Why Patents and Climate Change Just Don’t Mix

14 April 2023

We need a Green Technology Revolution but the current patent regime is not going to let us do it. The key to achieving the elusive 1.5C target lies in our ability to develop carbon-neutral technologies in an astonishingly short period of time. Left alone in the wilderness of the market, however, ‘green’ technologies have little chance of survival. Technical uncertainty, up-front costs and unpredictable markets - not to mention the ‘green premium’ paid by businesses that fail to exploit unpriced Carbon - all represent significant obstacles. It is a revolution, therefore, that requires intervention and intellectual property law - as the orchestrator of the relationship between technology and society - must become a co-conspirator.

Patents are criminally inappropriate when rapid diffusion of technology is a priority. The logic of patents is compelling: research is incentivised by the granting of a monopolistic period during which R&D costs can be recuperated. Guided by this principle, government strategy has so far revolved around establishing fast-track lanes for green IP, setting the stage for a green patent ‘arms race’ between the biggest companies. However, the double-bind of patent is that diffusion of technology in the short term is sacrificed to incentivise innovation in the long term. In the context of climate change, we must consider whether this is a bargain we are willing to accept. Do we want to see what happens when the ‘wicked’ problem of climate change meets the ‘tragedy’ of the Anti-Commons?

Certain game-changing technologies - wind and solar, for example - have already been developed but patenting of the underlying technology has limited their impact. Licensing has been too expensive to make follow-on development and cheap production of the technology commercially viable. High-profile cases have already brought this into stark relief. In 2014, Mitsubishi were blocked from importing wind turbines into Texas because of an infringement of a General Electric patent. More recently, GE themselves were unable to deploy the Halide X turbine in the US because of a Siemens Gamesa patent. There are calls to shorten the period of exclusivity for green patents, but these miss the point: if there can be no justifiable delay to technological diffusion in the present circumstances, how can there be time for patents?

Whilst often trumpeted as solutions, semi-open patent mechanisms are inadequate fixes to an inappropriate IP regime. Yes, compulsory licensing has proven effective when forcing pharmaceutical companies to transfer medicine overseas. However, green technologies are not chemical formulas and licensing may not be sufficient unless companies are also compelled to reveal the trade secrets and technical know-how required to replicate their products. Moreover, although open patent pledges seem ‘breathtakingly progressive’, they often come with ‘strings attached’ that limit their practical impact. Toyota, for example, only pledged patents relating to their fuel-cell drive system on the condition that companies purchase certain Toyota products and have proven quick to litigate to enforce their requirements.

Most importantly, strong patent regimes are not an equitable way to achieve the technical revolution required. Climate change is entangled with complex questions of social justice, historical reckoning and global inequality. Indeed, the UNFCCC is founded upon the concept of ‘common but differentiated’ responsibilities and any legal mechanisms divined to address climate change must be uncompromisingly fair. Low-carbon technologies are already desperately needed in many countries in the Global South, but almost 85% of green patents are held by companies in the US, Japan and Germany alone. It cannot be correct that a handful of companies in the Global North can dominate markets and diffuse technologies at their discretion. Although reluctant, the Global North political elite finally realised that IP rights over COVID vaccines must be significantly diminished to meet the humanitarian needs of people around the world. If we learned the lesson that ’intellectual property and pandemics don’t mix’, why have we been so slow to reject the patenting of climate-critical technology?

It is not enough, however, to muse over the failings of the patent regime without attempting to find practicable alternatives. Here I offer two suggestions. Firstly, to recenter the humanitarian importance of green technology, existing patent holders must be forced to compete for their rights within the framework of Human Rights. Indeed, both intellectual property and climate change are posited as rights issues and it should be no great leap to co-articulate them within established frameworks for balancing competing interests. Judicial review could become a powerful tool to adjudicate the appropriate extent of intellectual property on a case-by-case basis, paying special consideration to the humanitarian urgency of access to green technologies as articulated through the language of Human Rights.

More importantly, it is critical that governments look beyond patent to stimulate green innovation. Commentators often forget that IP rights are not actually rights but regulatory tools used by governments to influence market activities, and they are not always suitable. Increased public spending on R&D, public purchase of privately developed technology, or the award of ‘prizes’ may represent more effective and equitable ways to focus innovators on climate issues and avoid debates over property rights altogether. As long as compensation packages are designed appropriately, companies should take no issue with waiving property rights to access these schemes. Take the Green Impact Fund for Technology, which proposes compensating innovators vis-a-vis the emissions reductions their technology delivers: the more impactful the technology, and the further it is diffused worldwide, the more compensation the company receives. Sidelining patents worked for COVID vaccines and it could work for green technology, but governments must be bold in casting off orthodox legal discourse and pushing beyond the narrow boundaries of intellectual property.

It is clear, then, that strict patent regimes and climate change ‘do not mix’; it would be an environmental, social and ethical disaster to allow patent to reign over the green technology sector unchecked. Forcing patent holders to compete for their rights within Human Rights frameworks tempers the power of patents to ride roughshod over competing interests and places green patents firmly within the ethical context of an impending humanitarian disaster. Moreover, patent must be removed from its pedestal in favour of alternative incentive schemes that compensate the fast, wide and fair diffusion of technology. Fundamentally, climate change may have levelled an irrecoverable challenge at the theoretical foundations of patent law. In an increasingly tumultuous, pandemic-ridden, climate change-fighting, globalised world, we must ask whether the strong protection of individual property rights remains appropriate. I too wonder ‘what value [there will] be in a few pieces of paper granting a monopoly over some technology in a post-apocalytic world’? Patents only last for a fixed period of time; perhaps time is up for the patent regime itself.