Carolina Rossini and Silas Bauer - The alternative energy field represents a unique case for studying the trends regarding political economy of intellectual property (IP) in an emerging market. Some of the technology can be considered mature; however many are the barriers - technical, political or related to funding - that justify a young market in many countries. It is these issues that are at the centre of our research under the Industrial Cooperation Project at the Berkman Centre at Harvard University. This research is part of a broader project being led by Prof. Yochai Benkler. In the research, we are seeking to understand the approaches to innovation in the alternative energy sector looking specifically at wind, solar and tidal/wave technologies. The intention is to map the degree to which open and commons-based practices are being used compared to proprietary approaches.

In this post, we share some thoughts regarding the emerging IP issues and players and what this means for the development and deployment of technologies in the alternative energy field.

A Rapidly Growing Market  

The market for alternative energy technologies in the United States, for instance, has grown due to a myriad of indirect and direct factors. Indirectly, global climate change concerns and volatile fossil fuel prices, along with US energy security concerns tied to its dependence on unstable foreign sources of oil, have pushed alternative energy into a strategic position of importance. Direct factors affecting growth have been a recent increase in private funding for alternative energies, and a growing public-sector opinion that supporting these technologies is in the best interest of the country. Up to this point, the US has lagged behind other countries, mainly those in Europe, in terms of both its public research and development (R&D) and demonstration funding (supply-push policies), and its technology deployment funding (demand-pull policies).

Spurred in part by the increasing momentum of the “Clean Tech” movement, alternative energy producers, consumers, and various regulatory and advocacy bodies are each responding to and evolving with the field, and thereby creating new market demands and offerings. While these trends are complicated in their economics, politics, and other social factors/barriers, the gradual consolidation of the field’s largest producers is already perceptible in the wind market, for instance.

IP and Alternative Energy Technologies

As global climate change continues to dominate international negotiations around capping carbon emissions, the IP rights of the technologies that will facilitate the carbon reductions have become a hotly debated topic.

Patents represent the most significant IP tool involved in this field. Until recently, the IP factor did not parallel the usual IP debate found elsewhere in regards to access, sharing or balance. Many IP issues did not come to the center of attention of IP observers or even civil society groups focused on IP issues and development. This is because the debate over clean and renewable technologies has been politicized and linked to long-term discussions around climate change, but not linked to innovation and IP as in other fields like pharmaceuticals, software, and cultural works.

In this sense, political strategies from Clean Tech and renewable energy industry associations were much more focused on policies to foster the adoption of these technologies over oil-based energy as explained in this report. Thus, we observed a stage in our research where few in the international IP community paid attention to the crescendo of patents in the Renewable Energy market.

Open and Commons-based Approaches versus Proprietary Approaches to Innovation in the Alternative Energy Market

However, this situation changed dramatically in the spring and summer of 2009 with the advent of the Obama administration making public statements about sharing technology related to energy. In reaction, the United States Chamber of Commerce, a leading lobby representing businesses, is expressing growing concern that moves to spread new energy technologies to developing countries could erode the IP rights that have driven commercial efforts to innovate for generations.

Late in May 2009, the group and representatives of General Electric, Microsoft and Sunrise Solar gathered in Washington to launch the Innovation, Development & Employment Alliance, or I.D.E.A. The initiative is aimed at pressing Congress and the Obama administration to ensure that global climate-treaty talks do not weaken protections on who can profit from new technologies that provide abundant energy without abundant pollution. The creation of I.D.E.A. has been widely noted, with some alarm, in the IP “watchers” community, and likely means the status of alternative energy as a less-observed IP sector is finished for good.

Private industry views the patents on these technologies as a necessary to ensure a return on their R&D investment, while many governments around the globe have identified the challenge of climate change as worthy of compulsory licenses for critical technologies. This policy is modeled on the TRIPS Doha Declaration, which allows compulsory licensing of pharmaceuticals that are critical to public health. The United Nations Framework Convention on Climate Change (UNFCCC) has been the host of these discussions as member nations are trying to design the Post-Kyoto regime. China, India and Brazil have, for example, been advocating for the compulsory license provision in order to provide technologies at a reduced price to developing nations. The United States has been divided on the issue and has powerful entities working on both sides. 

The new Secretary of Energy, Steven Chu, a Nobel Prize winner, has publicly supported collaborating with developing countries - in particular China - and sharing all IP rights of the resulting technologies. He has already pushed forward with a new U.S.-China Clean Energy Research Center, developed with $15 million dollars each from the U.S. and Chinese governments, and designed to create innovative technologies for building energy efficiency, clean coal (including carbon capture and storage) and clean vehicles. In addition, Secretary Chu is advocating for the development of open-source building energy-efficiency software that will make it cheaper and easier for developers to implement energy saving measures in new buildings, both in the U.S. and in emerging economies like China and India. 

In reaction, I.D.E.A.’s first act was to back the Larsen-Kirk Amendment to the Foreign Relations Authorization Act (H.R. 2410). The amendment calls on the President, the Secretary of State and the Permanent Representative of the United States to the United Nations to uphold the existing international legal requirements for IP rights and avoid any weakening of them for the UNFCCC in the context of energy and environmental technology. The Amendment passed the House with a 432-0 vote. It was described as an amendment to protect U.S. green jobs and U.S. technology innovation. 

Internationally, IRENA - a multi-national organization whose membership includes more than 79 countries pledging to facilitate the global growth of renewable energy through the sharing of all relevant information including renewable energy resource measures, best practices, effective financial mechanisms, and state-of-the-art technological expertise - still does not show a clear position in relation to the dispute around sharing of IP. But it is clear in its goal in facilitating sharing of information and technology transfer.