INTERNATIONAL PROPERTY RIGHTS AND TECHNOLOGY TRANSFER

Climate-related technologies are central to the international effort to mitigate and

adapt to climate change. Without the deployment of emissions-reducing, energy-saving
technologies, countries cannot exploit the agricultural, industrial, and residential products
and software necessary to pursue a low-carbon economic growth trajectory. Historically,
most of the world’s technological innovation has originated in the industrialized “North”
whereas the developing “South” confronts different market and institutional obstacles to
accessing such technologies, which include: inadequate foreign direct investment flows
and minimal indigenous research and development (R&D). As the developing countries’
total greenhouse gas emissions are exceeding the level emitted by the industrialized
countries, the objective of bridging this technological disparity becomes increasingly
important. However, a major obstacle that hinders technological transfer and a stumbling
block for current negotiations in Copenhagen is the issue of intellectual property rights
(IPR).

On one side of the debate, the U.S., Europe, and Japan are entrenched in the
policy position that IPR protection is not an obstacle, but imperative in encouraging
innovation. Since innovative activities are both costly and risky, market actors must be
ensured of temporary monopolistic power in order to appropriate the benefits accrued
from their innovation. In addition, the dissemination of knowledge is promoted because
information from the patent claims is available to other inventors and entrepreneurs, and
can serve as a substrate for further innovation. Furthermore, proponents of IPR protection
claim that in the absence of a sufficient IPR regime, the threat of imitation damages the
incentive for any potential R&D.

In contrast, the diplomatic coalition of developing countries, the G-77, represents

the antithetical view that the current IPR regime is an obstacle to technology transfer
because it stifles innovation and knowledge diffusion. Proponents of this view generally
believe that profiteering multinational corporations withhold proprietary knowledge to
the detriment of the welfare of the South. For this reason, India, Brazil, and China have
led efforts to demand compulsory licensing, especially in the wake of the precedent-
setting Doha Declaration and the concession of the pharmaceutical companies during the
African HIV/AIDS epidemic.

These two views correspond to either extreme of the spectrum of policy options.
The optimal course of action will represent a balancing act between maintaining a strong
incentive for firms to engage in R&D activities while keeping costs low for new
technologies, especially for their use in developing countries. For this purpose, measures
should be taken to uphold the minimum standards of IPR protection established by
international treaties such as the World Trade Organization’s Agreement on Trade
Related Aspects of Intellectual Property Rights (TRIPS). If IPR protection is effectively
enforced, inventors will have the confidence to challenge the status quo by experimenting
and creating new innovations.
 Concurrently, policymakers must be cautious of providing excessive IPR
protection that may encourage proprietors of knowledge to reserve their patents for
prolonged periods of time, which may lower capacity output and increase production
costs of a new technology—and thereby hinder its deployment. In the interest of the
developing world, mature technologies should be transferred as readily as possible in
order to enhance the social and economic welfare among the most vulnerable
populations. To avert damaging the incentive for future R&D, the transferred
technologies can constitute information and products that are behind the technological
frontier by at least five years.

Although both parties of the debate are entrenched in rigid positions, there is a
viable solution that can mitigate the political tension over IPR protection: an international
clean technology institution that is analogous to the Consultative Group on International
Agricultural Research (CGIAR). Since the majority of innovative activities occur within
the private sector, firms will be more accommodative to the establishment of such an
institution, rather than the prospect of compulsory licensing. With the cooperation of
universities, governments, and firms contributing funding and knowledge to this
international R&D agency, countries will be enabled to tap into its knowledge stock and
to exploit its technological solutions. As a result, the producers of the North will maintain
favorable profit margins in the sale of their most cutting-edge technologies whereas the
technological needs of developing countries will be addressed—especially with the
development of clean technologies that have no particular utility in developed countries.
Most importantly, the firms of developing countries will have access to a source of
knowledge and know-how that can proficiently advance their domestic technological
capacities and accelerate their transition from imitation to innovation.

In light of recent developments, policymakers must reach a consensus in this

essential, but highly under-reported, issue in the global climate change debate. The
balance between the incentivization of R&D and the fulfillment of social, economic, and
ecological objectives should be struck in a manner conducive to the spirit of
multilateralism and cooperation. For this reason, the best resolution to this debate
involves the establishment of an international clean technology R&D institution that can
provide useful, environmentally sound technologies to those who stand to benefit the
most from them—the developing countries of the world.