IPR and technology transfer: myths and realities

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IPR and technology transfer myths and realities

• M 1 IPR is a barrier to the transfer of
  technologies
• M 2 IPR block innovation
• M 3 IPR favor developed countries
• BC 1 Emerging economies are leading the
  diffusion of clean technologies
• M 4 IPR in clean technologies are similar to
  pharmaceuticals
• BC 2 Technical capacity is attracting large
  investments in RD in emerging economies
• M 5 IPR create a monopoly power and induce high
  prices
• M 6 Sharing patents will increase technology
  diffusion
• BC 3 Adapting technology and sharing learning
  experiences as drivers of success

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Myth 1. IPR is a barrier to the transfer of
technologies

• TNA identified economic and market barriers
  (80) as the greatest obstacles to technology
  transfer.
• Graph Economic and market barriers to technology
  transfer

Source UNFCCC (2006)
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Myth 1. IPR is a barrier to the transfer of
technologies
Redistered Patents in EST (1998-2008)

• In most LDCs anyone is free to use inventions
  filed in other countries because no patent right
  exists
• If technologies are nor been diffused in those
  countries is due to significant economic and
  capacity barriers.

215.000 patents
Source Copenhagen Economics(2009)
REALITY Patents are creations of national laws
Patents are one of the key drivers of technology
diffusion
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Myth 2 IPR block innovation

• IPR are key drivers of investment in RD,
  innovation and dissemination of EST
• allow innovators to realize the value of
  successful RD investments (many RD programs
  fail)
• stimulate investment in innovation that might not
  otherwise occur
• provide companies with competitive advantage
• IPR provide firms and innovators commercial and
  economic incentives and legal assurances to share
  ESTs and know-how, rather than keeping it secret
  for fear of compulsory licensing or
  misappropriation.

Source UNFCCC (2009)
REALITY a relaxation of IPR for the relevant
technologies would be a barrier to low carbon
technology innovation
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Myth 3 IPR favor developed countries

• Emergent economies today account for 20 of total
  patents worldwide, compared to less than 5 in
  1998.
• 33 increase in local patent holder
  registrations in 1998-2008.
• In China, 92 of new patent applications are
  local (40 of total)

Registered patents
x5
545
120
Source Copenhagen Economics(2009)
REALITY Patent protection is increasing in DC.
Further patent protection could stimulate
domestic innovation.
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BC 1 Emerging economies are leading the
diffusion of clean technologies

• Emerging economies are increasingly exporting
  technologies and manufacturing capacities abroad
• China is a worldwide leader in renewable energy
  production, solar PV, and wind, through Suntech,
  Sinovel, China Wind Systems and Gold Wind (wind
  energy).
• Indias companies are also among the world
  leaders in clean technology (Suzlon and Tata-BP)
  and India ranks fifth in total installed wind
  power.
• Brazil is the world leader in biofuels, with
  Petrobras funding energy and carbon storage
  research and developing innovative biofuel
  technologies.

REALITY technology diffusion involves developed
and emergent countries companies. Capacity
building and economic development will be key for
the rest of DC to follow the trend.
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Myth 4 IPR in EST similar to drugs

• EST have different competitive advantages or
  business models than drugs
• EST patent cost represents a small percentage of
  total development cost vs. 95 of total costs for
  some drug
• Range of EST to reduce emissions involving
  multitude of patents vs. a single drug patent
  critical
• In EST the cost of bringing new technology to the
  market relates to non- patentable aspects such as
  operations and maintenance, human capacity and
  training, and organizational procedures.

REALITY The diffusion of EST involves much more
than IPR and includes capacity building,
technological and business know-how, consumer
information and education, and regulatory
stability.
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BC 2 Technical capacity attracts RD
investments in emerging economies

• Engineering schools and institutes are annually
  supplying with 300.000 graduates in China and
  150.000 graduates in India.
• Research institutes in emerging economies are
  developing considerable know-how and capacity in
  the clean technology space.
• Hundreds of foreign-run RD centers have been
  established
• Vestas, GE, Alstom, Gamesa, Siemens and others
  have major RD facilities in China and India,
  relying on large educated workforces, leading
  research institutes, and substantial economic
  potential.

REALITY Capacity building has driven the
emerging economies to lead in the adoption and
development of clean technologies.
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Myth 5 IPR create a monopoly power and induce
high prices

• Patents are very limited in scope (specific
  improvements or features) and IPR protected clean
  technology portfolios tend to be diverse,
  ensuring no one company holds all the patents to
  a particular solution. Competition between clean
  technologies, as well as across sectors, is
  intense, giving users broad choice at highly
  competitive prices.
• No single company or nationality dominates the
  market for a particular technology (China -38 of
  solar energy- and Japan -28 of fuel cells).
• In some cases, the newest and most expensive
  technology might not provide the best solution.
  In others key technologies might be already
  mature, meaning that non-IP protected solutions
  are often available.

Source Copenhagen Economics(2009)
REALITY Users can choose between IP and non-IP
protected technologies to achieve their policy
objectives. Competition ensure cost-effective
solutions.
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Myth 6 Sharing patents will increase technology
diffusion

• Technology is transferred through FDI (80 of
  capital inflow to DC), commercial cooperation
  agreements, JV, licensing and local training and
  technology cooperation.
• Sharing patents has worked in other sectors (ITC)
  and might make sense sometimes in EST, however
  the complexity and diverse solutions require
  tailored investment frameworks and environments
  that encourage technology cooperation. One
  solution does not fit all
• Investing in RD programs in DC provided solid
  patent protection will drive further RD (foreign
  and local), stimulates sharing protected
  innovation with local businesses and leads to
  effective commercial solutions.

REALITY Companies have an inherent interest in
encouraging diffusion of as many technologies as
possible. Patents are a tool to share knowledge
between businesses, which drives further
innovation.
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BC 3 Adapting technology and sharing learning
experiences drivers of success

• Engineering schools and institutes are annually
  supplying with 300.000 graduates in China and
  150.000 graduates in India.
• Research institutes in emerging economies are
  developing considerable know-how and capacity in
  the clean technology space.
• Hundreds of foreign-run RD centers established
  in China India
• Vestas, GE, Alstom, Gamesa, Siemens and others
  have major RD facilities, relying on large
  educated workforces, leading research institutes,
  and substantial economic potential.

REALITY Capacity building has driven the
emerging economies to lead in the adoption and
development of clean technologies.
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CONCLUSION

• IPR enables the development and diffusion of low
  carbon technologies.
• Business believes that negotiations should be
  grounded on factual technical information on the
  essential elements to effective technology
  deployment.
• Experiences learnt and fast advances in some EST
  show the importance of providing
• Returns to RD investments
• Ensure good patent protection
• A robust patent system encourages further
  innovation in the country.

REALITY IPR are an important policy tool to
drive private sector investment in clean
technology and give businesses the confidence to
invest in, disseminate and share the know-how and
technology
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