Businesses looking to remain resilient and competitive in the new economy are taking action on sustainability. Now more than ever, consumers are increasingly basing their purchasing decisions on the sustainability of products and brands. In response to this, the Baker McKenzie Consumer Goods & Retail industry group has produced the “CG&R and Sustainability Video Chat Series” in which experts provide short, practical insights into some of the legal considerations that companies need to keep in mind when undertaking green innovation.
In the third episode of the series, Mackenzie Martin, partner in our IP and Technology practice in Texas, and Tanvi Shah, senior associate in IP and Technology in London, discuss the role of patents, trade secrets, and plant variety rights in green innovation—and in particular, how they incentivize and promote technological development in the consumer goods and retail industry.
- Innovation in “green technology” is critical in addressing sustainability and environmental challenges.
- The IP system—particularly, patents, trade secrets, and plant variety rights—plays an important role in promoting green innovation.
- IP incentivizes private sector investment and provides a framework under which such innovations can be shared, commercialized or further developed.
Environmental, social, and governance (ESG) trends are paving the way for companies to enter into new research endeavors, collaborations, or partnerships, to develop innovative solutions that reduce or remove negative environmental and societal impacts. Innovation in so-called “green technology”—for example, green tech aimed at reducing fossil fuel use, improvements in materials and packaging to create more sustainable alternatives, and increasing efficiency in agriculture and the food industry—is critical if we are to address sustainability and environmental concerns.
When embarking on new research endeavors, companies should be mindful of issues surrounding new IP, IP ownership, data exchange, and other important IP considerations.
Patents, plant variety rights, and trade secrets
Patents grant the inventor a temporary right to commercially exploit the invention—either independently or in collaboration with third parties—in exchange for the patentee’s full disclosure of the innovation, including how to replicate it. Coined the “patent bargain,” it allows third parties to understand the invention and build on the innovation developed by the patentee. This protection allows the owner to recoup their own research and development expenditure. To encourage innovation, some countries have introduced fast-track patent programs to speed up the approval process for patents associated with a positive environmental impact.
Plant variety rights (PVRs), also known as plant breeders’ rights, are a separate IP right designed to incentivize and reward the development of new plant varieties. Registration of PVRs gives plant breeders a temporary exclusive right to commercialize the propagating material of new varieties in that jurisdiction.
Trade secrets, which are in essence commercially valuable information that are not public and are actively protected, enable developers of sustainable innovation to commercialize knowhow through collaborative engagements, where the invention may not qualify under patent or other IP protection. Trade secrets can be a very valuable IP right in a fast-paced CG&R industry and in circumstances where it is critical to be first to market and where long-term IP protection is less of a concern.
How can IP help promote green innovation?
The IP system plays an important role in promoting green innovation. On top of the financial incentives derived from exclusivity, IP rights provide a framework to allow innovation to be shared, developed, and commercialized. When innovation is jointly developed, IP rights provide clarity on the ownership of the existing technology each collaborator brings to a project, and of the resulting new technologies. The established structures around IP ownership and licensing—and the resulting clarity around how the risks and benefits of the project will be shared—help facilitate partnerships that lead to greater and more successful innovation.
IP also provides clarity around what technology is available. For example, the World Intellectual Property Office has established “WIPO Green,” which is an interactive, online marketplace that connects technology and service providers with those seeking innovative solutions, and helps accelerate innovation and diffusion of green technologies.
All in all, a comprehensive IP strategy recognizes the complementary nature of the various IP rights, as well as the potential tensions across different routes to protection. It is therefore crucial for companies to define their IP strategy and take advantage of available funding, grants, and fast-track application processes across jurisdictions.
For more practical legal insights on key issues affecting consumer goods and retail businesses in incorporating green innovation practices into their operations and strategies, tune into the Baker McKenzie Off the Shelf video chat series.