By Kaitlin Mara
As more companies embrace environmental sustainability as an essential part of business strategy, policymakers have been questioning what they can do to create a policy environment conducive to green business. Intellectual Property Watch spoke to several green business professionals to get their view on the IP policy environments in which they work.

There is a demonstrated consumer interest in purchasing brands they feel are ethical: labels indicating corporate responsibility, such as “fair trade” or “organic” are increasingly commonplace and companies are beginning to awaken to the fact that “green” can also be profitable. But still to be navigated is the question of how “corporate social responsibility” can become part of a brand, and once branded, protected.

Intellectual property is “a very important differentiator to our clients” said Diana Verde Nieto of Clownfish, a London-based consultancy firm that offers marketing and business advice from an environmental science perspective. But there is still a balance to be struck, she said.

“We always aim to achieve a strong balance between gaining reputation by helping to solve a particular environmental issue, while providing the resources for other businesses and individuals to do the same,” she explained. “Being too exclusive with your solutions to solving an environmental issue can be seen as insensitive and inefficient to the global context, and therefore decrease brand reputation.”

It is about “balancing the ability to give a little bit of the IP away to spark people’s thinking and innovation, while positioning yourself as the best person/brand/organisation to support further exploration,” she said.

Leslie Pascaud from Added Value, a marketing and brand development firm, told Intellectual Property Watch a policy change that would facilitate her work is a more consistent form of international labelling and certification.

Consumers want to be reassured that an environmental standard means what they think it means, she said, but there are a “plethora of labels,” and not much international consistency. For example, “organic” is stricter in France than in the rest of Europe.

“People are beginning to question labels like organic and fair trade,” said John Luff, owner of Sustainable Marketing, an organisation he founded to combine his experience in corporate social responsibility and his experience in marketing with the belief that social value is the direction businesses must go into the future.

But “developing your own trademark for a particular environmental standard can be quite a feat,” said Nieto. This is partly because a standard tends to cover only one area of sustainability, “negating other imperative aspects” and leaving a company open to accusations of “greenwashing” – or painting a brand in the veneer of ecological sustainability but for marketing advantage alone.

It is also difficult to build green labels because the market is already quite saturated, and it requires a significant investment to see a payoff from the creation of new terms, said Nieto. Pascaud said that an international labelling system with verified terms, perhaps even unified terms that encompass several ecological and social issues, would be beneficial.

Ethics of IP Affect Branding

“There is a lot of discussion around IP in the sense of ethical issues,” noted Luff, citing the example of patent protection driving up prices for HIV/AIDS medication. This is also a brand-image issue.

Logos were originally created so that when economies grew beyond small towns and familiar faces, people would still know who to trust, said Luff, and long lasting brands have always “been based on integrity and ethics.” But somewhere along the way some brands started to believe communication could be spun to hide less wholesome parts of a product.

With electronic information in the public domain, said Luff, we have “an age of transparency at the speed of light”: if a company does something unethical on a Wednesday afternoon, by Thursday morning people all over the world are aware. This can have branding, marketing, and trademark implications, as increasingly those products and services businesses seek to protect “are having to build in corporate social responsibility.”

But there is an inherent tension. Some might say, “Maybe you shouldn’t protect [something] that’s good for the world: make it free!” Luff said. And at the same time, he added, there is the angle that behind every fake is a potential “unregulated sweatshop [and] if you don’t protect brands, you are encouraging outside-the-law activity.”

Patents, Scale, and Innovation

Carolyn Allen of California Green Solutions, an information clearinghouse for sustainable business and design, and of Sunshine by Design, a marketing and communications service for nature and green organisations, brought up the concern that IP protection is out of reach of many of her clients, who are primarily small and medium-sized enterprises.

A combination of steep legal and administrative processing fees plus the rapid pace of technological change raises doubts as to the real life value of a patent, she noted. Market pressure for constant and quick reinvention (especially in retail-to-consumer industries) means trade secrets can be a better route for smaller businesses.

But there is also a great deal of market pressure to legally protect ideas: companies cannot find investors to take their products to market if their technology is in the public domain, explained Allen, though innovators themselves do not necessarily oppose releasing their ideas. “Venture funds won’t look unless a company has patents,” she said, as they are “seen as a necessary part of the recipe for growth.”

Peter Horsburgh of clean technology venture capital fund Environmental Technologies Fund confirmed that intellectual property protection is “critical” to his fund’s decision to invest in a company. And Thaddeus Burns, legal counsel for environmental technology innovator General Electric, has stated (IPW, WIPO, 29 August) that IP protection is essential to his organisation’s business strategy.

Iyad Omari of environmental and clean technology venture firm Foursome Investments said the fund would “absolutely not” consider investing in a company that lacked IP protection. Companies that have well-protected technology will get much higher consideration in the marketplace, because the IP is something that is being “acquired on top of the business” itself, he explained.

In searching for investments, said Omari, Foursome looks for uniqueness that is protected. It is key that in jointly developed projects the ownership of the intellectual property that is created is “drawn up cleanly and clearly.” There would also be concerns if a potential recipient of the investment was set up, or looking to expand, into a place where the “IP infrastructure is not solid and robust.”

The only possible exception, said Horsburgh, is in very high-end technology – such as the cutting edge of the biotechnology sector – where know-how might be more useful than patents. If you have come up with something totally new, then applying for a patent might just be “letting the cat out of the bag.”

“You don’t want your information to get out too early,” said Allen, because your competitors can then counter your move. But there is a point where that stops being a good strategy, Horsburgh said, noting that ETF’s focus on more mature technology sectors makes IP protection essential.

Open Source?

While “patents are valuable” to preserving innovation models for the future, said Nieto, “it is important to plan for open sourcing.” Intellectual property could become “a time bound issue with first mover advantage� and become open source when it is appropriate for mainstream use.”

Allen speculated that an increasing interest on the part of information technology professionals in green technology, and particularly in green energy, might introduce the open source model to a new sector. Google is, for instance, looking into solar energy, she said, and many alternative energy technologies are so complex that computer technology – potentially open sourced – will be needed to run them.

Ultimately, “folks that work in the IP area have a lot to offer the corporate social responsibility industry,” said Luff. There are a lot of important questions: how can one protect IP in stateless societies, online environments, or how can one protect profits and also make the world a better place. There are not a lot of answers so far, but “it’s something we should be talking about.”

Kaitlin Mara may be reached at kmara@ip-watch.ch.