Green IP: the role of intellectual property in sustainability

October 2021 | EXPERT BRIEFING | INTELLECTUAL PROPERTY

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At the beginning of August 2021, the Intergovernmental Panel on Climate Change (IPCC) released a report stating that climate change is “widespread, rapid and intensifying”. The report prepared by scientists across 66 different countries has been described by the United Nations (UN) secretary-general as a “code red for humanity”. This report comes only three months before the UK will host COP26, a summit bringing parties together to accelerate the action needed to meet sustainability targets worldwide.

In this context, it is no surprise that climate change and sustainability is becoming an ever more pressing item on corporate agendas, as governmental, regulatory, investor and consumer focus on these issues intensifies. It is an issue that affects businesses from all industries, sectors and territories. This article explores why it is important for businesses to consider the importance of intellectual property (IP) while undertaking their sustainability journey and some of the current issues arising in relation to ‘green IP’.

The best means to tackle climate change remains a source of debate, with multiple factors to consider, such as individual behavioural change, interrogating current practices and supply chains, as well as technological innovation.

Where innovation is a potential solution, patent protection should be considered. A patent is a monopoly right granted to protect an invention, including a process, device, method or product that is new, inventive and useful. Therefore, it is likely to be a valuable business asset which can be used to protect the invention from use by others, thereby maintaining a unique proposition which can be sold to others. The patent right itself can also be commercialised through sale and licensing arrangements to generate income for further innovation and to allow others to benefit from the innovation.

Innovation is also likely to generate information and data of key strategic value, whether in the form of the product or processes themselves, or the market conditions and opportunities. Following the adoption of the Trade Secrets Directive 2016/943 in 2016, the value of confidential information and trade secrets has been more clearly and strongly recognised and businesses are taking the steps needed to protect these valuable assets. Secrecy may be maintained to maximise market position for innovative technologies or, with the correct contractual framework in place, these too can be shared as part of a licensing opportunity or a collaborative arrangement where parties work together to produce greener technology.

Design rights may not be the first IP right that springs to mind when considering the protection of innovative new products or technologies. However, complementary to other IP rights, such as patents, design rights can offer a more efficient, simple and less expensive way to protect the aesthetic appearance of a new product. These rights may be particularly attractive to businesses within industries such as the fashion, consumer products, engineering, automotive and aerospace industries, which are coming under increasing pressure in relation to their environmental impact. Design rights may also be a valuable right as the use of 3D printing grows as a potentially more sustainable manufacturing technique.

Copyright can also play an important role in protecting green technologies such as software and algorithms and the data produced from such technologies. Software can be central to a business’s sustainability journey, from helping to evaluate, measure and record emissions to improving existing technologies or creating new technologies.

Artificial intelligence (AI) and machine learning (ML) is increasingly being developed and implemented both to increase the speed and accuracy of data analytics and to implement new connected technologies. Its use in the fight against climate change is key. To encourage the development and use of AI tools it is essential to understand the IP rights which protect its various components, from the data that is inputted, the software and algorithms which carry out the analytics and ML functions, to the results which it generates, which may include further innovations. Such understanding is essential both for the purposes of protecting the AI tools from reproduction by others without permission or licence, and to avoid infringement of third parties’ IP in their use.

As businesses focus on generating new products and branding that promote green credentials, there has been an inevitable increase in trademark applications. While applying for trademark protection is always recommended when launching a new product, technology or brand, care should be taken to ensure that the proposed trademark does not contain elements which could be considered to be merely descriptive of the characteristics of the products. As such, words such as ‘eco’, ‘green’ and ‘enviro’ are likely to be refused as they are commonly used to indicate that a product has environmental credentials. The policy behind this is to ensure that those types of descriptive words are free for all businesses to use.

There is also a different type of trademark which may be registered which is called a certification mark. The proprietor publishes criteria which if met means that the trademark can be used by third parties. These applications are often made by bodies, such as charities or non-profit organisations, that have regulatory oversight over businesses.

Challenges may also arise when considering how to develop a brand which communicates to the public that the product or technology has green credentials. Inevitably, most brands have gravitated toward the use of a limited range of colours and imagery. Consequently, it is important to undertake appropriate clearance searches to ensure that any brand does not fall foul of an allegation of infringement of third parties’ registered or unregistered trademark rights.

All advertising in the UK must comply with consumer protection legislation (Consumer Protection from Unfair Trading Regulations 2008) and comparative advertising (Business Protection from Misleading Marketing Regulations 2008). Both Trading Standards and the Competition and Markets Authority (CMA) can enforce those statutes. Certain advertisements are also subject to self-regulation via the Committee of Advertising Practice (CAP) and Broadcasting Committee of Advertising Practice (BCAP) codes which are enforced by the Advertising Standards Authority (ASA).

One of the central themes of each set of rules is that advertising should not make claims which mislead the public. In May 2021, the CMA published new draft guidance to support businesses that wish to make green claims comply with consumer protection legislation. As part of that guidance, it found that 40 percent of green claims made online could be misleading to consumers. Both the CMA and ASA have reiterated that green claims will become a key focus for enforcement efforts in the future. Care should therefore be taken to ensure that any green claim is carefully written and can be fully supported by evidence.

The increased development and demand for ‘green’ software intended to assist businesses with their sustainability targets raises some additional interesting issues. For example, data and analytics software has been designed to provide companies with the insights needed to assist in their decarbonisation journey. As well as the usual IP issues arising from the licensing of software, negotiations of such licences have raised new issues due to the nature of the software. For example, will ‘green’ software suppliers be willing to stand behind the results of their data analytics software so that customers can rely on these for mandatory sustainability reporting or green claims? In addition, issues have arisen regarding ownership and use of the resulting data – should this be available to the green software suppliers for use to improve their analytical services and the overall effectiveness of the green software?

In the drive to address climate change and sustainability, no single entity will have all the answers and be able to develop the appropriate solutions. Collaboration will be essential to combine resources and expertise. Collaborations have been seen to produce great results, often in shorter time scales and at less cost. However, there are many IP issues which will need to be navigated when entering such collaborations, including the appropriate licensing of each party’s existing IP rights, the ownership of the IP that is developed from the collaboration and each party’s rights to use the results of the collaboration, both during the term of the arrangement and on into the future. Getting these issues right at the outset gives all parties the certainty required to maximise the value of their joint developments.

It is undisputed that businesses have an essential role to play in helping combat climate change. As such, innovation, and the IP rights that support it, will become more significant and their protection and commercialisation very important in helping to establish and embed practical solutions that make a real difference in creating a greener future.

Cerys Wyn Davies is a partner, Tom Nener is legal director and Nicky Pereira is a senior associate at Pinsent Masons LLP. Ms Wyn Davies can be contacted on +44 (0)121 625 3056 or by email: cerys.wyn-davies@pinsentmasons.com. Mr Nener can be contacted on +44 (0)121 260 4085 or by email: tom.nener@pinsentmasons.com. Ms Pereira can be contacted on +44 (0)121 629 1545 or by email: nicola.pereira@pinsentmasons.com.

Cerys Wyn Davies, Tom Nener and Nicky Pereira

Pinsent Masons LLP