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Alternative Mechanisms to Disseminate Green Technologies

Introduction 

In my previous post Declaration on IPRs on Environmentally Sound Technologies, I explained how intellectual property rights (IPRs) could pose a barrier to the dissemination of environmentally sound technologies (ESTs). As it stands now, the majority of ESTs are developed in the private sector, where the technologies will be patented before they are commercialized. To place inventions of public good into the hands of private parties, may cause certain issues, at least on a case-by-case basis. Private monetary interests may lead to high licensing fees and anti-competitive practices, which potentially can hinder or complicate namely developing countries’ access to urgently needed technology. Additionally, weak facilities in developing countries discourage technology transfers from profit-maximizing companies – where the leading technology typically is owned.  On this background, I have suggested that the WTO members could make a declaration on ESTs similar to the Doha Declaration to make sure that IPRs do not hinder developing countries’ access to green mitigation and adaption technologies. However, strong counterarguments can also be made against adopting such a declaration.

A WTO Declaration on Intellectual Property Rights?

First of all, the adoption of a declaration which allows for a wider access to obtain compulsory licenses or even just compromises IPRs most slightly, seems unrealistic from a political standpoint.  Developed countries such as the US and EU will most likely oppose the initiative, since IPRs are traditionally viewed as prerequisites for private investments in research and development (R&D).Alternative Mechanisms to Disseminate Green Technologies.

Secondly, the Doha Declaration was adopted to facilitate developing countries access to essential medicines and vaccines and pharmaceuticals are fundamentally different from ESTs. In the pharmaceutical industry, a patented drug may not have any substitutes, which leaves the patent holder in a very strong market position. In comparison, ESTs can generally be replicated and there are many competing market actors in most EST industries. It is usually improvements or certain features of technologies that are patented in the EST industries, in contrast to patents on core-technologies that can lead to monopoly powers.[1] Another fundamental difference is that ESTs are generally more complex inventions and requires greater manufacturing capabilities.[2] A generic industry in the field of ESTs does not exist in the same way as in the pharmaceutical industry, where products easily can be replicated at a low cost.[3] IPR-issues connected with EST is thus of a different nature, compared with the similar concerns in the pharmaceutical industry.

Thirdly, by obtaining a compulsory license, the government authorizes a third party to use a patented technology without permission from the right holder. However, the right holder is not obliged to share associated know-how and technical expertise.[4] Without a concurrent transfer of know-how, the technology transfer may be inefficient or de facto prevent the licensee from utilizing the technology.

Fourthly, Article 31 (a) of TRIPS[5] requires the authorization to be considered on its individual merits. This means that the authorization should be evaluated on a case-by-case basis, which makes it practically impossible to grant compulsory licenses to the entire field of ESTs, as the category of conceivable ESTs cannot be exhaustively estimated.

With this in mind, a WTO declaration on ESTs may not be possible at the current time from a political and legal perspective. To provide a fuller picture, I will highlight some alternative mechanisms which may help to rapidly disseminate green technologies to developing countries.

Public Support

The public sector will play a key role in the development and dissemination of EST by funding and incentivizing R&D. Public mechanisms such as subsidization or procurement could serve as alternative channels to support and promote ESTs without relying on the patent system.

Subsidization could be direct funding from a government agency to R&Ds carried out by universities, corporations or small businesses, or by government support to education more broadly.[6] Other subsidies include prizes or rewards (“monetary rewards provided to the first person to deliver a specified invention[7]), feed-in tariffs (“fixed electricity prices that are paid to renewable energy producers for each unit of energy produced and injected into the electricity grid[8]), loan guarantees, various kinds of credit, tax subsidies or foreign aid.[9]

Procurement resembles subsidies in R&D, “but typically provides incentives by conditioning funding on achieving innovation outputs that are commercial or non-commercial products.[10] The method of the government‘s acquisition of procurement is generally public bidding.[11] Bidding resembles auctioning for prizes, which results in a lower funding level.[12] Prominent examples of innovation funded by government procurement are the internet, GPS technology, and passenger jets.[13]

To development and diffusion ESTs to developing countries is a costly affair, and it remains to be seen to what extent the green transition can be funded by governments, without relying on the private market. The funding will have to come from the public purse, meaning that the taxpayers have to be persuaded that the global green transition is in their interest.[14]

Use of policy instruments

To the extent that states wish to rely on patents to incentivize the development of ESTs, governments can set out policies to prescribe “what parties can and cannot do.[15] Examples of such regulations could be cap-and-trade system and carbon taxes.

A cap-and-trade-system (such as the EU Emissions Trading System) basically allows Country A to sell excess carbon credits to Country B. The idea behind a cap-and-trade system is to give countries an economic incentive to find ways of reducing emissions by compromising these countries for the sale of unused permits while simultaneously helping countries that are unable to meet reduction targets by providing them the option of buying the excess credits.[16]

A carbon tax is simply a fee imposed on the burning of carbon-based fuels (coal, oil, gas).[17]

Policy regulations such as these can incentivize R&D in green technologies, by punishing the use of technologies with a negative environmental impact.

Fast-Tracking Green Patent Applications

The world’s major patent offices such as the European Patent Office, the Japan Patent Office, and the United States Patents and Trademark Office, have introduced the so-called fast-tracking green patent application, which is an accelerated examination procedure for green technologies.[18] The accelerated patent procedure allows green inventions to be marketed and thereby disseminated faster.

Patent Pools

Patent pools are mechanisms where patent-owners, most often competing companies, agree to share and cross-license their patented technologies.[19] Particularly in high-tech industries, a single product can involve hundreds of overlapping patents.[20] Patented ESTs are often high-tech technologies such as modern windmills or CCS technologies, for which reason overlaps in patent rights are likely to occur. Patents pools in certain EST industries can thus prove to be favorable.

Patent Pledges

The meaning of patent pledges can be illustrated with a prominent example from the electric vehicle industry. In June 2014, Elon Musk initiated a post on Tesla’s blog with the following statement[21]:

Yesterday, there was a wall of Tesla patents in the lobby of our Palo Alto headquarters. That is no longer the case. They have been removed, in the spirit of the open source movement, for the advancement of electric vehicle technology.

Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal. Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.”

Tesla’s open innovation-approach is to my knowledge a rare occurrence in the EST industries, but without a doubt an efficient way to avoid IP barriers in the dissemination of green technologies.

Patent Commons

Unlike patent pools, patent commons are not limited to cross-licensing agreements between competitors but can involves a number of companies that agree to license patents on royalty-free terms to the benefit of the general scientific development in green industries.[22] An example of such a patent common was The Eco-Patents Common which launched in 2008 and ended in 2016. Open innovation and green patent commons will be the subject of a future article on this blog.

WIPO Green

WIPO Green is an online platform which in part consists of a database for users to make their ESTs available for licensing and partnership agreements, and in part, of a network that enables technology seekers and technology providers to connect with each other. [23] WIPO Green can help actors in developing countries to easily access and get in contact with providers of ESTs in developed countries.

TNAs and TAPs

Finally, with help from the UNFCCC[24], more than 80 developing countries have conducted so-called technology needs assessments (TNAs) since 2001.[25] The purpose of TNAs is to identify and prioritize individual developing countries climate technology needs. The outcome of the developing countries TNAs are concluded with technology action plans (TAPs). A TAP “is a concise plan for the uptake and diffusion of prioritized technologies (..).”[26] TNAs and TAPs can help to structure and manage the process of capacity building, technology transferring and climate financing in developing countries, which should be viewed as an intrinsic part of the goal to rapidly disseminate ESTs.

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[1] John Barton (2007), Intellectual Property and Access to Clean Energy Technologies in Developing Countries –

An Analysis of Solar Photovoltaic, Biofuel and Wind Technologies, ICTSD Programme on Trade and Environment pg. 20.

[2] Wei Zhuang Intellectual Property Rights and Climate Change, Interpreting TRIPS for Environmentally Sound Technologies, Cambridge University Press 2017, pg. 307.

[3] Dalindyebo Shabalala, Climate Change, Technology Transfer and Intellectual Property: Options for Action at UNFCCC, 2014,  pg. 283.

[4] Zhuang pg. 306.

[5] Trade-Related Aspects of Intellectual Property Rights, Annex 1C of the Marrakesh Agreement Establishing the World Trade Organization, signed in Marrakesh, Morocco on 15 April 1994.

[6] Joshua D Sarnoff, Government choices in innovation funding, Research Handbook on Intellectual Property and Climate Change, Paperback edition 2018, pg. 207.

[7] Ofer Tur-Sinai (2018), Patents and Climate Change: A Skeptic’s View, Environmental law Vol. 48:211, pg. 251.

[8] https://energypedia.info/wiki/Feed-in_Tariffs_(FIT) (opened 26-03-2020).

[9] Sarnoff, pg. 207-208.

[10] Ibid. pg. 211.

[11] Denis Borges Barbosa and Charlene de Avila Plaza, The Role of Government Procurement, Research Handbook on Intellectual Property and Climate Change, Paperback edition 2018, pg. 318.

[12] Ibid. 317.

[13] Ibid.

[14] Gwyn Prins et al., (2010), The Hartwell Paper – A new direction for climate policy after the crash of 2009, pg. 24.

[15] Tur-Sinai (2018), pg. 257.

[16] Christopher Napoli, Understanding Kyoto’s Failure, SAIS Review of International Affairs, Volume 32, Number 2, Summer-Fall, 2012, pg. 183.

[17] https://www.carbontax.org/whats-a-carbon-tax/ (opened 20-07-2020)

[18] Antoine Dechezleprêtre (2013), ICTSD: Fast-tracking Green Patent Applications (February 2013), pg. 11 and 19, and Zhuang pg. 244.

[19] Kingsbury and Gamman, Patent Collaboration: Licensing, Patent Pools, Patent Commons, Open Source and Communities of Innovation, New Zealand Intellectual Property Journal September 2013, pg. 4.

[20] Ibid.

[21] https://www.tesla.com/blog/all-our-patent-are-belong-you (opened 20-07-2020).

[22] Michael A. Carrier, Antitrust and Climate Change, Research Handbook on Intellectual Property and Climate Change, Paperback edition 2018, pg. 263.

[23] https://www3.wipo.int/wipogreen/en/ (opened 24-04-2020).

[24]United Nations Framework Convention on Climate Change.

[25] https://unfccc.int/ttclear/tna  (opened 22-03-2020).

[26] Ibid.

Alternative Mechanisms to Disseminate Green Technologies.

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