Green technology products, comprising wind and solar power, water efficiency, electric vehicles, heating, ventilation and air conditioning, is a global market with an estimated worth of over two trillion dollars a year, and growing at an annual rate of 12 per cent. According to World Intellectual Property Organisation applications to patent green technology have risen by over six per cent since 2011, making it one of the leading growth areas for intellectual property.

However, the convoluted IP and licensing issues besides curious Government policies are proving to be the nemesis for an otherwise promising sector. The hurdles faced in India and in other countries are stifling innovation and threatening the prospect of an expedient transition from a traditional resource-hungry economy to sustainable and green technologies based economy.

The Indian viewpoint on IP issues of clean technology based products does not bode well for the green technology innovation scenario in India. This was made clear way back in 2009 at the United Nations Climate Change Conference in Copenhagen when India tabled the proposal that sought to effectively end patent protection for clean technologies, making them subject to ‘compulsory licensing’.

This amounted to waiving off the intellectual property rights and, therefore, served as a major setback to innovative entrepreneurs who were determined to bring about a change with green technology. Since then, India has highlighted the initiative to issue CL for green technology at numerous international forums amid intense scrutiny and criticism from stakeholders in India and abroad. Countries such as the UK and the US have registered strong objections to India’s decision to allow CL as it allows domestic producers to manufacture copied versions of patented environment-friendly products. India at its end maintains that it has not violated any international laws and that CLs will be issued only if the strict criteria mentioned in the Indian Patent Act and the global Trade Related Aspects of Intellectual Property Rights are met.

The crux of India’s posture on the issue is the National Manufacturing Policy, issued in late 2011. The NMP justifies and explicitly sanctions the Government to issue CL for green technology in cases where patent holders charge unreasonable rates, or where domestic demand is not being met in a satisfactory manner. The Government is of the opinion that these initiatives combined with suitable tax sops will help promote clean technology in the country.

However, the Indian Government needs to realise that the NMP policies will eventually foster mistrust globally and result clean-tech companies being circumspect of entering India. No business entity would be comfortable in a market where the local players have the advantage of approaching their Government and acquire CL to manufacture patented products. This would put the patents and investments of international companies at risk.

As other countries such as Brazil and China join in to this concept of weakening the IP rights in order to produce affordable green products to conserve the environment the countries are increasingly growing oblivious to the long-term consequences of such policies. A weak IP rights erodes the incentive to develop newer and more effective technologies and affects the research & development capability of the country. A populist move that seeks to provide impetus to local industry may in the long-term setbacks such as stifling of green job creation.

Europe is already facing this scenario according to a report published by the Coalition for Innovation, Employment and Development. The report says millions of jobs could be created in Europe through the research and production of innovative green technologies but this opportunity can be jeopardised by weakening intellectual

property rights.

Global research & development has resulted in whatever advancement we have today in clean technologies. And there is no free meal. India will have to strengthen its research & development, incentivise to innovate and develop sustainable technologies that can be scaled up.

India should incubate ideas and the patent policies should allow temporary protection for those who actually produce the products their ideas envision. At the same time the regulations should be severe on non-manufacturing companies that acquire and exploit libraries of patents to extract licensing fees from creative firms.

India should look at CL as an option for emergency situations where patent-protected products are prohibitively expensive. Additionally, as a balanced approach, the policies can limit patents to 10 years instead of 20 years. Besides this the regulations can require patent holders to provide annual evidence that they are producing the patented green product, and, in this manner, patents can be great defensive measures to protect and promote innovation besides spreading knowledge.