IP can accelerate sustainable development

At the beginning of a new year, you may be looking for a fresh start, to make this year better than the last. This year, shortly after the closing of COP28 (UN’s Climate Change Conference) in December 2023, you may be wondering how you can contribute to sustainable development and a safer, more equal world.

Well, if you are an IP professional you can start by taking some time to reflect on the role of IP in your company, or, if you work in private practice, take the opportunity to talk to your clients about how they use their IP.

With innovation and technological development comes the possibility of protecting your IP, and the opportunity of sharing your IP rights with others, through different models.

Can your company share its IP rights and thereby accelerate sustainable development?

Sustainability for long-term value in business

Sustainability is important to all companies that want to create long-term value and continue being relevant in the future.

The market, your customers, as well as talent, already have expectations from companies to offer more sustainable products and act more responsibly towards the environment and society, and these kinds of expectations are likely to increase over time.

There are already legal requirements for larger companies to report on their activities from a sustainability perspective, and such corporate requirements can only be expected to expand in the future.

For example, following the implementation of the EU’s Corporate Sustainability Reporting Directive (CSRD), the reporting requirements will be more extensive, and more companies will be required to report, such as listed SMEs.

The role of the Sustainable Development Goals

Companies need to adjust their business proposition to meet changing market expectations and corporate sustainability requirements. Company policies relating to sustainability, or ESG (Environmental, social and governance) which is an alternative term commonly used, must of course align with all applicable laws and treaties, and may additionally be inspired by the Sustainable Development Goals (SDGs) adopted by the United Nations in 2015.

The 17 SDGs are said to balance the three dimensions of sustainability: the environmental, the social, and the economic dimension. These goals cover a broad span of conditions and human activities, including good health and well-being, gender equality, affordable and clean energy, climate action, protection of life on land and below water, as well as responsible consumption and production.

This also means that companies of virtually all business sectors can contribute to one or more of the SDGs, including but not limited to pharma, medtech, digital, greentech, chemtech, manufacturing and processing industries. SDG number 9 specifically states: “Build resilient infrastructure, promote inclusive and sustainable industrialisation, and foster innovation”, and is relevant to most businesses, not least tech companies.

Reaching the SDGs will require innovation and diffusion of sustainable solutions. While many companies can provide solutions that contribute to one or more of the SDGs, they can aim at distributing these solutions more narrowly or more broadly. This is where intellectual property comes into play.

Understanding IP models and their impact on sustainability

With innovation and development of technology comes the possibility of protecting your IP, and the opportunity of sharing your IP rights with others, through different sharing mechanisms, or IP models.

IP and IP rights are not included in the existing European sustainability reporting requirements. Nevertheless, your IP can be among the tools to achieve your sustainability goals.

The researchers of an international research project, “Intellectual Property Models for Accelerating Sustainability Transitions” ( IPACST), analysed different IP models and identified them as closed, semi-open, and fully open, respectively.

A closed IP model means no sharing of the IP, third parties get no access to the IP. Examples of closed IP models are trade secrets, and patents which are not licensed to anyone but only used by the patentee.

A semi-open IP model means that companies protect and share their IP, eg, by different licensing models (exclusive, non-exclusive, FRAND, cross-licensing), patent pools, and patent pledges with restrictive clauses.

A fully open IP model means that inventions and IP rights are shared for free, eg, royalty-free licensing. The IP is in the public domain and free to use for all. Examples of fully open IP models include open access licensing, defensive publishing, and expired IP rights.

Generally speaking, the more open an IP model is, the more likely it is that the associated technology is widely distributed. If the technology contributes to any aspect of sustainable development, you can achieve an increased sustainability impact by choosing a semi-open or open IP model rather than a closed IP model.

The spectrum of IP strategies depending on business phase

Different IP models and strategies are appropriate for different types of companies and at different stages of a company’s journey, ranging from the start-up phase to phases of medium and large corporations.

For many companies, it makes sense to choose a closed IP model during the start-up phase. The company uses its IP and IP rights to build value, ensure economic stability, and attract investors, and, by applying for patents, aims to obtain freedom to operate, and at the same time acknowledge the efforts of its engineers.

In later phases, having established a portfolio of IP rights, many companies see a business opportunity in sharing their IP with others, for example by licensing their patents, thereby getting an additional return on their investments in IP rights.

A recently launched patent pool is the ESG Smart Pool, so far including >250 patents owned by Siemens Energy and Maersk, covering electrical grid operations and energy systems.

Some companies, in particular large corporations, choose to make a patent pledge, offering one or more of their patented technologies for free, to make the technology available to more people. Examples of existing patent pledges include the Open Covid Pledge, and the Low Carbon Patent Pledge.

A mixture of different IP models can be used to share your IP. You may choose to apply a first type of IP model in relation to a first collaboration partner and/or in relation to a first technology that you have developed, while you apply a second type of IP model in relation to a second collaboration partner and/or a second technology that you have developed.

One example, taken from a case study published by the IPACST research project, relates to a start-up company within the e-mobility sector. After a few years of applying a closed IP model, during which the company built a reputation within their business sector, it started sharing its know-how on hardware in its products with start-up companies that provided complementary technologies or services within the same sector.

About a year later, it started applying open-source software and defensive publishing relating to a digital part of its products, and it released its IP relating to the charging of its products to drive standardisation of this technology.

Applying this mixture of IP models encouraged the entry of new firms and the creation of an ecosystem and infrastructure around its field of technology, helping to accelerate the sustainable development of the entire sector.

In this context, questions you may ask yourself include: Is your IP already among the tools you use to achieve your sustainability goals? How could you share your IP differently to accelerate sustainable development?

Ida Christensen is a partner at EIP in Sweden