Intellectual property is the throttle of the global innovation engine. Applied properly, the throttle can accelerate innovation and support business, governmental, and humanitarian goals. Set incorrectly, it can stifle innovation or exacerbate inequality. Intellectual property policy, therefore, is a key piece of the march toward a global, sustainable energy model. Yet curiously, little attention is being paid to intellectual property policies.
The remarkable dearth of published work or policy papers on intellectual property as it relates to renewable energy highlights the difficulty in developing it. Yet without a coherent policy, creating a global sustainable energy system will be, at best, slower than need be. The major barrier to developing such a policy is the conflict among business, governmental, and non-governmental organizational interests. However, just because something is difficult does not mean it should be ignored.
Yet that's what most policy-making bodies have chosen to do. Neither the Organisation for Economic Cooperation and Development (OECD), the United Nations nor any of their related organizations has developed intellectual property policies on sustainable energy. Individual nations also have been mostly silent on the issue, defaulting to their standard national policies on intellectual property. The issue of global sustainable energy, however, presents a special situation that a patchwork of national policies and transnational treaties cannot address.
United States and European Union Intellectual Property Policy
As global leaders, both the United States and European Union have important roles to play on the issue of intellectual property policy. Unfortunately, both have failed to lead efforts to develop a coherent policy. Instead, each has relied on its current intellectual property policies.
In the US, patents are granted for a period of 20 years from the date of application, endowing the holder with the right to exclude others from selling products made by the patented process or of the patented design. To be granted a patent, an invention must satisfy three criteria: utility, novelty, and non-obviousness. Critics of US patent policy point out that when US courts granted the right to patent methods of doing business and software they created patent thickets, backlogging the US Patent and Trademark Office (USPTO) with years of applications. Moreover, many critics believe it is simply too easy to get a patent in the United States.
In 2007, however, the US Supreme Court issued a landmark intellectual property decision in KSR International Co. v. Teleflex Inc., raising the bar for obviousness by ruling that simply combining elements from the public domain is insufficient grounds for a patent if it yields predictable results. This ruling has important ramifications for renewable energy intellectual property because most of the fundamental elements of sustainable energy science have long been off patent. In many cases, improvements in sustainable energy infrastructure are incremental and built off this mature, fundamental science. Or they result from a combination of older technologies or previous technology that has been repurposed. The result is questions about whether advances in the area are novel enough, and if they build off public domain science or still-patented work.
In the European Union, the intellectual property policy situation is complicated by the fact that as a transnational body, the EU is composed of nations with their own intellectual property histories and policies. The EU has made a concerted effort to standardize its industrial property rights with policies designed to support innovation while still protecting individual rights. Yet, the EU has made little effort to lead a worldwide reformation of IP policy.
There are at least three reasons why any governments would be reluctant to lead the effort to develop a coherent global policy on intellectual property for sustainable energy:
• No precedent exists for developing such a policy. Intellectual property policies have been developed on a national level or on a one-to-one treaty level known as harmonization.
• Nations and corporations have a vested interest in withholding information about the economic costs and benefits of patents. Companies want to maintain secrecy for obvious financial and business reasons. Governments have a role in financing research and development for a variety of social, economic, and military reasons, which they are often not interested in divulging.
• Most nations with strong intellectual property policies see patents as an individual right, protected by the rule of law. And even though many patents are granted to individuals working for universities or companies, it is often these assignees that benefit from patents granted, not individual inventors. In addition, governments tend to err on the side of the "home team" and craft policies that benefit companies residing within their borders.
Current and Emerging Policy Drivers
Beyond the various national intellectual property policies, several other, non-governmental, drivers are at play that in some ways evolved in the sustainable energy market because of the lack of over-arching policy direction from governmental organizations. Curiously, in other ways they are the direct result of what existing national patent policy does exist.
To achieve their business objectives, companies have been making greater use of two different intellectual property concepts: patent pools and open source work.
Patent pools, which were used as far back as the 1800s to mitigate risk and save time and money, are consortiums of companies that band together to allow joint, non-exclusive licensing of intellectual property. Patent pools make sense in sustainable energy development because of the large number of organizations attempting to develop similar technologies or products that must work seamlessly together within the existing power infrastructure. This is especially important because a migration to sustainable energy sources will involve the decentralized generation. With patent pools, companies can develop innovative designs with less concern about whether and how they will integrate them into the grid.
An almost contrary approach called open source is usually associated with computer software, particularly the Linux operating system. The idea is to freely license or release into the public domain the science or technology so that anyone with the skills can modify or add to the core technology. Open source attempts to take advantage of the emerging recognition that "most of the brightest people work somewhere else," a realization that is fundamental to a corollary movement called "open innovation," by which companies attempt to foster connections with collaborators outside their organization.
The open source model works because many new design ideas are aggregates of several prior designs. As a result, they require expertise from a wide variety of engineering disciplines, but without direct monetary reward for participating in the project. As SETI@home and Grid.org have demonstrated, this need not be an obstacle in cases where the project is working toward a greater good, as the development of renewable energy clearly is.
Coherent Intellectual Property Policy Components
Pointing out a system's weaknesses is easy; developing solutions is where the real work is done. Developing a coherent intellectual property policy for renewable energy is no different and requires several key components:
• Standardize the definition of what is patentable. Nations typically do this on a case-by-case basis. A broader, multi-national agreement would clearly be preferable.
• Make patent review as quick a process as possible. In the US a "Petition to Make Special" can speed the prosecution of an application that "contribute[s] to the development or conservation of energy resources."
• Ease the way for technology licensing and acquisition. Again, easier cross-border licensing would aid global energy infrastructure development.
• Facilitate collaboration among organizations. Easing the ability to form international joint ventures, for example, would lower barriers to participation for organizations of limited means like university development offices and start-ups.
• Strengthen intellectual property rights in developing nations. While this idea has its limits, patent protection should not inhibit innovation.
Developing a coherent global intellectual property policy is critical to the successful migration to sustainable energy. Sadly, there is very little leadership in this area currently. With greater attention to the subject, thoughtful policy development, and concerted effort on implementation, this can be overcome.
About Nerac
Nerac Inc. (http://www.nerac.com) is a global research and advisory firm for companies developing innovative products and technologies. Nerac analysts deliver custom assessments of product and technology development opportunities, competitor intelligence, intellectual property strategies, and compliance requirements through a proven blended approach to custom analysis: review of technical knowledge, investigation of intellectual property, and appraisal of business impacts. Nerac deploys analysts in diverse disciplines to help clients discover new applications, serving as a catalyst for new thinking and creative approaches to business problems or identifying strategic growth opportunities.
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