Intellectual property rights in LCA text

Legal assistance paper

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Date produced: 11/06/2010

1. Could you provide an analysis of what institutional provisions are proposed in respect of IP in the Chair’s draft text (FCCC/2010/6), Chapter III (Annex III)? 

2. If there are no such provisions, where could such an institution be placed?  Would it be an institution in its own right, or would it be incorporated into the existing functions of, say, the Technology committee? 

3. Would such a committee or institution have sufficient legal standing to compliment existing institutions such as WIPO?

4. Are there provisions for IP trade and transfer in the Chair’s draft LCA text? This is necessary to overcome issues where IPRs are a significant barrier to allowing the wide-scale deployment of climate-friendly technologies. In order to fulfil the aforementioned objective, should amendments be made to the draft text (and if so, where and what amendments), or would it be better to look for alternative forum which could enable these outcomes? If the latter, which fora would be best?

Chapter III recognizes that the development of environmentally sound technologies and the transfer of such technologies to developing country Parties is important to the achievement of the objective of the Convention, and that time is an enemy in this context, in the sense that the development and transfer should occur as rapidly as possible.  The goals and objectives stated in the preamble and in the section headed Objectives do not, by themselves, seem to raise any policy issues relating to technology and the IP that may be associated with it.

It is clear, even without reference to Annex III, that technology will play a significant role in the achievement of the Convention objective, and the goal must be to encourage both the development and the dissemination of technology on a worldwide basis.  Meeting this goal will necessarily mean dealing with the issue of intellectual property rights in a way that will promote, not impede, the development and dissemination of technology.

The Technology Executive Committee functions outlined in Paragraph 7 include, within brackets as if noted for special consideration, the function of “recommend[ing] and support[ing] necessary actions to address and remove the barriers to technological development and transfer [identified by developing country Parties], in order to enable action on mitigation and adaption.”  We are uncertain about what exactly is meant by this, but is seems likely from a U.S. perspective that such  barriers will affect not development, but transfer.  Substantial funds are being invested, privately and publicly in the U.S., in the development of new technologies to aid environment remediation, but the strong IP laws that will product such new technologies in the U.S. do not generally exist in developing countries.  Accordingly, since most of the new technologies developed in the U.S. will be privately, not publicly, owned, a key issue to be resolved is how to provide incentives substantial enough, even if not quite equal to the U.S. incentives, to encourage transfer of these new technologies around the world.

Paragraph 11, Option 2 of Annex III, says that no treaty dealing with intellectual property issues should contain provisions that hinder or prevent “any Party” from taking “any measures” to address climate change, “in particular the development and enhancement of endogenous capacities and technologies of developing countries and transfer of, and access, to environmentally sound technologies”.

This language will make the countries that have privately developed advanced climate change mitigation technology uneasy.  Venture capitalists will underline that sentence for future reference and action.  The next sentence is more direct, referring to the removal of barriers to the transfer of technologies arising from intellectual property rights, including by providing for a pool of IPR that will be made available on a non-exclusive royalty-free basis:

“Specific and urgent measures shall be taken and mechanisms developed to remove barriers to the development and transfer of technologies arising from intellectual property rights protection, in particular: 

(a) Creation of a Global Technology Intellectual Property Rights Pool for Climate Change that promotes and ensures access to intellectual property protected technologies and the associated know-how to developing countries on non-exclusive royalty-free terms;

(b) Take steps to ensure sharing of publicly funded technologies and related know-how, including by making the technologies and know-how available in the public domain in a manner that promotes transfer of and/or access to environmentally sound technology and know-how to developing countries on royalty-free terms;”

Although this advice does not cover how IPR pools have performed, we note that the U.S. does have some few pools of IPR and a great deal of economic study has been done recently on their economic effect.  This may be an area for further research.  The key issue is that, in the U.S. at least, where substantial private investment is being made in technology dealing with climate change with the traditional U.S. attitudes and hopes, this language will raise red flags

It should be borne in mind that the statement near the end of Paragraph 11: “Developing countries have the right to make use of the full flexibilities contained in the Trade Related Aspects of Intellectual Property agreement, including compulsory licensing,” is also likely to be badly received by some circles in the U.S.  Compulsory licensing is strongly opposed by a vocal group in the U.S., rarely applied in U.S. law, and its inclusion in any proposed treaty will make its passage in the U.S. Senate more difficult.