Environmental change, patents, and development
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1 Environmental change, patents, and development Bronwyn H. Hall University of California at Berkeley and University of Maastricht Based on joint work with Christian Helmers, U Carlos III Madrid and LSE
2 Papers (all joint with Helmers) The role of patent protection in (clean/green) technology transfer, Santa Clara High Technology Law Journal 26 (2010): Innovation in clean/green technology: Can patent commons help? NBER Working Paper No (March 2011); UNU MERIT Working Paper No , forthcoming JEEM. The impact of joining the regional European Patent Convention system, July 2012 The impact of foreign pharmaceutical patents on innovation in Chile, with Maria Jose Abud and Aisan Etcheverry (INAPI and Chilean Ministry of Economy) December 2012 SIMPATIC Workshop - Bruegel 2
3 Hall Helmers Helmers 2010 background Double externality Green technology policy needs diffusion as well as innovation Green technology is highly varied, draws from many scientific and engineering disciplines Much is complex (e.g., electric & hybrid cars) Some is low tech; highly substitutable (e.g., clean stoves) Some requires standard setting (e.g., smart grid) Patents may raise transanctions cost and slow diffusion December 2012 SIMPATIC Workshop - Bruegel 3
4 Two questions for research Does stronger patent protection encourage technology transfer? How does it affect the behavior of foreign firms? Stronger IP protection in thehosthost country should encourage (or at least not discourage) transfer of technology. Doesstronger stronger patentprotectionencourage protection encourage technology development? How does it affect the behavior of domestic firms? Stronger IP could encourage their innovative activities, but can also discourage imitation and inhibit learning and catchup. December 2012 SIMPATIC Workshop - Bruegel 4
5 Question 1: Tech transfer For middle income countries that atalready have ae innovative capacity or capable of imitation Both tech licensing and FDI respond to stronger IP regimes Quality of technology transferred rises, and there is a shift toward licensing (markets for technology) Very low income countries see little response IPRs are not very highly ranked by firms as an influence on tech transfer, except for R&D facilities and very advanced technologies. December 2012 SIMPATIC Workshop - Bruegel 5
6 Question 2: Patents & tech development Stronger patents encourage patenting in general, especially by firms and countries on the frontier Difficult to find clear evidence of positive impacts of stronger patents on innovation, except in chemical related sectors Many other factors matter, so the experiments are often not clear we don t see enough variation in patent systems, and it takes time for firms to adjust It is rare to have an independent measure of innovation (other than patents), so R&D effort used as proxy Historically, IP systems have developed in parallel with the innovative part of the economy December 2012 SIMPATIC Workshop - Bruegel 6
7 An unanswered question Is the marginal scientist or engineer in a developing country better employed examining patents? OR doing R&D? commercializing new technology? advising dii firms on adoption of new technologies? December 2012 SIMPATIC Workshop - Bruegel 7
8 Knowledge sharing via patents Two experiments in clean/green technologies: Eco Patent Commons created by IBM & others at the WBCSD Hall and Helmers (2012) study GreenXchange created by Nike & others Ghafele and O Brien (2012) study December 2012 SIMPATIC Workshop - Bruegel 8
9 GreenXchange Created January 2010 by Nike with ~400 patents Other participants are a very mixed group: Yahoo!, Best Buy, Creative Commons, IDEO, Mountain Equipment Co., ngenera, Outdoor Industry Association, salesforce.com, 2degrees Only 19 additional i patents added d (Best Buy and UC Berkeley) 3 types of license: standard a royalty free license (like EcoPC) standard plus a license with restrictions/payment research non exempt allows improvement and patenting for nonommercial use (designed for universities) BUT, in practice (on the website today) only 2 standard, 5 standard plus, 456 research licenses offered on website December 2012 SIMPATIC Workshop - Bruegel 9
10 Some lessons from GreenXchange Source: Ghafele and O Brien (ICTSD Policy Brief #13) traditional IP model very strong and hard to overcome many firms want access to people behind the patent rather than just the patent importance of tacit knowledge limited resources website is essentially useless for anyone who is interested in knowing what is available December 2012 SIMPATIC Workshop - Bruegel 10
11 The eco patents commons Created January 2008 by IBM at World Business Council For Sustainable Development (WBCSD) First green patent commons Firms can pledge patents related to green technology (defined by IPC subclasses, but flexible) 11 firms have done so, about 120 patents Available to third parties for climate change related activities with auto royalty free license ownership remains with firm not a donation, and not tax deductable defensive termination right December 2012 SIMPATIC Workshop - Bruegel 11
12 IBM view [P]ledging gpatents for free use by others [...] can be a win for innovators in other parts of the world, who might look at these ideas and further them and use them as the basis of additional solutions. And it can be a win for those who pledge because it could open up opportunities to collaborate with people that you might not otherwise have collaborated with. (Wayne Balta, Vice President of Environmental Affairs, IBM) That is, the patent helps you learn where and how to access relevant tacit knowledge for subsequent invention/ innovation. December 2012 SIMPATIC Workshop - Bruegel 12
13 Summary of findings Pledged patents tend to be narrower and less valuable than the typical patent in the class Pledged patents indistinguishable from the other patents in a firm s portfolio, except they are more green much less likely to match the IPC pattern of the firm, suggesting that they are not central to firm strategy Pledged patents just as likely to be kept in force December 2012 SIMPATIC Workshop - Bruegel 13
14 Knowledge transfer? Cannot tell whether inventions protected by pledged patents are used Look at diffusion by analysing whether patents are cited before and after donation compared to control patents in same class with same priority Conclusion: these patents are cited less before donation (and also less after). Who cites them? more likely to be individuals or non profits/ universities (than cite the controls) mostly developed country institutions & authorities December 2012 SIMPATIC Workshop - Bruegel 14
15 EcoPC cites decline earlier than those for the controls December 2012 SIMPATIC Workshop - Bruegel 15
16 Overall conclusion So far, a,these commons o or exchanges ec have aenot yielded much. Relatively few patents are actually donated. Patents are often not that useful by themselves. those that really have a valuable exclusionary effect will not be donated others might have useful information but the information is often incomplete Hard to see the use if users do not at least have to register. December 2012 SIMPATIC Workshop - Bruegel 16
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