The Role of Intellectual Property Rights (IPR) in Technology Transfer / Technology Cooperation

Overview

Intellectual property is an important factor for innovation and technology cooperation. There is an ongoing discussion about the need of a global policy to accelerate renewable energy technology (RET) innovation and support business, governmental, and humanitarian goals. In the Bali conference (COP 13), article 1 (d) of the final document demands „Effective mechanisms and enhanced means for (…) scaling up of the development and transfer of technology to developing countries Parties in order to promote access to affordable and environmentally sound technologies“. From the perspective of Developing Countries, industrialised countries have to provide the relevant technologies or at least the rights to use them if they want them to join their efforts of combating climate change. In certain cases governments from DC’S could force companies in industrialised countries to provide licences in areas of national security (compulsory licenses), e.g. to combat climate change. For the owner of the licence this could mean wasting large investments in the development of sustainable energy technologies like carbon sequestration, off-shore wind farms and bio fuels. This unclear situation could create barriers for the dissemination of sustainable energy technologies.  This political debate is part of a current polarized  discourse focusing on either the necessity of (strong) IP protection for innovation (as an incentive) or the impeding effect of IP protection on innovation (innovation is seen to be discouraged by high upfront costs and unequal distribution of ownership of IP in the North).

 

Only a few models and initiatives go beyond this and aim at providing unbiased and evidence-based information on how policymakers in developing countres can properly calibrate IP systems to maximise innovative potential, and how innovators and creators can adapt or work around suboptimal (particularly too strict) IP environments. See below for a description of the open source / open innovation models, which enables different levels of openness that reduce exclusive control over knowledge and potentially increase participation, cooperation & collaboration in innovative processes as well as innovative business models.

 

International policies 

In light of the debate above, neither the Organisation for Economic Cooperation and Development (OECD), the United Nations nor any of their related organizations has developed intellectual property policies on sustainable energy. There are at least three reasons why governments of industrialized countries are reluctant to lead the effort to develop a coherent global policy on intellectual property for sustainable energy

• No existing precedent for developing such a policy, as intellectual property policies have been developed on a national level or on a one-to-one treaty level
• Strong interest in withholding information about the economic costs and benefits of patents.
• Most nations with strong intellectual property policies see patents as an individual right, protected by the rule of law.

As long as technology exchange is limited to small, decentralized technologies, targeting mainly (poor) Developing Countries, the question of IPRs is not crucial for its success, but it might hinder foreign investments and cooperation with private companies from industrialized countries. For the Least Developing Countries, the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement is still not applied and will become a binding rule only from 2013 on.

 

Alternative IP concepts based on openness

While a political framework is still missing, companies and organizations have been making use of two alternative intellectual property concepts: patent pools and the open source / open innovation model.

1) Patent pools are consortiums of companies that band together to allow joint, non-exclusive licensing of intellectual property. They make sense in sustainable energy development because of the large number of organizations attempting to develop similar technologies or products that must work seamlessly together within the existing power infrastructure, in particular important for decentralized generation.

2) The idea of the open source / open innovation approach is to liberally license the science or technology so that anyone  can modify, add and reuse the technology. As Wikipedia notes, the concept is built on “practices in production and development [of products] that promote access to the end product's source material”. In short, an open source licence is a “licence to innovate”; it grants all necessary rights to study, use, remix and redistribute an improved work – under the condition that the results will once again be available to all parties interested. It is important to note, that in this sense an open source approach is not equivalent to releasing knowledge or technology in the public domain: Open Source crucially depends on socalled "copyleft" licensing, whereby any resulting improvements or adaptations are also bound by the same copyleft licensing scheme and need to be "re-shared". This viral status of open source provides a large potential for rapidly building a vast pool of technological innovation through "commons-based peer production" (Hippel xxx) as part of a "knowledge commons" (Link Wikipedia.) At the same time this viral obligation to "re-share" gives some level of protection against unlicensed use of intellectual property by competitors (who are not sharing). Other advantages of the open source models include a large pool of potential contributors to innovation, as "most of the brightest people work somewhere else". The open source model works because many new design ideas are aggregates of several prior designs. As a result, they require expertise from a wide variety of engineering and other disciplines. This line of thought is related to the paradigm of "open innovation". According to Henry Chesbrough open innovation is about “internal as well as external ideas, and internal and external paths to markets”. According to the new paradigm, innovation is no longer a confidential issue, but rather about sharing insights with anyone interested in the matter.As the example of  Free and Open Source Software is indicating, such "crowdsourcing" has the potential to induce new forms of “private-collective innovation” (van Hippel/von Krogh 2003), which provides both viable incentives for innovation and alternative business models as well as an underlying “public good” or commons good.

Other aspects of IP in technology transfer / cooperation 

a) Quality control through IP protection: Although investments of companies in research and development (R&D) are seen as the main rationale for IPRs other aspects play an important role. Handing out technical drawings without the required assistance on how to use them is of no benefit for the user but might easily put at risk the good reputation of the technology. To ensure a reasonable quality level, trainings and feedback rounds to check the produced quality should be obligatory. Manufacturers using this design should be registered and should give a feedback on how many units they produced and installed at which sites (providing data on site characteristics), and which experiences and modifications regarding the design they made. Under an open source approach, such feedback loops would be embedded in the licensing itself.

b) Capacity Building and IP:  

Sources and further readings

Main source of this article:

- GTZ Study "RETEX_-_Renewable_Energy_Technology_Exchange", main authors: Hedi Feibel, Fritz Kölling]

Other sources of this article:

Further readings and background information:

 

See Wikipedia for background information on general debate on IPRs and NDAs. E.g.: http://en.wikipedia.org/wiki/Non-disclosure_agreement

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[1]     Kevin Closson, How Intellectual Property Policies Can Create Sustainable Energy Infrastructures (2008)