On December 7, the United States Patent and Trademark Office (USPTO) announced a pilot program that would accelerate the examination of “green” technology patent applications.  Eligible patent applications must pertain to inventions that “materially contribute[] to environmental quality, the discovery or development of renewable energy resources, more efficient utilization and conservation of energy resources, or greenhouse gas emission reduction.”  The patent applications must be limited to three or fewer independent claims and 20 or fewer total claims.  Under the pilot program, the first 3,000 such applications submitted with a no-cost petition will be granted special status and given accelerated examination.  The USPTO expects the expedited examination to reduce the patent pendency period by about a year, meaning applications under this program patents will issue in an average of 28-36 months from the date of filing.

Similar programs have been implemented in the United Kingdom and South Korea.  In the UK, patent application examinations will be automatically expedited where an applicant makes a “reasonable assertion” that the invention’s impact will have an environmental benefit.  In South Korea, applications directed towards the minimization of the discharge of pollutants or for inventions that have received funding or authentication for green growth will be examined at “Superspeed.”

The goal of the USPTO’s program is to “accelerate the development and deployment of green technology, create green jobs, and promote U.S. competitiveness” in the green technology sector.

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In their article “The U.S.-China Clean Tech Opportunity,” co-authors Mario Mancuso and Asma Chandani of Akin Gump describe the opportunity for the United States and China to collaborate on clean energy technologies and assess some of the current challenges to a transparent and level-playing field in clean tech trade and investment between the two countries.  In particular, the authors examine the implications of (i) export controls, (ii) enforcement of intellectual property rights and (iii) regulatory barriers and protectionism.  The authors propose concrete steps that the United States and Chinese governments can take to create the framework and conditions for an open, functioning and competitive clean technology market.  Such an approach would lay the foundation for a clean tech future that the world wants and needs and introduce the next constructive chapter in one of the most important bilateral relationships in the world.

The Hon. Mario Mancuso is a partner at Akin Gump Strauss Hauer & Feld, LLP, an international law firm that opened its Beijing office in 2007.  He previously served as a senior U.S. Defense Department official (2005-07) and as U.S. Under Secretary of Commerce (Industry and Security), U.S. Chair of the U.S.-China High Technology and Strategic Trade Working Group, and member of the Committee on Foreign Investment in the United States (2007-09).

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On August 7, 2009, the United States International Trade Commission (ITC) handed down a ruling in a dispute that could have broad repercussions for international trade in clean technology.  The case involves patent infringement allegations by General Electric (GE), the source of about 50% of the new wind capacity in the U.S. and the country’s largest domestic supplier of turbines.  The Commission’s decision may serve as an example of how the United States will continue to protect  intellectual property rights in both domestic and international climate change negotiations, as well as clear further paths for U.S. business to capitalize on the rapidly growing domestic wind energy industry—now the largest in the world.

The case involved Administrative Law Judge Carl Charneski’s determination that certain GE patents were infringed by wind turbines manufactured by Mitsubishi Heavy Industries, Ltd. and Mitsubishi Power Systems Inc.  In the ITC’s investigation, filed in February of 2008 and titled “In the Matter of Certain Variable Speed Wind Turbines and Components Thereof,” GE claimed that Mitsubishi wind turbines infringed patents directed to variable speed wind turbine technology, which allows the speed of a wind turbine’s rotor to vary with wind speeds while continuing to supply a constant current of electricity to a utility grid.

GE uses the technology covered by the patents in question in its 1.5 MW wind turbines, which are intended to provide emissions-free technology at costs lower than other renewable resources-partially closing the competitiveness gap with coal- and natural gas-fueled facilities.  GE  claimed its patents were infringed by Mitsubishi’s 2.4 MW wind turbines, as well as components of such wind turbines.  According to GE’s complaint, Mitsubishi sold its accused 2.4 MW turbines in the U.S. and had received additional “massive” orders for its wind turbines from major U.S. power generation developers.

Patents, Border Measures and the ITC

Section 337 of the Tariff Act of 1930, 19 U.S.C. §1337, makes unlawful any unfair methods of competition and unfair acts, such as patent infringement, in the importation of articles that could destroy or substantially injure an industry in the United States, or prevent the establishment of such an industry, or restrain or monopolize trade and commerce in the United States.  The ITC is an independent administrative agency in which all Section 337 proceedings are initiated and finally decided.  The remedy for a finding by the ITC that a violation of Section 337 has occurred is a general exclusion order, thereby, excluding the infringing articles from entering the United States.  Money damages for such infringement is not an available remedy at the ITC.

Not surprisingly, the ITC is an increasingly popular forum for litigating patent infringement disputes due to the relatively fast disposition of the case, the familiarity of the ITC’s Administrative Law Judges with intellectual property disputes and the formidable remedy of an exclusion order to prevent infringing goods from entering the U.S.

Next Steps

The Initial Decision by Administrative Law Judge Charneski is not a final ruling by the ITC; Mitsubishi will have the opportunity to present post-hearing arguments, as well as appeal the decision to the full ITC Commission.  Finally, the President has the ability to review the decision and could overturn any exclusion of Mitsubishi turbines “for policy reasons.”  One potential policy determination could be the current shortages of key products needed for projects authorized under this spring’s stimulus bill.  That bill contained “Buy American” provisions, which have in some places forced the shelving of projects-including an issue with a GE-produced water filter.  The significant amounts of stimulus money allocated towards energy projects could provide the President with an incentive to remove additional obstacles to such projects, including the ITC decision blocking turbine imports.

Should the decision be upheld, however, it would be a severe blow to Mitsubishi, which was trying to break into the potentially very lucrative American wind energy market.  The U.S., which overtook Germany as the world’s largest wind energy producer, is also laying the ground for even more significant wind energy expansion-billions of dollars set aside in the stimulus will go to improving the transmission grid supporting renewable energy, as well as significant funds in the Department of Energy budget to increase wind energy’s market penetration.

The Commission’s decision may serve as an example of how the United States may seek to protect  intellectual property rights in both domestic and international climate change negotiations, as well as clear further paths for U.S. business to capitalize on the rapidly growing domestic wind energy industry–now the largest in the world.

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An international debate has recently intensified to determine the role, if any, that the transfer of intellectual property rights and technologies may play in current and future international climate change treaties.  Specifically, the transfer of intellectual property rights—patents, copyrights, etc.—directed to low-carbon technologies that can be utilized by countries to meet their greenhouse gas (GHG) reduction targets is an increasingly significant, and contentious, consideration for developed and developing countries. Delegates at the United Nations Framework Convention on Climate Change (UNFCCC) conference in Bonn earlier this year discussed the transfer of intellectual property rights, such as by compulsory licensing.  These issues are expected to be subject to intense negotiation this December at the UNFCCC meeting in Copenhagen. The UNFCCC has begun to formulate and express its long-term visions and goals for clean technology transfer mechanisms. The transfer of intellectual property rights and technologies to combat the effects of climate change necessarily implicates U.S. foreign policy, U.S. climate change policy, and U.S. intellectual property policy.  In recognition of the importance of the technology transfer issues, the U.S. Congress escalated this issue among its legislative priorities and intends to set forth its positions in advance of the Copenhagen meeting. 

On June 10, the House of Representatives passed H.R. 2410, the “Foreign Relations Authorization Act, Fiscal Years 2010 and 2011.”  Section 329 of this legislation is directed to the “Protection of Intellectual Property Rights.”  Its title alone alludes to the stance that the U.S. is expected to take in Copenhagen.  

While not limited exclusively by its language to climate change issues, Section 329 requires the Secretary of State to ensure that the protection in foreign countries of intellectual property rights owned by U.S. persons and U.S. companies is a “significant component” of U.S. foreign policy.  In countries that have been identified as denying adequate protection or market access for intellectual property rights, the Secretary also must ensure that the U.S. diplomatic presence will have sufficient resources:

1. to support enforcement actions in that country against violations of intellectual property rights owned by U.S. persons or companies; and
2. to cooperate with the host country to reform its laws, regulations, practices, and agencies to enable that country to fulfill its obligations with respect to the protection of intellectual property rights. 

The Secretary of State is further authorized to appoint ten intellectual property attachés to serve in U.S. embassies, prioritizing these appointments based on the greatest potential benefit to reduce counterfeit or pirated goods entering into the U.S. market, to protect the intellectual property rights of U.S. owners and their licensees, and to protect the interest of those in the U.S. who are otherwise harmed by intellectual property violations in those countries.  The intellectual property attachés will have other duties and responsibilities, as well, including engaging in public education efforts against counterfeiting and piracy. 

Rep. Rick Larsen (D-WA) sponsored an amendment to H.R. 2410 that was approved unanimously.  Referred to as the “Statement of Policy Regarding Climate Change,” the amendment asserts that “[t]o protect American jobs, spur economic growth and promote a ‘Green Economy,’ it shall be the policy of the United States that, with respect to the [UNFCCC], the President, the Secretary of State and the Permanent Representative of the United States to the United Nations should prevent any weakening of, and ensure robust compliance with and enforcement of, existing international legal requirements [] for the protection of intellectual property rights related to energy or environmental technology,” and lists a variety of technologies, including wind, solar, biomass, clean coal, energy efficiency-related technologies, and others.

Thus, the legislation passed by the House intends to protect the overseas intellectual property rights of U.S.-based owners.  With the UNFCCC investigating means for technology transfer that may be seriously discussed as early as December 2009, the U.S. has made it known that it will ensure that U.S. owners of relevant intellectual property rights will be protected, and, in all likelihood, compensated for any such transfer of rights or technologies. 

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 On Monday, December 1 the U.N. Framework Convention on Climate Change (UNFCCC) commenced in Poznan, Poland.  The conference, if all goes as planned, will lay out a schedule for consensus on a successor to the Kyoto Protocol for agreement by December 2009 in Copenhagen.  While many see an agreement in the near future, many fear that a lack of U.S. support due to the recession and change of administration will hinder an international agreement.

During the first week of discussions, five major issues confronted conference participants:

1. Shared vision.  This issue, which encompasses both emissions reduction targets and the differentiated responsibilities for reaching those targets, has already received significant discussion at the conference, as the working group tasked with long-term cooperative action met on Tuesday, December 2. At that meeting, a number of proposals were issued: the Japanese endorsed a 50% reduction in emissions from 1990 levels by 2020, while the EC suggested a more ambitious 85% decline. The Chinese, while not endorsing a long-term goal, did support a 20-40% reduction by 2020; the Chinese also stressed equity issues, noting the divide between developing and developed country responsibility for historic emissions and pushing for industrialized countries to take dramatic action as a leadership gesture.
2. Tech transfer. Perhaps the most contentious issue at the conference is how to transfer low carbon technologies to developing nations. Strong words leading up to the COP from the Chinese and Indian governments threatening to undermine intellectual property rights and utilize compulsory licensing have laid the foundation for heated discussions during the second week of the conference.
3. Financing.  This issue is shaping up to be another contentious one, as developing countries push for further help in mitigating climate change, as well as adapting to its effects; at the same time, the global economic slowdown makes developed nations less interested in significant outlays of financial aid. Senator John Kerry, an observer at the conference and an ally of President-elect Barack Obama, said “The bottom line is we are not going to be in the position we were two years ago in the short term to do as much technology transfer or economic assistance in terms of transitional issues that might have led other countries to participate.”
4. Adaption.  Many developing countries are pushing for funding not just to prevent further greenhouse gas emission, but also to adapt to the effects of climate change that have already come.
5. Mitigation.  Though significant discussion on this topic is likely, many participants find it unlikely that hard emissions reduction targets will come out of the Poznan conference. So far, only European countries have committed to hard reduction targets, and it is unlikely that many other countries will join them.

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