Intellectual Property, Innovation, and the Environment (2014) edited by Peter Menell and Sarah Tran
A Review by Matthew Rimmer
Peter S. Menell and Sarah M. Tran (ed.), Intellectual Property, Innovation and the Environment, Cheltenham (UK) and Northampton (MA): Edward Elgar, 2014, 756 pp Hardback 978 1 78195 160 6, http://www.e-elgar.com/bookentry_main.lasso?id=15063
There has been a longstanding deadlock over intellectual property and clean technologies in international climate talks. The United States — and other developed countries such as Japan, Denmark Germany, the United Kingdom, Australia, and New Zealand — have pushed for stronger and longer protection of intellectual property rights related to clean technologies. BASIC countries — such as Brazil, South Africa, India, and China — have pushed for greater flexibilities in respect of intellectual property for the purpose of addressing climate change and global warming. Small island states, least developed countries, and nations vulnerable to climate change have called for climate-adaptation and climate-mitigation technologies to be available in the public domain. In the lead-up to the United Nations Climate Summit in New York on the 23rd September 2014, it is timely to consider the debate over intellectual property, innovation, the environment, and climate change.
In a new collection, Intellectual Property, Innovation, and the Environment, the editors Peter Menell and Sarah Tran provide a comprehensive guide to the history and the evolution of the debate over intellectual property law and the environment. In the introduction to the collection, the editors consider the interplay between intellectual property, innovation, and the environment:
Technological innovation has long been widely viewed as a critical means of reducing environmental pollution, conserving energy, and raising standards of living. Yet the role of intellectual property — the primary general regime for promoting innovation — in advancing pollution control technology and conserving energy was not widely perceived until relatively recently. Furthermore, concerns have been raised that intellectual property protection could well slow the diffusion of technologies that address environmental problems (ix).
In particular, Menell and Tran’s collection ‘traces the emergence of intellectual property as an environmental protection policy lever, examines the interaction of market failures at the intersection of technological progress and environmental protection, discusses concerns that have been raised about the use of proprietary rights in the service of environmental protection, and considers alternatives to intellectual property — such as subsidies and prizes — as encouragement for advances in environmental protection policies’ (ix). Menell and Tran stressed that there is a need to properly consider the role of intellectual property law in environmental regulation: ‘Although only obliquely recognized during the first two decades of the modern environmental era, intellectual property has always been a vital part of the environmental protection system’ (ix).
The two editors have extensive expertise and experience in the field of intellectual property, innovation, and the environment.
Professor Peter Menell is the Koret Professor of Law at the Berkeley School of Law at the University of California and the Co-Director of the Berkeley Center for Law & Technology. He has written extensively on intellectual property law, property law, environmental law, and information technology law. Peter Menell is a polymath and an intellectual whose work cuts across multiple technological fields. His previous edited works include Intellectual Property in the New Technological Age (Aspen Law & Business, 6th ed. 2012), Software and Internet Law (Aspen Law & Business, 3rd ed. 2006), Environmental Law (Ashgate Publishing 2002), Property Law and Policy: A Comparative Institutional Perspective (Foundation Press, 1998), and Environmental Law and Policy (Aspen Law & Business 1994). In addition, Peter Menell has been involved in an amicus curiae brief to the Supreme Court of the United States in the landmark Grokster case.
Sarah Tran was an Assistant Professor of Law at the Southern Methodist University, Dedman School of Law in Dallas, Texas. Tragically, she passed away at the age of 34 in February 2014. Sarah Tran was widely respected as innovative teacher and researcher in respect of intellectual property and the environment. Her work was particularly interested in improving the operation of the patent regime to stimulate clean technologies and renewable energy. Sarah Tran was noted for her dedication, engaged in online teaching, while suffering from acute leukemia. Her University has remembered Tran as ‘a shining example of brilliance, tenacity, an adventurous ‘can do’ spirit, dedication to family, students, fun, love and life.’ Menell has paid tribute to his co-editor in an elegiac piece.
The collection gathers together a canon of intellectual property scholarship on the environment and climate change. This is an important service — because the field is important and significant, it has often been neglected and forgotten. The environmental dimensions of intellectual property law have too often been elided and erased in contemporary scholarship. This collection should be essential reading for lawyers, economists, and policy-makers, working in the fields of renewable energy, and climate change. Michael Madison has recently argued that there is a need for academics, students, and policy-makers to reacquaint themselves with the ‘lost classics’ of intellectual property. Citing Santayana, he laments: ‘Those who cannot remember the past are condemned to repeat it.’ Madison maintains that there is a need for legal scholarship to acknowledge its intellectual debts: ‘[I]ntellectual property law scholarship would be strengthened by better and more consistent acknowledgement of earlier work.’
- The History of Pollution Control
The first part of the collection provides a historical perspective upon promoting innovation in pollution control through regulation and market-based instruments. The editors charted the rise of the environmental movement in the 1960's and the establishment of a broad federal system in the United States designed to protect air, land, and water. Menell and Tran note that ‘neither the environmental protection standards nor the implementing regulations directly addressed the role of intellectual property in supporting technological advance’ (ix). The collection considers three classic works. There is a 1977 paper by D. Bruce La Pierre on ‘Technology-Forcing and Federal Environmental Protection Statutes.’ In a 1981 piece, Richard B. Stewart offers a conceptual framework for ‘Regulation, Innovation, and Administrative Law.’ In a 1988 article, Bruce Ackerman and Richard Stewart explore the democratic case for market incentives in reforming environmental law. Menell and Tran reflected upon the era: ‘This literature largely overlooked the particular role of intellectual property in promoting environmental protection.’
2. The Economics of Intellectual Property and the Environment
The second part of the collection considers the economic foundation of intellectual property protection in general and its interplay with environmental protection. Menell and Tran note: ‘Viewing environmental and innovation market failures together reveals an inherent policy tension: while motivating the development of better environmental technologies, the patent system potentially constrains the diffusion of technological advances that seek to ameliorate environmental harms’ (xi). The editors are also conscious that ‘strong protection for pioneering technology could well limit the improvements and follow-on innovations critical to further technological advance and technological diffusion’ (xii).
The collection includes the classic 2005 paper ‘A Tale of Two Market Failures: Technology and Environmental Policy’ by Adam Jaffe, Richard Newell, and Robert Stavins. The writers comment:
Problems such as global climate change are too important — and the potential positive technological externalities are too clear — to abandon policy efforts simply because they are difficult. Government must remain engaged in technology policy, but it should try a variety of ways to structure policy in this area to minimize the known policy problems. Models are already working, such as public-private partnerships that subsidize research but retain significant elements of market forces in determining which technologies to pursue (234).
The economists were of the view that ‘we should embrace the fact that technological change is a long-term process, and we ought to be willing to take a long-term view’ (235).
More recently, Adam Jaffe has been involved in research on the diffusion of green technologies, with collaborators from New Zealand.
Claude Henry and Nobel Laureate in Economics, Joseph Stiglitz, have also conducted significant work in the field. In a 2010 paper, the economists noted:
In the past 15 years, a new concern has risen to the top of the global agenda: global warming. Reducing global carbon emissions to prevent global warming will require an agreement between developed and developing countries. The global intellectual property regime that was imposed on developing countries has made reaching such an agreement even more difficult. The current flow of funds from developing to developed countries in royalties obviously undermines their ability to bear the costs; but even more important, it makes developing countries wary about signing another agreement that might increase such payments. That might happen if they sign on to obligations to reduce emissions that could only be obtained through usage of American (or European) technology.
The pair observed: ‘The worry is that other countries might be mired in the legacy of a flawed intellectual property system, embraced in their response to TRIPS’. In their view, ‘That would be a tragedy both for the health and well-being of the citizens of these countries and for the prospects of their sustainable development’. The economists maintained that there is a need to reform intellectual property law to promote the diffusion of sustainability-enhancing inventions.
3. Intellectual Property and Environmental Protection
The third part of the collection explores using intellectual property to promote environmental protection. The editors noted: ‘In the 1990s, scholars came to recognize that intellectual property protection provided a potential tool for pursuing environmental protection.’
One of the pioneers in the field of intellectual property and environmental law is Michael A. Gollin, a law partner at Venable LLP and a faculty member of Georgetown University’s McDonough School of Business. He has written a number of prescient articles and books upon the subject, which are worth reflecting upon.
In a groundbreaking article published in the Harvard Journal of Law and Technology in 1991, Michael A. Gollin considered practical ways to improve environmental protection by promoting innovation in beneficial environmental technology through the application of reformation of intellectual property laws. He concluded from his survey of intellectual property law and environmental law:
Regulators, industry, private citizens, and their counsel need to balance economic and technical progress with environmental protection. Intellectual property law can provide helpful means for identifying, selecting, and encouraging environmentally beneficial technology that is profitable. Coordination of environmental regulation and intellectual property laws can help achieve the desired balance between progress and protection. Environmental regulation to date has been more effective at restricting the use of harmful technology than at promoting innovative beneficial technology. Intellectual property law is a well-established system for promoting invention and facilitating commercial development. Therefore, application of intellectual property principles can promote innovation of environmental technology. Intellectual property law can be applied to improve environmental protection in several ways.
Gollin concluded: ‘Intellectual property managers must be conversant with environmental affairs, because the market for environmental technology is largely defined by laws and regulations’. He suggested: ‘By the same token, environmental managers should consider the existence of licenses, patents, trade secrets, and other intellectual property assets in selecting the best compliance strategies for their companies’.
Natalie Derzko wrote an influential paper on intellectual property and environmental law for the Harvard Environmental Law Review in 1996. She contended that there were a number of reforms, which could foster clean technology:
There are a number of steps that can be taken to create a legal and regulatory climate that encourages environmental technology development. First, an environmental patent akin to the German and Japanese utility patents should be introduced to encourage environmental technology innovation and to accelerate the process of diffusion. Second, both command-and-control and marketable permit systems should remain as important tools of environmental policy. Each creates different valuable innovation and diffusion incentives for the polluting industry and the pollution control industry. Where the command-and-control approach is relied upon, however, performance standards should be utilized instead of technology standards. Third, the innovation barriers that exist within the command-and-control and market-based systems must be removed. In the case of the command-and-control system, the permitting process must be standardized, must provide a testing system and must include an adequate soft-landing policy. In the case of the marketable permit system, there must also be a soft-landing policy as well as a way to test new environmental technologies. Furthermore, extensive self-reporting and other enforcement mechanisms must be established. Finally, as for the diffusion of new environmental technologies, change is necessary both at the national and the international levels. At the very least, information clearinghouses must be created and monetary incentives should be provided to developers of new environmental technology. The barriers to diffusion created by intellectual property issues must also be eliminated.
Derzko concluded that ‘new environmental technology must be created to control and reduce the pollution that has been generated as industrial development continues’. She emphasized: ‘To this end, the intellectual property system and the regulatory framework must be modified to facilitate and encourage the necessary development of environmental technology.’
In her 2012 article, ‘Expediting Innovation’, Sarah Tran considers administrative reforms in respect of the examination of green patents. She provides a critique of the operation of the Green Technology Pilot Program. She called for an overhaul of the processes of the United States Patent and Trademark Office: ‘My thesis is that the PTO should reduce the obstacles that prevent applications involving beneficial green technologies from being expedited and select more categories of high-priority technologies for accelerated review.’
4. Intellectual Property and the Diffusion of Clean Technologies
The fourth part of the collection examines intellectual property and concerns about the diffusion of improved environmental protection technologies. This part contains seven articles in the field.
In his 2011 article on ‘The Patent System and Climate Change’, Joshua Sarnoff considers critical national and private policy levers to mitigate the adverse effects of patents for climate change technologies. He contends: ‘Governments will also need to decide what kinds of creative discoveries to treat as patent-eligible inventions, what parameters to adopt for various patentability doctrines, what exceptions to create to create to patent rights, and whether and how to regulate competition and prices in markets for patented climate change technologies.’
Sarnoff has six key substantive recommendations. First, he calls for broad patent eligibility exclusions for basic research and development to direct innovation to more creative applications. He reflects: ‘Presumably, climate change is now recognized as a sufficiently serious problem that excluding patentability for environmental sound technologies that make significant contributions to climate change would help to avoid serious prejudice to the environment’ (425). Second, Sarnoff calls for the robust interpretation for the defence of experimental use and inter-operability exceptions: ‘The result is likely to be greater technology transfer as well as greater development of local scientific and innovation capacity in the developing South’. Third, Sarnoff recommends the retention of research and humanitarian licensing powers. Fourth, he calls for presumptions in respect of non-exclusive licensing. Fifth, Sarnoff wants expansive, clear march-in criteria in respect of federally funded inventions. Finally, he is in favour of expansive exhaustion criteria in respect of parallel importation.
Summing up, Sarnoff concludes: ‘Given the magnitude of the climate problems to be addressed, continuous supervision will be needed to determine whether supplemental international approaches should be adopted to further stimulate the innovation and technology transfer pipeline’ (446).’
In his 2012 piece on ‘Standards, Patents, and the National Smart Grid’, Jorge Contreras considers the complex intellectual property questions associated with developing a National Smart Grid. He contends: ‘Securing the nation’s energy independence, and improving the reliability, security, and capacity of the national electric grid are urgent national priorities’ (481). Contreras was concerned, though, that ‘the viability of the Smart Grid could be jeopardized by the opportunistic enforcement of patents covering key standards that ensure the Smart Grid’s interoperability’ (481). He was worried about the growing problem of patent trolls affecting key infrastructure: ‘Market-based private solutions have proven ineffective to stem the rising tide of patent litigation in standards-intensive industries such as telecommunications and semiconductors’ (481). Contreras explores various policy options — including Smart Grid selection preferences and patent policies, march-in rights, government use, compulsory licensing, injunctive relief, and patent pools.
The late Professor John Barton from Stanford Law School made an influential contribution to the debate over intellectual property and climate change. Building upon his work on intellectual property development, Barton explored intellectual property and access to clean energy technologies in developing countries. In particular, he offered an analysis of solar photovoltaic, biofuel, and wind technologies in a report for the International Centre for Trade and Sustainable Development.
Professor Eric Lane from the Thomas Jefferson School of Law has made a notable and distinctive contribution to the literature on intellectual property and clean technologies — both his book, Clean Tech Intellectual Property, and his Green Patent Blog. His work is particularly focused on intellectual property management and commercialisation — looking at patents and clean technologies, green trade marks, and consumer law. The Menell and Tran collection features two articles by Eric Lane. The first ‘Keeping the LEDs On and the Electric Motors Running: Clean Tech in Court after eBay’ focuses upon patent litigation, non-practising patent entities, and clean technologies. The second, ‘Clean Tech Reality Check’, looks at international climate law and technology transfer. Eric Lane argues that intellectual property rights are not necessarily a barrier to technology transfer.
In a 2010 article, Bronwyn Hall and Christian Helmers explored the role of patent protection in technology transfer of clean technologies. The writers give a sense of the diversity and the complexity of the issues at stake in the field:
Climate change-related technologies comprise a vast range of fundamentally different technologies addressing distinct climate change-related problems. Patenting propensities and patent effectiveness differ substantially across different technological fields. This makes it highly unlikely that a single, universal mechanism characterizes the nexus between IPRs and the generation and diffusion of green technologies within countries. Also, since different technologies are appropriate for different countries depending on their location, industrial structure, and stage of development, it is highly unlikely that a single, universal mechanism characterizes the nexus between IPRs and the generation and diffusion of green technologies across countries (614–615).
Hall and Helmers believe that ‘IPRs can address the gap between private and social returns to innovation that results from the public good characteristics of knowledge’ (615). Nonetheless, Hall and Helmers emphasize that other policy interventions are required to address environmental externalities: ‘Therefore, the discussion of IPRs and green technology has to be framed within the setting defined by policy interventions specifically designed to address environmental externalities’ (615).
In his 2006 article, ‘Sharing Potential and the Potential for Sharing’, Jason Wiener explores open source licensing as a legal and economic means for the dissemination of renewable energy technology. He contended that open innovation would work well with clean technologies:
The open source software movement is coming of age and expanding into industries beyond its roots in the software field. Valuable innovations in the biotechnology, applied software, mechanics, and mechanical energy technology fields have been developed under the open source methodology. Within the international environmental treaty framework, states have obligations to promote the transfer and dissemination of renewable and environmentally-friendly technology . Governments should employ the panoply of legal and economic tools available under and sanctioned by international law to meet consensual multilateral obligations. Open source technology initiatives should be nurtured by public incentives, public sector procurement policies, and legal alternatives to traditional conceptions of intellectual property rights. (651-652).
Such an option has contemporary resonance — with the announcement in 2014 by the electric vehicle company Tesla Motors that it would make its portfolio of patents available under an open source licensing model.
5. Climate Prizes, Technology Inducement, and Carbon Pricing
The fifth and final part of the collections considers alternatives to intellectual property for stimulating advances in environmental protection. The editors highlight that ‘public policy should seek to increase the perceived cost of fossil fuels relative to renewable energy alternatives’ (xvi). Menell and Tran maintain that ‘this can be done by reducing the costs of conservation and renewable energy sources through technological advance as well as by raising the costs of fossil fuels, for example through fees imposed on fossil fuels’ (xvi).
In the 2011 article, ‘Eyes on a Climate Prize’, Jonathan Adler explores the use of technology inducement prizes to encourage research, development, and diffusion of clean technologies:
Prizes are no panacea. Indeed, barring some serendipitous discovery, there is no panacea for the climate policy challenge. Yet technology inducement prizes offer a relatively low-cost way to encourage greater innovation than traditional grant-based R & D funding. In order to encourage greater levels of technological innovation, it would also be desirable to reduce existing regulatory barriers to the development and deployment of alternative technologies, as well as to place a price on carbon, ideally with a simple and straightforward carbon tax. Combined with prizes, such measures could create a more favorable environment for climate-friendly innovation. (699).
Adler concludes that ‘now it is time to up the ante for climate innovation with federally funded climate prizes.’ Carbon pricing has become a particularly important measure in public policy to address the harms of carbon pollution and encourage the development of renewable energy.
In the final chapter, Gary Marchant draws larger lessons from the history of technology regulation in thinking about sustainable energy technologies. He observed:
There are a number of potential legal tools available to promote or encourage sustainable energy technologies. These tools include direct government funding of research and development, patent law, antitrust law, technology standards, tax credits, government procurement policies, industry-government cooperative programs (for example, the Environmental Protection Agency’s Energy Star program), consumer information disclosure programs, technology-based regulations (including best available technology standards, and technology mandates), and market approaches, including cap-and-trade programs or a pollution (for example, carbon) tax (703).
Marchant is conscious, though, of the difficulties involved in inducing technology innovation: ‘Notwithstanding the many available legal options for attempting to induce technology change in energy supply and demand, forcing beneficial technology change is a difficult endeavour’ (703).
This rich and diverse collection provides important insights into the need to consider the interactions of intellectual property, innovation, and climate policy. The collection provides an important foundation for future research, which intends to address the wicked global problem of climate change and global warming.
Dr Matthew Rimmer is an Australian Research Council Future Fellow, working on Intellectual Property and Climate Change. He is an associate professor at the ANU College of Law, and an associate director of the Australian Centre for Intellectual Property in Agriculture (ACIPA). He holds a BA (Hons) and a University Medal in literature, and a LLB (Hons) from the Australian National University, and a PhD (Law) from the University of New South Wales. He is a member of the ANU Climate Change Institute. Dr Rimmer is the author of Digital Copyright and the Consumer Revolution: Hands off my iPod, Intellectual Property and Biotechnology: Biological Inventions, and Intellectual Property and Climate Change: Inventing Clean Technologies. He is an editor of Patent Law and Biological Inventions, Incentives for Global Public Health: Patent Law and Access to Essential Medicines, and Intellectual Property and Emerging Technologies: The New Biology. Rimmer has published widely on copyright law and information technology, patent law and biotechnology, access to medicines, clean technologies, and traditional knowledge. His work is archived at SSRN Abstracts and Bepress Selected Works.
Matthew Rimmer, ‘Intellectual Property, Innovation, and the Environment (2014) edited by Peter Menell and Sarah Tran — a Review’, Medium, 26 August 2014, https://medium.com/@DrRimmer/intellectual-property-innovation-and-the-environment-2014-edited-by-peter-menell-and-sarah-tran-2fb9dd6069a3
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