How IPR protection can boost green innovation

Innovation has transformed the world. But what spurs innovation? Evidence shows that intellectual property rights (IPR) promote innovation by rewarding innovators. Now another transformation beckons, albeit with green technology. International treaties related to climate change have been adopted, and national targets set, but unless there is technological advancement, it will all be in vain.

What needs greater attention in tackling climate change is the unsung hero of innovation — intellectual property. On the occasion of World Intellectual Property Day 2020 today, we look at the role of IPR protection in boosting green innovation. 

There is no single commonly accepted definition of green innovation or technology. It varies from abatement of climate change to adaptation, depending on the goal. But in general, it can be described as environment-friendly. As defined in Chapter 34 of Agenda 21 (The United Nations Programme of Action from Rio, 1992) and referred by the World Intellectual Property Organisation (WIPO), green technologies are environmentally sound technologies that protect the environment, are less polluting, use all resources in a more sustainable manner, recycle more of their wastes and products, and handle residual waste in a more acceptable manner than the technologies for which they are substitutes. They include “know-how, procedures, goods and services, and equipment as well as organisational and managerial procedures.”

Green technology is generally thought of as unreliable and expensive. Souto and Rodriguez (2015) have shown in their research that the major obstacles in environmental innovation are lack of funds, high cost of innovation and uncertain demand, which is consistent with some previous studies. Some studies show that IP protection promotes development, commercialisation and distribution of green technology by protecting and rewarding innovation. It also helps in obtaining funding. An analysis by WIPO showed that from 2002 to 2012, the number of PCT patent applications published for renewable energy increased by 547 per cent. This period witnessed a huge investment in the sector.

Advanced economies (AEs) have long been investing in research and development of green technology. Developing countries neither have huge resources and innovation capabilities for technology development, nor capital to buy or license the technology from the AEs. These countries often resort to compulsory licensing. India’s National Manufacturing Policy also promotes compulsory licensing of patented green technologies for technology transfer, where necessary.

Article 31 of the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement permits compulsory licensing in “case of national emergency” or for “public non-commercial use”. However, determining the rationale for compulsory licensing is complicated and the debate whether green technology can be considered a national emergency and qualify for compulsory licensing is not yet settled. Further, such licensing would discourage innovation and could expose the country to potential economic sanctions from AEs. India has been on the US priority watch list over this issue for a while. While affordability is an important concern for developing countries, compulsory licensing may also not be an effective way for large-scale green technology transfers. There is a need to find alternative ways. Some argue that relaxation in tariff and non-tariff barriers may be more beneficial. 

Apart from technology transfer, India also has huge potential for green innovation. In this regard, India could take a cue from AEs that have introduced measures to fast-track “green” patent applications. Usually, it takes several years to obtain a patent. However, under fast-track programmes, the time has been compressed to a few months, and the application process has been simplified. A “green channel” was first introduced in the UK in 2009. Later, Australia, Israel, Japan, Korea, the US, Canada, Brazil, China and Taiwan also launched similar programmes. At present, India has an expedited patent grant provision for start-ups. It may benefit by introducing a green channel for expedited grant of patents for green innovation. 

The role of international organisations such as WIPO is crucial in green technology transfer. WIPO has already been proactively facilitating this through its online platform for technology exchange called WIPO GREEN by connecting providers and seekers of environmentally friendly technologies. India must make the best use of its clout with WIPO and other international organisations in green technology transfer.

Green technologies like solar cells and electric vehicles have taken more than a century from first invention to profitable commercialisation. It is expected that the transition to a green economy may take several years, but the process can be accelerated by adopting favourable policies and incentive mechanisms. The damage that unclean technologies have wreaked on earth and its inhabitants has never been so starkly evident than in the restoration of clean air and water during the Covid-19 lockdown. On this World IP Day, the significance of IP in promoting green innovations in achieving the goal of a clean sustainable world must be strongly reiterated.

Mayaram is a former finance secretary of India, and chairman, CUTS Institute for Regulation & Competition. Sodhi is a senior fellow at the institute