Role of TRIPS in the Implementation of the Paris Agreement, 2015

I. Introduction

The main issue of this project is how the TRIPS will help in the facilitation of the Paris agreement. In other words, we can say how the TRIPS helps the member States in resilience against climate change & helps to limit greenhouse gas emissions. Prima facie raises two issues, how the present framework of TRIPS facilitates the Paris agreement and what are the changes or approaches required in the TRIPS to implement the Paris agreement more smoothly. This project covers both issues.

First, the TRIPS agreement has few provisions that contribute directly and indirectly to the implementation of the Paris agreement. Like art. 7 talks about the dissemination of the technology, art. 4 emphasizes MFN treatment which helps in the promotion & transfer of technology unconditionally to the nationals of all the members, art. 27(2) that excludes patentability inventions that cause serious prejudice to the environment art. 66 highlights the requirements of the least developed country members and few others.² So, in the second chapter, the project brief how the present framework brought significant change in the facilitation of the Paris agreement.

Second, in the battle against climate change, technology will play a pivotal role. We know that one of the visions of the Paris agreement is the development & transfer of technology because the capability & the capacity of all the member states are not the same.³ Some developing and least developed countries don’t own environmentally sound technology like developed countries. Multiple times, many countries communicated and raised issues like automatic granting of rights through voluntary licensing and the use of TRIPS flexibilities to access green technology, etc. However, these changes are not adequately implemented, and few are not even added to the TRIPS. Also, environmental pollution is categorized as a national emergency in the developing world, which raises the issue of whether climate change justifies the compulsory licensing of green technology.⁴ This needs to be analyzed in light of the Doha declaration and art. 31 of TRIPS. Furthermore, whether there is a need to increase the incentive for the companies who are working in the innovation & manufacturing of green technology and what will be the role of private investment in the implementation of the Paris agreement, and how to attract investment for green technology, this means a plethora of changes are required in the TRIPS & in the approach of the WTO members for smoother implementation of the Paris agreement.

Third, the challenges that TRIPS is facing or will face for facilitating the implementation of the Paris agreement, like the regulation of the IP costs because sometimes the charges in the name of the royalty for the IP are exorbitantly high. Fourthly, the issue of compulsory licensing, which is the need of the hour for environmentally sound technologies and if the TRIPS promotes compulsory licensing for the green technology, then who will define the term green technology, what will happen if the members misuse the provision because it has the potential to affect the entire objective of the TRIPS of the balanced IP system that promote social & economic welfare. Also, technology transfer affects competition in the global market, and this issue is also discussed in this project.

II. Contribution of TRIPS in the implementation of the Paris agreement

TRIPS promotes trade in knowledge & creativity, and one of the primary objectives of the TRIPS is the transfer & dissemination of technology. There are lots of TRIPS provisions that facilitate the implementation of the Paris agreement and address climate change. A few of them are discussed below.

Promotion & development of green technologies

TRIPS aims to enable and promote invention, and few of these inventions come under the ambit of green technology. The word green technology is defined under chapter 34 of agenda 21 in Rio Summit, 1992 as the technology that protects the environment and works in a more sustainable manner from their substitutes.⁵ TRIPS protects IPR rights like Patent, which empowers the inventors to promote innovation that enables green technology. These green technologies play a pivotal role in the battle against climate change, or we can say to reduce carbon emissions. The preamble of TRIPS, art. 7 & art. 8 of TRIPS highlight the same.

Transfer & dissemination of green technologies

Globally, only a few developed countries possess major green technologies, and these green technologies are much needed to address climate change because these technologies reduce greenhouse gas emissions drastically. These green technologies play a paramount role in mitigating climate change and strengthen Paris agreement members’ commitments to achieving the 1.5 degree Celsius level. To combat climate change, all members need to contribute, and if the least developed countries are technologically handicapped, then here these provision creates balance. Under this transfer of green technologies, the least developed countries can also contribute to the battle against climate change.⁶ Same as the previous, this approach is also highlighted in the preamble, art. 7 & art. 8 of TRIPS. Article 7 emphasizes the transfer of technology for the mutual advantage of other stakeholders and to promote social & economic welfare. So, one of the significant contributions of TRIPS in the implementation of the Paris agreement is to facilitate the transfer of green technologies to address climate change.⁷

Exclusion from patentability

Under art. 27(2) of the TRIPS, there are few grounds on which a member may deny a patent to inventions that otherwise fulfilled all the criteria. One of the ground is when the invention has serious prejudice to the environment. This provision has two interpretations, and both interpretations prevent exploitation of the environment.⁸

First, it denies patents to those inventions that contribute to climate change and have caused a severe effect on the environment while functioning. For example, if any invention runs on non-renewable sources and while functioning pollutes the environment or deteriorates the nature, then a case per case basis member state can reject the request to grant a Patent. Second, if the member state feels that granting Patent to the invention will prevent technology transfer or the technology transfer will occur at a significantly lower rate with the others, then also member state can deny granting Patent. This is debatable, though, whether not granting the Patent to avoid monopoly in the case of green technology is against the fundamental objective of IPR. These two interpretations of art. 27(2) of TRIPS contribute a lot to address climate change which is the primary objective of the Paris agreement, 2015.⁹

Disclosure requirements under TRIPS

One of the pre-requisite of the patent application is the disclosure requirements, and under this, the application for the Patent has to disclose the clear & complete details of the invention. This disclosure helps to determine green technology. Because of this disclosure, a member state can identify whether the invention is green technology. This will help the member state to create a roadmap and use green technology to curb climate change.¹⁰ This disclosure requirement is governed under art—29 (1) of the TRIPS.

Exceptions & limitations under TRIPS

These two provisions play a crucial role in the transfer & dissemination of technology. First, art. 30 acts as an exception to the exclusive right given to the Patent and respects the third parties' legitimate interests and second, art. 31 of TRIPS permits the other user to use the subject matter of the Patent without the authorization of the right holder.¹¹ Under art. 31, the government authorizes any third party or the government itself to use the patented invention. In many cases of green technologies, these above two provisions can be invoked and used by the government to reduce carbon emission by transferring green technology to those who are deprived and have the potential to bring change in the fight against climate change.

Provision for least-developed country members

Art. 66(2) of TRIPS creates an obligation on the

developed countries' members to incentivize the enterprises in their territories. This incentive promotes and encourages the transfer of technologies to the least-developed countries that helps them to create a viable technological base.¹² As discussed in the above points, only a few developed countries possess a significant number of green technologies. This is their duty to promote green technologies to address climate change.

National Treatment & Most Favoured Nations (MFN)

How national treatment and MFN contribute to the implementation of the Paris agreement is quite interesting. First, as mentioned in art. 4 of TRIPS, MFN highlights that any favour, privilege, etc., must be given to all members because a state cannot deny the transfer of technologies, including green technology, to any state. Second, national treatment gives an equal playing field to the other member and also resolves the dispute concerning access to green technologies because only the domestic court has the jurisdiction to hear the IPR matter.

Role of WIPO Green

WIPO Green is an online platform created for the exchange of technology. WIPO green encourages global efforts to fight against climate change by giving a platform to both the providers as well as seekers of green technologies. This online platform maintains its database and invites important stakeholders to enable green technology innovation and dissemination.¹³

III. Issues in the present frame-work

Despite dozens of TRIPS provisions that facilitate the implementation of the Paris agreement, there are still many issues in the present framework that need necessary changes to contribute more efficiently to the implementation of the Paris agreement. A few of them are discussed below.

First, many developing countries and the least developed countries are not able to access the TRIPS flexibilities to access green technology. Second, many scholars claim that provision like art. 7 & 8 that promotes the transfer of technologies are abstractly framed. Third, the a high gap in the difference in the trade of green technologies as many reports highlight that few developing countries like China attract major trade and others do not benefit even after the increase of trade in green technology. Fourth, even the transfer of technology takes place; then, in that case, the royalty or the licensing cost is exorbitantly & commercially unviable for many underprivileged countries. Fifth, the effect on competition in the global market as the enterprises of the developed countries argue that if they transfer technologies to developing countries like India, then their manufacturers will be able to make cheaper products affecting the global competition. Sixth, the most important is the issue of compulsory licensing of green technologies in light of the Doha declaration on public health. The next chapter includes the changes that are required to curb these above-discussed issues.

IV. The need for changes in the TRIPS Agreement

Despite numerous TRIPS provisions that contribute to the implementation of the Paris Agreement, there are lots of changes required in the provision of the TRIPS to make the TRIPS more efficient in the implementation of the Paris Agreement. A few of the changes are discussed below.

Automatic granting of rights through voluntary licensing

Ecuador raised the proposal of automatic granting of rights through voluntary licensing of environmentally sound technologies (ESTs) as one of the solutions on how IP can contribute to facilitating the transfer of ESTs.¹⁴ Under the voluntary licensing of ESTs, authorization is given to other enterprises by the patent holder to manufacture the patented Article. In contemporary times this is limited only to cost generic medicines, but to facilitate the implementation of the Paris agreement, there is a need to widen the ambit and include ESTs.¹⁵

Reshaping TRIPS flexibilities to access green technology

There are many flexibilities mentioned in the TRIPS, which provide access to green technology like art. 30 & 31. But these flexibilities cannot provide access to green technology at a good rate, and only developing countries like China can take the benefits. There is an urgent need to review the flexibilities to make it friendlier for least-developed country members to access green technology. There is a need to understand that TRIPS flexibilities were drafted decades ago without giving so much importance to the issue of climate change.¹⁶

Compulsory licensing for ESTs

TRIPS permit compulsory licensing without the patent holder's authorization only in times of emergency, and this concept is introduced under art. 31. If the patent holder refuses to share the technology during an emergency, then compulsory licensing comes under the picture.¹⁷ In contemporary times, compulsory licensing is merely limited to life-saving drugs. Doha declaration 2001 on public health entitled the member states to determine the grounds on which compulsory licenses are granted, and environmental pollution is considered a national emergency in the developing world.¹⁸ Compulsory licensing will enhance the export of green technology to those countries with inadequate or deprived manufacturing facilities of green technology.¹⁹ This is why there is a need to introduce ESTs in the ambit of compulsory licensing to promote technology transfer without any legal hurdles.

Placing some IPRs in the public domain

Many developing countries like India and the least-developed country members always highlighted this change in the plethora of international conferences.²⁰ They suggested that the IPRs of some green technology that helps to address climate change by reducing carbon emission must be released in the public domain. This ensures the transfer of technologies of the critical green technologies in a smooth way. This change ensures that even least-developed countries' members contribute to the battle against climate change.²¹

Other Changes

i. Review the present licensing structures as there are many changes required in the current licensing structures and update the IP management strategies to speed up dissemination & transfer of technologies.²² Many least-developed nations contend that the licensing structures have many loopholes, and all the members cannot utilize the fullest because of the hurdles present. There is a need to introduce a broad-based open licensing structure to achieve the objective of the Paris agreement.

ii. Introduction of cross-licensing or pool arrangements that enable diverse technologies stakeholders to share benefits from each other technologies.²³

iii. The government uses authorization concerning non-commercial public use or for research & development.²⁴ These steps with proper safeguards will bring revolutionary changes in the TRIPS to implement the Paris agreement.

V. Challenges & Recommendations

The changes mentioned in the previous chapter have a few operational challenges. These challenges mandatorily need to be addressed; otherwise, the beneficiaries will exploit the green technology, affecting the entire objective of technology transfer of the TRIPS & Paris agreement. This chapter includes significant challenges and the required approach for the challenges.

1. The ambit of Green Technologies or Environmentally Sound Technologies

The entire proposed changes are in the TRIPS are for the transfer of technologies. The different members use terms like green technology, environmentally sound technology, environmentally rational technology, climate-friendly technology, etc., which are used by the various members in various instances. Though chapter 31 of agenda 21 in the 1992 summit has defined the term green technology, the definition is quite vague.²⁵ If relaxation is provided, then there are huge chances that many member states will take advantage of this vague definition and exploit the IPR rights, which is paramount in economic growth.²⁶ Because of this, the first task before drafting changes is to outline the ambit of the green technology and determine what kind of technology is to be used to implement the Paris agreement. To determine the ambit of green technology, both the TRIPS & UNFCCC have to play a crucial role in providing a multidisciplinary ambit of green technology.

2. Combatting Climate Change v. Economic Growth

This is one of the controversial debates in contemporary times that who will prevail the environment protection or the infrastructural development. Here, IPR is a critical issue because it helps both in addressing climate change and also in economic growth. Also, this is a wrong notion that the technology transfer to address climate change will affect economic growth, but in reality, the technology transfer promotes global economic growth. Like the previous question, this is also debatable whether technology transfer promotes global economic growth or not. But about the first issue of combatting climate change v. economic growth, we must adopt a mixed approach in which both aspects are considered proportionate, but combatting climate change must need to be prioritized. Hence, both will be at an equal stage, but climate protection will prevail in direct conflict.

3. The issue of competition

The fundamental objective of transfer of technology suffers setback because of the anti-competition practice to maintain the monopoly of the Patent. Patent holders of developed countries argue that if they share the technology, then developing country manufacturers will produce the products at a cheaper rate than them, ultimately creating a deteriorating effect in their global market, because of which the patent holders from the developed countries hesitate in the dissemination & transfer of technology. The solution in these scenarios is to explore and use pro-competition steps for market-driven transfer of technology.²⁷

4. Green Mercantilism

In this, the country adopts the policies to boost exports & limit imports of green technology and give the country an unfair advantage. China's government subsidy because the manufacturers were exporting the solar panels at a lower rate is one of the examples of green mercantilism.²⁸ This unfair trade practice will help address climate change or foreign consumers to reduce the burden but restricts the incentive to invest in the next generation of green technology affecting the environment in the long run. These scenarios will be rampant if proper safeguards are not present.

5. Tariff & Non-Tariff Barriers

The tariff & non-tariff barriers act as a barrier to trade in environmentally sound technology & market liberalization. The same issue was also highlighted in paragraph 31 of the Doha Ministerial Declaration of 2001. There is a need to reduce or eliminate these barriers to liberalize the market & trade-in environmentally sound technology.²⁹

6. Bad signal to current & potential investors

This green technology sector needs lots of investment; billions of dollars are invested in the research & development of environmentally sound technology. Countries like the USA & European Union argue that if the TRIPS introduces compulsory licensing for ESTs, it will give wrong signals to current & potential investors.³⁰ They might feel that their investment are not safe because of the transfer of monopoly. The countries contended that it would also affect the innovation in the future green technology, which creates more disasters for the environment. Here, there is a need to safeguard the investor interest of reasonable profits on the investment as well.

7. Compulsory licensing- Legal, Political & Operational Problems

The introduction of the compulsory license will bring lots of other challenges with them. Like member countries need to change their domestic laws, which will create a stir in their internal system.³¹ In a situation like in the least developed countries like Uganda, even if the developed countries want to transfer the technology, they also don’t have domestic enterprises to work on the technology. Also, there are high chances that many countries will exploit the provision of compulsory licensing of green technology for their benefit. There is a need to draft this very cautiously because even a tiny mistake will affect the Paris agreement's objective.

VI. Conclusions

TRIPS, as the most comprehensive multilateral agreement on intellectual property, enables the trade-in knowledge & creativity and ensures that intellectual property itself doesn’t become a barrier to legitimate trade globally. On the other hand, Paris Agreement is also a landmark treaty on climate change because the agreement is binding on 197 countries. One of the common goals of both the TRIPS & Paris agreement is the technological innovation of green technology & the dissemination & transfer of green technology. As discussed in this project, TRIPS has a significant role in implementing the Paris agreement. Initially, the TRIPS present framework contributed to the implementation of the Paris agreement. A provision like art. 30 & 31 that highlights the exceptions & limitations, art. 27(2) that talk about patentability exclusion, art. 66(2) creates obligations for the developed countries to provide an incentive for the least-developed members and many others. But, many experts believe that these provisions are very abstractly framed. Many reports also highlight the inequality in the global trade of ESTs that only a few countries like China are taking the benefit, and other developing and least-developed members cannot use the TRIPS flexibilities to access climate-friendly technologies to address climate change. The anti-competition practices to maintain the monopoly of the enterprises of the developed countries is also a barrier in the transfer of technology. Also, the issue of widening the ambit of compulsory licensing is a major challenge.

The issues in the present framework of TRIPS justify that significant changes are required. An essential requirement is reshaping the TRIPS flexibilities because, as we discussed, all those flexibilities are abstractly framed that impact the dissemination & transfer of technology. Recommendations like the automatic granting of rights in the case of green technology through voluntary licensing proposed by countries like Ecuador are also crucial to address climate change because it ensures participation from least-developed members. There is also the need to place some IPRs of green technology in the public domain. Apart from these changes, the compulsory licensing part also needs revolution as in contemporary times, and it is limited only to life-saving drugs. But, climate change is a global issue and requires urgent attention in a developing world. This all raises the need for compulsory licensing in ESTs in light of the Doha Declaration of 2001 on public health. There is also a need to reform the present licensing structures to enable IP management strategies to promote green technologies transfer to reduce carbon emissions globally. TRIPS can also promote cross-licensing & pool arrangements for the welfare of different stakeholders and frame rules concerning the government use authorizations solely for non-commercial use.

Interestingly, these required changes also need to be implemented cautiously because of the challenges present. First, the ambit of green technology, environmentally sound technology or environmentally rational technology, climate mitigating technology, etc., is the main hurdles in implementing the changes. Second, the climate change v. economic growth debate. Third, the competition issues created by the enterprises of the developed counties. Fourth, the issue of green mercantilism recently came into the limelight because of China's government subsidy in solar cells affecting imports in their country. The presence of stiff tariffs & non-tariff barriers also prevents the trade-in knowledge & creativity. But, the most crucial challenge after implementing the changes is the wrong signal to the current & future investors of green innovation as they might feel that their investments are not safe.

This project helps us to understand that the role of the IPR is multi-dimensional, helping both in facilitating & hindering technology transfer. There is a need to reshape the entire IPR regime to make it friendlier for the least-developed nation & developing countries to access green technology. No doubt, compulsory licensing is the need of the hour, but with adequate safeguards otherwise, it will be exploited by many developing countries. TRIPS must take a balanced approach that secures the private interests of the IPR holders, the development of new technology or technological innovation, and the most crucial dissemination & transfer of green technology. But, these all changes required political reaffirmation, especially from the developed nations like the US, European Union & Canada.

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