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IP Protection and Diffusion of Environmentally Sound Technologies
Making an advancement towards the SDGs, the UN Environment Programme has defined Environmentally Sound Technologies (ESTs) as technologies that have the potential for significantly improved environmental performance relative to other technologies. ESTs protect the environment, are less polluting, use resources in a sustainable manner, recycle more of their wastes and products, and handle all residual wastes in a more environmentally acceptable way than the technologies for which they are substitutes. In a wider scope, ESTs are not limited to a specific technology but the entire procedure and mechanism involved in a certain sector of society together may form an EST. The Rio Earth Summit, 1992 was the first to emphasize on this concept which has thereon become a major focal point in the international environmental circuit.
In the light of climate change and instigating environmental protection, global diffusion of ESTs is a necessity but is faced with impediments, market and policy uncertainties and appropriation of imperfect knowledge. The WIPO Global Report on IP and the Transfer of ESTs identifies these factors and areas that require further research. It is often suggested that IP protection of technology through patents and trade-secrets is a barrier in the way of global circulation but in recent years, the concept of “stealth licensing” which facilitates compulsory licensing outside the TRIPS agreement exceptions has been brough into place to address this issue. IP protection not only provides incentive to developers to help diffusion but also determines whether diffusion is happening and the speed at which it is diffused. According to a study based on patent data from some 120 countries over the period 1990-2005, IP rights has amplified the willingness of IP rights holders to transfer their new technologies overseas (Park and Lippoldt 2008). Focussing on ESTs , they have been shown to facilitate the transfer of solar thermal technologies from the United States to China and India (Lane 2011). In fact, when IP protection is comparatively weak, foreign businesses are often hesitant to license their technologies in fear of being used without authorization.
IP rights, rather than considered to hamper flow of knowledge must be used as a mean to address negative externalities. Conferring temporary exclusive rights on owners incentivizes them to apprehend additional profit and value to their cost of making, resulting in further diffusion.
Trade secrets, unlike patents are cost-effective and provide for a safe passage to distribute expertise and know-how information of proprietary knowledge. They are also not faced with physical and contractual curtailment which is often faced by patent owners. Although ESTs mainly depend upon patent law and innovation, when the wider scope of the entire process is considered, trade secrets play an important role.
