Close

Case study: Winds of change

Understanding the value of its IP and how to maximise it through licensing agreements helped move this Kiwi company from challenges into the fast lane.

New Zealand’s not just the land of the long white cloud – we’ve also been called the Saudi Arabia of wind. Christchurch-based Windflow Technology is making the most of this abundant natural resource to become a world leader in wind-turbine technology innovation.

Windflow has developed a revolutionary two-bladed 500kW wind turbine technology, the Windflow 500, which is able to generate power under gale-force conditions while simultaneously providing the highest power-to-weight ratio in the industry.

In late 2011, Windflow approached Auckland-based commercialisation specialists EverEdge IP for help and advice. Commercialisation of the technology was stalling and Windflow needed to get it back on track, says EverEdge IP chief executive officer Paul Adams.

“Around 100 of these turbines had been installed at the New Zealand Windfarm’s Te Rere Hau development near Palmerston North,” he says. “But it was becoming clear that a manufacturing-only strategy would be challenging going forward. The Windflow board of directors wanted EverEdge to independently assess the intellectual property position of a core piece of technology behind their turbine technology.”

Having carried out an initial assessment, EverEdge was able to give Windflow a clear picture of how strong the intellectual property was. This information was a critical input for the board and led to a request for EverEdge IP to prepare a commercialisation strategy for Windflow’s intellectual property that would shift the company’s thinking.

“Windflow didn’t simply have a unique turbine, they also had an enormous amount of intellectual property inside it,” says Adams. “It wasn’t just patents, it was know-how, confidential information, copyright, design drawings and so on. They had very valuable and highly innovative intellectual property but weren’t sure how to extract further value from it. We worked with the team to prepare a commercialisation strategy that clearly charted the path forward to value.”

The key to the strategy was that, rather than solely manufacturing in New Zealand and Australia, Windflow would shift its focus so that the international commercialisation of its intellectual property would occur through licensing to major players around the world.

EverEdge IP developed a ‘matrix’ licensing campaign for Windflow. The result is that rather than being restricted to extracting value from its technology via its own commercial operations or a single licensee, Windflow is able to do so in multiple territories and through multiple applications in those territories.

“EverEdge helped us understand where the strengths of our intellectual property lay and provided guidance about how to best extract value from that intellectual property,” says Windflow chief technology officer John Arimond. “Paul and his team were able to provide deep insight and experience at a critical phase in our company’s development.”

With the strategy in place, the focus now turned to reaching a deal in the US.  A subsidiary of Fortune 100 corporation General Dynamics had previously expressed an interest in Windflow’s technology. However, negotiations were taking too long and the deal was critical to Windflow’s future. Adams accompanied Arimond to Texas in December 2011 – the clear goal: land a deal. Three days later, the team left with a handshake agreement on a license that was formally completed in February 2012.

“EverEdge’s help during the negotiation process was highly valuable,” says Arimond. “As an engineering-focused firm, we needed someone with us who knew what approach and tactics to use.”

The deal provides for a 10-year relationship based on licensing and joint development around Windflow’s 500kW turbine. In addition to royalties, the agreement affords co-funding for the development of further turbine technology and contains key provisions to support Windflow resuming manufacture of its turbines in Christchurch.

“This was a real win, as it fuels further R&D, which Windflow can then feed back into more licenses,” says Adams. “We’re now selecting potential companies with which to negotiate licenses in other territories, such as China and Europe.”

With the future for most New Zealand technology companies involving deals with much larger international organisations, the ‘small to large’ dynamic can be unfamiliar to many local service providers, says Adams.

“That’s particularly true if it involves intellectual property or technology; you really need to know what you’re doing in the process of that negotiation. That’s something EverEdge IP has a great deal of experience in – helping smart small- and medium-size Kiwi companies land major deals with big players offshore.”

IN BRIEF

EverEdge IP helped wind turbine company Windflow Technology Ltd to: assess the strength of its intellectual property; develop a commercialisation strategy to best extract value from its technology; and to negotiate a major deal with a US Fortune 100 company to license its technology as the first step in a global commercialisation campaign.

CONTACT

Paul Adams  

CEO, EverEdge IP

(09) 489 2331

p.adams@everedge.com

www.everedge.com

Idealog has been covering the most interesting people, businesses and issues from the fields of innovation, design, technology and urban development for over 12 years. And we're asking for your support so we can keep telling those stories, inspire more entrepreneurs to start their own businesses and keep pushing New Zealand forward. Give over $5 a month and you will not only be supporting New Zealand innovation, but you’ll also receive a print subscription, an Idealog t-shirt and a copy of the new book by David Downs and Dr. Michelle Dickinson, No. 8 Recharged (while stocks last).