Clean energy and intellectual property

Consumers will be benefited by a better clean energy product which may lead to a reduction in prices.

After the impressive victories of the BJP in the recent 2017 legislative assembly elections, ambitious Prime Minister Narendra Modi delivered a speech at the headquarters of his party. He emphasised once again developing a ‘new India’ if we go in accordance with the current level of pollution, global warming and greenhousegas effect.

The important question that arises is whether future generations will ever be able to see that ‘new India’ or will it be just taken as a political rhetoric? During his speech at Madison Square Garden in September 2014, Modi emphasised on developing of a ‘new India’ by providing incentives to the startups and strengthening the information technology sector.

Aware of climate change, the Union government also realised the importance of a clean environment and passed ambitious projects like rejuvenating the Ganga and ‘Swacch Bharat Abhiyan,’ which even led to raising taxes to fulfil that project.

Before delving into clean energy technology and the barriers faced by it from intellectual property law, it will be helpful to define the term ‘clean energy’. Clean energy means power created from renewable sources of energy with low impact on the environment. The possible examples might include wind energy, solar energy and hydropower. The budget of 2010-11 created the National Clean Energy Fund (NCEF) for funding research and innovative projects for clean energy technology.

Recently, Finance Minister Arun Jaitley renamed the Clean Energy Cess as Clean Environment Cess and doubled its magnitude. It is estimated that Rs 13,000 crore is contributed to NCEF per annum. The recent 2017-18 budget raised many eyebrows vis a vis the government’s spending on clean energy technology.

The 2017-18 budget allocation to the Ministry of New and Renewable Energy of Rs 5,473 crore has not increased from the allotment made in 2016-17. Although it gave positive signals on developing biomass and methane-based clean energy through raising indirect tax incentives on them, it also raised concerns for declining financial support to research and further development of clean energy.

Some positive intakes from the budget are also there like allotment of 20,000 MW of power to solar energy park development, powering of 7,000 railway stations with solar energy, reduction in tempered glass used in manufacturing of a solar energy plant from 12.5% to 6%, reducing income tax by 25% for firms with an annual turnover of Rs 50 crore. Earlier in September 2015, even the Reserve Bank of India introduced masala bonds which helped finance clean energy technologies.

The temperature around the world is generally increasing. With more effects of global warming and the greenhousegas effect, emission of carbon gases like carbon dioxide and carbon mono- oxide will increase in coming years.

The United Nations Framework Convention on Climate Change indicates that developed countries should assist developing countries in getting or obtaining cleaner sources of energy. It has laid out the Clean Development Mechanism indicating how assistance can be provided to a developing country by a developed one.

The Supreme Court in the case of G Sundarrajan vs Union Of India observed that for the protection of environment, clean energy technology or renewable sources of energy should be preferred over non-renewable sources of energy.

Net metering
For adequate use of clean energy, the concept of net metering can play a crucial role. Net metering is mainly used in the case of solar and wind energy. It is used to store electricity generated from these clean sources. Consumers can use this energy whenever they want to use it, which minimises the wastage of energy produced.

The energy is aligned with the main grid through net metering. Net metering has gained prominence in Germany and Japan. When energy use is low, net metering allows people to pay less than the wholesale price of the electricity.

Many scholars had anxiety about the barriers which clean energy will face from intellectual property laws. The laws pertaining to intellectual property play a different role in the case of clean energy technology as compared to the pharmaceutical sector. In the pharmaceutical sector, if a drug company obtains a patent over a drug, then it gains monopoly over it and no other pharmaceutical company is generally allowed to manufacture that drug.

That patent holder even gets the right to decide the price of its product by virtue of the monopoly it obtained through a patent. In the case of clean energy technology, if one obtains a patent, the patent holder gets a patent only for the modifications in the energy source done by that holder.

This creates a competition for different players in the field of clean energy technologies. Consumers are benefited by a better clean energy product which, because of competition, may lead to a reduction in the prices. Thus, the intellectual pr­operty law is benefiting the consumer and also importantly the planet as a whole. Considering all the aspects discussed for the benefit of future generations, it is essential for the government to pass laws which promote use of cleaner energy technologies.

(Rosencranz is professor and Nitish Raj is sophomore at Jindal Global Law School)