The extent to which intellectual property rights represent a barrier to the diffusion of low-carbon technologies in developing countries has been among the most contentious issues in global climate talks in recent years. No agreement has been reached on the central elements of the issue, and even identifying a path toward constructive dialogue can seem difficult and uncertain.
The debate has been under way at least since the first Earth Summit in 1992. That summit produced a blueprint for sustainable development known as Agenda 21, which dealt extensively with transfer of environmentally sound technologies, including the role of intellectual property rights. Agenda 21 included a reference to the use of compulsory licensing—a mechanism through which a government allows a third party to produce a patented product or utilize a patented process without the consent of the patent owner. This language stemmed in part from some developing countries’ difficulties in implementing the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer. In particular, chlorofluorocarbons were to be phased out under the protocol, but restrictive practices by technology suppliers in industrialized countries had made it difficult for firms in nations such as India to obtain substitutes.
Now as then, polarized positions characterize the debate over intellectual property rights. On one side are those who believe that intellectual property rights are an impediment to the affordable and large-scale diffusion of low-carbon technologies in the developing world. On the other side are those who believe that intellectual property rights play an essential role in fostering innovation and indeed in the diffusion of low-carbon technologies.
A number of developing countries adopt the first viewpoint. They point out that patenting of low-carbon technologies continues largely to be dominated countries belonging to the Organisation for Economic Co-operation and Development. As documented in Patents and Clean Energy, a 2010 report of which I was co-editor, almost 80 percent of patent filings for technologies in clean-energy generation are accounted for by Japan, the United States, Germany, South Korea, the United Kingdom, and France (though a number of emerging economies, such as China, show increasing specialization in some individual sectors.) In addition, the report indicates that patenting in technologies for clean-energy generation increased at a 20-percent annual rate from 1997 to 2008. This reflects increased proprietary ownership of these technologies, which could make their large-scale diffusion on an affordable basis more challenging. Meanwhile, a number of case studies show that some firms from nations such as China, India, and Brazil can remain confined to the lower echelons of innovation systems and production processes because they are forced to obtain technologies from second-tier technology holders.
Consequently, developing countries have proposed a range of measures—some of them also invoked in a similar debate about access to medicines—that would facilitate access to low-carbon technologies. Such measures include the expanded use of compulsory licensing and other flexibilities in international intellectual property instruments; the exclusion of climate change technologies from patentability in developing countries; and arrangements such as patent pools. But enacting some of these measures might entail changes to global intellectual property rules, in particular rules associated with the Agreement on Trade-Related Aspects of Intellectual Property Rights, which sets minimum standards to which all members of the World Trade Organization must conform.
Many industrialized countries and private-sector organizations have strongly opposed these proposals, as well as the premises on which they are based. They argue that intellectual property rights have not prevented firms in emerging economies such as China and India from becoming top global players in particular sectors, as exemplified by the Chinese company Suntech in solar photovoltaics and the Indian firm Suzlon in wind energy. They also point out recent studies which indicate that relatively few patents are filed in the poorest countries in any case. For instance, a 2013 study found that, from 1980 to 2009, less than 1 percent of world patents related to clean-energy technology were filed in Africa. The report thus concludes that patents present little impediment to the transfer of clean-energy technologies to African countries.
Given all this, the impact of intellectual property rights on low-carbon technologies in developing countries is both complex and hard to quantify. Impacts often vary from one technology to another, and are frequently difficult to isolate from a variety of other economic and institutional factors. The extraordinary diversity of climate mitigation and adaptation technologies makes it difficult to reach categorical conclusions; one is left to examine specific technologies, sectors, countries, and cases. Empirical evidence remains recent, somewhat limited, and focused mostly on mitigation technologies and a few developing countries—emerging economies in particular. And the market situation is itself evolving fast.
Until greater clarity emerges, what’s needed is a structured, incremental, and constructive debate on the issues. The debate could start with an examination of practical initiatives and measures that might encourage the diffusion of low-carbon technologies in developing countries. It could eventually proceed to more controversial discussions regarding norm-setting—and whether the empirical evidence calls for examining possible changes to global rules that govern intellectual property, a course of action that seems a remote possibility for the moment.
More immediate measures worthy of consideration include improving the availability of information regarding patents for low-carbon technologies—an issue on which the European Patent Office is already working. Public-private partnerships hold promise as well. For instance, the World Intellectual Property Organization has launched an interactive marketplace platform known as WIPO Green which "promotes innovation and the diffusion of green technologies."
A recently published report by the Global Commission on the Economy and Climate places particular emphasis on the creation of patent pools, which can ensure access to environmental technologies and eliminate the expense and difficulty of entering into legal agreements with multiple patent owners. The report calls for the development of patent pools for low-carbon technologies—and calls on institutions to provide support to poorer countries to ensure access. In a similar vein, developing countries have proposed that the new UN-backed Green Climate Fund cover developing countries’ costs for acquiring low-carbon technologies if licensing costs are too high.
Ultimately, intellectual property rights should be seen in a broad context of appropriate policies, adequate institutions, and resources that both encourage low-carbon innovation and ensure that its benefits are widely diffused. The importance of intellectual property rights should be neither overestimated nor underestimated. What’s certain is that intellectual property rights cannot be ignored. But discussion of the issues must be structured and incremental. It must focus on practical measures and initiatives. It must be based on empirical evidence and concrete cases. Otherwise, agreement on low-carbon technologies and intellectual property rights is likely to remain elusive, whether at the World Trade Organization or the UN Framework Convention on Climate Change.