As the clock towards the Climate Change showdown in Copenhagen keeps ticking, our mostly market-based global financial structure results in yet another bizarre confrontation: Negotiators are arguing whether developing nations should be allowed to break or modify foreign-held patents on emissions-reducing technologies. This would obviously help to lower prices to levels at which poorer countries could afford to go green, but on the other hand clearly lessen the income of those innovative companies that once invented those technologies.
Developing and emerging economies led by Brazil and India demand concessions on clean technology that would be similar to the world agreement on AIDS and malaria drugs reached in 2001. That agreement, reached only after bitter international controversy, loosened patent rights on drugs owned by U.S. and European companies to create a system of “compulsory licensing,” or generic production of patented pharmaceuticals. A similar system for clean tech could adopt many forms, including generic production of patented products such as windmills, thin-film solar panels and advanced coal-power generators.
But apparently, those concessions seem to be unthinkable in Washington and especially at the US Chamber of Commerce. On June 10, the House of Representatives voted 432-0 to oppose any weakening of intellectual property rights in a new climate treaty, thus drawing a deep line in the sand for U.S. negotiators. Meanwhile, in a recent interview with the Green Patent Blog, Caroline Joiner, Vice President of the Chamber of Commerce’s Global Intellectual Property Center, described the upcoming Climate Change talks as representing “the IP battle of the year.”
Some cleantech entrepreneurs see a hefty stake in the matter, too. Scott Faris, CEO of Planar Energy Devices, a battery developer said:
“There’s a direct correlation between IP protection and the flow of capital, particularly for smaller companies. If we’re doing cutting edge stuff, we have to carve out a defendable stake with enough time to build up. That’s what investors look at — how defendable is your position?”
So far, little research has been carried out on how price affects intellectual property rights on green technologies, or the complex effects of patent ownership on emissions-reduction investments. Surprisingly enough, it’s hardly obvious that emerging markets such as China indeed need help in that particular form: China’s solar cell industry has quickly become the world’s largest exporter, its wind turbine manufacturing industry is expected to be the world’s largest by the end of this year, and Chinese firm BYD has become the first automaker worldwide to put a plug-in hybrid auto on the market.
However, China remains to be only one outstanding example of big developing or rather emerging countries that can hardly be compared to those often even more affected by Climate Change – be it in Africa, Asia or Latin America. The politcal and humanitarian consequences of a treaty that fails to prioritize the quick spreading of urgently needed technology and knowhow, but rather protects property and profits in the already well-off economies would be devestating.
Besides, the finger-pointing would probably be similar to the public-relations scandal that emerged during the controversy over AIDS drugs a decade ago, when pharamaceutical companies were labeled hypocritical profiteers in face of an unfolding humanitarian emergency.
But in spite of those frustrating news, there still seems to be some reasonable ground for optimism: This month, former co-winner of the Nobel Prize for Physics and US-Energy Secretary Stephen Chu took a valuable step forward, signing an agreement in Beijing to set up U.S.-China research institutes in clean technologies.
The clean-tech innovations and patents resulting from this joint-venture are expected to be jointly held, offering a valuable example for the private sector. Before that, Chu had already caused some discussion, when he clearly stated that the international community should take a “very collaborative” approach to improving energy efficiency and reducing greenhouse gas emissions. Here’s the larger context for Chu’s comment, as reported by the New York Times’ Dot Earth blog (he’s not calling for an all-out attack on IP protections):
“You don’t build a power plant, put it in a boat and ship it overseas, similar to with buildings. So developing technologies for much more efficient buildings is something that can be shared in each country. If countries actively helped each other, they would also reap the home benefits of using less energy. So any area like that I think is where we should work very hard in a very collaborative way — by very collaborative I mean share all intellectual property as much as possible.”
It’s – from my point of view – comprehensible that small innovative companies would not want to share their knowledge and inventions for free, but want to be paid for what they have invested in, often in times nobody believed their ideas would ever be that relevant. On the other hand, products such as the computer operating system Linux, the webbrowser Firefox or the platform Wikipedia show that inventions and products can be built in a way that is based on both the “open source”-mindset and a sustainable business model.
Last, but not least, there is one thing that all those companies and diplomats involved should not forget: There is no market on a death planet.