PUBLISHED:September 12, 2010

Faculty collaborate for paper on intellectual property rights and climate change technology

In a forthcoming paper, Duke professors Jerome Reichman, Arti Rai, Jonathan Wiener, and Richard Newell examine the application of intellectual property rights (IPRs) to emerging technologies intended to curb the emission of greenhouse gases, such as biofuels, photovoltaic solar power, wind power, and hybrid cars. The paper, "Intellectual Property and Alternatives: Strategies for Green Innovation," was commissioned by Chatham House, a leading international policy research institute.

The authors find that the evolution of those existing technological innovations gives some clues as to how IPRs could hinder or promote healthy growth in green technology, but that specific mechanisms to ensure that growth will be hard to identify until international regulatory bodies reach agreements over how to price carbon. In the meantime, says Reichman, continuing to take a hard look at the patent system is vital.

“We want to think about patents because we don’t want to be 'Pollyannas,”' Reichman says. “We have to acknowledge that problems could happen stemming from the patent system. And we also need to examine the patent system because right now, in the absence of any external agreements on a carbon tax or some other method of pricing, patents are the horse that is drawing the cart. It is helping to drive the innovation in this kind of technology.”

Global interest in green technology has been rising steadily for more than 10 years and has been accompanied by an explosion in related patent applications, says Reichman, the Bunyan S. Womble Professor of Law and principal author of the paper. One study, he adds, showed that the rate of climate change innovation exceeded the aggregate rate of innovation in all other technologies by nine percent between 1998 and 2003. The discourse on IPRs has grown significantly since the Duke quartet began writing for Chatham House two years ago, he says. “When we began writing, there was almost no literature out there, and now there is too much, so we’re trying to get some perspective on it.”

The international dialogue on green technology IPRs also has become contentious, he says, pointing to the lead-up to the United Nations Climate Change Conference held in Copenhagen in December 2009. “Intellectual property became a deal-breaking component,” he says. “You had resolutions of Congress saying ‘Don’t touch our intellectual property.’ You had resolutions of developing countries about the obstacle that intellectual property was going to create. It became quite a brouhaha.”

Green technology vital to global greenhouse gas reduction
Fostering innovation that will lead to efficient green technologies is essential to reducing the cost of global goals regarding the emission of greenhouse gases, write Reichman and his colleagues.

“Modeling scenarios of cost-effective global climate mitigation policy suggest that … the cost of greenhouse gas mitigation through 2050 is … an annualized cost in the tens to hundreds of billions per year,” they write.

Investment in broad-based research and development for green innovation is crucial to keeping those costs as low as possible, they argue. “One study finds that if we were limited to technologies available in 2005, the present value cost of achieving [greenhouse gas reduction goals] would be over $20 trillion greater than with expected developments in energy efficiency, hydrogen energy technologies, advanced bioenergy, and wind and solar technologies.”

Intellectual property rights can encourage innovation — or hamper it
The researchers survey existing technologies to gauge the effects of patents and patent alternatives, finding an array of possibilities.

In the biotechnology industry, they find that patents appear to help small firms attract venture capital. Patents also seem to correlate with increased value in large, publicly traded firms in the pharmaceutical and medical-device sector.

However, they note that patents can cause significant additional cost in some cases. “Many of these obstacles consist of transaction-cost problems that can arise in the licensing necessary for follow-on innovation,” they write, in reference to overlapping patents. The use of patents can cause other problems for green technology, including low-quality patents that are too general or too specific and administrative processes that can lead to slowed innovation, all of which can lead to costly litigation.

The paper also discusses the need to avoid a pronounced disparity in the availability of green technology between rich and poor countries, a problem that arises in other areas such as pharmaceutical development.

Having worked extensively on IPR innovations to facilitate access to essential medicines in poor nations, Reichman notes that progress has been slow because patients who die due to lack of access generally go unseen by those who have that access.

“But with regard to environmental technology, there is a very good chance that we could all suffer,” he says. “As a collective action problem, it would seem that we all have a bigger stake in making this environmental technology transfer work.”

Faculty expertise
The four faculty members working on the Chatham House paper are well suited to address the complex environmental, legal, and policy ramifications of green technology IPRs.

Reichman has written and lectured widely on diverse aspects of intellectual property law, including comparative and international intellectual property law and the connections between intellectual property and international trade law. His articles in this area have particularly addressed the problems that developing countries face in implementing the World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). He also is one of the principal investigators on Duke University's Center for Public Genomics project that explores alternatives to the current intellectual property regime in genomics, including a possible microbial commons.

Rai, Duke’s Elvin R. Latty Professor of Law, is a leading scholar of patent law and policy, the biopharmaceutical industry, innovation policy, administrative law, and health care regulation. She rejoined her Law School colleagues in September after serving as administrator of the Office of External Affairs in the United States Patent and Trademark Office (PTO). In that capacity, she served as chief PTO liaison to Congress, other executive-branch agencies, and international institutions on matters of intellectual property and innovation policy.

Wiener, the William R. and Thomas L. Perkins Professor of Law at Duke Law School, Professor of Environmental Policy at the Nicholas School of the Environment, and Professor of Public Policy at the Sanford School of Public Policy, has written widely on U.S., European, and international environmental law and risk regulation, including the books The Reality of Precaution (forthcoming), Reconstructing Climate Policy (AEI Press 2003, with Richard B. Stewart) and Risk vs. Risk (Harvard University Press 1995, with John D. Graham), as well as articles in a diverse array of journals. Before coming to Duke, he worked on U.S. and international environmental policy at the White House Council of Economic Advisers, at the White House Office of Science and Technology Policy, and at the U.S. Department of Justice, serving in both the first Bush and the Clinton administrations. He helped negotiate the Framework Convention on Climate Change.

Newell is the Gendell Associate Professor of Energy and Environmental Economics, Environmental Sciences, and Policy at the Nicholas School of the Environment. He is a leading scholar in the economics of energy and environmental markets, climate change, energy efficiency and market-based environmental policy and currently serves as administrator of the federal Energy Information Administration.