It’s great news that the United States will surpass Russia to become the world’s #1 energy producing nation. Leveraging these resources responsibly can power the U.S. economy for the next several decades, reducing our dependence on dicey trading partners, and blessing world energy markets with increased supply.
Some may fear that these new domestic energy resources will take the wind out of the sails of alternative energy research and innovation. It’s true that the past few years have seen a wasteful and largely failed attempt to direct green innovation from the top-down as part of a political agenda, and it will be good to see that failure come to an end.
But there will be—and should be—continued innovation in alternative energy sources, driven by private capital and market-based adoption of successful technologies. And America should lead the world in it.
Alternative energy innovation—like all innovation—depends on a system where the rights of the creators are respected, and where they have at least a chance of commercializing their inventions, repaying investors, and being rewarded by the market for their successes. In other words, green innovation will require intellectual property rights to be respected if the innovations are to be commercialized and the technology transferred, as IPI wrote in 2008.
Unfortunately, some of our major trading partners have decided that part of their national development strategy is to disrespect the rights of creators and innovators, trampling on internationally recognized intellectual property norms and essentially seizing patented technologies by issuing compulsory licenses. India has led the way by using compulsory licenses on pharmaceuticals to transfer patented technology to their domestic producers as industrial policy, under the guise of public health.
And now India has said that it reserves the right to issue compulsory licenses in the green technology sector. India’s National Manufacturing Policy of 2011 (PDF p. 15) authorizes the issuance of compulsory licenses for green tech if the cost of licensing a patent is “unreasonable,” if the patent holder is unwilling to license, or if the patent is not being worked in India.
Of course, you could drive a hydrogen powered truck through those conditions, which is undoubtedly what India plans to do—illegitimately transferring technology to domestic Indian firms in order to compete internationally as a low-cost manufacturer.
India’s disrespect for international patent norms is a serious threat to its trading partners. If India succeeds in short-circuiting intellectual property rights in order to make domestic gains, it will come at the price of an overall loss to innovation by discouraging investment in green innovation.
The greatest threat to green energy innovation is not new energy resources, but rather disregard (such as India’s) of the rights of innovators through the international IP system.
October 3, 2013