ITSSD: U.S. High-Tech Innovations Face Gathering 'Perfect Storm' of Compulsory Licensing and Royalty-Free Interoperability Frameworks Abroad
PRINCETON, N.J., Dec. 16, 2010 /PRNewswire-USNewswire/ -- In the Washington Legal Foundation Working Paper published today and in the Global Trade & Customs Journal article to be released in February 2011, international business and regulatory attorney Lawrence Kogan identifies and describes the growing number of foreign regulatory frameworks and national standards initiatives designed to convert privately developed intellectual property-rich high technologies into virtually free-of-charge 'public interest' assets mostly at the expense of U.S. innovators and investors.
These articles are based on Mr. Kogan's continuing involvement in the work of the World Intellectual Property Organization Standing Committee on the Law of Patents and a related event he recently convened on this subject while attending the body's 15th session meetings during October 2010 in Geneva, Switzerland.
According to Mr. Kogan, "such market intervention mechanisms are grounded in United Nations human rights, technology transfer and wealth redistribution soft law declarations and ambiguous UN environmental and World Trade Organization treaty provisions that have already begun to weaken the prevailing neo-liberal exclusive private property right basis for patents, trade secrets and copyrights which has long provided an invaluable incentive for undertaking high-risk technological research & development, innovation and commercialization activities. 'BRIC' nations, in particular, seek to replace the current international system with a state-centric utilitarian regulatory model that guarantees to their public constituents universal access to U.S. high technologies at pre-determined concession-rate prices," emphasizes Kogan. "However, the European Union, for economic competitiveness and trade protectionist reasons, is also involved."
"Capital-intensive technology development and commercialization already engenders significant economic and legal risks and other uncertainties. Given the precarious state of today's global economy, it simply defies logic and common sense that governments and civil society organizations would seek to create additional regulatory and policy risks capable of stifling discoveries and innovations that could lead to the job creation, knowledge dissemination and other downstream public benefits they desire," Kogan believes.
"Consequently, it would be unwise for the U.S. innovator and investment communities to be lulled into a false sense of security by U.S. and foreign government assurances that these frameworks are narrowly focused and applicable only in a limited number of instances," warns Kogan. "Much to the contrary, compulsory licensing and government procurement interoperability regimes are quite broad and expansive, applying to a number of technology industry sectors including, but not limited to, software, broadband, healthcare, energy, transportation, education, emergency and disaster management, and defense/national security. Thus, competent counsel should be retained as soon as possible to identify possible public and private law opportunities to mitigate such risks."
Climate Change: Technology Transfer or Compulsory License?
By: Lawrence A. Kogan, Esq.
President, Institute for Trade, Standards, and Sustainable Development (ITSSD)
Presented at
American National Standards Institute (ANSI) Monthly Caucus Luncheon
January 15, 2010
I. Introduction and Welcome
II. Overview of the Copenhagen Conference
A. Legal Objective:
B. Political Problems:
· Lack of Trust in GHG Emissions Reduction Verification
· Clean/Green Technology Patent/Trade Secret Protections at Risk
o Officials from China, India and Brazil have proposed that new green technologies be made subject to “compulsory licensing”, which is tantamount to waiving IPRs.
§ UNFCCC Arts. 4.3 and 4.5 § WIPO General Assembly Cluster C “Technology Transfer, Information and Communication Technologies and Access to Knowledge”
C. Non-Legal Result/Outcome: A limited and nonbinding instrument known as the “Copenhagen Accord”.
· Flaws in the UN process, which demands consensus among the members of the international community, were exposed at Copenhagen and caused chaos.
o E-10 group of countries – largest GHG emitters would include: the United States, the European Union, China, Russia, India, Japan, Canada, South Africa, Australia, and Brazil.
III. Top-Down Proposed International Solutions to the Broader Problem that Threaten to Adversely Reform International Regulation of IPRs:
A. Creation and execution of a Doha Declaration on Climate Change:
B. Creation of Multilateral and/or Intergovernmental Funds:
· Fund grants would be subject to “Global Access Principles”, which would set forth rules for the international management of IPRs.
· Funds would create an additional UNFCCC bureaucracy and outside ‘expert’ committees.
C. Proposals Made Within the WIPO Standing Committee on the Law of Patents:
D. Top-Down Patent and Standardization Proposals Made by the Chinese Government at the National Level with International Consequences:
· China 2005 proposal to WTO Technical Barriers to Trade (TBT) Committee G/TBT/W/251, G/TBT/W/251 Add.1. (2005)).
· The Standardization Administration of China (“SAC”)’s recently drafted Proposed Regulations for the Administration of the Formulation and Revision of Patent-Involving National Standards, mandate free-of-charge or FRAND at a price significantly lower than normally royalties patent licensing. Articles 8, 9, 12 and 13.
§ This will have a severe impact on US clean/green technologies.
§ “Only one of the top ten solar photovoltaic (PV) producers in the world is American; only one of the top ten wind turbine producers is American; and only two of the top ten advanced battery producers are from the U.S.
IV. Is There Still a Sufficient Incentive to Innovate in Clean/Green Technologies After Copenhagen and With China in Mind?
· IPRs patents and trade secrets subject to reverse-engineering.
· Costs of compliance will increase to reach GHG reduction targets and reduce job creation.
V. US Domestic Considerations
A. Top-Down Proposed US National Solutions:
· Condition federally funded government patent grants to universities and private parties on the licensee’s exhaustion of the patent on compliance with ‘humanitarian licensing clauses’. (e.g., US NIH)
· Reform Bayh-Dole legislation
B. Bottom-Up University Alternative Licensing Solutions:
· Some US universities have begun to change their licensing practices to incorporate ‘humanitarian’ or ‘open licensing’ policies.
o Humanitarian
o Open Licensing
§ Equitable Access Licensing Clauses
§ Reach-Through Licensing Clauses
VI. Which do you prefer: Tech Transfer or Compulsory License?
A full version of this presentation is accessible online via the www.itssd.org website at:
Panel Calls For An Ethical Framework For IP And Climate Change
By Kaitlin Mara
IP Watch
October 16, 2009
BANGKOK - Normal negotiation strategy is unlikely to result in an impact on climate change, since the most important stakeholders in fighting it - not yet born - have no seat at the negotiating tables, said a panel last week in Bangkok. An ethical approach is a better way to achieve results, speakers said, and an ethical take on intellectual property rights and alternative forms of innovation may have a place in new climate-friendly economic models.
The changes needed will be extraordinary: In order to meet United Nations Framework Convention on Climate Change targets for reductions in emissions by 2015, there will need to be a tenfold increase in carbon productivity, said economist Nitin Desai, a former senior UN official, who also chaired the panel.
This is “comparable to the increase in labour productivity throughout the entire industrial revolution,” he added.
“This is an aspect [of fighting climate change] that we are not facing up to,” said Desai. The “industrial revolution wasn’t just about technology: it was a whole new world. It’s the scale … that is not being adequately recognised.”
In particular, basic ethical principles of responsibility are useful in looking at ways to tackle the climate issue, said Desai. The collection of speakers was hosted by the Tata Energy Research Institute (TERI), a nongovernmental agency which looks at matters of energy, environment, and development, and took place on 8 October.
Ethical questions on climate change include not just a fair allocation of responsibilities, obligations and costs in fighting it, said Manish Shivastava, a research associate at TERI who is working on a paper entitled “Technology, Ethics, and IPR: The Dilemma in Climate Change Governance.”
They also include a fair allocation to benefits, to the right to development and to various resources, and an elimination of differences in exposure to consequences and unequal protection.
Intellectual Property, Ethics, and Climate Change
As technology is a key factor in combating climate change, ethical issues raised include who will commit what kinds of support for the development and dissemination of technology - generally, developed countries are seen as responsible for financial support, and developing countries as responsible for building favourable policy environments (tariff structures or foreign investment policies) for technology to come in, Shivastava said. And there is general agreement that IP rights encourage innovations and private investment in research and development, said Shivastava.
“But as a side effect, they add cost to users,” he said, both directly (by increasing prices) and indirectly (by increasing transaction costs for acquiring a needed bundle of technologies, or gaining ability to use a technology if a firm is unwilling to licence).
But IP in environmental technology may not look the same as it has in previous debates, such as over pharmaceuticals, in particular as related to HIV/AIDS medications in Africa.
“Most people think about IP and the high cost, taking the example of pharma,” but this may be a different situation, said another speaker who declined to be identified. In pharmaceuticals, the “cost of R&D is so high that IP can constitute something like 90 percent of the price of a technology.” Butin green energy the IP is likely not to constitute more than about 10 percent of the product, the speaker asserted.
“There is a clear difference with pharmaceuticals, where IP is linked to a product” than “in the case of energy or environmental technology” which is “much more complex [and necessitates looking] at IP as a part of overall cost, and how to manage cost to make deployment happen,” said Anand Patwardhan, a professor at the Indian Instituteof Technology in Mumbai, with a background in environment, technology and public policy.
If there is a paradigm-shifting technology where the problem is IP rights, then there is already the option of compulsory licensing in the World Trade Organization Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS) agreement, the speaker said, which applies to any product and is not limited to pharmaceuticals.
Open Sourcing for the Environment
It is “definitely true that IPR is a social contract that balances public and private interest,” said Patwardhan, adding that “to the extent that there’s a public interest in more rapid development, you might want to think less about compulsory licences but more about how to encourage development that’s more open.” In open source development, “the ability to work collaboratively is enhanced” and “actually speeds up the technology cycle and makes it more diverse.”
Desai agreed. “With climate, we’re talking about process, not product,” he said, referring to the need for an economic paradigm shirt. “So we need a structure … like a transparency requirement.” This fits, he said, into the open source model of revealing source code.
Other solutions suggested by Shivastava included waivers on royalties for publicly funded technology, patent pools, or patent commons where rights holders pledge conditional waivers on their royalties.
Several participants also mentioned how critical it is that financing for both development and diffusion be provided.
Also contributing as research fellows of TERI, though not on IP issues, were Nitu Goel, who wrote on ethics in funding for adaptation to climate change, and Neha Pahuja, who spoke about measurable, reportable and verifiable goals.
Bangkok Climate Meeting Leaves Political Issues, Compulsory Licences Unresolved
By Kaitlin Mara
IP Watch
October 12, 2009
BANGKOK – Humanity may be facing the single greatest threat to its future in history, yet significant political disagreements still stand in the way of common action needed to combat what will be a common crisis. One potential blocking point appears to be whether compulsory licensing may be encouraged for poor countries needing climate technologies.
The Bangkok session of the ongoing UN climate change talks drew to a close Friday with little progress on the most politically difficult issues: who should be obligated to undertake action to combat climate change, what actions should be performed, and who should be footing the bill.
Past UN discussions on this issue place the onus on developed nations to take the lead, citing historical responsibility for the problem. Some developed nations are also calling for commitments from the larger developing countries.
Concessions need to come from developed countries, said Michael Zammitt Cutajar, who chairs one of the working groups at the talks, in response to a question at a press conference on 9 October. “Of course,” he added, there will be no agreement “until developing countries are clear about how they can contribute.”
Time is short to progress on these matters: five negotiating days are left until the UN Framework Convention on Climate Change is meant to come to an agreement in Copenhagen on the next steps to avert a potential global catastrophe. The next meeting of the UNFCCC will be 2-6 November in Barcelona, Spain. The Copenhagen Climate Change Conference will run 7-18 December. The Bangkok session ran from 28 September to 9 October.
The technology-transfer negotiating text – in which intellectual property appears – if anything appears to have grown in length this week. A non-paper released by the chairs[pdf] on the final day, 9 October, contained a fifth option on intellectual property (up from four in the previous non-paper released 2 October IPW, Environment, 6 October 2009).
Creating and Distributing the Right Technology
Technology development and diffusion is one of the linchpins of the long-term strategy to reduce emissions that threaten the planet’s atmosphere. It is the development of new environmental technologies that will make necessary reductions possible, and it is access to new technology - along with capacity building and financial support - that will allow developing and least-developed countries to participate in the new, low-carbon future.
Within this framework, intellectual property is shaping up to be a complex part of the puzzle - perhaps even a deal-breaker if positions remain as diametrically opposed as they currently are - though it is as yet unclear what kind of an effect IP has on the diffusion of environmental technology.
What is clear is the strength of the positions of member states. The United States has said it will refuse an agreement containing compulsory licensing and several other developed country members indicated a lack of willingness to discuss changes the IP system.
On the other hand, a Bolivian submission from September[pdf; Bolivia's submission begins on page 8] that many developing country delegates referred to in Bangkok says proposes the UNFCCC reaffirm “that intellectual property has been a barrier to the transfer of and access to environmentally sound technologies and associated know-how [and] urgent action needs to be taken to overcome this barrier.”
And there has been concern among many developing countries, intergovernmental agencies and non-governmental agencies that climate change will lead to new forms of protectionism that will only further shut developing countries out of the market (see, for example, the recent report of Sangeeta Shashikant of the Third World Network on Climate, IPRs, and Protectionism).
The new paragraph in the text of 9 October, which sources said was added at the request of the “G77” group of developing countries and China reads: “Consistent with their obligations under international treaties and agreements, Parties may compulsorily license specific technologies for the purpose of mitigation and adaptation to climate change, where it can be demonstrated that those patents and licenses act as a barrier to technology transfer and prevent the deployment or diffusion of that technology within a given country.”
With such differentiated stances, the UNFCCC secretariat may lack the technical expertise to address these issues.
US, Others Take Exception to IP Exceptions
The United States signalled dissatisfaction that the section on IP remained in the chair’s text at all during the technology transfer group final informal meeting in Bangkok on 9 October, according to sources.
“The United States will not do compulsory licences,” Jonathan Pershing - deputy special envoy for climate change at the US Department of State - later told Intellectual Property Watch. On intellectual property, he said, the US “will look at things” that increase technology diffusion in the market, not compulsory licensing which “does the opposite.”
They are not alone in this stance. “We will not agree on any change in the system of IPRs,” Anders Turesson, chief negotiator on climate for Sweden on behalf of the European Union, told Intellectual Property Watch. “It would be counterproductive and counter the development of technology we need so badly.” Though, he added, in case of a specific technology need, solutions might be discussed. A separate participant to the technology transfer debates said there was “no willingness on the part of industrialised countries to discuss IP” during the Bangkok meeting.
The US statements are being watched in particular as it is currently the only industrialised nation that has not ratified the Kyoto Protocol, the last major environmental agreement to come out of the UNFCCC, which required a set of developed countries to commit to reductions in their emissions. It is also one of the world’s largest polluters both in aggregate and per capita, so it is seen as particularly important that the country sign on to the next generation of climate protection measures.
“There is no agreement in Copenhagen without the United States in it,” said Cutajar, who chairs the Ad-Hoc Working Group on Long-Term Cooperative Action, which is the umbrella working group under which technology development and transfer issues are being discussed.
There may be domestic difficulties in the US, however, as the Congress is still working on a climate change bill. Not having it complete by December “doesn’t mean that no deal is possible,” said Pershing, but added it was difficult to commit to specific numbers without Congress. The bill that passed the House of Representatives [pdf] earlier this year calls IP a “key driver of investment and research” and says “any weakening of intellectual property rights protection poses a substantial competitive risk to US companies” and says US funding to developing countries should “promote the robust compliance with and enforcement of” IP rights protection.
A draft bill before the Senate lists as one of its purposes in international clean energy deployment as to “promote robust compliance with and enforcement of existing international legal requirements” for IP protection. The bill was introduced by Democratic Sens. Barbara Boxer (California) and John Kerry (Massachusetts).
But is IP the Issue?
Some are questioning whether IP is the key problem in climate change, or whether infrastructure, lack of financing, or lack of capacity might be greater problems.
The “barrier is not IPR,” Turesson. The “barriers lie somewhere else… [in] poor situations, or environments.”
“Barriers to technology transfer look different in different countries, and they should be described” and addressed as such, he added. “Technology goes where capital goes” – so that in countries that are poor and not growing, then capacity building and financing is key.
Thaddeus Burns, senior counsel on IP and trade for General Electric, said tariffs on green technology add more to the price of the good than fees on IP licensing.
Lesotho in a party submission [pdf, Lesotho's submission begins on page 5] from May 2009 on behalf of the least developed countries (LDCs) said low capacity to adapt technology in LDCs might mean IP is of less significance than in “major” developing countries.
Others have said that a UNFCCC agreement with IP in it may not provide any additional rights on top of what is already guaranteed in the World Trade Organization Trade-Related Aspects of Intellectual Property Rights Agreement, which guarantees governments the right to issue compulsory licences, even without prior negotiation with the rights holder, in cases of “extreme urgency” or “public non-commercial use.”
Financing and The Need To Move Forward
Whatever activities are decided, from technology transfer projects to emissions reductions, financing them will be a critical issue. In particular, financial help for developing countries must be available.
“What is the point of taking your llama to a dry watering hole?” said Yvo de Boer, executive secretary of the UNFCCC, referring to the difficulty in securing funding resources. Industrialised country leadership and financial support are needed, he said.
“There’s been very constructive engagement from developing countries,” he added. “But without financial backing, what’s the point?”
Ambassador Di-Aping Lumumba of Sudan said in a press statement that there is a “massive leadership deficit” in developed countries, and called on their citizens to correct this.
These issues and others will be taken up again in Barcelona, during which time many delegates in Bangkok said they hoped substantial issues would be addressed and moved towards resolution.
GENEVA -- World leaders are talking a lot about climate change, not least in their flashy statement on controlling global temperatures at the recent Group of Eight summit in Italy. One of the smarter ways they can put this determination into effect will be to protect the intellectual property of green innovators from a growing onslaught by developing-world politicians and mistaken activists.
Intellectual property rights are the underappreciated link in the environmentalist chain. By rewarding inventors and entrepreneurs, well-enforced patents provide the right incentives for the innovation that will produce technologies necessary to manage climate change. Yet this fact is getting lost. Access to low carbon technologies has become a central issue in international climate change negotiations as rich countries put more pressure on the poor to cut their emissions. Understandably the poor aren't prepared to do so unless they are given cheap access to technologies. Patents are increasingly viewed as the main obstacle to cheap technology transfer.
Preview
So a representative of the Brazilian government, Haroldo Machado Filho, this week told a World Intellectual Property Organization conference in Geneva that leaders should consider the possibility of allowing "compulsory licensing" for green technologies.
This would be a new loophole in international intellectual property rules that would allow developing-country governments to break patents "for the public good"; such a loophole already exists for pharmaceuticals.
In a similar vein, Indian Climate Change Minister Shri Rameshasserted late last month that access to intellectual property for low-carbon technology is a "global public good." This kind of thinking lays the intellectual groundwork for patent violations down the road.
Most worrying, opponents of patents have succeeded in having included in the current negotiating text for a post-Kyoto agreement paragraphs to undermine patents. The final text won't be finalized until at least the December U.N. Copenhagen meeting, but current proposals range from "compulsory licensing" to the "creation of a global technology pool for climate change" that would socialize intellectual property.
These proposals fundamentally misunderstand why low-carbon technology is expensive. A January report by Copenhagen Economics, a consulting firm, found that the high prices are most likely a result of the immaturity of technologies, not patents. New technologies are generally more expensive when there are fewer products competing in the market. As more technologies are innovated the price is likely to drop. Most promising green technologies are so new they simply haven't had time to decline in price yet.
The Copenhagen Economics report also notes that weakening intellectual property for green technologies would be bad for the developing world countries whose governments advocate such measures. A growing number of patents on these technologies are held by developing-country innovators. China is one of the largest owners of solar and fuel-cell technology patents. The balance is still in favor of developed-world innovators, but the gap is narrowing fast. Allowing entrepreneurs in poorer countries to profit from their discoveries will be good both for the environment and for developing-country economies.
Undermining patents won't help access to technologies, but it will stop the next generation of technologies being invented, and with it a long-term solution to achieving the twin goals of developing countries to reduce emissions and alleviate poverty. Rather than breaking patents, policy makers could re-evaluate tariff regimes and other barriers that can add up to 165% to the cost of some imported green technologies, according to a 2007 World Bank study. The best path to a green future is not to break free-market principles, but to return to them.
Mr. Wilson is director of the Institute of Public Affairs in Melbourne, Australia.
No patents on climate-friendly technologies, says South
SUNS #6718
by Sangeeta Shashikant
Third World Network
June 12, 2009
The Group of 77 and China as well as several developing countries in their individual capacity have made proposals calling for climate-friendly technologies to be excluded from patenting.
In their text submitted Wednesday, the G77 and China proposed that "All necessary steps shall be immediately taken in all relevant fora to mandatorily exclude from patenting climate-friendly technologies held by Annex II countries which can be used to adapt to or mitigate climate change". [Annex II of the Convention contains a list of 24 developed countries with financial obligations].
The "no patents" proposal is one of several other ambitious proposals put forward by developing countries to address the intellectual property barrier to the transfer of and access to environmentally-sound technologies for climate mitigation and adaptation (ESTs).
The proposals were submitted on "Enhanced action on development and transfer of technology", one of the five building blocks of the Bali Action Plan (BAP) adopted by Parties tothe UN Framework Convention on Climate Change (UNFCCC) in December 2007. These proposals were added during the discussion of the text of the Chair of the Ad-hoc Working Group on Long-Term Co-operative Action (AWG-LCA) in the informal plenary on 10 June.
The work of the AWG-LCA is to implement the Bali Action Plan in order to enable the full, effective and sustained implementation of the UNFCCC through long-term cooperative action now, up to and beyond 2012.
Developing countries also called for: (i) the adoption of a Declaration on IPRs and Environmentally Sound Technologies in relevant fora; (ii) the use to the full flexibilities contained in the TRIPS Agreement including compulsory licensing to access intellectual property protected technologies; (iii) steps to ensure sharing of publicly funded technologies and related know-how; and (iv) the creation of a "Global Technology Pool for Climate Change" that ensures access to technologies including on royalty free terms.
The call for bold action to deal with IPRs, an obstacle to the transfer of and access to ESTs, follows heated debate that took place last Saturday, largely along North-South lines.
Developed countries, in particular Japan, Canada, Australia, Switzerland and the US insisted on strong IPR regimes, even opposing the use of compulsory licensing, which is allowed under the TRIPS Agreement (See SUNS #6716 dated 10 June 2009). The developed countries also questioned the need for new institutional arrangements, in particular, the technology mechanism that has been proposed by the G77 and China.
On the other hand, developing countries had argued that there was a need for patent exclusion on climate technologies, given the need for a global and systemic response to address the global challenge of climate change, adding that the current TRIPS flexibilities were inadequate.
The Philippinesproposed that: "All necessary steps shall be immediately taken in all relevant fora to mandatorily exclude from patenting environmentally sound technologies which can be used to adapt to or mitigate climate change".
The Philippines also proposed that: "Biological resources including microorganisms, plant and animal species and varieties, and parts thereof that are used for adaptation and mitigation of climate change shall not be patented".
Bolivia proposed that Parties should "take all steps necessary in all for a to mandatorily exclude from patenting in developing countries environmentally sound technologies to adapt to or mitigate climate change, including those developed through funding by governments or international agencies" and "to revoke in developing countries all existing patents on essential/urgent environmentally sound technologies to adapt to or mitigate climate change".
It also proposed text that "nothing in any international agreement on intellectual property shall be interpreted or implemented in a manner that limits or prevents any Party from taking any measures to address adaptation or mitigation of climate change, in particular the development and transfer of, and access to technologies".
Other developing countries have also made proposals reflecting a similar sentiment as follows:
"[[LDCs][Countries vulnerable to the adverse effects of climate change] should be exempted from patent protection of climate-related technologies for adaptation and mitigation, as required for capacity building and development needs.
[Genetic resources, including germplasms of plant and animal species and varieties that are essential for adaptation in agriculture, shall not be patentedby multinational or any other corporations.]]]"
Aside from the "no patents" proposal, the Chair's text as well as the various submissions of countries during the technology debate also contains other proposals to address the IPR barrier.
Some of the proposals envisage bolder actions to overcome the IPR obstacle, such as "Limited/reduced time for patents on climate friendly technologies".
The Philippines proposed language to improve the Chair's text that supported the use of TRIPS flexibilities as well as to ensure the sharing of publicly-funded technologies and related know-how. It proposed the following:
"Specific measures shall be taken and mechanisms developed to remove existing barriers to development and transfer of technologies from developed to developing country Parties arising from intellectual property rights (IPR) protection, including:
(i) to use to the full flexibilities contained in the Trade Related Aspects of Intellectual Property Rights (TRIPS) including Compulsory licensing to access intellectual property protected technologies;
(ii) take steps to ensure sharing of publicly funded technologies and related know-how including by making the technologies available in the public domain at an affordable price and on terms and conditions that promotes access for developing countries".
The Philippines also proposed the "adoption of a Declaration on IPRs and Environmentally Sound Technologies in relevant fora to inter alia reaffirm the flexibilities in the TRIPS Agreement and enhance the enabling environment for implementing these flexibilities".
The Chair's text had "Compulsory licensing for specific patented technologies" as a specific measure to remove IPR protection barriers to technology development and transfer.
The G77 and China proposed the "creation of a Global Technology Pool for Climate Change' that promotes and ensures access to intellectual property protected technologies and associated know-how to developing countries including on non-exclusive royalty-free terms in order to provide better information service and reduce transaction costs".
The Philippinesmade a similar proposal in its submission including an additional paragraph that states: "All necessary measures and actions shall be immediately taken to facilitate technology pools that include associated trade secrets and know-how on environmentally sound technologies and enable them to be accessed, including on royalty-free terms for developing countries".
The technology pool proposal is similar to a proposal in Bolivia's submission. The Bolivian proposal also speaks of immediately creating and providing "new and additional financing that is adequate, predictable and sustainable for joint technology excellence centres in developing countries, to enable entities in these countries to do research and development especially on adaptation as well as mitigation technologies" and "to ensure that any technology transfer to developing countries is appropriate for the developing countries concerned in order to enable its effective utilization".
(The immediacy is based on the mandate of the AWG-LCA to enhance implementation of the Convention "now, up to and beyond 2012".)
The Chair's text also contains a proposal for "The Executive Body on Technology", "to establish a committee, an advisory panel, or designate some other body, to proactively address patents and related intellectual property issues to ensure both increased innovation and increased access both for mitigation and adaptation technologies".
It further states that the committee/panel should:
"(a) Actively engage enterprises and institutions in both developed and developing countries; (b) Develop a clear framework for evaluation and determining when intellectual property becomes a barrier to international technology research, development, deployment, diffusion and transfer and provide options for corrective action; ( c) Make recommendation back to the UNFCCC COP or COP/MOP on barriers that may require further actions".
There are also proposals in the Chair's text that mention "Preferential pricing", "Differential pricing between the developed and developing countries", "promoting innovative IPR sharing arrangements for joint development of Environmentally Sound Technologies", and "Promoting Joint technological or patent pools for the development and transfer of technologies to the developing countries at low cost". +
Cooperation not compulsion on clean technology transfer
by Dalindyebo Shabalala
Science and Development Network
3 June 2009
Compulsory licensing of clean technologies will only be needed if developed countries duck UNFCCC obligations, says Dalindyebo Shabalala.
Developing countries will need 'clean technologies', such as micro-wind energy, if they are to play an active role in combating climate change over the coming decades. The question is how to access these? The answer lies in genuine cooperative technology transfer between the developed and developing world.
Compulsory licensing, where governments allow manufacturers to produce patent-protected goods for domestic use without the patent owner's consent (sometimes with payment),is one option. It has worked well for medicine, though developing nations have had to fight hard to access some key drugs. And some countries, including Thailand, have suffered severe political penalties, such as threats to remove or suspend trade preferences.
Many in the climate change debate argue for new and more flexible compulsory licences for clean technologies, especially given potential demand in developing countries and the short time frame for action.
A last resort?
Individual countries could unilaterally use existing World Trade Organization rules for compulsory licences to access key clean technologies. But that — and any new licensing system — should only be needed if industrialised nations fail to meet their technology transfer and financing commitments under the UN Framework Convention for Climate Change (UNFCCC).
Some proponents of new compulsory licensing for climate-related technologies have misunderstood key differences between the access to medicines debate (under the TRIPS Agreement) and technology transfer, under the UNFCCC.
Whereas TRIPS contains just one relatively weak commitment to technology transfer that only refers to least developing countries, the UNFCCC addresses it extensively, giving clear guidelines, especially on financing, for developed and developing countries.
And there are other factors that compulsory licences may not resolve. For example, for many climate technologies, such as micro-hydroelectric, wind and solar, the major cost may not be the intellectual property (IP), but the actual hardware and maintenance.
More than access to the actual technologies, developing countries need access to the skills, know-how and capital that can help them use, reproduce and adapt clean technologies. Compulsory licences — except those granted for competition reasons — may not transfer this tacit knowledge, which is often protected by trade secrets.
UNFCCC obligations
Under the UNFCCC, industrialised countries are committed to providing and financing technology transfer, regardless of patents. They are obliged to make available funds and mechanisms to ensure access, distribution and uptake of environmentally sound climate-related technologies in developing countries. For example, the [UN] Montreal Protocol — an international treaty to protect the ozone layer — pays for licensing fees at reasonable costs. Countries remain free to exercise compulsory licences when companies refuse to license their products.
The Montreal Protocol — and the UNFCCC — also account for IP market failures, where patented goods or knowledge become unaffordable for most relevant consumers. Under them, developed countries guarantee to transfer technologies, including paying for licences, if the technology in question exists and is unavailable in the national market at an affordable cost.
Unlike compulsory licensing, this commitment represents a cooperative approach. Only if this fails will developing countries, left to their own devices, have to resort to unilateral measures.
Those engaged in the current UNFCCC negotiations are well aware that agreeing a workable mechanism for technology transfer is essential. It is crucial for strategies to successfully combat climate change after 2012 (when the first commitment period of the Kyoto Protocol ends).
Lessons from Montreal
The Montreal Protocol shows technology transfer can be successfully addressed. What is needed is a fully funded financing mechanism that pays the full costs of accessing technologies, especially patent licences and accompanying services. And there must be a fair mechanism for managing intellectual property barriers, such as refusals to license, unreasonably high licensing costs, restrictive licensing practices, and other issues.
Developing countries at the UNFCCC are proposing a Technology Cooperation Mechanism that draws on experiences of the Montreal Protocol. Developed countries, who have not yet proposed any mechanisms themselves, need to acknowledge the success of experiences such as the Montreal Protocol and actively join with developing countries in seeking a cooperative and good faith solution. Only then can developing countries begin to effectively take on the challenge of reducing greenhouse gas emissions and adapting to climate change.
In the meantime, developing countries will continue to use compulsory licensing as a bargaining chip.
But we should all hope that unilateral measures remain nothing more than that. If developing countries have to resort to large-scale compulsory licensing to acquire climate-related technologies, it will signify a fundamental breakdown in the global climate policy regime. Developing countries will have been left on their own to sink or swim in a deluge of someone else's making.
Dalindyebo Shabalala is director of the Intellectual Property and Sustainable Development Project at the Center for International Environmental Law (CIEL). The views expressed in this piece do not necessarily reflect the views of CIEL or its funders.
Diffusion of Climate Friendly Technologies: Can Compulsory Licensing Help?
By Nitya Nanda,
Centre for Global Agreements, Legislation and Trade, Resources and Global Security Division, The Energy and Resources Institute (TERI), India Habitat Centre, New Dehli 110 003
14 Journal of Intellectual Property Rights 241
May 2009
Abstract:
Countries often resort to compulsory licensing to promote diffusion of technologies, particularly when intellectual property rights (IPR) holder is considered to have abused its dominant position. However, use of this instrument is often difficult due to legal, political and operational problems. In this context, this paper reviews global regimes as well as national regimes in major jurisdictions, governing use of compulsory licensing. It also examines functional requirements and market conditions for compulsory licensing to work.
Based on these, it concludes that the global IPR regime under the WTO needs a mechanism similar to that has been developed for pharmaceutical products, and a more flexible regime even in that, as most countries do not have domestic manufacturing capabilities, if compulsory licensing has to work for the diffusion of climate friendly technologies. However, even such a flexible mechanism may not be adequately effective due to highly concentrated market structure of these technologies, particularly in developing countries.
Mr. Kogan is CEO/President of the ITSSD. During 2007, he served as an Adjunct Faculty member at the John C. Whitehead School of Diplomacy and International Relations at Seton Hall University, where he taught International Trade Law & Policy to graduate students.
ITSSD, The Institute for Trade, Standards, and Sustainable Development, Inc. is an independent, not-for-profit, non-partisan educational organization dedicated to the promotion of a positive paradigm of sustainable development consistent with private property, free market and WTO Rule Of Law-based principles. The ITSSD examines evolving international law and policy as it relates to trade, science, technology and sustainable economic freedom and development around the world.
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