Looks Like IP Is About To Slow Down Innovation In Clean Tech

from the there-goes-that-idea dept

Plenty of studies have shown, over and over again, that in an emerging market, the last thing you want is patent protection. It slows down innovation and adoption drastically. That's because in a brand new emerging market, the bigger issue is actually figuring out how to get the market established -- and that means a lot of different efforts getting thrown at the wall, and the ability for multiple parties to try different approaches to getting things to work in a way that the market wants. Often this means a lot more sharing of ideas (even among competitors), as everyone begins to recognize that getting over that adoption hurdle is a much bigger deal than hoarding IP. And that's a key point. With these emerging markets, the incentive is often the realization that when the market need is actually met, it will make a lot of people very wealthy, not by hoarding IP, but by selling product. This is a perfect example of a market where patents make no sense at all. There's no need for monopoly protections where the market can accurately reward the innovators.

The clean tech market has been an interesting one to watch, because it certainly has not needed patents to keep people interested. Lots of companies have been jumping into the market, realizing that the world needs better energy solutions, and recognizing that those who successfully crack that nut won't have to worry about patents, but about being able to actually serve the demand. But, those who look at innovation entirely through the spectrum of patents would like to paint a different picture. Reader bretton points out that a recent document sent around by a big law firm is pushing the idea that patents will be essential for "fostering innovation" in clean tech (pdf). Of course, studies (and history) have shown exactly the opposite... but, of course, more patents would be good for the law firm and its business.

At almost the same time as that link was sent over, Michael Koch alerted us to a discussion of how some big companies are suddenly very interested in patents on clean tech. It notes that, prior to this year, there was very little interest in the clean tech community for patents or patent issues, but as the new administration talked up the importance of working together and sharing information (even across borders) to further the goal of actual innovation (rather than the hoarding of ideas), suddenly the US Chamber of Commerce unleashed its lobbying muscle to demand that patents be a big part of this:

However, this situation changed dramatically in the spring and summer of 2009 with the advent of the Obama administration making public statements about sharing technology related to energy. In reaction, the United States Chamber of Commerce, a leading lobby representing businesses, is expressing growing concern that moves to spread new energy technologies to developing countries could erode the IP rights that have driven commercial efforts to innovate for generations.

Late in May 2009, the group and representatives of General Electric, Microsoft and Sunrise Solar gathered in Washington to launch the Innovation, Development & Employment Alliance, or I.D.E.A. The initiative is aimed at pressing Congress and the Obama administration to ensure that global climate-treaty talks do not weaken protections on who can profit from new technologies that provide abundant energy without abundant pollution. The creation of I.D.E.A. has been widely noted, with some alarm, in the IP "watchers" community, and likely means the status of alternative energy as a less-observed IP sector is finished for good....

The new Secretary of Energy, Steven Chu, a Nobel Prize winner, has publicly supported collaborating with developing countries - in particular China - and sharing all IP rights of the resulting technologies. He has already pushed forward with a new U.S.-China Clean Energy Research Center, developed with $15 million dollars each from the U.S. and Chinese governments, and designed to create innovative technologies for building energy efficiency, clean coal (including carbon capture and storage) and clean vehicles. In addition, Secretary Chu is advocating for the development of open-source building energy-efficiency software that will make it cheaper and easier for developers to implement energy saving measures in new buildings, both in the U.S. and in emerging economies like China and India.

Such an effort could certainly help advance some of the important scientific research and innovation in clean tech issues... but of course, this new lobby is having none of it:

In reaction, I.D.E.A.'s first act was to back the Larsen-Kirk Amendment to the Foreign Relations Authorization Act (H.R. 2410). The amendment calls on the President, the Secretary of State and the Permanent Representative of the United States to the United Nations to uphold the existing international legal requirements for IP rights and avoid any weakening of them for the UNFCCC in the context of energy and environmental technology. The Amendment passed the House with a 432-0 vote. It was described as an amendment to protect U.S. green jobs and U.S. technology innovation.

Of course, the reality is exactly the opposite. If we don't make the necessary innovation breakthroughs then there won't be that many US green jobs at all. It's stunning in this day and age that politicians can still be convinced that such protectionist policies protect jobs rather than limit them. Getting serious innovation in the clean tech market will create tremendous job opportunities. Focusing on who gets to own the patents (and blocking foreign collaboration) at this stage only delays the ability for the US to create those jobs and to move to better energy options.

What a shame.

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Senate Nixes Clean-Tech Investment Incentives

from the ouch-that-hurts dept

The clean-tech sector -- along with every other sector, company, and person who uses energy -- suffered something of a setback today at the hands of the United States Senate. By a vote of 40-59, federal tax incentives for clean-tech investments will be left to dry up at the end of next year. Using the 2007-2008 Senate math that most of us missed in 8th grade civics class, it now takes 60 votes to get anything done, including an extension of current renewable energy investment tax credits set to expire. These tax credits have played a big role in the surge of investment into wind, solar, and other clean energy technology. The votes of 40 Senators certainly don't reflect the feelings of their constituents (Americans are almost unanimous in their support for developing new sources of renewable energy) but the issue is more complicated than 39 Republican and one Democratic congresspeople who are sour on solar. The clean-tech incentives ran into a roadblock when supporters insisted on -- you'd better sit down for this -- paying for them. Specifically, the tax incentives would be paid for through the year 2016 by repealing billions of dollars of long-standing subsidies to fossil fuel companies. The escalating costs of energy are being felt by Americans who are paying significantly more to fuel their car, heat their home, and keep their lights on. Higher energy costs will eventually work their way into just about every product that we purchase and every service that we have come to enjoy. A near-decade-long extension of the federal incentives would have significantly leveled the playing field versus legacy energy systems and paved the way for continued acceleration of investment into clean-tech. The sector has seen false starts before as incentives have come and gone. Today's inaction dampens hopes that energy consumers will have alternatives any time soon, and leaves individuals, companies, and entire industries at the ongoing mercy of an aging and unstable fossil fuel infrastructure.

Daniel DiPasquo is an expert at the Insight Community. To get insight and analysis from Daniel DiPasquo and other experts on challenges your company faces, click here.

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