Differentiated Intellectual Property Regimes for Environmental and Climate Technologies

Prior to the Copenhagen meeting on developing a new framework for climate-change policy there were sharp differences between the positions of developed and developing countries regarding the role of intellectual property rights (IPRs) in fostering international technology transfer (ITT). Expanding effective ITT is central to meeting needs for acquiring and adapting environmentally sound technologies (ESTs) in poor nations. Policymakers in developed economies generally view IPRs, particularly patents and trade secrets, as positive and critical inducements to ITT, while those in developing countries often describe them as sources of market power that impede access to new technology. This report reviews the economic logic of these positions and reviews available empirical evidence. The relationships among IPRs, innovation, ITT and local adaptation are complex and neither of the basic views described captures them well. Policy should be based on a more nuanced view. In that regard, to date there is little systematic evidence that patents and other IPRs restrict access to ESTs, which largely exist in sectors based on mature technologies in which there are numerous substitutes among global competitors. This situation may change as new technologies based on biotechnologies and synthetic fuels, which are likely to be more dependent on patent protection, become more prominent. At present, however, there is little evidence to support significant limitations on the issuance and use of IPRs in this area. In particular, it is unlikely that an international agreement on a compulsory licensing regime could achieve significant ITT benefits, while it may raise considerable costs. However, there may be scope for beneficial differentiation in patent rights, which is the primary subject of the report. Among these elements include ex ante extensions of patent terms tied to licensing commitments, expedited patent examinations in ESTs, investments in patent transparency and landscaping efforts, and facilitation of voluntary patent pools. The report argues that such changes are unlikely to achieve significant gains in innovation and ITT unless they are accompanied by broader policy approaches, including publicly financed fiscal supports for local technology needs and adaptation. Perhaps most important are finding means to raise the global costs of using carbon-based energy resources and improving the climate for investments in poor countries.