Climate change: is open sharing green tech part of the solution?
Innovation is one of the key solutions to the global challenge of climate change. To maximise the benefits of innovation, do innovators need to reconsider the role of IP rights in green innovation, moving away from the usual monopoly commercialisation of new technology, towards sharing freely for the greater good?
The need for innovation
In November 2021, the eyes of the world were on the UK for COP26. This was the most eagerly anticipated Conference of the Parties since COP21, which had produced the Paris Agreement. Opinion remains divided on whether the key goals of COP26 were achieved, and an analysis of the successes and shortcomings of the conference is beyond the scope of this article. However, there is now (if there was not before) global consensus that urgent action is needed to address the challenges of climate change and sustainability. Innovation will be at the heart of this.
Innovation in this context means the practical implementation of ideas that result in new products, processes, or ways of doing things that minimise, or eradicate altogether, the environmental damage being caused by existing products or processes.
We have already seen many examples of exciting green technologies emerging, particularly around renewable energy, carbon capture and battery technology, as well as AI tools to optimise energy resources, but there is a need for more. In light of the current global mood, we expect the pace of development of green technologies to increase significantly.
The role of IP rights
Intellectual property (IP) rights are pivotal to this green agenda. Typically, a business will protect its new technology using a bundle of IP rights. The business might patent a new and inventive product or process, obtain registered design protection for aspects of the appearance of the product, and seek to make its technology stand out in the market by bold branding, using registered trademarks.
These IP rights provide monopoly rights, giving the owner exclusivity around the invention, design, or brand with the ability to prevent a third party from encroaching on the scope of protection provided by the IP right whether or not the third party knew of its existence. Copyright, the key IP right in the protection of software, also protects against copying of original creations. These rights provide protection for long periods of time, and trademark rights can subsist indefinitely.
Once a business has obtained IP protection, it will usually look to commercialise the value in the technology and the related IP. A portfolio of IP rights gives a business a unique position in the market by guaranteeing that no-one else can provide the same technology for upwards of 20 years.
The business might implement the technology itself and/or license the related IP rights to third parties in return for royalty payments. Whichever method is chosen, the objective is financial return. Often, eye-watering levels of investment are needed in R&D and a business must recoup that investment, by generating profit, for its business model to work.
The purpose of IP rights is to encourage innovation. A business that knows it can recoup its investment in R&D by having commercial exclusivity will innovate, benefitting society as a whole.
Responding to climate change
The COVID-19 pandemic created an urgent need for new thinking around the protection and commercialisation of medical technology. We have seen unprecedented levels of know-how and technology being shared voluntarily between competitors, particularly around vaccines, diagnostic tools and anti-viral treatments.
This sharing is driven by the collective recognition that collaboration means quicker and more effective results; two heads (or more) are better than one in speeding up the development and rollout of urgently needed treatments. With the shared societal goal of preventing deaths from COVID-19 around the world, the sharing has been facilitated either by IP rights in the technology being waived or being licensed for a fixed duration on a royalty free basis.
Climate change is widely regarded as the next global emergency. In light of the global recognition that we need to find solutions to address climate change as a matter of urgency, should there be similar sharing of technology in the green space?
Voluntary sharing
The pandemic is not the only precedent we have around the voluntary sharing of technology and other material. The availability of open-source software is another example. Unlike ‘proprietary software’ where the source code is usually fiercely protected, the code in open-source software is made freely available for inspection, copying, modification, use, sharing or enhancement.
The obvious advantage of the free availability of open-source software is that it reduces the time and cost of development work that would otherwise be needed if the software had to be licensed on an individual basis. The quid pro quo, however, is that a standard open-source licence can sometimes stipulate that anyone who releases a modified open-source program must also release the source code for it, again for the wider benefit of all (sometimes referred to as a “copyleft” licence).
Similarly, “Creative Commons” licences facilitate the free distribution of a work access to which would otherwise be restricted by copyright. The copyright owner selects one of six standard royalty-free licences, depending on the level of control they want to maintain over their work.
They then publish the work, permitting third parties to use it subject to the terms of the selected licence. The result is that the copyright owner releases their work for the creative benefit of society at large and in return benefits by asserting their copyright, controlling how their work is used and minimising the risk of infringement. Open government licences work in a very similar way, giving the public access to government information or, for example, national archive documents that would otherwise be hidden from view behind a copyright or database right wall of protection.
What are the obstacles?
For some innovators, the suggestion that they freely share their know-how and technology is unacceptable. After all, if the business cannot rely on its IP rights and commercialise the technology in the usual way, how will it recoup its original R&D costs? The concern is that this will result in a disincentive for the business to innovate. Moreover, how can a company’s board be persuaded to sanction what appears to be a commercially unsound decision?
These obstacles may be overcome by keeping the goal of the greater good in mind.
Firstly, any business that is known to be making its technology freely available to tackle a public emergency will benefit reputationally. This benefit is likely to persist, adding value to the brand on a long-term basis with a resulting positive impact on the bottom line.
Secondly, free sharing of new technology may well help the business to achieve its own pledges around net zero and sustainability. One area of agreement at COP26 was around making private sector reporting on progress with net zero targets more stringent and transparent, and legislation at national level to implement that commitment is likely to be forthcoming soon.
Thirdly, and perhaps most importantly, innovators should bear in mind that this does not have to be an ‘all or nothing’ scenario. They could, for example, choose freely to share one aspect of their technology while retaining exclusivity in the rest. The societal benefit from this is that third parties with whom the technology is shared may be able to use this or develop similar technology more quickly as a result and on a royalty free basis. The innovator may also benefit by free access to this technology driving the opportunity for charging a licence fee to anyone who wants to access its related technologies, meaning that its technology is still an income generating asset for the business.
Similarly, an innovator who freely shares technology may benefit from income from other related sources. For example, a business may freely share a tool to diagnose severe illnesses or environmental damage. The obvious benefit to society of this freely available technology is that more people can secure diagnosis more quickly and receive or implement appropriate treatment to improve the quality of their lives or the environment.
The benefit to the innovator is that, as the holder of the patent for the treatment of the condition or issue, they will increase revenue from the sale of the treatment through better diagnosis. This approach requires innovators to take a holistic look at the interrelationship of their technologies and assess where open access can provide societal benefits whilst revenue might be generated in the technology journey as a whole.
A call to arms
The question of commercialising versus free sharing can be a dilemma for innovators. In the green space, a hybrid approach might strike a commercially acceptable balance, providing an incentive to innovate while acknowledging the urgent need to pull together to respond to a crisis that affects us all.
Cerys Wyn Davies is a partner at Pinsent Masons. She can be contacted at: cerys.wyn-davies@pinsentmasons.com
Gill Dennis is a senior practice development lawyer at Pinsent Masons. She can be contacted at: Gill.Dennis@pinsentmasons.com
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