Inside Views PFF On Cooling The World By Misappropriating Patent Rights
Published on 1 April 2009 @ 5:59 pm
Disclaimer: the views expressed in this column are solely those of the authors and are not associated with Intellectual Property Watch. IP-Watch expressly disclaims and refuses any responsibility or liability for the content, style or form of any posts made to this forum, which remain solely the responsibility of their authors.
Intellectual Property Watch
By Sidney A. Rosenzweig, visiting fellow, The Progress & Freedom Foundation
The latest United Nations conference on climate kicked off this week in Bonn, Germany. And once again, the issue of compulsory patent licences is on the agenda.
A compulsory licence occurs when a government decides that it “needs” a product; it then authorizes others to breach any patent rights associated with that product. A compulsory licence, then, is really not a licence, but it is compulsory. Most famously, these licences occur when a government deems certain drugs necessary to combat an epidemic such as HIV/AIDS. Because these licences are government takings, trade treaties such as the World Trade Organization’s TRIPS agreement restrict their use.
Compulsory licensing comes up in the climate-change context because certain countries – including China and India – want to take advantage of new technologies that mitigate or remedy environmental problems without having to pay. In November 2008, President Evo Morales of Bolivia advocated the use of climate-change-related compulsory licences “so that all countries can access products already patented and free of cost.” Compulsory licensing, however, is hardly free of cost.
One problem with these compulsory licensing proposals is that it is not at all clear what a climate-change-related technology actually is. Many, and maybe most, patents cover such “green” technologies. Any patent that ekes out a little more efficiency from an industrial process or a longer lifespan for a product can be thought to be green. Every generation of semiconductors, for instance, is greener than the last. The prospect of compulsory licences should cause all US industries to be gravely concerned.
When we speak of green technologies, though, we intuitively think of something narrower: wind farms, photovoltaics, and the like. The Obama administration has positioned these industries as a linchpin for the renewal of the US economy. Governor Schwarzenegger has done the same in California. Yet these are the industries that need patent rights the most. Like their biotechnology predecessors before them, these firms – many of which are small startups – have enormous capital expenses. Their principal lifeline is venture capital and their principal collateral is their intellectual property. Their patents are the foundation of their existence. Weaken that foundation and the house quickly crumbles.
Beyond the effects on domestic industry, compulsory licensing is inappropriate in the climate-change context. There will not be any one technology that will be necessary or sufficient on its own to solve climate change. Different solutions will have to compete in the marketplace. There is no reason to believe that the marketplace for these technologies is flawed. To the contrary, the very problem that has bedevilled drug pricing globally, causing some compulsory licences, is absent here.
Pharmaceutical companies have been loathe to sell their products at significant discounts in poor countries for fear of “reimportation.” The fear is that cheap drugs sold in poor countries will end up back in rich countries. That fear is misplaced for green technologies: The solar farm installed in India will not be put on a midnight barge to the United States. Accordingly, the market can adjust to the available resources of each nation. That is quite different from a bottle of pills sold from an Indian pharmacy online to a US consumer.
Under these circumstances, it is terrible policy to advocate for compulsory licences. Alternative methods exist to finance the deployment of green technologies, such as tax incentives and public subsidies. These alternatives ensure that the very entities upon which we rely to solve the world’s problems do not also bear the world’s burdens. Hopefully, the UN will recognise that.
Sidney Rosenzweig is a Visiting Fellow at The Progress & Freedom Foundation. Rosenzweig has over a decade of expertise in intellectual property law, with a focus on patent and copyright litigation, as well as electronic surveillance and computer fraud counseling.
Categories: Inside Views, Education/ R&D/ Innovation, English, Environment, Lobbying, Patent Policy, Technical Cooperation/ Technology Transfer, United Nations
1 April 2009 at 6:34 pm
Advocating against Compulsory Licenses in China and India while narry a word on their permissive use in the US itself smacks of vested interest ramblings dressed up as analysis.
The last country I know that tried to use CLs was whacked on the US IPR watch-list and retreated. And that was Thailand for important medicines. If life saving access cannot be granted what chance for long term climate damage.
The consequence of the writer’s analysis is ask China and India to cut emissions but make it unaffordable for them do so. Should we just let the planet burn as long as people make money?
And why should poor countries bear the cost of the needed technology when most of the emissions were emitted by developed countries?
1 April 2009 at 9:13 pm
With all due respect to the first commenter, U.S. practice toward compulsory licenses has been grossly exaggerated by proponents of compulsory licenses abroad. I’ve written about this before. See, for example, http://www.pff.org/issues-pubs/pops/2009/pop16.8patentstiglitz.pdf at pages 17-20, and http://blog.pff.org/archives/2009/03/jamie_loves_bogus_reliance_on_the_clean_air_acts_c.html#more
6 April 2009 at 4:51 am
With all due respect to the author, he has not answered the part of the comment relating to CL and environmental technology. I guess this would required a really twisted set of arguments. It is really discomforting and puzzling to see how all the cohort of IP lack any ingenuity in suggesting innovative suggestions in coping with an issue that is been recognized as a vital problem for the global society. I am sure they readily and enthusiastically subscribe to the concept of the , but then are completely unable to find meaningful ways to cope with it. What they are doing is transforming the village environment in a environment where the rule is the fight between bands and districts.
What the author suggests is , the classical highly innovative instrument particularly suited to the needs and capacities of developing countries.
An example of another way could be a UN trust funded by resources given by the main developed countries (that are still the major polluting actors) that will pay the IP rights to on account of the developing countries, the developed ones enforcing and applying directly in their own realm the connected IP rights. This would be a mean to give substance to the concept of sustainable development and aid.
Of course our experts would say this would be a cumbersome mechanism and open to distortions and disruptions of the market. The answer is simple as that: rules, integrity guided oficials are the only means to have a healthy market and healthy national/international mechanisms in order to avoid a .