Needed: Concrete action

By Carlos M. Correa, March 27, 2015

In Round Two, Ahmed Abdel Latif wrote that I had “presented several pieces of information that [did] not … tell the whole story about the relationship between intellectual property rights and clean-energy technology.” But Abdel Latif then presented information of his own that buttressed rather than undermined my main argument in this roundtable: that developing countries will face obstacles as they attempt to gain access to low-carbon technologies.

Abdel Latif observed that, though firms in the developed world dominate patenting in technologies for low-carbon energy, “this phenomenon is not specific to low-carbon energy. The same situation prevails in many sectors of technology.” Abdel Latif is correct—but this only emphasizes the North-South asymmetry that characterizes technology ownership. Likewise, when Abdel Latif wrote that patent proliferation in low-carbon energy systems “only mirrors a broader global surge in patent filings,” he confirmed that an increasing number of patents are being filed for low-carbon technologies. For firms in developing countries, and indeed for any party interested in patented technologies, proliferation makes it difficult to determine what is patented and by whom. It complicates the negotiation of licenses. And patent holders are often unwilling in any event to consider granting licenses, particularly if they prefer to supply the market in question through exports.

In a similar vein, when Abdel Latif noted that in the United States no compulsory licenses have been granted under the Clean Air Act, he really emphasized the narrow scope of the Act—which deals only with air pollutants. As noted in 2007 by Harvard University’s F.M. Scherer, a leading scholar in industrial economics, thousands of patents have undergone compulsory licensing in the United States.

But a broader point is salient here: When people argue that intellectual property rights, particularly patents, will not create an obstacle to developing countries seeking access to low-carbon technologies, they often ask for empirical evidence that transfers of protected technology are not taking place. Instead, they should provide evidence that such transfers are occurring. As attorneys and judges are well aware, proving a negative is always difficult, and often impossible. Still, evidence is accumulating that patents in green-energy technology will lead to real problems. Take biofuel technologies, which hold out the promise of generating low greenhouse gas emissions throughout their life cycles and thereby reducing fossil fuel consumption. The biofuel arena is crowded with patents, the overwhelming majority of them held by companies from developed countries, notably the United States (though a growing number are emerging from China as well). As the Nuffield Council on Bioethics has argued, “Given the range of technologies likely to be involved in the production of new biofuels, the area seems particularly prone to patent-stacking and patent-thickets.” Litigation regarding biofuel patents has been quite intense, and demonstrates patent holders’ determination to exclude possible competitors.

The international community will do little to address the problems associated with intellectual property and green technology if these problems are dismissed or minimized. This could make it much harder to achieve goals for climate mitigation and adaptation. And not only developing countries would be affected—when it comes to climate, the world is deeply interdependent. Therefore it would be wise if all countries, developed and developing alike, agreed to concrete actions that removed actual and potential obstacles to the diffusion of green technologies.

Within the UN system, discussions are currently under way regarding the establishment of a “technology facilitation mechanism” that would promote “the development, transfer, and dissemination of clean and environmentally sound technologies.” These discussions should not overlook the fact that intellectual property rights—no matter what their role may actually be in promoting innovation—by their very nature confer on private firms the power to decide who may use a technology and under what conditions. This power must be subordinated to a global interest—that of achieving environmental sustainability for the entire planet.

Topics: Climate Change