Sustainability and Intellectual Property in Italy

Abstract

 This chapter explores the role of Intellectual Property in sustainability from a comparative perspective, also in the light of the new challenges posed by the Green transition providing proposals and possible strategies to stimulate the development of the circular economy.

1 Introduction

The future of the Earth depends on protecting biodiversity. The term Biodiversity is commonly used to “describe the number and variety of living organisms on Earth” and can be considered synonymous with “life on Earth.” Biodiversity is a fundamental resource for our survival, and an economic and social asset.

Italy has one of the most significant biodiversity assets in Europe, both in terms of the total number of animal and plant species and the high rate of endemism. Thanks to its geological, biogeographical, and socio-cultural history, as well as its central position in the Mediterranean basin, Italy is home to about half of the plant species and about a third of all the animal species currently found in Europe.

Despite this richness, biodiversity in our country is rapidly declining as a direct or indirect consequence of human activities. According to the Red List of ecosystems of Italy¹ which follows the criteria established by the IUCN, the World Union for the Conservation of Nature, Italy is indeed a country with many ecosystems at risk.

In the light of the findings of the Red Lists, as well as increasing pressures on biodiversity, there is an urgent need to define more incisive and effective actions to reverse the trend over the next decade and sustainability certainly plays a pivotal role.

Underlying these changes is the digital revolution—the so-called “Industry 4.0”—which affects both the production and distribution sectors. At the same time, consumers have also changed their approach towards more sustainable, more personalized, more “social-oriented” needs and demands.

Therefore, companies are forced to modify and adapt their business models, and traditional “linear” economic system is losing its appeal in favor of new “circular” solutions.

This is leading to a progressive shift from a linear economy to a circular economy, which is “a model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible.”²

In this regard, the concept of sustainability is fundamental, meaning the adoption of business models to support projects capable of generating positive results in many ways, such as on the environment, on social governance, and on people’s well-being and health—leading to greater respect for natural balances, with the right approach that is essential and decisive for the very survival of the planet and those who live on it, as the current pandemic has shown.

2 Whether IP Has a Role in Sustainability

IP certainly plays a very important role in sustainability.

Since 2015, the United Nations has defined an ambitious set of 17 sustainable development goals in the so-called “2030 Agenda.”³ In this regard, at European level, the Commission has adopted a specific Action Plan on Industrial and Intellectual Property (IP)⁴ aimed at strengthening the resilience and supporting the economic recovery of the EU, by making the most of the potential of the IP sector.

In this process of implementing the circular economy and sustainability, among the many tools needed to meet the challenge and achieve the desired results, a key role is played by the IP system which must be valued and protected for its positive effects on strategies oriented towards a green and blue transition based on innovation, competitiveness, value generation, and sustainability.

It is, therefore, completely wrong to claim that, today, IP rights represent a barrier and a sort of brake on the use of innovation, also because without this instrument there would be no “innovation” at all.

This is why, to enable and accelerate the transition towards true sustainable development, the driving force provided by the IP system and the related protections is necessary, with the possible corrective measures provided for in the exceptions to the exclusive right of the owner on his own patent (a cue offered by the recent lively debate on vaccines highlighted by the pandemic crisis) when states can grant and thus make available to third parties compulsory licenses on patents when they appear as “essential” to combat emergencies and dependent on innovation and “critical” technologies.

Politics must offer companies tools and incentives for industrial research, development, and technological innovation, in order to be and remain competitive, seeking to create a closer relationship with consumers, a collaborative and participatory economy, which implies the necessary support of digital technologies, such as the Internet of Things (IoT), big data, blockchain, and artificial intelligence.

The circular economy will thus provide consumers with high quality, functional, safe, efficient, and affordable products, with a longer lifetime and designed to be reused, repaired, or recycled. They will also benefit from new sustainable services, such as product-as-service models to improve their quality of life and increase their knowledge and skills.

In this route IP protection is fundamental because companies, to maintain their competitive advantage, must be able to maximize the exploitation of intangible assets (such as: trademarks, designs, software, know-how, inventions, artistic and cultural creations, R&D, processes, and company data) and, at the same time, protect them from being appropriated by current or future competitors.

The IP system should therefore be reviewed in the light of the new changes dictated by the circular economy, considering the development of new technologies and enabling companies to share knowledge.

The most suitable measures to achieve the above targets include the licensing system, the so-called licensing of essential patents referring to the fundamental elements of the digital transformation or of new eco-sustainable materials or of the process for obtaining them, improving their transparency and predictability in a so-called frand fair, reasonable and non-discriminatory approach, and also through the pooling measures that make it possible to combat abusive monopolies or anti-competitive conduct.

3 The Role That IP Should Play in Sustainability

IP has a very important role in sustainability, which is different depending on the specific IP right concerned.

3.1 Trademarks

Distinctive signs, and specifically trademarks, constitute a real communication tool, as they convey a message to those who interact with them. With regard to innovations, trademarks particularly indicate the commercial origin of the product or service, allowing the public to associate that innovative or sustainable quantum with one company rather than another, allowing it to become an added value in the marketplace, directing the choices of buyers who want that value and encouraging companies to compete in providing that added value, thus also environmental sustainability. The company adopting a trademark that convey sustainability, gains a competitive advantage, visibility, and an economic return on its investments, leading it to produce in an increasingly sustainable manner. The balance between the protection of competition and exclusivity is ensured by the rules that penalize business communications liable to mislead the public, going so far as to impose the forfeiture of a trademark that has deceptive meanings.⁵

Moreover, there are eco-brands owned by qualified entities that carry out checks on the production of those authorized to use them, through co-branding agreements. Once again, the market and intellectual property are at the service of sustainability, bringing benefits to both the consumer and the company.

3.2 Designs

Design plays a fundamental role in the development of goods whose production is guided by and reflects the principles of the circular economy.

In fact, through appropriate design—so-called eco-design—innovation in a circular and sustainable sense starts already at the stage of the “design conception” and “development” of a product or service, to reduce its environmental impacts.

Indeed, the Italian Association of Industrial Design (ADI), which established the ADI Compasso d'Oro Award, the oldest but above all the most prestigious design award in the world, recently established a new award open to international companies and designers that have applied a design culture to production methods that are both advanced and culturally aware of the material and immaterial qualities of the products involved, and that is responsible towards the individual, society, and the environment and which proposes new ethically sustainable forms of behavior that are advantageous for the communities, populations, and economies involved.⁶

3.3 Patents

The protection of technical innovation, and thus the incentive to realize new technical solutions that are compatible with the protection of the environment and the future of the world, is one of the most important tools provided by intellectual property to sustainable development. In this sense, exclusivity represents a fundamental incentive to innovation, since the patent system guarantees, on the one hand, that only the patent holder can enjoy and dispose of the right to implement his invention (giving him an exclusive right, which, moreover, in many cases, is convenient for him to exploit through generalized licensing policies, as typically happens with patents that become standards for which licenses are granted to anyone who requests them under FRAND conditions, i.e., Fair, Reasonable and Not Discriminatory) and, on the other hand, that the conceptual content of the patented invention becomes in the “public domain,” from the first day of publication of the relevant application, fueling competition and ensuring a fruitful circulation of information for competitors and researchers.

4 How Should This Role Be Pursued

A robust and widespread IP system, particularly a patent system, stimulates innovation and development of technologies that effectively address climate change and support the emergence of the green economy, which is increasingly at the center of global policy debates.

“Innovate for a green future”: this is the theme chosen by WIPO in 2020 to celebrate World Intellectual Property Day.⁷ Working for a more environmentally sustainable future is, in fact, an imperative that technological innovation and intellectual property shall pursue. The development and deployment of new technologies, whether revolutionary or capable of de-carbonizing existing ones and providing solutions for the more sustainable management of resources, is indeed of paramount importance in addressing climate change while responding to the growing demand for energy and natural resources on a global scale.

And so, the mission is to know how to make the most of Italy’s enormous potential: those related to quality productions, increasingly green, inseparable from the changes towards decarbonization and circularity of production, distribution, and consumption models; those in which Italy has achieved levels of excellence, such as waste recycling, a pillar of the circular economy, energy efficiency and renewable energy sources strategic in the energy transition towards a climate-neutral economy.

On February 10, 2022⁸ the Italian Ministry of Economic Development issued a Decree containing the terms, conditions, and procedures for granting contributions to support programs and initiatives targeted by the Sustainable Growth Fund, aimed at the ecological and circular transition in the areas of the “Italian Green New Deal.” These are non-repayable contributions and subsidized financing. The overall budget of the measure is EUR 677,875,519.57.

Expenses strictly functional to the realization of the investment programs, relating to the purchase of new tangible and intangible fixed assets, are eligible for aid if they concern industrial machinery and equipment; computer programs and licenses relating to the use of the tangible assets; acquisition of environmental certifications. For investment projects aimed at improving the company’s energy sustainability, expenses relating to consulting services directed toward the definition of energy diagnosis are also eligible.

Sustainable innovation programs involving industrial research, experimental development, and/or, limited to SMEs, the industrialization of research and development results, are eligible for the support of facilitative interventions with particular regard to the objectives of: reduction of plastic use and replacement of plastics with alternative materials; urban regeneration; sustainable tourism; decarbonization of the economy; adaptation and mitigation of risks on the ground from climate change.

Industrialization activities must have high innovation and sustainability content, and be aimed at diversifying the production of an establishment through additional new products or radically transforming the overall production process of an existing establishment; furthermore, they must include investment in tangible assets and may be eligible separately or together with an industrial research and experimental development project as part of an integrated program submitted for facilities under this measure.

To improve sustainability, it might not be necessary to create new IP rights but that existing ones can also be used. For example, trademarks perform an important guarantee function ensuring that consumers are confident in what they buy, or that the product that they are buying complies with certain standards. It is, therefore, increasingly common to see logos indicating that a product is certified by a particular organization, such as the trademark Ecolabel, which is a European trademark of ecological quality for consumer goods and services. The birth of the trademark dates back to the establishment of European Regulation No. 880 in 1992, recently updated by the new Regulation No. 1980/2000 of 21 September 2000. Products with the “daisy trademark” are quality products and services that respect the environment.

Our system, such as most legal systems, provides specific types of trademarks for this purpose, known as certification marks and collective marks.

A similar result can be achieved through the use of the marks by environmental associations which, having become aware of an innovation in environmental matters transposed into a product or service for which a given mark is used, make use of that mark, within the limits of a real descriptive need, to report on the results of its evaluations, positive or negative, on its ecological compatibility, and also on the truthfulness of the messages that the owner company disseminates.

In this way, companies will be encouraged to create products that are as environmentally friendly as possible, also to avoid negative publicity resulting from the judgement of the environmental associations.

Regarding the enforcement of IP rights, I believe that if there were no patents and therefore no patent enforcement there would be no technical progress and therefore no innovation.

Of course, the most suitable measures to achieve sustainability include the licensing system, the so-called licensing of essential patents referring to the fundamental elements of the digital transformation or of new eco-sustainable materials or of the process for obtaining them, and through the pooling measures that make it possible to combat abusive monopolies or anti-competitive conduct.

5 The Success of IP in Its Role for Sustainability

I believe that the current IP rights provided by the Italian regulation can also be tooled to support sustainability, although there should be more tax reduction from the government and more incentive to use licenses and pooling systems.

For example, to identify Italian patent applications concerning green technologies, the IPTO (Italian Patent and Trademark Office) adopted the WIPO methodology, which is based on the IPC Green Inventory, identifying as eco-innovations those patents classified with at least one IPC (International Patent Classification) code belonging to the Green Inventory.⁹ The choice was dictated by the exclusive use of the IPC classification system for Italian patent applications.

Although the eco-innovation definition is very broad and, in any case, not exhaustive, the IPTO decided to use all the fields identified by the WIPO Inventory to reduce the risk of excluding patents pertaining to potentially sustainable technologies.

From 2009 to 2018, eco-sustainable inventions averaged 9.6% of total patents filed in Italy. In the last decade, confirming a rather sustained activity of Italian companies in the search for technological innovations attentive to environmental sustainability, the percentages, globally, attribute to eco-inventions between 5–10% of total patent filings.¹⁰ As in the rest of Europe, companies in Italy have pursued strategic investments and initiatives to develop technologies that improve environmental sustainability.

If a detailed analysis of Italian patents is made by placing them in the seven technological fields as catalogued in the IPC Green Inventory, it emerges that Italian patent applications are mainly concentrated in three areas: Alternative Energy Production; Waste Management and Energy Conservation. These fields cover more than 60% of the entire dataset. Patent activity therefore confirms that our country is taking an active part in the development of the green economy with interesting performances in technologies involving the reduction of pollutants and the reuse of secondary materials, as well as in technologies aimed at improving energy efficiency and the use of renewable sources.

Moreover, in 2018 IPTO launched a new database dedicated to biotechnological inventions.¹¹ Biotechnology and Life Sciences are technologies that have refined and evolved to play a major role in the modernization of European industry. They include techniques capable of providing breakthrough solutions and new applications in various industries such as healthcare and pharmaceuticals, animal health, textiles, chemicals, plastics, paper, fuel, food, and feed processing. According to the estimates of the Organization for Economic Co-operation and Development (“OECD”), their exploitation will have a huge impact on the growth of the entire world economy in the future, contributing to sustainable development, improved public health, and environmental protection.

The main applications of biotechnology in the EU economy are in the health and pharmaceuticals sector (with the discovery and development of advanced drugs, therapies, diagnostics, and vaccines), the agriculture, animal husbandry, veterinary products and aquaculture sector (by helping to improve animal nutrition producing vaccines for livestock and enabling advances in diagnostics for the detection of various diseases), and the industrial and manufacturing processes sector (where biotechnology has led to the use of enzymes in the production of detergents, pulp and paper, textiles, and biomass by using fermentation and biocatalyst of enzymes instead of traditional chemical synthesis, it has been possible to achieve greater process efficiency, reducing energy and water consumption, and decreasing the production of toxic waste).

The national database of biotechnological inventions developed within the Directorate General for the Protection of Industrial Property - Italian Patent and Trademark Office contains information on Italian patent applications classified in the technical field of biotechnology as defined by the OECD. The data comes from the IPTO computerized register and patent applications are identified on the basis of the first IPC assigned by the examiner during the prior art search and indicated in the relevant report.

The database provides a complete picture of Italian biotech innovation by means of statistical tables illustrating various aspects of patenting in this sector, from the number of filings to geographical distribution and the most innovative companies. The system is built with an open perspective; in fact, the user, in addition to searching by application number, title, or classification, can download the set of Biotech patent applications present in the BD in csv or Excel format.

The recent measures taken by the Italian government are of course a great incentive for companies to invest in sustainability. These measures should be renewed annually and coupled with incentives for companies that demonstrate that they file IP rights that meet sustainability criteria.

For example, fees reduction could be granted when registering patents and designs that implement sustainability and meet certain requirements. Moreover, the government could arrange for tax reductions of companies that are able to prove that they have invested in sustainability in the tax year.

Concerning the enforcement of IP rights regarding sustainability, the Courts should encourage settlement agreements to grant licenses to those who guarantee that they meet the necessary requirements to use the patents/trademarks/designs.

The application of patent law to the field of biotechnological inventions faces many issues not seen in other technological fields, therefore the activity directed to the preparation of contracts for the economic exploitation of patents in this area is delicate.

Moreover, the data regarding the Italian current situation of technology transfer processes of universities is rather critical but, in the light of the upcoming reforms, it is expected that that will be evaluated and new solutions prepared aimed at fostering intellectual protection, technology transfer, and economic exploitation of patents.

6 Improving the Success of IP’s Role in Sustainability

Improving the industrial property protection system is a necessary change to strengthen the competitiveness of the production system, an objective outlined by the strategic lines of intervention on industrial property, for the three-year period 2021–2023, provided by the 23 June 2021 decree, signed by the Italian Minister of Economic Development.¹² Another strategic objective is the implementation of the “European Patent with Unitary Effect”¹³ which will aim to strengthen Italy’s role in European and international industrial property contexts.

In the strategic lines of action, attention is drawn to the need to adopt a series of interventions aimed at promoting the culture of innovation and enhancing and protecting intellectual property, which is seen as a key element in mastering the digitization process that is sweeping our society and, specifically, our production system.

The importance of industrial property is also explicitly confirmed by the National Recovery and Resilience Plan (NRRP),¹⁴ which announces the reform of the industrial property system, which is seen as crucial for the protection of ideas, work development, and what is generated by innovation, and for ensuring a competitive advantage for those who have been active in this area.

The NRRP provides a package of investments and reforms divided into six missions. The Plan promotes an ambitious reform agenda, particularly those covering public administration, justice simplification, and competitiveness.

The Plan is fully consistent with the six pillars of the Next Generation EU with regard to the planned investment shares for green (37%) and digital (20%) projects.

The resources allocated in the Plan amount to 191.5 billion euros, divided into six missions:

• Digitalization, innovation, competitiveness, and culture—40.32 billion

• Green revolution and ecological transition—59.47 billion

• Infrastructure for sustainable mobility—25.40 billion

• Education and research—30.88 billion

• Inclusion and cohesion—19.81 billion

• Health—15.63 billion

To finance additional interventions, the Italian government has approved a Supplementary Fund with resources of 30.6 billion euros. In total, investments under the NRRP and the Supplementary Fund amount to EUR 222 billion.

Relative to the Green Revolution and Ecological Transition, the projects included in the mission aim to foster the country’s green transition by focusing on energy produced from renewable sources, increasing resilience to climate change, supporting investment in research and innovation, and incentivizing sustainable public transport.

For these lines of intervention, 1.25 billion is allocated to strengthen investment in the main sectors of the green transition, including by fostering industrial reconversion processes and new entrepreneurship.

One billion investments for renewables and batteries aims to develop industrial supply chains in the photovoltaic, wind, and battery sectors through three main lines of action, namely, the establishment of a giant plant for the construction of innovative high-efficiency photovoltaic panels, the construction of an industrial plant for the production of flexible panels for wind power, and the construction of another giant “ultra-modern” (4.0) plant in the battery sector.

Returning to the subject of industrial property, Italy is adopting a number of strategies to strengthen its promotion and enforcement, such as the upcoming reform of the Industrial Property Code, which is considered essential for the adaptation of the regulatory framework to the developments being foreshadowed by the above-mentioned lines of action.

Another novelty, which has been recently approved by the Italian Parliament, concerns the protection of innovation in universities and at public research institutions:¹⁵ ownership of inventions will no longer be granted to the researchers who developed them, but to the respective structures in which they operate and, only in the event of inaction by the structure in question, will it be attributed to the researcher.

This is an important and long-awaited reform, which was promoted, among others, also by Federchimica Assobiotec, the national association for the development of biotechnologies. The latter, together with the reform of the so-called “Professor’s Privilege,” also proposed the creation of a Tech Transfer Competence Center (TTCC) for the Life Science field which should take care of organizing and integrating the competences developed at the level of the individual Italian regions, guaranteeing the research centers and other entities (such as universities, hospitals, etc.) the possibility of being autonomous, equipping themselves with the necessary competences to provide concrete support also in the area of intellectual property management. The centers should also make it possible to achieve a minimum amount of material, not duplicating competences, and making use of the resources that the regions already have.

Lastly, efforts are being made to create a new telematics support infrastructure for the management of all industrial property applications and titles, using the latest technology, and to be complemented by the implementation of the Unitary Patent System, thus optimizing the “Supplementary Protection Certificates” system.

In conclusion, with regard to the provision of improved aspects within the European system, certainly the implementation of the “European Patent with unitary effect” is of fundamental support. It will be granted by the European Patent Office (EPO) and will enable its holder, through the payment at the EPO of a single renewal fee, to simultaneously obtain patent protection in the 25 participating EU countries.

This patent will not replace the national patent, but will be pre-eminent in case of cumulation of protections with the national patent. The European Patent with unitary effect will be operational only after the International Agreement on the Unified Patent Court (UPT) enters into force.

7 Conclusions

Investing in innovation is very important as there is a direct positive relationship between R&D investment and a country’s growth. Innovation is a complex and articulated process that starts with an idea and evolves through research, development, production, and commercialization.

Moreover, it can be the starting point for new ideas and new innovations resulting from the superior contribution that other individuals or companies can make.

This creates a true virtuous circle whereby innovation generates new innovation, with benefits not only for those who produce it, but also for the direct or indirect stakeholders involved and for the entire planet.