CBI Urges Protection For Green Intellectual Property

by Robin Pilgrim, LawAndTax-News.com, London

10 September 2009

The Confederation of British Industry has this week called on the UK government to ensure that firms which develop innovative low-carbon products will continue to have their intellectual property protected under international law.

The business group argued that "the current IP system is working", and urged the government not to throw away the UK's competitive advantage at global climate change talks in Denmark later this year.

Speaking at the CBI’s Climate Change Forum in London, John Cridland, CBI Deputy Director-General, suggested that protection for intellectual property is a key incentive for businesses to invest in the development and deployment of new low-carbon technology.

“There are worrying signs that the government is preparing to blink on this issue to help the rapid diffusion of low-carbon technologies in developing countries," he cautioned, continuing:

“Any compulsory licensing of these technologies would be counter-productive and damaging in the longer term by reducing the incentive for business to continue innovating. In any case, the growing number of patents from emerging countries shows that the current regime of protection is working. China has 38% of the patents in solar, for example."

However, the CBI chief went on to add that:

“There could be a role for the World Intellectual Property Organisation in facilitating low-carbon IP, encouraging companies and countries to work together to support developing countries.”

Mr Cridland was commenting at the CBI’s Climate Change Forum, which took place on September 8, on the launch of a new CBI report on how best to maximise opportunities for UK businesses in a global low-carbon market.

'Pulling ahead: innovating for low-carbon leadership’ sets out a number of recommendations for government and businesses to ensure the UK can lead the way in low-carbon innovation.

In the report, the CBI urges the government to:

• Focus on technology success: use a transparent and robust assessment to establish technologies that can add value to the UK economy, taking account of existing strengths;
• Take firm actions not words: establish the next level of policy detail to set the framework for the private sector to commercialise technologies and encourage investment;
• Leverage private capital: make the best use of public funds to maximise private finance, through business incubators and public-private hybrid funds for early stage development and loan guarantees to aid final commercialisation;
• Make it easier to get support: consolidate and streamline applications to public agencies for support and press for greater transparency in EU research programmes;
• Maintain incentives: maintain and improve the R&D tax credit scheme to ensure companies have confidence that this vital incentive will continue over the long term;
• Be intelligent about public procurement: ensure public procurement decisions are taken on a whole-life cycle basis and government uses its procurement muscle to drive demand for low-carbon products, and supports large-scale technology demonstration;
• Not delay on infrastructure: create the right physical infrastructure, including substantial grid upgrades, to ensure the demonstration and the commercial deployment of large-scale energy technologies;
• Make planning simpler: implement the 2008 Planning Act as quickly as possible. Task the Better Regulation Executive to minimise regulatory barriers to innovation for low-carbon technology families key to the UK’s economic growth;
• Invest in training: ensure the UK workforce has the necessary skills to be globally competitive, attract investment to the UK and extract maximum value from international supply-chains and global markets; and
• Support entrepreneurs: help ensure start-up companies have strong commercial management to bring about full exploitation of technological knowledge.

In addition the CBI put forward three recommendations for business to encourage low-carbon innovation:

• Make carbon part of core business: take steps to measure carbon use and include carbon costs in the bottom line. Clear measurement of carbon use and the reduction potential of innovation can increase uptake and give businesses a head start on competitors;
• Rethink approach to innovation: embrace innovation by focusing on how frontline staff can reduce emissions and fundamentally re-think at a boardroom level the impact of the low-carbon economy on existing and new business processes; and
• Enable creative thinking: develop a culture of managed risk-taking to aid innovation and create incentives that allow employees to experiment and innovate.

The CBI has been fairly vocal in its criticism of the UK authorities in recent months, so its acknowledgement that the UK intellectual property system currently appears to be fit for purpose is likely to have been welcomed.

Earlier this month, Richard Lambert, CBI Director-General, stressed the importance of the contribution made to the UK economy by the financial sector, and criticised FSA chief Lord Turner for his suggestion that a 'Tobin' tax on financial transactions might be necessary, in order to rein in the 'excesses' of the banking sector.

Although, speaking at the CBI’s annual North East Dinner, Mr Lambert stressed that:

“The fact is that his [Turner’s] analysis of what caused the credit catastrophe, as evidenced for example in an Economist lecture earlier this year, is the best there is. And the Turner Review of Financial Stability is regarded from Wall Street to Tokyo as a model from which other financial regulators must learn."

“Moreover, it’s not his job to be a cheerleader for the City of London. The FSA is a regulator, not a trade association. And if the world’s financial regulators had been more challenging and aggressive in the past decade, then the financial sector without doubt would be in a lot more healthy shape than it is today.”

He added:

“The trouble is, though, that the headlines Lord Turner has generated are about the wrong issues. There are only two questions that really matter in the banking market today, and they are not about bankers’ pay and rations, or the social value of credit derivatives."

“Instead, the right question to ask is: how do we get credit flowing properly through to the private sector, especially to small and medium sized enterprises? And what kind of shock absorbers do the banks need to have in place so that they can get off the taxpayers’ back, and do what they are supposed to do in a competitive and open marketplace?”

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