Don’t get Green-washed by Green-tech Hype!

Posted on 14th June, 2011

Rob and I have been advising on a technology deal in the “green” space for some months now, which has the potential to roll out on a global basis and make a huge contribution to reducing the carbon footprint of many urban areas.  For obvious reasons, I can’t give too many details.

What has struck me, as the veteran of many technology-related deals over the years, is that there is a danger of being, as they say, “green-washed” with the excitement of it all.  That is, believing that, as this is a new industry and one which is poised to address some of the world’s most pressing problems, one can afford to suspend one’s normal commercial critical faculties.

In fact, the issues at the heart of the deal were much the same as ever:

1. Was the intellectual property underpinning the new technology properly protected?  In this case, there was an interesting tension between whether it was strategically better to keep the “secret sauce” a closely guarded secret or to disclose it in return for the protection of  a patent.
2. Linked to this, how could the new technology best be rolled out worldwide, while still protecting the invention behind it – and the interests of the inventors?  Where should manufacturing of equipment take place and on what basis?
3. What sort of infrastructure should be created?  A global corporate structure, with all the expense and tax issues that would raise, or a network of agency and distribution agreements?
4. What about the regulatory and compliance issues of rolling out new technology in multiple countries?
5. Where’s the money to come from to fund this, and on what basis?  Would private equity fund the initial trials or would public bodies or global financial institutions subsidise them?  Would the basis of funding the global roll-out (and therefore the return on investment) differ from country to country?

So, as we all worked hard to make the deal happen –and we all believe very much in its merits – our job as lawyers was to remain focused also on due diligence and asking the simple questions about who owned what and the many “what ifs” that can irritate clients so much!

The lesson is to let yourself be excited by exciting projects – but also to remember to kick the tyres!

For more information on our technology practice – green or otherwise – contact me at rory.graham@coffeygraham.com