VIEWS: Energy Innovation vs. Intellectual Property Rights – A Necessary Inquiry into Values

Dispatch from SSC Intern Paul Turaew

Recently, America entered into a formal understanding with China in which the two nations expressed their intent to cooperate with one another in order to address and solve the global warming (also known as climate change) dilemma. The memorandum formalizing this understanding was broad and comprised of promises such as:

Commit[ing] to respond vigorously to the challenges of energy security, climate change and environmental protection through ambitious domestic action and international cooperation; and

Resolve[ing] to pursue areas of cooperation where joint expertise, resources, research capacity and combined market size can accelerate progress towards mutual goals.

The memo did not explicitly bind the nations into taking any specific measures. None the less, it was explicit enough for some in the private sector to take notice.

For many businesses, cooperation and sharing is great only to the extent that it doesn’t hinder the economic bottom line – businesses are in business to make profit. This is not necessarily a bad thing under “normal” circumstances. American businesses that research, experiment and create new, clean and efficient energy technologies are (and should rightly be) protected from others copying and profiting off of their hard work. Within the U.S. there are a plethora of statutes that do just that. However, these protections are not mirrored in China. Many domestic companies expressed great concern over this newly formed, federally-backed partnership between the U.S. and China because they believe their efforts will be looted. Large multi-national companies like GE oppose IP (intellectual property) liberalization by claiming their overseas operations are in the rightful place to implement their efforts – not Chinese companies.

Energy Secretary Chu believes that dropping some forms of IP protection may be needed - he is under the impression that we are not living under “normal circumstances.” Secretary Chu provided the example of new technology developed by a US company that allows power plants to store and capture CO2. Dr. Chu uses this example to illustrate his reasoning that because the US-based company cannot actually build this new power plant domestically to ship overseas (generating revenue), the fiscal deterrents are minimal and should not prevent the company from sharing the technology, thereby mitigating global warming - the greater good.

If the broader, long term implications of climate change are not kept in mind, it won’t matter what side prevails – we’ll all lose. A better answer may lie in seriously considering Dr. Chu’s ideas which may lead current IP laws to be amended and relaxed. Climate change is a significant enough issue that we should not let economic profit hinder progress. We must discover a middle ground, allowing for cooperation and sharing of helpful technologies while not stifling companies’ bottom lines and hindering progress. A good place to start would be to ensure that the new, less stringent protections do not lead to abuse.