Patent Law, Green Technology and Innovation 9781032333908, 9781032333946, 9781003319467

Table of contents :
Cover
Half Title
Series
Title
Copyright
Contents
1 Introduction
1.1. Background
1.1.1. Role of Patent System in Promoting Green Technology Innovation: An Overview
1.2. Review of Literature
1.2.1. Patent Protection, Technology Transfer and Diffusion
1.2.2. Trends in Green Patenting 7
1.2.3. Patent Pledges, Eco-Patent Commons and Diffusion of Green Technology
1.2.4. Compulsory Licensing in relation to Green Technology
1.2.5. Business Innovation, Green Economy and Diffusion
1.2.6. Effect of Fast-tracking Programs
1.2.7. Green Marketing, Green Consumerism and Green Technology
2 Green Innovation and Green Technology: An Overview
2.1. Green Innovation: Meaning, Evolution and Importance
2.1.1. Importance of Green Innovation Centers (GICs)
2.1.2. Presence of GICs in India
2.2. Pertinence of Green Manufacturing
2.3. Meaning and importance of Green Skills
2.3.1. Green Employment
2.3.2. Green Economic Development
2.3.3. Global Endeavor and Green Skilling
2.4. Green Technology: Trends and Prospects
2.4.1. Public Governance: Innovation Policies and Green Growth
2.4.2. Access to Green Technology and Uptake of Green Innovation: Barriers and Challenges
2.4.3. Fostering Green Innovation through Right Timing and Investment
2.4.4. Formulation of Technology-specific Policies
2.5. Green Innovation in the US
2.5.1. Institutional Initiatives
2.5.2. Major Policy Points Pertaining to Green Innovation
2.5.3. International Role of the US in Promoting Environmental Protection and Green Innovation
2.6. Role of Patenting in Promoting Green Innovation
2.6.1. Green Technology Pilot Program
2.6.2. Fast-Tracking (FT) Program for Green Patents
2.7. Evolution of Green Innovation in India
2.7.1. Reasons behind India’s Slow Green Growth
2.7.2. Innovation Ecosystem: Indian Perspective
2.7.3. Role of various Institutes
2.7.4. R&D in India: Statistical Analysis
2.7.5. Sectors of Green Growth: Indian Policy Framework
2.7.6. Green Infrastructural Growth and the Way Ahead
2.7.7. Low-Carbon Technologies and Innovation: A Giant Leap Ahead
2.8. Role of Patent Protection in Boosting Green Innovation
3 The Nexus Between Green Innovation and Green Economy
3.1. Relevance of Green Innovation and Green Economy
3.1.1. Promoting Frontier Green Innovation
3.1.2. Technological Capabilities and Local Technology Push
3.1.3. Global Technological Push: Supporting Strategies
3.1.4. Public Research Funding to Promote Green Innovation
3.1.5. Science as a Green Entrepreneurial Endeavor
3.2. Technological Dimensions and Green Innovation
3.2.1. Information and Communications Technologies (ICTs) and Green Innovation
3.2.2. Direct Impacts of ICT
3.2.3. Enabling Impacts of ICT
3.2.4. Systemic Impacts of ICT
3.2.5. The Smart Grid
3.2.6. Biotechnology and Green Innovation
3.2.7. Nanotechnology and Green Innovation
3.2.8. Green Chemistry and Green Innovation
3.3. Promoting Green Innovation in Developing Countries
3.3.1. Promoting Catch-up Green Innovation
3.3.2. Enhancing Access to Climate-friendly (Green) Technology
3.3.3. Accelerating Green Technology Absorption
3.3.4. Supply-push and Demand-pull Policies
3.3.5. Promotion of Absorptive Capacities
3.4. Green Investment and Green Innovation
4 Patent Law, Diffusion of Green Technology and Allied Matters: A Global Perspective
4.1. Green or Environmental Innovation in OECD Countries
4.1.1. Measuring the Levels of Green Innovation in OECD Countries
4.1.2. Patents for Measuring Innovation Levels
4.1.3. Role of Patent Data in the Identification of Environment-friendly Technology
4.1.4. PATSAT Database for Advanced Patent Search
4.2. Relative Technological Advantage (RTA): A Study of the World Innovation Regime
4.2.1. International Collaborations in Climate Change Mitigation Technologies
4.2.2. Selected Jurisdictions and Environment-friendly Technologies: Relative Study
4.3. Fast-tracking of Green Patent Applications and Diffusion of Green Technology
4.3.1. Green Patent Applications and Inventions according to Nationality
4.4. Diffusion of Climate Change Mitigation Technologies: Role of OECD Countries
4.4.1. Clean Development Mechanism (CDM) and Diffusion of Green Technology
4.5. Role of Patents in Promoting Diffusion of Green Technology
4.5.1. Green Channel in the UK
4.5.2. Prevailing Issues in Adoption of Green Technologies
4.6. Compulsory Licensing and Diffusion of Green Technology
4.6.1. Compulsory Licensing: Pharmaceuticals versus Green Technologies
4.6.2. Public Health and Urgency
4.6.3. Extending the Scope of Compulsory Licensing to LDCs
4.6.4. Doha Declaration, Means of Production and Compulsory Licensing
4.6.5. Green Technology and Pharmaceuticals under TRIPS
4.6.6. Explicit Inclusion of Public Health
4.7. A Case Against Compulsory Licensing of Green Technology
4.7.1. Economic Ramifications
4.7.2. Green Technology Industry and Compulsory Licensing: The Dichotomy
4.8. Policy Instruments, Adoption and Diffusion of Green Technologies
5 Green Technology Diffusion and the Indian Patent Regime: Role of India in Promoting Green Economy and Green Growth
5.1. Introduction
5.1.1. Environmental Deterioration and Technology
5.1.2. Cooperative Patent Classification and Climate Change Mitigation Technologies
5.2. Green Technology in India
5.2.1. Transfer of Technology
5.2.2. Sectors Exhibiting Growth in Green Technologies
5.3. India’s Global Position
5.4. Green Patenting: Current Position and Emerging Trends in India
5.4.1. Access to Green Technology and Indian Patent Law
5.4.2. Compulsory Licensing and Green Technology
5.4.3. Facilitating the Diffusion of Green Technology
5.5. Green Technology: Sector-wise Study in the Indian Perspective
5.5.1. Developing Cost-effective Green Technologies
5.6. Green Marketing and Patent Regime: Indian Scenario
5.6.1. Genesis of Green Marketing
5.6.2. Phases of Green Marketing
5.6.3. Green Marketing: Current Trends in India
5.6.4. Steps Taken by Indian Companies in the Field of Green Marketing
5.7. Patent Law, Technology Transfer and Green Marketing
5.7.1. Indian Patent Regime and Green Marketing
5.7.2. India and Technology Transfer
5.7.3. Patenting and Green Market Strategy in India
5.7.4. Patent Pooling and Diffusion of Green Technology
5.7.5. Patent Pooling and Green Technology in the US
5.7.6. Patent Pooling and Green Technology in India
6 Cutting-Edge Developments in the Field of Green Innovation and Diffusion of Green Technology
6.1. Movement on International Fronts
6.2. Progressive and Cutting-edge Green Innovation
6.3. Nobel Prize: Recognition of Impact of Innovation on Climate Change
6.4. Green Technology Diffusion: The Current Scenario
6.4.1. Efforts for Raising Technological Capacities
6.4.2. Patent Protection and Green Technology Diffusion
6.4.3. Accelerating the Diffusion of Green Technology: A Contemporary Business Outlook
7 Conclusion
7.1. Findings
7.2. Conclusion
Bibliography
Index

Citation preview

Patent Law, Green Technology and Innovation

In the era of modern industrial regimes, the role of technology in tackling climate change is pivotal. International goals of climate change mitigation and sustainable development cannot be achieved without the contribution of new technologies. At the same time, the importance of patent protection and an efficient patent system that facilitates technology transfer among international frontiers cannot be overlooked. Many patented technologies are either not accessible for further dissemination or do not hold much technical value. Therefore, advanced systems of collaborative innovation have been developed, especially in the sector of green technology and green innovation. The environmental concerns of the global community cannot be tackled by a single company, person, sector or country. Innovation partnerships and collaborative research will play a vital role in combating global climate concerns and in determining the diffusion of green technologies for maximum impact. This book argues that policy-makers should encourage partnerships in technology rather than focusing on gaining investment and access to green technology to encourage global technological giants to transfer their technology and knowledge to local entities. It analyzes the relationship between patent protection, green innovation and diffusion of green technology against the backdrop of climate change and severe climate crisis. Taking an interdisciplinary approach to align patent law and green technology with the Sustainable Development Goals, it examines the effects of patent protection, technology transfer and compulsory licensing on the diffusion of green technologies while offering a systematic analysis of the relationship between patent protection, green innovation and diffusion of green technology from a global perspective. Ankit Singh is Assistant Professor of Law at Hidayatullah National Law University, Raipur, Chattisgarh, India. Yogendra Kumar Srivastava is Professor of Law at Hidayatullah National Law University, Raipur, Chattisgarh, India.

Routledge Research in Intellectual Property

Available: The Patentability of Software Software as Mathematics Anton Hughes Annotated Leading Trademark Cases in Major Asian Jurisdictions Edited by Kung-Chung Liu SEPs, SSOs and FRAND Asian and Global Perspectives on Fostering Innovation in Interconnectivity Edited by Kung-Chung Liu and Reto M. Hilty Towards an Ecological Intellectual Property Reconfiguring Relationships Between People and Plants in Ecuador David Jefferson The Transformation of EU Geographical Indications Law the Present, Past and Future of the Origin Link Andrea Zappalaglio Copyright Law and Translation Access to Knowledge in Developing Economies Chamila S. Talagala Patent Law, Green Technology and Innovation Ankit Singh and Yogendra Kumar Srivastava For more information about this series, please visit www.routledge.com/ Routledge-Research-in-Intellectual-Property/book-series/INTELLPROP

Patent Law, Green Technology and Innovation Ankit Singh and Yogendra Kumar Srivastava

First published 2023 by Routledge 4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 605 Third Avenue, New York, NY 10158 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2022 Dr Ankit Singh and Dr Yogendra Kumar Srivastava The right of Dr Ankit Singh and Dr Yogendra Kumar Srivastava to be identified as authors of this work has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for this book has been requested ISBN: 978-1-032-33390-8 (hbk) ISBN: 978-1-032-33394-6 (pbk) ISBN: 978-1-003-31946-7 (ebk) DOI: 10.4324/9781003319467 Typeset in Times New Roman by Apex CoVantage, LLC

Contents

1 Introduction

1.1.  Background  1 1.1.1. Role of Patent System in Promoting Green Technology Innovation: An Overview  4 1.2.  Review of Literature  6 1.2.1. Patent Protection, Technology Transfer and Diffusion  6 1.2.2.  Trends in Green Patenting  7 1.2.3. Patent Pledges, Eco-Patent Commons and Diffusion of Green Technology  7 1.2.4. Compulsory Licensing in Relation to Green Technology  7 1.2.5. Business Innovation, Green Economy and Diffusion  8 1.2.6.  Effect of Fast-Tracking Programs  8 1.2.7. Green Marketing, Green Consumerism and Green Technology  9

2 Green Innovation and Green Technology: An Overview

2.1. Green Innovation: Meaning, Evolution and Importance  14 2.1.1. Importance of Green Innovation Centers (GICs)  15 2.1.2. Presence of GICs in India  16 2.2. Pertinence of Green Manufacturing  17 2.3.  Meaning and Importance of Green Skills  18 2.3.1.  Green Employment  19 2.3.2.  Green Economic Development  19 2.3.3.  Global Endeavor and Green Skilling  20 2.4.  Green Technology: Trends and Prospects  20 2.4.1. Public Governance: Innovation Policies and Green Growth  21

1

14

vi  Contents 2.4.2. Access to Green Technology and Uptake of Green Innovation: Barriers and Challenges  22 2.4.3. Fostering Green Innovation Through Right Timing and Investment  22 2.4.4.  Formulation of Technology-Specific Policies  23 2.5.  Green Innovation in the US  24 2.5.1.  Institutional Initiatives  25 2.5.2. Major Policy Points Pertaining to Green Innovation  26 2.5.3. International Role of the US in Promoting Environmental Protection and Green Innovation  28 2.6.  Role of Patenting in Promoting Green Innovation  31 2.6.1.  Green Technology Pilot Program  31 2.6.2.  Fast-Tracking (FT) Program for Green Patents  32 2.7. Evolution of Green Innovation in India  33 2.7.1.  Reasons Behind India’s Slow Green Growth  33 2.7.2.  Innovation Ecosystem: Indian Perspective  34 2.7.3.  Role of Various Institutes  34 2.7.4.  R&D in India: Statistical Analysis  35 2.7.5. Sectors of Green Growth: Indian Policy Framework  35 2.7.6. Green Infrastructural Growth and the Way Ahead  46 2.7.7. Low-Carbon Technologies and Innovation: A Giant Leap Ahead  47 2.8. Role of Patent Protection in Boosting Green Innovation  48

3 The Nexus Between Green Innovation and Green Economy 3.1.  Relevance of Green Innovation and Green Economy  60 3.1.1.  Promoting Frontier Green Innovation  60 3.1.2. Technological Capabilities and Local Technology Push  61 3.1.3. Global Technological Push: Supporting Strategies  62 3.1.4. Public Research Funding to Promote Green Innovation  63 3.1.5.  Science as a Green Entrepreneurial Endeavor  65 3.2.  Technological Dimensions and Green Innovation  65 3.2.1. Information and Communications Technologies (ICTs) and Green Innovation  65 3.2.2.  Direct Impacts of ICT  65

60

Contents vii 3.2.3.  Enabling Impacts of ICT  66 3.2.4.  Systemic Impacts of ICT  67 3.2.5.  The Smart Grid  67 3.2.6.  Biotechnology and Green Innovation  68 3.2.7.  Nanotechnology and Green Innovation  69 3.2.8.  Green Chemistry and Green Innovation  70 3.3.  Promoting Green Innovation in Developing Countries  70 3.3.1.  Promoting Catch-Up Green Innovation  71 3.3.2. Enhancing Access to Climate-Friendly (Green) Technology  72 3.3.3. Accelerating Green Technology Absorption  73 3.3.4. Supply-Push and Demand-Pull Policies  75 3.3.5.  Promotion of Absorptive Capacities  76 3.4.  Green Investment and Green Innovation  77

4 Patent Law, Diffusion of Green Technology and Allied Matters: A Global Perspective

4.1. Green or Environmental Innovation in OECD Countries  82 4.1.1. Measuring the Levels of Green Innovation in OECD Countries  82 4.1.2. Patents for Measuring Innovation Levels  84 4.1.3. Role of Patent Data in the Identification of Environment-friendly Technology  85 4.1.4.  PATSAT Database for Advanced Patent Search  85 4.2. Relative Technological Advantage (RTA): A Study of the World Innovation Regime  86 4.2.1. International Collaborations in Climate Change Mitigation Technologies  88 4.2.2. Selected Jurisdictions and Environment-friendly Technologies: Relative Study  89 4.3. Fast-Tracking of Green Patent Applications and Diffusion of Green Technology  90 4.3.1. Green Patent Applications and Inventions According to Nationality  91 4.4. Diffusion of Climate Change Mitigation Technologies: Role of OECD Countries  92 4.4.1.  Clean Development Mechanism (CDM) and Diffusion of Green Technology  93 4.5. Role of Patents in Promoting Diffusion of Green Technology  94

82

viii  Contents 4.5.1.  Green Channel in the UK  94 4.5.2. Prevailing Issues in Adoption of Green Technologies  95 4.6. Compulsory Licensing and Diffusion of Green Technology  97 4.6.1. Compulsory Licensing: Pharmaceuticals Versus Green Technologies  98 4.6.2. Public Health and Urgency  99 4.6.3. Extending the Scope of Compulsory Licensing to LDCs  101 4.6.4. Doha Declaration, Means of Production and Compulsory Licensing  102 4.6.5. Green Technology and Pharmaceuticals Under TRIPS  102 4.6.6. Explicit Inclusion of Public Health  102 4.7. A Case Against Compulsory Licensing of Green Technology  103 4.7.1. Economic Ramifications  104 4.7.2. Green Technology Industry and Compulsory Licensing: The Dichotomy  104 4.8. Policy Instruments, Adoption and Diffusion of Green Technologies  105

5 Green Technology Diffusion and the Indian Patent Regime: Role of India in Promoting Green Economy and Green Growth

5.1.  Introduction  111 5.1.1.  Environmental Deterioration and Technology  112 5.1.2. Cooperative Patent Classification and Climate Change Mitigation Technologies  112 5.2.  Green Technology in India  113 5.2.1.  Transfer of Technology  113 5.2.2. Sectors Exhibiting Growth in Green Technologies  114 5.3.  India’s Global Position  116 5.4. Green Patenting: Current Position and Emerging Trends in India  118 5.4.1. Access to Green Technology and Indian Patent Law  120 5.4.2. Compulsory Licensing and Green Technology  121 5.4.3. Facilitating the Diffusion of Green Technology  122

111

Contents  ix 5.5. Green Technology: Sector-Wise Study in the Indian Perspective  125 5.5.1. Developing Cost-Effective Green Technologies  126 5.6. Green Marketing and Patent Regime: Indian Scenario  127 5.6.1.  Genesis of Green Marketing  128 5.6.2.  Phases of Green Marketing  128 5.6.3.  Green Marketing: Current Trends in India  131 5.6.4. Steps Taken by Indian Companies in the Field of Green Marketing  132 5.7. Patent Law, Technology Transfer and Green Marketing  133 5.7.1. Indian Patent Regime and Green Marketing  134 5.7.2.  India and Technology Transfer  134 5.7.3.  Patenting and Green Market Strategy in India  135 5.7.4. Patent Pooling and Diffusion of Green Technology  136 5.7.5.  Patent Pooling and Green Technology in the US  141 5.7.6.  Patent Pooling and Green Technology in India  143

6 Cutting-Edge Developments in the Field of Green Innovation and Diffusion of Green Technology

153

7 Conclusion

161

Bibliography Index

166 174

6.1.  Movement on International Fronts  153 6.2.  Progressive and Cutting-Edge Green Innovation  153 6.3. Nobel Prize: Recognition of Impact of Innovation on Climate Change  157 6.4.  Green Technology Diffusion: The Current Scenario  158 6.4.1.  Efforts for Raising Technological Capacities  158 6.4.2. Patent Protection and Green Technology Diffusion  158 6.4.3. Accelerating the Diffusion of Green Technology: A Contemporary Business Outlook  159

7.1.  Findings  161 7.2.  Conclusion  162

1 Introduction

1.1. Background Innovation has always been the essence of humanity. With the growth of society and the ever-increasing need for convenience, man has applied his intellect for developing new technologies. One can’t even begin to predict the potential of human thought and creativity. Human thinking touches each and every aspect of society, and it becomes necessary to promote innovation for the overall welfare and progress of the community. In the era of globalization where the entire world is connected and is engaged in trade, business, cultural exchange, dialogues etc., it is important to focus on the fact that human innovation helps the development of the world as a single unit. Promoting and motivating swift flow of innovative ideas is extremely important in order to facilitate the creation of a developmental environment across the world. For the past few decades, the world community has looked at environment and development through the glass of intergenerational equity and sustainable development. This approach has been significantly progressive and has been able to meet many environmental challenges. However, other emerging issues require a clear regime in order to devise a sustainable future for our coming generations. To begin with, combating rapid climate change and environmental deterioration would require basic transformations of the energy system. As per the estimate of the International Energy Agency (IEA), the prospective demand for investment in the energy sector could shoot up to USD 46 trillion by the year 2050.1 It is also estimated that more than three-quarters of the total new investments in energy would be channeled to developing nations. It is clear that this huge capital cannot be raised alone from governmental efforts. New business models, policy tools and marketing strategies have to be introduced to meet the target of the future.2 In recent times, environmental sustainability and climate change have become major issues in global governance. Countries like the US, the UK, France, Japan, Russia, India etc. are coming forward with plans to promote the green agenda. The world community has been constantly engaged in many dialogues pertaining to environmental protection and sustainable development. Many efforts have been made to create a link between innovation, technology and green development, as it has always been a central issue that new technologies with industrial application DOI: 10.4324/9781003319467-1

2  Introduction are the main cause of environmental degradation. Thus, constant steps are being taken to reverse the effects of technology on the global climate. There have been various international instruments pertaining to environmental protection, i.e., the Nagoya Protocol,3 Stockholm Convention,4 Kyoto Protocol,5 Earth Summit6 and the very recent Paris Agreement.7 It is important, however, to look beyond these agreements, because when we talk about technology and innovation and their impact on the global climate, we are forced to think about patent governance. It is the patent law that regulates the growth and transfer of technology. A technology cannot survive in the market if it is not protected by a government granted monopoly, i.e., patent. However, it is a two-way street. Granting a patent to an innovator consequently incentivizes further innovation which is beneficial to the community at large, because if an inventor is not afforded adequate protection, and if he doesn’t feel protected, he would refrain from sharing his invention with the community. For a long time, the idea prevalent in the world community has been to promote technology and innovation which contributes to the improvement of climatic conditions. The concept has been termed “green innovation,” and the technology to achieve such an objective is termed “green technology.”8 In the era of the modern industrial regime, the role of technology in tackling climate change is a pivotal one. International goals of climate change mitigation and sustainable development cannot be achieved without the contribution of new-age technologies. At the same time, the importance of patent protection and an efficient patent system that facilitates technology transfer among international frontiers cannot be overlooked. Many patented technologies either are not accessible for further dissemination or do not hold much technical value. Therefore, advanced systems of collaborative innovation have been brought forward, especially in the sector of climate-friendly technology and green innovation. The international community is in extreme need of green technology, and ensuring its timely and proper diffusion and adoption is one of the biggest challenges today.9 It is true that innovation, development and diffusion of green technologies have become ongoing global practices. Technologies are transferred around the globe to reach heterogeneous markets belonging to developed, developing and even least developed countries. Collaborative development and commercialization of innovative products and services, sharing of know-how, maintenance of equipment and licensing of patents are some of the processes that play a vital role in building local technological capacities.10 A positive development can be initiated by the straightforward sale of an innovative product that itself includes transfer of technology to the user through the product itself. For instance, if an electricity-generating technology is made available at a place devoid of electricity, even if it is manufactured and developed by outside innovators, is helpful to the population living without electricity. This has twofold impact, i.e., enhanced productivity as well as living standards. Thus, securing access to innovative technology can catalyze innovation in various domains.11

Introduction 3 Various local conditions like the inherent capacity of a community to absorb or receive a technology play a key role in enhancing technology diffusion. Skills and knowledge of the workforce of a community are fundamental determining factors of the kinds of solutions that are needed to be deployed in a particular territory. The capabilities of the local workforce also determine the kind of collaboration that will evolve between local and outside partnering entities. Efficient regulatory mechanisms and a sound investment regime can promote transfer of technology, catalyze the sharing of know-how and ensure the sustainability of deployment of new technology.12 There are a number of ways in which the patent system promotes the development and diffusion of green technology. One of the ways is through technology partnerships. An efficient and predictable system of IP protection supports technology transfer deals and exchange of know-how. The IP rights possessed by a company determine its contribution to the partnership. This is extremely helpful when a partnership is established between large-scale technology companies and small and medium-sized enterprises (SMEs). IP rights also help in clearly establishing ownership in the case of collaborative or joint inventions. Therefore, strong protection and assertion of IP rights helps in promoting innovation.13 Environmental concerns of the global community cannot be tackled by a single company, person, sector or country. Innovators across the globe have to conduct collaborative work and build on each other’s achievements. Innovation partnerships and collaborative research will play vital roles in combating global climate concerns. This is mainly because local conditions help in identifying the most efficacious tools and mechanisms to mitigate climate change and ensure adaptation.14 Partnerships are also important in determining the direction of technology. It is imperative not only to research and develop environment-friendly technologies but also to disseminate them in the areas where the impact is maximum. This multi-faceted process of deploying technologies in various geographical locations is called “technology diffusion”—which is the thrust of this research. Diffusion of technology is crucial in ensuring sustainable development of pertinent technology solutions across nations over a certain period of time. It is a time-taking endeavor and calls for a significant knowledge base. If the local communities lack the capacity to use and maintain a technology, a solution may not have the desired impact. It is true that the technology diffusion is a gradual and organic process which may be further catalyzed by appropriate policies and strategic steps.15 A trans-border technological partnership will be fruitful if the partners are comfortable with the mutual sharing of knowledge. It is necessary that policymakers should attract partners in technology rather than merely focusing on gaining investment and access to green technology. This will be beneficial in the long run. Various efforts by the government to promote knowledge transfer fail because it discourages global technological giants from transferring their technology and knowledge to local entities. These policies may also stifle technological development.16 The aim of this book is to examine various sectors of patent and its operational domains. The authors will try to come up with a correlation between patents and

4  Introduction promotion of green technology across the globe. Various components like green economy, green consumerism, green marketing, green entrepreneurship, patent pooling, compulsory licensing etc. are going to be analyzed extensively in this book. 1.1.1.  Role of Patent System in Promoting Green Technology/ Innovation: An Overview The current global concern of climate change calls for rapid green technology innovation and its transfer. The harmful impacts on the environment have to be mitigated by adopting environmentally sound technologies (ESTs).17 In 2007, the Bali Meeting convened by the United Nations Framework Convention on Climate Change (UNFCCC) resulted in enhanced focus on the importance of patent systems in the domain of technology transfer and climate change. Basically, the function of any given patent system is to promote and enhance green innovation and technology diffusion at a global stage. Patent regime of any economy is founded on the need of a fine balance between public good and incentives to private entities. Public welfare is automatically achieved by widespread diffusion of new and innovative knowledge. Incentives are extended to various inventors and innovators in the form of an economic exploitative right to them in relation to their patented invention. However, it has been revealed that the fundamental technology aimed to be diffused is either not accessible in an easy way or is below the technical standards. The jumbling up of several patent rights in the possession of multiple patent-holders makes the utilization of the patent invention quite impracticable. The “tragedy of the anti-commons,” as discussed in 1998 by Eisenberg and Heller, is caused when multiple patent owners with conflicting powers possess rights on their past inventions that act as a barrier for future research and innovation. This blockage of knowledge and further innovation reveals the negative impact of particular patent regime on green innovation and demands an overhaul of patenting policies.18 The United Nations Secretariat and many other developing countries contend that intellectual property rights act as a major barrier in the way of innovation of green technology and its dissemination.19 It is further contended that these green technologies are not made available to the developing countries at affordable prices because strong patent regimes either restrict the entry of knowledge in public or restrict its usage.20 Patent rights are said to create a monopolistic situation by granting exclusive exploitation rights to the innovator. This also results in steep prices of the invention and a limitation on the diffusion of knowledge for the usage of affordable climate change mitigation technology innovation.21 As a part of the global regime of intellectual property rights, it the TRIPS agreement that includes several flexible provisions that permit nations to safeguard and preserve their policy tools and objectives. For example, one flexible rule is compulsory license to exploit a previously patented product or process in the public interest without obtaining consent from the concerned patent-holder.

Introduction 5 However, these policy-based interventions have proved to be quite problematic for both governments and private entities. In case there is a deficiency in national capacity to adopt and develop, governments may prevent the imposition of compulsory licenses in relation to green technologies. Governments may also put a stop on further foreign direct investments in this sector. On the other side of the coin, private organizations contend that these compulsory licenses interfere with the legal right over their inventions.22 However, there are many developed nations which have displayed reasonable flexibility. They have adopted progressive measures in their patent regime to promote green innovation and development of green technologies. IP offices across the globe have incorporated a fresh process that accelerates the examination of green patent applications. This process has a dual model operation: (1) the first model includes fast-tracking particularly for climate change mitigation technologies pertaining to green innovation; and (2) the second model is an advanced patent prosecution highway that catalyzes the process of patent prosecution procedures by sharing of pertinent information among various IP offices across the world.23 In March of 2011, a fast-tracking examination procedure was officially launched by several developed economies. Under this program, green patent applications are allowed to be examined at a fast pace so as to be granted early patent protection as compared to other sections of patent applications.24 The fast-tracking procedure is aimed at the following: (1) Promoting investment in the development of green technologies; (2) Accelerating the commercialization of such technologies. The objective is to catalyze the development of those technologies that mitigate the negative impact of human activities on the climate and help preserve natural resources. It is a fact that the reduction of time taken to obtain a grant of green patent will encourage further green innovation and consequently expedite the commercial exploitation of environment-friendly technologies in the sectors where they are required the most. This will have a two-pronged effect. First, investments in green innovation will increase, and second, great benefits will be extended to society. One more policy measure in this direction is the global patent prosecution highway (PPH), which expedites the processing of patents and their standard examination. As of 2014, the PPH has been successfully adopted by 19 national intellectual property (IP) offices across the world. The prime advantage of the PPH is that it allows swift examination of a patent application if the claim relating to such application has already been accepted by any of the participating IP offices.25 In addition, several other international organizations have begun many innovative policy initiatives to enhance the access and adoption of climate change mitigation technologies.

6  Introduction In the year 2010, the United Nations Framework Convention on Climate Change had set up the CTCN (Climate Technology Centre and Network) to promote proactive action in the field of development and transfer of technology.26 In November of 2013, an impressive initiative by the name WIPO GREEN was launched by WIPO. The primary aim of WIPO GREEN is to create a marketplace that promotes and accelerates adaptation, adoption and dissemination of environment-friendly technologies and related solutions. WIPO GREEN essentially involves the following two key components: (1) Easily and freely accessible database of various innovations, know-how and other IP assets; (2) A global platform that establishes a nexus between providers of technology and seekers of technology. WIPO GREEN also offers a wide range of efficient services to enhance fruitful commercial transactions among stakeholders.27

1.2. Review of Literature An extensive exploration of available literature has provided certain driving factors to the authors on which the current book has been developed. These factors have broadly been divided into seven categories, and relevant literature output has been given. It is worth mentioning that literature related to these factors had very little or no nexus with India, and the authors has attempted to synthesize the knowledge to establish a logical link between the world and Indian scenarios. 1.2.1.  Patent Protection, Technology Transfer and Diffusion Evidence shows two groups of developing nations (the first group consists of emerging economies such as India, Brazil and Mexico, while the second group largely contains least developed countries). Strengthening patent protection in the first group of emerging economies is shown to have a positive impact on domestic development of technology as well as transfer of technology from developed nations (Hall and Helmers, 2010).28 Further, Hall and Helmers (2010) also claim that patent protection has a very small role to play in mitigating environmental externalities. A  specific study relating to India and China has substantiated the point that strong patent protection leads to effective technology transfer, but the issue relating to green innovation remains contentious (Lema and Lema, 2012).29 In support of skilling of local workforces, it is also argued that local conditions impact the diffusion of technology and that skill and knowledge of the workforce in a given local jurisdiction is a crucial determinant (Brant, 2008).30 This is an important factor that India must consider in its endeavor of developing and diffusing green technology. Brant (2008) has also found a strong correlation between patent protection and cross-border technology transfer.

Introduction 7 1.2.2. Trends in Green Patenting Since 2008, upward trends have been witnessed in patenting of green technology across the world, including India. Various public-sector organizations have focused on this area as well. However, more R&D investment is needed to meet the global players (Deshpande and Nagendra, 2015).31 Patents provide a strong incentive to invent further and boost green innovation (Gattari, 2013).32 Patent pools have proved to be an effective mechanism in promoting electronic items and pharmaceuticals (Lampe and Moser, 2016).33 Due to antitrust effects of patent pools, the mechanism itself is under suspicion (Barpujari, 2010).34 However, pooling of green technologies with an effective check on anti-competitive activities, India can achieve significant results in green patenting. Patent protection showed a strong correlation with diffusion of technology a decade ago (Copenhagen Economics, 2009),35 and the same still stands but with certain modified arrangements. It is further argued that patent offices of developed countries like the UK, the US and China are granting green patents quickly and at a lower cost with term extension (Rimmer, 2011).36 There is a dearth of literature on the subject, but current evidence suggests that India’s patent regime is showing slow growth as far as green patenting is concerned due to an excessively tedious patent process. 1.2.3.  Patent Pledges, Eco-Patent Commons and Diffusion of Green Technology Several multinational companies have formed the Eco-Patent Commons in order to achieve global diffusion of technology which has not really played a significant role (Hall and Helmers, 2013).37 To boost diffusion of environmentally-friendly technology, the Eco-Patent Commons should be coupled with a uniform green patenting system across the world (Cronin, 2008).38 A system of patent pledging has shown weak correlation with diffusion of green technology (Awad, 2015).39 Developing economies like India have very little to achieve through these systems. 1.2.4.  Compulsory Licensing in Relation to Green Technology From the lens of TRIPS, compulsory licensing of green technology can be defended on the grounds of public health (Karlsson, 2014).40 Drawing a comparison between pharmaceutical substances and green technology while discussing the issue of compulsory licensing would help in understanding the situation better (Fair, 2010).41 Policy related to compulsory licensing of patents directly impacts foreign direct investment in a developing economy (Lukac, 2017).42 In light of arguments extended by Fair (2010) and Lukac (2017), it would be fair to assume that India may be able to derive substantial advantage by balancing its compulsory licensing regime provided under Section 84 of the Patents Act, 1970, against green innovation. The issue is explored extensively later in the book.

8  Introduction 1.2.5.  Business Innovation, Green Economy and Diffusion Small businesses in the US have been active in adopting climate change mitigation technologies (Breitzman and Thomas, 2012),43 which is not the case in developing economies like India. These firms have also shown impressive outcomes in the filing of green patents. Large-scale companies are also contributing significantly to the growth of green economy in the United States which is majorly due to the measures taken by the US Patent Office relating to patenting of environmentallyfriendly technology. There is a strong relationship between the income of a nation and technological development. Trade openness is also a contributing factor to technology diffusion (Xu and Chiang, 2005).44 Boosting international trade in the area of green technology may prove helpful in technological diffusion even for countries like India, Brazil and South Africa. To ensure development and diffusion of climate change mitigation technologies, IPR policy of a nation should be carefully crafted (OECD, 2004).45 The National IPR Policy, 2016, of India is quite comprehensive in nature but doesn’t address green technology and its importance. Environmental externalities and knowledge failures are the two major impedances in the way of green innovation. Primacy should be given to policies promoting development of green technology over emission pricing (Newell, 2009).46 The US has some pretty aggressive eco-innovation policies, which range from emission reduction to global partnerships (OECD, 2008).47 Though India has taken certain measures toward green innovation, policies like those of the US have not been developed yet. Trade regimes such as tariff and non-tariff barriers, foreign direct investment and R&D expenditure have a significant impact on transfer and adoptability of green technology, especially in developing countries like India, Brazil, Mexico, South Africa, etc. Absorptive capacity, being a necessary condition, must be coupled with robust patent protection (Lybecker, 2014).48 1.2.6.  Effect of Fast-Tracking Programs Programs promoting fast-tracking of green patent applications or applications relating to environmentally-friendly technologies have been initiated by many patent offices around the world, including Australia, Brazil, Taiwan, Canada, China, Israel, Japan, South Korea and the UK. The most prominent one has been the Green Patent Pilot Program (closed in 2012) initiated by the US, under which more than 1,050 patents were granted. Notably, the Indian patent office has not adopted this kind of program yet.49 This fast-tracking of green patent applications across various patent offices of the world is proving helpful in green patenting, but there are also certain procedural differences among the offices (Dechezleprêtre, 2013).50 The US Patent Office has been extremely active in mapping and fasttracking of green patent applications through its Pilot Program on Green Technologies (Abbot and Booton, 2009).51

Introduction  9 1.2.7.  Green Marketing, Green Consumerism and Green Technology There is an inverse relationship between cost of patenting and emission rates. However, there is a positive correlation between emission tax and green investment in the presence of green consumers (Langinier and Chaudhuri, 2018).52 Public awareness and political intervention are important factors in the journey of sustainable development and green growth (Datta, 2016).53 There is a behavioral transition in both consumers and producers. Therefore, in India, green marketing is required to be strategized in accordance with economic conditions and consumer readiness (Garg and Sharma, 2017).54 This will help in boosting adoption of green technology by business enterprises. In India, the conflict between pro-environment and pro-patent lobbies requires an active reconciliation (Kumar and Kumar, 2016).55 Through examination of patent data across the globe, it is not clear whether or not patent protection hampers international technology transfer. However, the protection of climate-friendly technologies in various markets (viz. Africa, Latin America etc.) is continuously gaining relevance (Haščič and Migotto, 2015).56 Green products and services are rapidly emerging, and green marketing is making its separate base in developing countries like India, which is evident from the various corporate measures in this regard (Katiyar, 2015).57 It is also contended that companies that do not adopt innovative strategies pertaining to green marketing will be categorized as uncompetitive and unresponsive and will struggle to survive in the industry (Fuller, 1999).58 This may enhance the demand and adoption of environment-friendly technologies. However, it is important that green marketing measures are genuine and do not violate the trust of consumers. The process of “greening” may appear expensive in the shorter run but would ultimately prove sustainable and cost-effective (Nadaf and Nadaf, 2014).59

Notes 1 See www.irena.org/-media/Files/IRENA/Agency/Publication/2018/Apr/IRENA_Report_ GET_2018.pdf (last accessed on 11–02–2018). 2 Hultman, Nathan, Sierra, Katherine, and Shapiro, Allison (2012), Innovation and Technology for Green Growth, The 2012 Brookings Blum Roundtable Policy Briefs, available at www.brookings.edu/wp-content/uploads/2016/06/10-green-growth-­hultmansierra.pdf (last accessed on 23-06-2019). 3 The Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity is a 2010 supplementary agreement to the 1992 Convention on Biological Diversity (CBD). 4 The Stockholm Convention on Persistent Organic Pollutants is an international environmental treaty, signed in 2001 and effective from May 2004, that aims to eliminate or restrict the production and use of persistent organic pollutants (POPs). 5 The Kyoto Protocol is an international treaty which extends the 1992 United Nations Framework Convention on Climate Change (UNFCCC) that commits State Parties to reduce greenhouse gases emissions, based on the premise that (a) global warming exists and (b) man-made CO2 emissions have caused it.

10  Introduction 6 The Earth Summit was a UN event. The United Nations Conference on Environment and Development (UNCED), also known as the Rio de Janeiro Earth Summit, Rio Summit, Rio Conference, and Earth Summit (Portuguese: ECO92), was a major United Nations conference held in Rio de Janeiro from 3 to 14 June 1992. 7 The Paris Agreement (French: L’accord de Paris) is an agreement within the framework of the United Nations Framework Convention on Climate Change (UNFCCC) governing greenhouse gases emissions mitigation, adaptation and finance from 2020. The agreement was negotiated during the 21st Conference of the Parties of the UNFCCC in Paris and adopted by consensus on 12–12–2015 but has not entered into force. 8 Green technologies, also called environmentally sound technologies, are innovations that protect the environment, are less polluting, use all resources in a more sustainable manner, recycle more of their wastes and products and handle residual waste in a more acceptable manner than the technologies for which they were substitutes (Chapter 34 of the United Nations Agenda 21: A voluntarily action plan of the United Nations with regard to sustainable development adopted in Rio, 1992). 9 Awad, Bassem Dr. (2015), Patent Pledges in Green Technology, Centre of International Governance Innovation (CIGI) Papers, May, available at http://www.pijip.org/ wp-content/uploads/2015/03/Bassem-Awad-PP-in-Green-Tech.-Patent-Pledges-2015. pdf. (last accessed on 11–11–2018). 10 Brant, Jennifer (2014), Green Technology Diffusion: Insights from Industry, February, available at www.wipo.int/wipo_magazine/en/2014/01/article_0002.html (last accessed on 04–04–2016). 11 Ibid. 12 Ibid. 13 Ibid. 14 Ibid. 15 Ibid. 16 Ibid. 17 Mitigation is about slowing down global warming by reducing the level of greenhouse gases in the atmosphere. Among the many mitigation technologies already on the market are renewable energy sources, such as biofuels, biomass, wind, solar and hydro power; low-carbon building materials; and emerging technologies which aim to capture carbon out of the atmosphere and lock it away. Adaptation involves dealing with the existing or anticipated effects of climate change, particularly in the developing, least developed and small island countries, which are most severely affected. In addition to “soft” technologies, such as crop rotation, hard technologies for adaptation include improved irrigation techniques to cope with drought and new plant varieties which are resistant to drought or to salt water. See World Intellectual Property Organization (2009), Climate Change: The Technology Challenge, 2 WIPO Magazine, April, available at www.wipo.int/wipo_ magazine/en/2009/02/article_0003.html. (last accessed on 23–12–2018). 18 See Heller, Michael A., and Eisenberg, Rebecca S. (1998), Can Patents Deter Innovation? The Anti-Commons in Biomedical Research Science, Vol. 280, 5364, 698 at 698; Magerman, Tom (2011), Impact and Consequences of Science-Intensive Patenting: In Search of Anti-Commons Evidence Using Latent Semantic Analysis Text Mining Techniques, KU Leuven, Netherlands, at 8. 19 Developing countries were led during the UNFCCC negotiations by Bolivia, Brazil, China, India and the Philippines. See Lane, Eric L. (2011), Clean Tech Intellectual Property: Eco-Marks, Green Patents, and Green Innovation, Oxford University Press, Oxford. 20 According to the Kyoto Protocol, developing countries have no obligation to reduce greenhouse gas emissions unless they receive sufficient funding and technology from developed countries (art. 4.3). 21 Even though neither the original UNFCCC treaty nor the Kyoto Protocol expressly mentions intellectual property in any of their provisions, the treaty text invites the parties to take all practicable steps to promote, facilitate and finance the transfer of or

Introduction  11 22

23

24

25

26

27

access to environmentally-sound technologies and know-how to other parties, particularly developing country parties. See Drahos, Peter (2011), Bargaining Over the Climate: Lessons from Intellectual Property Negotiations, Climate Law, Vol. 2, No. 1, at 1; Correa, Carlos M. (2007), Intellectual Property and Competition Law: Exploration of Some Issues of Relevance to Developing Countries, ICTSD Programme on IPRs and Sustainable Development Programme, Issue Paper No. 21, International Centre for Trade and Sustainable Development, Geneva, Switzerland, available at www.ictsd.org/sites/default/ files/research/2008/06/corea_oct07.pdf; Abbott, Frederick M. (2009), Innovation and Technology Transfer to Address Climate Change: Lessons from the Global Debate on Intellectual Property and Public Health, July  13, ICTSD Programme on IPRs and Sustainable Development, Issue Paper No. 24, FSU College of Law, Public Law Research Paper No. 383, FSU College of Law, Law, Business  & Economics Paper No. 0918, available at http://ssrn.com/abstract=1433579; Gervais, Daniel J. (2012), Climate Change, the International Intellectual Property Regime, and Disputes Under the TRIPS Agreement, Vanderbilt Public Law Research Paper, available at http://ssrn. com/abstract=2235775. (last accessed on 28–12–2018). Awad, Bassem Dr. (2015), Patent Pledges in Green Technology, Centre of International Governance Innovation (CIGI) Papers, May, available at http://www.pijip.org/wp-content/uploads/2015/03/Bassem-Awad-PP-in-Green-Tech.-Patent-Pledges-2015.pdf. (last accessed on 28–12–2018). The fast-tracking green patent application has been implemented since 2009 by nine national intellectual property offices: the UK, Australia, South Korea, Japan, the US, Israel, Canada, Brazil and China. See Lane, Eric L. (2012), Building the Global Green Patent Highway: A Proposal for International Harmonization of Green Technology Fast Track Programs, Berkeley Technology Law Journal, Vol. 27, No. 3, 119; Derclaye, Estaelle (2010), Not Only Innovation but also Collaboration, Funding, Goodwill and Commitment: Which Role for Patent Laws in Post Copenhagen Climate Change Action, The John Marshall Review of Intellectual Property Law, Vol. 9, No. 3, at 167; Dechezleprêtre, Antoine (2013), Fast-Tracking Green Patent Applications: An Empirical Analysis, ICTSD Programme on Innovation, Technology and Intellectual Property, Issue Paper No. 37, International Centre for Trade and Sustainable Development, Geneva, Switzerland, available at http://ictsd.org/downloads/2013/02/fasttracking-green-patentapplications-an-empirical-analysis.pdf. (last accessed on 28–12–2018). The Global Patent Prosecution Highway (PPH) project was launched in January 2014 between 19 national intellectual property office including IP Australia, Austrian Patent Office (APO), Canadian Intellectual Property Office (CIPO), Danish Patent and Trademark Office (DKPTO), Finnish Patent and Registration Office (PRH), Hungarian Intellectual Property Office (HIPO), Icelandic Patent Office (IPO), Israel Patent Office (ILPO), Japan Patent Office (JPO), Korean Intellectual Property Office (KIPO), Nordic Patent Institute (NPI), Norwegian Industrial Property Office (NIPO), Portuguese Institute of Industrial Property (INPI), Russian Federal Service for Intellectual Property (ROSPATENT), Intellectual Property Office of Singapore (IPOS), Spanish Patent and Trademark Office (SPTO), Swedish Patent and Registration Office (PRV), UK Intellectual Property Office (UKIPO), and US Patent and Trademark Office (USPTO). See the Patent Prosecution Highway Portal site, available at www.jpo.go.jp/ppph-portal/globalpph.htm. One of the functions of the established “Climate Technology Network” is to stimulate and encourage, through collaboration with the private sector, public institutions, academia and research institutions, the development and transfer of existing and emerging environmentally sound technologies, as well as opportunities for North/South, South/ South and triangular technology cooperation. See United Nations Framework Convention on Climate Change: UNFCCC Technology Work, UNFCCC, available at http:// unfccc.int/focus/technology/items/7000.php (last accessed on 22–01–2016). WIPO GREEN Members include partners and users from public or private institutions and the WIPO Secretariat. See World Intellectual Property Organization, WIPO

12  Introduction 28

29 30 31 32 33 34 35

36 37 38 39

40 41 42 43 44 45

GREEN Charter, WIPO, available at https://www3.wipo.int/wipogreen/en/about/pdf/ charter_en.pdf. (last accessed on 22–03–2019). Hall, Brownwyn, H., and Helmers, Christian (2010), The Role of Patent Protection in Clean/Green Technology Transfer, Working Paper 16323, National Bureau of Economic Research, available at www.nber.org/papers/w16323 (last accessed on 29–02–2020). Lema, Rasmus, and Lema, Adrian (2012), Technology Transfer? The Rise of China and India in Green Technology Sectors, Routledge (Taylor and Francis Group), Innovation and Development, Vol. 2, No. 1. Brant, Jennifer (2008), Green Technology Diffusion: Insights from Industry, available at www.wipo.int/wipo_magazine/en/2014/01/article_0002.html (last accessed on 21–02–2020). Deshpande, Nishad, and Nagendra, Asha (2015), Climate Change Mitigation Technologies—Perspective Based on Patents, Journal of Intellectual Property Rights, Vol. 21. Gattari, Patrick (2013), The Role of Patent Law in Incentivizing Green Technology, Northwestern Journal of Technology and Intellectual Property, Vol. 11, No. 2. Lampe, Ryan, and Moser, Petra (2016), Patent Pools, Competition and Innovation— Evidence from 20 US Industries Under the New Deal, The Journal of Law, Economics and Organization, Vol. 32, No. 1, March. Barpujari, Indrani (2010), Facilitating Access or Monopoly: Patent Pools at the Interface of Patent and Competition Regimes, Journal of Intellectual Property Rights, Vol. 15. Copenhagen Economics A/S and The IPR Company APS (2009), Are IPR a Barrier to the Transfer of Climate Change Technology? Copenhagen Economics A/S and The IPR Company APS, January  19, available at http://trade.ec.europa.eu/doclib/ docs/2009/february/tradoc_142371.pdf (last accessed on 27–06–2019). Rimmer, M. (2011), Intellectual Property and Climate Change: Inventing Clean Technologies, Edward Elgar Publishing, Cheltenham. Hall, Brownwyn H., and Helmers, Christian (2013), Innovation and Diffusion of Clean/ Green Technology: Can Patent Commons Help?, Journal of Environmental Economics and Management, Vol. 66. Cronin, Nancy (2008), Growing the Eco-Patent Commons to Truly Promote Green Innovation, available at www.greenbiz.com/blog/2008/04/15/growing-eco-patentcommons-truly-promote-green-innovation (last accessed on 21–02–2020). Awad, Bassem Dr. (2015), Patent Pledges in Green Technology, Centre of International Governance Innovation (CIGI) Papers, May, available at http://www.pijip.org/wp-content/uploads/2015/03/Bassem-Awad-PP-in-Green-Tech.-Patent-Pledges-2015.pdf. (last accessed on 01–04–2019). Karlsson, Anders (2014), Green Technology Patents—Trips, Compulsory Licensing and Global Health, Faculty of Law, Spring Term, Stockholm University, Stockholm. Fair, Robert (2010), Does Climate Change Justify Compulsory Licensing of Green Technology?, Brigham Young University International Law & Management Review, Vol. 6, No. 1, Article 3. Lukac, Kim (2017), Compulsory Licensing for Green Technology Transfer: Should Green Technology Be Subject to Compulsory Licensing to Advance Green Technology Transfer?, SNR: u1279193, ANR: 662181, Tilburg University, Tilburg. Breitzman, Anthony, and Thomas, Patrick (2012), Analysis of Small Business Innovation in Green Technologies, SBAHQ-09-M-0269, available at www.sba.gov/content/ analysis-small-business-innovation-green-technologies. Xu, Bin, and Chiang, Eric P. (2005), Trade, Patents and International Technology Diffusion, Journal of International Trade & Economic Development, Vol. 14, No. 1. Patents and Innovation: Trends and Policy Challenges, Organisation for Economic Co-operation and Development, 2004, available at www.oecd-ilibrary.org/ science-and-technology/patents-and-innovation_9789264026728-en (last accessed on 22–12–2018).

Introduction  13 46 Newell, Richard G. (2009), Literature Review of Recent Trends and Future Prospects for Innovation in Climate Change Mitigation, OECD Global Forum on Environment & Eco-Innovation, Paris. 47 OECD (2008), Eco-Innovation Policies in the United States, Environment Directorate, OECD, Paris. 48 Lybecker, Kristina M. (2014), Innovation and Technology Dissemination in Clean Technology Markets and the Developing World: The Role of Trade, Intellectual Property Rights, and Uncertainty, Journal of Entrepreneurship Management and Innovation (JEMI), Vol. 10, No. 2. 49 Jackman, Peter A., and Brandes, Lori M. (2015), Latest Options for Fast-Tracking Clean Technology Patent Applications, available at www.sternekessler.com/sites/ default/files/2017-11/Latest_Options_for_Fast-Tracking_Clean_Technology_Patent_ Applications0.pdf (last accessed on 06–03–2020). 50 Dechezleprêtre, Antoine (2013), Fast-Tracking Green Patent Applications: An Empirical Analysis, Centre for Climate Change Economics and Policy Working Paper No. 127, Grantham Research Institute on Climate Change and the Environment Working Paper No. 107, Geneva. 51 Abbot, C., and Booton, D. (2009), Using Patent Law’s Teaching Function to Introduce an Environmental Ethic into the Process of Technical Innovation, Georgetown International Environmental Law Review, Vol. 21, No. 2, 219. 52 Langinier, Corinne, and Chaudhuri, Amrita Ray (2018), Green Technology and Patents in the Presence of Green Consumers, SAS Grant, University of Alberta, Edmonton. 53 Datta, Satrajit (2016), ‘Green Economy’ in the Context of Indian Economy, International Review of Research in Emerging Markets and the Global Economy (IRREM): An Online International Research Journal, Vol. 2, No. 3 (ISSN: 2311-3200). 54 Garg, Shurti, and Sharma, Vandana (2017), Green Marketing: An Emerging Approach to Sustainable Development, International Journal of Applied Agricultural Research, Vol. 12 (ISSN 0973-2683). 55 Kumar, Swarup, and Kumar, Jitesh (2016), Easing the Path for Green Tech in India, Life Sciences Intellectual Property Review, available at www.lifesciencesipreview. com/article/easing-the-path-for-green-tech-in-india (last accessed on 19–02–2020). 56 Haščič, I., and Migotto, M. (2015), Measuring Environmental Innovation Using Patent Data, OECD Environment Working Papers, No. 89, OECD Publishing, Paris, available at http://dx.doi.org/10.1787/5js009kf48xw-en (last accessed on 19–02–2020). 57 Katiyar, Shilpi (2015), An Overview of Green Marketing for Indian Market, Abhinav National Monthly Refereed Journal of Research in Commerce & Management, Vol. 4, No. 2. 58 Fuller, Donald (1999), Sustainable Marketing: Managerial-Ecological Issues, Sage Publications, London. 59 Nadaf, Yasmin Begum, and Nadaf, Shamshuddin F. (2014), Green Marketing: Challenges and Strategies for Indian Companies in the 21st Century, International Journal of Research in Business Management, Vol. 2, No. 5 ((IMPACT: IJRBM) ISSN(E): 2321-886X; ISSN(P): 2347-4572).

2 Green Innovation and Green Technology An Overview

2.1. Green Innovation: Meaning, Evolution and Importance On several occasions, the meaning and scope of the term “green innovation” or “eco-innovation” have been the subject of discussion. Following are some of the definitions that have come up after much deliberation: (1) It is the process that is used to create or implement novel and significantly enhanced products, processes, marketing strategies, organizational structures and institutional arrangements which have an effect of improving environmental conditions when compared to other alternatives. (2) It is a fresh concept that bears huge importance for business owners and ­policy-makers. It relates to innovations that have considerably lower impact on the environment than other relevant alternatives. It is also asserted that eco-innovation may be both technological and non-technological. Green innovation has several motivating factors such as economic, social and naturally environmental. The main objectives are to control pollution, manage various kinds of waste and market eco-friendly products. (3) Green innovations consist of significantly enhanced processes, modified practices, energy-efficient systems and products which contribute to the improvement and sustainability. (4) Green innovation is also categorized as the process of creating new and competitively priced products, systems and processes that considerably satisfy contemporary human needs and enhance the overall quality of life with minimal exploitation of natural resources and minimal emission of hazardous substances. (5) Green innovation is also defined as innovations with focus on research which have the ability to integrate environmental issues with the economic process. (6) It involves persistent manufacturing, conditioning or exploitation of goods, services or managerial or business processes that have a feature of novelty in the developing organization and considerably reduces environmental risk and results in impact mitigation throughout its life cycle, hence promoting sustainability. (7) Green innovation may also be related to the innovation of various hardware or software which consists of technologies which save energy, reduce pollution and promote recycling. It relates to the development of green products or processes that play a great role in corporate environmental management. DOI: 10.4324/9781003319467-2

Green Innovation and Green Technology  15 Green innovation, as a concept, evolved as a precursor to the much-deliberated issue of sustainable development. Nations around the globe are streamlining their policies to bring themselves in line with the international goal of climatic justice and green growth. Research has shown that there are four kinds of notion that have been used in various publications related to environmental growth and protection, i.e., green innovation, environmental innovation, eco-innovation and sustainable innovation.1 However, there is no substantial conceptual difference among these notions, but sustainable innovation has wider social and economic dimensions than the other three. The unprecedented deterioration of the environment Is alarming and calls for a joint global effort. Technology takes the driving seat in the pursuit of this effort. We are witnessing a continuous growth in the field of science and technology that is aimed to be climate friendly. Therefore, in order to tackle the issue of climate change, focused technological innovation is of great importance. 2.1.1. Importance of Green Innovation Centers (GICs) These extremely crucial centers were initiated by the German Federal Ministry for Economic Cooperation and Development (BMZ) in 14 countries for a period of six years (2015 to 2021). The primary goals of the GIC can be summarized as follows: (1) To facilitate innovative activities in the agricultural and food sectors; (2) To enhance employment generation; and (3) To significantly improve the quality of regional supply of food products. The primary focus of the GIC program is various smallholder farms. The objectives of GIC in relation to these farms include: (1) Sustainable growth of their income and production; (2) Generation of new jobs in the domain of food processing; and (3) Availability of major portion of the agricultural produce in the local and rural areas.2 The program fosters intellectual collaborations between local innovators with the aim to enhance and accelerate the innovation diffusion among the member nations. It is a fact that many innovations may be highly technical, which may include the following: (1) Mechanization processes in agricultural methods; (2) Developing seeds of improved and refined quality; and (3) Chains of food and fertilizer cooling. In this case, an advanced entity is required to carry out such technical activities. Therefore, the focus of this program is to foster mutual cooperation by establishing

16  Green Innovation and Green Technology producer associations, enterprises with specialized knowledge of the technicalities and various interest groups.3 The GICs also aim to facilitate the creation and diffusion of knowledge through the following ways: (1) (2) (3) (4)

Providing advisory and instructive services; Organizing training and courses and educational seminars; Easing the access to loans to support further innovation; and Cooperating with currently functioning agricultural institutions and research hubs (e.g., International Institute of Tropical Agriculture, Africa Rice Centre, etc.).

In addition to the this, significant international research is carried out by the Centre for Development Research as a part of this initiative.4 According to us, GICs are a great initiative as far as meeting the global green innovation needs is concerned. The only probable issue is to ensure its effective implementation, especially in countries where, due to economic weakness, innovation is curtailed. 2.1.2. Presence of GICs in India For a period of more than 60 years, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH has been functioning in a collaborative manner with its various operational partners in India for ensuring continuous and sustainable economic, social and ecological growth. Presently, GIZ is working with more than 330 employees in India. It is also noteworthy that 85% of these employees are national personnel. India has shown rapid growth in the economic domain as well as in the industrial sector. It is also a strong member of the G20 (Group of Twenty). It also boasts the status of being one of the five highly emerging national economies which include the BRICS countries, i.e., Brazil, Russia, India, China and South Africa. Still, in light of the rapidly developing economy, growing poverty and unemployment and various other socio-economic issues, the major challenges posed to India still have to be combated. Continuously growing population and burgeoning urbanization have put our climate at a significant risk. The levels of greenhouse gas and carbon emissions have exhibited an exponential increase.5 The prime domains of focus of GIZ in India are: • • • •

Sources and production of energy; Environment and management of natural resources; Sustainable urban development; Sustainable economic development.

Green Innovation and Green Technology  17 As far as the functioning of GIZ is concerned, it is operating through the following commissioning parties: (1) The Federal Ministry for Economic Cooperation and Development (BMZ); (2) The Federal Ministry for Environment, Nature Conservation, Building and Nuclear Safety (BMUB); and (3) The Federal Ministry for Economic Affairs and Energy (BMWi). There exist several other potential clients that are based in the Indian public sector, the European Union and various other foundations.6 The government, in this regard, has launched several policy measures to tackle current problems and socio-economic challenges. GIZ is making a significant contribution in this endeavor. Through various initiatives, GIZ has become an important entity for India: (1) Development of Smart Cities; and (2) Clean and Green India Mission. The objective is to promote a fruitful intellectual collaboration between Indian policy-makers and GIZ in order to come up with sustainable, inclusive plans for the future. One input that can be suggested at this point is that these green innovation centers should enhance their community outreach rather than working through high-end offices. A higher magnitude of community engagement would advance the purpose of GICs. Apart from green innovation centers, manufacturing in industries and other supply processes need to be considered as well.

2.2. Pertinence of Green Manufacturing In current times, the cost of modern manufacturing techniques and energy resources is constantly increasing due to high demand. It is also to be kept in mind that application of high-end manufacturing technology is damaging to the environment. Hazardous effluents, chemical waste, etc. are some of the ill effects of such technologies particularly in the case of mass production. The concept of green manufacturing7 can be discussed under the following heading: (1) Environment Management Tools: These tools are concerned with keeping a track of input and output of mass production. The costs of energy resources, machinery, etc. are accounted for. Product life cycle is also an important tool. The life cycle of a product is directly proportional to environmental degradation. Through the product life cycle value design, suitable recyclable materials are employed in production to minimize environmental loss.

18  Green Innovation and Green Technology (2) Sustainable Manufacturing: A system may be considered unsustainable when the society consumes resources and produces resources at a rate that exceeds nature’s ability to transform such wastes into environmental nutrients and resources. Sustainable manufacturing is not merely a process whereby negative environmental impact of industrial manufacturing is assessed and minimized. It is a lot more than the simple act of analyzing and modifying the environmental performance of manufacturing processes and systems. (3) Green Operation (GO): This emphasizes product- and process-oriented environmental practices to balance and improve financial performance as well as pollution reduction. The prime issues with which GO is concerned are: (a) alleviating environmental burden by promoting less usage of non-renewable and other hazardous products and substances; (b) promoting the use of recyclable materials in packaging processes; and (c) mitigating environmental impacts of various industrial processes. (4) Green Supply Chain Management (GSCM): Under GSCM, several activities are conducted to improve environmental conditions, such as: (a) manufacturing and recycling as per the green design; (b) management of quality pertaining to the environment; (c) green practices relating to product procurement; (d) climate-friendly packaging and transportation methods, and various other end-of-life practices. The prime area of focus of GSCM has been the automobile industry. (5) Green Application: This implies usage of renewable resources of energy such as solar, wind etc. and conservation of fuel and other non-renewable resources. Green methods of water and air purification should be used to ensure hygiene and sustainability. The issue of green manufacturing is discussed here because in an economy, innovation and manufacturing are two sides of the same coin. It is important to look at green growth from both the lenses, i.e., innovation and manufacturing. It is also necessary that the business model, especially in developing countries, is redesigned with green manufacturing processes kept as a central issue. For this, individuals have to be trained in the area which is popularly known as “green skilling.”

2.3. Meaning and Importance of Green Skills A new concept of green skills has been introduced by the Australian government which is closely related to green innovation and green growth. The Council of Australian Governments (COAG) has defined green skills in quite a comprehensive manner.8 COAG has taken various initiatives for development of green skills across communities: (1) Including green skills practice and teaching in the curriculum and regulatory framework; (2) Access to skilled trainers to deliver green skill discourse;

Green Innovation and Green Technology  19 (3) Developing strategies and training workers in vulnerable regions, sectors and industries.9 Modern economies are now heading toward a transformation that is categorized as an environmentally-friendly or green one. In order to effect this transformation, it is important to equip the workers with skills in climate-friendly activities and practices. Environmental values and green skills should be inculcated in all professional and vocational domains. It is proved that skill development is the foundation of improved labor efficiency and productivity. On the other hand, research data have also revealed that skill deficiency in the labor force acts as a major hurdle in the way of a country’s transformation into a green economy. Therefore, several development programs and skill-based curricula have to be introduced to incorporate green skills in the workforce. 2.3.1. Green Employment The ILO has characterized green jobs as a major contributor to the goal of sustainable development.10 Green jobs may be categorized as decent jobs that contribute to preserve or restore a sustainable environment, be they in traditional sectors such as manufacturing and construction, or in new, emerging green sectors such as renewable energy and energy efficiency. Green jobs are recognized by the ILO as jobs which enable the communities, through employment, to adapt mitigation practices. The ILO has also defined “greening” of employment in the current scenario.11 Other definition of greening of occupations has been given by the Plan International in its research paper on green skills for South East Asia.12 2.3.2. Green Economic Development The ILO has given various facets of green economic development:13 (1) Putting emphasis on technology based on low carbon usage and reduction of carbon emission level. Focus is also to be planned on major carbon industries including the agricultural sector; (2) Enhance green skills and creation of green jobs; (3) Improve market conditions for resources that are abundant and considered cheap such as carbon, water, forest land, bio-waste and bio-resources; (4) Significant expansion of green industries and advancement of their policies; and (5) Emphasis on the role of non-governmental organizations (NGOs), local communities and businesses in the creation of green jobs in light of their social and environmental responsibilities. In order to promote green economic development, the labor force across the globe, especially in developing countries, needs to be trained in a manner as to equip it to face the challenges of climate change.

20  Green Innovation and Green Technology 2.3.3.  Global Endeavor and Green Skilling A study of the most recent trends reveals the following pertinent information: (1) According to the annual flagship report of the International Labour Organization (ILO) on the global job market, the endeavor of accomplishing the Paris Deal’s goal of reducing global temperature by will generate about 18 million jobs across the world by the year 2030. (2) A report titled “World Employment and Social Outlook 2018—Greening With Jobs” reveals that a workforce of more than 300,000 persons will be put to fruitful employment in sectors like wind and solar energy. It is the direct outcome of Indian Prime Minister Narendra Modi’s highly ambitious target of generating 175 gigawatts (GW) of electricity from various renewable resources of energy by the year 2022. (3) India now boasts the status of being among the top ten countries as far as production of renewable energy through various sustainable sources such as solar, biomass and wind is concerned. However, the inefficacy of green skill programs becomes a hurdle in achieving the green economy goals. Closing this green skill gap is absolutely necessary for setting up sound environmental sustainability programs. It is further noted that an increase in green jobs will affect the market in two ways simultaneously: (1) There will be a decline in the number of jobs in various industries, such as those reliant on carbon-based production; and (2) The alteration in skill sets will equip workers to continue working in sectors like agriculture and infrastructure as they proceed in a greener direction. Thus, we see that all of the abovementioned factors form key components in building of a green economy. Most developed countries have been moving fast in this direction. India has initiated its journey in pursuit of its climate goal to which it committed in the Paris Agreement and Sustainable Development Goals. After discussing the functioning of GICs, green manufacturing and green skilling of individuals who are engaged in such manufacturing, it is now important to go into the technology aspect.

2.4. Green Technology: Trends and Prospects The impact of the modern lifestyle of man on the climate has been quite significant in the past few decades. There are many factors which contribute to such impact, such as pollution, carbon emission, destruction of natural resources, depletion of forests etc. All these factors jointly result in environmental deterioration and global warming.14 Awareness regarding such impact has also been increasing continuously. Recent scientific data has revealed that the magnitude of climate change is posing a grave threat to our survival.15 In this turn of events, the

Green Innovation and Green Technology  21 global community is desperately looking for solutions to mitigate climate change. Hence, the need for progressive changes in policy is increasing. At the same time, changes in lifestyle, education, investment in R&D and social habits are also required. These positive steps will prove immensely helpful in the advancement of sustainability and intergenerational equity. The role of technology in the area of global challenge of climate change and sustainable development is extremely crucial. Over the years, the global community has deliberated extensively on issues related to technology transfer and cooperation. As has already been discussed, the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol are key documents behind these deliberations. There are huge challenges posed in the way of development and diffusion of green technology. There are several factors which drive the process, and uncertainty related to these factors makes things more difficult. Factors such as actual costs, end products, market reception, ability to appropriate the returns to research in an atmosphere of intense competition, current and future policies, pricing of competing and complementary goods and regulatory impacts on the research process and end results face the threat of uncertainty. Among these uncertainties, it is difficult for the innovation companies to justify their expenditure on ­environmentally-friendly technologies.16 Therefore, a government must register these uncertainties and take effective steps to create a stable regulatory environment that promotes innovation and dissemination of green technology. Like other technologies, the development of green technology requires both investment and incentive. In this situation, public awareness coupled with government initiative plays a crucial role. It is also to be noted that laws relating to intellectual property deliver relevance and value to innovations, which operate as a great incentive for future innovation and dissemination of environmentally sound technologies.17 It is observed that available literature related to funding of green innovation is limited. Various authors have formulated modified financial mechanisms that generate both public and private financing for climate-friendly technologies. These mechanisms, however, are guided by factors like type of technology, maturity of the market, life-cycle stage of the technology and the risk surrounding the process of research and development. In the end, it is the market conditions that guide the financing barriers and investment choices in a given time frame. 2.4.1.  Public Governance: Innovation Policies and Green Growth Green development across the globe can only be ensured by persistent innovation in the field. Due to the factor of unpredictable market failure, it is not advised to leave the innovation driver depending on the trends in the market. Some proactive and well-crafted policies have to be introduced to promote and motivate green innovation. Loads have to be borne by firms and households in order to mitigate climate change and environmental deterioration due to greenhouse gas (GHG) and other toxic emissions.18

22  Green Innovation and Green Technology Therefore, awareness and motivation result in beneficial implications. Creation and dissemination of environmentally-friendly technologies, products and processes have become important. Social demand matters a lot for innovation. If there is no demand from the public for greener solutions, the incentive to innovate would also go down. Increase in greener demands has been termed green consumerism,19 which motivates big companies to invest in green innovation and green growth. Efficient instruments to regulate the market will prove extremely beneficial in tackling negative environmental externalities. These instruments include carbon pricing, green taxes, trade permits etc. At the same time, these market instruments will also contribute to the robustness and credibility of a given policy regime, which will in turn motivate the investors to take forward risks in bringing about green innovation. 2.4.2.  Access to Green Technology and Uptake of Green Innovation: Barriers and Challenges Bringing policies into operation that promote innovation and diffusion of green technology faces a lot of market barriers which have to be taken into account: (1) Lack of incentives provided by the market forces to firms and entrepreneurs to enable them to invest in green innovation; (2) Disincentive resulting from the free riding of technology by the public, especially in developing economies, due to government interference;20 (3) Public support for R&D usually results in spillover which discourages private firms/innovators from investing in green innovation at an optimum level; (4) Issues pertaining to credibility of market instruments to fight the environmental externalities may also act as a disincentive; (5) If a developed green technology is weak according to market signals, adoption and diffusion of such technologies is considerably less.21 Apart from these, other innovation barriers that hinder the access and diffusion of green technology also arise from failures in capability, networking, systems, institutions and frameworks.22 These barriers are a result of incoherence between two parts of an innovation system, i.e., private firms and the public research sector.23 Other kinds of policy failures that are pertinent to the diffusion of green technology can also be located and identified. These include articulation of market demand, coordination of policies, directionality and failures in ascertaining reflexivity.24,25 2.4.3.  Fostering Green Innovation Through Right Timing and Investment In order to take decisions pertaining to long-term investments in green innovation, it is important to foresee the technological requirements and to conduct

Green Innovation and Green Technology 23 comprehensive studies of the contemporary scenario of a particular location. This approach has been illustrated by the International Energy Agency through its Energy Technology Perspectives. It is also important to ascertain the right timing for making hefty investments which is possible by carefully monitoring the evolution of new innovations in the market. It requires a dedicated focus on research and development as well as entrepreneurial endeavors because they act as major contributors to the experimentation process that is the key behind the emergence of progressive ecofriendly innovation options. Imparting strength to the market for absorbing green innovation in an efficient manner is another way to go that might help us make good decisions. However, it is also important to keep in mind that the regulatory and public procurement policies are formulated by the government in such a manner that satisfies the emerging demands of the market rather than being driven political considerations. Therefore, while working toward the development of a green market, it is a challenge before any government to strike a fine balance between the demand-side policies and the actual need of the market. Continuous review of different policies framed in this regard to ensure their efficacy will certainly be of great benefit, especially for the development of new technologies and innovations. The requisite alteration in the policies post-evaluation has to be balanced with the stability of those policies in order to ensure a sustained market that would foster green innovation. As already noted, policies to foster green innovation will also benefit from continued evaluation and monitoring to improve the effectiveness and efficiency of policies over time and to benefit from the development of new scientific insights and new technologies and innovations. The required policy changes resulting from evaluation will have to be balanced against the need for policy stability over time. 2.4.4.  Formulation of Technology-Specific Policies One major challenge in the way of designing of strategies for both demand side and supply side in the area of green innovation is the deficiency of clear indicators for comprehending the foundation to design a roadmap of future aims. There is a need to clearly understand what constitutes green innovation and green technology before formulating investment and R&D policies. The R&D investment in the green supply side is only measured in the range of renewable energy technologies or eco-friendly technologies. But studies have clearly shown that various areas such as social sciences contribute to the growth. Therefore, it is important to establish a comprehensive meaning of terms such as “green innovation,” “green growth” and “green technology.” Another struggle that the governments are facing in the way of green development is achieving technological neutrality.26,27 In other words, in achieving a greener system, technological neutrality is a tough task, especially when technologies converge and develop at various stages. Lack of empirical evidence linking the role of government R&D and public policy in the promotion of green innovation is also a great difficulty.28

24  Green Innovation and Green Technology Therefore, for creating a new technology paradigm, technology-specific policies need to be devised parallel to technology-neutral policies. At the later stages, with the development process and demand of a certain technology, governments would need to modify the policies accordingly. Governments should not be under pressure to fund all the technologies equally in a given market, and the choice should depend on the market demand and efficiency and pertinence of a given technology. One important aspect of technology-targeted or technology-specific policies is the timing. It is one thing to predetermine R&D investments based on industrial structures and research capabilities, but it is a challenge to timely channelize technology-specific investments based on commercial developments in the vast fields of technology. In order to ensure efficient formulation and operation of technology-specific policies, the following steps may be taken: (1) (2) (3) (4) (5)

Promotion of the use of “strategic policy intelligence”; Technology road mapping; Coordination of research priorities for effective funding; Monitoring the dynamic technological transition in the market; and Analysis of social changes at both consumer and developer levels.

Legitimization of priority-setting processes should be ensured through wide consensus of the policy-makers. In turn, a well-structured long-term budget is also a great way to promote a vision of sustainable innovation.

2.5. Green Innovation in the US Being a non-OECD country, the US has taken an impressive stance on environmental protection and green innovation. The Environment Protection Agency (EPA) in the US has always laid emphasis on collaborative endeavors to reach sustainable development goals. It also talks about a two-pronged approach, i.e., regulatory and technological. The EPA fosters and supports regulatory innovation at the state level also.29 Providing incentives for environmental improvement, assisting the growth and regulation of small businesses and self-certification procedures are various ways in which the EPA is playing a vital role. There are certain areas of mutual interest for the states in which monetary assistance is provided by the State Innovation Grant Program.30 These areas include environmental management system, environmental permitting and performancebased leadership programs. Support of the government is indeed crucial in the endeavor of green development and eco-innovation. Environmental protection and innovation, being dynamic processes, called for amendments in several environment-based legislations (viz. the Clean Air Act of 1963,31 Clean Water Act of 1972,32 Federal Insecticide Fungicide and Rodenticide Act of 201033 etc.). The resulting amendments have considerably enhanced the green mandate. The legal tools are focuses on achieving both environmental

Green Innovation and Green Technology 25 results and technological advancement. These tools also rely on market forces to ensure effective growth throughout the landscape. 2.5.1.  Institutional Initiatives There are various major institution-based activities that have taken place to enhance green innovation in the US. 2.5.1.1. National Center for Environmental Innovation (NCEI) The National Center for Environmental Innovation (NCEI) is also working in the direction of environmental improvement and eradicating pollution of all kinds. The NCEI has been working in an advanced and modern manner to bring about a new generation of environmental protection. It uses market-based incentives which are annexed to various economic as well as environmental goals. It also focuses on the importance of the role of the public and assures through its working mechanism, significant public involvement in decision-making that ultimately boosts green consumerism and awareness. NCEI has a network of ten regional offices, which assures its functioning at firm, sector and community levels. Partnership with the EPA or with other public- or private-sector units is a key strategic component of the NSEI. It also emphasizes leveraging of resources to boost innovation. 2.5.1.2. US Department of Energy (DoE) When it comes to green technologies, the US DoE has a vital role to play. It has laid down crucial groundwork in the domain of fossil fuel, energy efficiency standards and promotion of renewable energy. One of the main aims is to focus on development and commercialization of technologies through national laboratories to make them cost effective. The department collaborates with other agencies, universities and venture capital companies to expand its dimension. It operates a number of instruments with a view to lowering the risks for investors: commercialization funds, loan guarantees (to subsidize the cost of capital for large scale project development) and entrepreneurship residence programs (to create incentives for venture capital firms to come in the laboratories); it showcases best technologies to venture capital firms. 2.5.1.3. US Department of Defense (DoD) The US DoD collaborates with the DoE and EPA to function in the field of sustainable and energy-efficient technologies. One major instrumentality of this DoD–DoE–EPA partnership is the Strategic Environmental Research and Development Program. The SERDP focuses on cross-service needs of the Army, Navy and Air Force. The development and implementation of environmentally-friendly technologies is very important in ensuring sustainability of the DoD’s training

26  Green Innovation and Green Technology and testing ranges. It also helps in reducing current and future environmental ­liabilities within and outside the US. 2.5.1.4. US Department of Agriculture (USDA) The USDA34 has been effectively involved in eco-innovation for bio-fuels, bioproducts and other forms of biodegradable resources. Like the DoD, the USDA also runs collaborative activities with various agencies and institutions. In totality, the USDA focuses on rural development and supports rudimentary research in the field of feedstock supplies, logistical issues which are upholstered by direct public funding. Prioritizing market access, the USDA plays a major role in the transition of R&D into deployment. 2.5.1.5. National Science Foundation35 The domain of fundamental research and education is looked after by the National Science Foundation. Research proposals may be presented by universities, colleges, non-profit, non-academic organizations, SMEs and even state and local governments. Consequently, the proposals are assessed and funds are released. The Foundation has a separate Environmental Research  & Education division which is active in eco-innovation activities. Besides these institutions, states are also engaged in environmental innovation and related policy, including through the Environmental Council of the States.36 They approach eco-innovation through either an environmental or an economic development perspective (e.g., Mississippi considered turning its economy into a bio-fuel economy in the aftermath of Katrina). Under certain circumstances, they can also set and act as per their own standards. 2.5.2. Major Policy Points Pertaining to Green Innovation There have been many policy actions to boost eco-innovation from both federal and state entities. This has made the US the leading nation in the area of green growth and green innovation. Some prominent policy actions are discussed in this section: 2.5.2.1. Federal Initiatives Apart from environmental legislations, the US federal government has taken progressive policy initiatives to ensure sustainable infrastructure and green innovation:   (1) Corporate Average Fuel Economy (café) Regulations:37 The law set a target of 35 miles per gallon for the combined fleet of cars and light trucks by model year 2020. Also, fuel economy programs were established for trucks.

Green Innovation and Green Technology 27   (2) Renewable Fuel Standards (RFS):38 The law set an upgraded standard that started at 9.0 billion gallons of renewable fuel in 2008 and rose to 36 billion gallons by 2022. The target is also to obtain 21 billion gallons from advanced bio-fuels.   (3) Appliance and Lighting Efficiency Standards:39 The energy standards are set for broad categories of electronic consumer goods such as lamps. The standards are also set for industrial goods such as furnace fans, battery chargers etc.   (4) Science to Achieve Results (STAR) Program:40 This program is competitive in nature and provides research grants and fellowships to promote research in the field of environmental science and climate change.   (5) Clean Automotive Technology Program:41 Under this program, the EPA collaborates with the automotive industry with an aim to achieve ultra-low emissions, enhance fuel efficiency and reduce the levels of greenhouse gases. The manufacturers are also motivated to produce energy-efficient machines.   (6) Federal Renewable Fuels Standard: This was set up by the 2005 Energy Policy Act, which aimed that US vehicles consume a minimum of 7.5 billion gallons of renewable fuel annually by 2012—up from about 1.8 billion gallons in 2001.   (7) EnergySTAR: It is one of the biggest federal instruments, which has been devised in collaboration with more than 8,000 public- and private-sector organizations. The target is to promote manufacture of energy-efficient advices and reduction of GHG levels. The EPA has also extended this program to cover residential and commercial buildings.   (8) Natural Gas STAR: The EPA collaborates with the natural gas industry under this program. The aim is to produce energy-efficient technology with special focus on reducing the emission of methane gas. Fifty-six percent of the entire US natural gas industry participates in this program. The program has the participation of more than 110 companies and is endorsed by almost 20 major industry trade associations.   (9) Executive Order 13423: The order was signed by President Obama on 24 January 2007 to strengthen the Federal Environmental, Energy and Transportation Management. The order laid down energy-reduction goals for every federal agency. The target was 30% reduction in energy intensity by 2015. (10) Renewable Electricity Production Credit (REPC): Under this monetary initiative, tax credit is granted at the rate of per kilowatt-hour for generation of electricity through qualified energy resources. Electricity from wind, closedloop biomass and geothermal receives a tax credit of 1.9 cents/kWh. Electricity from open-loop biomass, small irrigation hydroelectric, landfill gas, municipal solid waste resources and hydropower receives 1.0 cent/kWh. (11) Volumetric Ethanol Excise Tax Credit (VEETC):42 This policy is to support bio-fuels. Tax credit is provided at the rate of $0.51 per gallon to ethanol producers and $1 per gallon for renewable biodiesel producers. There is also a $0.54-per-gallon tariff on ethanol imports protecting domestic producers.

28  Green Innovation and Green Technology 2.5.2.2. State Initiatives In addition to federal strides, various states have also taken impressive initiatives in the arena of eco-innovation: (1) California Public Interest Energy Research (PIER) Program:43 It puts its main focus on funding of R&D in energy technologies, which goes up to USD 62 million every year. (2) California’s Innovative Clean Air Technologies (ICAT):44 The ICAT funds are utilized to support businesses in bridging the monetary deficit between research and wide-scale diffusion of technologies. Funds are also used to bridge the funding deficit between research and wide-scale deployment. The funds are also put behind technically sound projects that prevent or at least improve the emission levels of harmful gases. (3) Connecticut Clean Energy Fund (CCEF):45 It has been in existence since 2000. The primary function of this fund is to invest in companies that accelerate the development of clean energy technologies such as solar energy, fuel cells, green buildings etc. (4) New York State Energy Research and Development Authority (NYSERDA):46 This organization mainly functions for public benefit by enhancing research in environmentally-friendly technologies and is financed by taxpayers. (5) Massachusetts Clean Energy Fund:47 This is basically a public–private venture that funds green technologies and green innovation. (6) Chicago Climate Exchange:48 It is one of the major state-based initiatives that deals in climate emissions trading. Apart from these, regional initiatives such as the Western Climate Initiative49 (comprised of western states), the Midwestern Greenhouse Gas Accord50 and the Regional Greenhouse Gas Initiative51 (comprising Delaware, Connecticut, Maine, New Hampshire, New Jersey, New York and Vermont) have also strengthened the efforts of the US in this field. There have been many steps by the US government in the arena of climate change and sustainable development. The US has assumed a major global responsibility mainly because it is one of the most developed nations and one of the major contributors in carbon emission. Thus, policy-wise, the US has been streamlining its game for the past couple of decades and has also motivated other national players to follow suit. 2.5.3. International Role of the US in Promoting Environmental Protection and Green Innovation The US has taken major initiatives to foster international cooperation to motivate governments and provide them with tools to strengthen their eco-innovation regimes. International cooperation aims at providing partner governments with tools (not grants) which will strengthen their capacity to design and implement policies to support eco-innovation.

Green Innovation and Green Technology  29 The National Advisory Council on Environmental Policy and Technology has recently encouraged the EPA to engage more in international activities, increase awareness of and response to changing international standards and markets and identify emerging export markets in clean, energy-efficient technologies to India and China and other developing countries. 2.5.3.1. US Agency for International Development (USAID) USAID52 is an organization that boosts eco-innovation across the globe. It sponsors 16 international research centers that are located throughout the world (13 in developing countries) which cover a wide array of basic food commodities and natural resource issues. It also grants funds to the Consultative Group on International Agricultural Research (CGIAR)53 at the World Bank. USAID has been supporting research and education since 1978 through its Collaborative Research Support Programs (CRSP).54 The primary aim of CRSP is to foster expertise from various universities of the US at reasonable cost and contribute trained personnel and technology to agriculture across the world. Apart from these activities, two more programs, viz. the Middle East Regional Cooperation (MERC) Program55 and the US–Israel Cooperative Development Research (CDR) Program,56 both fund competitively reviewed, applied research projects. These programs mainly deal with agriculture, human health, water management systems and wildlife management. 2.5.3.2. Asia-Pacific Partnership on Clean Development and Climate This partnership is led by the US and includes various prominently developing nations such as China, India, South Korea, Australia and Japan. The partnership aims at developing, promoting and sharing of clean energy technologies. The domain of this partnership includes civilian nuclear power, hydro-power, liquefied natural gas, wind power, solar power, bio-energy and green buildings. 2.5.3.3. Methane to Markets57 This partnership focuses on cost-effective recovery of methane and subsequent utilization as a green source from natural gas resources, coal mines, landfills and agricultural waste management systems. The partnership was launched in 2004 and includes 18 nations (in alphabetical order): Argentina, Australia, Brazil, Canada, China, Colombia, Ecuador, Germany, India, Italy, Japan, Mexico, Nigeria, Republic of Korea, Russia, Ukraine, the UK and the US. 2.5.3.4. Global Nuclear Energy Partnership (GNEP) The GNEP58 aims to develop global consensus on expanded use of cost-efficient, zero-emission nuclear energy to fulfill global energy demand. The US, under this program, which was announced in February 2006, had undertaken to work with

30  Green Innovation and Green Technology nations that have advanced civilian nuclear energy programs such as France, Japan and Russia. Progressive technologies are utilized under GNEP that effectively and safely recycle already exhausted nuclear fuel. 2.5.3.5. International Partnership for the Hydrogen Economy (IPHE) Considering the common interest in hydrogen research, the US established the IPHE59 to organize and coordinate multi-national and cross-national hydrogen research programs that focus on global hydrogen economy transition. The partnership was launched in Washington, DC, in April 2003. 2.5.3.6. Carbon Sequestration Leadership Forum (CSLF) The main focus of the CSLF60 is to promote the development of technologies to separate, transport and store carbon dioxide safely over a long period and make these sequestration technologies available to industry at reasonable prices. The forum also addresses issues relating to regulations and policies pertaining to the capture and storage of carbon dioxide. 2.5.3.7. Clean Energy Initiative (CEI) This US initiative was launched in 2002 at the World Summit on Sustainable Development (WSSD)61 held in Johannesburg. The CEI is mainly founded on market-oriented and performance-based partnerships. The CEI focuses on many aspects of clean environment such as clean fuel and vehicles (led by the EPA) and efficient energy ensuring sustainable development (led by the DOE). The main objective of the CEI is to bring together governments, international organizations, industrial players and civil society and make them work together to expand economic growth and develop modernized energy sources. 2.5.3.8. Clean Energy Technology Export Program (CETE) The CETE deals in proven green technologies and assures that they are made available to multiple vendors at multiple locations through outreach endeavors. Efforts are also made to institutionalize contacts and ensure regular collaborations with private players and provide them with opportunities to try their hand at ecofriendly technologies. Guatemala has been one of the prime beneficiaries of the CETE program. It is now abundantly clear that the US has been active in the domain of green growth and green innovation by taking multi-faceted initiatives which have been extending the benefits not only in the country but in various other countries which have become responsible toward global environmental protection. The US has proved itself to be a leader of the efforts in the direction of clean environment and sustainable development.

Green Innovation and Green Technology  31

2.6. Role of Patenting in Promoting Green Innovation A lot of environmentally-friendly technologies have evolved in the last decade and have been registered with patent offices throughout the world. Many technologies based on cutting-edge innovation and proficient R&D have been granted patents by the US Patent and Trademark Office (USPTO). In the US, a patent—as a monopoly-based intellectual property right over inventions—plays a crucial role in enhancing innovative activities and boosting economic growth. With technological advancement and industrial revolution, the role of the patent regime has increased exponentially because it is the only thing that secures the interest of innovators in the progressively expanding commercial market. As patents play an important role in protecting new technology such as biotechnology, software etc., the recent development in green innovation and environmentally-friendly technologies has also stirred the attention of the policymakers. Transition in the legal and regulatory framework has resulted in more comprehensive domains of patentable subject matter and more strengthened and valuable patents.62 The US patent regime plays a vital role in promoting green innovation across the technological landscape of the country. The advantage of such technologies also extends to other developing parts of the world. Green patents have been tracked by the Clean Energy Patent Growth Index (CEPGI) since 2002. The research has revealed an upward trend in green patents in various efficient economies of the world such as Japan, Germany, Korea, Taiwan and the US. The tracked green patents embrace various ecological domains such as solar energy, wind energy, bio-fuels, geo-thermal energy, hybrid electric vehicles etc. A steady increase in the filing and granting of green patents has been reported by CEPGI. This section will discuss the growing trends in green patenting in the US.63 2.6.1. Green Technology Pilot Program In line with the green innovation scheme, the USPTO started this program64 in November 2009. The program focused on applications covering “green technologies” as per the mandate of the US Patent Classification Codes (USPC). Earlier, the class of energy-friendly technologies under the UPSC included the following: (1) (2) (3) (4)

Alternative energy production; Environmentally-friendly farming methods; Conservation of energy; and Environmental purification.

Discovering these classifications to be restrictive after a certain period, the USPC replaced them with a simple phrase: “green technology.” The applications pertaining to green technology may include a broad category of inventions such as reduction of GHG levels, reducing environmental deterioration, energy conservation etc.

32  Green Innovation and Green Technology The thrust of the Green Technology Pilot Program is that the accepted applications are examined immediately rather than being kept on the shelf for two or three years.65 In early 2012, the program was closed after receiving 3,500 applications. However, other modes of accelerated examination options are still available for green patents, which include: (1) Prioritized Examination Program (Track I); (2) Patent Prosecution Highway; and (3) Accelerated Examination Program. Thus, it is quite clear that the US patent regime strictly supports inventions that relate to climate change mitigation and sustainable development. The law of patenting in the US is liberal enough to motivate innovators to come to the front with their advanced research and innovation in the field of environmentally-friendly technologies. 2.6.2.  Fast-Tracking (FT) Program for Green Patents The fast-tracking program is in response to the UN policy of promoting and accelerating green technologies. Seven countries have initiated FT programs, which include the US, the UK, Australia and Canada. The fast-tracking program is essentially undertaken by OECD countries. However, the USPTO has also taken advanced steps in promoting innovation and diffusion of green technologies, and one of these is the fast-tracking program. The FT program may apply to both normal and green patents based on the preference of applicants. During the period of December 2009 to March 2012, the total number of fasttracked green patents was 3,533. There are several reasons applicants prefer FT programs rather than the normal examination process. These reasons may be suspicion of infringement, fear of imitation etc. However, the FT program in relation to green patents is advantageous in the sense that the technology is ready to be distributed in the market to be used by potential consumers who are aware and concerned about their environment.66 As far as the granting period is concerned under the FT program, it gets reduced by almost 42% in the US. The same time gets reduced up to 75% in the UK. Thus, it can be opined that the FT program lives up to its promises. The magnitude of fast-track patent applications has been increasing continuously. One of the main objectives of fast-tracking programs is to accelerate the diffusion of green technological knowledge in the economy.67 Research has also shown that the advantage of FT programs in the US and the UK is not being taken only by US and UK nationals but also by applicants from the OECD and other countries. This is a good signal as far as the interests of the inventor are concerned. One more thing observed is that the majority of patent

Green Innovation and Green Technology 33 applicants belong to India and China, which implies that patents are transferred by multi-national companies located in India and China. A fine balance between economic resources and green patenting is a necessity in the current times. Green patent applications in the US have been dealt extensively and are being fast-tracked into the mainstream in the interest of the investors and the community. However, the overall economic analysis of the system may be important to fill the gaps in the market. Continuously emerging green market and green innovation activities demand active attention of the policy-makers to leverage the market powers. The role of a liberal patent regime in any country (whether developing or developed) is to promote diffusion of new knowledge in the interest of the consumers and to safeguard the interest of the innovators who spend large amounts of time and energy in coming up with beneficial technologies. Thus, it can be concluded that the US and OECD countries, with their finely tuned green patent programs, are moving ahead in the direction of green and sustainable development.

2.7. Evolution of Green Innovation in India With 1.3 billion people, India is the largest democracy and undoubtedly one of the fastest-growing economies of the world. This growth has a few downsides, one of which is alarming environmental degradation. Thus, it is necessary to focus on a sustainable and energy-efficient India. In two different World Bank surveys, the following concerns have emerged: (a) the environmental deterioration costs India USD 80 billion per year, which roughly amounts to 5.7% of the economy; and (b) India has been ranked 155th out of 178 countries in air pollution exposure. The World Bank survey also stated that the quality of environment of India is below all BRICS nations. To add to this, according to a recently released survey by the World Health Organization, India counts for the 14 most heavily polluted cities of the world in a list of 30 cities.68 Thus, the Indian government has valiantly accepted this environmental challenge and has advanced its journey toward sustainable development. Indian policy-makers have started acknowledging the fact that green innovation (climate-friendly technologies, business models etc.) is crucial for the transformation of the Indian economy into a green one. 2.7.1. Reasons Behind India’s Slow Green Growth Through a comprehensive study of India’s policy response toward environmental degradation and green innovation, the following drawbacks were revealed: (1) The innovation reservoir that India possesses has gone deeply untapped; (2) The youth as a resource have not been addressed properly in the fabric of green development; (3) The standards in India for enforcing strict green innovation guidelines are themselves weak and blurry;

34  Green Innovation and Green Technology (4) The business community functioning in India has been fixated on profits instead of coming forward to face and solve environmental problems; (5) India’s investment structure has not been inclined toward green innovation. This is evident by the fact that India has invested only USD 3 billion per annum in sustainable technologies, which amounts to less than about onethird of the gross investment in two e-commerce giants, Flipkart and Amazon. However, picking up from here, the Indian policy-makers have certainly taken giant strides toward green innovation and green development. After doing a comprehensive study of the US scenario, in this section, we shall thoroughly discuss the steps of green growth in India. 2.7.2. Innovation Ecosystem: Indian Perspective The infrastructure pertaining to science, technology and innovation has grown exponentially since the Liberalization, Privatization and Globalization movement. There are many governmental (central and state) organizations that are engaged in intense research and development in various domains. Some prominent research organizations that are handled by the central government include the Department of Scientific and Industrial Research (DSIR), Department of Science and Technology (DST), Department of Atomic Energy (DAE), Department of Space (DOS), Department of Ocean Development (DOD) and Department of Biotechnology (DBT). Two ministries, i.e., the Ministry of Earth Sciences and Ministry of New and Renewable Energy, also work in the area of environmental protection directly under the central government. In addition, there are many independent R&D institutes, private-sector organizations, academic units and other departments such as IT, environment, health and agriculture which conduct domain-specific research to come up with beneficial outputs in the area. It is fair to contend that since independence, the evolution of India’s R&D scenario has been tremendous. The innovation ecosystem has become efficiently multi-layered. It is only proper execution that is required to carry out ambitious governmental policies for the welfare of the nation and its people. 2.7.3.  Role of Various Institutes Various departments play an important role in their respective area as follows: (1) Department of Science and Technology (DST):69 It identifies primary areas of R&D and promotes intensive research in line with the Five-Year Plans; (2) Science and Engineering Research Council (SERC):70 It consists of eminent scientists and technologists and acts as an advisory body to the DST; (3) Technology Information, Forecasting and Assessment Council (TIFAC):71 It plays an important role in designing technological forecasts and developing market assessments and surveys. One notable thing about TIFAC is that it developed and carried out a program called Technology Vision for India up to 2020 to provide compelling insights and initiatives in the national technology scene of India. It also promoted centers of excellence and patent facilitating centers.

Green Innovation and Green Technology 35 2.7.4. R&D in India: Statistical Analysis According to a 2013 analysis conducted by the Department of Science and Technology, the amount spent on R&D was about 0.88% of the national GDP, which amounted to INR 72.62 billion.72 The contributions were made by both private and public sectors. However, a huge amount of investment was made by the central government through its Planning Commission (now NITI Aayog). Several other independent research-based strategic institutes functioning in the areas of defense, atomic energy, space etc. have been the recipients of such contributions. According to World Bank Indicators (2000–2011), the investment in R&D in India increased merely from 0.74% to 0.81%, which is quite negligible when compared to countries like China (0.8% to 1.84%) and Japan (3% to 4.4%).73 In recent times, however, the Indian government has taken proactive initiatives to boost R&D in various sectors. In 2008, the global share of India in the domain of scientific publication was about 3.7% and ranked ninth on the global index. Considering the same aspect, China has exhibited phenomenal success with 11% global share in scientific publication and a global rank of second. It is also worth mentioning that China became the nation with the largest number of patent applications filed with a single IP office. However, India is also among the top ten countries in terms of patent applications.74 When we consider patent grants, India has shown a moderate increase from eight in 1980 to 1,137 in 2010. China, on the other hand, has exhibited a fast growth from four in 1980 to 3,303 in 2010. Further, China accounted for the largest number of patent applications received by any single IP office, with fastest annual growth in filings received. India is also included in the top ten countries in terms of patent applications filed in its patent office.75 Thus, it can be opined that India needs a fresh perspective toward green innovation policy and bringing about certain groundbreaking policy points to boldly veer into the direction of green growth. 2.7.5.  Sectors of Green Growth: Indian Policy Framework Let us discuss the Indian policy to boost green innovation in a sector-wise manner. This will give us a better understanding of the advantages that are extended to the stakeholders belonging to these sectors. 2.7.5.1. Renewable Energy India has set up a goal of adding 175,000 MW of renewable energy to its existing resources by 2022, which has automatically made the need to enhance R&D in the sector imperative for the policy-makers.76 The support extended by the government in this regard is focused on many factors such as cost-efficiency, augmentation of efficiency, reliability and manufacturing of long-lasting and wholesome systems. The ultimate target is to enhance the use of renewable resources and make them sustainable. To achieve this target, various strategic drivers are deployed such as

36  Green Innovation and Green Technology building indigenous capacity, energy diversification, cost-effective supply to rural areas, reducing GHG emissions during energy-conversion processes and enhancing the overall quality of life. Pursuit of research in the field of renewable energy has taken an impressive leap in the past decade. A dedicated ministry, i.e., the Ministry of New and Renewable Energy (MNRE), is continuously working in the direction of promoting renewable energy resources. The main functions of MNRE include the following: (1) (2) (3) (4) (5)

Support R&D activities in the area of grid interactive renewable energy; Focus on rural and urban energy requirements; Promote research in alternate fuels and energy technologies; Expand the Indian market to boost the renewable energy sector; and Support industrial R&D to make the industry globally competitive.

In addition to this, a comprehensive policy on research, design, development and demonstration (RDD&D) has been established to promote and enhance R&D in the new and renewable energy sector, including associating and supporting RD&D by industry for market development. In this regard, a scheme has also been set up that focuses on providing guidelines for project identification, formulation appraisal, approval and financial support.77 The government has also introduced a set of policy instruments in the renewable energy sector: (1) Market-based policy instruments (a) Feed-in Tariffs (FITs): FITs are the minimum purchasing price of renewable energy power (REP). In other words, it sets up the price threshold at which REP is purchased through contracts from producers or innovators. (b) Fiscal Incentives: These are provided to attract and promote engagement of private sectors in boosting REP growth. These incentives may be offered in the form of tax holidays, accelerated depreciation, capital subsidies etc. (c) Renewable Energy Certificate (REC) and Average Power Purchase Agreement (APP): These are also available to the developers as an alternative to FITs. (2) Control instruments (a) Renewable Purchase Obligations (RPOs): An RPO makes it mandatory for a distribution licensee to include a certain amount of renewable resource utilization in its portfolio. However, the amount varies among states and distributors. (b) Renewable Generation Obligations (RGOs): An RGO makes it necessary for the producer to produce a certain amount of power through renewable resources.

Green Innovation and Green Technology 37 2.7.5.2. Non-Renewable Energy The electricity sector of India lags the globally standardized mechanism. There are various challenges such as low-efficiency thermal power plants, excessive reliance on coal and inefficacious transmission and distribution networks. As an integral scheme of the 12th Five-Year Plan,78 the Ministry of Power laid out quite an ambitious plan which ensures sustainable development of the electricity and power sector. A  capacity addition of about 88,537 MW has been estimated during this plan. A 2014–15 report by TERI Energy & Environment Data Diary and Yearbook (TEDDY) confirms that reliance on coal resources will touch the 50% barrier by 2031, and that is why efficiency enhancement of the electricity generation mechanism is needed.79 The process of power generation through the use of coal has to be made in such a way so that it reduces air pollution. It is important to strike a balance between domestic coal resources and imported ones, because both categories require different treatment and have a differing effect on the climate. In such situations, adoption of integrated gasification combined-cycle (IGCC) is recommended, which is an advanced coal combustion technology. A  consortium of the Bharat Heavy Electricals Limited (BHEL), Andhra Pradesh Power Generation Corporation Limited (APGENCO) and Department of Science and Technology (DST) built a 200 MW IGCC demonstration plant in Vijayawada, Andhra Pradesh.80 The Indian government has set up a number of organizations such as the Indian Carbon Dioxide Sequestration Applied Research (ICOSAR), research institutes like the Indian Institute of Technology (IIT) and Indian Institute of Petroleum (IIP), state-owned organizations such as the National Aluminium Company (NALCO), Oil and Natural Gas Corporation (ONGC), National Thermal Power Corporation (NTPC), National Hydro Power Corporation (NHPC) etc. that are working in the areas of carbon dioxide sequestration and carbon capture and storage (CCS). In addition, under the 12th Five-Year Plan, the Central Power Research Institute (CPRI) has released funds to mechanize various schemes such as Plan Research and Development (grant of USD 3 million), Research Scheme of Power (grant of USD 3 million) and National Perspective Plan (grant of USD 8 million) to effectively promote innovation in the non-renewable energy sector.81 If we talk about international collaborations to boost new renewable energy innovation, India has taken leaps forward. India has become a part of the FutureGen project initiated by the US, the Big Sky Carbon Sequestration Partnership and the Asia Pacific Partnership for Clean Development. In the domain of international laboratory collaborations, India has engaged with the National Energy Technology Laboratory, US, Pacific Northwest National Laboratory, US, and SINTEF, Norway. These steps are being taken by the Indian government to align itself with the global standards of green innovation. As we know that utilization of non-­ renewable resources is inevitable for power generation, an intensive and expanded R&D regime becomes important to substantially reduce carbon emissions and

38  Green Innovation and Green Technology effectively implementing carbon sequestration. Policy-makers have efficiently been taking initiatives on state levels to support research entities: (1) Development of a comprehensive transmission system for ensuring provision of long-term access to private players has been initiated and facilitated by the Power Grid Corporation of India Ltd (PGCIL); (2) Nine high-capacity power transmission corridors (HCPTCs) have taken a final shape to fulfill the evacuation requirement of independent power producers (IPPs). The target states for the same are Andhra Pradesh, Chattisgarh, Jharkhand, Orissa, Madhya Pradesh, Sikkim and Tamil Nadu. The estimated cost of this project is about USD 11.6 billion.82 (3) The National Power Training Institute has been established to promote intensive research, capacity building and infrastructural training. It is one single step to ensure nation-wide advancement of the power sector. 2.7.5.3. Transport Sector The transportation industry in India is going through a transitional stage wherein the government is focusing on enhancing the fuel efficiency of conventional engines. The policy is also driving toward increasing the use of alternative technologies in transport mechanisms such as electric vehicles, solar-powered vehicles etc. R&D activities in the Indian automotive sector are heavily supported by the Department of Heavy Industry (DHI). The developmental operations are carried out by utilizing the automotive cess funds which are separately allocated to the Development Council for Automobile and Allied Industries (DCAAI). Playing a vital role in the transformation of the Indian transport sector, DCAAI has approved 209 projects in the last 25 years. The total expenditure on these projects fairly amounts to USD 91 million (~ INR 543.55 crores).83 Apart from these, numerous other measures are taken to ensure a greener transportation sector: (1) An association of Technology Information Forecasting Assessment Council (TIFAC) and Department of Science and Technology (DST) initiated the Collaborative Automotive R&D (CAR) Program in 2005 to promote pre-­ competitive based automotive research. A fund of over INR 35 crores has been released in the course of eight years to ensure efficient functioning of the CAR program; (2) For the 12th Five-Year Plan of 2012–17, the DHI proposed a massive budget of INR 175 crores per year solely for the purpose of automotive R&D;84 (3) Two major plans were created, i.e., the Automotive Mission Plan (2006–16) and the National Electric Mobility Mission Plan 2020, which primarily focus on research and development of affordable and climate-friendly technologies in the transportation sector. These plans also focus on the manufacture of hybrid electric vehicles (HEVs);

Green Innovation and Green Technology  39 (4) The government has launched a drive called Faster Adoption and Manufacturing of Electric Vehicles (FAME). The goal is to run around 6 to 7 million electronic vehicles on Indian roads by 2020. FAME serves a two-fold aim, i.e., to considerably reduce GHG emissions and to generate employment as a part of the Make in India scheme. A subsidy incentive of INR 738 crores (~USD 123 million) has been granted to enhance the functioning of FAME; (5) To encourage the utilization of bio-fuels, the Indian government has launched the National Policy for Biofuels, which aimed at a blending target of 20% by 2017; (6) The Auto Fuel Vision Committee has come up with strong recommendations for adoption of Bharat Standards, i.e., BS IV, BS V and BS VI norms pertaining to emissions to be adopted by 2017, 2020 and 2024, respectively;85 (7) The Motor Vehicle Act is also amended from time to time to ensure the presence of efficient emission norms and adoption of green technology in the automotive sector. The primary issue that needs to be addressed is that R&D in the transport sector is mainly undertaken by the industry. Enhanced government–industry collaboration is required to achieve the goal of green transportation faster and with more efficiency. 2.7.5.4. Buildings and Infrastructure In the context of infrastructural development, smart cities and green buildings form an integral part of the emerging model of the urban development scheme in India. Presently, India is the second-largest country in constructing energy-­efficient buildings, with a footprint of 2.2 billion sq. ft., which is ambitiously aimed at 10 billion sq. ft. by 2022.86 It is also pertinent to note that after the agriculture sector, the construction sector is the second-largest employer in India, as it is highly diversified. The construction sector involves the role of many collaborative organizations that provide design and engineering assistance, materials and equipment and also carry out multi-dimensional operations and maintenance services. A number of research and development institutions in India are engaged in construction of green infrastructure: (1) Central Building Research Institute (CBRI):87 It performs many functions such as: (a) supply of technology to industrial players; (b) formulation of standards for construction that pertain to thermal and visual comfort, wind speed, lighting levels etc.; and (c) administering guidelines for the construction of green buildings; (2) Indian Green Buildings Council (IGBC):88 It possesses a rating system specifically designed for evaluating green buildings. IGBC functions in collaboration with the UK government; (3) The Energy and Resource Institute (TERI):89 This is one of the prominent organizations in the sector. It works toward the advancement of R&D

40  Green Innovation and Green Technology activities in the field of energy-efficient and climate-friendly technologies, solar energy and several other deployment programs; (4) Indian Institute of Science (IISc):90 It primarily focuses on alternative building and environmentally sound technologies. It also develops and deploys mechanisms for functional efficiency for buildings which include climate adaptation and performance; (5) Glazing Council of India (GCI): GCI is mainly concerned with certification and labelling of envelopes and windows; (6) International Council for Local Environmental Initiatives (ICLEI):91 ICLEI primarily supports and promotes energy-efficient projects that are developed and deployed by local governments in rural, urban and semi-urban areas. Apart from these organizations, institutes like the Indian Institute of Technology (IITs), Centre for Environmental Planning and Technology (CEPT)92 and National Institute on Solar Energy (NISE)93 are also engaged in green infrastructural development through advanced technological methods. India has developed a strong regulatory framework to endure construction of greener buildings and townships: (1) Environmental Impact Assessment (EIA):94 It makes environmental clearance mandatory for construction projects; (2) Fast Track Environmental Clearance:95 This program was launched by the Ministry of Environment and Forests (MoEF) to facilitate construction of projects with green rating under the Green Buildings Rating System India (GRIHA)96 and IGBC; (3) Sustainable Habitat Mission:97 This focuses on ensuring energy-saving codes in commercial buildings; (4) Energy Conservation Building Code (ECBC):98 ECBC promotes construction of buildings that are energy efficient; (5) National Building Code (NBC):99 It is a comprehensive national instrument that governs the construction of energy-efficient buildings across the country. It acts as a model code to be adopted by all those organizations which are involved in construction and infrastructural developments. The central government has also been focusing on boosting foreign direct investment (FDI) and public–private partnerships (PPP) as key instruments to be utilized in boosting green infrastructural development. 2.7.5.5. Agricultural Sector Advancement of the agricultural sector is the crux of the 12th Five-Year Plan (2012–17) and with this objective the Ministry of Agriculture (MoA), in association with the Department of Agricultural Research and Education (DARE), has established the Indian Council of Agricultural Research (ICAR). The primary functions of ICAR include coordination, guidance and management of

Green Innovation and Green Technology  41 research and education in the domain of agricultural activities. Such activities involve fisheries, horticulture, animal science and natural resource management. ICAR supervises about 71 agricultural universities, 100 agriculture institutes and 641 Krishi Vigyan Kendras (KVKs) which operate across the country. Considering the contemporary needs of the stakeholders, ICAR has also catalyzed the transition from commodity-based research to agro-climaticzone–based research.100 Further, the 12th FY Plan delivered a special focus on the need to increase funding toward National Agricultural Research Systems (NARS) to 1% of the AgriGDP by the end 2017. It is pertinent to note that the allocation of funds to DARE which was INR 2,337 crores (~USD 390  million) in 2007–08 has significantly increased (~3 times) to INR 6,320 crores (~USD 1053 million).101 This tells us the story of the seriousness of the Ministry of Agriculture pertaining to the needs of the sector. In addition, there are several other policy and technological actions undertaken to strengthen the agricultural sector: (1) National Monsoon Mission:102 The mission has been initiated by the Indian Meteorological Department, which established a modern and dynamic model of short-term and long-term monsoon prediction; (2) Coordinated Horticulture Assessment and Management Using Geoinformatics (CHAMAN):103 This has been set up with an objective to enhance the use of geoinformatics in the planning of agricultural practices and activities; (3) National Agriculture Innovation Project (NAIP):104 The project has been initiated by ICAR to ensure efficacious implementation of R&D in technology pertaining to agriculture. The key achievements of NAIP include: (a) advanced super-computing hub at the Indian Agriculture Statistical Research Institute; (b) analytical database on bioinformatics and biotechnology based research; and (c) business planning and development (BPD) that has administered 331 commercialized technologies; 186 patent applications; training to more than 3,000 entrepreneurs across the country; and funds of around 1,900 lakhs; (4) Drip Irrigation Technology:105 This is considered one of the most water-­ efficient technologies and is widely practice for vegetables, orchards and plantation crops. The technology plays a vital role in low-carbon development while ensuring efficient water use. An estimate released by the Indian government disclosed that the national capacity or potential for the adoption of this particular technology is a sum total area of 27 million hectares. Already, in the states of Maharashtra and Tamil Nadu, drip irrigation technology has been gaining popularity in cultivation of sugarcane; (5) National Mission for Sustainable Agriculture:106 It counts as one of the sub-targets as delineated by the National Action Plan on Climate Change (NAPCC)107 that focuses on resource preservation, promotion of sustainable agriculture methods, soil health management, increasing efficient use of water and integrated farming processes;108

42  Green Innovation and Green Technology (6) National Innovations for Climate Resilient Agriculture (NICRA):109 The policy has been initiated by the MoA and aims to mainstream such practices into national agricultural development planning that are climate resilient. The Government of India has taken advanced technological initiatives to modernize the agriculture sector while ensuring implementation of climate-friendly innovation in the interest of the climate and farmers. 2.7.5.6. Industrial Sector The Indian industrial sector is considered to be one of the most booming sectors around the globe and exhibits immense potential for green innovation and sustainability. The innovations in the industrial sector may include exploring unconventional sources and clean fuel technologies. The responsibility of promoting eco-innovation in the Indian industrial sector is being undertaken by the Department of Industrial Policy and Promotion (DIPP) working under the aegis of the Ministry of Commerce and Industry. The prime objective is to encourage the acquisition of technological capacity in various industrial domains. The Government of India specifically allocated a budget of INR 105 crores (~USD 18 million) in 2014–15 to support industrial research and innovation activities undertaken by autonomous institutions such as the Quality Council of India, the National Council for Cement and Building Materials (NCCBM), the National Institute of Design, the Central Pulp and Paper Research Institute (CPPRI), the Central Manufacturing Technology Institute, the Indian Rubber Manufacturers Research Association and the National Productivity Council.110 There are various industrial sub-sectors which have received special monetary attention of the government such as aluminum, fertilizers, iron and steel, pulp and paper, cement etc. There are several other energy-intensive policy actions undertaken to enhance the efficiency of the industrial sector: (1) BEE-SME Program:111 The Bureau of Energy Efficiency (BEE) has initiated this program in 35 clusters to catalyze the adoption of energy-efficient technology; (2) TEQUP Scheme: The Technology and Quality Upgradation Scheme (TEQUP)112 primarily focuses on introducing energy-efficient technologies in the MSME sector; (3) TERI-SDC Partnership:113 This is a prime example of international partnership which was founded in 2010 to assure energy-saving policies for the MSME sector. TERI collaborated with the Swiss Development Corporation (SDC) to introduce replicable, bio-mass-based energy-efficient technologies in the MSME sector in various states; (4) Technology Acquisition and Development Fund (TADF):114 This fund has been established by the Global Innovation and Technology Alliance (GITA)

Green Innovation and Green Technology 43 in collaboration with DIPP to boost green manufacturing in MSME sectors. The process of green manufacturing involves various mechanisms such as technology acquisition, funding support through patent pooling, subsidized manufacturing of energy-efficient products and pollution control equipment, subsidies for construction of green buildings and implementation of wastewater treatment facilities. DIPP has released a discussion paper which highlights the following aspects of the Indian industrial sector: (1) The Indian share in global trade of high technology products is merely 8%; the aim is to double the same through better and more efficient inputs; (2) There is a need to boost the commercialization of IPRs coming into existence through publicly funded R&D; (3) Incubation and entrepreneurship development centers have a large role to play in the advancement of the industrial sector; and (4) There is a need to promote utility models involving indigenous technology and to devise a legal framework to boost frugal innovation. Keeping this in mind, the Indian government has to take advanced steps in the direction of green industrial innovation in order to create a healthy ecosystem for future generations. 2.7.5.7. Forest Management For ensuring welfare of forest communities, it is necessary to promote innovation and development of climate-friendly technologies. This will also help in effectively commercializing forest produce. The task of boosting environmental research in forestry has been assumed by the Ministry of Environment, Forest and Climate Change (MoEFCC). There are many autonomous research institutions which have been involved in forestry R&D: (1) Indian Council for Forestry Research and Education (ICFRE):115 It is a nodal body that plans, promotes and conducts various forestry-related research endeavors; (2) Indian Plywood Industries Research and Training Institute (IPIRTI):116 The Institute ensures efficient use of timber and other composites of wood; (3) Forest Survey of India (FSI):117 The main function is to collect, store and retrieve forest-related data for national- and state-level planning. National Basic Forestry Inventory System (NBFIS) is also established to serve the purpose; (4) Wildlife Institute of India (WII):118 It primarily acts as an advisory body to central and state governments on forest- and wildlife-related issues.

44  Green Innovation and Green Technology For carrying out eco-friendly research activities in the sector of forestry, in 2014–15, a budget of INR 166.68 crores (~USD 28  million), which was INR 118.80 crores (~USD 20 million), was allocated to the Indian Council for Forestry Research and Education and the Indian Plywood Industries Research and Training Institute.119 The Indian government has initiated some prominent policy actions to promote innovation in forestry: (1) National Mission for a Green India:120 It is one of the wing-missions of the National Action Plan on Climate Change (NAPCC), which was devised to create awareness in the public regarding environmental deterioration and climate change. The main objectives are: (a) to increase the national forest cover by 5 million hectares; (b) to enhance the quality of forests of another 5 million hectares in the course of ten years; and (c) to provide effective livelihood to the forest communities. Other wing-missions of NAPCC include the National Solar Mission, National Mission for Enhanced Energy Efficiency, National Mission for Sustainable Habitat, National Water Mission, National Mission for Sustaining the Himalayan Ecosystem, National Mission for Sustainable Agriculture (as discussed previously) and National Mission on Strategic Knowledge for Climate Change; (2) National Forest Policy:121 This sui generis policy has been specifically laid down to ensure advancement of R&D activities in the area of forest protection and sustainable development; (3) Research Programme of Socio-Economic Issues of Environment (RPSE): This program is initiated directly under the MoEF to promote advanced research in forest management; (4) National Working Plan Code:122 It was established by the MoEF in 2014 for effectuating sustainable management of forests and biological resources; (5) National Natural Resources Management System (NNRMS):123 It was set up to optimize the use of remote sensing technologies for assessment and monitoring of natural resources; (6) National Mission on Bamboo Applications (NMBA):124 It was initiated in 2015 to provide village energy security and improve the forested area; (7) Tribal Co-operative Marketing Development Federation of India Ltd. (TRIFED):125 This is a nodal agency that supports the government-initiated mechanism to commercialize minor forest produce (MFP).126 It also boosts research and development to enhance the quality of technology used in collection of MFP. Apart from these, the government has also initiated policy actions like the Joint Forest Management and Forest Rights Act whereby the forest-dwelling communities are involved in the management of forests and are made responsible for sustainable use of forests.

Green Innovation and Green Technology 45 2.7.5.8. Waste Management Managing of wastes and making the sector eco-friendly certainly requires advanced technology and policy instruments. Technology is required for various processes such as recycling, extracting thermal and bio-chemical energy from organic waste and capturing gas from landfills. The most widely used technology to treat solid waste in India is mechanical biological treatment (MBT).127 Conversion plants that extract thermal energy from wastes are gaining pertinence because of their impressive capacity to reduce waste volumes by more than 90%. For promoting coal replacement, refuse-derived fuel (RDF) plants128 are also set up in many cities and are gaining wide importance. There have been multifarious technology interventions in the area of waste management: (1) Plastic waste management: Both organized (3,500) and unorganized (4,000) sector organizations conduct plastic waste management activities across the country. Plastic-to-oil technology by Indian Institute of Petroleum and ­plastic-aggregate bitumen technology initiated by Pune Municipal Corporation are some prominent examples in the area;129 (2) Municipal Solid Waste (MSW) management: Various technological plants, i.e., 172 bio-methanation plants, 76 waste to energy plants, 94 sanitary landfill facilities (SLFs) and 535 waste processing plants are some of the initiatives for MSW management;130 (3) Construction and Demolition (C&D) waste management: Use of alternate building material is promoted. There is also a dedicated SLF site at Narela;131 (4) Packaging waste management: It involves packaging with the use of natural elements such as banana fiber, jute, coir etc. and low-temperature pyrolysis; (5) Biomedical waste management: Biomedical waste forms a hefty part of the annual waste in India (~288.2 tonnes per day out of 506.74 tonnes). There are 602 biomedical waste incinerators, 2,218 autoclaves, 192 microwaves, 151 hydro-claves and 8,038 shredders to deal with the high magnitude of biomedical waste. Moreover, majority of the waste incinerators use air pollution control technology;132 (6) Electronic waste: Per a 2014 report, 1.7 mt of e-waste is generated annually. Various heavy metals like cadmium, mercury and arsenic that cause harm to public health are processed with copper, aluminum, gold etc. to mitigate the effect.133 Apart from these, under the Swachch Bharat Mission (2015), the following technology interventions have been introduced: (1) EcomanEnviro Solutions Limited: A private-sector company which operated in the area of processing of organic waste and road-sweeping machines;

46  Green Innovation and Green Technology (2) Muskaan Jyoti Samiti: An NGO which uses a drum technique134 for producing organic manure; (3) Nokooda Solution Systems Pvt. Ltd.: It uses a green waste processor for processing plastic waste and solid waste. 2.7.6.  Green Infrastructural Growth and the Way Ahead The rapid pace of infrastructural growth in India is evident, and it has inevitable environmental repercussions as well. This is well acknowledged by the government and private players, and steps are being taken in the same direction. It is indeed the joint responsibility of policy-makers and business-owners to safeguard the ecosystem. Even the United Nations has opined that the Sustainable Development Goals are achievable only through global partnership between governments and private companies. Efficient knowledge and technology exchange will definitely help the global cause of climate change mitigation.135 Hence, Indian stakeholders owe it to the society at large to take the greener path, and simultaneously it is the responsibility of the government to boost green innovation and diffusion of environmentally-friendly technologies. The idea is a paradigm shift—from infrastructure to green infrastructure. In the green journey, Cochin airport has emerged as India’s first airport (a 12 MW project) which is based on solar power. It has a capacity of producing 18 million units of power in a year.136 In August 2015, Cochin airport became India’s first airport to run on solar power. Set up by Bosch Ltd. in Bangalore and running on photovoltaic panels, the airport has the capacity of producing 18 million units of power in a year. The absolutely power-neutral Cochin airport project cost around INR 62 crores and can provide 50,000 to 60,000 units of electricity in a day.137 One more milestone in the journey of Indian green development is the newly built Chandigarh International Airport at Mohali. The innovation behind the airport has been delivered by the renowned infrastructural development company Larsen and Toubro (L&T). With double-insulated roofing, fly-ash bricks, cavity walls, a sensor-based plumbing system to save water and energy-efficient chillers, the airport sets fresh benchmarks in the domain of green technology. The major portion of the airport is illuminated by LEDs, and the rooftop of the terminal has a dedicated 200 KW solar plant. It also has a modern sewage treatment mechanism with extended aeration technology. The Green Rating for Integrated Habitat Assessment (GRIHA) has given a four-star rating to the airport. The Chandigarh International Airport stands apart not only in India but in the world.138 Adopting the usage of advanced fossil fuel technologies and renewable energy, these two airports have been aligned with the UN Sustainable Development Goals. They have also motivated and boosted investment in activities and research related to green technologies.

Green Innovation and Green Technology 47 2.7.7.  Low-Carbon Technologies and Innovation: A Giant Leap Ahead According to the Global Cleantech Innovation Index released in 2014, India ranked 21st out of 40 countries. The research was a joint work of World Wildlife Fund and the CleanTech group. India’s weak performance on the index can be attributed to many factors such as feeble inputs in green innovation, an extremely slowly growing entrepreneurial culture, lack of awareness and government focus on environmentally-friendly technologies etc. India’s low consumption of renewable energy resources and comparatively lower amount of clean tech companies are also contributing factors. However, in recent years, India has shown great potential in improving its rank on the global front by strengthening the ecosystem for boosting green development and wide commercialization of green technologies. 2.7.7.1. Facility for Low-Carbon Technology Deployment (FCLTD) When it comes to low-carbon technologies and related initiatives, India has been proactive in recent years. The Technology Development Board (TDB),139 working under the aegis of Department of Science and Technology, Government of India, has tightened its boots for ensuring progressive technological development. Collaborating with the World Bank, the TDB has launched an impressive project to establish a Facility for Low-Carbon Technology Deployment (FCLTD).140 The resources used to create the FCLTD amount to almost USD 9.1 million. The functions of the project can be summarized as follows: (1) Adoption and promotion of new energy-efficient technologies; (2) Installation of machinery that consumes less energy with high-level outputs; (3) Setting up of modern mechanisms such as industrial low-grade waste heat recovery, pumping and HVAC (heating, ventilation and air conditioning); and (4) Development and deployment of performance-based and efficient prototypes for commercial usage. 2.7.7.2. National Clean Energy Fund (NCEF) To boost research and development in the field of clean technologies and environmental sustainability, the Indian government also established the National Clean Energy Fund (NCEF)141 in 2010. The dimensions covered by NCEF are: (1) Development and demonstration of integrated community energy solutions; (2) Smart grid technology including wind, solar, tidal and geothermal energy; (3) Replacement of technology with an environmentally-friendly approach through the mission based on strategic knowledge;142 (4) Developing critical renewable energy infrastructure such as manufacturing of silicon; and (5) Environment management and focus on clean fossil energy.

48  Green Innovation and Green Technology It is rather impressive to note that up to September  2014, NCEF had already recommended INR 18,577 crores (equivalent to USD 3,096  million) worth of climate-friendly projects. This shows the commitment of the Indian government toward climate change mitigation and sustainable development.143

2.8. Role of Patent Protection in Boosting Green Innovation When we talk about innovation, it is important to appreciate and recognize the efforts put in by the inventor in bringing beneficial inventions into being. A patent, as an intellectual property right, plays a major role in providing exclusivity to the inventor. It is also contended that exclusive nature of the right of patent may become a hurdle in the diffusion of beneficial technology due to excessive monopolization. These issues have been addressed by many scholars.144 To give a basic understanding of patenting criteria in various jurisdictions, our research145 has come up with three factors or tools that are involved in granting of a patent to any inventor. These tools can be utilized to promote both innovation and diffusion through patents: (1) Subject Matter: It means the extent of the domain of knowledge within which patents would subsist in a given jurisdiction. Generally speaking, novel inventions are prima facie patentable; however, mere discoveries and abstract concepts are excluded. Patentable subject matter, as a legal tool, has an invariable correlation with society and public interest. Policy-makers always want to strike a fine balance between the interest of the inventor and social interest. Therefore, patentability depends on the social and industrial efficacy of a particular invention; (2) Requirement: It is the level of an inventive or novel step that is required to make the invention (product or process) patentable. Patent requirement varies from regime to regime based on the economic situation. Therefore, it is clear that higher the level of patent requirement lower the number of patent grants. The converse is also true. However, keeping the requirement level low would certainly increase the number of grants but may compromise the groundbreaking innovations and may also have an adverse effect on the innovationbased market paradigm; (3) Patent Breadth: It means the extent and strength of protection a patent-grant contains against the competitors of the inventor in the market. It protects not only the invention but also the “functional equivalents” of the invention that give a great advantage to the patent-holder. This means that the broader the patent, higher is the zeal of the inventor to innovate further, the narrower the patent, lowers is the motivation to the inventor. These three tools have to be utilized by the policy-makers in their respective patent regimes to effectuate both innovation and social benefit. Since the focus of the study is effect of patent protection on green innovation and development, we will move ahead with that perspective.

Green Innovation and Green Technology  49 As discussed earlier, both the US and India have taken proactive steps to boost green innovation and environmental development. However, the patent regime and the operation of the aforementioned tools of patenting are quite different in both countries. Therefore, the correlation between patent protection and green innovation in these countries is also different. Socio-economic situations, R&D planning and funding, outlook of the inventors and policymakers and the vision plan are the determining factors of the future levels of green innovation. Patents that are granted to provide incentive to innovators to come up with climate-friendly technologies are termed green patents by the OECD. In current times, green patenting is used around the world by companies as an effective business strategy while extending environmental benefits to the stakeholders.

Notes 1 Crespi, Francesco, Mazzanti, Massimiliano, and Managi, Shunsuke (2016), Green Growth, Eco-Innovation and Sustainable Traditions, Environmental Economics and Policy Studies, Vol. 18, No. 2, 137–141. 2 Green Innovation Centres for the Agriculture and Food Sector, available at www.giz. de/en/worldwide/32209.html (last accessed on 09–06–2017). 3 Ibid. 4 Ibid. 5 Available at www.giz.de/en/worldwide/368.html (last accessed on 09–06–2017). 6 Ibid. 7 Basiago, A.D. (1999), Economic, Social, and Environmental Sustainability in Development Theory and Urban Planning Practice, The Environmentalist, Vol. 19, 145–161. 8 COAG definition: “Skills for sustainability, also known as green skills, are the technical skills, knowledge, values and attitudes needed in the workforce to develop and support sustainable social, economic and environmental outcomes in business, industry and the community.” 9 Green Skills for Rural Youth in South East Asia, Research Report for Plan International, Indonesia, Myanmar, Thailand  & Vietnam, The Research Base, available at https://plan-international.org/publications/green-skills-rural-youth-south-east-asia (last accessed on 02–10–2018). 10 ILO Definition: “Decent jobs that contribute to preserve or restore a sustainable environment, be they in traditional sectors such as manufacturing and construction, or in new, emerging green sectors such as renewable energy and energy efficiency.” 11 “The extent to which green economy activities and technologies increase the demand for existing occupations, shape the work and worker requirements needed for occupational performance, or generate unique work and worker requirement.” Available at ILO Department of Statistics (2007), Definition of Green Jobs Used in the Employment and Environment Policy Context, International Labour Office (ILO), Geneva. 12 “The process by which tasks and responsibilities within jobs are made environmentally friendly and efficient.” 13 Jarvis, Andrew et al. (2011), Assessing Green Jobs Potential in Developing Countries: A Practitioner’s Guide, International Labour Office (ILO), Geneva. 14 See Kyoto Protocol to the United Nations Framework Convention on Climate Change (1997), Annex A, December 11, U.N. Doc FCCC/CP/1997/7/Add.1, 37 I.L.M. 22, available at http://unfccc.int/resource/docs/convkp/kpeng.pdf (last accessed on 21–11–2018) [hereinafter Kyoto Protocol] (listing the six major greenhouse gases:

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Carbon dioxide (CO2), Methane (CH4), Nitrous oxide (N2O), Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs), and Sulphur Hexafluoride (SF6)). 15 See Lenny Bernstein et  al. (2009), Climate Change 2007: Synthesis Report, Contribution of Working Groups I, II and III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, R.K. Pachauri and A. Reisinger (eds.), IPCC, Geneva, Vol. 64 (“There is medium confidence that approximately 20 to 30% of plant and animal species assessed so far are likely to be at increased risk of extinction if increases in global average temperature exceed 1.5 to 2.5° C for 1980–1999 levels.”); see also Derclaye, Estelle (2009), Patent Law’s Role in the Protection of the Environment—Re-Assessing Patent Law and Its Justifications in the 21st Century, International Review of Intellectual Property and Competition Law, Vol. 40, 249–250 [hereinafter Patent Law’s Role] (providing statistics about influence of greenhouse gases on the atmosphere). 16 Lybecker, Kristina M. (2014), Innovation and Technology Dissemination in Clean Technology Markets and the Developing World: The Role of Trade, Intellectual Property Rights, and Uncertainty, Journal of Entrepreneurship Management and Innovation (JEMI), Vol. 10, No. 2; Klincewicz, Krzysztof, and Ujwary-Gil, Anna (eds.) (2016), New Topics in Entrepreneurship and Innovations Management, Wyższa Szkoła, Nowy Sa̜cz. 17 See Dibble, William (1994), Justifying Intellectual Property, UCL Journal of Law and Jurisprudence Review, Vol. 1, 74 (“The need for intellectual goods in contemporary culture means that we place an enormous value on them. The value however can only be realised in the form of a price if it is protected by some form of law or recognised within law.”). 18 Newell, R. (2009), Literature Review of Recent Trends and Future Prospects for Innovation in Climate Change Mitigation, OECD Environment Working Paper, available at www.oecd.org/greengrowth/consumption-innovation/43680851.pdf (last accessed on 05–05–2019). 19 It is categorized as a market situation where consumers want to buy things that have been produced in a way that protects the natural environment, available at https:// dictionary.cambridge.org/dictionary/english/green-consumerism (last accessed on 05–05–2019). 20 Arrow, K.J. (1962), Economic Welfare and the Allocation of Resources for Innovation, in R. Nelson (ed.), The Rate and Direction of Inventive Activity: Economic and Social Factors, Princeton University Press, Princeton, pp. 609–625. 21 Jaffe, A.B., Newell, R.G., and Stavins, R.N. (2004), Technology Policy for Energy and the Environment, in A.B. Jaffe, J. Lerner, and S. Stern (eds.), Innovation Policy and the Economy, The MIT Press, Cambridge, Vol. 4. 22 Arnold, E. (2004), Evaluating Research and Innovation Policy: A  Systems World Needs Systems Evaluations, Research Evaluation, Vol. 13, No. 1. 23 OECD (1998), Special Issue on New Rationale and Approaches in Technology and Innovation Policy, STI Review No. 22, OECD, Paris. 24 Weber, M.K., and Rohracher, H. (2012), Legitimizing Research, Technology and Innovation Policies for Transformative Change: Combining Insights from Innovation Systems and Multi-Level Perspective in a Comprehensive ‘Failures’ Framework, Research Policy, Vol. 41, 1037–1047. 25 Reflexivity is categorized as the relation between an element and the impact of its own qualities and activities on itself. 26 Technological neutrality is the process of choosing the most appropriate technology by a government and granting it financial support. 27 Azar, C., and Sanden, B.A. (2011), The Elusive Quest for Technology-Neutral Policies, Environmental Innovation and Societal Transitions, Vol. 1, No. 1, 135–139. 28 Grubb, M. (2005), Technology Innovation and Climate Change Policy: An Overview of Issues and Options, Keio Economic Studies, Vol. 41, No. 2, 103–132.

Green Innovation and Green Technology  51 29 Leflaive, Xavier (2008), Eco-Innovation Policies in the United States, Environment Directorate, OECD, Paris. 30 Between 2002 and 2009, the EPA provided financial assistance to state environmental agencies through the EPA State Innovation Grant (SIG) program to help them test innovative approaches to improving results in permitting programs. This website is an archived site for the SIG program and provides information about the competitions, projects and their results. Using the EPA grant program, states tested and implemented a variety of new ideas to improve permit compliance and integrate voluntary stewardship approaches, available at https://archive.epa.gov/osem/stategrants/web/ html/index.html (last accessed on 07-05-2019). 31 The Clean Air Act (42 U.S.C. § 7401) is a US federal law designed to control air pollution on a national level. It is one of the US’ first and most influential modern environmental laws, and one of the most comprehensive air quality laws in the world. 32 The Clean Water Act (CWA) establishes the basic structure for regulating discharges of pollutants into the waters of the US and regulating quality standards for surface waters. The basis of the CWA was enacted in 1948 and was called the Federal Water Pollution Control Act, but the Act was significantly reorganized and expanded in 1972. “Clean Water Act” became the Act’s common name with amendments in 1972; 33 U.S.C. § 1251 et seq. (1972). 33 The Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) is a US federal law that set up the basic US system of pesticide regulation to protect applicators, consumers and the environment. 34 See www.usda.gov/our-agency/about-usda (last accessed on 07-05-2019). 35 See www.nsf.gov/ (last accessed on 07-05-2019). 36 See www.ecos.org (last accessed on 07-05-2019). 37 NHTSA’s Corporate Average Fuel Economy (CAFE) standards regulate how far our vehicles must travel on a gallon of fuel. NHTSA sets CAFE standards for passenger cars and for light trucks (collectively, light-duty vehicles) and separately sets fuel consumption standards for medium-and heavy-duty trucks and engines. NHTSA also regulates the fuel-economy window stickers on new vehicles. This site contains information about many aspects of these programs, and we encourage you to check back as new information is posted. See www.nhtsa.gov/laws-regulations/corporateaverage-fuel-economy (last accessed on 07-05-2019). 38 The US Congress created the renewable fuel standard (RFS) program to reduce greenhouse gas emissions and expand the nation’s renewable fuels sector while reducing reliance on imported oil. This program was authorized under the Energy Policy Act of 2005 and expanded under the Energy Independence and Security Act of 2007. See www.epa.gov/renewable-fuel-standard-program (last accessed on 07–05–2019). 39 Minimum efficiency standards for residential appliances and lighting have been one of the most successful policies used by US states and the federal government to save energy. Appliance efficiency standards prohibit the production and import or sale of appliances and other energy-consuming products less efficient than the minimum requirements. These standards not only save energy but also reduce pollutants, improve electric system reliability and save consumers significant amounts of money over the life of the equipment. Standards help to assure a level playing field by eliminating products with burdensome operating costs and hastening the development of innovations that bring improved performance; available at https://aceee.org/topics/ appliance-standards (last accessed on 07–05–2019). 40 To (1) support research to determine the environmental and human health effects of air quality, drinking water, water quality, hazardous waste, toxic substances and pesticides; (2) identify, develop, and demonstrate effective pollution control techniques; and (3) support research to explore and develop strategies and mechanisms for those in the social, governmental and environmental arenas to use in environmental

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management decisions. See www.federalgrantswire.com/science-to-achieve-resultsstar-program.html#.XNHA7KThXIU (last accessed on 07–05–2019). 41 The goal of the Clean Automotive Technology program is to research, evaluate and develop advanced vehicle engine and drivetrain technologies that help increase fuel efficiency, reduce regulated criteria emissions such as nitrogen oxides (NOx) and particulate matter (PM) and cut greenhouse gas emissions. To achieve this goal, the Clean Automotive Technology program focuses on developing technologies that are clean, efficient and cost-effective for both the consumer and manufacturer. See https://archive.epa.gov/otaq/technology/web/html/ (last accessed on 07–05–2019). 42 The Volumetric Ethanol Excise Tax Credit (VEETC) is the basically the largest subsidy to corn based ethanol, the most common biofuel in the US. The tax credit is worth 45 cents per gallon of ethanol blended with gasoline, costing US taxpayers $5.16  billion in 2009. See www.taxpayer.net/agriculture/the-volumetric-ethanolexcise-tax-credit-history-and-current-policy/ (last accessed on 07-05-2019). 43 See www.adaptationclearinghouse.org/resources/california-energy-commission-­publicinterest-energy-research-program-pier.html (last accessed on 07–05–2019). 44 ICAT was an Air Resources Board program from 1993 through 2008 that co-funded the demonstration of innovative technologies that could reduce air pollution. Its purpose was to advance such technologies toward commercial application, thereby reducing emissions and helping the economy of California. ICAT is no longer an active ARB program. For more see https://ww3.arb.ca.gov/research/icat/icat.htm (last accessed on 07–05–2019). 45 See www.energy.gov/savings/connecticut-clean-energy-fund (last accessed on 06–05– 2019). 46 NYSERDA has USD 280 million available for energy storage projects to assist the state in combating climate change and support former Governor Cuomo’s nationleading energy storage target of 3,000 MW by 2030. The funding is part of a larger USD 400 million energy storage investment to put New York on the path to carbon neutrality, under the governor’s Green New Deal. Fore more see www.nyserda. ny.gov/ (last accessed on 05–05–2019). 47 See www.mass.gov/info-details/overview-of-the-massachusetts-clean-energy-center (last accessed on 04–05–2019). 48 The Chicago Climate Exchange (CCX) is a voluntary GHG emissions cap-and-trade scheme based in North America. Although participation is voluntary, compliance with emission reduction objectives is legally binding once a member joins. CCX has as part of its cap-and-trade scheme an offset program with a full-fledged carbon offset standard. For more see www.global-greenhouse-warming.com/Chicago-ClimateExchange.html (last accessed on 07-05-2019). 49 Western Climate Initiative, Inc. (WCI, Inc.) is a non-profit corporation formed to provide administrative and technical services to support the implementation of state and provincial greenhouse gas emissions trading programs. The board of directors for WCI, Inc. includes officials from the provinces of Québec and Nova Scotia and the state of California. The services provided by WCI, Inc. can be expanded to support jurisdictions that join in the future. See www.wci-inc.org/ (last accessed on 07-05-2019). 50 In 2007, governors of the diverse Midwestern states and the premier of Manitoba unified behind a commitment to advance the region toward a lower-carbon energy economy that “maximizes the energy resources and economic advantages of Midwestern states while reducing emissions of atmospheric CO2 and other greenhouse gases.” The Midwestern Greenhouse Gas Reduction Accord (Midwestern Accord) is a regional agreement by six governors of states of Minnesota, Wisconsin, Illinois, Iowa, Michigan, Kansas and the Canadian province of Manitoba. For more see https://climatechange.lta.org/midwestern-accord/ (last accessed on 07–05–2019).

Green Innovation and Green Technology 53 51 The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory market-based program in the US to reduce greenhouse gas emissions. RGGI is a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont to cap and reduce CO2 emissions from the power sector. Following a comprehensive 2012 Program Review, the RGGI states implemented a new 2014 RGGI cap of 91 million short tons. The RGGI CO2 cap then declined 2.5% each year from 2015 to 2020. The RGGI CO2 cap represents a regional budget for CO2 emissions from the power sector; available at www.rggi. org/ (last accessed on 07-05-2019). 52 Visit www.usaid.gov/ (last accessed on 07–05–2019), 112. 53 See www.cgiar.org/ (last accessed on 01–05–2019), 113. 54 For more visit http://crsps.net/ (last accessed on 01–05–2019). 55 The Middle East Regional Cooperation (MERC) Program was established in 1981 to facilitate research collaboration between Egyptian and Israeli scientists after their two countries signed the Camp David Accords. The program expanded to include Jordan, Morocco, Tunisia, Lebanon, the West Bank and Gaza Strip in 1993; available at www.usaid.gov/where-we-work/middle-east/merc (last accessed on 07–05–2019). 56 The CDR program was congressionally chartered in 1985 to make Israeli experience in the application of science to development available to developing countries. It also seeks to encourage broad scientific contacts between Israel and USAID supported countries. CDR focuses on helping scientists from target developing countries obtain Israeli technology and to collaborate with Israeli researchers. Country eligibility changes with the international situation. CDR grants are for no more than USD 200,000 total funding (usually spread over three, four or even five years). The US Agency for International Development allocates USD 3 million to fund the program and has funded 350 grants worth more than USD 54 million since it was established; For more see www.jewishvirtuallibrary.org/u-s-israel-cooperative-developmentresearch-program-cdr (last accessed on 07–05–2019). 57 Gunning, Paul M. (2007), The Methane to Markets Partnership: An International Framework to Advance the Recovery and Use of Methane as a Clean Energy Source, available at www.tandfonline.com/doi/full/10.1080/15693430500402390 (last accessed on 08–05–2019). 58 For more see www.energy.gov/sites/prod/files/edg/media/GNEPfactsheet.pdf (last accessed 08–05–2019). 59 The IPHE, established in 2003, is an international intergovernmental partnership currently consisting of 18 member countries and the European Commission. Its objective is to facilitate and accelerate the transition to clean and efficient energy and mobility systems using hydrogen and fuel cell technologies across applications and sectors. This partnership provides a forum for sharing information on initiatives, policies and technology status, as well as on safety, regulations, codes and standards to accelerate the cost-effective transition to the use of hydrogen and fuel cells in the economy. The IPHE also informs broad stakeholder groups, including policy-makers and the public, on the benefits of, and challenges to, establishing widespread commercial hydrogen and fuel cell technologies in the economy; available at www.iphe.net/ (last accessed on 08–05–2019). 60 The Carbon Sequestration Leadership Forum (CSLF) is a ministerial-level international climate change initiative that is focused on the development of improved cost-effective technologies for the separation and capture of carbon dioxide (CCS) for its transport and long-term safe storage. The mission of the CSLF is to facilitate the development and deployment of such technologies via collaborative efforts that address key technical, economic and environmental obstacles. The CSLF will also promote awareness and champion legal, regulatory, financial and institutional environments conducive to such technologies. The CSLF is currently comprised of

54  Green Innovation and Green Technology







23 members, including 22 countries and the European Commission. CSLF member countries represent more than 3.5 billion people, or approximately 60% of the world’s population. Unless otherwise determined by the members, any costs arising from the activities contemplated by the CSLF charter are to be borne by the member that incurs them. Each member’s participation in CSLF activities is subject to the availability of funds, personnel and other resources; available at http://climateinitiativesplatform. org/index.php/Carbon_Sequestration_Leadership_Forum_(CSLF) (last accessed on 08–05–2019). 61 See https://sustainabledevelopment.un.org/milesstones/wssd (last accessed on 08-052019). 62 Patents and Innovation: Trends and Policy Challenges, OECD Paper, available at www. oecd-ilibrary.org/science-and-technology/patents-and-innovation_9789264026728en (last accessed on 28–04–2019). 63 Using Green Patents to Create a More Sustainable Business, available at www. ecovadis.com/blog/using-green-patents-create-sustainable-business/ (last accessed on 28–04–2019). 64 Under the Green Technology Pilot Program, an applicant was able to have an application advanced out of turn (accorded special status) for examination, for applications pertaining to green technologies including greenhouse gas reduction (applications pertaining to environmental quality, energy conservation, development of renewable energy resources or greenhouse gas emission reduction). The Green Technology Pilot Program was modified several times, including expanding its eligibility to include applications filed on or after 8 December 2009, in addition to applications filed before 8 December 2009, and extending the program until 30 March 2012, or the date that 3,500 applications have been accorded special status under this program. The Green Technology Pilot Program provided for applications pertaining to green technologies, including greenhouse gas reduction, to be advanced out of turn for examination without meeting all of the current requirements of the accelerated examination program (e.g., examination support document) or the Prioritized Examination (Track  I) program; available at www.uspto.gov/patent/initiatives/green-technology-pilot-program-closed (last accessed on 08–05–2019). 65 Dechelzlepretre, Antoine (2013), Fast-Tracking Green Patent Applications: An Empirical Analysis, ICTSD Programme on Innovation, Technology and Intellectual Property, Issue Paper No. 37, February, Geneva. 66 Ibid. 67 Ibid. 68 Burman, Gaurav, Why Eco-Innovation is a Crucial Ingredient for India’s Progress, available at https://yourstory.com/2018/08/eco-innovation-crucial-india-future (last accessed on 24–04–2019). 69 See www.dst.gov.in/ (last accessed on 08–05–2019). 70 The Science and Engineering Research Council (SERC) was established in 1974 and is an apex body through which the Department of Science and Technology (DST), Government of India, promotes R&D programs in newly emerging and challenging areas of science and engineering; available at www.serc-dst.org/ (last accessed on 08–05–2019). 71 www.tifac.org.in/ (last accessed on 08–05–2019). 72 Anand, Manish, Dhawan, Ninika, and Kedia, Shailly (2015), Science, Technology and Innovation for Low Carbon Development in India, Discussion Paper, Shakti Sustainable Energy Foundation, TERI, New Delhi, p. 4. 73 Ibid. 74 Ramani, S.V. (ed.) (2014), Innovation in India: Combining Economic Growth with Inclusive Development, Cambridge University Press, New Delhi. 75 See www.dst.gov.in/ (last accessed on 08–05–2019).

Green Innovation and Green Technology 55 76 Anand, Manish, Dhawan, Ninika, and Kedia, Shailly (2015), Science, Technology and Innovation for Low Carbon Development in India, Discussion Paper, Shakti Sustainable Energy Foundation, TERI, New Delhi, p. 19. 77 Ibid. 78 The government on 4 October approved the 12th Five-Year Plan (2012–17) document that sought to achieve annual average economic growth rate of 8.2%, down from 9% envisaged earlier, in view of fragile global recovery. The theme of the Approach Paper was “faster, sustainable and more inclusive growth.” According to officials, the projected average rate gross capital formation in the 12th Plan was 37% of the GDP. The projected gross domestic savings rate was 34.2% of the GDP, and the net external financing needed for macro-­ economic balance had been placed at 2.9% of the GDP. During the 11th Plan (2007–12), India recorded an average economic growth rate of 7.9%. This, however, was lower than the 9% targeted in the 11th Plan. Besides other things, the 12th Plan sought to achieve 4% agriculture sector growth during 2012–17. The growth target for manufacturing sector had been pegged at 10%. The total plan size had been estimated at Rs. 47.7 lakh crore, 135% more that for the 11th Plan (2007–12). For more see www.simplydecoded.com/2012/10/13/ summary-of-approved-12th-five-year-plan/ (last accessed on 08–05–2019). 79 Anand, Manish, Dhawan, Ninika, and Kedia, Shailly (2015), Science, Technology and Innovation for Low Carbon Development in India, Discussion Paper, Shakti Sustainable Energy Foundation, TERI, New Delhi, p. 17. 80 Ibid. 81 Ibid. 82 Ibid., p. 20. 83 Ibid., p. 25. 84 Ibid., p. 17. 85 See www.india.gov.in/report-expert-committee-auto-fuel-vision-and-policy-2025 (last accessed on 08–05–2019). 86 Anand, Manish, Dhawan, Ninika, and Kedia, Shailly (2015), Science, Technology and Innovation for Low Carbon Development in India, Discussion Paper, Shakti Sustainable Energy Foundation, TERI, New Delhi, p. 26. 87 The Central Building Research Institute, Roorkee, India, has been vested with the responsibility of generating, cultivating and promoting building science and technology in the service of the country. Since its inception in 1947, the Institute has been assisting the building construction and building material industries in finding timely, appropriate and economical solutions to the problems of building materials, health monitoring and rehabilitation of structures, disaster mitigation, fire safety, and energy-efficient rural and urban housing. The Institute is committed to serve the people through R&D in the development process and maintains linkages at international and national levels; for more, see https://cbri.res.in/ (last accessed on 08–05–2019). 88 The Indian Green Building Council (IGBC), part of the Confederation of Indian Industry (CII), was formed in the year 2001. The vision of the council is “To enable a sustainable built environment for all and facilitate India to be one of the global leaders in the sustainable built environment by 2025”; for more see https://igbc.in/igbc/ (last accessed on 08-05-2019). 89 Established in 1974, TERI is an independent, multi-dimensional organization, with capabilities in research, policy, consultancy and implementation. They are innovators and agents of change in the energy, environment, climate change and sustainability space, having pioneered conversations and action in these areas for over four decades; for more see www.teriin.org/ (last accessed on 08–05–2019). 90 IISc was established in 1909 with active support from Jamsetji Tata and Krishnaraja Wodeyar IV and thus is also locally known as the Tata Institute. It was granted the Deemed University status in 1958; fore more see www.iisc.ac.in/ (last accessed on 08–05–2019).

56  Green Innovation and Green Technology 91 ICLEI—Local Governments for Sustainability, founded in 1990 as the International Council for Local Environmental Initiatives, is a global network of cities, towns and regions committed to building a sustainable future. The international network was established when more than 200 local governments from 43 countries convened at its inaugural conference, the World Congress of Local Governments for a Sustainable Future, at the United Nations in New York in September  1990. Today, the ICLEI network includes more than 1,750 local and regional governments in 100+ countries; for more see www.iclei.org/en/About_ICLEI_2.html (last accessed on 08–05–2019). 92 CEPT University focuses on understanding, designing, planning, constructing and managing human habitats. Its teaching programs aim to build thoughtful professionals, and its research programs deepen understanding of human settlements. CEPT University also undertakes advisory projects to further the goal of making habitats more livable. Through its education, research and advisory activities, CEPT strives to improve the impact of habitat professions in enriching the lives of people in India’s villages, towns and cities. The university comprises five faculties. The Faculty of Architecture was established as the School of Architecture in 1962. It focuses on design in the private realm. The Faculty of Planning, focused on planning in the public realm, was established in 1972 as the School of Planning. The Faculty of Technology, which concentrates on engineering and construction, was established in 1982 as the School of Building Science and Technology. The Faculty of Design was established in 1991 as the School of Interior Design. It deals with habitat related interiors, crafts, systems and products. The Faculty of Management was established in 2013 and it focuses on habitat and project management; for more, see https://cept. ac.in/ (last accessed on 08–05–2019). 93 The National Institute of Solar Energy (NISE), an autonomous institution of the Ministry of New and Renewable (MNRE), is the apex national R&D institution in the field of solar energy. The Government of India converted the 25-year-old Solar Energy Centre (SEC) under MNRE to an autonomous institution in September 2013 to assist the ministry in implementing the National Solar Mission and to coordinate research, technology and other related works; for more see https://nise.res.in/ (last accessed on 08–05–2019). 94 The EIA is a formal process used to predict the environmental consequences of any development project. It is statutorily backed by the Environment Protection Act, 1986, which contains various provisions on EIA methodology and process; available at www.gktoday.in/gk/environment-impact-assessment/ (last accessed on 09–05–2019). 95 See www.grihaindia.org/fast-track-environmental (last accessed on 09–05–2019). 96 Ibid. 97 The National Mission on Sustainable Habitat is one of the eight climate missions of the Government of India under the NAPCC mitigation strategy. It was formulated to make the cities sustainable through improvements in energy efficiency in building and management of solid waste and to shift to public transport; for more, see www. jagranjosh.com/general-knowledge/do-you-know-about-indias-national-mission-onsustainable-habitat-1525780107-1 (last accessed on 09–05–2019). 98 See https://cleanenergysolutions.org/sites/default/files/documents/ecbc_released_ver sion.pdf (last accessed on 09–05–2019). 99 The code was first published in 1970 at the instance of the Planning Commission and then first revised in 1983. Thereafter three major amendments were issued to the 1983 version, two in 1987 and the third in 1997. The second revision of the code was in 2005, to which two amendments were issued in 2015; for more see www.comarchitect. org/new-national-building-code-of-india/ (last accessed on 09–05–2019). 100 Anand, Manish, Dhawan, Ninika, and Kedia, Shailly (2015), Science, Technology and Innovation for Low Carbon Development in India, Discussion Paper, Shakti Sustainable Energy Foundation, TERI, New Delhi, p. 35. 101 Ibid.

Green Innovation and Green Technology 57 102 See www.tropmet.res.in/monsoon/monsoon2/ (last accessed on 09–05–2019). 103 See www.ncfc.gov.in/chaman.html (last accessed on 09–05–2019). 104 See https://naip.icar.gov.in/index.htm (last accessed on 09–05–2019). 105 In India, the irrigated area consists of about 36% of the net sown area. Presently, the agricultural sector accounts for about 83% of all water use. The remaining uses include 5%, 3%, 6% and 3%, respectively, by domestic, industrial and energy sectors and other consumers. Increasing competition with the other water users in the future would limit the water availability for expanding irrigated area. In traditional surface irrigation methods, the losses in water conveyance and application are large. These losses can be considerably reduced by adopting drip and sprinkler irrigation methods. Among all the irrigation methods, drip irrigation is the most efficient and it can be practiced in a large variety of crops, especially in vegetables, orchard crops, flowers and plantation crops. In drip irrigation, water is applied near the plant root through emitters or drippers, on or below the soil surface, at a low rate varying from 2 to 20 liters per hour. The soil moisture is kept at an optimum level with frequent irrigations. Drip irrigation results in a very high water application efficiency of about 90–95%; available at www.iari.res.in/index.php?option=com_content&view=article&id=200&Itemid= 1093 (last accessed on 09–05–2019). 106 See https://nmsa.dac.gov.in/ (last accessed on 09–05–2019). 107 The Government of India formulated national plan on water, renewable energy, energy efficiency agriculture and others—bundled with additional ones—into a set of eight missions under the National Action Plan on Climate Change. The Action Plan was released on 30 June 2008 to address the future policies and programs for climate mitigation and adaptation; for more visit www.jagranjosh.com/generalknowledge/national-action-plan-on-climate-change-1441620255–1 (last accessed on 20–04–2019). 108 8 Govt Missions Under National Action Plan on Climate Change (NAPCC) Designed to Heal India, available at www.indiatoday.in/education-today/gk-current-affairs/ story/8-missions-govt-napcc-1375346-2018-10-25 (last accessed on 19–04–2019). 109 National Innovations on Climate Resilient Agriculture (NICRA) is a network project of the Indian Council of Agricultural Research (ICAR) launched in February 2011. The project aims to enhance resilience of Indian agriculture to climate change and climate vulnerability through strategic research and technology demonstration. The research on adaptation and mitigation covers crops, livestock, fisheries and natural resource management. The project consists of four components: strategic research, technology demonstration, capacity building and sponsored/competitive grants. The project was formally launched by the Honorable Union Minister for Agriculture & Food Processing Industries, Shri Sharad Pawarji, on 2 February 2011; available at www.nicra-icar.in/nicrarevised/index.php/home1 (last accessed on 09–05–2019). 110 Anand, Manish, Dhawan, Ninika, and Kedia, Shailly (2015), Science, Technology and Innovation for Low Carbon Development in India, Discussion Paper, Shakti Sustainable Energy Foundation, TERI, New Delhi, p. 40. 111 See https://beeindia.gov.in/sites/default/files/ctools/BEE%20SME%20SCHEME.pdf (last accessed on 09–05–2019). 112 See www.dcmsme.gov.in/schemes/TEQUPDetail.htm (last accessed on 09–05–2019). 113 See www.teriin.org/project/teri-sdc-partnership-scaling-energy-efficient-technologiessmall-enterprises-eese-india (last accessed on 09–05–2019). 114 See www.pib.nic.in/PressReleaseIframePage.aspx?PRID=1485292 (last accessed on 09–05–2019). 115 See http://icfre.gov.in/dg-message (last accessed on 09–05–2019). 116 See www.ipirti.gov.in/ (last accessed on 09–05–2019). 117 See www.fsi.nic.in/ (last accessed on 09–05–2019). 118 Established in 1982, the Wildlife Institute of India (WII) is an internationally acclaimed institution which offers training programs, academic courses and advisory in wildlife research and management. The Institute is actively engaged in research

58  Green Innovation and Green Technology across the breadth of the country on biodiversity related issues; for more see www. wii.gov.in/ (last accessed on 09–05–2019). 119 Anand, Manish, Dhawan, Ninika, and Kedia, Shailly (2015), Science, Technology and Innovation for Low Carbon Development in India, Discussion Paper, Shakti Sustainable Energy Foundation, TERI, New Delhi, p. 46. 120 For more details visit www.downtoearth.org.in/news/forests/green-india-missiongrossly-underfunded-parliament-panel-63291 (last accessed on 09–05–2019). 121 For more details visit https://news.mongabay.com/2018/04/indias-new-forest-policydraft-draws-criticism-for-emphasis-on-industrial-timber/ (last accessed on 09–05–2019). 122 See www.indiaenvironmentportal.org.in/files/file/National%20Working%20Plan% 20Code%202014_0.pdf (last accessed on 09–05–2019). 123 The National Natural Resources Management System is an integrated natural resource management system of India which aggregates the data about natural resources from remote sensing satellites and other conventional techniques. One of the important elements of this management system is the National Resource Information Systems, which acts as a feeder information system to the larger information system of the government, which includes socioeconomic information and models. NNRMS activities are coordinated at the national level by the Planning Committee of NNRMS (PC-NNRMS), which frames guidelines for implementation of the systems and oversees the progress of remote sensing applications for natural resources management in the country; available at www.vssc.gov.in/VSSC/index.php/43-isro-centres/500-bhoosampada-5 (last accessed on 09–05–2019). 124 This revamped the National Bamboo Mission and was duly approved by the Cabinet Committee on Economic Affairs (CCEA) on 25 April 2018. The mission envisages promoting holistic growth of the bamboo sector by adopting an area-based, regionally differentiated strategy and to increase the area under bamboo cultivation and marketing. Under the mission, steps have been taken to increase the availability of quality planting material by supporting the setting up of new nurseries and strengthening of existing ones. To address forward integration, the mission is taking steps to strengthen marketing of bamboo products, especially those of handicraft items; See https://nbm.nic.in/ (last accessed on 09–05–2019). 125 See http://trifed.in/trifed/(S(v31x4iqhke5jlkenilvhd5gk))/default.aspx (last accessed on 09–05–2019). 126 This policy primarily aims at the marketing of 12 selected MFPs, i.e., bamboo, tendu, mahua seed, sal leaf, sal seed, lac, chironjee, wild honey, myrobalan, tamarind, gum karaya and karanj. 127 MBT stands for mechanical biological treatment. It is a process that could help the UK to meet its obligations under the Landfill Directive (EC/ 31/1999) of diverting biodegradable municipal solid waste from landfills to help protect the environment and reduce the amount of greenhouse gas emitted from landfill sites. See www.ciwm. co.uk/ciwm/knowledge/mechanical-biological-treatment.aspx (last accessed on 09–05–2019). 128 For more details visit www.no-burn.org/understanding-refuse-derived-fuel/ (last accessed on 09–05–2019). 129 Anand, Manish, Dhawan, Ninika, and Kedia, Shailly (2015), Science, Technology and Innovation for Low Carbon Development in India, Discussion Paper, Shakti Sustainable Energy Foundation, TERI, New Delhi, p. 51. 130 Ibid. 131 Ibid. 132 Ibid. 133 Ibid.

Green Innovation and Green Technology  59 134 The Bokashi Method uses a select group of microorganisms to anaerobically ferment organic waste: (1) Add kitchen daily waste to the airtight drum for fermentation;

(2) You might see maggots the next day around the rim. Then add Bokashi powder; (3) Ensure that the drum has a tap which can drain a small amount of the liquid generated from time to time. This liquid will smell like molasses, bran and vinegar; (4) Around the 17th day, there will be some white fungus grown in the drum, showing the fermentation. The white mold is a beneficial fungus which helps suppress pathogens. If you have white mold, it means that your fermentation is going well; (5) Collect kitchen waste in the Bokashi drum for a month and then let it sit for 18 days; (6) Mix some of the drum’s contents with semi-done compost and put this mixture in a tub; (7) Dig a trench and then put the fermenting wet waste in it and cover it up; (8) After three weeks, your black compost will be ready. For more, see https://krishijagran.com/agripedia/how-to-prepare-organic-manure-athome/ (last accessed on 16-05-2019). 135 Environment Friendly Green Technologies Being Used in the Developing Infrastructure of India; available at https://www.masterbuilder.co.in/environmentfriendly-green-technologies-used- developing-infrastructure-india/ (last accessed on 14-04-19). 136 Ibid. 137 Ibid. 138 Ibid. 139 The Government of India constituted the Technology Development Board (TDB) in September 1996 under the Technology Development Board Act, 1995, as a statutory body to promote development and commercialization of indigenous technology and adaptation of imported technology for wider application. The board consists of 11 board members. For more see http://tdb.gov.in/ (last accessed on 09–05–2019). 140 See www.low-carbon-innovation.org/ (last accessed on 09–05–2019). 141 See https://doe.gov.in/sites/default/files/NCEF%20Brief_post_BE_2017-18.pdf (last accessed on 09–05–2019). 142 National Mission on Strategic Knowledge for Climate Change (NMSKCC). See http://dst.gov.in/sites/default/files/NMSKCC_July_2010.pdf (last accessed on 09–05–2019). 143 Anand, Manish, Dhawan, Ninika, and Kedia, Shailly (2015), Science, Technology and Innovation for Low Carbon Development in India, Discussion Paper, Shakti Sustainable Energy Foundation, TERI, New Delhi, p. 55. 144 Patents and Innovation: Trends and Policy Challenges; OECD Working Paper, available at www.oecd-ilibrary.org/science-and-technology/patents-and-innovation_ 9789264026728-en (last accessed on 25–04–2019). 145 Encaoua, D., Guellec, D., and Martinez, C. (2003), The Economics of Patents: From Natural Rights to Policy Instruments, Collection EUREQua (2003.124), Cahiers de la MSE, Paris.

3 The Nexus Between Green Innovation and Green Economy

3.1. Relevance of Green Innovation and Green Economy The term “innovation” means a process wherein a more efficient delivery system is established. In the era of technological evolution, innovation is always in the front because it gives a market edge to the proprietors. Introducing something new to the established paradigm is the core idea behind innovation. Innovation denotes advancement, enhancement and improvement of the existing technology or any regime constructed for the utilization of the human race. Technically speaking, large-scale innovation has always been a game of developed countries, which play an important role in accelerating global growth. Countries like the US, the UK and Russia have been the key players. As far as green innovation is concerned, as the name suggests, it is the practice of innovating technologies that help the cause of climate change mitigation and sustainable development. At this point, it would be quite redundant to discuss the concept of green innovation at length, because in the post–Earth Summit era, environmental innovation has become the focus of all policy-making. The policy regimes in various countries, most importantly the developed ones, have responded to the global concern of climate change, and innovators are motivated and inspired to “go green” with their R&D. Consequently, a lot of elite organizations of the world have adopted green innovation as a core part of their strategy. There have been many innovations which have substantially helped the cause of sustainable development. The focus in this research paper is on the potency of green innovation in a developing economy like India and the role green innovation has played in shaping up the technological landscape of the economic superpower, the US. 3.1.1.  Promoting Frontier Green Innovation A well-planned policy regime is a must for promoting frontier green innovation. The aim is to push technology in the supply chain, reduce the costs incurred in knowledge creation and commercialization and enhance net revenue by increasing the market pull. Stimulation of market-based innovation needs multiple incentives that have an indirect impact on the investments on both margins—cost and revenue. DOI: 10.4324/9781003319467-3

Green Innovation and Green Economy  61 It is also revealed through research that novel green technologies can be developed and commercialized in nations where technological capacities are relatively less advanced. However, it does require one or more amalgamations of firms with adequate capabilities as far as technologies are concerned. It also requires highquality educational paradigms and high cost-benefit pertaining to public support to enable expenditures of limited public resources relative to alternative uses. One of the ways to achieve this is to exploit the heterogeneity of public and private capabilities through public–private dialogues and inputs from firms performing well. 3.1.2.  Technological Capabilities and Local Technology Push In almost all the countries across the globe, the innovation systems are heavily backed by direct government funding for research and development. This may include many elements such as monetary support to public laboratories, soft loans, project grants, early-stage subsidies to private firms engaged in innovation supporting pre-commercialization development of technology through R&D tax subsidies, promoting creative collaboration of firms etc. As we have already discussed, majorly in respect of India and the US, R&D institutes and organizations funded by the government have always been the traditional mechanisms to push frontier tech innovations. One advantage of this system is that it promotes cooperation in research efforts with little possibility of duplication. Another advantage is that the knowledge being publicly produced is generally available freely, which is socially desirable, and the information may further be put to efficient use. However, one drawback with government-funded R&D is that the movement of the research process is from basic to applied phases, and the indicators are not strong enough to map the consumer needs and expenditure inclinations. Green innovations processes that are majorly supported by formal R&D grants are shown to be largely concentrated in high-income countries and some countries that are basically considered to have advanced technological regimes. Patent data have shown that developing countries have comparatively low innovation levels. In the absence of sufficient innovation drive and technological capabilities, the role of government funding for R&D would prove to be rather limited. Thus, researchers have supported the view of pushing frontier green innovation in capable and developed nations and of subsequently extending the advantage to the developing ones. The other view is from the perspective of patents as an intellectual properties that grant exclusivity to the innovator. We have already established that government funding of R&D activities aims at promoting knowledge creation and making that knowledge easily and freely accessible to the public. This comes in contrast to the granting of patents to inventors, which grants them the sole right and monopoly to use and exploit the knowledge created by them. Thus, it can fairly be contended that the supply push of technology aspired by the government through funding of research is compromised by patents. Patents are broadly

62  Green Innovation and Green Economy categorized as a decentralized demand-pull self-selection mechanism. This means that the inventor, for a specific duration of time, gets exclusivity of setting prices of their invention in exchange for full disclosure of its specifications to other stakeholders in the relevant market. It also happens that a researcher, whether belonging to a public or private entity, utilizes the funding provided by the government for synthesizing a patentable idea. Therefore, patents can be an incentive and a good signal for insightful innovations. As widely debated, the major problem with any patent system is that it proves to be rather distorted and inequitable because it grants arbitrary monopoly to the inventor, which in turn limits the diffusion of created knowledge, and even the use of knowledge by others is restricted for a considerable period of time. It is also argued that the incentive to research further is implicit in the patent system, but it also brings with it the distorted practice of minutely altering the knowledge just to increase the life of a patent and further restrict the knowledge. Other distortions of a patent system include marketing expenditures devised to reduce the elasticity of the market demand for a particular product to enable the inventor to fix arbitrary prices and amplify profits. Patentees may also engage in unreasonable social advertisement of their product in the name of exercise of patent monopoly. In developed countries, technological development, which is broadly recognized by the term early-stage technology development (ESTD), is strongly bolstered by both private and public resources. Elements like private investments (by family members, influential individuals, successful entrepreneurs etc.), venture capital, equity firms and corporations extend support to innovators to come up with new technology and get it patented. On the other hand, in developing nations, one of the major challenges is that investors seek deep financial markets that are supported by robust regulatory frameworks accompanied by monitoring and enforcement systems. Therefore, in developing countries, private investments have not been successful. Consequently, it becomes imperative for the public sector to take it upon itself to promote technological development. This proves to be rather difficult, because the financial resources have to be allocated to numerous sectors and not only R&D. Thus, it is contended by many scholars that technological push and green innovation at the local level can and must be promoted in those countries which have the technological and financial capabilities for the same. 3.1.3.  Global Technological Push: Supporting Strategies As pointed out, countries which possess a low level of technological capacity and are at a comparative disadvantage in the domain are not advised to expend public resources within their territory without proper marketing strategy. However, keeping in mind the global benefits of frontier green innovation, stable and long-term funding of R&D is recommended with progressive levels. Financial resources should also be utilized to facilitate the development and adoption of technology by the developing countries. Thus, a global partnership is the prime strategy in the contemporary scenario of green growth and green innovation.

Green Innovation and Green Economy 63 3.1.3.1. Prize Funds One of the effective demand-pull strategies is prize funds that cater to the technological development needs of the countries with low technological capabilities. A  prize fund is a pre-determined monetary benefit for an inventor who comes up with a technology that satisfies or meets the defined criteria. The researcher/ innovator only receives the prize once he or she achieves the specified outcomes. A fair and proportional quantum of the prize can be devised on the basis of the novelty and industrial relevance of a given invention. Another condition attached to prize funds is that once the prize is awarded to the innovator, the invention is made freely accessible and is subsequently diffused. Thus, the basic mechanism is that award of prize must require full disclosure related to the innovation so that it can be efficiently disseminated. The prize fund mechanism is particularly important in the area of green innovation, where the out-of-the box approach takes the front seat as compared to traditionally funded R&D. Prize funds are also aimed at promoting effective cooperation and coordination between engineers, researchers and scientists. 3.1.3.2. Advance Market Commitments (AMC) In addition to prize funds, AMCs are one more demand-pull mechanism. AMCs prove to be extremely useful when specific features of a desired technology are already known and can be integrated into a contract. Through AMCs, governments, private entities or sponsoring international financial organizations enter into a binding contractual obligation to purchase an invented product at a predetermined price to make it widely available in the market. A research proposal has suggested splitting of AMCs, i.e., a financially weak nation could commit some portion of the purchase, which can further be made up by various donors. The contract may also include provisions that require the manufacturer either to license their invention/technology after the agreed quantity is purchased or to sell it themselves at a substantially lower price. In 2007, a group of governments and private foundations entered into the first pilot AMC, in which they committed an amount of USD 1.5 billion for disseminating a pneumococcal vaccine1 in developing countries. It is true that the AMC mechanism has been only used so far in the area of healthcare in low-income nations. But the central idea is to use this mechanism to boost the dissemination of green solutions throughout the globe in order to combat climate change, scarcity of land and water and deteriorating crop growth in weak countries. 3.1.4.  Public Research Funding to Promote Green Innovation To enhance existing levels of green technological innovation, research plays an extremely crucial role. Innovative processes may emerge in many domains that are not limited to environmental science.2 To quote an example, an analysis based on patenting in scientific domains that catalyze green innovation reveals that fields

64  Green Innovation and Green Economy such as material sciences and chemistry emerge as more relevant than researches on energy and the environment. In terms of green patents, the US, Germany and Japan are in the lead.3 New scientific inventions have the ability to open innovative avenues for energy production and enhance the efficiency of energy use. These inventions should be the focus of policy-makers across the globe if the issue of climate change has to be mitigated. When it comes to government-funded research in green innovation, the focus should be on the areas that have the ability to yield the highest social returns on investment. One more point to be kept in mind by the government while investing is to invest in areas where the private sector is reluctant to take bold financial steps on its own, which are obviously areas with high investment risks. Therefore, it is up to the government to remove the hurdles in investment to foster efficacious green innovation and motivate the private sector. The governments may make specific investments in the area where the environmental challenges are at relatively high levels. At the same time, some investments have to be rather general in nature, as one could never guess from where new ideas may emerge. It is evident from various studies that the need of greater investment in energy and environmental R&D activities is ever increasing. However, it is also shown that green innovations over the past few decades have been majorly dependent on scientific research that is multi-disciplinary in nature. Developing an effective research funding model to foster green innovation is extremely important. In order to develop and diffuse green technology, it is imperative to locate specific scientific disciplines to invest in. It is evidently through research that climate-friendly technologies are developed through wide and diverse fields of scientific knowledge, which in turn require wider focus of the policy-makers. A collaborative approach by different research cells to integrate various fields of science and technology can facilitate groundbreaking innovations and consequently open new avenues for technological advancement. It has been proved that major scientific breakthroughs are achieved by minor multidisciplinary and interdisciplinary groups.4 Thus, advancement of knowledge and innovation frontiers would require enhanced interaction across various domains and effective funding models that encourage multidisciplinary and interdisciplinary studies at institutional and higher levels.5 Competitive project funding as a research-financing mechanism in place of widely recognized and favored scientific specialization funding to promote multidisciplinary research pertaining to eco-innovation is also an effective method adapted by governments. Research priorities pertaining to green innovation at an operational level are also brought into movement through research missions by many research institutions or even through a flexible structure, i.e., a research cell or center of excellence. However, research managed by a top-down steering approach may have the effect of significantly curtailing the liberty of a researcher. A researcher needs freedom to come up with innovative scientific breakthroughs. Setting of research priorities, therefore, is extremely important, and fostering the involvement of stakeholders

Green Innovation and Green Economy 65 in the process has gained a lot of popularity, as it considerably reduces the risk attached to public research funding and the notion that it eliminates or forces out private research in emerging green technologies. 3.1.5.  Science as a Green Entrepreneurial Endeavor There is a gradual transition of various public research institutes (PRIs) and universities. They are becoming more entrepreneurial. This has subsequently resulted in a gradual increase in the initiatives relating to capacity building at national and institutional levels by promoting technology-based economic development, and collaborative industry–science linkages (ISLs)6 are rapidly initiated to foster greener innovation. When we consider patent dates of various countries, it is revealed that the degree to which public research contributes to green patenting varies drastically. For example, between 2004 and 2009, in Portugal and Singapore, the public research system contributed 20% of all green patents. Commercialization of research and transfer of knowledge are wider than patenting. But ISLs as transfer channels and research publications are considered to be equally or even more important.7

3.2. Technological Dimensions and Green Innovation Various kinds of technology have the potential to spur green growth and green innovation. We will categorically study the ways in which technologies can be explored in manners that are climate friendly and sustainable. 3.2.1.  Information and Communications Technologies (ICTs) and Green Innovation ICT and internet applications as a wing of technology have the ability to bring about significant environmental improvement. The most recognized areas include energy, transport, manufacturing and buildings. ICTs also promote sustainable utilization of resources and greener lifestyles. The kind of environmental impact that the production, use and end of ICTs leave behind requires a thorough and diligent assessment. If the policy-makers develop a good understanding about the functioning of ICTs, it would certainly enable them to encourage green innovation and green growth. 3.2.2. Direct Impacts of ICT Direct impacts, which are also known as “first-order impacts,” pertain to both positive and negative impacts that occur due to the physical existence of ICT products and processes. Both producers and consumers of ICTs are contributors to the direct impact on the environment. On one side of the value chain, ICT producers leave huge impacts on the environment on both production (hardware, components etc.) and operation

66  Green Innovation and Green Economy (infrastructures, vehicles, offices etc.) levels. Moreover, the design of ICT products determines the ways in which it affects the natural environment beyond company limits. For example, energy-efficient products considerably reduce the usage of energy by ICT equipment, and controlled use of chemicals in the production of ICT components and modular ICT equipment enhances re-use and recyclability. A  report release by the OECD has revealed that efficient R&D and design can assist in tackling direct environmental impact throughout the life cycle of a particular ICT. Formulation of green ICT policies can play a vital role in promoting such climate-friendly ICT life cycles.8 On the other side of the value chain, the purchases made at the consumer end leave a direct environmental footprint. After-life treatment of ICT goods also contributes to this impact. In this context, consumers can become self-aware and choose certified green ICTs over other market-available options. It is found that a major part of the ICT sector’s GHG emissions footprint is the result of the use of consumer-based ICT products like televisions. The rapidly growing economic importance of the internet has given rise to the share of modern ICT infrastructures, which requires efficient policy-response at the moment. For example, when the life cycle of some ICT product ends, the consumer can return them for the purpose of recycling, reuse etc. The European Union has formulated a specific law that prohibits the disposal of electronic equipment in wastes resulting from households. It is true that domestic electronic waste has become a huge challenge in emerging economies. Recent data have revealed that non-OECD countries have not been able to mitigate the impact of domestic electronic waste, and they also do not have sufficient means for its sustainable treatment. It is further shown that these countries do not have a strong enforcement mechanism in place in order to check international limitations on the exports of electronic waste. 3.2.3. Enabling Impacts of ICT These impacts (also known as “second-order effects”) emanate from ICT applications that play a vital role in reducing environmental effects in various socioeconomic activities. ICTs basically affect the way in which other components are produced, designed, consumed and extinguished. Enhanced use of ICT-generated energy as compared to conventional mechanisms must be kept in mind while assessing the gross environmental impact. It is possible to reap huge climate benefits across sectors like transport, housing, energy etc. However, in order to enhance the efficacy of such benefits, coordinated development and diffusion by the stakeholders has to be ensured. It is evident that levels of adoption and transfer of technology differ across countries, and therefore, a specific analysis is necessary to deduce optimal implementation regimes for ICTs. Governments of OECD countries are engaged in the promotion of cross-sector R&D activities and local-level projects in areas lacking commercial incentives. This would prove extremely helpful in mobilizing the uptake of smart ICTs.9

Green Innovation and Green Economy 67 3.2.4. Systemic Impacts of ICT Systemic impacts or “third-order effects” are those effects which involve behavioral transition and various other factors that are non-technological in nature. These impacts cover the advertent and inadvertent outcomes of widespread consumption of green ICTs. Favorable consequences from green ICT applications majorly depend on wide user acceptance. Thus, it can be opined that systemic impacts include significant adjustments in individual lifestyles which warrant sensible consumption of ICTs in the interest of the environment. Factors like information disclosure, sensitive pricing and technology adoption can lead to systemic impacts. 3.2.5. The Smart Grid A report has revealed the energy supply industry contributes one-quarter of global GHG emissions. ICTs are claimed to have the efficiency to reduce these levels.10 Continuously increasing demands and consumption of electricity in urban households, industries and businesses is posing a huge challenge in OECD countries and more in countries with developing economies. Data have shown that in the period between 2006 and 2007, the net electricity consumption was 2.2% in OECD countries and 8.7% in non-OECD areas.11 In current times, a paradigm shift has been observed as high-speed communication networks and ICTs have been instilling innovation throughout the modern economy, as was done in the earlier years by transportation and electricity networks. A huge information gap is created between the distributors and end users, which is addressed by smart grids. On the demand side, modern internet connectivity with high speed enables the consumer to access efficient modes of communication which regulate their overall electricity consumption in real time. This also allows the consumers to control or adjust their consumption based on price signals and the demand-and-supply situation. On the utility side, smart grids are able to allow the operators and producers to moderate the demand by monitoring real-time consumption and calibrating it through technical means. Therefore, smart grids have been an effective mechanism in the user–producer system of demand–supply. Apart from performing a vital function of bridging the information gap, as discussed, ICTs possess the ability to improve environmental conditions throughout the value chain of the electricity sector that consists of following four steps: (1) (2) (3) (4)

Generation of energy; Transmission of energy; Distribution of energy; and Consumption.

Smart monitoring sensors that are installed across the value chain significantly help in reducing lost surplus electricity during the transmission and distribution phases. The level of lost electricity reaches up to 30% in India.

68  Green Innovation and Green Economy Apart from smart monitoring sensors, smart meters have also become an essential part of smart grids. These meters enable real-time communication between the end points of a given electricity grid (which may usually be either commercial or residential), the operators and other ancillary system components. Smart metering devices facilitate the feeding of locally generated electricity into the smart grids depending on the demand-response and are also helpful in the charging of electric cars. Smart meters also help domestic households in reducing their overall consumption of electricity, but the behavioral patterns of individuals also play a major role in this. Research output from several pilot projects has revealed that comprehensive information about the consumption and price level of electricity can result in up to 20% reductions in consumption. However, issues like consumer privacy and doubts about energy and cost saving get in the way of consumer acceptance of smart metering systems. The smart grid has been promoted at a grand level by intense governmental activities and policies, which has contributed to powerful innovation initiatives. Governments have majorly contributed in the form of mergers, acquisitions, venture capital and backing business start-ups. If we talk about the US, there are several pieces of legislation in place to provide funding for nationwide modernization of electricity grids, i.e., the Energy Independence and Security Act of 2007 and the American Recovery and Reinvestment Act of 2009. The aim is also to stabilize the prospects for midterm investors. Due to this initiative, during 2009, commercial investments in smart-grid ventures witnessed exponential growth. In the US, the smart-grid electricity market has now become a huge one that embraces all sorts of activities such as IT consulting, application development, value-added services, systems integration etc. The entire regime has been stimulated to make the ICT sector smarter and to further spur entrepreneurial growth and added value of green ICT jobs.12 3.2.6. Biotechnology and Green Innovation Biotechnology, as a branch of study, has developed many dimensions in the past few decades. These dimensions have the potential to powerfully stimulate green innovation and reduce the fossil fuel dependency of many industries and reduce GHG emissions at the same time. We can take many examples in this regard such as biodegradable plastic materials, next-gen bio-fuels (such as cellulosic and alga bio-fuels, which are derived from natural environmental products). A  study by WWF has shown that industrial biotechnology has a full climate change mitigation potential ranging between 1  billion and 2.5  billion tons of carbon dioxide equivalent per year by 2030.13 As a booming field, biotechnology also furnishes groundbreaking opportunities for the greening of individual industrial sectors such as the chemical industry. These individual industries contribute about 16% of direct industrial emissions of carbon dioxide. The implementation of biotech methods is estimated to substantially improve the energy efficiency, ranging between 13% and 16%.14

Green Innovation and Green Economy  69 There are various environmental benefits that can be derived from the utilization of biotechnologies in production and industrial processing. Apart from these benefits, biotechnology can also be used to improve and monitor environmental conditions in different environmental services sectors which include heavy metal cleanup, wiping chemicals, pre-treatment of chemicals and fuels and even reduction of other toxic compounds, water purification, waste management and monitoring of biological resources.15 Even after these proven benefits, levels of both public and private R&D in the area of biotechnology have been pretty low. In order to promote investment in biotechnology-related research activities, policy-makers need to adapt the current regime of fundamental funding and pre-­commercial development. Another challenge is to extract maximum socio-economic benefits from biotechnology and to convert pilot biotech projects into innovative products, which would certainly require an efficient economic framework and strong follow-on investments. Another branch of biotechnology that has the potential of stimulating groundbreaking innovation is synthetic biology or genomics. Research activities should be targeted across various platforms rather than specific technologies. This would enable the market to pick the most efficient product. Various research agencies need to come together on one platform to coordinate efficient research activities. Building of strong public–private partnerships transcending national boundaries is another way to meet the challenge of improving the functioning of various biotech platforms. Biotechnology based specifically on environment science is also a great source of spurting green growth, as it is extremely helpful in carrying out activities such as carbon sequestration, environmental remediation, value-added bio-mass delivery etc. 3.2.7. Nanotechnology and Green Innovation Promotion of green growth is also ensured by the use of various nanotechnologies. One major point relating to nanotechnologies is that they directly deal with various climatic challenges such as purification of water, production and storage of renewable energy etc. and even deal with challenges like ensuring the improvement of eco-efficiency. There are various nanotechnologies in operation across the globe which are helping tackle climate change and environmental deterioration:16 (1) Clean Car Technology: It is integrated in cars to ensure clean power generation by fuel cells. It also includes nano-catalyst particles and electrochemical reactors to improve the performance. (2) Cellulose Nano-Fibers: Bacterial cellulose is used to build novel products. (3) Site Remediation: This includes the use of a particular nano-scale iron to remediate soil and ground water. (4) Nanotech-Enabled Batteries: These are advanced lithium-ion batteries produced for electric vehicles which ensure zero emission.

70  Green Innovation and Green Economy (5) Nanotechnology in Agricultural Activities: This technology is used in carrying out various endeavors such as pollution identification, improving soil quality, soil stabilization, energy storage, slow-release encapsulated pesticides, fiber production etc. (6) Environmental Sensing: These nanotech-based sensors are designed to sense the presence of nano-particles in the environment. (7) Green Nano-Products: Various industrially relevant products such as selfcleaning coatings, light-emitting diodes (LEDs), nano-coatings for the preservation and generation of energy and nano-coatings in buildings have been produced to promote greener innovation through nanotechnologies. It is pertinent to note that wide use of nanotechnology products comes with an unverified risk of release of nano-particles in the environment, which may consequently raise health concerns for both workers and consumers. In this regard, the OECD has been working to identify and mitigate the risks. 3.2.8. Green Chemistry and Green Innovation Green chemistry, as the name suggests, is an environmentally-friendly wing of chemistry that involves designing and producing efficient and efficacious chemical products and processes that are climate friendly throughout their life cycle. The growing trend in green chemistry is motivating researchers to come up with innovative designs of new chemicals, processes, crops etc. to enhance environmental conditions and human health. Green chemistry also aims at determining potential risks that new industrial chemicals and products may produce and identifying materials which will result in environmental benefits. Ensuring sustainable chemistry innovation is a major challenge in front of the policy-makers, as a recent patent data survey revealed that one has to be cautious while establishing a strong causal link between innovation trends and public policy. Therefore, developing strong funding mechanisms to induce sustainable chemistry research and innovation have to be developed. As we have studied the role of various technological wings in the advancement of green innovation and green growth, it is fair to contend that the most significant outcome will come when all these technologies converge. The convergence will provide an opportunity to ensure wide applications of technologies serving general purposes. Converging technologies will also give an increased return to the investors in R&D. Enhancing the innovation and diffusion of converging technologies through efficient mechanisms will play a vital role in facing the challenges of climate change, food and water security and global warming. The main aim is to produce favorable and positive spillovers for the coming generations.

3.3. Promoting Green Innovation in Developing Countries Market expansion and sustainable economic development are the main goals of any innovation system, and to ensure the same, it is important to diffuse green innovations in emerging economies of the world. Knowledge-based markets have

Green Innovation and Green Economy  71 the potential to play a crucial role in the transfer and diffusion of green technology (for example, by way of patent pools). It is imperative to guarantee the free and sustainable flow of research and adoption of green technologies in both parts of the world—developed and developing. There have been policy discussions across countries about calibrating the IPR regime in order to promote the diffusion of critical green technologies. It is observed that a major obstacle in the way of technology adoption is the limited capability of developing countries, which is a bigger problem than the market value of the invention. There are various ways which have been considered to boost the local adaptive capacities which include technology transfer and R&D. These would prove more helpful than patent-centered policies.17 Technology transfer, as a policy, aims at promoting diffusion and adoption of green technology by ensuring ample access to innovative knowledge through modes such as education and training, which is also categorized as disembodied technology transfer. Funding is also released to cover the adoption costs, which include imported technical equipment, which is categorized as embodied technology transfer. There are several other factors that play a major role in promoting and implementing technology transfer and capacity building: (1) (2) (3) (4)

Foreign direct investment; Licensing; International transactions; and Government aid in the form of development assistance.

3.3.1. Promoting Catch-Up Green Innovation In developing countries, boosting green innovation is not so much about frontier innovation. It is more about enhancing the diffusion and adoption of existing green technology in the developed economies. An efficacious strategy of green growth, particularly in emerging economies, would involve facilitation of access to climate change mitigation technologies and their successful adoption. The prevalent business environment in most of the developing nations reveals extensive policy distortions and weaknesses that need to be addressed. These distortions are major impedances in the way of diffusion and uptake of green technologies as compared to economically advanced nations.18 There are several policy-based dimensions that need to be explored and exploited such as strong licensing and liberalized international trade regimes. One more way to boost the adoptive capacity toward green technologies is to strengthen the metrology, testing and quality (MSTQ) facilities. Other policy efforts in this direction may involve the following: (1) (2) (3) (4)

Enhanced financial access; Improving skills and developing capacities; Implementation of demand-side policies; and Enhancing the access to the internet and other modern ICTs.

72  Green Innovation and Green Economy 3.3.2.  Enhancing Access to Climate-Friendly (Green) Technology One key method to promote access to green technology is a liberalized regime of international trade and open channels for foreign direct investments (FDI). Many green technology embodiments can be found in imported goods or machinery, and some are also inbuilt in business models and processes which can be learned by an individual. These technologies can be diffused by persistent efforts by the people attached to the movements of such technologies across international frontiers. Research has shown that in comparison to patent protection, imposition of tariffs on renewable energy technologies and fossil fuel subsidies results in diminished levels of technology transfer. A recent study has revealed that removal of tariff barriers in the forerunning 18 developing economies (ranked on the basis of GHG emissions) would increase the imports of energy-efficient lighting by 63%, sources of wind power production by 23%, sources of solar power generation by 14% and clean coal technology by 4.6%.19 One more study based on Indian electric power plants has shown that by eliminating various hurdles in the way of import in relation to coal of standard and refined quality would result in enhanced adoption environmentally of sound technologies and significant reduction of carbon emission levels. An important international environmental instrument plays a vital role in boosting dissemination and uptake of green technologies, and that is the Clean Development Mechanism (CDM)20 of the Kyoto Protocol. It simply allows economically advanced countries to finance GHG emission-reduction projects in developing economies in order to receive emission-reduction credits. An analytical study pertaining to technology relating to the mitigation of emission of greenhouse gases has revealed that cross-national transfers have actually occurred in less than half of all the assessed CDM projects. These projects, for the record, involve a combination of operating skills and machinery/equipment transfer. The study also found out that most of the technology transfers took into account end-of-pipe destruction of GHGs in agricultural, chemical, waste management and wind power sectors. Various other projects such as biomass electricity production and energy-­efficiency measures majorly rely on local technologies rather than transferred ones. In conclusion, the study finds an ambiguous link between local absorptive capacity and cross-border technology transfer. While there is a requirement of high technological capacities to build adoptive capacities for new green technologies, this would also mean that the need for international technology transfer in the presence of high technological capacities will actually not be there. Thus, the study emphasized the need of local capacity building as a mechanism to catalyze diffusion of technology. This mechanism should be coupled with strong efforts by local governments to strengthen technology capabilities that would encourage both the import of foreign technologies and diffusion of local technologies. There are various other useful mechanisms to enhance access to prevailing green technologies, which summarized as follows: (1) Compulsory License: It compulsorily acquires the invention in lieu of compensation to the patent-holder. It is issued to make critical inventions available at an affordable price, particularly to poor households in low-income countries.

Green Innovation and Green Economy 73 (2) Patent Buy-Out: It is a mechanism wherein the purchaser—a governmental institution or a private organization—acquires exclusive marketing rights for a patented climate-friendly product or technology from its original patent owner and subsequently grants a royalty-free license to a legitimate green manufacturer to market the same in the targeted developing economies. (3) Patent Pool: It includes the cross-licensing of patent products among two or more patent-holders, i.e., a closed a pool or even a combined set of patents to a third party, which is generally referred to as an open pool. Patent pooling has been considered as an effective mechanism in order to curb the inefficiencies in any patent system, because fragments of patents are required to develop comprehensive inventions of the future. A lot of pools have been witnessed in the area of pharmaceuticals, biotechnology, ICTs etc. (4) Patent Commons: As a system, it is wider in operation as compared to patent pools. Patent commons basically allow patent-holders to pledge their inventions for diffusion and royalty-free utilization. As discussed earlier, a few MNCs came together in 2008 to create a non-profit Eco-Patent Commons, which was duly coordinated and cooperated by the World Business Council. Up to mid-2011, over 100 patents had already been pledged by 13 participating MNCs.21 If we consider initiatives from India, the Council of Scientific and Industrial Research (CSIR) launched a significant initiative called Open Source Drug Discovery (OSDD) in September  2008. OSDD is basically a public–private partnership that established a linkage between industry and academia using the free source mode with the sole target of speeding the discovery of important compounds and drugs for overlooked ailments and diseases through mutual exchange of knowledge and information. This creates a pathway for the formulation of similar partnership in the neglected areas of green innovation and green growth. 3.3.3. Accelerating Green Technology Absorption In order to enhance creation and diffusion of green technology across the globe, the following factors are require to be implemented in an efficient manner: (1) Market prices should reflect the absence of environmental costs; (2) Policies pertaining to the demand side such as regulations, standards and public procurement should be enforced properly; (3) Monetary policies such as feed-in tariffs for renewable sources, tradable permits to emissions, tax rebates to users of green technologies etc. should be implemented; (4) Awareness through comparison labeling and endorsement labeling on green products should be generated in order to promote green consumerism; and (5) Stringent government rules regulating emission and pollution standards should be introduced. On the one hand, regular technologies are adopted by companies due to the fact that they reduce costs and amplify the profile and market presence of a company.

74  Green Innovation and Green Economy On the other hand, adoption of green technologies is a slow process because they are costlier than regular technologies and are not attractive to consumers. Therefore, it is extremely important to fine-tune demand-side policies to incentivize the adoption of green technologies. It is obvious that scarcity of demand of a particular technology will not encourage the inventors to create such technology. One more measure to accelerate green development in a country is to improve its monetary infrastructure, which involves releasing significant funds to build a strong green infrastructure. Farmers should also be encouraged to use energy-­ efficient and climate-efficient technologies that decrease both crop losses and harm to the environment.22 There are several research studies in this regard: (1) It is revealed that in low-income nations, monetary incentive creates a significant impact on the effect of non-hydro renewable energy generation. Capital infusion in renewable energy resources are limited, and accessibility to longterm loans is highly restrained;23 (2) One more study finds that providing access to financial credit acts as a significant barrier to the adoption of solar home systems in China;24 (3) After World War II, relationship-based financial systems have played a vital role in enabling the absorption of low-risk technologies by firms and enhancing the revamping of much of Europe.25 To conclude, there are three pertinent factors that need to be considered in the context of developing economies: (1) The continuous advancement of green technologies and the reducing costs of adoption as compared to the prevailing non-green technologies result in more adoption by firms of green technologies. Also, this also mitigates adoption costs of environmental regulations formulated by governments. In a study conducted across 39 nations of the adoption regulations aimed at limiting nitrogen oxide and sulfur oxide emissions at coal-based plants, it was revealed that the countries making delayed adoption of such regulations make efficient use of per capital income than those who adopted those regulations earlier.26 Technology availability at affordable rates should be able to help tune the regulations that are required to incentivize firms belonging to low-income countries to adopt them. (2) The sustainable benefits of well-formulated environmental regulation play a key role in improving innovation and competitiveness in the market, particularly in markets which are still evolving in terms of physical and institutional business infrastructure and are slowly reaching maturity. For example, a study has found out that the efficiency and productivity of the Mexican food industry increased significantly in the presence of stringent environmental regulations.27 To quote another example of a study on Quebec, it was shown that across 17 manufacturing sectors, strict environmental regulations resulted in the progressive increase in productivity.28 In the case of developed countries, stringent and well-formulated environmental regulations result in enhanced

Green Innovation and Green Economy 75 innovation activities by firms and an increase in R&D investment on patents. However, the relationship between innovation and regulation costs still is not defined in clear terms as to whether increasing innovations are enough to cover the costs of meeting the regulations. In a study, the majority of countries (10 out of 13) showed negative relationship environmental regulations and productivity.29 Thus, it has been suggested that during the formulation of environmental policies and regulations, efforts must be made to create a healthy atmosphere for firms, and stability should be sought. Policies should aim at achieving favorable end results rather than means. (3) The conformity of innovative products and processes with the continuously evolving international sustainable standards significantly helps local firms in enhancing their environmental practices. Establishing a nexus between local firms and global value chains of renowned MNCs that have already adopted these international sustainability standards helps in ensuring environmental improvement and balancing global market pressures.30

3.3.4.  Supply-Push and Demand-Pull Policies It is clear from studies conducted in various economies that different systematic arrangements of policy instruments are required at different stages of technological advancement. For example, a recent empirical study has shown that a high magnitude of government R&D funding to increase supply-push in that presence of adequate technological capacities is much more effective than implementation of demand-pull policies which are aimed at the generation of new frontier innovations. This study was a result of the analysis of patent applications filed across the globe during the period between 1994 and 2005 in wind power technology. Almost a million dollars invested in public support for R&D led to the generation of 0.82 new inventions, whereas the same amount invested to strengthen demandpull policies generated only 0.06 new inventions.31 There was also no substantial evidence (based on the change in California’s wind industry) to suggest that demand-pull policies by themselves promoted radical and state-of-the-art technological transition.32 In the case of mature technologies, however, more attention should be given to demand-side policies so as to enable firms to introduce more innovations and initiatives. The main drivers of green innovation in any commercial market include the structure of environmental regulations and consumer demand. It is interesting to note that direct public support is the least important factor in motivating green innovation in all countries. In an environmental survey conducted in 19 countries, the majority of innovative firms thought that the environmental benefits garnered by innovation are more on the cost side (measured in terms of reduced use of energy per unit of output) than on the revenue side (consumers’ capacity and willingness to pay more for green products). This suggests that firms that are engaged in innovation can only move ahead with smaller and incremental innovations rather than with groundbreaking product innovations.33

76  Green Innovation and Green Economy Therefore, it is revealed that most of the green innovations are only incremental in nature rather than being novel and radical ones. It can fairly be contended that in order to spur radical frontier innovation in the field of climate-friendly technologies, greater stress should be laid upon demandside policies in the presence of ample local capabilities. On the other hand, emphasis on supply-side policies will have the effect of promoting incremental environmental innovations—frontier and catch-up.34 Both the policies have to be carefully mixed in order to stimulate local green innovation, especially in developing nations. 3.3.5. Promotion of Absorptive Capacities In a given economy, the more potent drivers seem to be the policies that mitigate the stigma of failure and promote chances for re-entry and revamped experimentation. Speeding up the efficient use of otherwise unused economic resources in order to avoid corporate bankruptcy has been a major initiative in the US. Statistically, on the one hand, winding up a gravely ill business in the US consumes a time period which is slightly less than ten months and allows somewhat over 90 cents on the dollar that is ultimately recovered in countries like Singapore or Canada, while on the other hand, it still takes an average of seven years to recover almost 16 cents on the dollar in Mumbai.35 Therefore, as part of a corporate regime, easing the method of winding up of business may have the effect of promoting new and innovative ideas in companies and even encourage the existing innovation models. Building a strong resale market where unused machinery can be easily sold for further commercial use is also a good way to support the innovation scene. One more way is to remove any hurdles from the paths of businesses that are largely based on electricity and information technology services. The policy-makers should focus on efficient use of monetary resources. To enhance mutual learning across the globe, inclusion of various firms in a global value chain alliance is the way to go. The advancement of wind energy technological capabilities in both India and China was a result of licensing mechanisms with producers based in Europe. The prime objective was to gain primary access to turbine-related technologies. Cross-border migration of skilled and semi-skilled workers also proved to be an important factor in this regard. More about Indian and Chinese green technology sectors is discussed in a later chapter. In this context, various steps have been taken by various nations that may be summarized thus: (1) Renowned Indian wind turbine manufacturer Suzlon has set up various research facilities in countries like the Netherlands and Germany to impart intensive training to the workforce and expose them to global expertise; (2) Chinese producer Goldwind sent its workers to foreign countries for rigorous training; (3) Fibrovent Wind, a wind turbine blade start-up based in Chile, included itself into a Spain-based market value chain operating at a global level. It also

Green Innovation and Green Economy 77 derived advantages from cross-border migration of skilled workers. It also sought help from a Brazilian wind turbine company. Apart from these, development and skilling of global MSE industries has played a vital role in the dissemination of information pertinent for green growth and development. An effective policy point that would work in favor of local absorptive capacities is enhanced coordination with the private sector in urban entrepreneurial development. It would play a key role in attracting and retaining local talent. The mobility of a worker population from rural to urban areas would expose them to creative and fruitful interactions with innovators, young and emerging entrepreneurs, institutions, organizations etc. and would certainly provide a boost to local innovative instincts.36 Intense urban-industrial cluster aggregations have played a vital role in enhancing technological capabilities and productivity by boosting supplies of skills and capital. One major example of such cluster aggregations is in China. Special economic zones (SEZs) coupled with heavy government support for industrial strengthening cover three of the most prominent urban-industry mergers, which are as follows: (1) Pearl River Delta, which is in Shenzhen, Dongguan and Foshan; (2) The region of the Yangtze River around the axis of Shanghai-Suzhou; and (3) The Bohai region in the area of Beijing and Tianjin. These agglomerations play a key role in enabling the universities to deepen their industrial ties, attracting foreign or local anchor firms that promote in-migration of suppliers and building strong communication infrastructure.37

3.4. Green Investment and Green Innovation Institutional funding is playing a vital role in enhancing the demand for green technologies. Organizations like Global Environment Facility (GEF)38 and multilateral development banks (MDB)39 and their monetary wings are instrumental in increasing awareness regarding clean technologies, especially in developing and least developed countries. Their key roles include offering governments easily affordable and accessible loans and monetary grants for green technology projects. The primary objective of the GEF is to mainstream global environmental concerns into national policy framework. GEF has so far allocated around USD 40 billion to 2,400 projects related to environmental protection and climate change in more than 165 countries. MDBs, on the other hand, underwrite those projects which use clean technologies for climate change mitigation, especially in developing nations. In this way, MDBs create and enhance demand for clean technologies without engaging in direct R&D funding. They also promote domestic green innovation and green growth.

78  Green Innovation and Green Economy The functioning of MDBs has left an extremely favorable impact which has enhanced the lending rate. As of 2005, MDB had already allocated funds to the tune of USD 66 billion, maintaining an average lending rate of over USD 40 billion per year for ten years.40 The World Bank, functioning through its operating bodies,41 has also enhanced the capital infusion for ensuring green growth and clean energy by almost 20% each year during the period of 2004 to 2009.42 The elements of risk and return always remain driving factors in any investment. The case with green investment is no different. While creating demand for environmentally sound technologies is vital, careful assessment of investment is also crucial. Private companies, particularly in the US and China, have exhibited tremendous growth in green investment. In the first half of year 2010, the investment made by private companies of the US touched USD 5.1  billion, which was a whopping 325% increase over the investment levels during the same period in 2009. Chinese investors, in the second quarter of 2010, also showed zeal in the green technology sector by investing an impressive amount of USD 1.73 billion in the initial public offerings (IPOs) of companies dealing with production and development of clean technologies. The United Nations Framework Convention for Climate Change (UNFCCC) has also taken certain practical steps to promote green investment:43 (1) Providing governments with keen insights into the clean technology–related projects; (2) Making market information available to R&D investors; (3) Building capacity and skills in various countries to enable them to efficiently implement green technologies; and (4) Devising a policy framework to strengthen long-term green investment in various countries. It is extremely important to provide private companies with a framework within which they are assured of receiving healthy returns on their investment. Naturally, the IP protection system is an effective factor in this regard. Patents provide an opportunity to the companies to get substantial returns on their green investment whenever a green technology is commercialized. Licensing agreements for facilitating transfer of technology, coupled with robust patent protection, also secure the rights of green investors, simultaneously inspiring future investments and green innovation. Here, patent landscaping of environmentallyfriendly technologies is also useful in determining future business opportunities and helping national policy-makers to formulate effective frameworks in accordance with emerging market trends. Critics, however, also assert that IP protection hinders free access and flow of green technology. But it is also true that denial of such protection would definitely discourage innovation and diminish returns on all fronts—economic, technological and social.

Green Innovation and Green Economy  79 It has been shown through evidence that an efficient IP protection system attenuates the risks involved in long-term green investments. IP protection and incentives play a key role in promoting diffusion of green technologies, assuring the investors of their return and fulfilling social needs.

Notes 1 The pneumococcal conjugate vaccine (PCV13) and the pneumococcal polysaccharide vaccine (PPSV23) protect against pneumococcal infections, which are caused by bacteria. The bacteria spread through person-to-person contact and can cause such serious infections as pneumonia, blood infections and bacterial meningitis. 2 Igami, M., and Saka, A. (2007), Capturing the Evolving Nature of Science, the Development of New Scientific Indicators and the Mapping of Science, STI Working Paper 2007/1, OECD, Paris. 3 OECD (2010), Measuring Innovation: A New Perspective, OECD Publishing, Paris. 4 Heinze, P., Shapira, P., Rogers, J.D., and Senker, J.M. (2009), Organizational and Institutional Influences on Creativity in Scientific Research, Research Policy, Vol. 38, 610–623. 5 OECD (2011a), OECD Science, Technology and Industry Scoreboard 2011, OECD, Paris, available at http://dx.doi.org/10.1787/sti_scoreboard-2011-en (last accessed on 14–04–2019). 6 For more see www.science.org.au/opportunities/travel/grants-and-exchange/pastgrants-and-exchange-programs/international-science (last accessed on 10–05–2019). 7 Cohen, W.M., Nelson, R.R., and Walsh, J. (2002), Links and Impacts: The Influence of Public Research on Industrial R&D, Management Science, Vol. 48, 1–23. 8 OECD (2009), Towards Green ICT Strategies: Assessing Policies and Programmes on ICTs and the Environment, OECD, Paris, available at www.oecd.org/dataoecd/ 47/12/42825130.pdf (last accessed on 15–04–2019). 9 Ibid. 10 IPCC (International Panel on Climate Change) (2007), Climate Change 2007: Synthesis Report, Contribution of Working Groups I, II and III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, R.K. Pachauri and A. Reisinger (eds.), IPCC, Geneva. 11 International Energy Agency (2009), Electricity Information, 2009 edition, OECD/ IEA, Paris. 12 Available at www.innovationpolicyplatform.org/content/icts-and-green-innovation (last accessed on 14–05–2019). 13 WWF (2009), Industrial Biotechnology: More Than Green Fuel in a Dirty Economy? WWF, Denmark. 14 Ibid. 15 OECD (2009a), The Bioeconomy to 2030—Designing a Policy Agenda, OECD Publishing, Paris. 16 OECD (2009b), OECD Conference on Potential Environmental Benefits of Nanotechnology: Fostering Safe Innovation-Led Growth, OECD Publishing, Paris, July. 17 Popp, D. (2011), The Role of Technological Change in Green Growth, mimeo, The World Bank, Washington, DC. 18 Available at www.innovationpolicyplatform.org/content/how-promote-catch-greeninnovation (last accessed on 16–05–2019). 19 Khanna, M., and Zilberman, D. (2001), Adoption of Energy Efficient Technologies and Carbon Abatement: The Electricity Generating Sector in India, Energy Economics, Vol. 23, 637–658.; Kremer, M. (1998), Patent Buyouts: A Mechanism for Encouraging Innovation, The Quarterly Journal of Economics, Vol. 113, 1137–1167. 20 See https://unfccc.int/files/cooperation_and_support/capacity_building/application/ pdf/unepcdmintro.pdf (last accessed on 16–05–2019).

80  Green Innovation and Green Economy 21 Hall, Bronwyn, and Helmers, Christian (2013), Innovation and Diffusion of Clean/ Green Technology: Can Patent Commons Help?, Journal of Environmental Economics and Management, Vol. 66, No. 1, 33–51. 22 Barry, Marie-Louise, Steyn, Herman, and Brent, Alan (2011), Selection of Renewable Energy Technologies for Africa: Eight Case Studies in Rwanda, Tanzania and Malawi, Renewable Energy, Vol. 36, 2845–2852. 23 Brunschweiler, Christa N. (2010), Finance for Renewable Energy: An Empirical Analysis of Developing and Transition Economies, Environment and Development Economics, Vol. 15, 241–274. 24 D’Agostino, Anthony L., Sovacool, Benjamin K., and Bambawale, Malavika Jain (2011), And Then What Happened? A Retrospective Appraisal Of China‘s Renewable Energy Development Project (REDP), Renewable Energy, Vol. 36, 3154–3165. 25 Wolf, Holger (2011), Relationship-Based and Arms-Length Financial Systems: A  European Perspective, Policy Research Working Paper 5833, The World Bank, Washington, DC. 26 Lovely, Mary, and Popp, David (2011), Trade, Technology and the Environment: Does Access to Technology Promote Environmental Regulation?, Journal of Environmental Economics and Management, Vol. 61, No. 1, 16–35. 27 Alpay, E., Buccola, S., and Kerkvliet, J. (2002), Productivity Growth and Environmental Regulation in Mexican and U.S. Food Manufacturing, American Journal of Agricultural Economics, Vol. 84, No. 4, 887–901. 28 Lanoie, P., Patry, M., and Lajeunesse, R. (2008), Environmental Regulation and Productivity: New Findings on the Porter Hypothesis, Journal of Productivity Analysis, Vol. 30, 121–128. 29 Ambec, Stefan, Cohen, Mark A., Elgie, Steward, and Lanoie, Paul. (2011), The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?, Resources for the Future Discussion Paper 11-01, Resources for the Future, Washington, DC. 30 Available at www.innovationpolicyplatform.org/content/how-promote-catch-greeninnovation (last accessed on 18–05–2019). 31 Dechezleprêtre, Antoine, and Glachant, Matthieu (2011), Does Foreign Environmental Policy Influence Domestic Innovation? Evidence from the Wind Industry, mimeo, February, available at https://www.lse.ac.uk/granthaminstitute/wp-content/ uploads/2011/04/WP44_environmental-policy-wind-industry.pdf (last accessed on 15–08–2019). 32 Nemet, Gregory F. (2009), Demand-Pull, Technology-Push, and Government-Led Incentives for Non-Incremental Technical Change, Research Policy, Vol. 38, 700–709. 33 Available at www.innovationpolicyplatform.org/content/how-promote-catch-greeninnovation (last accessed on 20–05–2019). 34 Ibid. 35 World Bank (2011), Doing Business, The World Bank, Washington, DC. 36 Glaeser, Edward (2011), Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier and Happier, The Penguin Press, New York. 37 Yusuf, Shahid, Kaoru, Nabeshima, and Shoichi, Yamashita (2008), Growing Industrial Clusters in Asia: Serendipity and Science, The World Bank, Washington, DC. 38 GEF, an independent financial organization active since 1991, provides funds to developing countries and countries with emerging markets for projects relating to, among others, climate change and biodiversity. 39 A multilateral development bank (MDB) is an international financial institution chartered by two or more countries for the purpose of encouraging economic development in poorer nations. See www.investopedia.com/terms/m/multilateral_development_ bank.asp (last accessed on 01–07–2019).

Green Innovation and Green Economy  81 40 Visit www.wipo.int/wipo_magazine/en/2010/05/article_0009.html (last accessed on 01–07–2019). 41 International Bank of Reconstruction and Development (IBRD) and International Development Association. 42 Ibid. 43 Ibid.

4 Patent Law, Diffusion of Green Technology and Allied Matters A Global Perspective

4.1. Green or Environmental Innovation in OECD Countries The prime foundation behind measurement of environmental innovation is its ability to mitigate adverse environmental effects resulting from industrial activities at a reasonable cost. It has already been recognized that significant and farreaching innovation is required to effectively tackle the issue of climate change, and this particular recognition may lead to the development of new markets and entrepreneurial opportunities. Therefore, green innovation was factored in as one of the growth indicators under the category of economic opportunities. Policy-makers in the OECD countries have become interested in green innovation because they have realized that the design of public policy affects not only the cost but the very direction of innovation in a particular territory. Any ­government-formulated policy has the potential to influence the economic environment of firms by altering rates of production and evoking innovative responses. The central issue is how an environmental policy can steer innovation in the direction of more climate-friendly and cost-efficient innovation. We can contend that the policy-makers are inspired to develop and diffuse green technology by their very capacity to formulate environmental policies that are more impactful and cost-efficient. Green growth is also accelerated in many regions in order to promote the development of progressive markets and business avenues. Setting up appropriate indicators to measure the level of innovation may help in assessing green growth and evaluating the innovation process. 4.1.1.  Measuring the Levels of Green Innovation in OECD Countries There are many indicators for measuring innovation levels, but not all of them are suitable to measure environmental innovation. The most common indicator to measure innovation is R&D expenditure or the number of personnel in various industrial setups.1 Currently, government budget allocation for R&D for socio-economic objectives is the only source to evaluate country-level environmental innovation. These allocations also include expenditures that may be categorized as “environmental expenditures” or “energy expenditures.” DOI: 10.4324/9781003319467-4

Patent Law, Diffusion of Green Technology  83 If we talk about the field of energy, statistical data are available that indicate public expenditure on R&D pertaining to energy technology that are further divided into various categories such as fossil fuels, renewable sources, energy storage, nuclear sources, hydrogen and fuel cells, etc. Public spending on energy has also been done in the industrial, commercial, residential and transportation sectors. However, one disadvantage that is revealed in using government expenditure as an indicator is that it may not be that effective, because the data analysis is incomplete without including private expenditure on R&D activities. The data on expenditure made by the private sector (such as business enterprises, non-profit organizations, etc.) are not available. When the data related to R&D expenditures by OECD countries are considered, it is disclosed that there exists a huge gap. It is also put forth that measuring the R&D expenditure only indicates the input in the innovation process. There are no indicators to measure the output. In light of these drawbacks, several efforts have been made to collect microlevel data in order to evaluate innovation outputs. For example, in the European Union, certain environment-related questions have been included in the Community Innovation Survey (CIS). A  project initiated by the OECD which was called Environmental Policy and Firm-level Management collected significant data on input measures of green innovation, such as expenditures on environment related research and development activities as well as on innovation output such as “product design” and “clean production.” It is acknowledged that such initiatives cost a lot of money. A well-designed industrial survey which focuses on environmental issues on a regular basis would naturally be a bit expensive. It is true that there are quite a few countries which do not include “environmental” indicators in their standard industrial censuses (such as Japan, Norway and Canada). It is also true that the data collected by one country cannot be used as a green innovation indicator in other countries. Therefore, it is necessary to bring forth an objective measure of environmental innovation. Administrative data of a country can be used as an innovation indicator as well. These indicators can be developed on the basis of two classifications, i.e., industry and commodity. These classifications are generally utilized to measure the output of goods and services. If any technologies are involved or integrated in goods and services, then that innovation would possibly be shown in the underlying data. In order to determine the significance of an environmental innovation, it is necessary to identify classes of industry or commodities which embody or represent environmental technologies. A study conducted by OECD2 has revealed that neither of these classifications is effective for identifying environmental innovation. Industry classifications such as NACE,3 NAICS4 or ISIC5 are not actually suitable for the purpose of identification of environment-related industrial activities except in a few domains, i.e., treatment of wastewater, water supply and management of solid waste.6 Moreover, these classifications only reflect end-of-pipe solutions to various climate issues which are comparatively less cost-efficient.

84  Patent Law, Diffusion of Green Technology There are two main reasons commodity classifications cannot be a suitable method to develop environmental innovation indicators: (i) these classifications do not effectively identify goods and services with mitigated impact on the environment, as the used classes are broad in their ambit and the goods may also be a cheap substitute for green innovation; and (ii) even if there is a situation in which commodity classification is able to identify environmentally-friendly goods and services, it would still not reflect the level of innovation exhibited by the goods or services themselves. It is rather difficult to differentiate between goods and services which have prevailed in the market for quite some time and those which actually represent environmental innovations in a real sense. These goods and services represent only a small fragment of the total production and trade. These two issues can be tackled by formulating two output indicators: (i) bibliometric data (scientific publications) and (ii) technometric data (patent publications). The use of bibliometric data to determine the level of environmental innovation is possibly inspired by the ease of searching through keywords, citations, authors, etc. There are various examples of useful databases such as the Science Citation Expanded Index, the SCOPUS database, etc. Bibliometric data help us in tracking the innovative activity by searching information about the author, date of publication, etc.7 Indicators based on these data are extremely helpful in assessing and analyzing the dissemination of knowledge among investors across nations. However, one major drawback of bibliometric data as an indicator is that while it is an intermediate indicator of innovation, it still is an ambiguous indicator of the gross market output. Publication in a renowned journal certainly shows scientific advancement but not necessarily a commercial one. Therefore, bibliometric data cannot serve as a qualitative indicator of environmental innovation and are of little economic pertinence. 4.1.2.  Patents for Measuring Innovation Levels Patent data have always been utilized as a measure of innovation, as they primarily focus on the outputs of inventive processes.8 Patent data provide comprehensive information on the nature and dimension of an invention and details about the inventors and applicant. In the modern scenario, patent data are easily available and thus play a key role in the development of innovation indicators. Almost all economically significant inventions get patented and contribute to these indicators.9 There are several advantages of using patent data as an indicator to measure green innovation levels:10 (1) The standardization of patent requirements (i.e., novelty, non-obviousness and industrial application) makes the objective selection of patentable innovation quite easy;

Patent Law, Diffusion of Green Technology  85 (2) Patent data measure those outputs of an inventive process that are intermediate rather than other indicators like R&D expenditure that are only helpful in measuring inputs or commodity classifications that do not embody any innovative technology; (3) Patent data can comfortably be subjected to statistical study because of their quantitative nature; (4) Patent data are easily available in the public domain; and (5) Patent data can be easily divided into specific fields, making it possible to identify environmental innovations. Considering these factors, it should be noted that patents cannot be used as a comprehensive measure or indicator for assessing innovation. The prime reasons behind this may be summarized in three broad points: (1) Note every innovation is patentable; (2) Not every innovation that is patentable necessarily gets patented; and (3) All patented innovations differ in size, type and quality. 4.1.3.  Role of Patent Data in the Identification of Environmentfriendly Technology Patent data are helpful in the identification of environment-related technology by facilitating searching in the following three ways: (1) Patent classifications: Patent classifications such as International Patent Classification (IPC), Cooperative Patent Classification (CPC), etc. are the most widely used method of searching innovations because they provide the detailed information of patent examiners. (2) Keyword search: Searching for a particular patent using keywords present in various article titles or abstracts. This method is used when it is difficult to search clean technologies in the patent classifications. However, a drawback of search based on keywords is that the search is language sensitive, and it is rather expensive to develop search strategies in multiple languages. (3) Manual selection: This method is rarely used because it is not suitable for large-scale analyses and is costly also. It is deduced that searches based on patent classifications are the most effective in formulating OECD Green Growth Indicators. 4.1.4. PATSAT Database for Advanced Patent Search In the early 2000s, the Directorate for Science, Technology and Innovation, an OECD body, in association with other working members of the OECD Patent

86  Patent Law, Diffusion of Green Technology

Figure 4.1  Cross-Country Comparisons of Technology Output (PATSAT Data)

Statistics Taskforce11 worked upon and developed a patent database that would facilitate statistical analysis. The management responsibility of PATSAT was assumed by the European Patent Office (EPO). Not only this, the PATSAT database is derived directly from the EPO’s master database. The PATSAT database has been developed with the prime purpose of enabling intergovernmental organizations and academic institutions to use it for conducting statistical analyses. PATSAT has become an optimal source of information on patent data for policy-makers, advisors, statisticians, research scholars and academicians.12 Finally, the Worldwide Patent Statistical Database (PATSAT) was unveiled. Consider the following pie chart (prepared by the authors on the basis of extracted data) that represents the most sought-after patent offices:

Analysis of the Data and Findings (1) The US and Japan are the two most sought-after avenues, which can be attributed to their fairly relaxed patentability requirements; (2) From observing the absence of India from the chart, it can be fairly deduced that innovators are not confident about their grant in Indian patent offices. The reason is explained later in this chapter and in the fifth chapter.

4.2. Relative Technological Advantage (RTA): A Study of the World Innovation Regime A working paper released by OECD has assessed the innovative activity across the globe in relation to environmentally-friendly technologies. A bi-dimensional analysis was conducted to deduce the technological specializations of various countries and their contribution to green development:

Patent Law, Diffusion of Green Technology  87 Table 4.1  Relative Technological Advantage (RTA)—The World Innovation Regime Invertor Country Australia Austria Belgium Canada Czech Rep. Denmark Finland France Germany Greece Israel Italy Japan Mexico Netherlands New Zealand Norway Poland Spain Sweden Switzerland Turkey UK US Brazil Russia India China South Africa BRICS WORLD

Air Water Waste Water Renewable Electric/ Energy Energy All Hybrid efficient efficient 0.4 1.4 0.8 0.5 0.9 0.8 0.7 1.0 1.7 1.1 0.1 0.8 1.3 0.8 0.5 0.2

2.8 1.6 1.5 2.1 2.8 2.0 1.9 1.2 1.1 2.5 1.2 1.2 0.7 2.3 1.8 1.9

Mgmt 2.1 2.6 2.0 1.9 6.8 1.3 2.8 1.3 1.0 3.0 0.8 2.1 0.7 4.1 1.8 2.8

Cons. 2.0 0.8 1.3 1.7 0.4 1.0 0.5 1.3 1.1 2.1 1.9 0.9 0.4 1.6 0.7 0.9

1.2 1.4 1.2 0.9 1.0 8.4 0.6 0.9 1.4 3.6 1.0 1.3 0.6 1.1 1.5 1.4

Vehicles 0.3 0.8 0.0 0.3 0.6 0.1 0.2 0.8 1.1 0.7 0.5 0.4 1.8 0.1 0.3 0.5

Lighting 1.1 1.7 0.4 0.8 0.6 0.2 0.5 0.3 0.7 0.4 0.7 0.6 0.9 2.2 1.2 0.6

HVAC 1.2 1.6 1.5 0.8 2.7 2.7 1.2 1.3 1.1 0.5 0.4 1.9 0.9 0.5 2.3 1.3

Techs 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

0.8 0.8 0.4 1.2 0.4 0.7 0.7 1.0 0.6 0.6 0.6 0.3 0.4

3.1 2.9 1.5 1.3 1.2 0.6 1.4 1.0 2.5 2.5 0.9 0.9 2.3

1.9 7.5 2.4 1.0 1.2 0.7 1.3 0.8 3.0 2.5 0.8 0.8 1.4

1.9 0.9 1.0 0.8 2.3 1.8 2.2 1.8 1.3 2.0 3.6 0.5 0.0

3.0 1.6 3.6 0.7 1.1 1.4 1.2 0.8 0.9 1.2 1.2 1.0 1.2

0.1 0.1 0.3 0.7 0.2 0.2 0.3 0.9 0.2 0.1 0.4 0.5 0.2

0.1 0.7 0.1 0.2 0.8 0.3 0.6 0.8 0.3 1.2 0.9 2.5 2.1

1.1 3.2 0.2 0.8 1.2 2.3 0.9 0.6 0.6 0.5 0.4 0.8 1.2

1 1 1 1 1 1 1 1 1 1 1 1 1

0.4 1.1 1 1

1.0 1

1.0 1

1.0 1

0.4 1

2.1 1

0.7 1

1 1

The RTA scores of a country are calculated according to its technological priorities. For example, the RTA of a country “x” in technological priority “y” is the country x’s share of y-priorities across the world compared to its share in all technological priorities. Therefore, RTA > 1 means that a given country is more active in a selected technological field than it is in all given fields.

Analysis of the Data and Findings (1) Japan is proactive in hybrid and electric vehicles, Germany is specializing in air pollution–related technologies and the Czech Republic is performing

88  Patent Law, Diffusion of Green Technology

(2)

(3)

(4) (5)

in the area of waste management, while Denmark specializes in renewable energy; OECD countries have also shown an impressive hike in environmental innovation. This is mainly due to aggressive economic policies designed in favor of R&D, particularly during the period of study as MDGs were announced; BRICS countries, on the other hand, underperformed in the sector of environmental innovation when compared to other countries. However, independently, India has shown impressive improvement in the field of green innovation, as discussed in Chapter 2; Alongside Denmark and Finland, India has been able to improve its situation during the period of study; As per the data, India has assumed a strong position in the sectors of water conservation and renewable energy.

To conclude, India’s mandate to innovate across various industrial sectors to ensure green growth is just getting started. The period of study was 2000–2011. As far as contemporary development of frontier green innovation is concerned, India has not been able to absorb or develop green technologies. The reasons are explored in Chapter 5. 4.2.1. International Collaborations in Climate Change Mitigation Technologies There have been various bilateral collaborations among countries to enhance global technological development. Table 4.2 reflects the data pertaining to these collaborations in the year 2011:13

Table 4.2  A Study of Climate Change Mitigation Technologies and International Collaborations Rank

Climate Change Mitigation Technologies

1 2

Energy USA-China USA-India

3 4

USA-Germany USA-Canada

5

USA-UK

GHG USA-India USA-France, Germany USA-China France-China, USA-UK France-Germany, NetherlandsBelgium

Transport USA-India USA-Germany

Buildings USA-China USA-India

France-Germany NetherlandsGermany USA-Canada

USA-Canada USA-Korea USA-Israel

Patent Law, Diffusion of Green Technology  89

Analysis of the Data and Findings (1) Inventors belonging to developed economies tend to collaborate at a higher rate, but inventors from emerging economies are also shown to be active in technological collaboration; (2) Indian inventors and researchers are showing a proactive collaborative approach, which is a good signal; (3) India has a co-invention rate of 90%, 86% and 75% in transport, energy and buildings, respectively, which indicates that Indian inventors are building their capacity to collaborate with scientifically advanced countries.14 To conclude, international collaboration in the field of green technology is a significant step toward achieving climatic goal. The researchers’ concern is domestic innovation. Collaborative approach is not always the solution, especially when the environmental conditions are deteriorating so rapidly. India’s struggle with domestic frontier green innovation is also explored and examined in Chapter 5. 4.2.2.  Selected Jurisdictions and Environment-friendly Technologies: Relative Study Table 4.3 indicates the share of the world’s inventions pertaining to climate change mitigation technologies (for the period 2009–2011):15

Table 4.3  Environmentally-Friendly Technologies: A Relative Study Rank

Patent Office

% of World’s Inventions

1 2 3 4 5 6 7 8 9 10 ..... 18 28 38 40 43 46 54

China Japan United States Korea European Patent Office Germany Chinese Taipei Canada Russia France ..... Brazil Argentina Morocco Colombia Peru Egypt Malaysia

37.7 32.4 25.1 18.4 15.4 9.9 3.5 3.4 2.9 2.6 ..... 0.67 0.25 0.10 0.09 0.07 0.06 0.02

90  Patent Law, Diffusion of Green Technology

Analysis of the Data and Findings (1) China and Japan are the two most active nations in the field of green innovation and climate change mitigation technologies; (2) The absence of India reveals that technologies relating to climate change are developing at a very slow pace and need a push; (3) In addition to the low level of domestic innovation, the Indian patent office is unable to attract foreign innovators due to its patent regime; (4) For accessing green technology, India is mainly dependent on transfer of technology and patent licensing, which still is hit by the existing economic framework. Active measures are required, especially if India wants to attract foreign technological players to diffuse green technology in the India jurisdiction. India has to work on constructing a more efficient patent regime and an economic structure in which foreign players feel safe.

4.3. Fast-Tracking of Green Patent Applications and Diffusion of Green Technology The prime objective of fast-track programs is to accelerate the examination of environmental patent applications and thereby the grant of patents. A study has shown that fast-track programs have lived up to the expectations in various jurisdictions.16 In the UK, the average time lapse between a patent application and grant (during the period of 2009 to 2011) was 3 years and 4 months, while the same was reduced by a remarkable 75% to 9 months for fast-tracked patent applications. In Canada, the average period of 7.8  years in normal patent examinations was reduced to just 2.5 years, exhibiting a 68% reduction.17 There was a 50% reduction in the time-to-grant period in both Israel and Australia.18 A slightly lower rate of reduction was recorded in the case of the US. But it was probably due to the stringency of initial patent application rules, which were later modified.19 An econometric study to analyze the value of fast-tracked patents against normal patents was conducted in which patent application data from various major patent offices of the world were included. It was revealed that fast-track patents were filed in 15% more countries than normal patents. A systematic increase from 2.5 to 2.83 countries was recorded. Table 4.420 represents the number of patents filed under the fast-track program in various jurisdictions: Table 4.4  Patent Fast-Track Programs around the World Country

Period of Study

Number of Green Patents

Australia Canada UK Israel Japan Korea US

Sept. 2009–Aug. 2012 Mar. 2011–Aug. 2012 May 2009–June 2012 Dec. 2009–Sept. 2012 Nov. 2009–Dec. 2010 Oct. 2009–June 2012 Dec. 2009–Mar. 2012

43 67 776 78 220 604 3533

Patent Law, Diffusion of Green Technology  91

Analysis of the Data and Findings (1) Raving feedback for the fast-track program is found in the US and UK; (2) Fifty-six percent more patent applications are likely to be filed in patent offices implementing fast-track programs as compared to normal-track patents; (3) By analyzing the world’s three major patent offices in terms of patent distribution and commercial value, i.e., European Patent Office (EPO), Japan Patent Office (JPO) and US Patents and Trademark Office (USPTO), the authors discovered much more emphatic results; (4) In all other patent offices, the hike in green patent applications was found to be 15%. The same jumped to 20% in the case of the mentioned patent offices. In conclusion, a consistent result exhibits a higher value of fast-tracked patents than those that are undergoing normal examination procedures.21 4.3.1. Green Patent Applications and Inventions According to Nationality Consider the tables that follow, which reflect the data relating to the nationality of inventors and their patent applications in the US and the UK:

Table 4.5  Nation-Wise Study of Green Patent Applications (Share in the US) Country

Number of Patents

Share (in the US)

United States Germany India South Korea Japan China Netherlands United Kingdom Canada Denmark Israel Taiwan Austria Spain Australia Switzerland Brazil France New Zealand

648 43 21 21 19 15 14 12 7 6 6 6 4 4 2 2 1 1 1

77.51% 5.14% 2.51% 2.51% 2.27% 1.79% 1.67% 1.44% 0.84% 0.72% 0.72% 0.72% 0.48% 0.48% 0.24% 0.24% 0.12% 0.12% 0.12%

92  Patent Law, Diffusion of Green Technology Table 4.6  Nation-Wise Study of Green Patent Applications (Share in the UK) Country

Number of Patents

Share (in the UK)

UK US Germany Ireland Taiwan Australia China Mauritius Singapore South Africa Spain Canada Denmark Norway Portugal Sweden Uganda

223 74 5 4 3 2 2 2 2 2 2 1 1 1 1 1 1

68.20% 22.63% 1.53% 1.22% 0.92% 0.61% 0.61% 0.61% 0.61% 0.61% 0.61% 0.31% 0.31% 0.31% 0.31% 0.31% 0.31%

Analysis of the Data and Findings (1) It is evident that the US and the UK are two of the most sought-after patenting avenues in the world; (2) It is discovered that Indian inventors are more inclined toward filing patent applications in the US, perhaps because the patenting criteria are liberal.22 It is an issue of concern that Indian inventors do not enthusiastically seek their patents in their own nation. The number of green patent applications filed in Indian patent offices by Indian innovators is not impressive. India has not been a player in introducing an effective fast-tracking platform for green patents. India is certainly among the fastest-growing green economies of the world, but there is still a long way to go if India has to match the standards of Japan, the USA and the UK.

4.4. Diffusion of Climate Change Mitigation Technologies: Role of OECD Countries An analysis conducted on 17 OECD countries and a few other developing countries reveals that core technology transfer takes place through a channel that runs from developed to developing countries.23 It is also shown that very few patents in OECD countries are granted to developing countries. The study also found that a share of 183 patents is also granted to local investors of developing countries. Developing countries usually adapt the technologies transferred from OECD countries. A thorough analysis of the patents granted to OECD investors shows

Patent Law, Diffusion of Green Technology  93 that such patents are broad in their ambit and are not cut out to cater to the local needs of developing countries.24 The study concluded that foreign patenting is only a raw measure to effect transfer of technology. One more study shows that the magnitude of technology transfer pertaining to green technologies is high among the OECD countries themselves. If we consider the number of patent filings, China is the only non-OECD country that has a noteworthy share.25 Hence, it is important to reduce this patent gap between the OECD and developing countries in order to ensure greater diffusion of green technology. 4.4.1.  Clean Development Mechanism (CDM) and Diffusion of Green Technology In order to promote the channel of transfer of technology between developed (Annex I countries)26 and developing countries, the following key elements introduced some market-oriented policy interventions: (1) United Nations Framework Convention on Climate Change (UNFCCC); and (2) Kyoto Protocol The Kyoto Protocol’s Clean Development Mechanism (CDM) is one such intervention or innovative tool that grants Certified Emission Reduction (CER) credit to the polluters in developed countries in order to enable them to start environmental projects in developing countries.27 Firms based in developed countries are generally motivated to take part in the CDM, as they generally find that it is actually cheaper and easier to achieve requisite levels of emission reduction in developing countries. Therefore, it can be contended that CDM is devised to provide an opportunity to the players of developed countries to achieve necessary emission reduction standards at lower costs. CDM was also designed to ensure smooth transfer of technology to developing countries, where it is needed the most. Apart from being cost-efficient to leading firms, CDM also provides an opportunity to the firms to engage and operate in new markets. Therefore, a study based on the Dutch waste management industry has also shown that firms that are not required to achieve the desired emission limits also engage in CDM projects.28 An analysis to examine the extent of technology transfer taking place through the CDM scheme was conducted on a data set of 644 CDM projects. It revealed that only 43% of all projects include some kind of technology transfer element, and 34% of these projects involve disembodied transfer of technology. However, it is also noteworthy that the selected sample size accounts for an impressive 84% of the total carbon dioxide emission reductions. As far as the geographical distribution of these CDM projects is concerned, the study reveals 73% of concentration in Brazil, India, China and Mexico. It is also shown that 59% of the Chinese projects involve technology transfer, while only 12% of Indian projects reflect transfer of technology.29 Analyzing similar data, a negative correlation was achieved between patenting of climate change mitigation technologies through the US Patents and Trademarks

94  Patent Law, Diffusion of Green Technology Office (USPTO) by a CDM project host nation and the probability of reliance of CDM projects on local technologies instead of engaging in foreign technology transfer. In other words, the data obtained from the analysis reveals that those nations which possess patents pertaining to climate change mitigation technologies have a high probability to extract benefits from international transfers of technology facilitated by various CDM projects. It is due to the fact that these nations have achieved an advanced stage in the global development mechanism.30 As far as acquiring CDM projects is concerned, the heterogeneity among various developing nations is quite apparent. However, this analysis is limited in studying the role of patents in transfer of technologies taking place through CDM projects.

4.5. Role of Patents in Promoting Diffusion of Green Technology A report by Copenhagen Economic comprehensively studied and analyzed the patent data relating to seven fields of green technology belonging to 38 developing countries over a period of ten years (i.e., from 1998 to 2008).31 This study was undertaken to test the global contention of whether patent protection hampers the development and dissemination of green technology. The study revealed an impressive increase in the green technology patent counts in a rather small group of developing countries that includes India, Brazil and China. The increase was registered majorly in the fields of solar energy, wind energy and fuel cells. However, if the case of least developed countries is taken, both green patents and general patents are almost absent. This strongly suggests that patent protection does not act as a barrier in the way of development and diffusion of green technology. It can also be contended that absence of patents of any nature means that firms do not regard these countries as fruitful markets for green innovation. One cogent explanation behind absence of a strong IPR protection regime in the least developed countries is their extreme reliance on economic and low-tech innovations. In a situation where these low-tech innovations correspond to the climate concerns in the LDCs, a low count of green patent applications is not an outcome of market failure, and neither is there a specific role of IPR in this scenario, because the very motivation to use high-tech green innovations is absent in these countries.32 4.5.1. Green Channel in the UK The UK has also played a prominent role in encouraging the development and fast-tracking of climate change mitigation technologies through its Green Channel, which was introduced quite early in May  2009. In this mechanism, prosecution of patents relating to green technologies is accelerated in order to make those technologies available in the market as soon as possible. In comparison to a normal patent prosecution process that takes two to three years, a green patent application is prosecuted and granted patent by the United Nations Intellectual

Patent Law, Diffusion of Green Technology  95 Property Office (UKIPO) in about nine months from the application date. Thus, the Green Channel has emerged as an effective mechanism to fast-track patent applications relating to technologies that have environmental benefits.33 4.5.1.1. Environmental Standard to Qualify for the Green Channel As far as the qualification of patent applications for the Green Channel is concerned, there are no specifically designed environmental standards. UKIPO has a liberal view in this regard, and it further contends that environmental benefits may arise in any domain of technology. There are several areas of technology that can be fast-tracked under the Green Channel: (1) (2) (3) (4) (5)

Wind power; Solar power; Processes producing minimal waste; Use of recycled streams and Energy-efficient and water-efficient devices.

The only requirement to qualify to enter the Green Channel is that the patent applicant has to convince the UKIPO through a detailed explanation that their technology has clear environmental benefits. The Green Channel is a free and transparent mechanism to promote green technologies, and it is easily accessible. It is clearly one of the best initiatives across the globe to promote development and diffusion of green technologies. 4.5.2.  Prevailing Issues in Adoption of Green Technologies Adoption of green technology in a particular territory is driven by a couple of factors: (1) Awareness and attitude about the environment; and (2) Public perception and resulting effects. Apart from this, growing concerns about environmental sustainability have resulted in the investigation of various factors affecting the choice of firms between two options, i.e., emission reduction using an “end-of-pipe” green technology and emission reduction through process redesign. A study concerning the adoption of environmentally sound technologies (ESTs) by firms belonging to developing countries has revealed that the level of commitment toward environment protection, technological capabilities and proprietorship plays a pivotal role in the decision of adopting such technologies. The study focused on both pollution abatement technologies and pollution prevention technologies.34 The study deviated from the outcome of other studies and found that community pressure does not have any role to play in influencing adoption decisions.

96  Patent Law, Diffusion of Green Technology However, the study does conclude that community pressure might be an important factor in motivating the firms to adopt more basic technologies that control pollution.35 A survey of 46 pulp and paper firms based in Spain was conducted to study the factors influencing adoption decisions pertaining to climate-friendly technologies. The adopted technologies majorly included technologies used for reducing wastewater discharge, solid residue and consumption of energy. It is noteworthy that most of these technologies were either end-of-pipe or incremental technologies that involved only a minimal change to the process of production. More than half of the total technologies (55%) were incremental, 36% of the technologies were end-of-pipe and merely 8% were groundbreaking clean technologies that involved substantial changes to the production process. The main reason cited for adopting such clean technologies was improvement of corporate image. Another reason given was the influence of environmental regulations. Monetary incentives such as cost savings or enhanced revenues were shown to be rather unimportant.36 A survey of 76 traditional Mexican brickmakers was conducted to examine the diffusion of propane as a clean production technology. The survey finds its roots in the initiative by an NGO that led a cooperative movement that launched a scheme to introduce clean combustion of propane in the early 1990s. Several factors like educational levels, experience, brickmakers’ belief in the combustion process of propane, costs of input, kiln capacity and magnitude of financial resources were included in the survey. The prime outcome of the survey pertained to the vital role community pressure can play in influencing the adoption decision of the firms. It was revealed that the brickmakers were pressured by local organizations with affiliation to one of the political parties to adopt clean-burning propane technology.37 In 2011, one more study was conducted to analyze the role of policy instruments and consumer demand in influencing the innovation and adoption of chlorine-free bleaching technologies in the pulp and paper industry. The analysis revealed that both the factors, i.e., policy instruments and consumer demand, played a pivotal role in affecting the adoption decision. It was also found that consumer demand generated ample pressure to force the plants to adopt clean bleaching technology even before the regulations were introduced.38 One more test on people claiming themselves as “environmentalists” was conducted in 2007 to find out whether their consumption patterns were in agreement with their environmental commitment and beliefs. The survey shows that a fraction of Green Party voters belonging to a community has a statistically pertinent and positive correlation with the registrations of various hybrid and green vehicles. Looking at numbers, an increase in green voters from 0 to 4% is associated with remarkable growth in market share of green vehicles, i.e., up to two- to fourfold.39 On the other hand, a study demonstrated an underlying opposing effect, i.e., promotion of environmental protection can have a negative impact on the adoption of energy-efficient technology in the US. This is mainly because the environment in the US is a political issue, and consequently, the researchers conducting

Patent Law, Diffusion of Green Technology  97 the study reached the hypothesis that political agents with a conservative ideology would respond to the environmental messages in a negative way. It was also contended that politically conservative leaders would be least interested in acquiring an expensive, energy-efficient light bulb merely because it contained an inherent environmental message. Therefore, the issue that political considerations and ideologies also play a role in promoting diffusion of green technology has also been raised.40 A study has found out that radical green technologies are more likely to be adopted by environmentally active firms in order to improve their corporate image and save costs. On the other hand, small firms are less likely to adopt radical green technologies because of limited resources—financial and technical as well as human.41 Another study based in Sweden reveals that the size of a firm is not a driving factor for investment in radical clean technologies, and larger firms are likely to invest more in end-of-pipe technologies than in radical ones.42 One more study was conducted to analyze the effect of pledging of clean technologies on the Eco-Patent Commons.43 This means that the participating firms donate their patents for free use by third parties, while the ownership of the patents remains with the firms. This study basically examined the value of citations of pledged patents as indicators for the dissemination of the underlying technology. A  difference-in-difference approach was adopted in which a comparison was drawn between citations of the pledged patent and a control group created to have the same priority year, technology class and application authority as those of the donated patents. The conclusion was that the donated patents were cited on fewer occasions than the control group, both before and after the donation. The study found no considerable impact on technology diffusion connected with the pledging of patents to the Eco-Patent Commons. The researchers have suggested that eliminating patent protection may have little or no impact on the diffusion of those green technologies which are already subject to protection.44

4.6. Compulsory Licensing and Diffusion of Green Technology It is imperative to extend some benefit to the innovator of green technologies if the objective is to promote the development and dissemination of such technologies. Strong protection is required, as innovative engineering has become an important instrument in ensuring physical and economic accessibility of new ­environmentally-friendly technologies. In 2009, the USPTO launched a very beneficial initiative which enabled the innovators to put their green innovation on the accelerated highway of patent examination. It is also important for the governments to support their innovators in every possible way in order to encourage green innovation and development of green technology.45 Global transfer of green technology requires some proactive steps which include international cooperation and liberalized cross-border trade between targeted sectors and governments. Another sector which has been the focus of the

98  Patent Law, Diffusion of Green Technology global community is pharmaceuticals. However, compared to pharmaceuticals, the capital requirements of green technology are a bit higher. On one hand, pharmaceuticals only require big initial capital investment in research and development, and once the ingredients and processes are in place, the production cost becomes steady or even decreases with time. On the other hand, green technology requires continuous capital inflow to ensure persistent R&D, installation, servicing, repair work and other post-sale necessities.46 It can be stated that diffusion of green technology has to happen on a global platform in order to ensure cost efficiency. The global push of green technologies is necessary because if one country has a progressive and climate-friendly industry, moving their production to other regions may cause various kinds of pollution due to weaker regulatory frameworks. This may help if the production unit is moved to a more regulated region. But what is required the most is a unified regulatory framework that is agreed globally to achieve climate goals and the only hurdle is different countries having their own climate strategy. Through the initiatives of the US and the EU, Various international environmental instruments have been agreed upon in Kyoto, Rio, Copenhagen, Stockholm, Paris, etc., but there is still a very long way to go.47 Climate change and environmental deterioration have become serious global issues. Development and diffusion of green technology would require combined and collaborative efforts. Instruments such as TRIPS and the Doha Declaration should be looked at from fresh perspectives, and the deep connection between innovation and public health has to be appreciated in a more comprehensive manner. 4.6.1.  Compulsory Licensing: Pharmaceuticals Versus Green Technologies Unlike pharmaceuticals, where the incidents of compulsory licensing around the globe have been quite frequent, there is not a single case reported of compulsory licensing of green technology patent in the interest of the environment and public health. The matter comes up in debate mostly in emerging economies or is even initiated by scholars belonging to developed countries. It has been made clear that the prime focus of TRIPS was not the environment, but it is also true that public health is. It is also true that inclusion of green technology and environmental sustainability has not been ruled out under TRIPS and can be interpreted so as to discuss compulsory licensing in green technologies.48 Drawing a comparison between two sectors, i.e., pharmaceuticals and green technologies, regarding the grant of compulsory license is quite a complex task and might raise several problems. As far as medicine is concerned, it is merely a mixture of two more or less known compounds to formulate a product with a defined purpose. Once the medicine comes into being, the cost of its further production gets low. In addition, the Doha declaration clearly discussed access to medicine, epidemics and public health, which makes the issue of licensing rather simple in the pharmaceutical sector.

Patent Law, Diffusion of Green Technology  99 Green technology, on the other hand, is quite a vast concept in the contemporary scenario of climate change. There have been various definitions provided, but in order to relate the concept of compulsory licensing, we must analyze every patent application pertaining to such technology as to its environmental efficacy and relevance to the contemporary climate problem. If we take the case of any least developed country (LDC), a compulsory license would be granted only when there is a threat to public health. Therefore, the issue is whether the current environmental situation is so alarming to public health that it could entail a national emergency or other grave circumstances, as explained under Article 31(b)49 of TRIPS so as to justify granting of compulsory licenses for green technology patents in the same way that compulsory licenses for pharmaceutical patents are justified. 4.6.2.  Public Health and Urgency There are two aspects that need to be clearly defined before entering into negotiation for granting of compulsory licenses: (1) The current health of the population; and (2) The level of need for implementing health improvement measures. Some quantitative indicators such as child mortality and data from the World Health Organization (WHO) are quite useful in assessing the level of threat to public health in a particular country. For instance, the six-phase system of the WHO estimates the threat caused by an epidemic and also acts as a great help to government organizations that prepare reports concluding that there is a need for emergency-based compulsory licenses. 4.6.2.1. Air Pollution and Urgency First of all, let us consider the position taken by WHO. According to WHO, air pollution has emerged as a grave threat to children of all ages and is a factor of huge risk, resulting in serious and chronic respiratory diseases.50 The core issue is that in spite of being dangerous, air pollution is not considered an epidemic. However, when it is difficult to assess the stage of air pollution, a precautionary measure may be taken without totally established scientific proof for the sake of public health. It can also be said that the possibility of outdoor air pollution being considered a kind of public health emergency under Article 31(b) cannot be completely ruled out. In that scenario, a compulsory license could be granted on the grounds of environmental emergency. However, a complicated issue is the justification for the grant of such a license, particularly in a country that is willing to waive the negotiation requirement under Article 31(b). The motive of possessing an efficient and flexible solution in the case of grave circumstances is getting impeded due to complex procedural barriers.

100  Patent Law, Diffusion of Green Technology 4.6.2.2. Decoding the Terms “National Emergency” and “Other Circumstances of Extreme Urgency” The uncertainty in the motive and language of Article 31 of TRIPS may expose the member countries to great risks. The uncertainty of Article 31 proposes a potential risk toward the member countries. Article 31(b) allows a member country to waive its duty of making a reasonable effort to negotiate with the rightholder for acquiring his patent in the following three circumstances: (1) National emergency; (2) Other circumstances of extreme urgency; and (3) For public non-commercial use. It also requires that in the first two cases, the right-holder should be informed within a reasonable period of time. However, in the third condition, where the contractor or the government is aware that the patent is going to be used for the purpose mandated by the government, the right-holder shall be promptly notified. Now, a dispute between member countries arises when the interpretation of the language of this article is different or conflicting. Incorrect or improper waiver and understanding of the terms “emergency” and “extreme urgency” are some areas where a dispute may arise.51 4.6.2.3. Precautionary Measures under TRIPS Article 8.152 of the TRIPS agreement allows the member countries to adopt measures in order to protect public health. In comparison, Article XX(b)53 of GATT also allows the countries to take action necessary to protect human, animal and plant life or health. The WHO emphasizes that necessity is a mandatory criterion for any member country to invoke compulsory health protection measures. It is also made clear under Article 8.254 of TRIPS that the precautionary measures taken by members must not be unreasonably more restrictive of trade and must not adversely affect international technology transfer. Therefore, any compulsory license granted according to the mandate of Article 31(b) has to pass the necessity analysis formulated under Article 8. The currently observed trend among policy-makers reflects greater adoption of precautionary measures. A paradigm shift is also observed, and precautionary measures are taken to protect both public health and environmental health. This has made way for measures in regard to climate-friendly technologies. There are certain conditions that need to be present in order to invoke the precautionary measure clause under TRIPS: (1) There must be an imminent threat which would cause grave damage to public health if action is not taken; (2) The risk associated with the threat must be uncertain; (3) An honest assessment of risk must be carried out; and (4) There must be a necessity to take the precautionary measure to achieve the desired objective.55

Patent Law, Diffusion of Green Technology  101 It is also clear that precautionary measures can be undertaken to prevent urgent health crises and achieve minimum levels of public health desired under a policy. It is also worth mentioning that precautionary measures infringe the intellectual property right of an individual, and therefore, any member country should always consider other potentially viable options before resorting to any precautionary measures.56 It is also notable that the European Union (EU) has regarded environmental issues as a grave risk to public health.57 The most fundamental complication with the granting of compulsory licenses to green technology is the intervening time interval between the actions leading to problems of air pollution. The flexibilities provided under TRIPS and the Doha Declaration may allow the granting of compulsory licenses as a precautionary measure against public health threats. It has also been mentioned that pharmaceuticals and technology can be transferred to LDCs, but there is no explicit mention of green technology. It can be contended that interpretation of Article 31 of TRIPS could be extended to support compulsory licensing of green technology as a precautionary measure to protect environmental as well as public health. On the other hand, a WTO complaint could be filed against a member country if it has not granted compulsory licenses in the proper manner during an outbreak. These issues need to be addressed separately. However, taking the support of Article 31 to issue compulsory licenses in respect of a green technology patent and verifying it under the mandate of Article 8, the action could be justified on an international platform.58 It is also worth mentioning that on various occasions, both the EU and the WTO have pointed out major structural differences between pharmaceutical and green technology markets. Thus, it would be rather premature to adopt a global policy of issuing compulsory licenses to green technology patents with an efficient policy structure.59 4.6.3.  Extending the Scope of Compulsory Licensing to LDCs The idea of issuing compulsory licenses to green technology is relatively new in the global community. Under TRIPS, there is every possibility to grant compulsory licenses in respect of patents of any kind, including green technology. However, in the absence of sufficient means to use such technology in a particular country, accessibility becomes an issue.60 It has been pointed out on several occasions that environmentally-friendly products and processes cannot be used to their full capacity in LDCs. Deficiency in infrastructure, absence of foreign direct investment and low initial investments are some factors responsible. On the other hand, emerging economies led by Brazil and India and China (BIC) have developed a robust production regime including a broad industrial spectrum. BIC has also raised a demand for explicit inclusion of environmentallyfriendly technologies under the TRIPS agreement. This has boosted the crossborder transfer of green technology for protection of the environment and public health.

102  Patent Law, Diffusion of Green Technology 4.6.4.  Doha Declaration, Means of Production and Compulsory Licensing If we assume that a member country does issue a compulsory license to a green technology and the government now has the authority to produce such technology, in the absence of adequate technological capacities to produce such technology, the compulsory license would be of little help. The government would require help from someone possessing the requisite skill set.61 It is also noteworthy that the Doha Declaration is a pro-health document, but it still does not explicitly include green technology and only talks about pharmaceuticals and access to them even in the absence of requisite means of production. Hence, in this aspect, the Doha Declaration offers no help unless a pharmaceutical patent can be considered green technology, which cannot be the case. Therefore, the Doha Declaration, in the absence of means of production in a country, is not proved to support the transfer of green technology in relation to public health in spite of being a public health document.

4.6.5.  Green Technology and Pharmaceuticals Under TRIPS If the issue is protection of public health, TRIPS does not specifically distinguish between green technology and medicine. The prime issue related to protection and improvement of public health has always been pharmaceutical products. It should also be noted that in the case of public health, the remedy under TRIPS does not extend beyond the Doha Declaration. Therefore, the only possibility is to explicitly include environmental health, which is absent in the Doha Declaration, under TRIPS through a somewhat similar declaration. 4.6.6.  Explicit Inclusion of Public Health Emerging economies led by BIC are setting up strong criticism against the US and other developed economies. The root of this criticism lies in the fact that these developed nations contribute significantly to global environmental pollution either through local production or production in countries where manufacturing cost is nominal and environmental regulations are not stringent. In addition, the necessary green technology to mitigate the pollution is monopolized through patents and kept in these developed nations and cannot be accessed by developing economies, at least not economically.62 Back in 2008, Brazil, India and China had already proposed the inclusion of green technology in TRIPS by laying down the argument that climate is “public good, just like health.” It is true that BIC countries may not be in great need of technology transfer, as they now have sufficient production means, R&D funds and access to technology, but they can fight for the rights of LDCs. It is worth mentioning that China has emerged as the largest manufacturer of green technology63 and has an estimated market size of 2.2 trillion USD by 2020.64

Patent Law, Diffusion of Green Technology  103 In order to ensure free access to green technology to all countries, the president of Bolivia had suggested relaxation of patent protection for green technology, and this idea received support from various nations such as Nigeria and Indonesia.65 On an earlier occasion, the European Parliament had passed a similar statement. However, such relaxation would most likely discourage innovators across the world from infusing more investment in green innovation and related R&D. In that case, the concerned governments should undertake initiatives to motivate the innovators. The governments must be ready to compensate and incentivize the innovators to continue the stimulation of green innovation.66 A joint statement has been made by five nations, i.e., Brazil, India, China, Mexico and South Africa, that access to green technology is extremely crucial in order to enable the developing economies to effectively contribute to the global cause of environmental protection and sustainable development.67 The central issue in front of LDCs is that a stringent patent regime keeps green technology inaccessible because the cost of such technologies is exorbitant. Therefore, transfer of technology has been suggested as an efficacious mechanism in order to enable the LDCs to use green technology in their territories. Simultaneously, green innovation is also appreciated and incentivized in these countries. However, explicit inclusion of green technology in the system of LDCs might raise a different issue, as these countries may not possess the requisite manufacturing capacity for green technology. Therefore, LDCs have to work on these issues before they begin with the global project of sustainable development in their respective territories.68 Therefore, as discussed earlier, instead of compulsory licensing, more formal modes like technology transfer have to be encouraged in the initial stages. Establishment of green energy plants and other environmentally sound structures would be helpful in improving the capacities of LDCs while simultaneously resulting in reduced GHG emissions. Domestic manufacturing in LDCs has to be improved through FDI as a tool for transfer of technology.69 In order to ensure long-term economic growth of LDCs, TRIPS has to be supplemented by some constructive instrument or document. Integrating green technology, stimulating transfer of technology, building manufacturing capacities, enhancing FDI levels and increasing accessibility to technology to further the betterment of LDCs will require proactive steps from developed nations. TRIPS as a single instrument for transfer of green technology to LDCs would not be sufficient. One suggestion might be to merge businesses in developed economies with sustainable development projects in developing economies and LDCs to stimulate further development.70

4.7. A Case Against Compulsory Licensing of Green Technology A country can emit compulsory licenses in favor of green technology under its laws, but the consequences may be disadvantageous to both the licensing country and further innovation. A long line of criticisms has been issued in relation to compulsory licensing of pharmaceuticals on the grounds of reduced innovation

104  Patent Law, Diffusion of Green Technology incentives and underlying economic backlash. The case appears to be the same in the context of green technologies. It has also been stated that in comparison, green technology is a considerably less appropriate candidate for compulsory licensing.71 4.7.1.  Economic Ramifications A state may legally grant compulsory licenses to green technology under the scheme of TRIPS. Therefore, there is no chance of that state facing a WTO complaint. However, the state would not be able to avoid various economic backlashes from both governments and private players: (1) The unhappy governments would most likely impose unilateral trade sanctions and other barriers; and (2) The unhappy private players would be discouraged from introducing their innovation in that state. 4.7.2.  Green Technology Industry and Compulsory Licensing: The Dichotomy Proponents of compulsory licensing assert that the practice extends great benefits to the public at large, but studies show that such is not the case in the field of green technology. Compulsory licensing proponents state that in developing economies, a weak regime of intellectual property rights protection discourages the collaboration of transnational corporations with local companies and also reduces their economic incentive. However, studies have shown that the level and strength of patent protection do not affect the level of FDI attracted by a country.72 This is because the size of the market is not that large in poor states, and the governments do not want to take pains to strengthen their IPR protection in order to motivate corporate giants to invest in their markets, which are actually not that lucrative.73 It has also been found that poor countries may not benefit from a strong IPR protection regime, but there is a positive correlation between robust patent protection and foreign direct investment in the case of middle-income nations.74 Studies have shown that granting of compulsory licenses for environmentallyfriendly technology by middle-income states (which include India, China and Russia) that also contribute majorly to global air pollution can result in huge FDI loss.75 Proponents of compulsory licensing contend that strong patent protection promotes proprietary interests, which further incentivizes innovation of new technology, but it is also true that follow-on innovations may get inhibited due to strong IPR protection because the technological capabilities of developing nations primarily focus on the adaptation and development technologies acquired from developed nations. It is worth mentioning that currently, green technology patents are mainly for minor and specific advancement of the prior art, and

Patent Law, Diffusion of Green Technology  105 stronger IPR protection may impede further technological enhancement of green innovations.76 It is true that when we compare green technology with pharmaceutical medicines (particularly life-saving drugs), we find out that there exist a lot of minor and specific improvements in the case of the former, and compulsory licensing has to be issued for various technological advancements which are necessary for climate change, while the latter has to be granted a compulsory license only once, as the formula already exists to cure the patients.77 It is also to be noted that competition in the market among the manufacturers and sellers of various technical improvements keeps the prices low. In the pharmaceutical sector, most of the groundbreaking drugs have no substitute, and the patent-holders possess a monopoly over the drug and have the authority to charge high prices during the life of the patent. On the other hand, the non-patentability of basic technological improvements in the renewable energy and green energy sector because of them being prior art results in little value of exclusive patent right of the patent-holder.78 These minor and frequent technical improvements compete with each other, inhibiting monopoly formation on the overall technology, which subsequently results in low prices. These prices are still not low enough to be advantageous for the developing economies, but since this is not due to monopolistic trends like in the case of pharmaceuticals, elimination of patent protection has little role to play in lowering of prices.79 The critics also contend that if compulsory licensing is allowed for green technology, it would be difficult to deduce what actually constitutes “green technology.” It is possible that any patented technology with efficiency and longer life span could be counted as “green.” Granting compulsory licenses to these technologies would eliminate patent protection for most innovative technologies and associated incentives. It is also contended that the value of compulsory licenses in relation to green technology would get compromised if the state granting such licenses doesn’t possess the requisite manufacturing capabilities. In this case, importation or transfer of green technology is a more viable solution than compulsory licensing.80

4.8. Policy Instruments, Adoption and Diffusion of Green Technologies A study of current patterns shows that introduction of binding regulatory mechanisms can force firms to adopt green technologies that would otherwise go unutilized. It is quite interesting to determine the choice of firms regarding various green technologies in the presence of different policy instruments. The relevant literature underlines the fact that the level of flexibility of market-based policy instruments allows choices of superior technology when looked at from the social cost perspective.81 Technology adoption is also affected by the introduction of specific policy instruments that are based on market conditions. More evidence is presented to substantiate the fact that regulatory instruments induce the adoption of end-of-pipe technology.

106  Patent Law, Diffusion of Green Technology Moreover, economic considerations governed by market-based policy instruments have a greater role to play in the more systemic environmental improvements. The global concern that still exists is that stringent enforcement of patent protection will limit the transfer and diffusion of environmentally-friendly technologies.82 From the theoretical point of view, a balance has to be struck between the possibility of cost increase or limited access to previously protected technologies and liberalization of international trade through foreign direct investment, which is an efficient mechanism for transfer of technology.83 It is evidently clear that policy instruments of varying nature have varying impacts on the choices relating to adoption of green technologies and their subsequent diffusion. Studies have shown that a higher level of flexibility of market-based policy instruments is likely to result in greater technology diffusion. However, studies have also found that stringent regulatory instruments have induced the adoption of new clean technologies. Thus, the field for further research in this area is quite open in order to determine a system wherein policy and adoption would be synergetic.84

Notes 1 See the OECD Frascati Manual (OECD 2002) for the definition of how R&D expenditure is assigned among the different socio-economic objectives. 2 OECD (2011), Invention and Transfer of Environmental Technologies, OECD Studies on Environmental Innovation, OECD Publishing, Paris. 3 Visit www.nace.org/home (last accessed on 23–05–2019). 4 The North American Industry Classification System (NAICS) is the standard used by federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing and publishing statistical data related to the US business economy; available at www.census.gov/eos/www/naics/ (last accessed on 23–05–2019). 5 See https://unstats.un.org/unsd/publication/seriesM/seriesm_4rev4e.pdf (last accessed on 23–05–2019). 6 OECD/Eurostat (1999), The Environmental Goods and Services Industry: Manual for Data Collection and Analysis, OECD Publishing, Paris. 7 Meyer, M. (2002), Tracing Knowledge Flows in Innovation Systems, Scientometrics, Vol. 54, No. 2, 193–212. 8 Griliches, Z. (1990), Patent Statistics as Economic Indicators: A  Survey, Journal of Economic Literature, Vol. 28, No. 4, 1661–1707. 9 Dernis, H., Guellec, D., and van Pottelsberghe de la Potterie, B. (2001), Using Patent Counts for Cross-Country Comparisons of Technology Output, STI Review No. 27, OECD, Paris, pp. 129–146. 10 Haščič, I., and Migotto, M. (2015), Measuring Environmental Innovation Using Patent Data, OECD Environment Working Papers No. 89, OECD Publishing, Paris, p. 17. 11 Other taskforce members include the European Patent Office (EPO), the Japan Patent Office (JPO), the US Patent and Trademark Office (USPTO), the World Intellectual Property Organisation (WIPO), the US National Science Foundation (NSF), Eurostat, and the European Commission Directorate-General for Research. 12 Rollinson, J., and Heijna, R. (2006), EPO Worldwide Patent Statistical Database (PATSTAT), presentation at the EPO and OECD Conference on Patent Statistics for Policy Decision Making, Vienna, Austria. 13 Meyer, M. (2002), Tracing Knowledge Flows in Innovation Systems, Scientometrics, Vol. 54, No. 2, 193–212, 106. 14 Ibid.

Patent Law, Diffusion of Green Technology  107 15 Ibid., p. 36. 16 Dechezleprêtre, Antoine (2013), Fast-Tracking Green Patent Applications: An Empirical Analysis, Centre for Climate Change Economics and Policy Working Paper No. 127 and Grantham Research Institute on Climate Change and the Environment Working Paper No. 107, Geneva, p. 14. 17 The period from application to grant in Canada is typically very long, as applicants have to request the examination of the patent for the procedure to start. The examination is thus requested at a very late stage, when applicants are certain of the economic value of the patent. The average time from request of examination to grant for “regular” patents for the last three fiscal years 2010–2012 was 4.2 years. In comparison, the average time from request of examination to grant for fast-tracked patents is 1.7 years. 18 Dernis, H., Guellec, D., and van Pottelsberghe de la Potterie, B. (2001), Using Patent Counts for Cross-Country Comparisons of Technology Output, STI Review No. 27, OECD, Paris, pp. 129–146. 19 The initial rules of the program made patents eligible only if they had been filed before 8 December 2009. This rule was changed in November 2010, so the time to grant is likely to go down as more recent data becomes available. Our detailed USPTO data, including time to grant, covers only the first 800 patents that went through the program. 20 Meyer, M. (2002), Tracing Knowledge Flows in Innovation Systems, Scientometrics, Vol. 54, No. 2, 193–212, 106. 21 Dernis, H., Guellec, D., and van Pottelsberghe de la Potterie, B. (2001), Using Patent Counts for Cross-Country Comparisons of Technology Output, STI Review No. 27, OECD, Paris, p. 16. 22 Section 101 of the US Patent Act states that processes, machines, articles of manufacture and compositions of matter are patentable. At first blush, this wording appears to cover every conceivable type of invention. To a large extent, this is true. Under this statute, the US has one of the broadest standards for what constitutes patentable subject matter in the entire world. Inventors of physical devices generally do not have to worry about whether their inventions are non-statutory. See www.bitlaw.com/patent/requirements. html (last accessed on 23–12–2019). 23 Lanjouw, J.O., and Mody, A. (1996), Innovation and the International Diffusion of Environmentally Responsive Technology, Research Policy, Vol. 25, No. 4, 549–571. 24 Ibid. 25 Dechezleprêtre, A., Glachant, M., Hascic, I., Johnstone, N., and Ménière, Y. (2009), Invention and Transfer of Climate Change Mitigation Technologies on a Global Scale: A Study Drawing on Patent Data, Fondazione Eni Enrico Mattei Nota di Lavoror No. 8, available at https://ideas.repec.org/a/oup/renvpo/v5y2011i1p109-130.html (last accessed on 22–09–2019). 26 Annex 1 countries are developed countries and countries in transition, including the members of the European Union, Iceland, Norway, Switzerland, Canada, Australia, New Zealand, Japan, the US, Turkey, Belarus, Ukraine and the Russian Federation. 27 Dechezleprêtre, A., Glachant, M., and Ménière, Y. (2008), The Clean Development Mechanism and the International Diffusion of Technologies: An Empirical Study, Energy Policy, Vol. 36, No. 4, 1273–1283. 28 Costa, I., Doranova, A., and Eenhoorn, G.-J. (2008), Beyond the Emission Market: Kyoto and the International Expansion Of Waste Management Firms, UNU-Merit Working Paper Series #2008-020, available at http://collections.unu.edu/view/ UNU:1267 (last accessed on 22–09–2019). 29 Dechezleprêtre, A., Glachant, M., and Ménière, Y. (2008), The Clean Development Mechanism and the International Diffusion of Technologies: An Empirical Study, Energy Policy, Vol. 36, No. 4, 1273–1283. 30 Doranova, A., Costa, I., and Eenhoorn, G.-J. (2009), Knowledge Base Determinants of Technology Sourcing in the Clean Development Mechanism Projects, UNU-Merit Working Paper Series #2009-015, available at https://ideas.repec.org/p/unm/unumer/2009015.html (last accessed on 23–09–2019).

108  Patent Law, Diffusion of Green Technology 31 Copenhagen Economics A/S and the IPR Company A/S (2009), Are IPRs a Barrier to the Transfer of Climate Change Technology? Report commissioned by the European Commission (DG Trade), available at http://trade.ec.europa.eu/doclib/docs/2009/ february/tradoc_142371.pdf (last accessed on 23–09–2019). 32 Shafik (1994) provides cross-country evidence for a panel of 149 countries over the period 1960–1990 suggesting that countries tackle different environmental problems at different stages of their development. Hence, Shafik suggests that less developed economies might be less interested in patented frontier technologies than emerging economies. Shafik, N. (1994), Economic Development and Environmental Quality: An Econometric Analysis. Oxford Economic Papers, Special Issue on Environmental Economics, Vol. 46, 757–773. 33 For more, visit www.carpmaels.com/accelerating-patent-prosecution-in-the-uk-viathe-green-channel/ (last accessed on 27–05–2019). 34 Luken, Ralph, Rompaey, Frank Van, and Zigova, Katarina (2008), The Determinants of EST Adoption by Manufacturing Plants in Developing Countries, Ecological Economics, Vol 66, No. 1, 141–152. 35 Ibid. 36 Del Río González, Pablo (2005), Analysing the Factors Influencing Clean Technology Adoption: A Study of the Spanish Pulp and Paper Industry, Business Strategy and the Environment, Vol. 14, No. 1, 20–37. 37 Blackman, Allen, and Bannister, Geoffrey J. (1998), Community Pressure and Clean Technology in the Informal Sector: An Econometric Analysis of the Adoption of Propane by Traditional Mexican Brickmakers, Journal of Environmental Economics and Management, Vol. 35, No. 1, 1–21. 38 Popp, David, Hafner, Tamara, and Johnstone, Nick (2011), Environmental Policy vs. Public Pressure: Innovation and Diffusion of Alternative Bleaching Technologies in the Pulp Industry, Research Policy, Vol. 40, No. 9, 1253–1268. 39 Kahn, Matthew E. (2007), Do Greens Drive Hummers or Hybrids? Environmental Ideology as a Determinant of Consumer Choice, Journal of Environmental Economics and Management, Vol. 54, No. 2, 129–145. 40 Gromet, Dena M., Kunreuther, Howard, and Larrick, Richard P. (2013), Political Ideology Affects Energy-Efficiency Attitudes and Choices, Proceedings of the National Academy of Sciences, Vol. 110, No. 23, 9314–9319. 41 www.carpmaels.com/accelerating-patent-prosecution-in-the-uk-via-the-greenchannel/ (last accessed on 27–05–2019). 42 Hammar, Henrik, and Löfgren, Aasa (2010), Explaining Adoption of End of Pipe Solutions and Clean Technologies—Determinants of Firms’ Investments for Reducing Emissions to Air in Four Sectors in Sweden, Energy Policy, Vol. 38, No. 7, 3644–3651. 43 It was established in January 2008 by IBM, Nokia, Sony and Pitney Bowes, in cooperation with the World Business Council for Sustainable Development. Since January 2008, Bosch, DuPont, Xerox, Ricoh, Taisei, Dow Chemical, Fuji-Xerox, Hewlett Packard and Hitachi have joined. 44 Hall, Bronwyn H., and Helmers, Christian (2013), Innovation and Diffusion of Clean/ Green Technology: Can Patent Commons Help?, Journal of Environmental Economics and Management, available at www.sciencedirect.com/science/article/pii/ S0095069613000211 (last accessed on 07–06–2019). 45 Fair, Robert (2009), Does Climate Change Justify Compulsory Licensing of Green Technology?, 6 BYU Int’l L. & Mgmt. R. 21 (2010). Vol.6, Issue 3. available at https:// digitalcommons.law.byu.edu/ilmr/vol6/iss1/3 46 Pradhan, Nikil (2013), Moving Towards a Sustainable Future: Replacing TRIPS with a New International Regime for Intellectual Property and Sustainable Energy Technology Transfer, Wisconsin International Law Journal, 169. 47 Ibid.

Patent Law, Diffusion of Green Technology  109 48 Karlsson, Anders (2014), Green Technology Patents—TRIPS, Compulsory Licensing and Global Health, Faculty of Law, Stockholm University, Stockholm, p. 29. 49 Article 31—Other Use Without Authorization of the Right Holder Where the law of a Member allows for other use of the subject matter of a patent without the authorization of the right holder, including use by the government or third parties authorized by the government, the following provisions shall be respected: a. authorization of such use shall be considered on its individual merits; b. such use may only be permitted if, prior to such use, the proposed user has made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions and that such efforts have not been successful within a reasonable period of time. This requirement may be waived by a Member in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use. In situations of national emergency or other circumstances of extreme urgency, the right holder shall, nevertheless, be notified as soon as reasonably practicable. In the case of public non-commercial use, where the government or contractor, without making a patent search, knows or has demonstrable grounds to know that a valid patent is or will be used by or for the government, the right holder shall be informed promptly. 50 World Health Organization, Air Pollution, Children and Environmental Health, available at www.who.int/ceh/risks/cehair/en/ (last accessed on 31–05–2019). 51 Andrew, Jennifer R. (2011), Swine Flu, Bird Flu, SARS, Oh My! Applying the Precautionary Principle to Compulsory Licensing of Pharmaceuticals Under Article 31 of TRIPS, Michigan State Law Review, at 408, available at www.msulawreview.org/ wp-content/uploads/2012/10/2011-2-Andrew.pdf (last accessed on 01–06–2019). 52 Article 8.1, TRIPS: Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement. 53 Article XX, GATT: General Exceptions: Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures: (a) necessary to protect public morals; (b) necessary to protect human, animal or plant life or health; (c) relating to the importations or exportations of gold or silver. 54 Article 8.2, TRIPS: Appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology. 55 Hammar, Henrik, and Löfgren, Aasa (2010), Explaining Adoption of End of Pipe Solutions and Clean Technologies—Determinants of Firms’ Investments for Reducing Emissions to Air in Four Sectors in Sweden, Energy Policy, Vol. 38, No. 7, 440. 56 Ibid., p. 435. 57 The 7th Environment Action Programme, Decision of the European Parliament and of the Council on a general union Environment Action Programme to 2020 (2013), Living Well, Within the Limits of Our Planet, Strasbourg, available at http://ec.europa.eu/ environment/newprg/pdf/PE00064_en.pdf (last accessed on 02–06–2019).

110  Patent Law, Diffusion of Green Technology 58 Hammar, Henrik, and Löfgren, Aasa (2010), Explaining Adoption of End of Pipe Solutions and Clean Technologies—Determinants of Firms’ Investments for Reducing Emissions to Air in Four Sectors in Sweden, Energy Policy, Vol. 38, No. 7, 34. 59 Copenhagen Economics and The IPR Company (2009), Are IPR a Barrier to the Transfer of Climate Change Technology? Copenhagen, available at http://trade.ec.europa. eu/doclib/docs/2009/february/tradoc_142371.pdf (last accessed on 16–05–2019). 60 See TRIPS and Pharmaceutical Patents, Fact Sheet, World Trade Organization, 2006, available at www.wto.org/english/tratop_e/trips_e/tripsfactsheet_pharma_2006_e.pdf (last accessed on 03–06–2019). 61 Hammar, Henrik, and Löfgren, Aasa (2010), Explaining Adoption of End of Pipe Solutions and Clean Technologies—Determinants of Firms’ Investments for Reducing Emissions to Air in Four Sectors in Sweden, Energy Policy, Vol. 38, No. 7, 35. 62 Gupta, Rishi R. (2012), Compulsory Licensing in TRIPS: Chinese and Indian Comparative Advantage in the Manufacture and Exportation of Green Technologies, Sustainable Development Law & Policy, Vol. 12. 63 OECD (2012), Green Growth and Developing Countries: A  Summary for Policy Makers, OECD, p. 8, available at www.oecd.org/dac/50526354.pdf (last accessed on 03–06–2019). 64 See United Nations (2011), The Road to Rio+20, for a Development-Led Green Economy, Geneva and New York, p. 5, available at http://unctad.org/en/docs/ditcted2011d6_ en.pdf (last accessed on 03–06–2019). 65 Hammar, Henrik, and Löfgren, Aasa (2010), Explaining Adoption of End of Pipe Solutions and Clean Technologies—Determinants of Firms’ Investments for Reducing Emissions to Air in Four Sectors in Sweden, Energy Policy, Vol. 38, No. 7, 37. 66 Ibid., p. 23. 67 Ibid. 68 Ibid., p. 171. 69 Ibid., p. 173. 70 Ibid., p. 175. 71 Supra note 290, p. 14. 72 Avedissian, Grace K. (2002), Global Implications of a Potential U.S. Policy Shift Toward Compulsory Licensing of Medical Inventions in a New Era of “Super-Terrorism,” American University International Law Review, Vol. 18, No. 1, 529. 73 Ibid. 74 Ibid. 75 The World Bank, Data & Statistics: Country Groups. See http://web.worldbank.org/ WBSITE/EXTERNAL/DATASTATISTICS/0 (last accessed on 11–05–2019). 76 Hammar, Henrik, and Löfgren, Aasa (2010), Explaining Adoption of End of Pipe Solutions and Clean Technologies—Determinants of Firms’ Investments for Reducing Emissions to Air in Four Sectors in Sweden, Energy Policy, Vol. 38, No. 7, 173. 77 International Energy Agency, Technology without Borders: Case Studies of Successful Technology Transfer (2001), United Nations Environment Program  & Climate Technology Initiative, 9–10, available at www.iea.org/textbase/nppdf/free/2000/ ctifull2001.pdf (last accessed on 05–06–2019). 78 Ibid. 79 Ibid. 80 Ibid. 81 Jaffe, Adam B., Newell, Richard G., and Stavins, Robert N. (2003), Technological Change and the Environment, Handbook of Environmental Economics, Vol. 1, 461–516.

5 Green Technology Diffusion and the Indian Patent Regime Role of India in Promoting Green Economy and Green Growth

5.1. Introduction India has evolved into a huge technological marketplace in recent years. Both local and foreign stakeholders are attracted to the Indian tech market. As a result, the Indian patent scenario has taken prominent strides, as a large number of tech companies have started filing for patents for protecting their respective technologies. In the context of this book, India, as per the Paris Agreement and other international environmental instruments, is committed to the following goals: (1) the Paris Agreement’s central goal of keeping the global average temperature increase well below 2 °C above pre-industrial levels in this century;1 (2) Pursuit of limiting the rise to 1.5 °C; and (3) Goal 9 (SDGs—Industry, Innovation and Infrastructure) read with Goal 13 (SDGs Climate Action).2 This chapter will mainly focus on the steps taken by India after 2015 to achieve these goals. It will deeply study the relation of economic and patent law factors with these goals. The Make in India initiative launched by the National Democratic Alliance (NDA) government has ignited a pro-development regime in the domestic industrial sector of our country. This movement is primarily aimed at achieving multidimensional expansion of the infrastructure and fine-tuning investment regulations. Rapid industrialization has amplified energy consumption. The current numbers reveal a rate of 4.6%, which is basically a 100% increase in the past one and a half decades. There has been a massive hike in the market need and supply of energy, resulting in an increased dependency of the ecosystem on carbon and other fossil fuels. Our nation only has witnessed an exponential increase in the usage of non-­ renewable sources of energy such as coal and diesel for the purpose of generating electricity and transportation.

DOI: 10.4324/9781003319467-5

112  The Indian Patent Regime The world community is driven by certain purposes. One of them involves the reduction of GHG concentration. The following international agreements have been signed as significant efforts in this direction: (1) The Kyoto Protocol; and (2) The European Union Emission Trading System (EU–ETS). The primary objective of these agreements is to reduce the said concentration and bring it down to the range of 450 to 750 parts per million (ppm). This ambitious goal certainly requires groundbreaking green innovation and adoption of technologies that can create the desired impact. In this endeavor, India has emerged as a prominent player. 5.1.1. Environmental Deterioration and Technology To add to the existing problems, the level of emission of a harmful gas, i.e., carbon dioxide, has increased drastically, particularly in the past couple of decades. The main reason cited behind this growth is the rapid increase in the demand for energy and heavy industrial dependency on carbon. India, quite notably, is now recognized as the world’s fastest-growing environment polluter as far as carbon emissions are concerned. A study released by British Petroleum (under its initiative known as Statistical Review of World Energy) has revealed staggering data. According to that study, the carbon dioxide emission level in India rose 8.1% in the year 2014. India, as far its share on the global scale of emission is concerned, has exhibited the largest piece of pie. The persistent increase in emission levels of carbon dioxide has driven technology giants to innovate and develop technologies that mitigate such emissions and reverse their harmful impact on the environment. Research data has revealed that statutory protection of more than 70% of such green technologies is being demanded by developed economies. This clearly shows that developed countries have an upper hand when development and diffusion of green technologies are concerned. 5.1.2.  Cooperative Patent Classification and Climate Change Mitigation Technologies Patents pertaining to sustainable environment and climate change mitigation cover a vast technological landscape in the contemporary economic order. The various dimensions in which such green technologies are developing make the compartmentalization of such technologies extremely difficult. One viable solution afforded in this direction is the careful revamping of the Cooperative Patent Classification (CPC) scheme in order to make room for patents relating to environmentally sound technologies. Such structural calibration resulted in the newly

The Indian Patent Regime  113 introduced YO2 classification scheme. YO2 primarily focuses on the technologies that are designed to mitigate the GHG emission levels in line with the objectives of the Kyoto Protocol.

5.2. Green Technology in India India now comfortably sits on the status of being an economy at a stage of postdevelopment. Still, innovation and diffusion of green technology are sectors which are at a pre-development stage. India has made enthusiastic commitments to make significant contributions to the global ambition of reducing the level of carbon emissions and achieving environmental sustainability. This has posed a significant challenge to policy-makers. They now need to design a well-planned strategy that enhances the access to and diffusion of green technologies. 5.2.1. Transfer of Technology Transfer of various technologies across borders is one of the main mechanisms for a budding economy like India’s to come in contact with developed nations which are engaged in heavy investments in R&D pertaining to green innovation and green technology. Mainly, two nations in Asia, India and China, have undertaken two methods to enhance transfer of technology. One of them is a conventional method while, the other is an unconventional method. These two methods operate differently. 5.2.1.1. Conventional Method of Technology Transfer This method involves a relatively lower interaction among nations. Therefore, the level of investment and other major efforts of the recipient nation get minimized. The foundation of conventional transfer involves two driving factors: (1) Foreign technology; and (2) Domestic production. In a mechanism where local production is supported by international technology, capital infusion from both sides, i.e., recipient country and foreign investors, comes into play. The magnitude of local production is considerably increased by patent licensing and collaborative ventures. These activities are chiefly operated from the headquarters of a particular multi-national corporation (MNC). Free flow of technology, know-how, technological knowledge, expertise and experience are extremely crucial for achieving sustainable development if the conventional mode of transfer is adopted.

114  The Indian Patent Regime 5.2.1.2. Unconventional Mode of Technology Transfer In contrast to the conventional mode, in the unconventional mode, significantly more investment and efforts are required on the part of the recipient country. This can be accomplished by the following methods: (1) Overseas R&D collaborations; (2) Foreign acquisitions; and (3) High and continued capital infusion. Unconventional modes are rather cumbersome to manage. It is not very easy to integrate knowledge possessed by workers in a firm that is acquired. It is also difficult to internalize an organizational pattern. However, evidence reveals that most developing nations are showing interest in unconventional modes of technology transfer. Even in the area of climate change mitigation technologies, which requires significant research and investment, unconventional modes are highly preferred throughout the world.3 5.2.2. Sectors Exhibiting Growth in Green Technologies In the domain of climate change mitigation or green technologies, both India and China have exhibited exponential development in three major power sectors: (1) wind, (2) solar and (3) electric and hybrid automobiles. 5.2.2.1. Wind Power Sector This sector has been in a zone of fast growth. The main reason behind this burgeoning industry is transfer of efficient technology through both conventional and unconventional modes. In the past four decades, India has emerged as the fifthlargest market in the world in the wind power sector. Technological players and manufacturers based in foreign countries have showed an inclination toward entering Indian markets through either joint ventures or wholly owned subsidiaries. Presently, there are more than 30 producers of wind turbines in the Indian market. But according to a report released by C-WET,4 Suzlon accounts for half of the contribution to the market and has now been identified as the wind energy giant in the Indian market. Particularly, Suzlon has entered into licensing agreements with various offshore suppliers. Some of the acquisitions made by Suzlon include AE-Rotor (blades), Hansen Transmissions (gearboxes) and Repower (off-shore turbines and R&D).5 Suzlon also has successfully entered into fruitful joint ventures with Austrian Elin under which it co-designs wind turbine generators. It came up with a joint endeavor with a giant company, Austrian Elin, to coproduce wind turbines and other wind-based generators. Presently, Suzlon boasts

The Indian Patent Regime  115 state-of-the-art R&D and technological facilities in Germany. It has now accomplished the status of being the fifth-largest turbine manufacturer in the world. Moreover, its high-magnitude investment in promoting R&D at the local level in India is also noteworthy. 5.2.2.2. Solar Power Sector (PV Sector) India’s solar power sector underwent a major transformation in the late 1970s to late 1980s. In this period, a paradigm shift occurred in the public supplyand-demand trends. The shift was from public to private technology. Following a downward-sloping demand graph regarding the solar energy demand from state-controlled or state-owned entities, the producers of solar power made effort to have access to the export market. The current market capture is about threefourths of the total PV output. In the field of adoption of the unconventional technology transfer mode, the popular organization Moser Baer has made its mark. It has entered into agreement with various solar tech companies for technology transfer. Some pertinent overseas R&D endeavors have also been undertaken by Moser Baer. Moser Baer has also partnered intellectually with prominent Indian research institutions such as IIT, Kanpur, the National Chemical Lab and the National Physical Laboratory. Indian companies have engaged in several remarkable endeavors to accelerate the transfer of technology. Some of them are as follows: (1) (2) (3) (4)

Joint ventures; Cross-border cooperation in R&D; Foreign acquisitions; and R&D at the domestic or local level.

As far as licensing is concerned, manufacturers based in India have been widely interested in acquiring crystalline silicon batteries or cells. The regional integration of Indian companies with prominent research organizations has come as a blessing, which has resulted in significant improvement of technology produced at low cost. The procedure of patenting such technologies has also been tuned to cater to the needs of both the innovators and the society. 5.2.2.3. Different Sectors Having Growth Potential In addition to the mentioned industries, Indian companies have launched many other initiatives to propagate the idea of green technologies in various other sectors:6 (1) Agricultural Sector: Contemporary agricultural methods leave a huge impact on the environment. The aim of agriculture-based green technologies is to minimize such impact; (2) Automobile Industry: It is evident from research data that the Indian automobile industry is a major contributor to carbon emission across the world.

116  The Indian Patent Regime

(3) (4) (5) (6) (7) (8)

Implementing green technology in vehicles is basically to achieve minimum or zero emission. Renewable and other sustainable sources of energy are used in vehicles—two-wheelers, four-wheelers and heavy vehicles; Construction Industry: Technology is now being used to construct green buildings according to strict environmental regulations; Health and Medicine: One of the major contributors to pollution is medical waste. Utilization of biodegradable and recyclable products is being promoted in hospitals and other health-care facilities; Water Purification Sector: The multiple-stage water purification process leaves a significant adverse impact on the environment. Therefore, climatefriendly processes to filter seawater are being incorporated; Industrial Sector: The prime aim is the conversion of harmful industrial processes into environmentally-friendly ones, which would ultimately result in a low level of carbon emission; Food Processing Industry: All environmentally harmful processes involved in processing and packaging of food products are now being gradually converted into green processes; Aviation Sector: Continuous development in the field of science and technology has made international air travel and space travel quite easy. Currently, the demand is for renewable sources (i.e., fuel for aircraft), and other green technology has increased in this sector. Giant technological players like Tesla are working in this direction.

5.3. India’s Global Position The ongoing deterioration of the environment across the globe has raised the need for cleaner modes of production. In current times, pollution is not limited to being a by-product of industrial processes. It has now become a grave threat to the human race. Consequently, policy-makers are steering their thought toward the direction of green innovation and green growth. The focus of lawmakers across the globe has undergone a significant transition. Leaders worldwide have gradually realized that the clash between development and climate commitment has to be reconciled as soon as possible. The worldwide demand for environmentally sound technologies is increasing with each passing day. Those economies that are engaged in high-level investment in green innovation and R&D have discovered remarkable opportunities to tap various markets and gain significant power. The issue of environmental degradation and climate change is being technologically dealt with by countries like the US, China and Japan. But the nations which are heavily dependent on fossil fuels and other non-renewable sources of energy production will have to reconsider their stand if they have to sustain it in the global market. Therefore, it is evident that countries undertaking efficient initiatives to compete in the recently begun “green race” are in a strong position to make heavy profits. They are going to capture the market with their innovative green technology by becoming champions of environment protection and sustainable development.

The Indian Patent Regime  117 After all, this is the international climatic goal, and nations which exhibit commitment toward the same will certainly have an upper hand. Green growth has shown a rapid increase in those countries which have acted in a proactive manner and invested in domains like imparting green skills and promoting green consumerism. These countries eventually have an edge in global business. Several methods have been developed to actually measure the level of green development, green innovation and green competitiveness of a country. The adaptability of a country toward climate change mitigation technologies plays a significant role. Data related to technological trading may reveal a country’s competitive status at a global level. When we talk about data, India appears to be in a rather favorable position. It has developed a large industry in the field of low-carbon environmental goods and services (LCEGS). It has also accomplished the third-highest market sales (which is second highest as per the terms of GDP ratio) in Asia of these goods and services. India is showing persistent growth in the area of green innovation. However, the improvement prospects are endless. If the focus were to be put on high-value patented inventions, India seems to be in a position that is fairly neutral and well balanced. Statistical data reveal that about 13% of high-value patents in India are in the field of climate change mitigation technologies.7 This is in consonance with the global average. It is also true that in India’s patent basket, the share of green technology patents is much higher when compared to the world average. The areas in which India has exhibited innovation specialization include carbon sequestration, carbon capture, green buildings, production and processing, water-adaptation technologies etc. It is significant to note that India is leading the world average by four times in the area of water-adaptation technology patents. According to recently published data, the level of water in 91 different reservoirs of the country is at a mere 27% of the total capacity. It is a compelling truth that India is still facing a grave shortage of water.8 Therefore, it is vital that we capitalize on the scientific information and technological know-how that we have created over the years. This innovative knowledge should also be backed by carefully formulated policies. In totality, India has never been a leading inventor in the world. However, its performance in comparison to low- to middle-income countries is much better. To conclude, India cannot be considered a leading player in innovation. However, when compared with other low- to middle-income economies the performance of India has been significantly better. Research data have revealed that India successfully filed 1,140 high-value patent applications relating to green technologies in 2013, while Brazil and South Africa filed 300 and 150, respectively. On the other hand, China filed 16,000 green patent applications, which is extremely impressive. Hence, it can be asserted that the majority of high-value green patents are concentrated in only a few countries.9 It is a statistical truth that almost 60% of the entire world’s green patents are attached to prime innovators such as the US, Japan and South Korea.

118  The Indian Patent Regime In the past 15 years, remarkable growth has been exhibited by giant Asian players such as India and China in the domain of eco-innovation. Empirical evidence suggests that elimination of fossil fuel and carbon subsidies may enhance green innovation. This will certainly give a competitive edge to India in the coming years. India is engaged in global trading of smart grids, bio-fuels and wind energy. If we talk about exports, India’s share of wind energy is about 1.7 times the world average, while its share in smart grids is almost double the world average. However, these are the only two sectors where India seems to be excelling. In totality, India has still not emerged as a giant global exporter. In the year 2013, India only had 2% of global exports, which is significantly less than China’s 13%.10 However, the opportunities for development are endless. Statistically, low-­ carbon exports made by India are shown to have tripled during the period of 2001–2013. With these notable numbers, India certainly has the ability to brace for a significant transition to a green economy. As mentioned earlier, the wind power industry is a major strategic chance in the hands of the Indian government. India boasts a whopping 10 GW of manufacturing capacity through wind turbines. This number is almost triple the local demand for wind energy, which would ultimately lead to the opening of many export doors. In the wind power sector, India faces several global competitors such as European countries. However, India has a significant strategic advantage, as its wind turbines are specifically designed to adapt to slower wind speeds—which distinguishes them from everything else available in the market. In the competing environment, particularly in the domain of green innovation, lower costs of labor provide a remarkable edge to India. The presence of efficient smart-grid technologies in India also extends much competitive benefit. India can also promote innovation in such smart grids to resolve its own efficiency-related issues. Presently, the losses pertaining to transmission and distribution are running quite high. More than 20% of energy is lost across the geographical map. More‑ over, some states have reported losses up to 40%. In this situation, smart-grid technologies may become of great assistance. These technologies can save India from more power shortages and widespread blackouts. Continuous efforts for adoption and diffusion of environmentally-friendly technologies are being undertaken to attract investments from foreign organizations. India’s stand in the field of green development of late has been quite commendable.

5.4. Green Patenting: Current Position and Emerging Trends in India As discussed earlier, India has emerged as a key global player in the field of green innovation and development of climate change mitigation technologies. India has become an active player in the area of green technology and green innovation. However, India still largely depends on foreign companies for acquiring green technologies through licenses, technology transfer, etc. Therefore, domestic capacity building to boost patent applications in the field is required.

The Indian Patent Regime  119 The Indian patent regime, as compared to that of the US, is quite stringent and tedious. The basic reason behind this is the developing process of the economy. If inventions are granted patented easily, excessive monopoly will be the result, which would be in contradiction to the bigger mission of social welfare. Section 3 of the Indian Patents Act, 1970, is formulated to comprehensively calibrate the patenting mechanism. As far as green innovation and protection of green technology through patents are concerned, India has to travel a great distance. As discussed earlier, India has initiated many impressive action plans in the area of green growth and innovation. Still, the position of green innovators in the Indian market remains uncertain and lacks proper protection. The major problem is that a green innovator who is keen to create eco-friendly technology and desires ample reward for his time, effort and money gets discouraged by the level of patent requirement under Indian law. Patent controllers are often not in a position to appreciate the value of a climate change mitigation technology and find themselves in a bind because they keep looking for the “novelty” aspect of the invention. However, it is possible that some inventions may be granted patents and then afterward licensed for the greater public good. But many inventions are overlooked, and innovators do not find the motivation to diffuse such technology in the absence of strong protection. Given the growing nature of the economy, it is important for the policymakers to restructure the patent policy. This is required because a fine balance is needed to be struck between aware consumers who are actively responsible toward the environment and the firms which are conducting activities relating to green innovation and growth. Evidently, the current parent regime is resulting in various impedances in the way of effective development and diffusion of ­environmentally-friendly technology. The situation is that either the patent owners are not happy with the level of protection and nature of right provided to their inventions, or the monopoly created from the patent grant is resulting in soaring prices of the patented technology in the market. Following a comprehensive analysis of the green innovation domains of both India and the US, it has come abundantly clear that these two economies have been consistently exhibiting growth. Both nations have emerged as giants in the area of environment protection and sustainable development. A dichotomous study of innovation and economy has acquired a lot of gravity, as in the current scenario, people are interested in investing their capital in knowledge- and innovation-driven economies. From the perspective of environment protection, the future is apprehended by many scholars as bleak and dire. Therefore, rapid development and dissemination of environmentally sound technologies across booming sectors, namely food processing, industrial production, transportation, electricity generation, agriculture, etc., is significant. India has to make continuous sustainable efforts to enhance green innovation and development. The Indian government may set up an index to quantitatively and qualitatively measure green innovation in the coming decades.

120  The Indian Patent Regime On the other hand, domestic innovators also need a push from the policy-­ makers. This is possible if favorable alterations are incorporated in the current patent regime of India, particularly to promote green innovation. An intellectually stimulated collaboration of influential environmentalists and economists could also be an effective tool to make sure that the Indian endeavor of green innovation is a continued and sustainable one. Data have reflected a positive correlation between the strength of patent protection and the level of green innovation. However, a section of researchers through their work has contended that patent protection in fact becomes a hurdle in the way of swift diffusion of technology. This has certainly created a gray area in which our policy-makers need to brainstorm to come up with a viable regulatory mechanism. Our government has taken efforts to make many technologies available to the domestic stakeholders. This involves licensing, patent leasing, transfer of technology, etc. Still, local initiatives pertaining to innovation have to be supported, and the pace of technology diffusion requires a push to cater to the current needs of a fast-growing green economy. A developing economy like India’s should also have to continuously monitor the needs and requirements in the market relating to green innovation. It should also make sure that the regulatory requirements do not operate against the interest of those industries that still run on traditional sources of energy production. Policy-makers have to calibrate the transition of the Indian innovation regime into a green one, keeping both economic and social interests of the country in mind. It is quite true that in the era of environmental deterioration and heavy funding of R&D pertaining to green technology throughout the globe, India, being one of the largest economies of the world, has to take an effective stand on the issue. Thus, green innovation is, in fact, the future of the Indian economy, as it is of many developed countries which are playing a major role in uplifting the green growth of the world. India has stringent patenting regulations that may operate as a hurdle in the way of notable foreign technological players from entering the Indian market. The conflict between the government’s commitment toward green development and the patent regime has emerged as a significant point of deliberation, which has been addressed in this book. A protectionist regime for innovation certainly motivates investors and innovators to enter the market as they feel secure. Similarly, in a growing economy like India’s, where the patent protection is quite strong, innovators see a lucrative market. In light of the fact that India is one of the major contributors to global carbon emission, it is important that the policy-makers recalibrate the patent regime in line with the current green technological market trends. 5.4.1.  Access to Green Technology and Indian Patent Law Speedy infrastructural development exhibited by India has raised many contentions in the society. It is contended that such a growth rate would certainly have

The Indian Patent Regime  121 an adverse impact on the environment. International partnerships between public and private sectors in the field of technology have been the major objective of the sustainable development initiative launched by the United Nations. In the following period since the Make in India wave, it has been continuously seen and deduced by the policy-makers that facilitating access to green technologies is the only way to significantly reduce the level of carbon emissions. This is mainly because the global focus has shifted toward the manufacturing industry.11 As discussed earlier, transfer of green technologies occurs in India through various recognized modes. Thus, it is crucial for the government to keep pace with the rapidly developing industries if they are to provide access to transferred green technologies. It is also worth mentioning that efficient enforcement of patent regulations is a condition precedent for any innovator to make available their patented invention to India. Climate change mitigation technologies and the patent regime basically stand in a conflicting situation. Therefore, it is extremely vital for the policy-makers to understand the gaps in order to assess the Indian patent regime and its readiness for access and adoption of such technologies. In India, there is a prevalent contention that patents restrict access to green technology. Due to this reason, various stakeholders have come with a recommendation of relaxing or limiting the patent protection for green technologies. The initiative of weakening the patent rights in environmentally-friendly technologies has strengthened after India, under global pressure conditions, created an outlet for phasing out hydro-fluoro-carbons (HFCs) in 2015 to meet the provisions of the Montreal Protocol. It is to be noted that the Montreal Protocol is an international treaty that was signed to eliminate the substances which deplete the ozone layer.12 It was of utmost importance that the shift toward environmentally sound technologies be well tuned and calibrated. The adverse impact of the domestic industry on the environment was strongly felt. Therefore, Indian policy-makers had to introduce certain flexibilities related to the choice of adoption of alternative technologies. Smooth transition from HFCs to economically viable, environmentally sound, energy-efficient and climatefriendly technologies was basically the primary objective of the policy-makers. However, a separate section of stakeholders has posed a question on the incorporated flexibilities. They are fighting in favor of strengthening the patent protection regime in the interest of domestic players. Thus, the debate is far from being concluded. 5.4.2.  Compulsory Licensing and Green Technology Detailed arguments pertaining to compulsory licensing have been extended in the preceding chapter. However, it is important to gain a perspective on the same in relation to the Indian patent regime. Stakeholders such as innovators and patent-holders have shown a negative response to the proposal of compulsory licensing of climate-friendly technologies. Section 84 of the Indian Patents Act, 1970, relates to granting of compulsory licenses. The way

122  The Indian Patent Regime in which the law relating to compulsory licensing operates has been considered a potential deterrent. It is contended that granting a compulsory license in relation to a green technology may reduce future investments and stifle further innovation. Intensive research in the field of green innovation and environmental sustainability plays a pivotal role in enhancing future efforts for accomplishing a greener environment for our upcoming generations. Simultaneously, a robust patent regime is also important to promote economic incentives. After all, it is the guarantee of patent protection and exclusivity that promotes innovative ideas and attracts investments. The concept applies in a similar way to firms and companies engaged in developing climate-friendly technologies. A separate section of industry that has criticized the operation of compulsory licenses of climate-friendly technology has also set up an argument in favor of strong patent protection. It contends that strong patent rights do not operate as a barrier, as a large variety of green technologies is already available in the market. Moreover, the argument that technologies that are granted strong patent protection tend to be more expensive than unprotected technologies has also been refuted. This is supported by a simple explanation that to cure a certain ailment, a specific compound or drug is required. But to reduce the level of emission of harmful gases, there are several other technological options. Setting up an argument against compulsory licensing in relation to ­environmentally-friendly technologies, the stakeholders have asserted various socio-economic factors. They have argued that the cost incurred in permitting the application for compulsory licenses would be much greater than the actual cost involved in the granting of the same. Further, they also pointed out that socio-economic ramification of allowing such licenses in climate-friendly technologies may outweigh the costs that are saved by its issuance. To provide an example, issuing compulsory licenses in favor of climate change mitigation technologies would also attract global political backlash, and India may face unilateral trade sanctions.13 Moreover, it would also repel foreign investors and patent-holders owing to the simple fact that they would opt to keep themselves away from a seemingly “patent-averse” zone. 5.4.3.  Facilitating the Diffusion of Green Technology Any nation adopts new technology because it feels a significant need for the same. India has shown the same trend. India is a signatory to the Kyoto Protocol, Paris Agreement and other prominent international environmental instruments. Consequently, India has initiated the transition of its industrial sector. It has a clear mandate to convert its industry into an environmentally-friendly and sustainable one. Diffusion of climate change mitigation technology throughout is set to occur across the Indian technological landscape. Certain policy actions may be suggested in this regard: (1) Promoting adoption through various economic policies: Many Indian companies lack the financial capacity to acquire green technologies. Thus, promoting diffusion of such technologies through slashing of prices by mode of

The Indian Patent Regime  123

(2)

(3)

(4)

(5)

subsidies can be a viable solution. At the same time, capital investment is also required in order to motivate domestic and foreign innovators; Robust regime to combat carbon emissions: Imposing stringent regulations on industries resulting in high levels of carbon emission will drive them to adopt technologies which play a vital role in reducing carbon levels and other harmful waste. This will also encourage the innovators to make higher standards of eco-innovation available to various industries; Improved compliance of international environmental instruments/standards: As mentioned earlier, India has signed many international agreements focusing on global warming, climate protection and sustainable development. The policy-makers are required to design favorable policies and issue necessary directions to industrial proprietors relating to compliance with environmental regulations. The technological landscape of India has to be revamped in order to maintain the highest standards of environment safeguards; Raising awareness about clean technologies: In India, modernization and industrialization are taking place at an exponential pace. Industries are excessively relying on non-renewable sources of energy. Environmental deterioration is rampant. This combination has become a national and global threat. Thus, it is extremely crucial for our government to disseminate information and knowledge about global warming, climate change and the importance and need of green technologies in the manufacturing and other industrial sectors. The government should also take proactive steps to promote green marketing, green innovation and green consumerism; Fine-tuned patent strategies: The long-running Indian patent system has to undergo a change in order to facilitate rapid diffusion of clean technology. It is true that a practical relationship between patent protection and its impact on diffusion of technology has not been clearly established yet. However, a positive patenting regime may encourage the inventors to invest their capital, energy and time into green innovation and development. Further, monetary incentives couple with exclusivity may also encourage patent owners to innovate in the future as well. It is also important to effectively regulate the operation of such a monopoly in order to ensure that the access to clean technologies does not get limited to a particular section.14

5.4.3.1. Transfer of Technology and Its Nexus With Section 3(d) of the Indian Patents Act, 1970 It is an established fact that the Indian patent system does not permit evergreening of patents. Section 3(d) of the Patents Act operates in the same manner. However, the implementation of the section is majorly observed in the field of pharmaceuticals. The issue is that this section may also cover pertinent green innovations within its ambit. Therefore, many environmentally-friendly technologies may also get hit by its operation. One prevalent factor is that the India Patent Office may object to inventions relating to clean technology even in the most genuine and authentic cases. This

124  The Indian Patent Regime may happen only due to the fact that the interpretive background of this section has been that way. Even after the amendment in 2005, its scope and enforcement are rather ambiguous. This certainly operates against the innovators in emerging domains of technology such as green technology. In the midst of increasing demands for eliminating patent blocks on environmentally sound technologies, a strategic change is required to safeguard the commercial interest of innovators who invest considerable amounts of time, capital and energy in R&D. One solution may be adoption of a pricing regime that involves multiple tiers in which the patent-holders are allowed to sell climate-friendly technology at considerably affordable prices in India. In comparison to pharmaceutical substances, the large magnitude and utilization of green products and technology significantly shrink the risk of ricocheting to economies where they are sold at a high price.15 One more alternative remedy is to modify the system of providing licenses to green technologies along the lines of the telecommunication sector. Providing licenses in relation to standard essential patents to interested stakeholders at fair and reasonable terms may be established as a ground rule. The policy-makers may also ponder establishing centers of innovation, development and diffusion of climate change mitigation technologies. Various modes may be adopted to achieve the same, such as patent pooling and public–private partnerships. In current times, the main aim of the Indian government in the domain of development and dissemination of climate change mitigation technologies is to ensure minimum rift or friction between the pro-environment and pro-patent lobbies of the country. It is firmly established that India has taken giant and impressive leaps in the area of environmentally sound technologies and sustainable development, particularly in Asia. There are a number of climate-friendly regulations that have been launched in the past couple of decades by the Indian government to mitigate the adverse impact of industrial activities on the environment. Some of them are as follows: (1) Stringent and systematic regulation of fuel-based industries; (2) Determination for reducing carbon emission levels; and (3) Rapidly developing clean energy technologies. As far as patenting of environmentally-friendly technology is concerned, India is at an evolutionary stage. The Indian economy is at a growing stage, and it is very important for the policy-makers to modify the patent policy to reach a fine balance between those consumers who are deeply attached to their responsibilities toward the environment and the companies which are involved in green innovation. It is clear that India’s current patenting regime is creating impedance in the way of green technology diffusion due to many compelling factors. It is either that the

The Indian Patent Regime  125 holders of patents relating to green technologies are not happy with the nature of the rights and protection provided to them or the monopoly resulting out of patent is causing the price of such green technologies to soar in the Indian market. In light of this, it is imperative for the Indian policy-makers to carefully design efficacious standards of patent licensing and a separate patent landscaping and granting mechanism for proven green technologies. High magnitude of capital infusion of takes place in the innovation and development of climate change mitigation technologies, and if the innovators are not satisfied with the level of protection, further innovation may get stifled. It is natural for innovators to expect a return for their skills, patience, investment and hard work. The market in India is now being driven by the international trends relating to clean technologies and notable activities in the domain in the last decade. However, it is still imperative for the government to effectively analyze the growing patterns in the Indian economy. This would be extremely helpful in designing the roadmap for a future in which green development will be the core issue across the globe.

5.5. Green Technology: Sector-Wise Study in the Indian Perspective In the era of sustainable development and fight against climate change, the role of green technology in the industrial sector cannot be overlooked. There are various sectors of growth which play a vital role in modern human life. The adoption and implementation of environmentally sound technologies in these sectors has become important to reduce carbon footprints and mitigate negative environmental impact:16 (1) Agricultural Sector: Utilization of green technologies in agricultural processes such as pest management, soil conservation, nutrient management, crop diversification, etc. The prime objective is to minimize the environmental degradation caused by various agricultural methods; (2) Food Processing Sector: We all know that processes involved in food processing result in serious environmental damage. Hence, implementation of technology that reduces such impact and GHG levels is of utmost importance; (3) Potable Water Sector: Multi-level processes involved in water purification and distillation also cause adverse environmental impacts. Using green technology that mitigates such impact is necessary, as water supply is the cornerstone of any social welfare policy regime; (4) Renewable Energy Sector: Many products have been manufactured that ease people’s way of life. Green technologies should be developed and disseminated that harvest energy resources while causing minimum harm to the environment; (5) Automobile Sector: It is clear from research data that one of the major sources of air pollution is poisonous gases emitted by vehicles. All means of

126  The Indian Patent Regime transport in our country are now being made energy efficient by using green technologies; (6) Construction Sector: Indian policy-makers have started promoting the utilization of energy-efficient technologies and construction of green buildings; (7) Health Sector: Pharmaceutical manufacturing is one more process which causes adverse impact on the environment. Implementation of green manufacturing methods is the need of the hour; (8) Information Communication and Technology (ICT) Sector: Building of IT networks causes a lot of environmental deterioration. E-waste is also one of the major global issues. India has mandated the utilization of recyclable and energy-efficient computer goods and appliances; (9) Aviation Sector: Green products and technologies should be used in manufacturing aircrafts and space shuttles; (10) Automation Sector: It is necessary to reduce greenhouse gas emission in the industrial automation sector. Green energy resources and recyclable products should be used. It is therefore seen that various development areas beckon the need of green technology use. That can be possible if green innovation is promoted to suit the need of each development sector. Initiatives, as discussed earlier, have been taken by the Indian government to promote green growth and building a sustainable and green economy. 5.5.1.  Developing Cost-Effective Green Technologies Lately, emphasis has been on developing and disseminating environmentallyfriendly technologies that are economical and cost-effective. As discussed earlier, there are many sectors which leave an adverse impact on the environment and require “greening.” Considering the economic trend, Indian innovators (including scientific institutions and research organizations) have to revamp their stand and come up with cost-effective environmentally-friendly technologies. In research17 conducted in relation to the Kerala economy, various points have been identified which may help policy-makers and innovators to take effective steps in this regard. The main focus of this paper was the building and construction sector. India’s focus has been on the following: (1) Cheap Production of Solar Energy: India has capitalized on the diminishing cost of renewable energy resources and used it as a source of future energy decarbonization. This becomes evident by the numbers. In 2010, India had a total installed solar capacity of 10 MW, which made a tremendous climb of 6,000 MW in 2016. As per recent data, the total installed solar capacity in India stood at 30 GW in March 2019, which is a five-times increase in the past three years.18 Factors like government initiatives, incentive plans, cheap labor, availability of land and availability of key resources contributed to cost-effective production of solar energy;

The Indian Patent Regime  127 (2) Building and Construction Material: India’s infrastructural development plans have made a turn toward environmentally-friendly materials. Building materials, in addition to having functional efficiency, must also be sustainable and result in better quality of environmental conditions. The Building Materials and Technology Promotion Council (BMTPC) has asserted the following qualities of the building and construction sector: (a) utilization of local skills and materials, (b) utilization of renewable resources and benefiting local economies and (c) accessibility and monetary efficiency.19 Therefore, it is required for India to explore opportunities to ensure development of low-cost climate-friendly technologies in other sectors as well. The prime objective is to produce maximum utility with minimum expenditure. One contention arises over whether an innovator who takes pains to come up with an economical green technology for a particular sector will be able to get the same patented in a cost-effective way. As we have discussed about the lengthy and tedious patent-granting process, it would be necessary to examine such technology in a special manner. It again boils down to one factor, i.e., relaxation of the patent regime of India.

5.6. Green Marketing and Patent Regime: Indian Scenario The global business industry is marching toward environmentally-friendly products and services. Proprietors have an instrumental role to play in realizing the climatic goals of the world community. Many global players in diverse businesses are now successfully implementing green marketing practices. Various studies by environmentalists indicate that people are concerned about the environment and are changing their behavior. There have been several attempts on the global level to come down to the actual meaning of the term “green marketing,” but it was found that it has an extremely wide connotation from both an environmental and a commercial perspective. However, businesses, according to their own interpretation, have adopted green marketing as a strategy to do business which is environmentally sound and efficient. Green marketing is a phenomenon which has developed particular importance in the modern market and has emerged as an important concept in India as in other parts of the developing and developed world and is seen as an important strategy of facilitating sustainable development. The American Marketing Association has provided a rather comprehensive definition of green marketing.20 “Green Marketing” refers to holistic marketing concept wherein the production, marketing consumption an disposal of products and services happen in a manner that is less detrimental to the environment with growing awareness about the implications of global warming, non-biodegradable solid waste, harmful impact of pollutants etc., both marketers and consumers are

128  The Indian Patent Regime becoming increasingly sensitive to the need for switch in to green products and services. To add strategic dimension to the term “green marketing,” Martin Charter of 1992 defines it in the following words: “greener marketing is a holistic and responsible strategic management process that identifies, anticipates, satisfies and fulfils stakeholder needs, for reasonable reward, that does not adversely affect human or natural environmental well-being.” According to Polonsky (1994),21 green marketing involves activities that are framed to produce, promote and facilitate any trades aimed at meeting pressing human needs or wants. It is to be ensured at the same time that satisfaction of such needs causes minimum adverse effect on the ecosystem and climate. 5.6.1.  Genesis of Green Marketing The very idea of environmental or green marketing evolved in the 1980s in the US and various European countries. The growth in this sector has been continuous. The concept is acquiring tremendous popularity across the globe, as the issue of climate change and environmental deterioration is a burning one. It came into being due to the consistently depleting environmental quality owing to rapidly increasing industrialization across the world. Industrial outfits throughout the world have taken steps to contribute to the global objective of environmental sustainability. One major role played by green marketing is that it helps to reduce the negative impact on the environment by raising the demand in the public for green products and services. On the other hand, the transitioning approach of consumers and their increasing sense of environmental responsibility is playing a vital role in the continuous evolution of green markets across the world and in India.22 The concept not only satisfies the demands of the modern consumer but also backs the future prospects of the process of sustainable development. The persistent growth of environment-friendly technology market has unlocked many business opportunities for green entrepreneurs. Innovation and product development are the important driving factors of entrepreneurship and are also embedded in the concept of green marketing. Green marketing was given dominance after the proceedings of the first workshop on ecological marketing held in Austin, Texas, in 1975. The workshop released the first book on green marketing, entitled Ecological Marketing. 5.6.2.  Phases of Green Marketing According to Peattie (2001), the evolution of green marketing has three phases: (1) First phase (“ecological” marketing), where all market-related operations target environment problems and provide remedies for environmental problems; (2) Second phase (“environmental” marketing), where the prime focus moves in the direction of green technology that includes the production of innovative

The Indian Patent Regime  129 products which mitigate pollution and other waste caused by the industries; designing of innovative new products, which take care of pollution and waste issues; (3) Third phase (“sustainable” marketing), which came into prominence in the late 1990s and early 2000s. 5.6.2.1. Origin of Green Companies and Green Business With the proactive approach of governments of various countries, national and international companies have taken many initiatives in the same direction. The most common measures taken by green companies are as follows: (1) (2) (3) (4)

Producing environmentally-friendly products; Conservation of energy, water and natural resources; Climate protection; Providing assistance for the development of the underprivileged people.

5.6.2.1.1.  SALIENT FEATURES OF GREEN COMPANIES

(1) (2) (3) (4) (5)

Electricity generation from hydroelectric plants; Use of natural gas for boiler fuel; Reduce toxic effluents and emissions; Use of renewable sources of energy; Recycling of biodegradable waste.

5.6.2.2. Reasons Behind Increased Green Activities There are several reasons in the increased activity in commercial industry in the area of green marketing. They can be summed up as follows: (1) Perception of companies that green marketing can help achieve their objectives; (2) Companies find themselves morally obligated and socially responsible; (3) Government is encouraging business and industry to become more accountable; (4) Environmental activities among competitors ensure green competition in the market; and (5) Cost factors involved in waste management force companies to modify their strategies. 5.6.2.3. Green Entrepreneurs Green or environmental entrepreneurs are those who are engaged in start-ups which contribute to the betterment of the environment and are in line with the global goal of sustainable development.

130  The Indian Patent Regime The phrase “green entrepreneur” was introduced by a scholar based in Goizueta Business School, Emory University, Terry Clark.23 Green entrepreneurs are mainly concerned with incorporating ­environmentallyfriendly innovations and processes. They are ones who are considered socioeconomically responsible. This way of doing business has acquired popularity in current times as the world community has made the promotion of ­environmentally-friendly businesses the prime target.24 The very theory of green entrepreneurship emanates from the following climate concerns: (1) (2) (3) (4)

Different forms of pollution; Global warming and climate change; Increasing deficiency of natural resources; and Other damage caused to the ecosystem.

The current trend reveals that awareness regarding the environment and climate change has increased significantly. People are becoming more sensitive to the needs of today in relation to environmental protection. These factors also play a vital role in changing consumer behavior and consumption patterns. Now, consumers worldwide are moving toward green products and services.25 The evolution of green entrepreneurs has been a boon for the society as they work on innovation in a manner which is socially beneficial, sustainable and inspiring. 5.6.2.4. Green Products A product is green when it is climate and energy efficient and can be marketed in a green market. These products are manufactured in a way so that they leave minimum impact on the environment and still remain with recyclable content after they have been put to use by consumers. We can attach certain characteristics to green products: (1) They are energy efficient and flexible and are known to have low maintenance needs; (2) They are devoid of any chemicals that can damage the ozone layer and do not result in any poisonous by-products; (3) They are manufactured out of recycled and biodegradable substances or even renewable sources; (4) They are mainly obtained from domestic manufacturers and local resources; and (5) They are easily biodegradable either wholly or partially. For a loyal green consumer, locating an authentic green product is quite a difficult task due to excessive piracy in the market. There are several renowned and trustworthy international certification agencies that assure the green nature of a

The Indian Patent Regime  131 product through their certification. Some of these agencies are Energy Star, Green Seal, Forest Stewardship Council, Leadership in Energy and Environmental Design (LEED), US Department of Agriculture (USDA) etc. Environmentally-friendly products are now being mainstreamed into the marketplace. These products are demanded in all social domains such as residential, vehicles, food products, etc.—everywhere more environmentally sustainable alternatives are available. It is ultimately our responsibility to analyze our options and measure the pertinence of such green products in our lifestyle. One should make sure to be fully informed and aware prior to making the purchase.26 5.6.3.  Green Marketing: Current Trends in India India, in recent times, has become a prominent market for the rapid development of green business and green marketing. The progressive evolution of the relationship between government and corporate houses has made it possible for the Indian market to compete in the leagues of global sustainable development paradigms. It has been detected by the Bureau of Energy Efficiency that the retail industry has an extremely high potential of emerging into an energy-efficient one. The central government, on the other hand, is planning a robust strategy to calibrate the national energy demand by enforcing stringent regulations on the corporate entities so that they modify their manufacturing patterns in the interest of future generations.27 According to Shubhadra Saini, in India, retailers enjoying dominant market power are not inclined toward prioritizing green activities in their trading regimes. It is the condition when there is a possibility of 20% to 25% reduction in costs if green practices are adapted across retailing stores of the country.28 There are some lucrative and eco-friendly business ideas that have attracted the attention of Indian business proprietors: (1) Organic Food Products: The newly evolving entrepreneurial ventures can assist farmers and consumers in the process of recycling. The wide gap between consumers and farmers has been heavily misused by the middlemen. It is now time to eliminate this gap. Movements like FDI and Make in India have revolutionized Indian businesses;29 (2) Waste Management: Processes are incorporated to transform industrial and other kinds of waste into useful products such as manure, seeds, etc. Plastic waste can also be recycled to obtain various useful materials;30 (3) Organic Fashion and Clothing: Emerging fashion designers are now engaged in using recycled materials in designing clothing. Earlier, the cloth used to be disposed of after a single use. Other fashion ornaments and accessories are also manufactured by using easily biodegradable and recyclable material without compromising the product’s organic value;31 (4) Manually Produced Organic Goods: There may be many small-scale enterprises which can commence their business with minimum investment in raw material, labor force and machinery. The only condition is that it should be

132  The Indian Patent Regime well planned. The demand for organic products like soaps, cosmetics etc. in the market today is huge. Therefore, a well-structured investment in this area has the potential of bringing high profits coupled with socio-environmental benefits.32 Marketers have the responsibility to instill in consumers the sense of environmental responsibility and the benefits of using green products and services. This will play a vital role in building a greener ecosystem. The concept of green marketing has become even more pivotal in India, a speedily developing economy.33 5.6.4.  Steps Taken by Indian Companies in the Field of Green Marketing In a rapidly developing economy where industrialization is happening at a quick pace, various Indian companies and multi-national companies operating from India have taken environmentally responsible initiatives which are innovative and praiseworthy. In the contemporary scenario of green marketing and green competition in India, companies are coming up with new products to contribute their part to the international goal of sustainable development. These measures not only are beneficial for the continuously depleting environmental condition but also generate employment and help in uplifting the rural and underprivileged sections of the country. Some notable initiatives are as follows: (1) New Surf Excel that produces lesser froth but is as effective as before, thus reducing water consumption; (2) Badarpur Thermal Power station of NTPC in Delhi is devising ways to utilize coal ash, which has been a major source of air and water pollution; (3) The refrigerator industry has shifted from chlorofluorocarbon (CFC) gases to environmentally-friendly gases; (4) The Supreme Court of India forced a change to alternative fuels. In 2002, a directive was issued to completely adopt CNG in all public transport systems to curb pollution; (5) There are certain companies in India that have received clearance to carry out specifically structured projects in order to extract advantage from carbon trading (Kyoto Protocol). These companies are HLL, Jindal Steel, Tata Steel, Gujrat Flurochemicals Ltd. and Essar Power; (6) The Hewlett-Packard Company announced plans to deliver energy-efficient products and services and institute energy-efficient operating practices in its facilities worldwide; (7) A company in India by the name Atlas Copco has claimed that it uses environmentally safe compressor disposal practices. It is said to include a certain process that eliminates oil from water that is discharged into the rivers;

The Indian Patent Regime  133 (8) E-commerce business and office supply company Shoplet offers a web tool that allows users to replace similar items in their shopping carts with greener products. 5.6.4.1. Indian Tobacco Company (ITC): The Pioneer of Green Development in India The measures taken by ITC in various areas are laudable. They have emerged as a major proponent of green marketing in India while exhibiting global standards in their activities. Some of these efforts are as follows:34 (1) ITC’s Social and Farm Forestry initiative has greened over 80,000 hectares, creating an estimated 35 million person-days of employment among the disadvantaged; (2) ITC’s Watershed Development Initiative brings precious water to nearly 35,000 hectares of dry land and moisture-stressed areas; (3) ITC’s Sustainable Community Development initiatives include empowerment of women, supplementary education and integrated animal husbandry programs; (4) ITC’s Bhadrachalam paper unit has invested in Rs. 500 crore in technology that makes the unit chlorine free; (5) All environment, health and safety management systems in ITC conform to the best international standards.

5.7. Patent Law, Technology Transfer and Green Marketing Technology, today, is the cornerstone of all the climate change debates. It is claimed to play a vital role in addressing and dealing with global challenges like climate change and environmental degradation. The contemporary global economy is primarily focused on sustainable development, and green growth and technology are of utmost importance. The pertinence of an effective patent system also became the point of focus amid the deliberations on climate change and transfer of technology. The core technology that should be disseminated either is not easily accessible or has little technical value. New mechanisms for collaborative innovation have been introduced to the green technology sector. Access and timely diffusion of green technologies required for adaptation and mitigation constitute one of the major challenges faced by the international community. With innovations coming to the fore rapidly, patent law has a major role to play, as green entrepreneurs are equally diligent about their business monopolies. Opening the market for green technology and green innovation is a giant step that the Indian government has taken. Many big companies have entered the competition of producing environmentally-friendly technologies, which has given a considerable boost to the green economy.

134  The Indian Patent Regime Green technology innovation and its transfer are a key component of the fight against climate change and adaptation to and mitigation of its harmful effects.35 Since the United Nations Framework Convention on Climate Change (UNFCCC) Bali meeting in 2007, the role of the patent system has been the subject of increased attention in climate change discussions on technology transfer. The potential of patent regimes to enhance green innovation and promote large scale dissemination of green technologies across global frontiers is still to be measured through various tools. Any patent system is purely based on maintaining the balance between public welfare and private interests. 5.7.1.  Indian Patent Regime and Green Marketing India’s strict patent regime gives rise to the argument that it acts as a barrier to mobilization of green marketing and green technology. In India, obtaining a patent for an invention is a very lengthy process which subsequently makes the proprietors use the monopoly granted to them in a limited manner at high cost. Therefore, the companies entering India with their environmentally sound technologies (ESTs) are reluctant to relinquish their monopoly over their innovation. On the other hand, it is also considered that a sane and strong IPR protection of technology boosts innovation and works as a powerful incentive. The task of reconciling these two viewpoints depends on the demand of the economy, and when we are talking about green technology, it very much depends on the climatic needs of a nation. Agenda 2136 has chalked out a very efficient plan for the transfer and diffusion of green technology for developing countries like India. 5.7.2. India and Technology Transfer The creation or absorption of new technology has become a vital component for companies to improve or maintain their competitive position in the marketplace. Foreign companies are also showing an avid interest in India for trade in technologies and services, as a result of which intellectual property rights issues have gained significant importance. The continuing merger of local and international markets through persistent deregulation and liberalization of markets has had the following impacts: (1) Increased the competitive pressure among firms; (2) Enhanced the technological needs and requirements of small enterprises throughout the globe; and (3) Increased the demand of such enterprises for improvement of their access to newly emerging technologies and capital goods. While investing in technology creation may be expensive and risky, as there are many uncertainties linked to the innovation process, it has the advantage of preventing technological dependence on other companies and enables the company

The Indian Patent Regime  135 to enhance its technological capability and to innovate according to its own specific needs. Companies have to decide whether to develop technology in-house or to obtain it from others. Striking a balance between the intellectual property rights of green entrepreneurs and environmental sustainability is quite a challenge. Green marketers across the globe spend a considerable amount on research and development. It is fair that they receive a commensurate reward for creating environmentallyfriendly technology. On the other hand, it is also important that developing and least developed countries moving toward greener markets get economically feasible access to such technologies. The correlation between technology transfer and the Indian patent regime can be summarized as follows: (1) Under the Patents Act, the creation of any interest in a patent, including an assignment or license, is not valid unless it is reduced to writing in a document embodying all the terms and conditions governing the rights and obligations between the parties and an application for registration of such document is filed with the Controller of the Patents; (2) A robust regime of patent protection usually motivates patenting. However, it is still ambiguous whether a gradual growth in patenting projects enhanced underlying innovation or increased utilization of patents as a strategic tool. Protection of patents may also result in reorientation of research activities in favor of applied and patentable research. However, it may have a potentially adverse impact on the creation of groundbreaking innovation;37 (3) Stringent patent enforcement encourages imports and FDI but has little effect on technology transfer in low-income countries. Cross-border licensing and marketing of green technology still have to find their way in India in the presence of its strong patent enforcement regime. However, given the current economic development of India and its resolute dedication toward green development, diffusion of clean technology doesn’t seem to be an extremely difficult task. 5.7.3.  Patenting and Green Market Strategy in India It is to be understood that green marketers are mobilizing their trade at a rapid pace, and green competition in the Indian market is increasing consistently. At the same time, innovators of green technology and green products, especially in an atmosphere of intense competition, are vying for patents in order to exercise monopolies in the market. Companies that possess green technology are basically focused on their strategy and process of patent filing. They are also motivated to build an impressive patent portfolio. They use their patent status to gain access to technology which is meant for a particular market. In the case of a new technology, there may be many dimensions of that technology that are still at a nascent stage and even unproven,

136  The Indian Patent Regime and that may result in a significant degree of political and financial risk compared to investments in relatively mature technologies.38 Indeed, substantial innovation in green technologies takes place in young, startup companies, which are often characterized by large intangible assets, negative cash flow, technological uncertainty and low liquidation value. While the Indian government can play an important role in encouraging green technology growth, the flow of non-government capital into green technology is critical to the success of the industry. In addition to providing subsidies, tax credits, and legislation that encourage investment in green technologies, the government can encourage the growth of and public access to green technology through the patent system. Robust patent protection for green technologies will lead to increased private investment, the creation of green jobs and the ongoing progress of green technology.39 It is evident that there are numerous ways in which green marketing and green growth can be promoted. The core issue is the dedication of stakeholders toward environmental protection and sustainability. The new turn in commercial activities that are focused on mitigating environmental impact has indeed brought in a wave of innovation among the market players. Hence, green patenting has also come to the forefront in current times. Increasing competition among the firms to produce green products in response to green consumerism has accelerated the “green shift,” which, in the short run, appears expensive but, in the long run, is definitely anticipated to have considerably beneficial implications on both climate and economy. It is worth mentioning that India’s commitment toward green growth has motivated Indian companies to invest more capital in green development. At the same time, it is important for us to fine-tune our patent regime to facilitate diffusion and transfer of green technology. The concept of green marketing is at a very infant stage in India. A well-­ conceived partnership between the policy-makers and green marketers is essential to serve the consumers in an efficient manner and contribute to the global goal of sustainable development. 5.7.4.  Patent Pooling and Diffusion of Green Technology A patent pool is a consortium of two or more patent-holders to promote a particular technology and share the market monopoly. A patent pool is popularly categorized as collaboration between two or more enterprises or organizations to license their respective technological patents to each other (termed “cross-licensing”). In other words, it can be asserted that a patent pool is an agreement between organizations to make their patents available to each other or to an outside party in order to facilitate the utilization of a required patent.40 Patent pools can also be categorized as a mutual agreement between multiple patent proprietors who consensually license one or more patents to each other or any outside party. On many occasions, patent pools pertain to complex

The Indian Patent Regime  137 technologies, because these technologies need various other complimentary patents in order to be worked appropriately.41 Generally, technologies that are mature and typical are covered under the umbrella of patent pools. Sometimes, patent pools also act as an indicator of various industrial standards. Members of a patent pool are engaged in providing effective technical solutions and services to firms and companies across the world. Patent pools owe their origin and evolution to new technological developments and commercial needs of international technological players. Most technologies require a bundle of patents, and it is quite impossible for the owner to acquire all the patents without infringing on any such technology that is already patented somewhere. It is also a cumbersome task to obtain necessary licenses to that effect. Therefore, patent pools avoid the occurrence of such situations. One more reason behind the emergence of patent pools was to avoid lawsuits that competitors file to keep each other away from their respective technologies. Hence, patent pools also put a check on unnecessary litigation. The concept of patent pooling has emerged as a vital tool in the areas of nanotechnology, biotechnology, pharmaceuticals, clean energy technologies, etc. They are of great use to developing countries like India to attain access to advanced and expensive technologies. However, anti-competitive attributes have been witnessed in developed countries like the US. In the international patent regime, patent pooling is a commercially viable concept. 5.7.4.1. Patent Pools and Anti-Trust: an Analysis Patent pools are “one-stop shop” licensing mechanisms that facilitate access to complex technologies with high levels of patenting activity. However, given that patent pools give rise to long-lasting collaborations between patent-holders, antitrust situations may result if the pro-competitive features of the pool are not unambiguously demarcated. The effect of patent pools on innovation will be favorable (e.g., will alleviate the effects of patent thickets) if the pools are not anti-competitive and fulfil certain pre-decided conditions. Policy tools dealing with such issues are crucial in making sure that patent pools are compatible with the objectives of the patent system (e.g., facilitating access to new and innovative knowledge).42 In the global patent thicket where access to advanced technology is a need for developing nations, patent pools by renowned innovators have become an effective market strategy. This gives rise to the possibility of anti-competitive activities, as the firms coming together to pool their patented technologies in order to disseminate them might engage in certain cartel-like behavior. There have been several cases in various jurisdictions. When there are overlapping patent rights, patent pooling may impede the development of underlying technology by the inventors, as it would amount to infringement of patent. This poses a serious problem in anti-trust law.

138  The Indian Patent Regime If the patentees adopt a cooperative solution and cross-license or pool their patents, they effectuate a horizontal merger of their assets and can perpetuate monopoly pricing. With the strengthening of intellectual property law, patent rights are increasingly blocking the development of new technologies, and support is growing to loosen legal constraints on patent pools.43 The Indian perspective pertaining to antitrust and patent pooling is dealt with the Section 5.7.6.3 of this book. 5.7.4.2. Antitrust and Cross-Licensing Arrangements Cross-licensing is different from patent pooling in operations where firms holding overlapping patent rights mutually execute licenses to gain access to one another’s patented technology. Patentees in the industry often execute royalty-free cross-licenses that create open competition. Sometimes, patentees execute such licenses to shield a bogus patent from litigation, and mutual royalty schemes or other restrictions are incorporated.44 The US 1995 Antitrust Guidelines for the licensing of intellectual property give similar treatment to cross-licensing and patent pools. This conflicting situation among pooling of patents, cross-licensing and fair competition calls for serious regulatory measures. It is extremely important for the policy-makers to address the cartelization which is perpetrated by patent-­ holders in the garb of patent pooling. 5.7.4.3. Dichotomy of Patent Pooling and Green Technologies Like other advanced technologies, clean, green or environmentally-friendly technologies have also become the need of the hour. Many developing countries are striving to gain access to such technologies, as they don’t have sufficient capital to invest in R&D. This poses a challenge to the international patent regime, in which only a few firms in a few developed countries are developing effective green technologies. As per the mandate of UNFCCC, developing countries should also play a vital role in research, development and commercialization of green technologies. It has set up a funding mechanism to achieve this goal, which ultimately helps spread green technology and creates economic spillover effects in developing nations in the form of new jobs, industrialization, service industry development, etc. The history of the patent system has witnessed some high-level patent pools in various domains of technological advancement. Some of the prominent ones are: (1) Pools associated with monopolies such as the Sewing Machine Combination (1856), National Harrow Company (1890), the Motion Picture Patents Company (1908), Davenport Folding Beds (1916) etc.;

The Indian Patent Regime  139 (2) Pools created in response to US government policies such as the Manufacturers Aircraft Association (1917) and the Radio Corporation of America (1919); (3) Recent pools such as the MPEG-2 Patent Portfolio, MPEG-4 (1998), DVD 3C (1998), DVD 6C (1999) etc. 5.7.4.4. Patent Pledges From an environmental point of view, pledging of patents is a mechanism whereby innovators provide their patent royalty-free in the interest of the climate. In the context of environmental innovation, patent pledges are designed as cooperative ventures that allow green technology holders to pledge their patented technologies for widespread free use.45 They simplify access procedures and facilitate the non-exclusive use of materials for non-commercial purposes. Adhesion to such collaborative models requires an intellectual property right, and the pledge is usually subject to certain conditions. The current types of green patent pledges that have been adopted in the past few years usually take the form of community pledges.46 However, they do not yet address issues of product standardization or standardsdevelopment organizations due to the diversity of green technology innovation.47

5.7.4.4.1.  THE ECO-PATENT COMMONS

Perhaps the most glaring development in the field of green technology by way of patent pledging is the Eco-Patent Commons. It’s a consortium of renowned conglomerates which have pledged their patents in environmentally-friendly technologies. A recent development in this field is the non-profit initiative EcoPC. It started in January 2008. A few technological giants came together to launch this initiative. These included Nokia, IBM, Pitney Bowes and Sony. These companies collaborated with the World Business Council for Sustainable Development (WBCSD). The ultimate aim of this initiative was to permit the companies to pledge their patents protecting climate change mitigation technologies.48 “Pledge” in this context means making patents available for use by third parties free of charge.49 The pledge is a legally binding commitment that precludes EcoPC member companies from statutorily enforcing any pledged patent. The right of ownership is left to remain with the pledging party, which distinguishes the EcoPC from other conventional systems of patent commons. This also means that the non-assertion pledge can also be designated as a patent donation, and hence, a pledged patent is not deductible from a company’s taxable income. Patent Pool Distinguished From Patent Pledge: Potential users do not have to specifically request a license; a pledged patent gets licensed automatically without any royalty whatsoever. However, there is one precedent condition: that it must

140  The Indian Patent Regime be used in a product, service or process that extends significant environmental benefits and causes improvement in the climate. The basic distinction between a patent pledge and a patent pool is the presence of royalty, as discussed. In a patent pool, patents are mutually shared among the parties creating the pool. Patent pools are also brought into being to resolve certain technological standards gridlocks. In research conducted over 238 patents,50 it was found that slightly more than 80% of the patents were pledged by mainly four firms: Bosch, DuPont, IBM and Xerox. It was also found that the pledged patents under the Eco-Patent Commons were actually contributing to environmental protection. The Eco-Patent Commons has proved to be a commendable step in diffusion of green technology. However, the efficacy of this endeavor in the long run is yet to be determined. 5.7.4.5. Role of Financial Factors and R&D in Patent Pools It is important to note that private players (innovators) in the market are much concerned about their market cap and intellectual property rights. Also, it is their prerogative to infuse financial resources in their R&D. It is not possible to pledge a patent, i.e., provide a patented technology (eco-friendly) royalty free all the time. Cross-licensing of patents is an initiative taken by innovative firms in order to increase the magnitude of diffusion of technology. However, their motive to earn profits through patent pools cannot be overlooked. Unlike the pharmaceutical sector, where there are no substitute products, in the renewable energy sector, most clean technologies have been running off-patent. Only a few specific improvements in green technologies have been patented, and a great number of competing patents exist, which increases the competition in the market and brings the prices down. It plays a vital role in enhancing the access to clean technologies for those who require it the most: developing countries that are not financially strong enough to afford such technologies and are facing the heavy impact of climate change. It is important to note that firms which are engaged in green innovation run the risk of low returns. The capital that they infuse in the process of innovation and R&D doesn’t bring that much of an efficient return when they finally release their patent in the market by way of patent pools or otherwise, because too many ventures are engaged in the same activity, as the sustainable development movement has gained global acceleration. Economic integration appears necessary to catalyze the international market for renewable energy and clean technologies. This is mainly because there is a clear nexus between patenting and access to green technology. A constructive tie between firms of developed and developing countries will bring about a considerable change in the international technology diffusion scenario. Joint ventures will promote the national capacity to research and produce such technologies without the need of a foreign licensor. In turn, this will increase the number of patent pools in the interest of the environment.

The Indian Patent Regime  141 5.7.5. Patent Pooling and Green Technology in the US With a rapidly growing economy and plenty of innovation, patent pools in the US are also increasing. With the advent of new technology, pooling of patents in various domains of technology has been witnessed across the IPR landscape of the US. Patent pools are an efficient solution to prevent the creation of patent thickets resulting due to overlapping of patents in a particular field. After the proactive approach by the WHO pertaining to patent pools, they have been utilized as policy tools in the field of pharmaceuticals and medication. Since this initiative, patent pools have been formed around the area of diagnostics such as HIV-AIDS, breast cancer etc.51 A perusal of the history of patent pools in the US reveals that a lot of technology has been integrated by many firms via this tool.52 However, evidence relating to patent pooling in the field of environmentally-friendly technologies isn’t significant. 5.7.5.1. Green Innovation in the US The US has always been a global innovator in emerging fields. However, the governments under Presidents Obama and Trump have not been able to produce any satisfactory results in the area of green innovation and green technology. Various researches have attempted to study the reason behind the same. President Obama, during his term, switched to clean energy, and some states, like California, took aggressive measures. But the overall initiative by the various governments remained generally insufficient. Leading American companies hesitated to engage in sectors like wind power, low-energy appliances or even massmarket insulation because direct costs are high and profit margins are extremely uncertain.53 5.7.5.2. Green Patenting in US Firms: Current Trends Extensive research54 on green patenting and development of green technologies by US firms (small and large) has revealed the following notable results: (1) During the period between 2005 and 2009, US–based organizations accounted for 43% of patents in climate change mitigation technologies; (2) Green patents form a much lower percentage of these large firms’ portfolios than the small firms’ portfolios (1.5%, on average, for large firms versus 20% for small firms). Several small firms have patent portfolios that are almost entirely green, which is not the case for any of the large firms. It appears that many small firms are building their businesses around green technologies, while large firms are largely enhancing product lines with green technologies;

142  The Indian Patent Regime (3) Small firms have contributed a lot when it comes to patenting in the areas of fuel cells, solar energy and batteries. Cumulatively, in green technologies, small firms of the US account for 14% of the patents; (4) In green patenting, small firms have exhibited impressive citation metrics. This implies that small firms are engaged in inventing important green technologies, and they tend to file patents only on significant inventions. The study reveals that in the US, small firms are engaged in innovating green technologies as a part of their core business as compared to large firms. 5.7.5.3. Prolific Inventors and Green Entrepreneurs in the US Research has shown that individuals from small firms have had a fairly strong possibility of giving rise to a new wave of entrepreneurialism that is focused on the development and marketing of green technologies and green products. A study of patent trends from 2005 to 2009 revealed that there were 32 individuals who invented five or more green patents with a citation index of 1.0 or higher. Out of these inventors, 35% are now C-level (CEO, CTO, chief scientist) executives at small green firms, and nearly 30% are cofounders of green firms.55 Approximately 80% of the prolific green inventors had previous experience of working in large-scale organizations or advanced government or university-run laboratories. More than 30% had five or more patents for previous employers in non-green technologies. This illustrates the difficulty in training a person at a university to be a green entrepreneur. The factors that drive these individuals toward green technologies are still unclear. However, the findings suggest that it is important to promote a culture of green training and motivating young and dynamic minds to move toward green innovation. 5.7.5.4. Patent Pooling: Contemporary Scenario There isn’t any strong evidence to show that patent pools have been entered into by firms in the field of green technology. According to the study, firms both small and large have been engaged in innovation of technologies which are both green and non-green. However, patent pooling and cross-licensing have not been much explored avenues in the area of green technologies as they have been for other technologies such as DVDs, aircraft, radio technology, etc. It is crucial for the US policy-makers to promote pooling of patents by leading innovation firms in the domain of eco-friendly technologies. The patent regime and green innovation should work in a synergized manner to produce optimum results. The US, being the leader in innovation, should strive for joint efforts in order to enhance global diffusion of green technology through patent pools. Research56 has found a positive correlation between competition and innovation, particularly among patent pools in the US. However, the majority of the

The Indian Patent Regime  143 patent pools were found in the areas of biotechnology, nanotechnology, telecom, pharmaceuticals, etc. There is still a long way to go for the US to become a leading player in the diffusion of green technology through pooling and cross-­licensing of patents. 5.7.6. Patent Pooling and Green Technology in India With the rapid technological advancement and industrialization, patenting in India has also taken a massive leap. Though the Indian patent regime is known to be rigid in its operation, the landscape of patenting in India has opened a new gateway for innovators on both national and global platforms. Patent pooling is an emerging concept in the patenting domain of India. Big innovators have captured the Indian market with great efforts owing to the stringent patent regime in India, and they are often reluctant to pool their technology with competitors in the Indian market. However, the only area where patent pooling is shown to have a noticeable impact in India is in cheap and affordable healthcare facilities. Patent pools in the pharmaceutical industry have also been emerging as a successful business practice. Recently, Aurobindo Pharma Limited (Auro Pharma), a drug manufacturing company based in India, entered into a medicines patent pool (MPP) along with MedChem, a medicine supplier based in New Jersey. This provided the former the access to a patented drug called Gilead, which was incorporated into the pool recently. Currently, Auro Pharma is able to produce and sell the drug Tenofovir throughout the world royalty free.57 5.7.6.1. Green Patenting and Innovation in India According to UNEP and the OECD green indicators,58 India is one of the fastestgrowing green economies in the world. Many technology creators in India are working toward green innovation, and it is important that they receive the support of policy-makers so as to get due return on their investments. Policy-makers should also ensure that such technologies are easily accessed by consumers in order to build a green ecosystem. It is noteworthy that India, being a country at a post-development stage, has taken active measures to access green technology. In the past few years, Indian foreign policy has targeted obtaining licenses to use clean technologies that are innovated in developed nations. It has also been opined that like many countries (e.g., Brazil, Korea, the US etc.), India should also fast-track patent applications pertaining to green technology. In light of the fact that the Indian Patents Act, 1970, is silent as to the operation and execution of patent pools, there is a need for Indian policy-makers to finetune the patent system to make room for patent pooling (both national and crossnational) and diffusion of environmentally-friendly technologies.

144  The Indian Patent Regime 5.7.6.2. Patent Applications Relating to Environmentally-friendly Technologies When we consider BRICS countries and applications filed by them in relation to high-value green patents, the situation is very bleak as far as countries other than China are concerned. Consider, for example, the following graph (Figure 5.1, prepared by the authors on the basis of extracted data): 20000

10000 0

China

India

Brazil

South Africa

Figure 5.1 The Number of High-Value Green Patents Filed by BRICS Nations in the Year 2013

Authors’ Analysis of the Data and Findings (1) China has significant numbers (around 16,000), which shows the amount of innovation taking place there; (2) India’s performance is evidently weak, which has been a major concern throughout this chapter. Moving further, an analysis of statistical data extracted from the official OECD website reveals that India has been a considerably weak player in the past few years in the field of green patenting.59 Figure 5.2 (prepared by the authors on the basis of retrieved data) reflects the patent filed before the PCT during 2013 to 2016:

Figure 5.2  Green Patent Applications Before the PCT During 2013 and 2016

The Indian Patent Regime  145

Authors’ Analysis of the Data and Findings (1) India has been a consistently weak performer during the period of study; (2) China, on the other hand, emerged as the strongest performer of the sample lot in terms of growth; (3) The US has fallen into a slump but still remains a strong performer as far as number of green patent applications is concerned. India’s weak performance (Figures 5.1 and 5.2) can be attributed mainly to two factors: (1) India’s current investment structure is not boosting frontier green innovation; and (2) Indian innovators are not confident about their innovation, as they find it difficult to get their technology patented as per the domestic patent regime due to its tedious nature. In the presence of such conditions, patent pooling may act as a suitable mechanism, as discussed earlier in this chapter. 5.7.6.3. Patents Act, 1970, Competition Act, 2002 and Patent Pooling As far as the Patents Act is concerned, there is no provision that facilitates the creation of patent pools or cross-licensing of patents. However, with the formulation of a policy to that effect, innovators in India would be able to pool their patents and share market monopoly. Hence, government interference in this regard is required. Section 102 of the Patents Act provides for acquisition of patents by the central government in the public interest. However, this provision cannot be interpreted to mean that patent pools can be created under this section by the interference of the government, because that would mean the loss of monopoly of patent-holders. From the point of view of anti-trust, it is possible that some patent pools work in an adverse manner in the market, and thus, there is strict regulation of such agreements under the Competition Act, 2002. It can be perceived as a barrier in the way of the creation of patent pools. Section 3(3) of the Competition Act, 2002, deals with those horizontal agreements between associations or enterprises which (a) directly or indirectly determine the sale prices, (b) limit or control production, supply, technical development, investment or provision of services, (c) share the market, source of production or provision of sources by way of allocation of geographical area of the market, type of goods or services, number of market customers or in any other similar way or (d) directly or indirectly result in bid rigging or collusive bidding. It provides that any such agreement shall be presumed to have an appreciable adverse effect on the market.

146  The Indian Patent Regime The section, however, in its proviso, excludes agreements entered into by way of joint ventures if such agreement increases efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services. Section 3(4), on the other hand, deals with vertical agreements and provides that any agreement amongst enterprises or persons at different levels of the production chain in various markets, in respect of production, supply, distribution, price or trade in goods or provision of services, including (a) tie-in arrangements, (b) exclusive supply agreement, (c) exclusive distribution agreement, (d) refusal to deal or (e) resale price maintenance shall be deemed to have an appreciable adverse effect on competition in India. The confluence of combinations pertaining to IPR and fair competition has been dealt with in Section 3(5) of the Competition Act, 2002. It provides that any license granted with reasonable conditions to exploit the monopoly attached to an IPR would not constitute an anti-competitive agreement. The term “reasonable conditions” may be interpreted to mean that if any licensing arrangement has the effect of adversely affecting the prices, quality or variety of goods and services, the arrangement would fall into the category of anti-­competitive agreement. The Competition Commission of India (CCI) has regarded patent pooling as a restrictive practice which is exclusive of the bundle of rights forming an IPR, as recognized under Section 3(5). Further, the CCI has also identified some situations where patent pools could be deemed anti-competitive. For instance, when two firms pool their patents and agree not to grant licenses to third parties while fixing prices as well, the arrangement shall be considered anti-competitive. In an innovation market, if certain technologies are locked in limited hands and new entrants are strategically isolated from the market, it becomes difficult for third parties to compete. Therefore, in light of the guidelines provided by the CCI, especially in the absence of judicial pronouncements on the matter, it is imperative for the innovators who are engaged in patent pooling practices to ensure that their agreements do not entail antitrust litigation. The role of the judiciary in interpreting the law pertaining to patenting and competition cannot be ignored. The judges have to take up the responsibility to clear ambiguities in the matter so that the practice of patent pools can be used in an ethical and economically and socially beneficial manner. After carrying out a thorough study, the authors found that in the field of patent pooling, cross-licensing and diffusion of green technologies, innovation firms around the globe have become aware of the fact that their investment in developing their technologies must be aligned with globally recognized environmental goals. In other words, innovators cannot afford to relentlessly apply for technologies which are harmful to the global climate. The interface between intellectual property and competition has covered the global commercial market. Thus, the policy-makers and innovators across the globe must work in synergy to make efficient use of the patent thicket that is created in the competitive market. Patent pools must be diligently regulated to yield a pro-competitive impact.

The Indian Patent Regime  147 However, it is also imperative for the major innovative companies around the globe to come together to use the fairly new patent pooling system for developing and disseminating climate-friendly technologies like they have been doing in the sectors of pharmaceuticals, biotechnology, nanotechnology, radiology, etc. 5.7.6.4. Current Trends in India Relating to Patenting and R&D Expenditure We have discussed the cumbersome patenting process in India due to its procedural and patentability requirements. According to a study published by The Indian Express: (1) A staggering ratio of patent applications and patents granted was revealed. Only 37% of patents were granted to foreign residents, and 15% of patents were granted to Indians; (2) In 2017, India’s expenditure on its R&D is much less when compared to other Asian countries such as China and Japan; (3) In 2017, India’s patenting takes a period of 64 months, which is much more than any other country. This is quite a deterrent; (4) In 2016, the number of researchers per million people in India was the smallest, and India is lagging far behind the world leaders. It was also discovered that start-ups in India applying for patents may request fast-tracked or expedited examination of their applications by paying an addition fee of Rs. 8,000. In May of 2019, 512 start-ups had requested such fasttrack examinations, and 453 applications were examined, out of which 151 patents were granted.60 The authors’ central idea is to have an automatic costfree fast-tracking procedure for applications relating to environmentally-friendly technologies. In this scenario, if we talk about patenting of green technologies in India, the situation requires the attention of policy-makers. Simultaneously, boosting research and innovation culture in India in various sectors and especially green technologies is the need of the hour. In the same line, the next section of this chapter focuses specifically on the shortcomings of India’s patent regime in the contemporary scenario where development and diffusion of climate-friendly technologies has become a necessity. 5.7.6.5. Performance of India in the Domain of Intellectual Property Protection According to reports released by the Global Intellectual Property Center (GIPC), US Chamber of Commerce in 2017, 2018 and 2019, Figure 5.3 (prepared by the authors on the basis of retrieved data) depicts India’s changing positions in the past three years.

148  The Indian Patent Regime

Figure 5.3  Trend in India Relating to IP Protection

India’s performance on the International Intellectual Property Index has improved significantly.61 However, experts have shown major concern in several areas which are particularly important for our discussion. In 2017, India secured 43rd position on an index of 45 global economies. One of the major challenges posed to India was that of innovation. According to David Hirchmann, president and CEO of the GIPC, the Indian government needs to work on substantial legislative reforms pertaining to IPR.62 The national IPR policy identifies key gaps in the national regime of India but doesn’t address the issues relating to patenting of biopharmaceuticals and green technologies. In 2018, India ranked 44th out of 50 countries and exhibited a 30% increase in its IP index score. It was contended that the Indian government has to work on creating a more efficient IP environment, particularly in the field of patents.63 As per the latest report of 2019, India’s position improved significantly. India secured 36th position out of 50 global economies. The index was prepared after an analysis of 45 global IP indicators. India showed 36% growth as compared to the growth of 30% in 2018.64 This improvement has mainly resulted from India’s recognition of international standards of copyright protection and provision of incentives for intellectual property. The latest report, however, recorded the following key issues on which India has to frame effective policy: (1) (2) (3) (4)

Patentability requirements not in line with international standards; Lengthy pre-grant opposition proceedings; Limited participation in international IP treaties; No participation in Patent Prosecution Highway (in reference to green technologies); and (5) Inefficient use of compulsory licensing in non-emergency situations. Thus, it is established that Indian patent law is not in an effective position to ensure smooth diffusion of green technology. The discussed factors may also act

The Indian Patent Regime  149 as deterrents for green innovation. Effective solutions have to be sought by the policy-makers in order to achieve a fruitful outcome.

Notes 1 See https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement (last accessed on 26–12–2019). 2 See www.un.org/development/desa/disabilities/envision2030.html (last accessed on 26–12–2019). 3 Lema, Rasmus, and Lema, Adrian (2012), Technology Transfer? The Rise of China and India in Green Technology Sectors, Routledge (Taylor and Francis Group), Innovation and Development, Vol. 2, No. 1, 23–44. 4 For more visit https://niwe.res.in/ (last accessed on 23–07–2019). 5 Ibid. 6 Aithal, P.S. Dr., and Aithal, Shubhrajyotsna (2016), Opportunities  & Challenges for Green Technologies in 21st Century, available at https://mpra.ub.uni-muenchen. de/73661/ (last accessed on 27–06–2019). 7 Srivastav, Sugandha, and Kathuria, Rajat (2018), Green Technology: Can India Win the Race?, available at www.financialexpress.com/opinion/green-technology-canindia-win-the-race/1126192/ (last accessed on 22–06–2019). 8 Ibid. 9 Ibid. 10 Ibid. 11 See www.orfonline.org/research/access-to-green-technology-only-way-to-reduce-tocarbon-emissions-minister/ (last accessed on 30–06–2019). 12 Kumar, Swarup, and Kumar, Jitesh (2016), Easing the Path for Green Tech in India, Life Sciences Intellectual Property Review (LSIPR), available at www.lifesciencesipreview. com/article/easing-the-path-for-green-tech-in-india (last accessed on 12–12–2019). 13 Ibid. 14 Chu, Jonathan M.W.W. (2013), Developing and Diffusing Greentechnologies: The Impact of Intellectual Property Rights and their Justification, available at http://law2. wlu.edu/deptimages/Journal%20of%20Energy,%20Climate,%20and%20the%20 Environm ent/7-Chu.pdf (last accessed on 20–07–2019). 15 https://niwe.res.in/ (last accessed on 23–07–2019). 16 Sreeramana, Aithal, and Shubhrajyotsana, Aithal (2016), Opportunities & Challenges for Green Technology in 21st Century, available at https://mpra.ub.uni-muenchen. de/73661/ (last accessed on 24–05–2019). 17 Singh, Ham O., and Pillai, P.R. Sreemahadevan (2011), Cost Effective Environment Friendly Technology in the Context of Kerala Economy—A Conclusive Review, Civil and Environmental Research, Vol. 1, No. 1 (ISSN: 2224–5790). 18 Visit https://economictimes.indiatimes.com/small-biz/productline/power-generation/ how-india-in-a-short-period-of-time-has-become-the-cheapest-producer-of-solarpower/articleshow/70325301.cms?from=mdr (last accessed on 26–12–2019). 19 Visit www.bmtpc.org/topics.aspx?mid=55&Mid1 = 87 (last accessed on 26–12–2019). 20 “Marketing of products which are presumed to be safe for the environment and have least impact on the environmental conditions.” 21 Polonsky, M.J. (1994), An Introduction to Green Marketing, available at https://escholarship.org/uc/item/49n325b7 22 Sharma, N.K., and Kushwaha, G.S. (2015), Emerging Green Market as an Opportunity for Green Entrepreneurs and Sustainable Development in India, available at www. omicsonline.org/open-access/emerging-green-market-(last accessed on 11–06–2019). 23 Menon, A. (1997), Enviropreneurial Marketing Strategy: The Emergence of Corporate Environmentalism as Market Strategy, Journal of Marketing, Vol. 61, 51–67.

150  The Indian Patent Regime 24 Farinelli, F., Bottini, M., Akkoyunlu, S., and Aern, P. (2011), Green Entrepreneurship: The Missing Link Towards a Greener Economy, ATDF Journal, Vol. 8, 42–48. 25 Sharma, N.K., and Kushwaha, G.S. (2015), Emerging Green Market as an Opportunity for Green Entrepreneurs and Sustainable Development in India, available at www.omicsonline.org/open-access/emerging-green-market-as-an-opportunity-forgreen-entrepreneurs-and-sustainable-development-in-india-2169-026X-1000134. php?aid=56407 (last accessed on 18–06–2019). 26 Speer, Matthew, What Is a Green Product?, available at www.isustainableearth.com/ green-products/what-is-a-green-product (last accessed on 22–06–2019). 27 Start-Ups Are Ready to Rock with Their Eco-friendly Business, available at https:// retail.franchiseindia.com/article/whats-hot/trends/Startups-are-Ready-to-Rock-withTheir-Eco-friendly-Business.a5849/ (last accessed on 26–06–2019). 28 Ibid. 29 Ibid. 30 Ibid. 31 Ibid. 32 Ibid. 33 Nadaf, Yasmin, and Nadaf, Shamshuddin (2014), Green Marketing: Challenges and Strategies for Indian Companies in 21st Century, IMPACT: International Journal of Research in Business Management, Vol. 2, No. 5, 91–104 ((IMPACT: IJRBM) ISSN(E): 2321–886X; ISSN(P): 2347–4572). 34 See www.itcportal.com/sab-saath-badhein/default.html (last accessed on 30–06–2019). 35 Mitigation is about slowing down global warming by reducing the level of greenhouse gases in the atmosphere. Among the many mitigation technologies already on the market are renewable energy sources, such as biofuels, biomass, wind, solar and hydro power; low-carbon building materials; and emerging technologies which aim to capture carbon out of the atmosphere and lock it away. Adaptation involves dealing with the existing or anticipated effects of climate change, particularly in the developing, least developed and small island countries, which are most severely affected. In addition to “soft” technologies, such as crop rotation, hard technologies for adaptation include improved irrigation techniques to cope with drought and new plant varieties which are resistant to drought or to saltwater. See World Intellectual Property Organization (2009), Climate Change: The Technology Challenge, WIPO Magazine, April, available at www.wipo.int/wipo_magazine/en/2009/02/article_0003.html. (last accessed on 02–01–2020). 36 “34.9: A large body of useful technological knowledge lies in the public domain. There is a need for the access of developing countries to such technologies as are not covered by patents or lie in the public domain. Developing countries would also need to have access to the know-how and expertise required for the effective utilization of the aforesaid technologies. 34.10: Consideration must be given to the role of patent protection and intellectual property rights along with an examination of their impact on the access to and transfer of EST, in particular to developing countries, as well as to further exploring efficiently the concept of assured access for developing countries to EST in its relation to proprietary rights with a view to developing effective responses to the needs of developing countries in this area. 34.18. Governments and international organizations should promote, and encourage the private sector to promote, effective modalities for the access and transfer, in particular to developing countries, of ESTs by means of activities, including the following: i. In the case of privately owned technologies, the adoption of the following measures, in particular for developing countries: ii. Enhancement of the access to and transfer of patent protected ESTs in particular to developing countries; iii. Purchase of patents and licences on commercial terms for their transfer to developing countries on non-commercial terms as part of development cooperation for

The Indian Patent Regime  151 sustainable development, taking into account the need to protect intellectual property rights; iv. In compliance with and under the specific circumstances recognized by the relevant international conventions adhered to by States, the undertaking of measures to prevent the abuse of intellectual property rights, including rules with respect to their acquisition through compulsory licensing, with the provision of equitable and adequate compensation.” 37 Hall, Bronwyn H., and Helmers, Christian (2010), The Role of Patent Protection in (Clean/Green) Technology Transfer, National Bureau of Economic Research (NBER) Working Paper Series, p. 28, available at www.nber.org/papers/w16323 (last accessed on 14–07–2019). 38 Gattari, Patrick (2013), The Role of Patent Law in Incentivizing Green Technology, North-Western Journal of Technology and Intellectual Property, Vol. 11, No. 2, 6. 39 Ibid. 40 “The agglomeration of intellectual property rights which are the subject of crosslicensing, whether they are transferred directly by patentee to licensee or through some medium, such as a joint venture, set up specifically to administer the patent pool.” See Klein, Joel I. (1997), Cross-Licensing and Antitrust Law, American Intellectual Property Law Association, May 2, available at www.justice.gov/atr/public/speeches/1118. htm (last accessed on 21–07–2019). 41 Patent Pools and Anti-Trust A Comparative Analysis (2014), prepared by WIPO Secretariat, March, available at www.wipo.int/export/sites/www/ip-competition/en/studies/ patent_pools_report.pdf (last accessed on 05–07–2019). 42 Ibid. 43 Heller, Michael A., and Eisenberg, Rebecca S. (1998), Can Patents Deter Innovation?, The Anti-commons in Biomedical Research Science, Vol. 280, 698, 700; Merges, Robert P. (1996), Contracting into Liability Rules: Intellectual Property Rights and Collective Rights Organizations, California Law Review, Vol. 84, 1293, 1355–1358. 44 See, e.g., United States v. Singer Mfg. Co., 374 U.S. 174, 178 n. 2 (1963); United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 420 (1956) (Warren, J., dissenting); see also Klein DVD Letter, supra note 66. In the diaper industry, Kimberly Clark and Procter & Gamble entered into a cross-licensing arrangement after seven years of litigation once it became clear that Procter & Gamble’s patents were at risk because of the litigation. Through the cross-licensing scheme, the firms were able to extract double royalties from other diaper manufacturers. See Parker-Pope, Tara (1999), Cleaning Up: Stopping Diaper Leaks Can Be Nasty Business, P&G Shows Its Rivals, The Wall Street Journal, April 5, at Al. 45 See Cannady, Cynthia, Access to Climate Change Technology by Developing Countries: A  Practical Strategy, International Centre for Trade and Sustainable Development, available at http://ictsd.org/downloads/2009/11/access-to-climate-change-technologyby-developing-countries-cannady.pdf (last accessed on 14–05–2018). 46 Patent pledges are usually divided into two principal categories: community pledges and unilateral pledges. Community pledges are made by members of a specific group, according to some predetermined form or formula, with respect to a defined technology or set of patents. Unlike community patent pledges, unilateral pledges are made by firms independently and do not follow a pre-determined format. Contreras, Jorge L. (2015), Patent Pledges, Arizona State Law Journal, available at http://papers.ssrn.com/ sol3/papers.cfm?abstract_id=2525947, at 15 (last accessed on 14–05–2018). 47 Green technology is marked by its diversity but unified by its purpose to benefit the environment and mitigate climate change. It includes various categories and sub-categories: renewable energy generation technologies such as solar, wind, hydro, wave and tidal, geothermal and biofuels; energy storage technologies such as fuel cells and advanced batteries; transportation technologies such as hybrid and electric vehicles; energy infrastructure technologies including smart grids, energy-efficient power

152  The Indian Patent Regime systems, building materials and lighting technologies, bio-based plastics and other materials, water filtration and desalination systems; technologies that reduce pollution and emissions; and even carbon trading schemes and other green policies and investment mechanisms. See Lane, Eric L. (2011), Clean Tech Intellectual Property: EcoMarks, Green Patents, and Green Innovation, Oxford University Press, Oxford, at 1. 48 Hall, Bronwyn H., and Helmers, Christian (2013), Innovation and Diffusion of Clean/ Green Technology: Can Patent Commons Help?, Journal of Environmental Economics and Management, Vol. 66, 33–51. 49 According to the “Ground Rules,” www.wbcsd.org/web/projects/ecopatent/EcoPatent GroundRules.pdf), “any worldwide counterparts” to the pledged patent are considered to be subject to the non-assertion pledge, i.e., any equivalents to the pledged patent (last accessed on 10–05–2018). 50 Ibid. 51 The HIV Medicines Patent Pool “ ‘pools’ multiple patents related to HIV medicines in one place, which are then licensed out by the same one entity, in order to cut down on transaction costs for all parties involved. This ‘pooling’ allows more affordable and more adapted versions of patented drugs to be more easily produced as generics, long before their 20-year patent terms run out. Generic competition both brings down prices and helps spur innovation,” Available at www.medicinespatentpool.org (last accessed on 05–01–2020). 52 Lampe, Ryan, and Moser, Petra (2016), Patent Pools, Competition and Innovation— Evidence from 20 US Industries Under the New Deal, The Journal of Law, Economics and Organization, Vol. 32, No. 1, 24, March. 53 Rosenthal, Elizabeth (2011), U.S. Is Falling Behind in the Business Of ‘Green,’ available at www.nytimes.com/2011/06/09/business/09subsidies.html (last accessed on 03–09–2018). 54 Breitzman, Anthony, and Thomas, Patrick (2011), Analysis of Small Business Innovation in Green Technologies, available at www.sba.gov/content/analysis-small-­ business-innovation-green-technologies (last accessed on 03–09–2018). 55 Ibid. 56 Lampe, Ryan, and Moser, Petra (2015), Patent Pools, Competition and Innovation— Evidence from 20 US Industries Under the New Deal, The Journal of Law, Economics and Organization (JLEO), Vol. 32, No. 1. 57 Rastogi, Priyanka Singh and Associates, India: Patent Pool, available at www.mondaq. com/india/x/325602/Patent/Patent+Pool (last accessed on 13–09–2018). 58 See www.oecd.org/env/indicators-modelling-outlooks/green-patents.htm (last accessed on 13-09–2018). 59 Extracted from https://stats.oecd.org/index.aspx?queryid=29068 (last accessed on 14–11–2019). 60 Visit https://economictimes.indiatimes.com/tech/internet/pending-patents-key-to-bridgevast-tech-gap-with-us-china/articleshow/71458600.cms?from=mdr (last accessed on 26–12–2019). 61 The vertical axis is the GIPC’s points scale as per their parameters. The authors have not gone into the depths as to how such score is calculated. 62 See https://economictimes.indiatimes.com/news/economy/indicators/india-ranks-43rdout-of-45-nations-in-ip-environment-report/articleshow/57043325.cms?from=mdr (last accessed on 15–11–2019). 63 See https://economictimes.indiatimes.com/news/economy/indicators/india-ranks-44out-of-50-nations-in-global-ip-index/articleshow/62831661.cms (last accessed on 15–11–2019). 64 See https://economictimes.indiatimes.com/news/economy/indicators/india-jumps-8-placesto-36th-on-international-ip-index/articleshow/67884700.cms?from=mdr (last accessed on 15–11–2019).

6 Cutting-Edge Developments in the Field of Green Innovation and Diffusion of Green Technology

6.1. Movement on International Fronts According to the recently launched Industrial Development Report (IDR), the key to promoting the sustainability of demand-driven industrialization is eco-­ innovation and production of environmentally-friendly products. Major decisions pertaining to global environmental sustainability were taken at a recently concluded conference.1 It is to be noted that the IDR was prepared and developed by the United Nations Industrial Development Organization (UNIDO) in March  2018. Cecilia Ugaz Estrada, Director of the UNIDO Department of Policy Research and Statistics, has opined that improvement and advancement of our living standards significantly contributes to the accomplishment of the Sustainable Development Goals. She further added that advancing innovation levels and paradigm shifts in technology have a twofold effect of providing us with quality goods that are affordable and ensures that the activities are environmentally sustainable.2 In the wake of serious environmental deterioration, climate change and global warming, the continuously developing sector of green technology has hit advanced standards. Innovators across the globe are coming up with groundbreaking inventions to tackle the environmental challenge. The focus of this chapter is to study this remarkable growth by citing a few examples.

6.2. Progressive and Cutting-Edge Green Innovation Globally renowned actor and environmentalist Leonardo DiCaprio has extensively been dealing with the issue of climate change. He has asserted that trends in human activities have to undergo a massive change in order to combat persistent environmental deterioration. His proactive pursuit coupled with international efforts toward sustainable development has given a new flair to the green technology industry. Researchers across countries are investing time, money and energy to come up with innovations that are energy efficient and climate friendly:3 (1) Smartflower: The Smartflower POP is an impressive piece of innovation. It opens up with the first light of the morning and continuously follows the sun. DOI: 10.4324/9781003319467-6

154  Cutting-Edge Developments

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

It is proved to generate more power compared to solar roof panels. Priced at 20,000 pounds, the Smartflower has the ability to fulfil the electricity requirements of a well-insulated house; Living Buildings: The main function of living buildings is to absorb carbon dioxide, heat and even rainwater and further provide insulation. They are also effective in conserving energy and providing habitat to animals in otherwise secluded urban and semi-urban locations; Vertical Farming: It is also called indoor farming, which aims at using the land area efficiently. Because of the continuously increasing world population, total arable farmland has become scarce. In densely populated cities, vertical farming actually plays a major role by eliminating agricultural runoff, reducing water and pesticide usage. It can also be used to produce crops throughout the year. Being an indoor endeavor, it can also be conducted in empty buildings, which are in great numbers in many top cities of the world; Energy-Harvesting Floorboards: These floorboards are designed and developed by engineers at the University of Wisconsin at Madison. They use electro-magnetic induction to generate electricity from footsteps. These floorboards are made out of wooden pulp, which means they are affordable and sustainable; Electricity-Generating Fabric: Designed and developed at Georgia Institute of Technology, this smart fabric is an impressive piece of technological innovation. It is slim and flexible and generates electricity through movements; Edible Biodegradable Alternatives: Considering statistical data released in 2015 that reveals the existence of about 3 trillion plastic pieces in the ocean which are dangerous to the aquatic animals, researchers have developed biodegradable products that are edible to marine life; Extraction of Ocean Pollution: Renowned designers across the globe have taken proactive steps to mitigate ocean pollution by extracting pollutants and using them to create something novel and beneficial. Adidas has developed eco-friendly training shoes and Studio Swine has developed furniture out of waste, while Pharrell Williams has launched a concept-based clothing line; Innovative Turbines: Aesthetically designed and developed by a French company known as NewWind, these turbines (called Tree Vent) are specifically designed to function in low-wind atmosphere. These consist of an array of vertical turbines that actually resemble trees. They are expected to deliver impressive performance in urban areas due to their appearance and space efficiency; Biodegradable Bodies: A novel green design by the name Capsula Mundi acts as a climate-friendly alternative to being buried. In this, the body of the deceased is kept in a biodegradable pod, and a tree is subsequently planted above it. In this way, as the body decomposes, it actually provides nutrients to the tree to grow.

When the topic of green innovation and climate-friendly technology comes up, images of solar-powered production plants, low-emission mechanisms and

Cutting-Edge Developments  155 fuel- and energy-efficient machines start forming up in our mind. In the preceding chapters, we have studied at length the steps taken by various countries to promote such technologies. However, recent developments in the area are much more advanced and impressive.4 (1) 3-D Printer: A  new printer designed by Enrico Dini uses layers of sand instead of ink and can be used to design life-size stone buildings. Dini claims that the processing time of this printer is four times faster than other obsolete and conventional methods. It also offers a reasonable price, and waste production is minimal; (2) Transparent Solar Spray: A Norwegian company by the name EnSol AS has imparted a new definition to Photovoltaic (PV) cells and have completely debunked the idea of PV cells being hefty. EnSol AS have developed an advanced spray-on solar film that consists of metal nano-particles that are deeply embedded in a transparent matrix that immediately converts windows into solar panels automatically. The best quality of the spray is that it is crystal clear so as to allow us to look through our windows; (3) POWERleap: Major green-technology players across the world have looked into outside sources like sun, wind and water while working on generating alternative energy. POWERleap has tapped the energy lying within. It has developed a piezoelectric floor tiling system that converts the energy generated from human foot traffic into electricity. The technology can be applied at many places, including sidewalks and train stations, and can even be used in a residential campus to harness wasted foot energy; (4) Solar Ivy Photovoltaic Leaves: SMIT (Sustainably Minded Interactive Technology) is based in Brooklyn which has developed a system of paper-thin, leaf-shaped solar panels which generate energy while sparkling under the sunlight. These eye-pleasing solar panels consist of a thin-film material put over polyethylene with an attached piezoelectric generator, which gives them a major edge over large PV solar panels; (5) Shoe Generator: Next in line is another groundbreaking innovation: an ecofriendly shoe designed by a researcher belonging to Louisiana Tech University that transforms the footsteps of the person wearing it into electric energy. This remarkable shoe incorporates a modern piezoelectric generator in its sole that does that trick. Walking just got greener with the help of this innovation; (6) Science City Stores: Some innovators at Honggerberg Campus in Switzerland have designed a technologically advanced campus called Science City that harnesses natural heat from the warm months of summer. Thereafter, it pumps the natural heat in the underground and stores it till the winter. Then it pushes the heat to the building to enable it to act as a natural heating system in the colder seasons. There have been eight more significant innovations across the globe which paved a pathway toward a greener future.5 These innovations show us the zeal

156  Cutting-Edge Developments and enthusiasm these green pioneers have toward protecting the environment and ensuring sustainable development: (1) Energy-Generating Soccer Ground: A UK-based company, Pavegen, has built a soccer field in Lagos, Nigeria, that consists of special tiles that capture the kinetic energy generated by the players on the field and transform it into electricity. Pavegen has also installed the same technology (i.e., power-­generating walkways) in London airports and in public squares of Washington, DC; (2) Milk Wardrobe: This innovation hails from Germany, where milk wastage has crossed the mark of 1.9 million tons. Anke Domaske, along with her company, QMilk, is converting the milk waste into natural fibers that are claimed to require only 2 liters of water per kilogram. According to Domaske, production of one cotton T-shirt requires almost 2,700 liters of water; (3) Organic Solar Film: Heliatek, a company based in Germany, has developed a paper-thin and flexible solar panel. The solar panels, when combined with glass or concrete, create a functional mechanism for generating green energy. These solar films can also be recycled; (4) Sea Horse Turbines: Developed by the Okinawa Institute of Science and Technology, Japan, these five-blade turbines generate renewable energy while protecting the Japanese coast from erosion. It is claimed that if these “sea horses” cover 1% of the coast, they can generate power equivalent to ten nuclear power plants; (5) Sugar-Based Bio-Plastic: To combat the adverse effect on the environment of discarded plastic bottles, Dutch scientist Gert-Jan Gruter has come up with an environmentally-friendly sugar-based alternative. It does not require any petrochemicals to function. It cuts carbon dioxide and associated emissions by up to 70% and is totally recyclable; (6) Roads Made of Plastic: A  British company has developed a technology to turn waste plastic into asphalt mix for roads to enhance the strength of the roads. This also saves a lot of government money that goes into road maintenance. This technique is used on many roads in the UK and Bahrain; (7) Green Cargo Sailing: To promote eco-friendly sea transport, French innovation firm Zephyr & Boree has blended conventional sailing with wind energy technology. This is one step further, as we have only been consuming organic products, but Z&B has delivered a green supply chain. It is also claimed that their vessels produce 70% less carbon dioxide emissions than fuel-powered ones; (8) Solar Shops: Lack of access to electricity to local people in Africa has inspired a German start-up to develop modular solar shops that utilize energy from the sun to generate power. These shops can be used for internet access, water purification, refrigeration, printing and copying of documents and even charging mobile phones. Generating power for homes and other buildings using energy-saving resources has taken a new turn in the rapidly growing tech industry. There are green

Cutting-Edge Developments  157 technological innovations that are extremely promising. Like many discussed earlier, some are mentioned here: (1) Solar Paint: This paint was developed by researchers at the Royal Melbourne Institute of Technology. The main characteristic of this impressively innovative paint is that it can produce hydrogen gas from utilizing sunlight and even the moisture present in the air. This paint is all set to be launched for commercial use in the coming years;6 (2) Tesla’s Rooftop Tiles: Brought to market by Elon Musk’s Tesla, these tiles serve as energy generators while being used as an aesthetic addition to home roofs; (3) Plumbing to Harvest Rainwater: The process of moving water from the main source to various functioning facilities takes up a lot of energy, as it involves heavy usage of fossil fuels. Hence, utilization of rainwater does not prove to be eco-friendly. The entire process is not very cost-effective either. The new plumbing method moves the rainwater directly to a tank by means of a catchment area and several pipes. All the user needs to do is install an effective filter in the pipes where the water goes, and the water can be utilized for many household chores. This saves a lot of money and energy;7 (4) Low-Power Exercise Equipment: These days, gyms are extremely popular among the masses. However, the advanced equipment used in gyms takes up a lot of energy and is not environment friendly. New engineering has introduced non-electric and low-power equipment that is climate friendly and energy efficient; (5) LED/CFL Bulbs: These bulbs have become increasingly popular in every household. They are brighter than ordinary fluorescent tubes and filament bulbs. They are also energy efficient and have a longer life.

6.3. Nobel Prize: Recognition of Impact of Innovation on Climate Change In October 2018, the Nobel Prize in Economics was awarded to Dr. William D. Nordhaus and Dr. Paul M. Romer for their impressive research that integrated innovation and climate conditions with economic development. Dr. Nordhaus is the very first scientist to research and develop a quantitative assessment model that demonstrates the complex dynamic between climate and economy. Dr. Romer, on the other hand, had developed a theory which is now widely recognized as the Endogenous Growth Theory. The theory explains how ideas pertaining to different goods require well-designed and specific conditions to ensure progress in a given market.8 While awarding them with the Nobel Prize, the Royal Swedish Academy stated that the research carried out by Dr. Nordhaus and Dr. Romer provides fundamental understanding of the causes and outcomes of climate change technological

158  Cutting-Edge Developments innovation. Their efforts have provided us with possible solutions to the issues of attaining sustainable economic growth across the globe.9 This makes abundantly clear how pertinent green innovation and green economy have become across the globe. This could also motivate other prominent scientists of the world to conduct intensive research in the field. It is certainly a good signal.

6.4. Green Technology Diffusion: The Current Scenario In addition to the preceding chapters, this section deals with certain recent developments in the field of green technology and its diffusion. The global community has started addressing the issue of climate change even more seriously in the past decade. The entire economic regime across the globe, particularly in developing countries, has undergone a paradigm shift. This shift is the direct result of initiatives of both public and private sectors in the fields of eco-innovation and diffusion of green technologies. Persistent environmental deterioration has influenced economic and technological activities across the world. This has been the crux of this book. This part of the chapter deals with the current trends in modern economies pertaining to diffusion of environmentally sound technologies. 6.4.1.  Efforts for Raising Technological Capacities The capacity to absorb and develop green technology, particularly in developing economies, has always been an issue. Firms of these countries have been working on various fronts to get themselves ready for emerging green technologies from developed countries. There are certain policy tools that have been introduced by the governments of countries where rapid industrialization is taking place.10 These are as follows: (1) (2) (3) (4) (5)

Stringent environmental standards and regulations; Carbon pricing and carbon tax; Subsidies in relation to usage of climate change mitigation technologies; Promoting partnerships between public and private sectors; and Channeling funds into green innovation and R&D.

Governments of various developing economies, including India’s, have been working in the direction of gradual diffusion of low-carbon technologies. They are working to enhance the technological capacities of domestic industrial players so that they are in a position to adopt green technologies in their industrial activities. 6.4.2.  Patent Protection and Green Technology Diffusion There is sufficient empirical evidence to show that well-regulated IP protection has the effect of stimulating the development and diffusion of green technologies.

Cutting-Edge Developments  159 Therefore, the following policies pertaining to patents can be extended to developing countries if their IP protection is robust in nature: (1) Licensing of patents; (2) Leasing of patents; and (3) Pledging of patents. This happens because the patent-holder is confident about the protection of his patent rights in the recipient nation. An analysis of patent data (during the period from 1990 to 2005) reveals that the level and strength of IP protection determines the magnitude and speed with which technology diffusion would occur.11 Hence, working in the line of those results, India has extended strong protection to green innovators and their technologies in its territory. However, there are still certain policy gaps that need to be filled. 6.4.3.  Accelerating the Diffusion of Green Technology: A Contemporary Business Outlook In light of recent economic developments across the globe and emergence of various high-level industrial players, increasing the pace of green technology diffusion is a major challenge in front of the policy-makers, particularly in developing economies like India’s. There are certain business-related factors that need to be regulated and moderated accordingly in order to promote the diffusion of green technology from developed to developing and least developed economies:12 (1) The volatility in the business environment and innovation input has to be controlled; (2) Fluctuations in the macroeconomic variables have to be kept in check; (3) Free flow of technical knowledge among the innovators, particularly in the field of eco-innovation, has to be promoted; (4) Obsolete technologies have to be gradually eliminated so that new technologies can emerge; and (5) Efficient utilization of capital investment has to be promoted.

Notes 1 18th Global Development Conference on Science, Technology and Innovation (STI) for Development, held in New Delhi, India. 2 Green Technological Innovation Key to Sustainable Development, available at www. unido.org/news/green-technological-innovation-key-sustainable-development (last accessed on 27–04–2019). 3 Goddard, Gertie (2017), Exciting New Green Technology of the Future, available at www.sciencefocus.com/future-technology/exciting-new-green-technology-of-thefuture/ (last accessed on 30–04–2019).

160  Cutting-Edge Developments 4 6 Inspiring Examples of Ground-Breaking Green Technology, available at https://inhabitat.com/6-inspiring-examples-of-ground-breaking-green-technology/?variation=d (last accessed on 27–04–2019). 5 8 Green-Tech Innovations You Need to Know About, available at www.dw.com/ en/8-green-tech-innovations-you-need-to-know-about/g-41793166 (last accessed on 28–04–2019). 6 Solar Paint Helps Homes Produce Power: Green Technology for 2018, available at http://greenubuntu.com/top-green-innovations-of-2017-new-solar-paint-helps-homesproduce-electricity/ (last accessed on 29–04–2019). 7 Honrubia, Mario (2018), 6 Eco-Friendly Technologies to Help Companies Go Green, available at www.ennomotive.com/eco-friendly-technologies-go-green/ (last accessed on 01–05–2019). 8 Nobel Economics Prize Awarded to William D. Nordhaus, Paul M. Romer, available at www.thehindu.com/news/international/nobel-economics-prize-awarded-to-williamd-nordhaus-paul-m-romer/article25156475.ece?homepage=true (last accessed on 29–04–2019). 9 Ibid. 10 Lybecker, Kristina M., and Sebastian, Lohse (2015), Innovation and Diffusion of Green Technologies: The Role of Intellectual Property and other Enabling Factors, WIPO Global Challenges Report, p. 23, available at https://www.wipo.int/publications/en/ details.jsp?id=3924 (last accessed on 20–01–2020). 11 Ibid. 12 Hotte, Kerstin (2019), How to Accelerate Green Technology Diffusion? Directed Technological Change in the Presence of Coevolving Absorptive Capacity, Sorbonne Pantheon, Bielefeld University, Paris, pp. 61–65.

7 Conclusion

7.1. Findings The pertinent question that was posed in this research was whether patent protection has an impact on the diffusion of green technology. It is concluded that there is a clear impact of IP protection on the diffusion of green technology. However, the nature of the relationship between these two variables was quite difficult to deduce. Whether such protection promotes or impedes the diffusion of green technology was shown to be dependent on the economic standing of the subject jurisdiction. In an economically weak country, the impact of IP protection on the diffusion of green technology was found to be negligible because prominent players in the domain didn’t find any point in investing in such a country where there was neither any competition nor any major monetary benefit. Here, the driving factor was money rather than patent protection. However, a positive correlation was found between the two variables in countries that have a developing economy, like India. Foreign innovators find India a very lucrative market. Therefore, they are inclined toward making their patented green technology available to developing economies. However, they are only in an unambiguous position to do so if they strongly think that the security of their patent is not at risk. Thus, the patent protection regime of the subject country plays an important role in gaining access to climate change mitigation or green technologies. In the course of this book, it has become clear that when it comes to patenting of green technology, the “one-size-fits-all” philosophy fails. There are multiple domains of industrial processes, and the kind of technology required in each domain is different; hence, the process of patenting is also different. For example, a green technology incorporated in the wind sector would be different from one used in the electric vehicle industry. India, being a rapidly developing green economy, has become active in various industrial domains, and hence the requirement of green technology has sufficiently increased. Chapter-wise findings may be summarized as follows:   (1) In comparison to the US and other developed nations, green innovation in India is at an evolving stage. However, in the past two decades, India has exhibited significant growth across various sectors such as renewable DOI: 10.4324/9781003319467-7

162  Conclusion

  (2)

  (3)   (4)   (5)

  (6)   (7)

  (8)   (9)

(10)

energy sources, waste management, agriculture etc. India has formulated numerous policies in furtherance of climate goals; Green skilling of the workforce, igniting green consumerism, generating green employment and promoting green marketing are a few of the steps that must be taken in order to ensure green growth and build a green economy. Policy-makers in India have not shifted their attention toward the same, though there are some Indian business giants like ITC, Tata etc. that have come up with green products; In order to ensure development and diffusion of green technology, law and economics both have vital roles to play. Market-based policy instruments have to be upgraded in addition to the patent regime; Patenting of climate-related technology in a given jurisdiction depends on both the patent regime and the investment structure; The US, China and Japan have high rates of green innovation because of strong inclination of the economy toward R&D coupled with fairly simple patenting regimes. India has been a weak performer due to reasons like lack of R&D, high patent requirements and a tedious grant process; Compulsory licensing as an instrument to ensure dissemination of green technology is found to be ineffective in developed economies. It is because an innovator never wants to forsake his technology involuntarily; Patent examiners are confused about various aspects of green technology, and therefore, they treat a green patent application like any other invention, which has a possibility of getting hit by Section 3 (non-patentable inventions) of the Patents Act, 1970; In the Indian context, pooling of patents relating to climate change mitigation technologies is found to be an effective but untapped mechanism; Non-participation in the patent prosecution highway (PPH), the absence of a fast-tracking program for green patent applications, a lengthy pregrant process and high patentability requirements have put India in a weak position as far as green patenting and diffusion of green technology are concerned; Innovators see a lucrative market in India, but owing to its highly tedious patenting process, they refrain from approaching India with their technology. Innovators also refrain because of lack of absorptive capacity and weak financial policies pertaining to the promotion of green innovation.

7.2. Conclusion We come to the conclusion that the contemporary trend pertaining to green growth and green innovation is improving significantly in India. There are many institutes and organizations that are working in this direction. However, certain policyrelated complexities and gaps between private and public entities are becoming hurdles. India has assumed great environmental responsibility on an international

Conclusion  163 platform which can only be met with a strong policy mechanism and better coordination between public and private sectors. Enhanced access to green technology to ensure environmental protection and sustainability has become pertinent in current times in which climate change is a prime global concern. The objective of this study was to analyze the role of patent law and patent protection in promoting green innovation, green growth and diffusion of green technology, and a special reference was made to the Indian patent regime. A comprehensive study of various pertinent factors such as green patenting, transfer of technology, licensing, patent pledges, fast-tracking programs etc. across the globe provided us with a clear view of development each year in the field of research. We have examined the existing evidence relating two groups of developing economies: (1) emerging economies such as Brazil, India, China and Mexico and (2) less developed countries. It has been found out that strengthening of the IPR protection regime in the first group of countries would probably result in a positive impact on domestic technological development and transfer of climate change mitigation technologies from developed economies. It is true that the correlation between patent protection and environmental technologies is not very strong. This is because patent protection is not aimed at mitigating environmental externalities. It is only an instrument to motivate innovators. Therefore, the dichotomous study of these two variables must be conducted within a specific framework which is designed specifically to address the environmental externalities. It is also true that the ambit of green technologies is quite huge. It contains various technological fields. There cannot be a single patent protection mechanism to cover all those fields. Hence, it becomes much more difficult to study the nexus between patent protection propensity and diffusion of green technology. Such study is also difficult because technological requirements are different for different countries based on their industrial regime, geographical location, developmental stage etc. Hence, it is not possible to develop a single universal system to study the nexus between the two variables. After conducting a study of patent distribution pertaining in various technological domains across the globe, we have not been able to find an unequivocal relation between patenting and diffusion of environmentally-friendly technology. It is difficult to clearly assert the impact of patent protection on green innovation and green technology. It is also important to note that the continuous flow of information plays a pivotal role in technology diffusion and is catalyzed by market-based and other policy instruments. Flexibility of market-based instruments leaves a positive impact on diffusion of green technology. However, research also shows that stringency of policy instruments also acts as a driver for forcing firms and industries to adopt clean technologies. Therefore, it can be fairly adduced that a blend of flexibility and rigidity of environmental regulations and policy instruments can be beneficial for diffusion and adoption of green technologies.

164  Conclusion We also studied the effect of the presence of green consumers and their role in diffusion of clean technology. It was found that strict patentability requirements and high investment in development of green technology are only effective in reducing emissions where the magnitude of green consumers in the market is significantly small. It is also crucial to understand that a persistent increase in the number of ­environmentally-aware consumers in India and across the globe would force policy-makers to make effective changes in patentability requirements, because the conventional patent policy tools would become obsolete and ineffective when it would come to dissemination of environmentally-friendly technology. If India has to compete with countries like the US and the UK in terms of green innovation and development of green technology, then it has to upgrade its public policy relating to patenting and R&D investment. However, hawse have found that India has channeled a lot of investment to promoting green innovation. It has also been established that India is one of the fastest-growing green economies of the world. India is a rapidly growing business market. Therefore, it is important for Indian companies to contribute to the endeavor of green growth. They must adhere to the new global mantra, i.e., “going green,” and must address environment management issues while planning out their business strategies. Training of personnel, thorough research about green practices adopted by competitors in the market and investment planning in green practices, are some of the key elements that top managers must keep in mind. It is important to note that corporations adopt green practices only because of government expectations. This should be an integral part of a company’s business strategy. The inspiration to go green should emerge from within the business. It is the responsibility of the managers to instill innovative instincts and creativity in their organizations’ cultures. Indian companies should dedicate themselves to the goal of climate justice and do their part in producing green products and providing green services. Therefore, determining the level of green consumers in the Indian market would significantly help the policy-makers assess and alter the prevalent patent regime and environmental regulations. As discussed earlier in this book, various state governments have introduced carbon taxes in the past. But it is also necessary to take more steps in the domain of green technology and its adoption and diffusion. In total, India has a long way to go in becoming a leading green economy of the world. Patent protection and green innovation are going to play vital roles in the green development of India. Therefore, concerted policy actions and progressive strategic steps are warranted. Both public and private sectors have to come together to conduct intensive research in the field of environmental sustainability and clean technologies. It is primarily the role of the government to control both supply and demand chains, i.e., to ignite the demand for greener products and services among consumers and encourage producers to come up with such products and services. It is also fair to contend that no green technology or green innovation is a replacement to forests and natural resources. Apart from technology and legal

Conclusion  165 reforms, it is the prime duty of individuals, organizations and governments to increase forest cover and preserve natural resources. It is true that forests are the most powerful, efficient and economic carbon-absorbing/capturing system on the planet. In addition to promoting climate change mitigation, the focus of technologies must also be driven toward natural climate solutions. Somewhere in the ordeal to access fossil fuels, the international focus shifted from forests and other natural climate change mitigation systems. This book is a sincere attempt to thoroughly analyze the anatomy of the Indian economy and patent regimes and their readiness for meeting the global environmental challenges.

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Index

catch-up green innovation 71 Certified Emission Reduction (CER) 93 Clean Development Mechanism (CDM) 93 Clean Energy Patent Growth Index (CEPGI) 31 Community Innovation Survey (CIS) 83 compulsory license 72, 97, 121 Cooperative Patent Classification (CPC) 112 cost-effective green technologies 126 diffusion of climate change mitigation technologies 92 drip irrigation technology 41 Eco-Patent Commons 97 environmentally sound technologies 4, 95 environment management tools 17 fast-tracking program 32, 90 frontier green innovation 60 Global Environment Facility (GEF) 77 Global Nuclear Energy Partnership (GNEP) 29 global technological push 62 Green Channel 94 green economic development 19 green employment 19 green innovation 14 green innovation centers (GICs) 15

green manufacturing 17 green marketing 127 green patenting 118 green skills 18 Green Supply Chain Management (GSCM) 18 Green Technology Pilot Program 31 impact of innovation on climate change 158 Industrial Development Report (IDR) 154 innovation 60 local technology push 61 methane to markets 29 multilateral development banks (MDB) 77 Paris Agreement 111 patent pooling 136 patent prosecution highway (PPH) 5 Relative Technological Advantage (RTA) 86 renewable fuel standards (RFS) 27 tragedy of the anti-commons 4 transfer of technology 113 WIPO GREEN 6