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Are IPR a barrier to theAre IPR a barrier to thetransfer of climate changetransfer of climate change

technology?technology?

Study available at:Study available at:

http://trade.ec.europa.eu/doclib/docs/2009/febhttp://trade.ec.europa.eu/doclib/docs/2009/feb

ruary/tradoc_142371.pdfruary/tradoc_142371.pdf

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The backgroundThe background

Technologies relevant to emission reduction areTechnologies relevant to emission reduction are

increasingly being patented > private goodsincreasingly being patented > private goods

Developing countries claim that IPR rules constitute aDeveloping countries claim that IPR rules constitute a

barrier to technology transferbarrier to technology transfer

Are there any arguments in favour of extending TRIPsAre there any arguments in favour of extending TRIPs

compulsory licensing to climate change technology ?compulsory licensing to climate change technology ?

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Empirical approach: patent countsEmpirical approach: patent counts

Study by Copenhagen Economics & Danish IPR Company, for theStudy by Copenhagen Economics & Danish IPR Company, for the

European Commission / DG TradeEuropean Commission / DG Trade

Count of patent applications 1998-2008 for 7 relevant technologies:Count of patent applications 1998-2008 for 7 relevant technologies:

waste, solar, ocean, fuel cell, biomass, geothermal, windwaste, solar, ocean, fuel cell, biomass, geothermal, wind

Representative sample of low-income (32 countries) and emergingRepresentative sample of low-income (32 countries) and emerging

markets economies (BRICs + Ukraine, Argentina)markets economies (BRICs + Ukraine, Argentina)

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The GapThe Gap

Number of patent applications, annualNumber of patent applications, annual

Year Totalworldwide

Emergingmarkets

Low-Incomecountries

1998 9.118 342 3

2002 19.982 992 10

2007 27.505 3.439 10

2008 19.701 4.037 6

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Implications of the GapImplications of the Gap

Hardly any patents registered in low-income countriesHardly any patents registered in low-income countries

Patents are not an obstacle; there are no applicationsPatents are not an obstacle; there are no applications

Relaxing the patent regime would not have any impactRelaxing the patent regime would not have any impact

There are other reasons: technological capacity, marketThere are other reasons: technological capacity, marketsize, purchasing powersize, purchasing power

Look for economic solutions, not legal: Cheaper alternativeLook for economic solutions, not legal: Cheaper alternativetechnologies, foreign aid, etc.technologies, foreign aid, etc.

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ClosingClosing the Gapthe Gap

Fast growth in Emerging Markets: catching-upFast growth in Emerging Markets: catching-up

In 1998: 1 in 25 / in 2008: 1 in 5 in EMIn 1998: 1 in 25 / in 2008: 1 in 5 in EM 1/3 EM patents owned by EM residents1/3 EM patents owned by EM residents

Spectacular growth in patenting in ChinaSpectacular growth in patenting in China

Not weaker but stronger IP enforcement wouldNot weaker but stronger IP enforcement wouldbenefit EM, especially Chinabenefit EM, especially China

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Monopolistic market structure?Monopolistic market structure?

Unlikely: there is sufficient competition betweenUnlikely: there is sufficient competition between

patents owned by different countries, companiespatents owned by different countries, companies

and individualsand individuals

Different technologies are substitutes in fightDifferent technologies are substitutes in fight

against climate changeagainst climate change

IPR price component is lowIPR price component is low

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Ow ners hip of fuel ce ll tec hnology patent ap

in de veloping c ountries

Japa

28%

US25%

Chin

21%

Kore

7%

Res

19%

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Ow ners hip of solar te chnology patent appli

in developing c ountries

Chin

38%

Japa

29%

US

13%

Kore

10%

Rest

10%

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ConclusionsConclusions

Patents are hardly used in low-income countriesPatents are hardly used in low-income countries Economic factors explain low technology transferEconomic factors explain low technology transfer Use economic instruments to address thisUse economic instruments to address this

Patents growing fast in emerging markets, esp.Patents growing fast in emerging markets, esp.ChinaChina

Local ownership growing fast tooLocal ownership growing fast too Strengthening patent enforcement would benefitStrengthening patent enforcement would benefit

themthem