LEVERAGING MANDATORY LICENSING UNDER THE CLEAN AIR ACT: A NOVEL FRAMEWORK TO DOMESTIC REDUCTION OF GREENHOUSE GASES.

AuthorBernardini, Jessica
  1. Introduction 303 II. Background 307 A. Carbon-Capture Technologies and Barriers to Implementation 307 1. State of Carbon-Capture Technologies and Patent Ownership 307 2. Existing Industry Challenges the Proposed Framework Overcomes 309 B. Overview of the Clean Air Act. 310 1. The Clean Air Act: Enactment and Key Components Relied Upon by the Proposed Framework 310 2. Regulating GHGs of Stationary Sources 312 C. Compulsory Licensing in the U.S. 313 1. General Overview of the U.S. Patent System. 313 2. Compulsory Licensing and the U.S. Experience 314 3. CAA Mandatory Licensing Provision. 315 III. The EPA Exercises its Full Authority--Emission Reductk DNS and Invoking Mandatory Licensing 317 A. Step One: The EPA Promulgates an NSPS Based on Carbon-Capture Technology 317 B. Step Two: The EPA Invokes the Mandatory Licensing Provision 319 C. Anticipated Challenges from Regulated Entities 321 IV. How the Proposed Framework Will Stifle ANTICOMPETIVE Behavior 323 A. Overcoming Anticompetitiue Behavior 324 1. Compulsory License in the Absence of a Working Requirement. 324 2. A Tool to Encourage Voluntary Licensing 326 B. Potential for Patentees to Take Control of the Marketplace 328 C. Effect on Industry to Survive When Technology Standards are Stringent. 330 V. Conclusion 332 I. INTRODUCTION

    It is incredible the speed at which the United States government and the private sector can quickly develop solutions when faced with a substantial public health crisis. In light of recent developments surrounding the COVTD-19 pandemic, it was inspiring to see how quickly technological advances in testing were achieved through private sector and government cooperation. (1) Those with an interest in Intellectual Property Rights (IPRs) cannot help but consider the negotiation of licensing agreements over the sharing of this technology and information. During this time of crisis, it is likely that patented scientific processes were shared to achieve significant progress in medical advancement for the greater good. (2) What if law makers channeled an effort of equal magnitude of technology sharing and government involvement toward the greatest public health crisis that lies ahead of us--climate change?

    With the tipping point of climate change looming closer every day, and no sense of urgency from the federal government, we must consider what avenues are available to quickly decrease greenhouse gas (GHG) emissions and place environmentally beneficial technologies into the right hands. Presently, climate change is occurring at a rate which will require global net zero carbon dioxide emissions by 2050. (3) A "business as usual" approach will not be sufficient to drive innovation and decrease carbon emissions. (4) Despite multiple efforts by both the Senate and the House, (5) the United States still has no comprehensive climate change policy either requiring a reduction in GHGs or mandating a timely transition from a fossil fuel-based to a wholly renewable or "net-zero" electricity grid. It may, however, be possible for the country to make substantial reductions to GHG emissions at the speed necessary to combat climate change through government and private sector cooperation.

    To facilitate progress toward policy that resembles a climate change action plan, this Comment looks to existing options of government drivers: environmental regulations and the patent system. Unfortunately, the current patent system does not quickly transfer impactful and economically feasible technologies into the right hands--it may actually create roadblocks. Technology and environmental protection go hand in hand. However, the monopolistic rights afforded to patent holders are often in tension with access to environmentally beneficial technologies. (6) And because patents are inherently monopolistic, patent holders may exhibit anticompetitive behaviors, which create additional barriers to technology sharing. (7) Despite (maybe) understanding the impact that technologies have on combating climate change, Congress has no interest in weakening patent laws to assist with the deployment of energy and environmentally related technologies. (8) Although patented technologies exist which prevent carbon dioxide emissions from reaching the atmosphere, the fossil-fuel industry maintains that the technologies are too costly or technologically infeasible to implement on a large scale. (9) The industry claims infeasibility despite the fact that these same fossil-fuel companies own patents to and provide research funding for these beneficial technologies. (10)

    Many environmentalists are hoping for a swift transition from a fossil fuel to renewable-based electricity grid, but what drivers are in place to make this push in the absence of a comprehensive federal climate action plan? Additionally, the current structure of the United States patent system does not punish a patentee for not practicing their patented technology. (11) The lack of a government driver to force useful technologies into the marketplace is especially concerning when companies in the fossil-fuel industry hold patents to some of the most promising environmentally beneficial carbon-capture technologies. (12) While there are statutes which authorize the government to force patent holders to provide access to their inventions in the interest of the protection and preservation of the public health or national security, referred to as "compulsory licensing," these statutes have never been invoked. (13) Interestingly, the Patent Act does not have a generalized compulsory licensing provision. (14)

    Surprisingly the Clean Air Act (15) (CAA), of all areas of law, provides some leverage to force technologies into industry and discourage anticompetitive behavior. In the. 1970s, when the country was experiencing significant environmental degradation, Congress passed monumental environmental protections through amendments to environmental statutes such as the CAA. (16) When drafting the CAA amendments, Congress knew that any impactful control on air pollution would require economical access to pollution control technologies. (17) Recognizing the potential roadblocks in achieving meaningful air pollution control at emitting facilities, Congress crafted the "Mandatory Licensing" provision, which authorizes the EPA to step in and, under particular circumstances, require that a patentee license a technology for a reasonable royalty. (18) Since its enactment, however, the EPA has never exercised its authority under the Mandatory Licensing provision.

    In the absence of a comprehensive federal climate policy, the EPA should utilize its existing statutory authority to impose mandatory licensing of carbon-capture technologies while modifying existing emissions performance standards that can only be achieved through implementation of these technologies. Currently, Congress is not poised to pass significant environmental legislation. (19) Therefore, now is the time for the EPA to exercise its full authority under mandatory licensing, utilizing the path of least resistance to work toward carbon-neutral energy generation.

    The EPA can rely on mandatory licensure and agency deference to make significant headway in curbing carbon dioxide emissions from the fossil-fuel electricity generators. First, the EPA should promulgate aggressive carbon dioxide emission standards based on the implementation of carbon-capture technology. The standards may be challenged, but the EPA is traditionally afforded a high level of deference in its promulgation authority. (20) Second, the EPA should invoke the CAA Mandatory Licensing provision to provide economical access to the necessary technologies. This two-step framework provides an improvised climate action plan in lieu of a comprehensive legislative act. Carrying out the proposed framework may result in two different outcomes in the regulated industry. One, the fossil-fuel electricity generators will meet the stringent emissions standards by utilizing the technologies made economically available by mandatory licensing. Alternatively, the proposed plan may make it economically infeasible for inefficient plants or plants with limited remaining life to implement the technologies, even when made available through compulsory licensing. Consequently, these plants may shut down, accelerating the transition to renewable energy.

    Part II of this Comment presents background on key components of the proposed framework: the current state of carbon-capture technology and challenges to implementation of full-scale carbon capture and storage (CCS), the CAA's regulation of GHGs of emitting facilities, and compulsory licensing in the United States and the Mandatory Licensing provision of the CAA. Part III presents the two-step proposed framework--first, the EPA's statutorily authorized pathway to regulating carbon dioxide emissions based on the availability of carbon-capture technologies, and second, the EPA's invocation of the Mandatory Licensing provision to provide accessibility to the carbon-capture technologies. Part III also explores anticipated industry-based challenges to the proposed technology-based emission reduction standards. Part IV analyzes the potential impacts that invoking (or threatening to invoke) the Mandatory Licensing provision may have on the technology market and regulated industries. Specifically, Part IV considers the potential to deter monopolistic behavior and how the market may proactively take control to avoid government intrusion and facilitate technology transfer at reasonable licensing fees. In addition, Part IV describes how a similarly stringent air pollution regulation affected the fossil-fuel electricity generating industry and how this proposed framework may play out in light of that previous regulation.

    With no comprehensive climate change policy, the EPA should establish a steep carbon dioxide emissions regulation of fossil-fuel electric generating facilities. To...

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