WIPOD – Page Points: Transcript of Episode 7

Intellectual Property and Clean Technology

Joy Y. Xiang: The WIPO Green Platform has been one of the major successes among efforts that try to improve access to IP protected Clean-tech. One major reason for its success comes from the respect for IP, and another major reason is that WIPO is providing this mutual platform for technology owners and access seekers to know each other, to build relationships, so I'm very happy to see the success of WIPO Green, and I think WIPO is doing a great job in this initiative.

Lise McLeod: The global market for Clean energy technologies will be worth around 650 billion US dollars a year by 2030, more than three times today's level, if countries worldwide fully implement their announced energy and climate pledges. The most well-known examples of Clean technology are electric cars, solar panels, wind and wave energy.

Today, Joy Xiang joins me to discuss her book 'Climate Change, Sustainable Development and Cleantech: A Pathway for Developing Countries.'

Welcome, Joy to the Page Points podcast. I'm so pleased to have you here to speak to us about your book.

Joy Y. Xiang: Thank you Lise, it's my pleasure. Thank you for the invitation.

Lise McLeod: When you were writing this book, whom did you have in mind would be your intended audience?

Joy Y. Xiang: I wrote this book with policy makers, technology innovators, IP practitioners, and IP scholars in mind. So the audience I have particularly in mind to address are indeed the policy makers in developing countries who are focusing on addressing climate change, building sustainable development through innovation.

For the audience in developed countries, of course, I am focusing on the policy makers whose mission is to motivate technology transfer to developing countries for them to address climate change and to build sustainable development.

Lise McLeod: Okay, noted. So for all those policy makers out there, please listen up. In looking at the Table of Contents, Joy, you've divided the book into three different parts. Part One of the book focuses on international Cleantech transfer. In looking at that section, how do IP rights play a significant role and do they indeed enable international Cleantech transfer to the developing countries, as you mentioned?

Joy Y. Xiang: So for intellectual property rights, in the context of climate change and sustainable development, there are two aspects of functions that IPRs can play. The first is about its ability to stimulate innovation. Cleantech innovations are similar to innovations in pharmaceutical technologies. Intellectual property protection, especially patent protection, do stimulate investment, especially in complex Clean technologies. For some sectors of Cleantech, the fundamental technologies, were already being produced and have been in the field for a long time.

Some of them are already in the public domain. The new innovation tended to be incremental innovations, improvements over the fundamental technologies. So IPR's power over these incremental improvements of existing fundamental Cleantech, tend not to be that strategic.  But, in other Cleantech fields, for example, for the carbon capture and restoration technologies, and for certain agricultural bioengineering technologies that can facilitate sustainable development, or help to adapt to climate change, we still need fundamental breakthroughs.

So for these Cleantech sectors, in order to generate the needed fundamental breakthroughs, then you need mechanisms to attract investment for R&D. IP rights then is one such mechanisms to attract such investments, then IPR is playing a more important role for these complex Clean technologies.

The second role that IPR can play is about access to key Clean technologies. So that the part for the developing countries, the most interesting at this moment. For technology transfer the formal venues like international trade, foreign direct investment, international technology licensing, for these formal venues, through my research, I have concluded that IPR is there to help attract foreign direct investment and to facilitate international trade and facilitate technology licensing.

Okay, so IPR is playing a positive role there; the presence of adequate IP protection. Of course, for technology transfer, we have the informal channels like imitation copying, reverse engineering. For these informal technology transfer channels, strong IPR protection, of course, tended to deter the ability for countries to do so.

However, the majority of technology transfer, especially a transfer of complex advanced technology, tend to occur through the formal venues. Therefore, in that sense, IPR should be playing a positive role for enhancing Cleantech transfers through the formal venues.

Lise McLeod: You mentioned that there are mechanisms. How can developing countries best leverage those mechanisms?

Joy Y. Xiang: Inside the competition law regime, what I see is that especially developing countries, of course all jurisdictions have the freedom to do so, is to leverage means available inside the country of origin to address access to essential technologies. Such as essential climate change technologies. So I see there's two ways to do that.

One is that the jurisdiction can define an expansive objective for the competition law. So, usually competition law is set up to promote and maintain healthy competition in the market to protect consumer welfare. However, a survey shows that many countries, they also expand the objective, the coverage of their competition law, to protect social welfare, to protect public interest.

China, recently, even in its latest amendment for its anti-monopoly law, even included promoting innovation as part of the objective for competition law. So if a jurisdiction can have an expansive coverage for the purpose of the competition law, access to essential technology, to essential Cleantech, can be included in the coverage.

So that's from the design of the competition laws' purpose. Then, the practice level, the abuse of dominant position scrutiny offered by competition law try to regulate anti-competitive behaviors such as unilateral refusal to license, restricting access to essential facilities, excessive pricing. So all these are included in the difficult challenges that some jurisdictions complain that they have encountered when trying to access Cleantech from IPR owners.

So by using the abuse of dominant position scrutiny available in competition law, countries experience these challenges when trying to access needed Cleantech. They can examine whether the IP owner, the technology owner, is having anti-competitive licensing practice, therefore to improve access to the technology.

So that is why I emphasize that besides the mechanisms available in IP regime for improving access to Cleantech, the tools available, afforded by competition law regime, which a country can unilaterally decide, can be used also to improve access to technology by addressing the anti-competitive licensing practices in technology transfer.

Lise McLeod: Now moving the focus to global Cleantech, I'm wondering if we could talk about what it takes to build domestic Cleantech innovation and if you could outline the necessity of its development. 

Joy Y. Xiang: I'd be happy to. So let me start from the necessity front. This book is arguing such: besides international Cleantech transfer, we should also expand our focus, our emphasis, to include global Cleantech transfer. So necessity comes from two fronts. We're talking about sustainable development that needs to be implemented by each country in our community. And climate change is a transboundary issue, every country needs Cleantech to address climate change, to do the mitigation work, the adaptation work.

So we need Cleantech to be available at every corner on this earth. Each country needs Cleantech, so that's an obvious situation. What differentiates Cleantech from pharmaceutical technology in general is that Cleantech needs to be locally appropriate. That means the technology we use needs to adapt to the local climate, local ecological conditions.

That means that the Cleantech even if it's coming out from external - it's a foreign Cleantech - it still needs to be adapted to local conditions. But because Cleantech needs to be locally appropriate, it can also be argued that it's best to practice the technologies at home. It grows coming out of domestic innovations, therefore it's adapted to the local climate, ecological conditions in the first place.

Also, different jurisdictions, they have their own development priorities and capacities. Certain technologies from a foreign country may not fit into the current development priorities, capacities of a developing country. For example, if a developing country's priority is about developing climate adapted agricultural technology, then agricultural technology developed for a totally different climate condition won't be helpful to this particular jurisdiction.

So because of these arguments, this book is saying such, we need to encourage local jurisdictions to look into how to build their own capacity for developing local Cleantech innovations.

Lise McLeod: Perhaps now we can move on to your proposed solution. If you could highlight the advantages and the potential challenges that we might face in looking at such a solution.

Joy Y. Xiang: Yes, will be happy to. The reason I've engaged in the book is because developing countries have been trying to improve international Cleantech transfer, that means transfer of advanced Cleantech, mostly owned by developed countries to developing countries, and that emphasis, that effort, has not been very successful.

So I looked into why this emphasis has produced a very limited result. Then I realized, you know, there are reasons from both the lack of certain capacities in developing countries and the need to strengthen efforts by developing countries to offer support for Cleantech transfer. My proposal here is to say that we need to continuous the effort improving international Cleantech transfer. But second, in addition to that emphasis, the book suggests we need to enable domestic Cleantech innovation by developing countries.

So this is a push beyond merely Cleantech transfer at an international level. So the proposal for enabling developing countries to build domestic Cleantech innovation is a pathway. The pathway has three components: international aid, first step. Second, mutually beneficial international Cleantech cooperation. Third, domestic Cleantech innovation. So I envisioned this pathway for the least developed countries. Because these countries are at the low end of the ladder for Cleantech development and have experienced the most challenges in terms of getting proper Cleantech to mitigate and adapt to climate change. So in this pathway I suggest a tailored approach. LDCs probably should focus on getting sufficient international aid for their capacity to use foreign technology to address climate change.

Then for the mid-tier developing countries, even emerging markets, as the second phase which is mutually beneficial, international Cleantech cooperation, should be emphasized by mutually beneficial international Cleantech cooperation. I'm suggesting that we need to address Cleantech owners’ interest in protecting their Cleantech ownership and in getting just compensation for their technology.

So here I emphasize that IPR rights should be respected in order to motivate technology owners to further invest, means the technology breakthrough we need for addressing climate change, for building sustainable development. Here I propose that we need to emphasize creative, collaborative IPR management. Instead we're just pushing IP rights aside. We need to find ways to have an access model that secures the technology owner's IP right, but also enables the access seekers to have proper wholesome access to the IP protected technology. So here, when I say wholesome access, that includes access to the undisclosed know-how that is not available in a patent right. That is very much tied to the technology owner. So how do you have wholesome access to the entire know-how that enables the adaptation, the implementation of the foreign technology. So therefore that's why I emphasize the access needs to be conducted in a mutually beneficial atmosphere and IPR issues should be addressed creatively and collaboratively.

Then the third domestic Cleantech innovation. Here, I say that, you know, the LDCs, the mid-tier developing countries, after they build up their capacity, for Cleantech transfer and domestic Cleantech innovation through international aid, through the mutually beneficial international cooperation, then they can emphasize domestic Cleantech innovation. So here, emerging economies among developing countries such as China, India, Brazil, they can focus on this aspect, but even with this focus, this book still emphasizes mutually beneficial international Cleantech cooperation in order to share the innovation and to build further domestic innovation. So the advantage, of course, is that by expanding the emphasis beyond international transfer, I spread the weight for technology innovation into individual countries, individual jurisdictions.

Of course, this seems to be an idealistic inspirational goal, right? Asking every country to enable its own domestic Cleantech innovation. But this is a necessary goal, since we want to build sustainable development globally, we need to address climate change, which is an issue everywhere no country can escape. So by expanding this emphasis into domestic Cleantech innovation, emphasizing that mutually beneficial international collaboration, I envision that more Cleantech owners will be motivated to participate in international Cleantech transfer. If we are able to provide a creative, collaborative approach addressing IPR issues, instead of just trying to remove it or minimize IP protection. So this has a major advantage.

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So to adjust your last question about potential concerns for the proposal of enabling domestic Cleantech innovation through this three stage pathway. So concerns were brought up by colleagues, audiences when I was talking about this project.

The first top concern or objection brought up against this proposal of domestic innovation by developing countries is that some colleagues envisioning a global innovation system where developed countries being the innovators, and developing countries being the producers and the consumers of the innovations generated by developed countries.

I have reservations about this model, this global innovation system model. One is that it creates perpetual dependency of developing countries and I do not consider that perpetual dependency healthy for developing countries. Secondly is that the very limited international Cleantech transfer, which is emphasized since the 1970s, demonstrates to me that this kind of model does not seem to be successful because so far the Cleantech transfer from developed countries to developing countries, over the past 50 years has mainly been through a handful of emerging economies such as China, India, Brazil, South Africa etc.

Cleantech transfer to the majority of developing countries has been extremely limited even to a non-existence. So I do not think this dependency model will work for the long run and has not demonstrated to be working.

And the second major concern brought up is that while this proposal is emphasizing, pushing for developing countries' own innovation capacity, generating their own Cleantech innovation according to their local ecological conditions and the local resources, this concern is talking about the global value chains, saying that this kind of model goes against this practice of global value chains.

So my argument here is that I do not oppose to the global value chain. However, in order for developing countries to participate well in the global value chain, developing countries still need to upgrade their production capacities. In order to update their production capacities they still need to build up their local capacities - in producing engineers, capable labor forces - all these capacities fit into the building up of a domestic innovation system. It's part of building up a domestic innovation system. So even to maintain the global value chain practice, we still need developing countries to build up their local capacities for being a good, solid producer, consumers in the global value chain. So I do not think these two are in conflict with each other.

And the last important concern brought up by my esteemed colleagues is that, I'm proposing that developing countries build up their domestic innovation capacity in Cleantech. However, a common challenge that developing countries are facing is about brain-drain, the exodus of skilled human capital from the local jurisdiction. Such an exodus of skilled human capital, of course, will have an immediate negative impact on the local jurisdiction's capacity for economic growth and building up of its domestic innovation capacity.

However, the current brain-drain does not necessarily mean that it'll always produce a negative situation. When high skilled laborers go over to other countries, most often they will bring resources back to the local jurisdiction either by sending resources, for example, money back to their families or invest it in the local jurisdiction, or some of them eventually will come back there to the local jurisdiction.

So existing, the current brain-drain, should be a motivation for the local jurisdiction to build up their local capacities. So all the three concerns brought up by my colleagues, I think they further my argument that developing countries should emphasize building up their local capacities for domestic Cleantech innovation, for better integration into the global innovation system, global value chains, and for attracting the return of their high skilled laborers, attracting overseas resources for local Cleantech innovation and sustainable development.

Lise McLeod: Thank you, Joy. What you've highlighted here will incite the policymakers that you mentioned to dig deeper into your book and for potential future researchers to build and to grow on this most timely imperative subject.

Thank you for joining me today and for sharing your research.

Joy Y. Xiang: Thank you very much Lise, for the opportunity to discuss the book and thank you for adding this very interesting ebook and WIPO podcast to bring us a digital extension of the WIPO Library.

Lise McLeod: I hope that you've enjoyed this conversation on sustainable development and Clean technology. You can find a copy of Joy's book in our knowledge repository.

I would like to take this opportunity to mention that you can learn more about WIPO's work and green technology on our website, including our WIPO Green online platform that Joy mentioned earlier.

Until next time, and the next Page Points. Bye for now.