Energy Transition IP: A Common Global Good?

Clean energy transition will unsurprisingly be high on the agenda for the G20 Summit in India in September 2023. In advance of the Summit, The G20 Imperative for Global IP Reform to Facilitate Clean Energy Transitions (T20 Policy Brief) was published in July by one of the Task Forces of Think20. Think20 is an official Engagement Group of the G20. One of the cited challenges to increased global renewable energy capacity relates to ownership and commercialisation of intellectual property (IP).

The T20 Policy Brief issued a number of recommendations on technology sharing. If implemented, these recommendations would impact IP commercialisation in this space, affecting technology owners, developers and licensees.

The International Energy Agency projects that globally installed renewable energy capacity must triple by 2030 if we are to stay on track to achieving net zero by mid-century. Having affordable, timely and scaled up access to emerging green technologies globally forms part of the challenge to the clean energy transition.

Patent ownership in green technology – the divide between G20 and other countries

According to the T20 Policy Brief, the G20 owns approximately 91% of the Patent Cooperation Treaty (PCT) patents granted in environmental technology between 2000 and 2021. China, Japan, USA, Republic of Korea and Germany make up 85% of these PCT patents for this period. A significant amount of these patents will still be protected after 2030.

The T20 Policy Brief also points to the range of monetary incentives for green technology patent filings within the G20. For example, the EU’s IP Action Plan provides subsidies to SMEs filing patents, and Australia’s patent box scheme grants a 40% corporate tax discount for clean energy patents.

Companies in the wealthiest nations therefore hold the IP rights to commercialise their clean energy, and the monetary incentives to continue to innovate. The divide between the developed and developing nations continues to grow and this will become more apparent for clean energy transition.

TRIPS and patent waivers

TRIPS, the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights, is a multilateral agreement on intellectual property. It sets out minimum standards on intellectual property protection by member states, such as on patents, trade marks and copyright.

During the pandemic, patent waivers from certain TRIPS provisions were sought by over 100 countries. However, negotiation of these waivers proved difficult. IP waivers and obtaining compulsory licensing tend to be strenuously contested, with major players lobbying hard. As a result, by the time these pandemic-related waivers were agreed, the need had somewhat passed. It is currently unclear whether efforts related to the clean energy transition would warrant similar patent waiver regimes for TRIPs.

Tech20 Engagement Group and recommendations

The T20 Policy Brief recommends the establishment of a “Tech20 Engagement Group” comprising G20 country representatives, industry leaders, and civil society members. The aim of the group is to facilitate technology cooperation, co-development and sharing, and IP reforms between the G20 countries.

The T20 Policy Brief recommends that Tech20 should focus on green technologies, with three outputs:

• Technology transfer patent pool/bank to club IP for the G20: This would be a voluntary, open access, patent pool for green technologies to allow G20 countries to contribute patents to, and draw from, the pool/bank
• Technology co-development: Tech20 could become a platform for the G20 to share scientific knowledge and resources, conditioned upon the co-ownership of any resulting technology
• Enhanced financing for green technologies: Tech20 could be a platform for the G20 to share their requirements and discuss the scope and procurement of enhanced financing

Conclusion

It will remain to be seen how the recommendations from the T20 Policy Brief will be received at the G20 Summit and what outcomes we can expect. It is clear that patents and IP licensing will remain an important aspect of the clean energy transition.

This debate will be closely monitored in the energy and IP space, from developers and owners of green technology to prospective licensees and governments worldwide. A balance needs to be reached between encouraging innovation, which needs to be financially worthwhile for innovators by securing their IP rights, and ensuring that the technology is available for developing countries to achieve the global net zero goals.

For more information and expert advice, contact a member of our Intellectual Property team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

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