Who owns our Low Carbon Future?

1. Who owns our Low Carbon Future? Intellectual property and energy technologies 14 December 2009 Bernice Lee Research Director - Energy, Environment and Resource Governance Chatham House – Royal Institute of International Affairs blee@chathamhouse.org.uk

2. Chatham House and CambridgeIP have developed a patent database focused on six energy technologies Chatham House and CambridgeIP have developed a unique collection of patent databases and related analyses focused on 6 areas of energy technology • Wind • Concentrated Solar Thermal (CST) • Biomass to Electricity • Cleaner Coal • Solar PV • Carbon Capture The study involved nine months of research across the technologies (and over 30 sub-sectors). A database of close to 57,000 patents over 30 years has been compiled and profiles were developed of selected patent owners. In addition, the team reviewed aspects of corporate strategy and practice, such as collaboration, licensing, litigation and mergers and acquisitions.

3. Apart from wind and solar PV, patenting activities growth in other cleaner energy sectors are surprisingly sluggish Patent applications may be unpublished for 18+ months. Therefore the number of reported patents for the last 2 years may be under-represented.

4. The sub-sectors indicate where the value of inventions lie within these complex technology systems CSP Solar PV Biomass Wind

5. Policy works. Patenting has generally grown with deployment rate Wind Solar PV

6. The concentration of patent ownership cannot be assumed to be synonymous with a lack of competition or a monopoly, but it can slow innovation and diffusion in some types of markets depending on the business models.

7. Patent-ownership concentration is technology specific Concentration varies… but top 20 assignees take around 25-35% in 5 out of 6 technologies Top 20 and 50 Firms Concentration vs # patents And not correlated with total number of patents 7

8. Patent families indicate the commercial value of inventions As expected there is a quick drop-off in the number of patent families with >5 and >10 patents In each technology field there’s 250-500 patent families with >10 members

9. High-carbon companies control some of the key knowledge assets needed for the low carbon economy

10. Patent filing locations indicate an intention to invest, sell (equipments or technologies) or license

11. Geographical origins of assignees indicate innovation capacities

12. But the picture changes if you look at the location of parent companies. Companies and institutions in OECD countries will determine the speed of diffusion of the most advanced energy technologies in the next decade.

13. The public sector is also a key actor, and their role is likely to expand

14. The median age of corporations indicate the advantages of older institutions and companies

15. Cooperation on technology innovation and development is primarily a national activity Jointly assigned patents: developing-developed economies share

16. And a lot of collaboration takes place among companies, from the same country Jointly assigned patents: organisation mix

17. To speed up diffusion, there is a need to broaden inventor networks to encourage faster cross-fertilization between inventions from different sectors in different countries.

18. Speed matters.Sticking to what we know – and business-as-usual practices – will not bring these much-needed technologies to markets fast enough to meet medium and long term goals • Inventions in the energy sector have generally taken two to three decades to reach the mass market. This time lag is mirrored by the time it takes for any patented technology to be become widely used in subsequent inventions. Citation data indicate that, across the six sectors examined here, it takes between 19 and 30 years with an average of around 24 years. The process of registering a patent can take many years. • The diffusion time for clean technologies globally will need to be halved by 2025 to have a realistic chance of meeting climate goals.

19. Some pragmatic recommendationsto build more collaborative rules of the game • ‘Model’ R&D cooperation agreements. Government support for clean energy innovation is more likely to be effective at the early stages of the development of technology systems. • Publicly backed energy patent pools and knowledge-sharing platforms. Through tax, other fiscal or investment incentives, the public sector should support the design and creation of patent pools and cross-licensing schemes to encourage innovation and mass diffusion for relevant technologies. These patent pools can be used to support innovation in SMEs and emerging markets in exchange for a royalty fee. • A global database on licensing data and best practices. The development of a reliable patent-licensing database could assist in setting benchmarks and sharing best practices. As a first step, there is a role for an escrow service through which private-sector data are pooled and shared on an anonymous basis on the open market to set benchmarks. Institutions like WIPO can set up global databases on licensing and cross-licensing regimes as well as patent pools on climate-friendly technologies. Patent owners could register their licensing deals (and showcase their latest commercial success) within a specified time period (such as 18 months) to protect their latest commercial interests.

20. International cooperation to transform the marketplaceto double diffusion rate by 2025 • At the global level, the Copenhagen Summit must send credible and unambiguous signals to the global markets that far-reaching change is imminent and inevitable. Joint-venture companies, cross-training programmes, cross-licensing arrangements, trade tariff exemptions on selected technologies and joint manufacturing programmes are all tried-and-tested methods that could be stepped up at national and local levels. Governments can also help shape the global value chains of clean energy sectors through: • Supporting global demonstration programmes • Maximizing the potential of technology standards bodies • Supporting open innovation mechanisms

21. Conclusions • A rights-based approach – on both sides of the argument – is likely to result in log-jams and not solutions. • We are beginning to acquire the data needed to focus on diffusion rate. To set benchmarks, we need many new public-private partnerships – in creating the database, A sector-based approach is key. • The high carbon sectors have many technological assets to offer. How to harness them while in the long term change their business model? So cross-sector learning would need to be factored into future mechanisms and policies.

22. Thank you • Who Owns our Low Carbon Future? Intellectual Property and Energy Technologies • Website: www.chathamhouse.org.uk • Contact: Bernice Lee blee@chathamhouse.org.uk Ilian Iliev ilian.iliev@cambridgeip.com Felix Preston fpreston@chathamhouse.org.uk