Ahmed Abdel Latif Programme Manager Intellectual Property and Technology, ICTSD

1. Climate Change, Technology Transfer and IPRs:Issues, Options and Challenges for Copenhagen and beyond Ahmed Abdel Latif Programme Manager Intellectual Property and Technology, ICTSD European Parliament Committee on International Trade 10th November 2009

2. Climate Change, Technology Transfer and IPRs: Issues, Options and Challenges for Copenhagen and beyond • The technology transfer imperative • Deconstructing the role of IPRs • Evidence gap on technology transfer and IPRs • Compulsory Licensing • Voluntary Licensing • Technology and patent pools • R&D and technology collaboration • Public private partnerships (PPPs) • Innovation in developing countries and LDCs for climate change technologies

3. Enhanced transfer of climate friendly technologies :A key element of a global climate change deal The UNFCCC calls on developed countries to take steps to promote transfer of technology (TOT) to developing countries (Article 4.5). The Bali Action Plan called for “enhanced action on technology development and transfer to support action on mitigation and adaptation, including, inter alia, consideration of: (i) Effective mechanisms and enhanced means for the removal of obstaclesto, and provision of financial and other incentives for, scaling up of the development and technology to developing country Parties in order to promote access to affordable environmentally sound technologies (EST); Discussions at the UNFCCC on IPRs have witnessed a polarization around the question of whether IPRs are a barrier to the transfer of climate change technologies or an essential pre-requisite to promote technology transfer and innovation in green technologies.

4. Deconstructing the role of IPRs in Technology Transfer • Technology Transfer (TT) is a complex and multidimensional process. • Its success is contingent on many factors (finance, local absorptive capacity, enabling environment). • TT involves knowledge which is embodied not only in IPRs such as patents but also in blueprints, designs, know-how and trade secrets. • IPRs are important to promote innovation. By offering protection against a loss of control of information in technology-related transactions, IPRs can be an instrument facilitating the transfer of technology. • IPRs have also an impact on cost of technology acquisition and rate of technology diffusion. Licensing conditions play a key role. • Role of IPRs varies according to technology and sector. IP issues raised in the context of mitigation technologies are different from those in the context of adaptation.

5. Sample ‘Environmental’ Patent Application

6. Evidence Gap on Transfer of Climate Change Technologies and IPRs • The experience in the implementation of the Montreal Protocol • Landmark study by John Barton for ICTSD in 2007: IP and Access to Clean Energy Technologies in Developing Countries. An Analysis of Solar Photovoltaic, Biofuel and Wind Technologies. • Several studies were released in 2008/2009. • Some trends identified: • Significant increase in patenting of clean technologies in recent years (since 2000) • Concentration of patent ownership in OECD countries • Few patents registered in low income countries • Limitations: • Partial coverage of technologies and of countries • No technology mapping • No expertise in the retrieval of patent information • No comprehensive analysis of licensing practices. The number of patents in the area might not be the key issue but rather the licensing practices.

7. UNEP-EPO-ICTSD Project on IPRs and Climate Change Technology • Unique partnership between : • UNEP • European Patent Office (EPO) • ICTSD, • The scale of the challenge, both in analytical and policy terms, is such that only a broadly based partnership can have success. Partnership announced in April 2009. • The project includes carrying out a technology mapping, a patent landscape of clean technologies in the area of energy generation and a survey of licensing practices in the same area.

8. Research and Analytical Steps Current project Further possible projects PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 Technology mapping studies in 4 key mitigation sectors identified by the IPCC Energy Buildings Transport Industry Identification and specification of technologies for mitigation Patent landscaping: What patents exist on these technologies? Licensing survey for 300-500 selected companies and institutions per sector Synthesis report to better inform UNFCCC negotiations on transfer of technology and financing Broad dissemination of results

9. PHASE 2 : Patent Landscaping for Renewable Energies • Key question: Which patents are related to renewable energies, according to the technology mapping? • EPO's core competence in patent classification is key asset (internal classification scheme ECLA goes much deeper than IPC) . • A team of EPO examiners have tagged all related patent records worldwide.

10. Phase 3: Survey of Licensing Practices • How far to go asking for information which could be part of business strategy ? • Consultation in Geneva on May 8, 2009 with representatives of major industry/business associations. • Survey carried out between August and October 2009. • More than 150 responses received from respondents which include companies, public research organizations, academic institutions etc.

11. Input of the project into UNFCCC discussions • Results of the patent landscape and licensing survey are currently being studied. Some preliminary findings will be presented at COP 15 in Copenhagen. Final report will be available by spring 2010. • Project illustrates how to implement an element of the negotiating text on “Technology Information” : • A technology information platform for ESTs including a global technology database should be developed and continuously be updated to collect information on sector specific technologies and best practices, including on IPRs and licensing,… Ultimately, availability of accurate patent information not an end in itself but an element in an enabling environment for innovation and TT

12. Menu of options for the nexus Transfer of Technology/IPRs • In relation to IPRs, and taking into consideration results of evidenced based analysis, possible responses : → Business as usual approach: difficult to sustain in view of urgency and demand for rapid and wide scale diffusion of CC to developing countries → Promoting the transfer of technologies in the public domain → Guidelines on Technology Licensing on fair and reasonable terms for developing countries → Arrangements for greater use of alternative innovation models (prizes, patent pools, open innovation etc.) and collaborative R&D → Building capacities on EST research and innovation in developing countries → Use of TRIPS flexibilities Exclusion from patentability, compulsory licensing, competition.

13. Use of TRIPS flexibilities/Compulsory License • The TRIPS Agreement includes provisions that allow the exploitation of patented inventions without the consent of the IPR owner, such as compulsory licenses (CL). • TRIPS does not list specific reasons to justify the use of a CL and leaves grounds to be determined by national legislation in compliance with Article 31. • Question of Article 31 (f), CL for predominantly domestic market. • US Clean Air Act confers for a court, at the Government’s request, to order a CL with royalties decided by the court. • Cannady (ICTSD/2009): “a country may invoke CL for CC technologies without violating TRIPS”. • In a nutshell, CL is legally available but how practical is it to achieve greater access to climate change technology ?

14. Licensing of climate change technologies to developing countries • Negotiating licensing agreements on a case by case basis can be costly and time consuming. A new policy framework could help to lower these transaction costs for climate change technologies. • EGTT Strategy Paper (FCCC/SB/2009/3) suggests “Innovative licensing models”. • Private sector has expressed support for an :“An international set of core contractual principles for business engaging in clean energy technology licensing in developing countries”, CEO Climate Policy Recommendations to G8 Leaders (July 2008), WBCSD/WEF. • Guidelines on licensing climate change technologies on fair and reasonable terms for developing counties?

15. Establishing technology and patent pools • Patent pools have been proposed as a way to enhance developing country access to climate change technology • A patent pool is an agreement by multiple patent holders to share intellectual property among themselves or to license a portfolio of patents as a package to outsiders • Use of patent pools to advance public policy objectives has been limited. • Patent pools may offer licenses to patents that developing countries can use anyway, because the patent owners often do not file there. • Rules governing the patent pool arrangements are key.

16. Scaling up joint R&D and research collaboration • Widely shared and recurrent policy option. The questions are why is it not done more ? And how can it be scaled up? • Overall, there is little joint R&D and research collaboration in the areas of CC technologies, even between OECD countries. • Focus tends to be on “pre-competitive” stage of technology development. • In many countries, universities are not allowed to license technology funded by their national government to foreign firms. • Useful models, examples and options to consider: • IEA agreements (ITER) • EU experience in joint R&D and innovation between its member countries • Role of bilateral science and technology agreements

17. Greater use of public private partnerships (PPPs) • PPPs have proved useful in the health area to address situations of market failures such as research into neglected diseases. • In the are of climate change technologies, they could be particularly useful in relation to technology transfer to LDCs where traditional market mechanisms do not operate effectively. • Question remains: how to provide incentives to private sector to participate in such partnerships?

18. Support to research and innovation efforts in developing countries and LDCs • Integrate of CC technology as a priority in national innovation and S/T policies and strategies. • Regional innovation centres and networks. What would be their IP policies? • Explicit recognition of the role developing country universities and research institutions in climate change technology. • Capacity building for skills like technology management, use of the IP system and licensing contract negotiations. • Emphasis on international financial support for national technology innovation plans based on national needs and capacities (as defined by developing country parties)

19. Conclusion Broader policy questions: • How do we balance appropriately innovation and access? • Should the IP system operate in a business as usual mode when it comes to climate change ? does the scale and urgency of the climate change challenge require special measures to be taken to ensure that the IP system contributes effectively to the wide scale dissemination of climate technologies on an affordable basis?

20. Thank you ICTSD Global Platform on Climate Change, Trade Policies and Sustainable Energy ICTSD initiative on Climate Technology and Trade www.ictsd.net aabdellatif@ictsd.ch