Ten Myths: Intellectual Property Rights and the Montreal Protocol

Transcription

1 April 4, 2016 Ten Myths: Intellectual Property Rights and the Montreal Protocol Steve Seidel 37 th Open-Ended Working Group

2 Background Center for Climate and Energy Solutions An independent, nonpartisan, nonprofit organization working to advance strong policy and action to address our climate and energy challenges. Launched in 2011, C2ES is the successor to the Pew Center on Global Climate Change. CAUTION: Not an IP attorney! Research is a work in progress. Research papers: Montreal Protocol -- 37th OEWG 2

3 Overview Important issues have been raised about the impact of IPR on actions to limit HFCs: Given most patents held by transnational corporations, will domestic industry in Article 5 Parties be at a competitive disadvantage or locked out of markets? Will low-gwp alternatives be available in adequate quantities, at reasonable prices, and from multiple suppliers? If able to produce substitutes, will application patents prevent producers in Article 5 Parties from selling into certain segments? Montreal Protocol -- 37th OEWG 3

4 Myth: Patents last forever and impact all countries Patents are time limited. 20 years from date of filing (but important exceptions). and geographically specific valid only in the country in which it is filed Patents directly impact only a few of the largest Article 5 Parties Found patents filed for HFO-1234yf in only 5 of the 28 Article 5 parties covered by WIPO database Montreal Protocol -- 37th OEWG 4

5 Myth: Thousands of Patents Many filed in last few years NUMBER of patents Thousands of patents have been filed Small percentage granted to date (33% in US; 12% in India) Some will lapse; some rejected by patent office; others challenged and revoked Many are related as part of a larger patent family TIMING of patents Large number filed in past 5 years But many recent filings have much earlier priority dates Montreal Protocol -- 37th OEWG 5

6 Information on InPASS What are Priority Dates Invention Title COMPOSITION"CONTAINING FLUORINE SUBSTITUTED OLEFINS Publication Number 50/2015 Publication Date 2015/12/11 Publication Type Application Number INA 4952/DELNP/2015 Application Filing Date 2015/06/09 Priority Number Priority Country U.S.A.60/693,853,U.S.A.11/475,605 U.S.A.,U.S.A. Priority Date 2005/06/24, 2006/06/26, Montreal Protocol -- 37th OEWG 6

7 Myth: Multilateral Fund doesn t pay for patents MLF s indicative list of categories of incremental costs includes patents and royalties (licensing fees) Costs of converting existing facilities; new production facilities; and use in manufacturing sector Patents identified as eligible cost in several MLF sector guidelines and a few projects Costs of patents embedded in price paid for technology; indirectly paid for by MLF But, many projects relied on technologies not or no longer patented MLF practices (CE thresholds, technology criteria) may have limited extent to which patents paid for Going Forward.. Likely more MLF projects covered by patents Review guidelines and practices in light of HFC amendment Montreal Protocol -- 37th OEWG 7

8 Myth: HFOs will only be produced by a few transnational chemical companies Vast majority of production process patents held by few companies; small number held by Chinese entities Same true initially for HFCs; over time production shifted to Article 5 producers Unlike 134a, initial production of HFOs in US, Japan, India and China Producers in A5 parties can: Develop their own unique production process Enter into joint venture, licensing, or supply agreement with patent holder Wait for patent to expire and then produce Montreal Protocol -- 37th OEWG 8

9 Production Chemical Producer Location of Production Status of Production HFO-1234yf 3F Zhonghao (Chemours) China In production Expansion (2015) Expansion (2016) AGC (Honeywell) Japan 2015 Arkema Changshu China Expected by end of 2016 Chemours Japan U.S. (Texas) In production Permit applied for Jan Honeywell U.S Navin(Honeywell) India Late-2016 SRF India Pilot plant(march 2016 announcement) HFO-1234ze Honeywell U.S. (La.) In production HFO-1233zd Arkema TBD TBD Central Glass Japan In production Honeywell U.S. In production HFO-1336mzz Chemours China 2017 HFC-32 Arkema U.S. In production Daikin Japan In production Hindustan Fluorocarbons India Plan to modify existing plant Montreal Protocol -- 37th OEWG 9 SRF India Announced plans to convert HFC-134a plant to make both HFC-134a and HFC-32

10 Myth: Application or use patents are main roadblock in transitioning to HFC alternatives Large number of application patents have been filed Review of HFO-1234yf patents in India showed over 30, mostly 2-and 3- part blends Several key application patents in US and EU have been challenged EU (EPO 1,716,216) for use of HFO-1234yf in auto ac was revoked US patents (7,279,451; 7,534,366; 8,065,882; and 8,033,120) have had all their claims denied at a reexamination hearing before USPTO Others upheld and most are being appealed and remain in effect Some patents in India and other countries are related to these patents, (priority dates) and could be impacted if these challenges are upheld and patents are denied. Application patents aren t new (patent on HFC-410a expired only a few years ago) Available from several producers through cross-licensing arrangements Montreal Protocol -- 37th OEWG 10

11 Myth: Patents are an obstacle in converting important manufacturing sectors An Example Thailand moving out of HCFC-22 for room air conditioning into HFC-32 Included in Stage 1 HPMP proposal approved by ExCom Ten manufacturing enterprises -- $7.6 million in MLF funds committed Government developed extensive plan for safety-related standards and training as part of project Patents impacting ac equipment made available free of charge from Daikin. Patents on production and sale of 32 by producers not an issue. Montreal Protocol -- 37th OEWG 11

12 Key (Tentative) Take-Aways Large number of patents filed, but Many recent filings have earlier priority dates Legal challenges couldchange patent landscape in coming years Range of options for producers and manufacturers Cross-licensing and joint ventures are possibilities Recent announcements of HFO production in India and China Phase down can be sequenced with sectors where alternatives now available moving first Multilateral Fund Patents and royalties eligible under indicative list of incremental costs Paid for directly in few cases, indirectly in more cases More cases likely if HFCs covered Guidelines and implementation reviewed in light of HFC controls Montreal Protocol -- 37th OEWG 12

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