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Climate change mitigation and patent value recognition
01 December 2015
This month, representatives from almost 200 countries have joined the annual United Nations meeting in Paris, known as Conference of the Parties (COP21), to address climate change issues.
As in previous years, the meeting involves a lively and challenging debate regarding Intellectual Property Rights (IPRs). In this context it is interesting to note that at the Warsaw Climate Change conference in November 2013, the ministers stressed “the urgent need to address the issue of [...] the appropriate treatment of intellectual property rights, including the removal of patents on climate-related technologies for non-Annex I Parties.”
Much of the debate relates to removing IP protection and use of flexibilities in the IP instruments (e.g. TRIPs) such us compulsory licensing or removing IP protection altogether. IPRs are increasingly seen as a barrier for technology diffusion and are criticised, because of the exclusive rights given to their owners, especially by the countries that could benefit from weaker IPR protection for their own industrial policy reasons. Despite the fact that exclusive rights are at the core of IP laws, there are growing initiatives to weaken the IP regime and ‘rebalance’ or simply withdraw IP protection. Problematic proposals include a range of measures, from overt schemes to set aside IPRs such as compulsory licensing, to the provision concerning climate funds, patent banks or pooling mechanisms.
In practice, IPR systems provide a number of important benefits to the companies investing in green innovation and for the related technology transfer.
Their function is to stimulate the incentive for companies to invest in innovation. Many companies would simply not commit to R&D funding without stable and effective IP protection in place to allow them to successfully harvest the fruits of R&D. R&D success requires building and maintaining capable and experienced teams and appropriate facilities over long development cycles which involve continuous incremental innovation. The way to address long-term competitiveness is to continue with this investment in the development of new technology, ensuring its protection by means of IPRs.
IPRs also create the legal clarity and certainty for technology transfer transactions. Indeed, IPRs, especially patents, act as an important enabler for further innovation and technology dissemination. They require publication of the invention, thus making new knowledge publicly available and exposing the direction of the next technological step in relation to the climate mitigation technologies. Without publication, there would be no chance for the public to get information about new technical developments. IPRs also encourage companies to disseminate technology in a quicker way because they provide a basis for partnering and to assure the return on R&D investment. IPRs should be understood as a basis for incentivising technology diffusion and know-how, without which transferring, licensing or selling inventions would not be available, thus damaging the economy and the development of subsequent technology.
Intellectual property rights, especially patents, are often mistakenly viewed as being a monopoly, but this view cannot be justified in the economic terms. Patents have their limitations, term of 20 years, geographical coverage and complex patentability requirements. In the context of green technologies, companies usually file their patents in a few critical jurisdictions, while the underlying technologies remain free to the public in the others. For example, between 2006 and 2011, 81% of global patent filings in solar technologies were concentrated in US, Japan, Republic of Korea, Germany and China, and only 19% were filed in other countries globally (see Table 1). In wind technologies, 76% of global patent filings were again in the same five countries. Climate change technology-related patents remain highly concentrated in the developed countries, despite the growth demonstrated by e.g. China, India and Brazil. Thus, it is time to shift the awareness concerning patents as a barrier to climate change mitigation and recognise relevant patent data.
Furthermore, if patented products or technologies are successful in the market and end up providing some market power to the patent holder, this is generally not due to the patent right but to other circumstances such as lead time advantage in bringing the product on the market, successful marketing, better cost-management etc.
IPRs should be seen as an enabler in the technology dissemination, because they ensure publication of the inventions that can stimulate further development. Most relevant technologies are not patented in developing countries and emerging market economies. Finally, there is a risk that attempts to deprive technology developers from the tools provided by the IPR system will act as a disincentive and could be detrimental in the long-term, resulting in higher development, adaptation and dissemination cost.
Office of first filing in solar thermal from 2006-2011
Republic of Korea
Source: S. Helm, Q. Tannock, I. Iliev, and “Global Challenges Report Renewable Energy Technology: Evolution and Policy Implications- Evidence from Patent Literature” WIPO, 2014.
 The TRIPs agreement contains generic provisions on the compulsory licensing of patents
(Art. 31 – "Other use without authorization of the right holder"), in times of emergency which have been used in the exceptionally pharmaceutical field, but should not automatically mean, that such exceptions are applicable also to the nature of other e.g. green technologies.
 See, e.g., Ad Hoc Working Group on the Durban Platform for Enhanced Action, Negotiating Text (February 12, 2015), available at https://unfccc.int/files/bodies/awg/application/pd...@2200.pdf.
 See Synthesis Report of the Secretary-General on the Post-2015 Agenda, The Road to Dignity by 2030: Ending Poverty, Transforming All Lives and Protecting the Planet, (December 4, 2014), available at http://www.un.org/disabilities/documents/reports/S....
 see S. Bostyn, N. Petit “Patent =Monopoly – A Legal Fiction”, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2373471 and https://www.4ipcouncil.com/research.
 S. Helm, Q. Tannock, I. Iliev, „Global Challenges Report. Renewable Energy Technology: Evolution and Policy Implications- Evidence from Patent Literature” WIPO, 2014.
 S. Bostyn, N. Petit “Patent =Monopoly – A Legal Fiction”, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2373471 and https://www.4ipcouncil.com/research?ccm_paging_p=2