General Electric’s View On Green IP And Technology

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General Electric’s Ecomagination is an initiative launched in 2005 as a gathering/focal point for extant green technology as well as new research and development into clean technology. Ecomagination’s products include technologies for cleaner energy, notably wind turbines for collecting wind energy, photovoltaic tiles for solar energy, and a series of ‘Jenbacher’ engines using waste products as fuel, as well as innovations for greener transportation, and new techniques on water purification.

Carl Horton, chief intellectual property counsel at General Electric, told participants at the May European Patent Forum 2008 focussed on issues of climate change that the “patent system is one of the necessary prerequisites to inspire companies to do the right things about climate change.” Intellectual Property Watch‘s Kaitlin Mara caught up with him at the forum along with Thaddeus Burns, senior intellectual property counsel at GE. Read our conversation below:

Intellectual Property Watch (IPW): You said that the patent system is essential to incentivising green technology, but it seems as though Ecomagination uses a lot of already existing technology—what are the patentable outcomes of Ecomagination?

Thaddeus Burns (Burns): When we launched our Ecomagination strategy in 2005 we made four commitments: First, we would double our investment in eco-friendly technologies to US$1.5 billion by 2010. We have already exceeded the one billion dollar mark. Second, we would double our revenues from Ecomagination products to $20 billion by 2010; today we have a range of 60 certified Ecomagination products and have raised our revenue commitment to $25 billion. Third, we committed to reduce our own GHG emissions and energy usages by 1 percent of 2005 levels, which represents a 30 to 40 percent reduction in real terms. Fourth, we committed to keep our stakeholders informed of our progress. Our third Ecomagination report was published on May 28th.

Carl Horton (Horton): A big chunk of Ecomagination is not about patentable technology, it’s about taking responsibility for our own actions, as a corporation, as individuals within a corporation. GE has teams in our locations looking at us as consumers, not just as producers. We’ve installed halogen lights and made efforts to cut our emissions. It’s about being a good corporate citizen with transparency to the market.

IPW: Advanced market commitments are often discussed in public health as a way to incentivise inventions for the public good. Is there any role for that in environmental technology? [Advanced market commitments are binding contracts guaranteeing a market if a technology is developed]

Horton: This is what we have been talking about at this Forum, what could it take to change the game. One of the things that is unpredictable about a new technology is not knowing if there is going to be a market for it. So often you’re loathe to invest to develop or perfect a new technology with that uncertainty, but if you know there’s a market, the investment is pretty straightforward, and there will be plenty of people willing to invest. Basically, if you can mitigate the risk, then investing in these technologies becomes more palatable. It changes the economic equation much sooner so you can commit earlier on [making clean technology].

Burns: Supportive government policy is key to shaping the market for many clean technologies, especially in the transportation and energy sectors. Through USCAP [United States Climate Action Partnership, a group composed of businesses and environmental groups that is lobbying the government for stronger legislation to fight greenhouse gasses], GE and the over 40 other representatives from industry and NGO groups are actively involved in presenting the case for legislation around carbon emissions.

There is a lack of empirical research supporting the narrative that IP is a problem. We want the debate on this issue to be evidence-based. We are an evidence-driven company with rigorous standards for how we inform our decisions. And we hope that policy in this area would be made the same way. Given the size of our investments, the length of time for development and the stakes, we need to get this right the first time.

IPW: What do you make of arguments that intellectual property is in the way of technical application to combat climate change?

Horton: The rhetoric we hear people saying, that IP is the problem, I don’t understand it. I don’t see how patents are stopping anybody from making a wind or a gas-fired turbine. We don’t believe the premise, we think it’s hype.

There are other ways you could reform policy to get those technologies into the market; reshaping the IP paradigm is not the way to do it because it isn’t the problem. But there are other things you can do, such as these advanced market commitments, such as lowering tariffs around certain tech so you could make [key technologies] more affordable.

Regarding the compulsory licensing discussion: people looked at the pharmaceutical sector and said the reason people are dying in Africa because the cost of AIDS drugs is exorbitant for economies in developing countries, and they’re patented so no one else can manufacture them. In that scenario, one patent or a few patents cover a drug, though there was a lot of research and development going into the drug. And even there, IP is only one of many factors.

In the environmental technology field, the situation is different. There are, for example, hundreds if not thousands of patents on a given wind turbine. And some of that technology goes back 20, 40, 50, 60 years.

IPW: So a lot of those patents are out of date?

Horton: Yes, anyone can go out and make a basic turbine. That can be done freely. It’s the things that are making them more efficient, more profitable that are on patent. But even if I gave you access to that technology that is under patent, you would still have to find a way to manufacture the basic technology, which you may or may not know how to do.

And unlike a drug, you cannot replicate it. For a drug, once you work out a compound, you can replicate those pills for pennies. With a turbine, there’s a huge amount of metal, a huge amount of labour, you can never manufacture a turbine for cheap. There’s nowhere near the profit margin around a turbine that there is around medicine. A lot of things do not translate from the pharmaceutical paradigm.

IPW: Thank you.

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