Despite its title, this book is about much more than intellectual property and climate change.  While it does, of course, provide detailed treatments of IP and climate change law and policy, the topics covered in the new “Research Handbook on Intellectual Property and Climate Change” are diverse and far-ranging, even touching on food (for the body) and religion (food for the soul, for some).

Editor and contributor Joshua D. Sarnoff has organized the book into five general categories:  basic information on climate science and environmental and IP treaties and geopolitics; philosophical perspectives on IP and climate change including human rights, religion, and development; approaches to development and transfer of green technologies; specific IP doctrines; and contexts where climate change-IP considerations arise.

The first few chapters provide the reader with a solid introductory grounding in climate science, climate treaties, and IP treaties.

Then Carlos Correa gets into the developing countries’ perspective on IPR, reviewing familiar proposals such as compulsory licensing, excluding green technologies from patent protection, revoking patent rights in green technologies, and limiting terms of patents directed to green technologies.  Mostly non-starters, these policy tools have been detailed and advocated more forcefully elsewhere.  Nevertheless, their inclusion is essential for any compendium on IP and climate change.

Chapter 10 on developing country viewpoints stands out as providing particularly useful context.  Instead of simply saying the current state of affairs is inadequate and we need better technology transfer, Dalindyebo Shabalala lays out helpful and meaty (you can really sink your teeth into them!) definitions of technology transfer.  Those are followed by a useful review of IP and tech transfer developments in climate change treaty discussions over the years.

Sarnoff himself provides a taxonomy of choices for government funding of innovation and university research (Chapter 11) as well as a discussion on how the UNFCCC and other treaties relate to green patents in Chapter 16 on patents and climate change.

From there, the doctrinal IP section continues with a chapter on trade secrets and climate change (Chapter 17).  In it, Sharon K. Sandeen and David S. Levine propose changes to the law that would increase disclosure of trade secret information relating to climate change.

They make the point that heightening the disclosure requirements in this area might drive businesses away from relying on trade secrets toward more patent protection.  In view of the trade secret policies discussed here and the aforementioned proposals to weaken or eliminate patent protection on green technologies, one wonders where green tech innovators would turn to protect their technologies if all of these policies were enacted.

The copyright chapter by Estelle Derclaye discusses questions of access, dissemination, interoperability and pricing of copyrighted works relating to environmental issues (Chapter 18).  Such works might include green buildings and architectural plans, charts, maps, photographs, films, software, and databases.

After providing some context on eco-marks (including certification marks), green consumers and greenwashing, Christine Haight Farley suggests improvements to the certification mark registration process such as greater transparency in the certification standards, periodic review of those standards, and clearer terminology of the terms used for certification.

The book does suffer from what almost any such compilation would – patches of redundancy.  A reader of the full volume is treated to the basic principles of the UNFCCC treaty and the conflict between developed and developing countries not only in the introductory chapter on IPR under the UNFCCC treaty (Chapter 5) but also in the IP enforcement piece (Chapter 7), and Chapter 10 on tech transfer.   This is just one example.  In these chapters and others, the different authors go over the same principles, the same perceived barriers to tech transfer, and the same old proposed patent policy solutions.

Moreover, the compendium would have benefited from a chapter on green patent litigation.  There’s been so much of it over the last couple of decades, including some involving critical patents and substantially impacting some areas of green technology.  Hybrid vehicle technology company Paice’s enforcement efforts against Toyota and other automakers, GE’s two sets of litigation centered on a seminal variable speed wind turbine patent, and the Gevo-Butamax case come to mind, among others.

As mentioned above, one of the book’s strengths is that it goes well beyond the subject of intellectual property.  One of the novel contributions is an interesting chapter by Robert K. Musil on religious environmentalism in America, including religious climate activism (Chapter 9).

Another welcome perspective is the antitrust chapter by Michael Carrier discussing issues such as how to define the relevant market in green technology sectors, monopoly concerns such as refusing to license green technologies (though refusing to license is typically legally permissible and the prerogative of the patent owner), technical standards such as those in the smart grid sector, and how patent pools might be treated under antitrust law (Chapter 13).

On the whole, Sarnoff’s “Research Handbook on Intellectual Property and Climate Change” is packed with varied perspectives and essential information and is therefore a very useful guide for anyone interested in IP and climate change (and beyond!).  To have all this packed tightly into one book is a great thing.  I’m quite pleased to have it on my bookshelf.

The Bulletin of the Atomic Scientists recently published a spirited debate on the role of intellectual property rights (IPR) in commercialization and transfer of climate mitigation technologies.

The participants, who debated via a , were Carlos M. Correa, director of the Center for Interdisciplinary Studies on Industrial Property and Economics at the University of Buenos Aires, Frederick M. Abbott, professor of international law at Florida State University College of Law, and Ahmed Abdel Latif of the International Centre for Trade and Sustainable Development.

Correa kicked off Round 1 with an essay entitled “The burden of intellectual property rights” in which he lays out the case for patents acting as a barrier to diffusion of green technologies to developing countries and for those countries to use compulsory licenses to access the technologies they need.

The essay makes some valid points.  Correa persuasively took on the argument of IPR defenders that the dearth of green tech patents in the poorer developed countries means patents do not stand in the way of green tech transfer and acquisition.  He noted, probably correctly, that these countries must rely on technology produced elsewhere, such as China and India, so patents in those countries are relevant to green tech transfer to the ultimate target markets, including developed countries.

I agree to a large extent with Correa’s notion that IPRs should function not only as an incentive to innovators but more broadly as a vehicle for diffusion and commercialization of the technologies being developed and patented.  However, I think he goes too far in saying that the IP system should “ensure that new technologies are accessible to all countries.”   I don’t believe it is the role of the IP system to guarantee accessibility to innovation.

One misstep in the essay is the attempt to refute the point made by Professor Abbott and others that green tech patents rarely confer market power because most fundamental green technologies are off-patent and there is competition among the tremendous diversity of green technologies.

Correa counters that “many patents cover minor or trivial developments and may be used to block genuine innovation and competition.”  By definition, though, a patent directed to an incremental improvement will not block use of the earlier technology (without the improvement), and such a patent is highly unlikely to confer market power.

Correa also cites studies that show large numbers of patent applications filed on green technologies in recent years.  But these statistics are meaningless absent information on the inventions being patented and how those inventions compare to the many green tech inventions which are off-patent.

Where I strongly disagree with the essay is in its insistence that IPRs are a (clear and present) problem for developing countries seeking access to green technologies.  The support for this – presented in Correa’s Round 2 response entitled “The problem is real” – is that the problem has been recognized in environmental summits and climate change treaty talks over the years and countries such as Ecuador have proposed patent exemptions and reductions in patent terms.

Correa emphatically states that IPRs pose an actual problem:

But a problem does exist – insofar as the system of private appropriation of innovations may delay for 20 years (the normal duration of a patent) the introduction of new technologies into developing countries (the majority of the world). (emphasis in original)

While raising IPRs as a discussion topic and putting forth policy proposals may reflect a concern over IPRs as a potential problem, they do not make it an actual one.  The statement about patent term seems to recognize this distinction by admitting that a patent “may” delay introduction of new technologies.

While the possibility of a refusal to license patented green technology is mentioned, no documented cases of such refusals are discussed.

Perhaps this is why the Round 1 essay closes by calling for developing countries to use compulsory licenses to access to green technologies “whenever they find it convenient.”  Use of compulsory licenses when necessary may be an unattainable standard.

In his Round 1 contribution, entitled “A problem, but not without solutions,” Professor Abbott argues for a “middle path” between the defenders of IPRs and those calling for compulsory licensing of green tech patents.  One such path could be joint ventures between enterprises in developed and developing countries, facilitated by government policies to make investment in developing countries more attractive.

Abbott also proposes patent pooling, direct voluntary licensing, product development partnerships, and development buyout funds to purchase technology from high-income countries and share it globally.

Finally, Professor Abbott notes that IPRs are not the only factors that could be restricting access to green technologies in poorer countries; he writes that “entrenched economic actors” such as utilities may not want to introduce renewable energy technologies in some countries.  I would add to the list of non-IP factors in the poorer developing countries small market size, lack of infrastructure, and insufficient skilled labor.

As always, Ahmed Abdel Latif is a voice of reason in a contentious dispute.  That voice comes through in his essay, “Disputed impact, but not to be ignored” in which Abdel Latif calls for a “structured, incremental, and constructive debate on the issues.”

He thinks this debate should start by looking at practical initiatives that might encourage diffusion of green technologies into developing countries and later address the controversial issues such as changing IP regimes.

Whether the IP system needs changes, Abdel Latif reminds us, is still an open question.  Particularly, the essay notes that “the impact of intellectual property rights on low-carbon technologies in developing countries is both complex and hard to quantify.”  With the diversity of green technologies out there and the limited empirical research done so far, we still don’t have a clear picture of the role of IPRs.

Hence, the constructive debate Abdel Latif proposes, without giving undue weight to either side, but acknowledging the importance of IPRs:

The importance of intellectual property rights should be neither overestimated nor underestimated.  What’s certain is that intellectual property rights cannot be ignored.

As long as we have passionate and intelligent people like Correa, Abbott and Abdel Latif, we can be sure the role of IPRs in climate change will not be ignored.

It’s been quite a while since I’ve addressed green patents in the context of the UN Framework Convention on Climate Change (UNFCCC) and other international efforts to develop climate change policy.

A guest post by Prof. Matthew Rimmer discussed the UNFCCC Doha meeting in December 2012, and I commented on the 2010 Cancun climate change agreement.

Summarizing where we left off, most of the middle-income countries (AKA “developing” countries) together with the least developed countries (collectively,  “G77 + China”) have taken the position that IP protections act as a barrier to development and transfer of green technologies in and to their domestic markets.

The “rich-world” countries, by contrast, advocate strong intellectual property rights and believe they facilitate green tech development, transfer, and deployment.

What is the reality?  We don’t know.

A 2008 report by the International Centre for Trade and Sustainable Development (ICTSD) equivocally concluded that “IP is potentially both an incentive and an obstacle to the transfer of technology.”  The report also noted that “no comprehensive study has been conducted on the impact of IP rights” in green technologies.

Half a decade later, the international community plugs on, and little has changed.

Three Working Groups of the UN’s Intergovernmental Panel on Climate Change each generated a report this year that addresses various aspects of climate change.  Working Group II’s report on Impacts, Adaptation and Vulnerability and Working Group III’s report on Mitigation of Climate Change each addresses IP issues, though the contribution to the debate is small both in volume and significance.

The report of Working Group II skates over familiar ground, stating that in many cases “patents and other intellectual property protection constrain technology transfer” but noting the opposing view that “strong IP protection in receiving countries is facilitating technology transfer from advanced countries…”  The report does say the evidence suggests that middle-income countries are benefiting from exports, foreign direct investment, and technology licensing associated with IP protection.

Working Group III’s report is similar in substance and tone, observing that IP protection can provide incentives for innovation but “also works to slow the diffusion of new technologies, because it raises their cost and potentially limits their availability.”  Elaborating on the favorable evidence on tech transfer to middle-income countries, the report says IP protection “may be necessary to limit the risk for foreign firms that transfer of their technology will lead to imitation and resulting profit erosion.”

But like the ICTSD report from six years ago, the 2014 report of Working Group III still finds insufficient data to conclusively resolve this debate:

In summary, there is inadequate evidence in the literature regarding the impact of IP policy on transfer of GHG-mitigating technologies to draw robust conclusions.

Where is the comprehensive research we need on the true impact of IP rights on green technology development and diffusion?

I’d do it if someone would fund it…

 

Standards-setting organizations (SSOs) are industry or government groups that develop and publish uniform technology standards to ensure product quality and interoperability for new technologies.  Although rules vary among SSOs, generally private industry participants in the process have a duty to disclose patents or patent applications they own that relate to the industry standards under development. 

Failure to disclose relevant intellectual property can expose a company to legal liability (both through private lawsuits and by government agencies such as the Federal Trade Commission (FTC)) and render the company’s patents unenforceable. 

Companies that do disclose their patents early in the standards-setting process are more likely to see their patented technologies become the industry standards.  Often, companies in this situation are required by the SSO to agree to provide licenses to their technology under reasonable and non-discriminatory terms.

When the 1990 Clean Air Act mandated that gasoline be reformulated to reduce evaporation and cut ozone-forming and toxic air pollutants, the California Air Resources Board (CARB) worked with the oil and gas industry to develop reformulated gasoline (RFG) standards. 

After the RFG standards were issued, the U.S. Patent & Trademark Office (PTO) granted several RFG patents (which had been pending during the standards-setting process) to Union Oil Company of California (Unocal). 

In 2005, after Chevron Corp. (Chevron) bought Unocal, California consumers brought a class action against Unocal alleging that it had failed to disclose its pending patent applications during the standards setting process and had represented its technology as “non-proprietary” (the FTC also filed a complaint against Unocal in 2003). 

The class action complaint alleged that Unocal had manipulated and deceived the CARB and other industry groups into adopting RFG standards that overlapped with the undisclosed patent applications.

The patents at issue include U.S. Patent Nos. 5,288,393, 5,593,567 and 5,653,866, which relate to methods for producing gasoline having reduced nitrogen, carbon monoxide and other hydrocarbon emissions.  Unocal has since dedicated each of these patents to the public so they can no longer be enforced.

Last month, Judge Christina A. Snyder of the U.S. District Court in Los Angeles issued a preliminary approval of a settlement of the class action (settlementorder.pdf).  By the terms of the settlement, Chevron will pay $48 million to a class of consumers defined as all consumers who purchased CARB-compliant reformulated gasoline in California between January 1995 and August 11, 2005.

Obviously, it is important for patent owners participating in standards-setting activities to consult a patent attorney to review the disclosure obligations imposed by the SSO and analyze the company’s patent portfolio to determine whether patents and applications need to be disclosed to the SSO.

This issue is almost certain to come up again as new energy technologies emerge and mature.  Just last week, Matter Network reported that the Roundtable on Sustainable Biofuels is developing the first international standard for biofuel production.

 

Suzanne Badawi is a partner and insurance litigator at Luce, Forward, Hamilton & Scripps and the head of the firm’s Climate Change & Sustainable Technology practice.  Her article, “Global Warming: Are You Covered” appears in this month’s California Lawyer magazine.

The article explores whether claims made to defray the costs associated with carbon dioxide emissions will be covered by comprehensive general liability (CGL) insurance policies.  According to Badawi, the answer depends on the wording of the pollution exclusion in the policy and whether carbon dioxide is deemed a pollutant. 

Most CGL policies today have an “absolute pollution exclusion” (APE), which means they provide no coverage for the release of pollutants into the environment.  Not surprisingly, the scope of the exclusion often turns on the question of what constitutes a pollutant.  The article takes the reader through key cases that have ruled on the definition of “pollutant” and notes that the APE has not yet been addressed in the context of carbon dioxide emissions. 

Badawi speculates that the Supreme Court’s 2007 decision in Massachusetts v. EPA, which held that carbon dioxide is a pollutant subject to regulation by the EPA, provides an opening for insurers to argue that the greenhouse gas should be subject to the APE.

I’m always interested in how global warming impacts areas of the law outside of my field, and Badawi’s article is an interesting read.  With all the legal and regulatory efforts to curb greenhouse gas emissions, the article notes that emitters are looking for ways to defray related compliance and litigation costs:

And with that, the “global warming insurance claim” has arrived.