Tackling climate change: a story (also) about intellectual property rights and technology transfers

The current debate on mitigating climate change by ensuring more collaborative technological progress raises the questions of whether and to what extent there is flexibility in applying and re-interpreting intellectual property rules and standards to ensure the sharing of critical technologies.

Introducing the challenge: climate change

Philosopher Peter Singer has been warning for ten years that planet Earth requires globalised action as it is a shared place. However, the exploitative activities induced by globalisation continue to be overwhelming and disordered. Major city centres are particularly affected, with sea level rise and warming temperatures indicating a depleted environment. The Anthropocene has changed our perspective on ensuring a healthy and safe life for all, highlighting the need for a more sustainable use of natural resources. Environmental events have prompted the international community to search for solutions to reverse climate change and the decline of our planet.

This article delves into the legal interplay between intellectual property (IP) and technology transfers to mitigate climate change. The discussion identifies situations that could promote or hinder the development, access, and transfer of climate-friendly and green innovations.

Defining and transferring green technologies

The application of technology to address environmental issues and promote the common good of humanity was underscored by the UN Stockholm Declaration (Principle 18, 1972). The use, development and transfer of green technologies have been identified as crucial for addressing contemporary environmental concerns and promoting economic development, according to Agenda 21, a non-binding UN action plan on sustainable development adopted at the Rio 1992 Conference. As defined in Chapter 34(2) of Agenda 21, green technologies encompass process and product technologies that generate low or no waste, as well as end-of-pipe technologies for treating pollution. These technologies are often part of a system that includes know-how, procedures, goods and services, and organisational and managerial procedures. For example, offshore wind fields have emerged in recent years as a promising renewable energy technology.

However, green technologies can be expensive to develop and are typically the product of private sector innovation and creativity. Companies developing such technologies aim to have the exclusive right to decide and profit from them. Tesla is one example highlighting the importance of patent protection for green technology companies. This model (of strong patent protection) promotes greater innovation in renewable energy technologies by encouraging companies to invest in R&D, secure funding and protect their intellectual property. Moreover, compliance with patent protection can facilitate technology transfer, promote collaboration and encourage licensing agreements, accelerating the commercialisation and deployment of renewable energy technologies. On the other hand, it is crucial to ensure that such technologies are affordable and accessible to all countries, particularly those that do not have the resources to develop or purchase them. Therefore, effective policies and regulations that facilitate the transfer of critical technologies worldwide are essential for environmental protection and addressing climate change.

Several international legal instruments reflect concerns about climate change and the importance of technology transfers (understood in this Insight as the movement of knowledge, skills and technology from one region, country or entity to another). For example, the United Nations Framework Convention on Climate Change (UNFCCC) requires developed countries to promote, facilitate, and finance the transfer of environmentally sound technologies and know-how to other states, particularly developing countries, to help them fulfil their obligations under the Convention. Principle 8 of the Rio Declaration also calls for cooperation among states to improve scientific understanding by exchanging technical knowledge and by developing, adapting, diffusing and transferring technologies. Article 3(14) of the Kyoto Protocol identifies technology transfers as an issue to be considered in state actions to minimise the impact of climate change. The Paris Agreement acknowledges the critical role of innovation in addressing climate change and emphasises the need for a technology framework to support the Technology Mechanism.

It is worth noting that the effectiveness of technology transfers hinges on the ability of the receiving entity or country to utilise and eventually assimilate the technology transferred (i.e. the effectiveness of the technology transfer will depend on the ability of the company to assimilate the new technology into its existing manufacturing processes). Therefore, technology transfers are a multifaceted and global challenge that requires collective action to accommodate different relationships and linkages within the pluralism of legal orders. These transfers hold promise as a potential solution for accommodating different perspectives on climate change, including practical and legal considerations such as intellectual property rights.

Intellectual property as a way to regulate and foster green technology

Intellectual property rights (IPRs) are legal entitlements that aim to safeguard and recognise the efforts and creations of the human mind. These rights provide exclusive control over the products of our innovations, creations, and productions. As previously discussed, technology transfers from developed to developing countries can expedite the implementation of green technologies worldwide. However, the proliferation of technology transfers can be restricted due to IPRs. For instance, Vestas is one of the leading global manufacturers of wind turbines and holds a number of patents for innovative wind power technologies. In the complex process of tech transfer and the willingness of being repair may some countries hesitate to transfer technology to other countries without strong IPRs enforcement, as they fear that their technology may be copied or stolen without proper co. Strong IPRs enforcement is necessary to protect the interests of both the inventors and the recipients of the technology.

The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) lays down standards for safeguarding and enforcing IPRs globally. Although it does not directly address climate change, Article 7 of the TRIPS Agreement states that the protection and enforcement of IPRs should promote and facilitate the dissemination of technology, balancing legitimate interests with social and economic welfare. Furthermore, Article 8 recognises that all TRIPS countries must adopt measures to safeguard public interest in sectors of vital importance to their socio-economic and technological development, preventing the abuse of IP rights by right holders.

Moreover, Article 66(2) of the TRIPS Agreement requires developed countries to offer incentives to enterprises and institutions based in their territories to promote and foster the transfer of technology to the least developed countries. The annual reports of the TRIPS Council and the Council Decision on the Implementation of this article provide examples of incentives and mechanisms to facilitate technology transfers. One example is the Eco-Patent Commons programme launched in 2008 by the World Business Council for Sustainable Development (WBCSD). It promotes the development and sharing of eco-friendly technologies through patent pooling. Companies pledge to contribute environment-friendly patents to the pool, which are made available for free to other companies to use in their own products and services. This programme reduces barriers to entry for companies looking to develop green technologies and promotes collaboration and knowledge sharing among businesses in the field. Some of the patents included in the Eco-Patent Commons are technologies for reducing greenhouse gas emissions, improving energy efficiency, and reducing waste and pollution. The programme also aims to hasten the development and deployment of green technologies globally.

The key role of IPRs’ flexibilities

The TRIPS Agreement includes provisions that allow for limited exceptions to the enforceability of IPRs such as patents and trade secrets. Article 30 outlines the criteria under which countries may allow exceptions to the exclusive rights conferred by a patent. These exceptions must be limited, not unreasonably conflict with a normal exploitation of the patent, and not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties. However, there is a need for more guidance on how to apply this provision in the context of climate change. In other words, Article 30 of the TRIPS Agreement stipulates that exceptions to IPRs should (i) have a limited scope, (ii) not unreasonably conflict with the normal exploitation of the patent, and (iii) not unduly prejudice the legitimate interests of the patent holder while taking into account the legitimate interests of third parties. Nevertheless, it is evident that countries require more direction in implementing this provision in the context of climate change. The WTO Dispute Settlement Body has only provided a partial interpretation of this provision regarding pharmaceuticals and the right to health, as seen in Case DS114/13.

Article 31 of the TRIPS Agreement sets conditions for allowing compulsory licensing, a non-voluntary licence issued to a third party to perform acts covered by exclusive patent rights. Compulsory licensing can prevent patent holders from monopolising technology and limit abusive practices, but it is not an easy path to grant one. Article 31 also stipulates the pre-conditions for granting a compulsory licence, such as attempting prior negotiation with the patent holder and ensuring that adequate remuneration is paid to the rights holder.

There may also be limitations on the reliance of compulsory licences to facilitate the use and transfer of green technologies worldwide. For instance, beneficiaries of compulsory licences may not receive training or know-how from the licensor, which may be relevant with respect to climate change, where green technologies are often interdependent with other technologies.

The US and India provide examples of how compulsory licences can be granted in the context of green technologies. The US provides compulsory licences for any technologies necessary to meet emissions standards, where the patented technology is not otherwise available and the denial of such licence may create a monopoly. While the Indian government has considered granting compulsory licences when facing unwilling patentees, unreasonable licence fees, or insufficient green technology to meet domestic demand.

Summary reflections

The relationship between IPRs and climate change is intricate and multifaceted. On the one hand, IPRs can provide a critical impetus for encouraging and rewarding innovation considered essential for the development of technologies to mitigate the impacts of climate change. On the other hand, IPRs may impede the diffusion of such technologies, making it more challenging for developing countries to access and benefit from them. One way to support climate change mitigation through IPRs is by explicitly adapting legal provisions to address public environmental needs. IPRs should create fewer barriers to the widespread dissemination and use of green technologies. The high costs of patent licences can render clean technologies inaccessible to many developing countries that may not have the financial means to pay for them. Additionally, some companies may employ IPRs to maintain their market dominance and prevent the emergence of competition, which could slow down the development and dissemination of new technologies, such as drought-resistant crops or flood-resistant infrastructure, which can help save the planet and its communities. The ongoing debate about striking the right balance between encouraging innovation and ensuring access by those in need has only just begun~.

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