Will China’s pledge to be carbon-neutral change IP?
date: 2020-12-07 Sasha Read by:

    At the end of September, China’s top leadership announced the goal for the industrial and economic giant to become carbon neutral by 2060. As governments, corporations and individual consumers increasingly raise alarms about the climate change crisis, such an announcement is welcome, if surprising. Climate and environment experts are inspired, though skepticism is an obvious component of the response. To achieve such a lofty goal, the entire economy would have to be transformed – how 1.4 billion people eat, live, consume and contribute to the second largest economy in the world will be turned on its head. How can this be achieved? Last time China transformed its economy to reach unprecedented highs in the 1980s was the reform and opening up scheme, relying heavily on technology to drive progress. If an economy is to be transformed again, why not turn to tech again? Intellectual property is a known driver of advancements in technology, and as China continues to build its tech prowess in all fields, so have the domestic protections for IP rights. Its explosive economic growth carried the country to become among the top filers of patents and trademarks in the world (in 2020, China unseated US as a top PCT filer), and as investors and businesses are seeking entry into the lucrative market, it is also becoming a top destination for filings from abroad.

    Coal currently powers about 58% of China’s energy needs, according to a study by BP. To reduce this number and achieve total decarbonization, nonfossil fuel use must rise from ~18% now to 84% in 2060. If the commitment holds, China will have to shift its energy production to wind, solar, and other sources of renewable energy in the near future. The country is already a global leader in wind and solar technologies, and an active outbound investor in these fields. For foreign companies interested in staying on top of the Chinese economic wave, keeping up with these green technologies is a must. These collaborations is where intellectual property transfers, patent and trademark filings can be instrumental.

    Global Cooperative Patent Classification system, which China uses along with other major IP jurisdictions liked the US and Japan, includes a section with the tag Y02, designated as “Technologies or Applications for Mitigation or Adaptation Against Climate Change”. Data available shows that despite China’s relatively recent adoption of the system, a factor which may introduce some distortion to the numbers, nevertheless shows China’s intense commitment to developing green technology. As the plans for decarbonization are made more concrete, this trend will only continue to move up. One of the largest filers of patents with climate change designations is State Grid, a giant which services the electricity needs for over a billion people. As China’s main electricity provider, it is well positioned to bring about impactful change. In all types of green technology, from EV to biofuels to nuclear, according to 2007-2017 data from WIPO, China had double-digit increases in patent filings. The same WIPO report notes that most of these filings for China were domestic, a trend which will likely hold in the first few decades of the decarbonization process, as domestic institutions and corporations increase innovation to meet the set goals. A fast track option for patents currently exists if a patent application relates to a matter of national interest or other technology of high importance, including technologies such as energy conservation and environmental protection. Expanding the lists of these high importance technologies in the area of clean energy might work to China’s advantage in achieving its goal.




    Although patents will undoubtedly be the IP field where the drive for innovation will be seen more clearly, few words should be said for trademarks. Commitment to green technologies will go hand in hand with various industry standards and regulations for green products. Certification marks, aka marks placed on products which pass certain standards set forth by supervisory organizations, can become another area of growth and expansion, as more products will pass under more scrutiny before appearing on the market. Geographical indicators may also see an increased interest from the public, as some areas which can be marketed as more environmentally clean or friendly can register special products from their region to take advantage of the green trend expansion. Similarly, since commitment to one goal or another by the highest level of government in China usually leads to increased interest and following from the general public, foreign and domestic products carrying certain characteristics that appeal to the “green” trend will likely see an uptick. Brands should be aware of such trends and act early when registering trademarks in China.

    Reaching carbon neutrality by 2060 will surely be a journey with many barriers, as transforming such a multifaceted economy with one of the world’s largest consumer bases is an unprecedented feat. China’s commitment to mitigate climate change can be tracked through the most recent patent application data and technology development trends. Development and strengthening of IP protections for both foreign and domestic rights holders has reached the level of major developed countries, so China is well positioned to use its IP system to become one of the engines in its drive to innovate and reduce carbon emissions.