A report on the role of patents in the field of clean energy technologies was published in Brussels on 30 September 2010. The report is based on an empirical study jointly conducted by the European Patent Office (EPO), the United Nations Environment Programme (UNEP) and the International Centre for Trade and Sustainable Development (ICTSD) and provides some solid information on the widely debated subject of the role of patents in the transfer and development of energy generation technologies that have the potential for reducing greenhouse gas emissions.

To examine the effect of patents on the field of clean energy technologies, a worldwide mapping study was commissioned on various energy supply technologies – such as solar photovoltaic, geothermal energy, hydro/marine and wind power, biofuels and carbon capture. The findings of the technology mapping were used to identify all patents relevant for the study. In the end, some 400,000 clean energy technology patent documents were identified from a pool of 60 million international level patents.

Remarkable increase in clean energy patent applications

 The study reveals a surge of new clean energy technology patent applications, which coincides with the adoption of the Kyoto Protocol in 1997. The patenting rates of clean energy technology have increased approximately 20 percent per year since 1997, which makes clean energy technology patent-wise the fastest growing field of energy technology, outpacing traditional energy sources such as utilisation of fossil fuels and nuclear energy. The fields experiencing the most intensive growth include solar photovoltaic, biofuels, carbon capture and hydro, marine and wind power.

Geographic diffusion

Rather than the surge being a worldwide phenomenon, the report shows that six countries dominate the field, filing almost 80 per cent of all patent applications in the field of clean energy technologies. Japan is the number one player in clean energy technology patenting, followed by the United States, Germany, the Republic of Korea, France and the United Kingdom. However, a number of emerging economies like China, India and Brazil are showing specialisation in niche sectors – such as solar, hydro and wind power – with considerable increase in patent rates in recent years.

New classification scheme

In the process of the data collection for the study, the EPO has developed and launched a new classification scheme for technical attributes in climate change mitigation technologies, including clean energy technologies. The patents are collected into a global database of 600,000 patents and available at the EPO’s public patent information service esp@cenet, which provides access to all patent documents relating to clean energy technology. The scheme will provide continuous information on the development in the field and presumably, thus, help to improve the transparency of the patent system in the sector of climate change mitigation technology.

Survey of licensing practices

Alongside the study, the first ever global survey of licensing practices and trends of leading companies and organisations was carried out with regard to the licensing of clean energy technologies. Whereas the survey found that the out-licensing activity towards entities located in developing countries was very limited among the survey participants, the overall level of such activity is not lower than in other industries.

Findings from other industries indicate that there are a number of obstacles to overcome in out-licensing due to factors such as the transaction costs involved, finding suitable partners and agreeing on licensing conditions. Overall, patent protection in the country of the licensee was an important consideration when determining whether to enter into a licensing agreement. However, the majority of the respondents participating in the survey were prepared to offer more flexible terms when licensing in countries with limited financial capacity. Academic institutions and public organisations were slightly more willing than private enterprises and small and medium-sized enterprises were slightly more willing than multinational corporations to offer more flexible terms to actors operating in developing countries.

Conclusions

According to the compilers of the study, patents play a key role in providing information about existing technologies, the level of their development and their geographic spread. The EPO further states that understanding the role of clean energy technology patents can help in efforts to mitigate climate change, particularly by helping to enhance and accelerate the worldwide transfer of these technologies.

The compilers emphasise that political statements can spark innovative activity in a given area, as evidenced by the Kyoto protocol giving private companies the incentive to increase the development of clean energy products. Steven Stone, Chief of the UNEP Economics and Trade Branch, states that the intellectual property framework can provide an important stimulus for private sector innovation. In the year 2011, the UNEP will launch a report examining the role of investment in developing green technologies.

For Finnish companies, the study clearly indicates patents as the field’s main form of protection together with trade secret protection. In order to secure the value and competitive edge of a clean tech company or venture in this patent world, there seems to be an need to focus on ensuring sufficient freedom to operate, rational and predictable pricing and also to adopt new solutions in the allocation of IP ownership between the collaborating parties.