wolf. This interbreeding of coyotes, wolves, and dogs has resulted in an animal that is larger and faster than a coyote. It also has caused the resulting subspecies to overcome some weaknesses. For example, coyotes dislike hunting in forests, whereas an eastern coyote will hunt in open terrain (like a coyote) or wooded terrain (like a wolf). Wolves dislike humans and noise whereas an eastern coyote is more tolerant of people (like a dog). Eastern coyotes also have urbanized their diet and even have been observed looking both ways before crossing the street.

Adapting to changing situations isn’t just limited to animals. It’s something to consider for a patent strategy, too. Continue Reading

An Inventor Walks Into a Bar: Risks of Filing a “Bar Napkin” Provisional Patent Application

Posted in Intellectual Property

An inventor at a barInventors come up with ideas at the strangest moments. For example, an inventor in 1937 wrote down concepts for what is considered one of the first modern computers on the back of a cocktail napkin. After a bourbon, he came up with an electronically operated machine that used binary numbers, condensers for memory, a regenerative process to prevent memory loss, and direct logical action for computation. Hard to believe the fundamentals of the device used to type up this blog post (not to mention countless greentech inventions) were originally scribbled on a little paper square.

Provisional patent applications can help an inventor with only a proverbial bar napkin describing his or her invention. It serves as a way to establish an early filing date, mark your product as patent pending, and give the inventor twelve months to test feasibility or gauge interest. The provisional patent application needs to comply with U.S. Patent and Trademark Office requirements for providing a written description of the invention. However, a particular format is not required and no formal patent claim is needed.

Can your (proverbial or actual) bar napkin be filed as a provisional patent application? Continue Reading

Going Global: Tips on Building a Patent Portfolio Outside the United States

Posted in Intellectual Property

I occasionally hear an inventor or businessperson talk about how his or her company has a “global patent” or an “international patent.” Unfortunately, there is no such thing. While some companies have filed patent applications around the world (or at least in many corners of the industrialized world), most of the time these statements refer to filing a Patent Cooperation Treaty (PCT) application.

To clarify, a PCT application is neither a patent nor is it truly global/worldwide. PCT applications are a way to file a single patent application covering your invention in contracting states. Note that the PCT application is a vehicle for gaining patents in the future. It grants no patent rights in itself. A PCT application is, for lack of a better explanation, a placeholder. Further patent applications are needed subsequent to the PCT application to secure patent rights in various parts of the world.

That’s not to say that PCT applications don’t have benefits. Continue Reading

Using Utility Models to Protect your Intellectual Property in Taiwan

Posted in Intellectual Property

taiwanA new “green” attitude is pervading Taiwan. Besides ongoing environmental efforts, Taiwan is home to multiple green technology companies. While revenue results for some Taiwanese solar cell manufacturers declined this year, Taiwanese companies like Motech are still prominent in the green technology sector. Taiwan’s continuing presence in the green technology sector can be seen in the duties imposed by the U.S. Department of Commerce in early 2015 on solar cells imported from Taiwan.

Like China (which I previously wrote about here), Taiwan offers utility model coverage. Filing a utility model application in Taiwan can potentially speed growth of an international intellectual property portfolio. Continue Reading

New Email Alert System Allows for Patent Publication Monitoring

Posted in Intellectual Property

Monitoring email on digital tabletOn April 24, 2014, the United States Patent & Trademark Office (USPTO) announced the release of the Patent Application Alert Service (the Service).

The Service provides free, customized email alerts when U.S. patent applications are published. Additionally, the Service offers direct access to the published applications for convenient review.

How the Service Works

An account must be created in order to use the Service. Like most websites, creating an account requires an email address and a password. The Service only sends alert emails to the provided email address. Continue Reading

Discovery Orders May Threaten Traditional Notions of Trade Secret Protection

Posted in Intellectual Property

combination lockHistorically, confidential and proprietary information, such as the formulas for Coca-Cola and Pepsi, is trade secret information that will not be made available to the public during litigation. While Coke and Pepsi are probably the two most famous examples of protectable trade secrets, many companies in varying industries rely on trade secret protection for financial success and competitive advantage. For example, manufacturing, pharmaceutical, and chemical companies often choose trade secret protection over patent protection either because a trade secret may enjoy a lifetime of protection, as opposed to twenty years, or simply because the trade secret formula or chemical composition does not rise to the level of non-obvious invention required for patent protection.

Regardless of the technological or business reason for choosing to protect your confidential and proprietary information as a trade secret as opposed to patent, that protection should not be threatened by discovery orders in a litigation that your company is not even a party to. However, recently a Pennsylvania state court decision highlights risk to trade secret protection for certain hydrofracturing fluid manufacturers in the oil and gas industry. Continue Reading

Teamwork Can Benefit Your Company’s Research, but Verify Inventors on any Resulting Patent Application

Posted in Intellectual Property

Laboratory glasswareMuch of today’s innovation is a collaborative process. In the past few weeks, stories were in the news about breakthroughs involving groups of researchers working on aluminum batteries, carbon electrodes for lithium-ion batteries, wearable power generation, and wireless power transmission. The prevalence of collaboration in research is reflected in U.S. intellectual property trends. A study in 2009 showed that, over the past four decades, the average number of inventors per patent increased. A study in 2013 showed that the number of patents with solo inventors fell between 2005-2013.

While collaboration has benefits, it can cause problems when it comes time to file a patent application. Not all work done by members of a project team may be sufficient to qualify everyone as joint inventors under U.S. patent law. The proper list of inventors on a patent application may not include all the project team members because each joint inventor must contribute in some significant manner to the formation of a definite and permanent idea for at least one claim of the invention. Thus, each joint inventor must conceive of something in the claims. Continue Reading