JTIP Blog

     Underlying the U.S. and global patent systems is the belief that granting a limited monopoly will incentivize innovation. Although climate change comes to mind as a particularly controversial topic, according to PEW Research, six in ten Americans and majorities in other surveyed countries see climate change as a major threat.  Patent filings seemed to reflect that concern as climate change mitigation technology patents more than doubled between 2005 and 2012. However, beginning in 2012, patent filings for climate change mitigation technologies plummeted— down 44% for carbon capture and storage and 29% for clean energy patents. Why, in a world of increased awareness and acceptance of climate change, did the U.S. and global patent systems fail to deliver on the promise that patents were enough to incentivize innovation? 

     There are several potential explanations for the green tech patent drop-off. From a technological perspective, there is some evidence that green tech matured quickly and capped, leaving room only for improvement patents. From a policy perspective, many have argued that continued fossil fuel and carbon subsidies, along with the lack of a carbon pricing system, have disincentivized green energy and made it more difficult to compete. From a global market perspective, did the U.S. and China trade war for independence and dominance over the $300B semiconductor market detract from China, which was the largest patentor of green tech, filing patents in the biotech, chemical, and green tech sectors? What is the solution to reversing the green tech patent drop off? From a legal and patent perspective, I argue that the U.S. and global patent systems need to provide fast-tracking for green tech patent applications and reduced standards.

Patent Filings for Climate Change Mitigation Technology Plummeted 

     As the United States and the rest of the world moved toward embracing technology to remove and reduce carbon emissions, the innovation theorists appeared correct. Worldwide patent filings for climate change mitigation technologies more than doubled between 2005 and 2012. During that period, the growth in the green tech sector was increasing at a faster rate than other technologies. But while technologies in the health, engineering, and information and communication fields continued on their normal trajectories, in 2012 green tech did what few could have anticipated: it defied the innovation push and plummeted. For conservationists and technologists alike, this unexpected nosedive came in the form of a reduction by 44% for carbon capture and storage and 29% for clean energy patents.  Only a few related fields avoided this trend: patents that enable power system integration of climate change mitigation and patents for regulated maritime and air vessels. 

Possible Causes for the Green Tech Patent Drop-Off

     Old technologies are constantly being replaced by new technologies, but in a field that was already heavily digitized (40%) and therefore not needing to be retrofitted, green technology certainly did not appear to be on the verge of a swift exit. There are, however, particular reasons for why green technology patents dropped off. 

Technology Perspective: Green Tech Matured and Capped Quickly

     First, some energy and economic reports noted that some green technology was uniquely susceptible to maturing and capping earlier in the innovation phase. However, the International Energy Agency surveyed 400 technologies to model commercial readiness and reported the opposite: by 2070, still less than 25% of “key technologies the energy sector needs to reach net-zero emissions” will reach maturity, 41% will be in the early adoption stage, 17% in the demonstration stage, and 17% in the prototype stage. In particular, electricity infrastructure and electrification of heavy industry remain the furthest from zero-carbon maturity. 

Policy Perspective: Green Tech Struggling to Compete with Well-Funded Oil and Gas Industries

     A second possible cause for the green technology patent drop-off is that less subsidized renewable technologies struggled to compete against heavily funded fossil fuel industries. A nascent and unsubsidized industry that is not yet commercially viable has a much greater likelihood of extinction compared to subsidized industries that are well-established and commercialized. The U.S. Congressional Research Service reported that between 2009 and 2018, renewables received 19% of research and development funding while fossil energy received 21%. However, both are dwarfed by the $100 billion in subsidies or 29% of the R&D funding that nuclear energy received in that same time period. Nonetheless, the relatively similar percentage of R&D funding of renewables and fossil energy may be misleading, at least according to the International Energy Agency, which notes that despite increased urgency, low-carbon energy R&D is actually “below the levels in the 1980s[.]” 

Market Perspective: China, the leader in Green Tech Patent Filings, Shifting R&D to Win Semiconductor Trade War with U.S.

     A third possible cause for the green technology patent drop-off is less the result of internal U.S. policies, and more the result of external China-U.S. foreign relations. Between 2000-2011, China was leading the global growth in environmentally-related patents with a more than 1,040% increase in applications according to the OECD. Thus, any shifts away from green R&D and patenting would likely be significant. When both the United States and China began to engage in a trade war for greater control over the semiconductor industry, which is the most intensive R&D industry, China doubled down on its plan to invest $118 billion over five years into semiconductors.  This US-China trade war may partly explain why China shifted political energy and funding away from green technology and into semiconductors. 

     Regardless of the initial cause of the shift away from green technology, unlike the U.S., China appears to be on the rebound. Specifically, in 2018-2019, UK commercial law firm EMW reported that China filed 81% of the world’s renewable energy patents, a 28% increase from the year before, compared to the United States, which filed 8% of the world’s renewable energy patents. Additionally, there are some in the semiconductor industry who believe semiconductors can actually play a constructive role in fighting climate change.

How Fast-Tracking Patent Applications for Climate Change Mitigation Technology is the Fastest Way to Reverse This Trend 

     In order for the U.S. to reverse the trend away from needed and important patent applications for climate change mitigation technology, the U.S. should begin by restarting the Green Technology Pilot Program that it once championed to fast-track these technologies. Before the program ended on March 30, 2012, the USPTO accorded special status to 3,500 applications related to environmental quality, energy conservation,  renewable energy development, and greenhouse gas emission reductions. These accelerated examination programs allowed patentees to receive a final disposition within about 12 months. Despite the seemingly premature ending, there remain significant and promising technological inventions that have yet to be widely patented or enabled, including patents in relation to grids, batteries, and carbon capture technology. Because patents are an essential tool to combat climate change, the USPTO and the federal government should actively consider expanding and improving the fast-track process. 

The Consequences of Not Fast-Tracking Patent Applications for Climate Change Mitigation Technology Are Dire

     According to 98% of climate scientists, the warnings have not been heeded. Much has been discussed about the rapidly deteriorating state of icebergs at the polar caps, and of shifting weather patterns that would result in increased drought, starvation, human migration, and conflict. More innovation and thus more innovators are needed to respond to this growing threat. Innovation needs to be re-injected into green technology:  the world does not yet have a fully zero-emission fleet of vehicles; homes are not being constructed with materials that are resilient to increased extreme weather events; it will take years to commercialize fungi to break down plastic; it will take a decade for the alternative meat industry to capture 10% of the market; and it will take until 2040 for the Ocean Cleanup’s proprietary system to clean the Great Pacific Garbage Patch. If the U.S. and the world continue to ignore extreme shifts in climate, green innovators risk losing what traction they have. That is a loss we will all share.   

Conclusion

     Climate change is a critical problem that requires a solution, but the traditional solution–the patent system–stopped delivering on its essential promise to drive innovation. Beginning in 2012, while climate change awareness and acceptance grew, research and development sputtered. Fewer patents followed, down 44% for carbon capture and storage and 29% for clean energy patents. Various causes may underlie this problem, including some technological limitations, policy prioritization of fossil fuel and nuclear energy, and competing R&D concerns like the semiconductor trade-war. Nonetheless and regardless of the cause, the green technology patent drop-off has gone unnoticed and uncorrected for too long. Here in the U.S., the USPTO and the federal government have an important role to play in finding ways to get the patent system back on track. Fast-tracking green technology patent applications is the best way to accomplish this because time is what the green sector does not have enough of. 

Melissa Hurtado is a second-year law student at Northwestern Pritzker School of Law.