One of the hot technology trends over the past many months has been development of the smart grid (SG).  Reading Smart Grid News and other industry, and even mainstream, publications reveals an enormous amount of coverage of smart grid (SG) developments, both technical and commercial. Most of the coverage seems to be focused in two areas, smart meters and the standards-setting process.

Of course there’s much interest in smart meters, since (1) they offer exciting new opportunities for consumer control over their energy usage and cost, and (2) they have become controversial to regulators and consumer groups.  The other focus area in SG coverage is the very complex but crucial technical standardization process, driven by the National Institute for Standards and Technology (NIST).

My colleague, Lloyd Nirenberg, Ph.D. of Rocket Science Capital Advisors, LLC and I were discussing the development of the smart grid. Our attention ended up focusing on competition. We think the SG competitive battles will play out under the constraints of another big issue that has been largely ignored: the intellectual property (IP) (i.e., patents) that is not provided for standardization, but rather, is held for competitive advantage.

In the standards setting context, the SG community has focused its attention on making standards-associated IP available under generally equal terms. But regarding IP that is independent of the standards issue, there is a real danger of vendors and utilities infringing on IP rights of firms holding that non-standards-related IP.

Our intuition that IP has been largely ignored in SG context was confirmed by some quick searches we recently performed on Smart Grid News. A search on “smart grid” yielded 1,135 articles. Further searching on “wireless” yielded 125 results. But searches on either "intellectual property" or “patent” yielded only 9 articles each.

With this IP deficiency in mind, we decided to examine the space of SG patents to learn (1) which companies have the biggest SG patent portfolios, and (2) which technologies have received the most SG patents. We compiled a database of SG patents. The goal was to extract only those patents that relate specifically to the SG -- we defined the SG as a communications and control overlay on the traditional energy generation and transmission system --  and to exclude patents associated with the traditional generation and transmission of energy.

We immediately ran into several complications, some of which we’ll describe and explain our work-arounds. The long and short of it is that you cannot get much from searching patent databases for “smart grid”…but with some good judgment, you can see the structure of IP in the SG value chain.

Before I get into our analysis, let me first provide a better understanding of exactly what the smart grid is.