Sharing technology to meet a common challenge

Navigating proposals for patent pools, patent commons and open innovation

Climate change presents a collective challenge to the international community. Meeting that challenge is necessarily a collective endeavor. No other environmental threat has such a universal quality. In no other field can activity in one location potentially have such a direct impact across the globe. So it is no surprise that the world is turning to collective and collaborative initiatives to address climate change mitigation and adaptation. The innovation and widespread dissemination of new technologies will unquestionably form an integral part of this response. Technologies can both facilitate mitigation of climate change – such as those concerning carbon capture and sequestration, wind power or photovoltaics – and also enable communities to adapt to climate change – such as those for combating desertification or enabling agriculture in drier or more saline soils.

The earlier action is taken, the more widely new technologies are disseminated, the better the chance of significantly slowing the impact of climate change. This means that the rate of innovation, and the speed and breadth of dissemination of new technologies, are both critically important.

Delivering to a global public an effective, commercially and technically feasible technology is rarely a stand-alone exercise. It usually requires a package of contributions from various sources. One product or process might combine breakthrough research, platform technologies, manufacturing know-how and downstream tweaks and field improvements that can greatly increase the practical effectiveness of a particular technology. So getting results does not just mean interesting findings in the laboratory or workshop: it means finding the best way of combining input and building pathways to develop and distribute finished technologies.

Companies must typically negotiate licenses and other forms of access to technology held by others to bring new products to market. They may also invest considerable effort in locating optimal technologies. But ‘business as usual’ may not be sufficient in exceptional times. The urgent need for technology diffusion and the complexity of some technology fields critical to addressing climate change lead to an active debate about how best to organize innovation structures and diffusion of technology. To the extent that technologies are covered by intellectual property (IP), particularly patents, this opens up a debate about how IP rights can best be managed and regulated so as to yield optimal outcomes both for innovators and society at large.

Policymakers are actively investigating appropriate collaborative structures and other means of pooling and sharing technologies. A host of ideas are circulating for arrangements such as patent pools, patent commons, open source innovation, open licensing arrangements and non-assertion pledges or covenants. These have typically been developed on a voluntary basis, by technology holders who realize that the benefits of pooling technologies from several sources outweigh any immediate advantage of closely restricting access to their technology. In these cases, there is a common incentive to share technology. This has been the experience, for instance, with audio and video technologies involving a common standard, such as DVD and MPEG technology, where shared interests have led companies to form patent pools or joint licensing schemes.

More direct regulatory interventions, such as the use of compulsory licenses or government use authorizations requiring patented technology to be made available for certain public interest reasons – options discussed mostly in relation to public health – are also possible. A compulsory license is in principle an option in other fields of technology, although no recent cases have been reported directly concerning climate change technologies (access to medicines may also be a factor in future adaptation to climate change, for instance if changing climatic conditions affect the geographical spread of certain tropical diseases).

The challenges

The search for innovation and dissemination structures to meet the challenge of climate change seeks to:

• simplify the process of searching for and locating technologies that are essential to combating climate change;
• cut the costs and complexity of negotiating access to technologies;
• promote an environment of sharing pre-competitive, upstream or ‘platform’ technologies;
• facilitate access to and diffusion of technology to developing countries, especially least developed countries.

Photo: Barefoot College

Accepting these general objectives in principle is one thing, but achieving them in practice is a tremendous challenge – partly due to uncertainty about which technologies should be prioritized and what barriers present obstacles to their diffusion. Some considerations that apply in exploring the practical options include:

The state of play: What fields of technology are most needed, where, and by whom? Do needs differ between the mitigation and adaptation technologies? And of the key technologies, which are covered by IP rights – by whom are they held and in what countries? Which of these technologies are already in the public domain, and when will others enter it (for instance, as patents lapse or expire)?

The nature and purpose of the pooling structure: Is a scheme intended to focus on one specific outcome – such as making a hybrid engine available to developing country car manufacturers or providing a drought resistant strain of wheat to farmers? Or does a scheme aim to create a pre-competitive pool of technologies to promote competition and accelerate product development in a critical area, such as wind power or photovoltaic cells? Is the goal to open up access to general platform technology for all to use without constraint, or is it to ensure that further improvements and derivative ‘downstream’ technologies are fed back into a common pool for participants to share?

The scope of technologies covered: Does the arrangement zero in on very specific areas of technology (for instance, one existing patent pool contains only DVD technology)? Or does it cover a wide range of technologies of general relevance to climate change (and other related environmental or sustainable development goals)? How should relevant technologies be defined?

The legal character of the arrangement: Should access be granted automatically to all who meet certain conditions (e.g. all enterprises based in the developing world or those pledging to make technology improvements available on similar terms)? Or should the structure resemble a mutual agreement, whereby all participating parties grant licenses to one another? Does the contribution of technology automatically trigger an entitlement on the part of others to use it, or does it signal a willingness to negotiate on reasonable terms with anyone wishing to do so?

Incentives to participate: How can positive incentives be created that encourage firms to contribute technology – including commercial incentives, prospects for simplified access to others’ technologies and corporate social responsibility considerations?

The role of the regulator: How can a regulatory environment be promoted that enables and promotes valuable technology-sharing and collaborative structures? Can or should official fees be structured to encourage formation of collaborative or open licensing approaches? When is the coercive tool of the compulsory license or government use authorization appropriate?

Technology sharing models

Photo: Tom Stoffel/NREL

Clearly, the practical impact and legal implications of these different choices will differ dramatically, and no one model is likely to meet all the requirements for technology development and diffusion relating to climate change. The models under consideration fall into several general categories:

Patent pools: Definitions of patent pools vary greatly, but the essential idea is that participating patent holders agree to license their technologies to one another – some are termed a ‘joint licensing scheme’. Usually the technology is in a well-defined field, or specific patents may be identified. A closed patent pool would restrict access to technology. In some cases, this kind of arrangement might attract the attention of competition watchdogs, particularly where it excludes legitimate competition by those not taking part in the pool. An open patent pool would enable access by any party to the technologies covered.

Patent commons: Generally broader in scope, patent commons allow technology holders to pledge their patented technologies for widespread use for no royalty payment – usually subject to certain general conditions (for instance, agreement not to enforce rights over technologies resulting from access to the commons). A recent initiative, the Eco-Patent Commons (see box), includes patents on environmentally beneficial technologies. The participating companies legally pledge or covenant not to assert their patent rights against those implementing the technology to produce environmental benefits. These benefits include reduced/eliminated natural resource consumption, or reduced/eliminated waste generation or pollution.

License of right: In some countries, a ‘license of right’ system provides for a reduction in official fees for patent holders who agree to make their patented technology available to anyone requesting a license, subject to terms that can be negotiated or determined by the authorities. The UK Patent Office, for instance, maintains a database of patented technology that is endorsed as available for a license of right – this includes alternative fuel technologies patented by major automotive companies.

Non-assertion pledge or covenant: Rather than canceling or abandoning their patents, patent holders may choose to make their technology widely available by legally pledging not to assert their patent rights against anyone using the technology. This may be restricted to specific uses of the technology (such as for specific environmentally friendly uses), limited to certain geographical locations (such as countries below a certain average level of income), or conditional on the person who uses the technology making available improvements or derivative inventions on similar terms (in the spirit of a ‘commons’).

Humanitarian or preferential licensing: This type of licensing technology policy provides highly favorable or free terms to certain beneficiaries, for example, developing country recipients, social marketing programs, or public sector/philanthropic initiatives.

Public domain: Placing technologies directly in the public domain is one avenue for their transfer and dissemination. Often, technologies are patented in a relatively small number of countries, effectively placing them in the public domain in all other countries as soon as the patent applications are published. New technologies may be consigned to the public domain, so that anyone is free to use them without legal constraint (unless, of course, health and safety, environmental, ethical or other regulations apply), by the simple act of publishing or otherwise communicating them to the public. Special patent search tools can identify those technologies that have entered the public domain when patents lapse or expire.

Open innovation, open source, commons-based peer production and distributed innovation: This cluster of related concepts features in current discussions about innovation models that emphasize a collaborative or shared technological platform for innovation. The term ‘open source’ originated from a software development model that ensures access to the human-readable ‘source code,’ and permits others to use and adapt the software, and to redistribute it, whether or not it is modified. The Mozilla Firefox web browser is a well-known example of open source software. Open source is also now used as a metaphor or description for other fields of innovation in which a technological platform is left open to others to use and adapt, and, on the basis of which, innovations can in turn be shared, for instance, open source biotechnology.

‘Open innovation’ describes a similar but broader approach, emphasizing the interest of many firms in seeking synergies and collaboration with other actors working on related technologies, as opposed to closed innovation which would emphasize firm boundaries between rival companies: according to one definition, open innovation is “combining internal and external ideas as well as internal and external paths to market to advance the development of new technologies.”

‘Commons-based peer production’ refers to the development of new products through widespread collaborative networks without a formal hierarchy, often brought about by a sense of collective purpose: the Wikipedia online encyclopedia is a good example. ‘Distributed innovation’ refers to the development of innovative products through collective efforts in networks spanning different organizations, institutions or individuals. Some commentators have suggested these innovation models may be applied to some of the technology innovation, development and adaptation challenges of climate change.

Encourage a spirit of collective endeavor

The potential forms and applications of technology for addressing the challenges of climate change are numerous and diverse. Mitigation technologies may range from improvements to the efficiency of existing technologies (such as hybrid drives for motor vehicles) to entirely new technologies (such as the biological production of hydrogen through new strains of algae). Adaptation technologies may extend from new treatments for tropical diseases to new plant varieties that handle increased abiotic stress such as drought and salinity. The need for innovation may therefore include relatively straightforward adaptation of existing technologies as well as new breakthrough technologies.

Almost by definition, developing countries’ needs for transfer and dissemination of technologies will evolve as rapidly as the cutting edge of technology advances, and as rapidly as the impact of climate change is experienced. No one structure for innovation, nor mechanism for technology diffusion, is likely to be sufficient, even at the level of general conceptual debate and policy analysis. Policymakers, research managers and commercial enterprises alike are likely to explore the full range of options across the broad array of technologies relevant to climate change, as they seek the most appropriate ways of encouraging a spirit of collective endeavor in meeting this most pressing of technological challenges.

By Antony Taubman, WIPO, Global Intellectual Property Issues Division

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