Technology transfer and patenting are two vital points of interest in Qatar due to the country’s strong dedication to research and fast rate of development. How do these points look from a climate change mitigation perspective? The COP 18 side event Green Innovation: Examining Experiences in Low Carbon Technology Transfer and Green Patenting offered some strong examples.
China and India are outstanding examples of large-scale wind technology deployment, and Joanna Lewis, assistant professor of Science, Technology and International Affairs (STIA) at Georgetown University’s Edmund A. Walsh School of Foreign Service, drew from the experience of prominent companies in each country to compare their circumstances and strategies.
Suzlon and Goldwin, she said, are each leading manufactures in India and China, respectively. They both began manufacturing wind turbines around the same time. To set up context for these companies, Lewis introduced one ideological model for technology transfer, which is “often used to mean a lot of different things in a lot of different contexts,” she said. Tech transfer, according to her approach to Suzlon and Goldwin, involves one or any combination of the following: lisencing, mergers and acquisitions, and joint development.
Licensing offers the advantage of ensuring that the technology is field tested, which ups the confidence of investors, yet the drawback is that the technology might be old and even already licensed, she explained.
Mergers and acquisitions give full control to the buyer over the intellectual property (IP) but this means they have to produce all of the money up front. She said mergers and acquisitions can also be problematic when the takeover company lacks the knowledge necessary to integrate the new facilities into their business and run them properly.
Joint development relieves concerns about competition and IP risks by the nature of the collaborative investment, but Lewis said that experience between the two investors might be polarized, e.g. one may have manufacturing expertise and the other design expertise but little overlap thus creating a gap.
“Both Suzlon and Goldwin started with the license model,” she said. “As they became more successful they moved into different models.”
She stressed the importance of access to a global learning network, saying that Suzlon networked extensively on the R&D front in terms of gaining manufacturing and development experience in other countries and bringing it back to India. Goldwin, she said, has been more limited but has looked into networking more extensively, realizing the power in this approach.
When networks of technology transfer form, Lewis explained, they are all actually tied into a web of many companies and all of their collective IP.
As an alternative perspective, Lewis touched on the example of Hyundai, Doosan and Daewoo, mega-corporations that, when they moved into wind technology, adopted merger and acquisition and joint development models right away. They skipped licensing because they had funds and the sophisticated technology in house already. The supply for companies who can afford to take it on wholesale is there—Lewis said that a handful of companies, for example in the German design sector, have transferred IP (knowhow and experience) to companies in China and Eastern Europe.
China’s success story is punctuated by the fact that in 2004, the average size of their wind turbine fleet was 770 kilowatt hours, she said. Five years later, their average fleet size is 1.3 megawatts.
“China has become a success story in terms of size and magnitude, but also in terms of developing their own firms and their own IP,” she said. “We are starting to see more and more wind turbines exported. While patents are not so applicable to China which has a different approach to innovation, it’s interesting to note that the country has filed the fifth most patents worldwide for wind technology.”
World Trade Organization implications—around licensing, royalties on IP and technology—are starting to come to the fore, Lewis said, and China has become a target. So this is a growing area to look at for all countries as they embark on technology transfer strategies.
“We are not talking about commercial technology transfer in terms of payments for royalties and licenses; payments for royalties and licenses have not been a barrier, although it is country specific, and government can help facilitate in the private sector in many ways with advanced and pre-commercial technology approaches,” she said.
Fast-track green patents: in demand and gaining traction
Ahmed Abdel Latif, Senior Programme Manager for Innovation, Technology and Intellectual Property at the International Centre for Trade and Sustainable Development, was part of a team who recently performed the first empirical analysis of green patenting and shared these findings at the side event.
“One thing we’ve learned in the last couple of years is that low carbon is a complex puzzle that requires different expertise to look at the companies and their strategies to acquire technology.”
The intellectual property aspect, although it gets extra emphasis, is only one part of the equation of technology transfer, he continued, emphasizing finance as another considerable factor.
Patent offices began implementing the fast-track patent program around green technology in 2009. These offices decided that, for green technology, they would reduce the time to process and thus grant patents so they could arrive at the market quicker, Latif explained.
“It’s interesting but was never analyzed in climate change context,” he said. “We commissioned analysis and empirical study on what the effects were of these schemes—were they working or not?”
Latif and his research colleague looked at the nine countries that have adopted a fast-track green patent approach, namely the UK, the US, Australia, Brazil, China, Canada, Australia, Japan and South Korea.
Patents according to the scheme can be accelerated if they fall under a coded classification. “How do you define green technology?” Latif asked. “This has been left to the discretion of the examiner or even the developer.”
The European patent office formally published special classification information around clean energy patents, available at espas.net, he added.
To the low rate of usage so far, Latif responded: “The rate isn’t bad—patent applicants have an interest, but it’s under specific circumstances.” These include: suspicion of infringement (when they want to quickly pass their idea through without scrutiny on whether or not it copies other technology too closely), capital-raising activity (when they want to use the patent to draw income faster), securing commercial partners (with a sense of confidence around a patent).
The analysis showed that the UK has the highest rate of participation in fast-track green patenting. It also showed that fast-track patents are of higher value in terms of the extent to which they come together with other patents and are granted triadic patents, meaning that they are filed at the European Patent Office, the US Patent and Trademark Office and the Japan Patent Office.
Not only do fast-tracked patents usher technology into licensing and market sooner, but they also accelerate their publication and raise their visibility and citation rate among those who are analyzing R&D. In terms of knowledge diffusion, Latif said that fast-track patents draw twice as many citations in the same time period as other patents.
The fast-track scheme, according to the findings, draws mostly domestic applicants in the UK and US, “startups are also using fast-track a lot—they need funding and this is likely the motivating factor in most cases.”
In the end, Latif said, statistics in the UK show a demand for fast-track patenting and that the concern about these patents crowding others out should be weighed against the idea that many people and organizations choose to delay their patents rather than speed them up.
“These patents represent only a small share of overall green patents,” Latif said. “There is still lack of awareness about these schemes and how they can be used.”
Tangential to climate change, he mentioned that Brazil is looking to fast-track other patents from other sectors, such as biotechnology. He also noted that the European patent office doesn’t have a fast track system for green since they offer fast tracking for any sector, and any kind of technology, for no extra cost.
“Fast tracking is keeping up with its promises, with times to approval cut 42 to 75 percent,” he said. “This impacts innovation and, specifically, green energy innovation. It’s still at an early stage, but if anything it shows the need for a holistic view through examining different parts of it … finance and funding is quite important as a motivation in these schemes.”