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The Next Climate Deal: How Big is the Battle for Cleantech IP?

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COP15-logoLate last month, the U.S. Chamber of Commerce pulled together a small, motley crew of companies with a stake in upcoming climate policy to launch its Innovation, Development & Employment Alliance — a group trying to ensure that an international climate deal doesn’t weaken rules about who can profit from cleantech innovations. As we’ve noted before, the V-P of the Chamber of Commerce’s intellectual property center called the UN climate negotiations taking place in Copenhagen this December “the IP battle of the year.”


But for those waging battles to defend IP, the consequences of negotiators taking a “very collaborative” approach to reducing greenhouse gas emissions and sharing “all intellectual property as much as possible,” as U.S. Energy Secretary Steven Chu has urged, may not be such big a threat.

“In a world that’s innovating quickly, the life cycle of IP is short,” Alan Salzman, CEO and managing partner of VantagePoint Venture Partners told us in an interview recently, shortly after he returned from a summit in Copenhagen designed to get the business community on the same page about climate policies. Asked if he was worried about the next climate deal, which will replace the Kyoto Protocol, compromising IP protections, he said, “It’s not to my mind one of the larger issues.”

Eric Walters, a partner and chair of the Palo Alto, Calif., litigation department for the law firm Morrison & Foerster (he focuses mostly on intellectual property for high-tech companies), also said climate policy is unlikely to present a serious threat to IP protections, or to companies’ ability to profit from their patented innovations. The biggest barriers to deployment of advanced clean energy technologies in developing countries, he said, have to do with economics and infrastructure — not patents. So while it’s “unclear what kinds of policies are likely to be proposed” in Copenhagen, he said, knocking down IP protections probably would not further the goals of making these technologies available worldwide.

Both Walters and John Wetherell, who heads up the intellectual property practice in the law firm Pillsbury Winthrop’s San Diego, Calif. office, mentioned compulsory licensing — basically an option for governments to force companies to license technology if they’re not selling it in a particular market — as a policy to watch for that might affect the way cleantech innovators do business internationally. In the pharmaceutical industry, compulsory licensing is often used to make life-saving drugs more widely available at lower cost than they would be if one company controlled all production.

But some of the strongest arguments for compulsory licensing in biotech don’t translate directly to cleantech. Walters pointed out that in the cleantech industry there are often “dozens of competing companies” racing to improve upon existing technologies, while in biotech there’s often, say, just one cancer drug. Wetherell added that in medicine, “the cost of goods for a lot of drugs is quite low. Development is expensive.” But with solar cells, for example, production costs are high by comparison.

Still, compulsory licensing could be applied to cleantech and could be effective for deploying certain technologies, such as solar panels, in countries, like India or China, that have the infrastructure and expertise to build them, but where companies may not yet be selling their products. In that situation a government could force a company to license its technology for a nominal fee. It might not be the way that companies will make the most money, but it comes down to “the property rights of the patent holder vs. the societal needs,” said Wetherell.

Should cleantech innovators be worried about compulsory licensing? Wetherell doesn’t think so — just look at the drug developers that the policy already applies to. As he put it, “It doesn’t look like the pharmaceutical companies are going out of business.”

Photo courtesy Flickr user myuibe