ClimateTech: emerging technologies and legal issues

The focus on emerging technologies in relation to sustainability, climate change and agriculture has never been more prominent. The world is rapidly adapting to alternative energy and carbon neutral practices, with climate-related technologies becoming ever more significant. As countries and businesses grapple with the challenges involved in the transition to a net zero economy, technology has helped and will continue to, drive this renewable energy transition through the rise of green technologies in order to accelerate the rate of decarbonisation worldwide. 

ClimateTech refers to technologies that are focused on reducing GHG (greenhouse gas) emissions or addressing the impacts of climate change. ClimateTech businesses and ClimateTech in use by businesses each rely heavily on emerging technologies such as:

• blockchain and distributed ledger technology 
• big data and data analytics
• predictive modelling
• digital transformation related to cloud computing and cloud storage

These emerging technologies ensure both established and start-up businesses can engage in developing new disruptive solutions to tackle climate change. Angel investors and venture capital investors alike have also created funds specifically focused on ClimateTech start-ups given the massive potential for valuable innovation across a wide range of technologies including wind, solar, hydrogen, waste, agriculture, battery and tidal. Given this, in our context, the possibilities for Irish deployment seem significant.

There are a multitude of legal considerations for all forms of businesses, from entrepreneurs and start-ups to established companies and investors, in the areas of renewable energy and sustainability. Most notably, all ClimateTech businesses and users of ClimateTech need to be aware of the potential issues related to:

• intellectual property (IP), including any potential IP or patent disputes/litigation
• commercial contracts and licensing agreements
• data protection

Intellectual Property

In the ClimateTech space, new and emerging technologies are developing fresh solutions and evolving the manner in which we approach complex environmental challenges. However, at the core of these emerging technologies are the intellectual property rights embodied in, developed and exploited by these solutions. Without robust IP protection, the ability to exploit, protect and monetise these solutions is significantly restricted. Ensuring the protection of all patents, copyright, trademarks, confidential information and trade secrets is crucial to protecting the value and sustainability of the venture or solution. This IP protection grants the rightsholder exclusive property rights, which can be defended in the Courts if required to prevent against infringement by third parties. It would transform the ClimateTech solution into a tangible asset that is capable of being transferred, licensed or assigned. This allows the rightsholder to confidently control and license the IP with a view to income generation. It can also safeguard the value of the solution to attract potential investment, as investors will have certainty regarding the registered rights, which can be asserted over any third parties that might seek to exploit the IP without permission or a valid licensing arrangement. Ensuring the IP protection of these solutions also provides comfort regarding any investment on the research and development of these exclusive rights. ClimateTech businesses may also need to consider design rights or database rights in the event their developments involve the collation of a database of information to inform the climate solution. 

Additionally, disputes can regularly arise in this highly competitive environment focused on innovation. Given the potential for costly disputes or litigation relating to ClimateTech IP, ensuring your IP rights are duly protected can ensure significant costs or potential delays which would hamper innovation can be avoided.

In addition, as a user/deployer of a ClimateTech technology, it will be important to ensure that the intended use/deployment does not infringe the IP rights of any third party. Where any solution is obtained from a third party, robust IP protections in the associated contract will be necessary.

Commercial Contracts

Crucial to the exploitation of ClimateTech is the negotiation and agreement of licensing arrangements concerning the business’s climate-related technology, and other forms of commercial contracts relevant to the functioning of the business. A promising ClimateTech solution could be greatly devalued by entering into licensing arrangements that fail to sufficiently protect and value solutions provided by the business. 

Typical commercial contracts that a ClimateTech business might enter into include arrangements related to distribution, sales, marketing, agency, franchising, licensing, logistics, manufacturing, outsourcing, e-commerce and advertising. These may also include IT contracts focused on cloud computing, acquisition or licence of IT infrastructure, managed service contracts and system integration. 

Additionally, the negotiation of related commercial contracts is essential to the proper functioning of any emerging or established ClimateTech business. Ensuring robust protections are in place with strategic third-party providers is of utmost importance. 

Given the industry, there is also an increased emphasis on the importance of environmental standards and carbon emissions when putting in place commercial contracts with third parties. The growth and impact of the green technology sector contains some clear challenges for a business seeking to scale up while ensuring emissions from its supply chain and operating models remain at an acceptable level. ESG considerations should be at the forefront of ClimateTech business' minds when entering into any commercial arrangements, given this increased scrutiny and potential for significant reputational harm. 

Data Protection

For all ClimateTech businesses and ventures operating in the EU context, ensuring compliance with GDPR is crucially important. Issues such as the lawful collection and processing of personal data, data security measures, data minimisation, data breach response plans, cross-border data transfers and arrangements with third-party data processors are all vital considerations for any business in the digital age. Establishing strong data protection policies and privacy notices to ensure compliance with GDPR is also highly important to duly inform both employees and data subjects regarding their rights. There are additional important considerations to be taken into account in relation to cloud computing, direct marketing, cookies regulation and ensuring the ability to respond to any data access requests. 

ClimateTech businesses should be aware of the entire life cycle of data privacy and security, including policy formation, as well as legislative and regulatory updates to ensure compliance. With several significant legislative changes on the horizon in relation to data protection and data privacy, this is a constantly evolving area of law that all businesses must be prepared to address.

Conclusion

The above highlights the myriad of considerations and challenges that will need to be considered by ClimateTech businesses. These issues affect established technologies and new innovative solutions alike across all sectors, such as energy, construction, food, agriculture and land use (FALU), transport and manufacturing/industry management. The Irish and global ClimateTech sector is experiencing rapid growth, fueled by significant demand from the public and private sectors. With this exciting potential for investment and growth of these emerging ClimateTech solutions, navigating the legal landscape in relation to IP, commercial contracts and data protection is vitally important to protect the interests and value of the venture or, as relevant, any deployment of ClimateTech solutions.

For further information in relation to any of the above issues, please contact Mark Ellis, Partner, Andrew Desmond, Senior Associate or another member of the Commercial & Technology team at ALG.

Date published: 4 October 2023