Patent Walls or Solar Panels? The IPR Debate in Green Energy

ABSTRACT

Climate change remains one of the most pressing global concerns, necessitating collaborative and equitable solutions. Despite numerous treaties and climate summits, gaps persist in achieving meaningful outcomes, particularly concerning technology transfer. This piece examines the challenges at hand and explores the provisions related to technology transfer, which could aid the Global South in achieving a sustainable future. It further delves into the role of intellectual property rights (IPR) in facilitating or hindering this process. The discussion concludes with potential solutions and recommendations to enhance global cooperation in addressing climate change effectively.

INTRODUCTION

The twin crises of climate change and resource depletion have underscored the urgent need for technologies related to sustainable energy. Innovations in renewable energy, energy efficiency, and green technologies hold the promise of a cleaner, more sustainable future. However, access to these transformative technologies remains unevenly distributed across the globe.

The Global South, home to a significant portion of the world’s population, faces unique challenges in accessing cutting-edge sustainable energy technologies. Central to this issue is the complex interplay between intellectual property (IP) laws, particularly patents, and the equitable distribution of technology. While patents are designed to incentivize innovation by granting exclusive rights to inventors, they often act as barriers for low and middle-income countries by restricting access to vital technologies needed to address environmental challenges. In this blog the author seeks to explore the solutions to the problem faced by the Global South.

PROVISIONS IN UNFCCC WHICH PROMOTE TECHNOLOGY TRANSFER

To understand why the issue persists despite numerous provisions promoting technology transfer, we first need to understand what is common but differentiated responsibilities. This principle has been mentioned in article 3, paragraph 1 of United Nations Framework Convention on Climate Change (UNFCCC).[1] It means there is responsibility on each and every country towards keeping the environment sustainable. This means countries have varying responsibilities in mitigating the negative impacts of resource depletion on the climate. The principle aims to place greater responsibility on countries that have extensively used resources, recognizing the unequal resource consumption among nations. 

To operationalize CBDR principle, the Paris Agreement 2015 reclassified Annex 1 and non-Annex 1 countries as developed and developing nations. Article 2 reinforces this by emphasizing equity and the principle of common but differentiated responsibilities, acknowledging countries’ varying contributions to climate change and greenhouse gas.[2] 

There are several other provisions in the UNFCCC framework which promote the transfer of technologies to Global south to help them in achieving carbon free resources. Articles like Article 4, Paragraph 1(c) which  emphasizes the commitments of all parties, particularly the responsibility of developed countries to assist developing nations through technology transfer, reinforcing the principle of CBDR.[3] Article 4 Paragraph 7 also highlights the categorization of countries as developed or developing, strengthening the CBDR principle.[4] It recognizes that developing countries’ ability to meet climate commitments relies on support from developed nations.  Paragraph 5 of the same Article obligates developed countries to take practical steps to promote, facilitate, and finance the transfer of environmentally sound technologies and know-how, particularly to developing nations. 

Article 10.5 and 10.6 of Paris Agreement stresses the need for support to developing nations in technology development and transfer, aimed at both mitigation (reducing emissions) and adaptation (adjusting to climate change).[5] Other calls for financial and technical support for implementing these initiatives.

Despite the numerous provisions addressing technology transfer and the principle of CBDR, there remains a significant gap in the actual transfer of technology from developed countries to the Global South. There is a lacunae because firstly, UNFCCC lacks binding obligations or penalties for non-compliance, allowing developed countries to withhold technology transfer and protect patents under the TRIPS Agreement.[6] Secondly, UNFCCC provides no clear mechanism to facilitate technology transfer. While Article 4.7 emphasizes capacity building, it fails to specify the prerequisites for effective implementation in developing countries.[7] Lastly, although CBDR and equity guide the UNFCCC, they remain broad principles without specific provisions detailing or enforcing technology transfer and therefore their enforcement remains a question.

TRIPS AGREEMENT: OBSTACLE TO ACHIEVE SUSTAINABLE DEVELOPMENT

Article 7 of the agreement states that it was needed for the protection and enforcement of the IPR rights which should balance the interest of the producer and the users of the technological knowledge.[8] One of the key criticisms of the agreement is that it primarily serves the interests of the developed countries while neglecting the needs of the developing countries. The protection of the IPR rights is intended to facilitate the dissemination of technology. However, in reality it often has the opposite effect.

The IPR regulations often act as a mechanism that would drive technological advancements but they also limit the dissemination of the knowledge and hinder technology development, particularly in developing countries. The fight against climate change would require collaborative efforts between the developed and developing countries. However, the Least Developed Countries (LDC)do not have the financial means to acquire the patented technology. The high Cost of acquiring the technology and limited availability of the patented innovations cause a major setback to the collective efforts by the international community. The duration of patent validity poses a significant challenge, particularly in the case of green technology.  Statistics indicate that the 85% of industrial companies involved in green patents are concentrated in only five countries.[9] This creates a disproportionate impact as the 3.6 billion people live in vulnerable regions severely impacted by climate change. In the forums such as Agenda 21 and Convention on Biodiversity, it has been witnessed that there has been discussion about the need for addressing the concerns about the transfer of green technology. However, there has been no implementation of any substantive solution in the field of green technology. The 2030 Agenda for Sustainable Development was adopted by the United Nation which provided a framework for the international community to advance the cause of the sustainable development by adopting seventeen Sustainable Development Goals (SDGs). However, the framework had clearly ignored the issue of restrictive IPR regulations by not taking care of the concerns of the developing Countries.

The TRIPS agreement mandates strict IP protections that serves as an obstacle for the developing countries to access and use the technology that would be critical for building climate-friendly infrastructure and sustainable development. This protection makes the technology more expensive for the developing countries which was also reaffirmed by the United Nations Conference on Trade and Development (UNCTAD) Report on ‘The TRIPS Agreement and Developing Countries’.[10] The companies that have technology that is patented negotiate on unfair terms with the poorer countries which serves as a form of economic exploitation. The terms and conditions of the agreement has served contrary to the set of defined objectives of the agreement.

Additionally, the ambiguous definition of the term “Developed Country” and “Technology Transfer” serves as a loophole often used to evade the obligations. The WTO does not provide for a specified definition of these terminologies which serves as a major flaw in the framework. For instance, TRIPS has used the term “Developed Country” in Article 66(2) of the TRIPS agreement that contains the obligation of the developed countries to incentivize countries for promoting the sharing of the technology to the developing countries.[11] However, it does not specify what constitutes “Developing Countries” or “Developed Country”. This ambiguity is often used by developed countries to escape from the mandated obligation to provide incentives.

ROLE OF IPR IN GREEN ECONOMY & ITS ROLE IN SUSTAINABLE DEVELOPMENT

Intellectual property plays a significant role in shaping the green economy, particularly through the protection of innovations in sustainable technologies. However, the monopolization of patents by a handful of developed nations creates a barrier to equitable access to green technologies in the Global South. The technology monopolization is a very big issue.

The growing divide between the “haves” and “have-nots” in access to sustainable technologies exacerbates global inequalities, making it harder for developing countries to build climate-resilient infrastructure. The need for a balance between protecting intellectual property and fostering global cooperation to combat climate change is more urgent than ever. Without equitable access to green technologies, the Global South will struggle to meet its climate goals, undermining collective global efforts.

Developed countries have historically used the WTO’s dispute system to enforce IP standards favouring their industries. For instance, in the patent law compliance[12] between U.S. and India, the U.S. contested India’s lack of pharmaceutical product patent protection during TRIPS’ transitional period. A WTO panel ruled against India, forcing amendments to its patent laws. This delayed India’s generic drug production, impacting affordable medicine exports to other developing countries.

Another example, where U.S. challenged Brazil’s “local working” requirement, which mandated patent holders to manufacture drugs locally or face compulsory licensing.[13] Brazil argued this was a valid TRIPS flexibility to promote domestic industry and access to medicines. The case ended with a Mutually Agreed Solution (MAS), where Brazil agreed not to enforce the clause against U.S. companies, reflecting pressure to limit TRIPS flexibilities.

In Radio Telefis Eireann (RTE) and Independent Television Publications Ltd (ITP) v Commission of the European Communities, it was held that, rejecting to provide a license and blocking the entrance of a new product to the market constitutes an act of market dominance.

Thus, while IP is crucial for innovation, its excessive enforcement must be moderated when it hinders broader public interests like environmental sustainability. This case illustrates how such enforcement can disproportionately impact least developed countries (LDCs) and undermine overall market competition.

CONCLUSIONS AND SUGGESTIONS

A pervasive mistrust between LDCs and developing countries persists due to the repeated failure of developed nations to fulfil their commitments. Despite COP meetings, including COP29, pledging $300 billion annually for climate adaptation and mitigation, this falls far short of the estimated $1.1 trillion required.[14] The continued gap in funding, coupled with a lack of effective implementation, further erodes trust and hinders meaningful progress.

The Solution for addressing the aspects relating to climate change would include establishing mandatory reporting system which would also be governed by a monitoring committee. Despite existence of International framework governing the climate change, it lags behind the implementation. The Monitoring Committee would include the representation from the LDCs to ensure that the mechanism of monitoring is free from bias and in consistency with principle of Nemo Judex in Causa Sua. The clarity and transparency in terms of the defining the clause and avoiding vague and unclear terms to resolve the ambiguity needs to be done in order to fill in the loopholes that are exploited by the developed countries. The unclear definition serves as a loophole that gets exploited by the developed countries. Organizing a conference focused on addressing implementation challenges biannually and resolving key conflicts related to the support and assistance from developed countries could be a constructive step forward.

The critical framework for addressing the issues pertaining to climate change would include the Monopolisation of the green patents. The MNCs have been holding over the control over the Green Patents restricting small players and startups to compete and provides for access to technology violating the principles of free market. Compulsory licensing, as outlined in Article 31 of the TRIPS Agreement, allows the use of patented technology without the owner’s consent under specific conditions – a practice seen during the COVID-19 crisis to improve vaccine access in least-developed countries.[15] Additionally, Article 27 permits states to exclude certain inventions from patentability if their commercial exploitation harms public order, morality, or the environment.[16] Climate Change being a global crisis should not be a profit-driven endeavour that deepens inequalities between LDCs and developed nations. Collaborative efforts by forcing the Private players to ensure that they fulfil the social responsibility towards the global community by sharing the patents at a subsidized cost for preventing the concentration of technology in the hands of few.

The need for mutual cooperation and global solidarity towards climate change is needed. The impact of the climate change would impact the developing as well as the least developing countries. The equitisation of the fight against climate change by Integration of IPR with sustainable development can be implemented by making the SDG goals in line with the goals of climate change.

[1] United Nations Framework Convention on Climate Change art. 3, ¶ 1, May.9, 1992, 1771 U.N.T.S. 107.

[2] Paris Agreement, art. 2, Dec. 12, 2015, T.I.A.S. No. 16-1104, 55 I.L.M. 740 (2016).

[3] Paris Agreement, art. 4 ¶ 1, Dec. 12, 2015, T.I.A.S. No. 16-1104, 55 I.L.M.740 (2016).

[4] Paris Agreement, art. 4 ¶ 7, Dec. 12, 2015, T.I.A.S. No. 16-1104, 55 I.L.M.740 (2016).

[5] Paris Agreement, art. 10, Dec. 12, 2015, T.I.A.S. No. 16-1104, 55 I.L.M.740 (2016).

[6] Agreement on Trade Related Aspects of Intellectual Property Rights, Apr. 15, 1994, 1869 U.NT.S. 299.

[7] United Nations Framework Convention on Climate Change art. 4, ¶ 1, May. 9, 1992, 1771 U.N.T.S. 107.

[8] Agreement on Trade Related Aspects of Intellectual Property Rights, art. 7, Apr. 15, 1994, 1869 U.N T.S. 299.

[9] UNFCC, COP29 UN Climate Conference Agrees to Triple Finance to Developing Countries, Protecting Lives and Livelihoods <COP29 UN Climate Conference Agrees to Triple Finance to Developing Countries, Protecting Lives and Livelihoods | UNFCCC> (last visited May. 2, 2025).

[10] UNFCC, The TRIPS Agreement and Developing Countries (1997) <iprs_pb20092_en.pdf> (last visited May. 1, 2025).

[11] Agreement on Trade Related Aspects of Intellectual Property Rights, art. 66, Apr. 15, 1994, 1869 U.N T.S. 299. 

[12] Carsten Fink, Intellectual Property and the WTO https://documents1.worldbank.org/curated/en/535391484056053530/pdf/111783-WP-PUBLIC-Intellectual-PropertyIPRS-RUS.pdf (last visited May. 1, 2025).

[13] Nirmalya Syam, A Review of WTO Disputes on TRIPS: Implications for Use of Flexibilities for Public Health < https://www.southcentre.int/wp-content/uploads/2022/02/RP146_A-Review-of-WTO-Disputes-on-TRIPS_EN.pdf> (last visited May. 1, 2025).

[14] UNCTAD,  A new climate finance goal is on the horizon. How can developing countries benefit? UN Trade and Development (UNCTAD) <https://unctad.org/news/new-climate-finance-goal-horizon-how-can-developing-countries-benefit> (last visited May. 2, 2025).

[15] Agreement on Trade Related Aspects of Intellectual Property Rights, art. 31, Apr. 15, 1994, 1869 U.N T.S. 299.

[16] Agreement on Trade Related Aspects of Intellectual Property Rights, art. 27, Apr. 15, 1994, 1869 U.N T.S. 299.

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This post is authored by Vibhuti Sharma and Anmol Lall, second year law students at National Law Institute University, Bhopal and Gujarat National Law University, Gandhinagar, respectively.