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Journal of Intellectual Property Rights
Vol 23, January 2018, pp 22-26
Climate Change and the Patent Regime: Are Patents the Answer?
A Rosencranz, P Modi, S Parab and A Vora†
Jindal Global University, Sonipat Narela Road, Sonipat, Haryana 131 001, Haryana, India
Received: 5 March 2018, accepted: 3 May 2018
Next to nuclear annihilation, climate change poses the greatest threat to life as we know it. Climate refugees are
becoming a reality and it is expected that by 2050 most of the Pacific Islands will be under water. Forward-thinking nations
have made it their agenda to curb the effects of climate change and ensure the reduction in emissions of greenhouse gases.1
To effectively combat climate change, the deployment of clean energy technologies to combat the effect of carbon emissions
from fossil fuelshas been the tool of choice.2 Accelerated development and deployment of these clean energy technologies is
imperative. The public and private sectors must boost the creation and distribution of clean as well as environmentally sound
technologies – something along the magnitude and scale of the space race during the cold war. Addressing the threats posed
by climate change requires a portfolio of processes such as extensive introduction of new technologies and modification of
existing technologies while also creating optimum environments. The role of intellectual property3 pertaining to clean
energy technologies becomes of utmost importance. The patent regime, by its very nature, can either be seen as a hindrance
or an incentive for the development of new technology.4 This means that an argument can be raised that patents would
hinder climate change mitigations as clean technology is patented and licensing it would prove costly. On the other hand,
patents will incentivize innovation and therefore lead to advanced technologies to combat climate change.4 The paper,
refutes the former and argues that patents are essential and rebut the presumption that patents will increase prices. The paper
explains, with examples, how the holy trinity of patent pools, patent databases and compulsory licensing will help make the
clean energy technology competitive and accessible. The future and the applicability of fair, reasonable and non-
discriminatory (FRAND) licensing to standardised clean energy technology are also discussed. The paper is concluded with
an affirmation that patents are the answer to climate change.
Keywords: TRIPS Agreement, World Intellectual Property Organization, RE100, FRAND licensing, greenhouse gases,
clean energy technologies, climate mitigation, intellectual property rights, pharmaceutical industry, patent pool,
patent databases, compulsory licensing
Why the Former is a Rebuttable Presumption
In addition to the aforementioned, the structures
and systems created by IPR laws also have the
potential to combine efforts towards the goal of
climate mitigation. Opponents of IPR have often
argued that patents are inherently restrictive and
create problems in the scaling up of clean technology.
Reference is made to the costs associated with
acquiring a patented technology, on the lines that such
costs make it unfeasible to acquire technologies and
lead to loss of potential for greater implementation of
clean technology.5 While such arguments seem sound
intuitively, they come from an incomplete
understanding of IPR and its working. An IPR regime
does not create barriers for transfer of technology. In
fact, by providing legal clarity, it does the exact
opposite – it facilitates the transfer of technology on
universally recognised terms and conditions.6 More
importantly, IPR then takes the form of a legal
dialogue that allows law-making bodies to retain
control over a market of huge significance in the
battle against climate change. In the absence of IPR
laws, the government would have little or no legal
influence over the players in the clean energy market.7
But by subjecting energy companies and innovators to
IPR laws, the government ensures that private
interests do not outweigh public interests.8 For
instance, to ensure maximum utility is derived from
an innovation, the norms of patent databases,
patent-pools and compulsory licensing can be used.5
These norms have proved highly valuable in the
pharmaceutical and technology industries.
It is pertinent to draw inferences from the pharma
industry as it is an industry characterized by a never-
ending need for innovation. The creation and
marketing of new drugs allows companies to build
their personal identities and brand. But the R&D
involved often amounts to incurring extremely large
——————
†Corresponding author: Email: 14jgls-avviral@jgu.edu.in
VORA et al: CLIMATE CHANGE AND THE PATENT REGIME
23
sums which pose great risk to the companies.9 This
makes pharmaceutical companies highly competitive,
and unwilling to share any new drug formulae
developed. This puts the interests of the larger
community on a back-foot, and the economic interests
of the organization take precedence. Clean technology
may offer similar risks. In the absence of IPR
regulation, the pharmaceutical industry would
continue to be competitive and exclusionary. Patent
pools and compulsory licensing are norms of the IPR
regime that nullify the clash between private interests
and public interests. They allow for models of
regulation which balance the companies’ economic
interests with the larger benefit the public.
The Holy Trinity
Patent Databases
Effectively, patent databases function as a quasi-
technology transfer that allow ease of access to
climate technology.10 Such a database would provide
exhaustive details about climate change technologies.
Data is gathered from various jurisdictions by
governments that arrange and publish the same.
Private parties can search for this information for free.
A prime example of a public database would be the
European Union’s patent Espace database that
enables users to search and learn about climate
change technology patents.11 It provides the user with
a fool proof text. Another example would be
PatentScope,12 an initiative of the World Intellectual
Property Rights Organisation (WIPO) that
accumulates patent data from developed as well as
developing countries. It has stated that patent
information offers a plethora of benefits, claiming it
be a ‘goldmine’ of technology guidance to developing
countries, since material extracted from the data could
be used and commercialised.12
Essentially, patent claims enable a person skilled in
the art to reproduce the invention. It is useful to
research patents on clean energy technologies to find
out whether such patents are protected in a developing
country and also whether there are any openings that
would facilitate permeations so that any enterprise
from such country could operate with immunity. A
patent information approach is like saying a third
party benefits from someone else’s work.
Accumulation of patents on various databases comes
to the direct benefit of developing countries, since
patent laws incentivise foreign direct investment and
economic enlistment of a country.
Patent Pools
A patent pool is a cross-institutional licensing
agreement. It combines the patented knowledge of
different companies into a ‘pool’, and makes it
collectively available on license to willing purchasers.
In essence, it combines the economic and R&D
resources of different companies, and creates channels
for easier dissemination of this knowledge. This also
ensures that risk is mitigated across the board, and
new medicines are made available from various
sources. The Medicines Patent Pool, funded by the
UNITAID is one such patent pool organization which
deals with HIV, tuberculosis and hepatitis C
medicines. It has obtained patented knowledge from
as many as eight companies, and licensed it to
companies creating generic drugs in developing
countries. This has the additional benefit of cutting
costs for the consumers, as they do not have to pay for
the brand.
A patent pool allows the mitigation of risk across
companies and the creation of a collective body of
shared knowledge whereby further innovation may be
sparked. The possibility of easy licensing of this body
of knowledge also creates good prospects for
new-entrants in the market. These tools will help
incentivise innovations and at the same time ensure
that technology is not out of reach for developing
nations.
Compulsory Licensing
Compulsory licensing is another such practice that
addresses the conflict between public and private
interests. Born out of the Trade-Related Aspects of
Intellectual Property Rights (TRIPS) Agreement of
1995, a compulsory license is an exception to the
general rule of patents – that the patent holder has the
exclusive rights to enjoy the patented item.13 Under
compulsory licensing, as per the terms of the enabling
law, the government may authorize the licensing of
patented information to someone else, without the
patent-holder’s consent.13 This is done against the
payment of a fee to the patent-holder, which may be
pre-determined by the government, or left open to
negotiation.14
Practical Application
The compulsory licensing debate with respect to
granting of pharmaceutical patents has been a point of
contention for a significant period of time.15 On
9 March 2012 India’s first compulsory license was
issued to Natco Pharma by the Indian Patent Office
J INTELLEC PROP RIGHTS, JANUARY 2018
24
for producing a generic version of a patented drug –
Nexavar, manufactured by Bayer Corporation.16 This
drug treats kidney and liver cancer.17 The grounds for
which the Controller decided against Bayer were that
the reasonable requirements of the public were not
being satisfied, patented product wasn’t available to
the public at a reasonable and fair price and the
patented invention wasn’t developed in India. The
patent holders position was considered to be irrelevant
while granting compulsory licenses, and the sole
determining factor for accepting a compulsory license
application would be the affordability of the patented
product for the public.17 Pharmaceutical companies
therefore are precluded from slithering out of
compulsory licensing if their patents are not
benefiting of the public due to their excessive cost.17
The compulsory license thus proves to be a valuable
asset to poor countries to secure generic copies of
essential medicines.
Switching over to solar power as well as other
renewable sources of energy has been undertaken to
pursue the ambitious proposal of reducing global
temperatures by 1.5 degree Celsius at the 2015 Paris
Climate Agreement.18 Solar thermal power
technology, which is used for solar cooking, offers
several benefits, including electricity generation and
solar home eating.19 It is extremely cost effective and
environment friendly, especially in the rural areas of
developing countries.
The patent landscape reports of the World
Intellectual Property Organization (WIPO) are a
source of remarkable information to augment access
to patent information. Broadly, these reports
contribute by providing know-how processes and
insight on the costs and benefits of essential
technologies. The availability of such reports cater to
the basic needs of developing nations by providing
exhaustive patent information regarding improving
health as well as environmental standards. A relevant
example of a patent landscape report would be that of
the solar cooking technology landscape.
Over the years, patenting activity with respect to
solar cookers has constantly risen, with 397 patent
family members currently. The majority of these were
filed after the 1990s.19 The highest activity relating to
obtaining patents was in the year 2009, with 54 patent
inventions. Elaboration of the patent information on
such clean technologies, granted patents, licensing
costs and technological acumen to apply such
patented technologies, would assist government
policy makers and potential investors in evaluating
the technology. The availability of widespread
information through these reports would help to
reduce the cost of technology and can be anticipated
to be an important source of clean power in developed
as well as developing countries.19
Comparison with the Pharmaceutical Sector
It is true that the energy sector and the
pharmaceutical sector are not identical situations. In
the pharma industry, a unique patented molecule can
be worth a large amount of money; it has no
contenders. But in the energy sector, any new
technology developed would already be competing
with the existing ones for a market share, driving
down its price. This further emphasizes that the tools
would serve a beneficial role in making clean energy
competitive.5 What this means is that a patent in the
medicine industry is more valuable than one in the
energy industry; and since one has seen patent
pooling and compulsory licensing work well in the
pharma industry, it may be argued that the relatively
cheaper patents in the energy industry will be more
easily shared and disseminated.20
The success of patents in the pharma and
information technology industries is a good indicator
that they will also be successful in the energy
technologies industry. A patent can serve the same
purposes in the energy industry as it does in the
pharma industry – it can promote innovation, while
protecting the investment and also allow for raising
funds via licensing. At the same time, legal clarity
provided by the patents cut down transactional costs
and ensure smoother functioning of the system. Such
clarity will also enable the sharing of new technology
across the board, on legal terms of remuneration –
thus solving both the problem of need for widespread
dissemination and need to protect the developer’s
investment.21
A Glimpse into the Future
It is hardly a distant reality to envision private
companies like Tesla supplying large amounts of
renewable energy. Apple and Google have already
emerged onto the energy landscape, along with Tesla,
whose batteries are turning out to be a huge success.
Apple and Google on the other hand could have a
significant impact on the existing energy delivery
system. In June 2016, Apple Energy was approved by
the U.S. Federal Government to sell electricity on the
national grid.22 Google Energy also received a similar
VORA et al: CLIMATE CHANGE AND THE PATENT REGIME
25
approval. Globally, too, several private companies are
generating their own electricity and investing
significant resources for research and development
into renewable energy facilities. There are multiple
reasons for this new paradigm, one of them being that
the utilities are unable to supply the amount of
renewable energy now in demand by large
businesses.22
According to the 2015 market study by Morgan
Stanley, corporations care more about the issue of
sustainability than those of previous generations.23
Around 84% of the investors are identifying with
sustainability and recognising its importance when
making investment decisions, which can be the
primary reason for the shift in outlook of many
corporations. Apple, Google and 70 other companies
from around the world joined the RE100,
a collaborative of businesses who are committed to
only using electricity generated from renewable
sources and to increasing the demand for and access
to renewable energy around the globe.18 These
companies have come together to promulgate their
common commitment to become 100% renewable by
a voluntary date. A significant number of companies
plan to use on-site power generation for close to 50%
of their power consumption.18
This is a welcome move. However, one concern is
that this may tend to disrupt the holy trinity model
proposed above. This may lead to standards being set
that are applicable throughout the clean energy sector.
Tesla batteries, for example, may induce such
sector-wide standards. Private disruption of what has
historically been a highly regulated public service
industry could result in a slippery slope of market
power and a loosening of consumer protection.
Private companies, such as, Reliance Power and Tata
Power in India, are posing a significant threat to
Public Sector Undertakings that previously were a
state monopoly. This, along with the requisite
technologies patents, could mean that requiring a
standard-setting body for clean technology may be
coming.
In a free market with private companies wanting to
make profits, safeguarding consumer protections is
the key. As more and more multinational corporations
apply to sell electricity on the national grid, national
energy regulators ought to step up to implement
measures to ensure that consumers are charged fair,
reasonable and non-discriminatory rates for electricity
and energy products. At this juncture, one may look at
the Enron Scandal where the energy rates in
California sky-rocketed during the late 1990s.24
The regulators have presumably never
contemplated that large corporations will be able to
demand monopolistic market power in the sale of
renewable energy. The way to address this issue is to
reorganise the energy sector. This can be done
through FRAND licensing. We believe that patents
such as the ones discussed above made by these
multinational corporations will be the future of clean
energy development. To make sure that clean energy
technologies are developed in the first place, we need
to protect them with patents and subsequently ensure
that they are delivered to the public at large with
licenses that are fair, reasonable and non-
discriminatory.
Conclusion
IT is almost certain that developing countries
desperately need greenhouse gas abatement
technology. How will that happen? Clean energy is
the answer. To get the technology, they’ll need to
create it themselves or buy it from the patent-holder.
The avenues discussed above aim to enable
developing countries to shift to clean energy, and
thereby to make our planet a greener and safer place
to live in. The advent of clean energy technologies is
inevitable. The only question that needs to be
addressed is how the government will regulate this
transition. The faster that developing countries
implement the transition, the better for everyone
involved. How will that happen? Intellectual property
laws are the answer. In this article, by comparing the
success of IPR in the pharma and technology sectors,
it is shown that IPR is the way forward in the energy
sector as well. The trinity of patent pools, patent
databases and compulsory licensing will ensure that
the interests of all stakeholders are met and that clean
energy is pushed forward. At the same time, the
importance and benefits of providing a legal
framework for transactions in this nascent sector; and
that maintaining a level of regulation is essential to
meet the aim of providing clean and environmentally-
friendly technology are also highlighted. It may lead
to a hope to start a conversation with this article and
invite people to explore various strategies and policies
to mitigate the effects of climate change. Time is of
the essence – polar bears are in the path toward
extinction in the North Pole as we speak – and any
step taken away from fossil fuels, however small, is
the way forward.
J INTELLEC PROP RIGHTS, JANUARY 2018
26
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