Last week I noted the continued growth of venture investment in the energy storage technology and suggested that such investment reflects a vote of confidence by the venture capital community both in energy storage technology itself and in the market into which that technology will one day be sold.  For whatever the short term challenges of the advanced battery industry, the smart money still seems to be betting on its long-term success.

Still, the financial sector has not been noted for its prescience in recent years.  True cleantech venture success stories are hard to identify.  Could it be that the statistics about venture investment trends are misleading and that the real smart money is in fact less sanguine about the future of stored energy technology and its cleantech cousins than the investment numbers would make it appear?

Given the possibly of having misread the sentiments of the venture capital industry, I decided to check another metric.  The metric I selected was the trend of patent issuances in the cleantech sector, and in particular the trend of patent issuances in the area of energy storage.  The number of patents issued indicates several things.   At the most basic level, patent issuances reflect the pace of new innovation in a particular area.  They can also reflect, at least indirectly, the number of talented technology professionals working in that area. 

But patent issuances reflect more than just pure innovation and talent.  Filing a patent application involves lawyers and patent agents and often significant expense.  Filing for a patent indicates more than just that an important invention has been made.  It indicates that someone has made a business decision that the invention to be patented is likely to generate a financial return that will justify the often substantial cost of the patent application.  Very often those decisions are made, not by venture investors looking for a quick return, but by large corporations with decades of experience in the field of practice to which the patent relates.

The New York-based IP law firm of Heslin Rothenberg Farley & Mesiti P.C tracks cleantech patent filings in the United States and around the world.  According to Heslin Rothenberg, annual cleantech patent applications have more than doubled since 2008.  In the third quarter of 2011, the number of cleantech patents issued in the United States reached an all-time high of 599.  This was 109 more than the number of cleantech patents issued in the third quarter of 2010.  Of the cleantech patents issued, hybrid/electric vehicle-related patents accounted for 59, an all-time high for that subsector, up from 46 issued during the third quarter of 2010.

The upshot is that, for whatever the perceived problems in cleantech and lack of identifiable successful venture investment exits, money, ideas, and talent continue to flow into cleantech and energy storage technology.   The at times irrational exuberance of the last few years, which has undoubtedly contributed to some degree of overbuilding in near-term battery and solar panel manufacturing capacity, is based on solid, long-term trends and market forces that will continue to drive resources into the sector for many years to come.