Climate Change, Patent Pending

On 12 June, the US House of Representatives overwhelmingly passed a foreign relations funding bill which included an instruction to the US envoy to the UN-sponsored climate change treaty negotiations. The US delegation was not to accede to any proposal, the House declared, which would compromise the intellectual property rights US companies have over environmentally-friendly technologies.

Viewed in a vacuum, the House action is of little inherent significance. After all, the executive branch is in charge of US foreign policy, and it is the Senate, not the House which must approve treaties.

But the House can make some mischief. Congressmen can make enough noise to stir up public, as well as senatorial, wrath. It can also refuse to fund activities it disapproves of.

The House move was a pre-emptive strike against an expected proposal by China at negotiations later this year in Copenhagen over the UN Framework Convention on Climate Change (UNFCCC) for a regime of mandatory licensing of green technologies. Such a provision would weaken the control companies enjoy under current US and international law over patented inventions.

Although the US will be not asking China to agree to guarantee carbon emissions reductions as part of a Copenhagen treaty, it does want to press the Chinese to implement. The Kyoto protocols did not require reductions of developing economies. China is demanding, in return, access to the green technologies where the US has an edge.

The issue of intellectual property rights will pit the US against China. The two countries together are responsible for 40 percent of global carbon emissions. The successful completion of a climate change accord may hang in the balance.

China's position is allowing US politicians to make political hay.  Representative Mark Kirk, a Republican from Illinois and co-chair of the congressional US-China Working Group, recently returned from a trip to China and described climate change policy as the “one point of discord.”

At a gathering hosted by the Center for Strategic and International Studies in Washington last week, Kirk described a mandatory licensing provision as “authorization for the theft of US intellectual property (IP).” Kirk and his colleague, Representative Rick Larsen, a Democrat from Washington state, sponsored the IP amendment to the foreign relations authorization bill.

The US business community, not surprisingly, is behind the Kirk/Larsen measure. Just last month, the US Chamber of Commerce launched a lobbying group called the Innovation, Development & Employment Alliance (IDEA). “IDEA’s immediate priority is to urge Congress and the Obama administration to maintain strong IP protection for innovators as the US engages in international talks related to UNFCCC,” says the organization's website.

The Kirk/Larsen legislation “will play a vital role in efforts to protect intellectual property abroad,” Mark Esper, executive vice president of the US Chamber's Global Intellectual Property Center told ISN Security Watch. “Through an emphasis on protecting IP rights in climate change negotiations, America's foreign policy efforts will focus on protecting jobs and strengthening our economy.”

Patent precedents

While US politicians and its business community attempt to portray mandatory licensing as a form of legalized theft, such a scheme has, in fact, ample, legal and historical precedent.

“Compulsory licensing of patents is a means for getting technology into use where the patentee is sitting on his rights or is asking too much for it,” said David Weild, a patent attorney with the law firm of Edwards, Angell, Palmer & Dodge in New York. “In international law, it goes back to 1883, with the Paris Convention for the Protection of Industrial Property, and it has been echoed in national patent legislation in both common law and civil code countries,” he told ISN Security Watch.

The Canadian patent office for example, is authorized to impose a license on a patent holder who demands an exorbitant sum. In the US, federal courts have required patentees to accept licenses in lieu of enjoining the use of an invention by a patent infringer.

But at least one mandatory licensing scheme has proved a sticking point in international trade regulation, noted David Fidler, a professor of law at the University of Indiana. Article 31 of the World Trade Organization's Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement provides for mandatory licensing under certain circumstances. Developing countries have been trying to secure pharmaceutical licenses under its provisions.

“There has been an ongoing fight about what Article 31 means,” Fidler told ISN Security Watch. “There is still no meeting of the minds on international intellectual property rights.”

Some countries attempt to circumvent Article 31 by inserting stronger patent protections in bilateral and regional trade agreements.

“We see already that some in the US are raising red flags” over climate change, Fidler added. “The battle lines are being drawn and it will be difficult reaching an end game successfully since in other contexts it has proved illusive.”

But there may be some middle ground that can be staked out, and the US government may be moving in that direction.

The US-China relationship “is perhaps the most critical and the most delicate” of all the bilateral relationships relating to climate change, said Eileen Claussen, president of the Pew Center on Global Climate Change, a Washington-based research organization. “The Chinese do not want their country cast in a spotlight.”

Claussen discourages the US from confronting the Chinese on climate change. “A better approach,” she told ISN Security Watch, “is to pursue closer collaboration on clean coal technology and other energy and climate challenges.”

Secretary of State Hillary Clinton may be heeding that advice. During a trip to China earlier this year, she said that she wanted to explore collaborations between universities in the US and China “where we can jointly develop intellectual property, where we can jointly come up with new technologies. That is the level of partnership we want, where we can each benefit from the fruit of our labor and our intellectual investment.”

Clinton's approach may be consistent with a “draft” Copenhagen agreement released by a group of NGOs, including Greenpeace. “Where intellectual property rights prove to be a barrier to technology deployment, diffusion and transfer,” the document says, “a clear framework for using existing mechanisms, based on the approach of protect and share, should be developed to reduce and eliminate these barriers.”

Fidler also approves of the secretary of state's approach. “We need creative ideas and innovative mechanisms,” he said. Otherwise, he fears, climate change negotiations could get bogged down in an IP morass.