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The Revolution Will Not Be Patented

We're already sending our clean-energy tech to China, and intellectual property law has nothing to do with it.

| Wed Apr. 21, 2010 2:01 AM EDT

Also from the Climate Desk: One possible solution to the green-technology patent deadlock.

For the last 20 years, politicians, diplomats, and green activists alike have assumed that dealing with global warming would require a United Nations agreement on the transfer of clean-energy technologies from rich countries to poor ones. But US policymakers and firms feared that tech transfer was code for tech piracy: China already steals billions of dollars worth of American intellectual property annually—from Microsoft Office CDs to Avatar DVDs—so why would we give away our next generation of solar panels and wind turbines? "Developing countries, like China and India, see climate change as an opportunity to gain free access to American [intellectual-property rights]," thundered Rep. Jim Sensenbrenner (R-Wis.)*, before the Copenhagen talks in 2009, "but far from mitigating climate change, relaxation of IPR would ruin our only hope of responding."

Some business executives and economists have even argued that nations needed stronger, not weaker, intellectual-property laws. If China might reverse-engineer and more cheaply manufacture a breakthrough solar panel or nuclear plant from the United States, then there would be no point for investors to spend their money on development in the first place. Why would anybody invest in anything that they would have to just give away?" a General Electric executive asked.

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In response to all the talk of weakening intellectual-property laws, the US Chamber of Commerce created the Innovation, Development and Employment Alliance to lobby for more-restrictive patent laws. And in the run-up to climate talks in Copenhagen last year, conferences were held and a raft of reports released, all aimed at finding some compromise around the intellectual-property conflict.

Yet what was strikingly absent from the conversation was any recognition of the reality unfolding right in front of everyone's noses: Clean-energy technologies are already being transferred rapidly for reasons having nothing to do with global warming or the UN. It looks as if the next great technology transfer won't be from rich to poor countries, but from China to the United States.

The last few years have seen perhaps the largest energy-technology transfer in human history. In 2004, China paid about $5 billion for four state-of-the art nuclear reactors from Pennsylvania-based Westinghouse Corp. In exchange, Westinghouse agreed to transfer the technology and know-how to Chinese state-owned firms. French state-owned company Areva lost out because it refused to turn over its intellectual property. Now China is set to use Westinghouse intellectual property to build an additional 28 nuclear plants based on the same technology.

Energy firms are willing to part with their intellectual property because they want a stake, even a minority one, in the rapid growth of the energy sector in China and around the globe. "China will be the world's nuclear industry leader," the chief technology officer of Atomic Energy Canada flatly told Bloomberg.

It's not just nuclear. Last fall we analyzed all of the major global clean-energy sectors and found that China, Korea, and Japan are outcompeting the United States in the development of solar and wind power, electric cars, and high-speed trains. China's share of global clean-tech investment has risen each year, finally surpassing the United States for the first time in 2008. These Asian nations and China in particular aim to dominate global export markets, so that future tech transfer will come from China to us. To some extent, it already does: 79 percent of the US economic-stimulus funding for wind turbines went to foreign firms.

Around the time academics and corporate patent attorneys were debating complicated tech-transfer frameworks at the University of California-Berkeley and Chatham House, Arizona-based First Solar was inking a deal with China to build the world's largest solar-panel farm—a 25-square-mile behemoth in Mongolia that will provide power to 3 million households. "We will bring people over in order to transfer our knowledge related to the design and engineering of the plant," First Solar's CEO explained. "It's an IP transfer in that regard." Rather than reacting in horror, investors pushed First Solar's stock price up 10 percent.

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