Who Owns Green Tech?

Catalyst / by Veronique Greenwood /

Five experts discuss how intellectual property can be adapted to spread green tech, what we can learn from Pasteur, and how to inspire people to innovate.

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How can intellectual property be adapted to spread green tech?
Our Panel Responds:

By World Trade Organization law, if a patented drug can improve public health in a developing country, it’s available for compulsory licensing. That means that developing countries can make generics of the drug while paying a small royalty instead of the full fee to the patent-holder—a practice that makes patent-holding companies deeply uncomfortable. To date, the only drugs so licensed have been antiretrovirals to fight AIDS in Africa.

But as nations move toward global restrictions on carbon dioxide emissions for the good of us all, developing countries have begun to ponder whether other patented inventions could also be licensed. If China, for instance, decides it needs the plans for an electric car to meet a reduced emissions quota, can it get them licensed for generic production? Developing countries think the answer should be yes. Some companies, including Microsoft, Sunrise Solar, and General Electric, say no.

To combat such a revision of WTO law, these and other US companies have recently formed the Coalition for Innovation, Employment, and Development. Hosted by the US Chamber of Commerce, the coalition paints a picture of patents as crucial to turning ideas into industries. “Without the assurance that IP rights will be respected—and effort, creativity, and investments rewarded as a result—innovation will wither,” the coalition warns on its homepage.

While this seems a bit alarmist, strong patent laws have significant benefits. Should companies lose trust in patents—should they fear that their ideas will no longer be financially respected as theirs—they have an incentive to make the ideas corporate secrets instead of publicly available patents. The European Patent Office foresees the burgeoning of such legally protected secrets should patents be rendered less binding.

Making technology patentable and thus profitable has indeed been a good way to encourage companies to invest in ideas that serve the public good. However, when billions in the developing world who could benefit from these ideas cannot afford the current system, we need to consider how it can evolve.

How can we reconcile the useful qualities of the current patent system with the need for widespread use of green tech?

Why We Need “Green Licensing”

Federico Caprotti is an assistant professor in human geography at University College London who studies clean-tech investments in China and the United States.

The rationale behind patenting technology is clear: Patents and IP rights protect a corporation responsible for innovation, allowing it to invest in R&D without fearing that another company will steal its innovation and bring it to market without bearing any of the development costs. Proponents of “green and clean IP” rightly point to the fact that more than 70 percent of global R&D in green tech is spent by private companies that want to protect their investments. That is why, for example, Toyota has patented more than 1,000 systems and components on its third-generation Prius hybrid car.

The situation is clear when all we’re talking about is a car. Or a hybrid engine. Or the gearing components of a wind turbine. However, it is far less clear when the issue is about climate change and sustainability, not about specific components, technologies, and firms. The pressing issue of climate change forces us to start thinking past our own borders and past the narrow concerns of individual companies. In short, we have to start thinking past the private good in order to achieve the public good. It may be worthwhile to think of some of the greatest technological breakthroughs which have benefited humanity—and which happened without the benefits of patenting and IP. When Louis Pasteur developed the first vaccine against rabies—a disease which still kills upwards of 50,000 people a year—he did not patent his discovery, nor work for profit, but disseminated his knowledge for the public good. Indeed, in the case of the environment, rarely has the market unequivocally “worked” in eliminating the negative impacts—or “externalities”—of fossil fuel use, pollution, and environmental inequalities.

It would be naive to suggest that all green technologies should be free. However, a recent high-profile report by University College London suggests that climate change is the biggest threat to global health in the 21st century. Developing a broader green IP framework is therefore crucial to the success of international climate treaties and emissions reductions standards. It is also crucial for developing countries, which are set to bear the brunt of the projected increased incidence and spread of diseases, extreme weather events, and warming.

One promising avenue is the establishment of an international licensing mechanism focused on green tech and clean tech. This would enable companies and governments in the developing world to use established technologies for a fee, while protecting innovator firms. This already happens in the case of various technologies, from engine components to airliners. However, if the common good and the issue of climate change are to be kept in mind, the licensing of green tech needs to include a fee mechanism. This will enable economies at different stages of development—such as the US, China, and Bangladesh—to afford to use the same licensed technologies to promote sustainability and cleaner production. Ideally, this fee mechanism should account for the fact that several green technologies—from wind turbines to solar film—are manufactured in developing countries, taking advantage of low labor costs and incentives derived from those governments that the Green IP lobby is active in criticizing.

At the same time, the new “green licensing” scheme should focus on established, not cutting-edge or proof-of-concept technologies. This is because it is crucial for countries to start reducing emissions now—not in 20 years. Parallel to this, international agreements should increasingly encourage the joint development of green tech by firms from developed and developing economies. Examples of this already exist: Vestas, the world’s largest wind turbine manufacturer, sources 90 percent of the components for its new turbine from Chinese companies (see pdf). In turn, the turbine is manufactured in China’s Inner Mongolia Autonomous Region so that it can easily reach the Chinese market. A licensing mechanism which allows for the spread of established green tech today will help developing countries to act on national environmental strategies, while allowing for the protection of innovators and investors in advanced economies.

Don’t Throw the Baby Out With the Bathwater

John Wilbanks is the vice president of science at Creative Commons, where he heads the Science Commons project.

It’s somewhat sadly ironic that the conversation about innovation is almost always itself non-innovative. The issues are framed as binary, zero-sum choices—between a strong patent system and chaos, between a world where everything stays as it is and a world in which no innovation happens.

We live in a world where innovation now takes many forms, some of which are mediated by the network and depend fundamentally on access to information and freedom to operate. There are entirely novel forms of innovation, like the user-driven innovation studied by Eric Von Hippel at MIT or open innovation studied by Henry Chesbrough at the University of California–Berkeley. There has also been an enormous amount of innovation happening in intellectual property itself, where standards-based public licenses have created a vast common space of software, cultural works, and biological materials. We need to take these new forms and classes of innovation into account when we design policy and standardize transactions, or we risk strangling entire zones of innovative discovery in the crib, all in the service of somehow “protecting” traditional innovation.

Instead of engaging in debate about the patent system, we should be having a conversation about the way patents get licensed and used, and how we can use public, standards-based licenses to open up the innovation field worldwide. This can be done within existing law and using voluntary private licenses like those we’re developing at Creative Commons in cooperation with companies like Nike and Best Buy. These are companies who are innovating with their patents themselves, not just arguing for higher walls and more police. That’s a network way of thinking.

We can find a way to balance the incentives of corporate innovators while making sure the innovators in the developing world have the means to solve their own problems. We’ve seen similar solutions take root in cultural commerce with extraordinary results, from the existence of Wikipedia to Nine Inch Nails making millions of dollars on songs they also gave away on the internet for free. We can do this for patents, and we can do this for sustainability technology. But it can’t be done if the rhetoric around the conversation is consistently fueled by maximalism and confrontation.

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