today the select committee will hold a hearing to focus on an issue that underlies all of our discussions on technology but which is often overlooked intellectual property rights and the role they play  developing clean technology solutions the gentlemen from wisconsin mister sensenbrenner is a leading congressional authority on intellectual property rights and during our recent trip to china he constantly reminded our chinese host that technology must solve the problems of energy security and climate change but to do so effectively we need a rigorous system to protect intellectual property i view and we are having this hearing to explore those issues there is a huge and growing demand for climate related technologies it can and should be met by inventions of american companies america is well equipped to lead and provide the cutting edge technologies we so urgently need for solving the climate and energy challenges but we need to develop the solutions for tomorrow and then deploy them worldwide passage of the american clean energy and security act will push entrepreneurs and college kids silicon valley stars and stanford roommates to work hard and to try their luck at inventing new ways to produce renewable energy  reduce greenhouse gas emissions when those entrepreneurs succeed what will happen to their product and know how that is the question we will explore today in the upcoming copenhagen negotiations technology cooperation will be an important topic as countries look for ways to enhance deployment of climate technology around the world at the international level there is a consensus that clean technologies have to be developed an deployed and that the current efforts in this respect have to be enhanced there is also general agreement that the private and public sector will have to find new and better ways to bring those solutions to the villages of india and the towns in south africa but although countries might agree on the general direction there are very different ways to achieve the goals with only one hundred and thirty days left until the copenhagen negotiations the world faces great challenges to find agreement on how to address the technology challenge today is a good time to take a close look at business opportunities at technology cooperation at barriers to spreading solutions and at the closely related question of the protection of intellectual property rights intellectual property rights enable innovators to be rewarded for their creativity and investment of time and money but these rights must be balanced with the need for incentives and the common good in the interest of sharing ideas and technology this is why in the u s we have time limits on patents and copyrights this is why the united states and all members of the world trade organization agree on the treaty which outlines how intellectual property rights should be protected on a global basis we have the international framework in place although i appreciate there are disagreements as to how well that framework operates in daily practice nonetheless i think it is information technology let us again embrace our opportunities for our country and businesses so that they can lead the world to a low carbon future because this is our last hearing before the recess i would also like to subcommittee in the old interior committee and tom worked on the staff of manny lujan tom gave many distinguished years of service to that committee and then at the interior department and i was pleased to work and travel with him over the past three years as part of the select committee staff he was a consummate professional who was always fair and committed to the work of this institution i know that he cannot gentleman from wisconsin mister sensenbrenner mister sensenbrenner mister chairman let me say that i deeply appreciate the comments that you have made on the retirement of the republican staff director of the select committee tom weimer when i recruited tom for this job his extensive background both on the hill and in the interior department on energy issues was invaluable in helping get the committee off the ground despite the fact  that the chairman and i have some rather deep disagreements over how to go about solving the problems of climate change and energy security tom has worked very professionally with the democratic staff in order to make the work of the select committee a success after hearing your good words about tom i am going to make an offer to you over here on the republican side anybody that uses the word cap and trade instead of cap and tax ends up having to buy a round of refreshments for everybody else and mister weimer does owe a couple of rounds for  letting the wrong language slip out and when we have payback time mister chairman i will be sure to invite you so that you can enjoy the results of mister weimer's slipping up on what  sensenbrenner i thank the chair for those very good words and remember some words count and some words don't i am glad you agree that cap and trade is a bad word having said all of that my opening statement global warming has become less about science and opportunism soon after scientists rang alarm bells on carbon emissions everyone from financial institutions to developing nations realized that they could get rich off of it so while scientists continue to debate the best course of action those with vested interest declare that the science is settled and offer solutions that conveniently would also make them rich but we can't allow the need for action to make us victims of self serving proposals against american interests efforts to weaken intellectual property rights at the ongoing u n climate change negotiations are a perfect example developing countries like china and india see climate change as an opportunity to gain free access to american ipr but far from mitigating climate change relaxation of ipr would ruin our and the world's only hope of responding in a long term way china along with other developing nations in the so called group of seventy seven wants the u n to establish an executive body of technology that would be governed by of these same countries the chinese and others propose that this body would determine technology related financial requirements and seek to ensure that privately owned technologies are available despite the intellectual property protections put simply china and the developing nations seek to transfer the developed world's clean energy technologies to an unelected u n body which they would control the current draft u n negotiating text that will be considered in bonn early next month includes proposals that would exclude from happening in developing countries environmentally sound technologies to adapt to or mitigate developing countries on nonexclusive royalty free terms these governments argue that the risk of climate change justify free access to technologies to help mitigate them the result would be a transfer of billions of dollars worth of the latest technologies but the argument mistakes or willfully ignores the truth that technology is not a natural resource that can be pulled from the ground new technologies will exist only if there are incentives to create them and innovators should know that if they invest their time and money their innovations will be protected not given away chairman markey and i respectfully disagree on how best to respond to climate change but i think we agree that advanced technologies will ultimately be the long term solution whether we adopt new taxes or a more economic approach which i advocate companies won't has told the new york times why would anybody invest in anything that they would just have to give away china and india in particular have a checkered history of protecting ipr the u s trade representative reported t congress in april that neither china nor india provide an adequate level of ipr protection or enforcement or market action access for people relying on intellectual property protections and placed both on its priority watch list of the worst offenders the trade representative's report said overall piracy and counterfeiting levels in china remained unacceptably high in two thousand and eight and that its ipr enforcement regime remains largely ineffective and non deterred while privacy and counterfeiting including pharmaceuticals remain a serious problem in india and its ipr enforcement regime remains weak rather than demanding free access to new technologies if developing countries want to mitigate climate change they should pledge to protect them so that the investments will be made to develop those new technologies as the world works toward a new international agreement on climate change i urge the obama administration to end hopes that ipr will be freely granted by proposing new language for a climate change treaty that strengthens intellectual property and promises to protect and here today with arch venture partners he embodies the spirit of innovation and i look forward to his testimony i also have a little token of our appreciation mister chairman for your leadership this is a little bit of sapphire energy's algae be assisting the developing world and it is a serious issue but it ought not to be at the expense of innovators and it ought not to be in a way that depresses and suppresses innovation if we are going to be providing assistance to make new technologies available to the developing world it ought to be based in a way that the community as a whole finances it rather than just the innovation community to do otherwise really suppresses  prevents the innovation from coming into existence that we might be able to share and or sell to the developing world so i just want to make the point and i know that we will talk about this today that the worst way to share is to do something that would prevent that which you seek to share from ever coming into being and when in fact you deprive folks of intellectual property in fact that is what has happened so there are better ways to do that and i look forward to this discussion government protect the intellectual property rights of our innovators one of the things that i realized as we were working on preparation for this hearing is that over the past seven years all of the clean energy technology patents that have been put in place fifty percent of those are u s innovators so we are deeply invested in making certain that we protect that fifty percent of all of the patents that are held by u s citizens it is of concern to me that there are new developments in international law and international agreements that may threaten these rights and  outright piracy and theft of some of these patent protected technologies i am concerned too about the climate fund accounts as a price for participation in any treaty or agreement with carbon emissions i am concerned about compulsory licensing and preferential pricing of low carbon technologies that are coming into the marketplace so those are all things that i am going to want to take a look at as we have this hearing because i think we have to be careful that we don't barter or give away any of the work that has been done by our  radio so all of a sudden i have given a lot of thought to this whole issue of intellectual property and the value of the new and in some cases yet to be invented energy technolog invented so i look forward to this hearing there are some issues raised by midwest research institute in the fifth congressional district which you may or may not be familiar with which i would like to lift up as we govi rao who is the chairman of lighting science group corporation a leading digital lighting solutions company he is also partner of pegasus capital advisors a private equity fund manager  that is also pursuing opportunities for sustainable business solutions he came back from his business trip to bahrain yesterday night in order to testify in manufacturing operations in new jersey florida and california we would love to have operations in the rest of the country as well this hearing to me actually has a couple of connotations at the end of the day if it is ip or innovation without the opportunity we have given them the ability to actually be able to provide their technology to the rest of the world by building scale in both manufacturing and r and d the three questions that were posed to me for today's testimony a barrier or a boost and i have my personal opinion about that and also to see in the context of the upcoming negotiations what my hopes and worries are so i am going to address the three of them today my experience in the last few years in lighting science and two years especially in building this company has been extremely powerful in two ways one is seeking opportunities we look at this from a protectionist approach when it comes to intellectual property however between their energy requirements today and energy production today is significant and is growing so they are actually being very aggressive in coming up with new ways of meeting that demand both on the  energy generation side but more importantly they have also started very aggressively putting a cap on how to use the energy on the demand side that is a powerful thing i will spend some time on that today while we have new technologies that are coming on stream for generation i believe there is a tremendous amount of technologies here in this country already existing to mitigate the demand we are not doing much about them and i would like to spend some time on that this is climate change we look at this from a geographical perspective in intellectual property but i believe we have to change our paradigm and look at this as a global activity let me give you an example of my three days in  the middle east over the last few days the opportunities there on the demand side of energy are absolutely fantastic they are requesting us to help them curtail how they use energy whether it is through controls or east and asia and china and especially in india are humongous and phenomenal the technologies we have already if we do not get there and actually make these technologies have the day to day commercialization then we will fall behind in leadership in th robert nelsen co founder and managing director for arch venture partners his company has significant experience in the early sourcing financing and development of emerging technology companies as a part of arch venture partners mister nelsen has contributed to the development of over one hundred and thirty companies including leaders in the fields of solar and biofuels these companies hold over one thousand two hundred u s patents and p have been involved in founding thirty companies over twenty three years including companies that are the standard of care in breast imaging the leader in k six mathematics the leading genomics company and sapphire energy the leader in algae biofuels please for a moment imagine a world with oil made here in the u s a with just co and sunlight on desert land powering conventional cars and jets imagine a world where solar energy costs six to eight cents a kilowatt hour with no subsidy that time is now those technologies exist today and that innovation is happening in our research universities and labs and in start ups not in big companies big companies don't do that anymore and they don't take the risks this bottle of algae oil from sapphire energy has two hundred patents behind it and one hundred dollars million of private capital just to start it will compete with exxon and the middle east and china sapphire has a huge lead now because of u s innovation and patents and we hiring hundreds of people in new mexico and california without those patents no money would come no plants no jobs with a strong world patent system and the right voluntary incentives for global cooperation we can use this green crude to make poor countries oil exporters and we want to do that i believe the only way to get to energy independence and solve global warming is through technology four to five inventions in the next one to ten years will change everything algae biofuels at scale solar that competes on cost new batteries new lighting with greek e less electricity consumption it will happen only in the u s almost all of the major breakthroughs in energy are happening here not just fifty percent of the patents but almost all of the major breakthroughs only because of strong ip protection only because of huge private venture capital investments that follow federal research now imagine a world where we allow big oil to run over the innovators because of weakened patent laws and weakened enforcement where we accidentally harm our own clean industries by using compulsory licensing instead of incentives where we increase taxes on investors who create new companies jobs and solve our policy goals like reducing carbon that could be our trajectory the light at the end of the tunnel is this committee and others who are saying wait a minute policy goals actually matter we need to support and reward the innovators we need funding support for scale up and we need support in other committees of congress so that we do not inadvertently and accidentally hurt energy innovation we need the right policies and incentives for global cooperation so we can deploy our solutions rapidly to  the world while still protecting jobs at home we may even need something like a world green bank to help fund the deployment of green technologies in developing countries our greatest global competitive advantage in the next decade is energy innovation regardless of your position on global warming we will lead the world in innovation and we will become more secure as a result venture capital investment in energy is encourage that investment we are more secure more prosperous and we will have a greener and cleaner environment for the benefit of the global community thank you the chairman thank you sir our next witness is  representative where she was responsible for reconciling u s trade policy and environmental policy she has taught international environmental law at johns hopkins university and we welcome you  fact a strong climate policy will lead to a blossoming of new intellectual property in my statement i will make three points point one the most important driver of u s technology development and u s competitiveness is a strong domestic climate policy i know this is a hearing about intellectual property rights but really i think what we are talking about is our economic competitiveness our concern that sharing our own clean tech overseas will let economic competitors get ahead by stealing our secrets the truth is they don't need to steal our ideas to outcompete us in the new energy economy they can simply seize the opportunity first and europe japan and others are racing ahead right now when it comes to new carbon technologies how do we get back in the game by putting a cap on greenhouse gas emissions as this house has moved to do that will create an enormous domestic market for low carbon technology and the alternative is to sit tight and watch our foreign competitors take a commanding lead in the new energy economy and that would be a producer in the world with ninety five percent of its production destined for export i brought one graphic which my colleague will post there the chart reflects the geographic distribution of patents around the world and as congresswoman blackburn noted the circle on the left the green half of the circle is u s patents from the years two thousand and two through two thousand and eight we lead the world in clean energy patents but we have a much smaller share of production only nine percent in two thousand and five for solar the problem here isn't theft of our ip it is that we don't have the right national policies of course where valid concerns about ip exist they must be addressed but we are not going to build a clean energy economy just by having a of pieces of paper from the patent office we need factories and installers and we get that by putting a cap on carbon point two in the u n climate negotiations intellectual property discussions have so far displayed strong rhetoric that limited analytical basis ip rights are becoming a flash point in the u n climate negotiations where ip is one part of the broader issue of tech transfer over the years developing countries have been promised and have had high hopes for tech transfer but have mostly been disappointed as others have noted the parties to the international negotiations hold sharply divergent perspectives on ipr many developing countries argue that ipr restricts their access to climate friendly technology and seeks special treatment and relaxing of the rules they see the situation as analogous to life saving medications like those for hiv and aids but there are big differences between pharmaceuticals and low carbon technologies unlike pharmaceuticals many of the tools necessary to reduce carbon emissions and adapt to a warming planet are not leading edge unique solutions they are existing technologies unprotected by patents even in the developed world consider three main ways of emissions reductions the first energy efficiency typically involves things that don't require ip licenses putting up insulation caulking air holes installing more efficient windows appliances that sort of thing the second clean energy production likewise does not appear to be significantly hemmed in by patent protection many companies in different countries compete to offer renewable energy equipment in wind for instance there are at least twenty different firms scattered in many countries competing to sell wind turbines when a technology depends crucially on a single patent such as a drug to  treat hiv and aids this doesn't happen finally consider a third way sequestering carbon in farms and forests to our knowledge there are no exclusive rights for example in planting more trees flooding rice patties less often or using less fertilizer is also important to remember that getting a patent unlike copyrights requires a time consuming and often costly application process in each individual country thus unless an inventor has obtained a patent in a particular country he or she won't have any patent rights to enforce there for these reasons it is not clear whether there are enough ipr problems for climate friendly technologies to support significant modifications or exceptions to the rules it is also important to keep in mind when evaluating the developing countries proposals in the u negotiations that countries are in the midst of what has finally ripened into an actual negotiation with parties ramping up their rhetoric and staking out strong positions in anticipation of future compromise point three we need to be vigilant for emerging problems from either side of the issue potential infringement of ipr rights or potential ipr barriers to technology access as i have noted the case remains to be made in favor of climate specific modifications to the rules the urgency of the climate problem demands however that climate friendly technologies be widely available and that breakthrough innovations be quickly and widely disseminated accordingly we must continue to monitor the situation and respond swiftly if ipr rules are found to be blocking achieve a global deal to reduce greenhouse gases from all major sources the chairman thank you ms haverkamp very much our final witness is doctor mark esper executive vice president of the global intellectual property center and vice president of the europe and eurasia department of the u s of chamber of commerce previously doctor esper worked as a senior scholar at the national institute for public policy he also served members of the committee i appreciate the opportunity to testify today on behalf of the chamber of commerce global intellectual property center and its members the global ip center and its members believe that strong intellectual property rights are integral to driving the innovation and creativity necessary to create jobs save lives advance economic growth and development around the world and generate breakthrough solutions to global challenges such as climate change our nation's founders recognized the link between strong ip rights and innovation more than two hundred years ago and explicitly gave congress the drive forty percent of the united states economic growth and as of two thousand and eight ip intensive industries employed more than eighteen million americans but beyond driving job creating and economic growth strong ip rights have created a secure framework for investment in research that led to solving some of the world's most difficult problems from disease and famine to water scarcity and energy security just to name a few in addition to protecting and incentivizing inventors strong ip rights are also integral to promoting technology deployment and diffusion by providing a clear legal framework by which companies can transact business despite these facts threats to innovation and ip rights exist around the globe in an effort to promote domestic industries or appeal to narrow political interests some governments are actively engaged in attempts to weaken the current ip system the united nations framework convention on climate change is the latest front where some are attempting to portray ip rights as a barrier to solving climate change the gipc believes these critics have once again turned reality on its head robust ip rights are not an obstacle as some allege but instead play a fundamental role in encouraging innovative solutions to climate change mitigation and adaptation ip protection also helps facilitate tech transfer by providing companies a commercial incentive to engage in foreign direct investment joint ventures co production cooperative research endeavors and licensing agreements with local partners there now is a clear commitment by the developing world to address global warming through some form of binding international agreement as either negotiating tactic to block any international agreement or condition that will be used to advance their own economic development and technological prowess china india and other developing nations are using the issue of tech transfer as a major lever in current u n negotiations as a result proposals into the final u n agreement would not only have a negative impact on the development and diffusion of climate change mitigation and adaptation technologies but would also put american workers and the u s economy at a competitive disadvantage some countries claim that ip rights are a major barrier to the diffusion of technology such claims are quite misleading to begin ip rights cannot be a barrier to tech transfer if the patents are not protected in the first place which is often the case in many least developed countries ironically one of the real barriers to tech diffusion is not strong ip rights but the lack of them indeed a report commissioned recently by the european commission states that u s multinational companies are more active in engaging and transferring intangible assets to their own affiliates in the country if the country has strengthened its ip legislation another major obstacle to tech transfer is a country's absorptive capacity meaning a country's ability to not only receive the technology but then have the various means from physical to human capital to deploy remedies are readily apparent the u s could take a number of actions from for example urging developing countries to strengthen their ip laws and enforcement working with countries in the developing world to improve their absorptive capacity and working with our trading partners and others in the developing world to remove all tariff and nontariff barriers to trade these are just a few ideas i included more in my written testimony and we can discuss additional ones later but the fact is that technology development and deployment and diffusion cannot be mandated is a long term process that occurs largely and most effectively within the private sector along voluntary commercially viable not de compliant terms the global ip center applauds the house of representatives and its members who have taken a number of steps to ensure ip protection is rights to expropriate ip protected american innovations as such we believe it is critical that congress continue to send the administration and our negotiating partners clear and forceful signals that ip rights is not an area where the united states is willing to make concessions in copenhagen important more than ever to protect an ip based incentive system that has worked extremely well for centuries and driving innovation developing solutions and deploying those technologies as broadly as possible the congress has taken a number of positive constructive steps in this direction but more can  in my opening statement i refer to the current u n negotiating text at the bonn meeting next month including proposals to exclude from passing developing countries environmentally sound technologies to adapt to mitigate climate change a second to require compulsory licensing for environmentally safe and sound technologies a third to ensure access to intellectual property protected technologies and associated know how in developing countries on nonexclusive royalty free terms now obviously this goes directly opposite to what everybody has said here what would be your recommendation to mister stern and the u s negotiating team when they go to bonn next month on how to deal with this issue aside from saying what is in the text is a non mister nelsen i will take a shot i do think you have to have an alternative other than just saying no one of the things i was looking at as a model was something like the asian development bank  some possible private or private public sector incentive system essentially so for a developing country if there is a breakthrough technology that there is some way after the green bank here that would incentivize u s primarily u s breakthrough technologies to go to developing countries and possibly loan guarantees or some other way technologies are still proprietary and protected but there are incentives to deploy versus disincentives personally i think it is going to be very hard because of the amount of dollars that are going to be invested in these technologies to deploy billions and billions  if there is not some kind of intellectual property rights there people won't do the investment in the developing country so we will have exactly the opposite effect that the developing countries are thinking it will have some incentive structure  that the message that i got out of our recent trip to china is either quote give us a compulsory license or if you won't do that we will just steal the technology anyhow either alternative which is legal and one which is not would mean that the actual manufacture of the technologies that were developed as a result of american innovation would not be made by american workers for use in third world developing the technologies but the chinese will be using their workers and paying them slave labor wages so they will end up monopolizing the market mister nelsen i think we can do both i think there are plenty of incentives that are being created here at home to be able to start in texas and oklahoma and new mexico and other places but it isn't necessarily a loss for us if china makes this oil under the right construct if china is making domestic oil that means they are probably interfering in less things outside of china and africa and other places it might not be a bad thing i personally think with china it is a different case than some of china to invest some of their own foreign reserve in things like this so that they feel invested and that we feel protected mister sensenbrenner that is a big problem because if they can get it free why solar powered electrical powered vehicle transportation system and an alternative or adjunct path of a solar powered photosynthetic biofuels path to a transportation system the gentleman who  transportation fuel to something you need to compare it to a battery that stores electricity you can't compare solar photovoltaics to a transportation fuel basically you have to say it is a gallon of gas compared to a battery and right now a gallon of gas is two hundred times more dense than the best battery so if you have a battery that equals a gallon of gas and it was a duracell battery it would be nine feet high so far there isn't anything that replaces some manufacturing in china what is your current view of the relationship of your intellectual property in a china context what do you view the current status is how confident would you be of manufacturing in china or allowing that intellectual property to be available mister rao with respect to the led technology sir we have been waiting for that particular reason because our confidence level wasn't too high however we have seen technologies grow in china and take advantage of the massive local market at the end of the day they are able to invest in manufacturing in china if they are able to create the market in china we are finding low cost options for led technology coming from china and we are beginning to have conversations with people to actually either cross partnerships so that is why i brought up the sense of urgency for us to move forward if we don't take the action and create some kind of a mechanism on the commercial side to take advantage of our technologies and ip then i believe we will be left get out there and start putting our technology out there so it leads the world most of the core technologies in demand side whether led lighting or not is here today to lower energy consumption as american enterprise  able to get out there and make that lead and have other countries and companies follow i think we will continue to stay in the leadership mister inslee so do you look at yourself as sort of between a rock and a hard place if you wait and allow other companies to develop alternatives whether it is thailand or indonesia where there is more of a perceived protection of ip i am not sure if it is true or not there is less of a flow or what we do is we keep gen one products here in the u s and maybe older technology we take it to other parts of the world so you don't lose your current technology the other thing about being between a rock and a hard place sir is the fact that if we are able to create markets here locally we can stimulate innovation at a much rate that is one thing that is keeping us behind a couple of us mentioned here we are slow to create markets in energy and climate related technologies here in the u s that will be our number one challenge if we don't do that we will be left behind china and india and the middle east are doing that today mister inslee we have a little bill that we hope will become law in the fall that will help in that regard thank you very much the chairman the chair recognizes the gentleman from innovators can come to make sure that there is a neutral party to kind of manage oversee negotiate to prevent  a joint effort we are doing in china and there are some things in europe there is a lot of interesting ways we can think about ideas like that on a global basis focused on applications my point earlier was that most of the big breakthroughs are still going to happen in the u s so we have to do two things we have to protect the big breakthroughs and we have to develop the applications i think when you talk about these joint research institutes and potential neutral ground  better for the applications than they are for the breakthroughs because no matter what you do in foreign countries you won't be able to replicate the one dollar trillion or two dollars trillion investment the u s has in our research infrastructure that is pretty much waxman markey climate bill which we proudly passed over here in the house and if we could figure out a way to eliminate the senate constitutionally i think we could  make a lot of progress but that is just a personal opinion but you also mention that the kyoto protocol international offset program the clean development mechanism has not lived up to expectations what can you share with this committee that might improve our international offset program before the final by u s companies satisfy scientific requirements for their environmental integrity and i think the bill proposes a process for that happening there are some kinds of offsets like the  reductions in deforestation from tropical forest countries that you can be sure are keeping carbon out of the atmosphere and the bill in a very good way creates a lot of space for deforestation credits to come into the system with respect to emissions reductions from projects in developing countries along the lines of the clean development mechanism i think there are a couple of things that should happen one is  does which i applaud is that while preserving the clean development mechanism projects for the smaller poorer countries it has a mechanism for the largest emitters graduating out of the ability to sell their credits into our market and i think that is especially important for the atmosphere because the major emitting developing countries need to move as soon as they can toward real emissions reductions and cdm projects are frankly shifting emissions from one part of the world to another rather than an overall reduction globally in emissions thank you  energy in the aspect of demand containment so demand side management in terms of lighting digital lighting so led lighting and controls there are opportunities in these countries where they have recognize that controlling their use of energy is going to be a lot faster than just adopting energy generation technologies as an example in the middle east using solar photovoltaic technology is not going to be practical because of dust settling into solar panels so they have tried it you know we blindly believe that there is a lot of sun in the middle east so solar would be great while actually practically on the ground it does not seem to be all that fine the chairman would that be the same problem in the mojave desert in the united states dust would settle in and as a result that that is a false promise as well mister rao i am not sure if i am qualified to technically answer the question without a little bit more research chairman but i will tell you this if it is dust with moisture if the humidity content is high in the mojave desert which i believe it is not at least for most of the year that becomes an issue because the dust with humidity settles in and cakes  that and all across the middle east no matter whether it is one hundred degrees a day and the sun is out every single day that solar is not in their future is that what you are saying because of the humidity that accompanies the dust creek the middle eastern countries are because of their humidity accompanying there i never knew that before mister rao and they are looking for solutions so talk about technology and opportunity for innovation if we can solve the problem of dust and humidity settling in the without major infrastructure change they recognize that and they have asked us to help them with implementation of this technology so there are specific examples so if you talk about controls what am i talking about specifically making built environments more intelligent that actually  regulate the lighting the hvac et cetera based on ambient conditions of outside lighting as well as outside temperature and very often we find in commercial buildings or in other places as well the outside temperature is one hundred and ten degrees but inside temperature and air conditioning is ramped down to sixty five degrees and we have actually been in environments where you feel cold inside when it is one hundred and ten degrees outside the difference doesn't have to be that much to provide comfort for us as human beings to being inside so making it intelligent actually adds a tremendous amount of savings that is something that we ought to be doing here in the u s and people outside the u s and the middle east and southeast asia have recognized that as well they are beginning to implement those technologies the chairman let me ask mister nelsen a question you  something like the asian development bank would be a good example of something that exists outside of the u s proposed green bank so if i wanted to make a million acre algae biofuels facility in a poor country in africa i would approach the country and we would jointly apply to an entity that would help partially fund it intellectual property rights being preserve not actually transferring the technology to anybody but kind of a joint effort that would have some public funding and then with china i think it is a little bit different so it needs to go in at probably a different level and i actually think maybe the solution would be to have the chinese put up some of their excess money into that kind of a structure so they feel invested the chairman so when the chinese say they don't have any excess money directing the social security fund in china and the other person that happens to be in charge of the china investment corporation and they have a large amount of money and i think that  one of our challenges to china and one of the ways to solve this problem is to get them invested i mean if they are investing billions and billions of dollars in u s technology that is deployed in china and intellectual property rights are preserved in a government to government relation that actually might work because it is less likely that they are going to want to steal the technology if they have invested huge that are really aimed at improving their own economic competitiveness and their technological skills so it is a special case that we really have to work on in particular if we are going to break down these barriers and get them to be a transfer that is what we say when we rather than talking about ip and how we do compulsory licensing or tech transfer in the unfccc context we really need to not focus on the red herring and look at what the real obstacles are at the country by country level and tackle those  training people in the philippines it is kind of hard to accept that tariff barrier against our sales to them of high tech material and systems have we made any serious attempt there for instance mister esper well that is a good question and i don't have the answer for it right now i  think it is part and parcel of the strategy we need to put forward in terms of addressing the tech transfer issue of looking at these countries looking at where they rank on the special three hundred and one watch lists and asking ourselves how do we  other companies be invested so they have got an investment in it where they benefit if you will from ip protection were those mutually inconsistent at all that you know we are helping finance through green bank but we are also expecting people  personally invested mister nelsen i think you define it based on poor countries versus wealthier countries so there are developing countries that have large foreign currency reserves you know china being the obvious so i think  china and india and maybe one or two other asian countries are separate cases and then you have issues like africa and other places where basically there isn't money and so you need to probably have some kind of private sector public sector matching or similar some quasi public structure like the asian development bank where there is maybe or maybe multiple different organizations coming together to do project finance that has some private matching mister inslee just to share my story from china to show i am thinking on the lines you are is that when we were meeting with the chinese officials and the same line with remarkable message discipline everyone told us the same story in china which is that they are a developing nation we are a developing nation we are a developing nation and i was with one of the officials i noted that in driving to the  had gone by two gucci stores a prada store and a ferrari dealership and i noted that just that morning the chinese businessmen had bought a stake in the cleveland cavaliers and i said that i thought china was a are looking for the right technologies just as we are once the green technologies that actually can compete on cost exist i think they will absolutely invest their money in it and so as you see solar come down and as you see biofuels that are practical it is the same process that we have here i mean they are going to be marginally impactful until they can compete on cost and then i believe we will invest more and i believe china actually will want to invest some of their foreign currency in those solutions and that is probably actually a good thing for us in a lot of ways but we are still going to need to go high maybe in an sed level for ip protection  with uranium plutonium and other nuclear bombmaking material which is only going to escalate the tensions in the middle east and i am very afraid that as we send very expensive  nuclear power plants to the middle east that we are only shortening the day that we have to send ever more troops over there as a government collapses that has one of these nuclear power plants in the same way that in iran and that problem it is almost inevitable that the same thing will occur in one of these other countries a country that could otherwise generate electricity from solar so here is what i am wondering and everyone is gone here so chairman and i am just wondering you know we have this problem with rain that used to go on the windshields of american cars and somebody came up with the idea of a windshield wiper that would just wipe basically and then somebody came up with a brilliant brilliant idea it was called the intermittent windshield wiper it would just occur every thirty seconds or so a big patent fight over that about fifty years ago in the united states a guy got very rich winning this patent fight a big big fight and it just seems to me that maybe someone can invent a way that intermittently the since the very device that we are trying to protect generates electricity it would seem that perhaps there would be a way to have an intermittent dust wiper you know wipe off the dust so that the electricity which is being generated by the thing that is being protected by the int dust wiper would allow this country to be able to take advantage of their better natural resource rather than asking the united states to send them uranium and plutonium should i get a patent on my idea n about finding alternatives for self cleaning solar panels that actually can do the same thing we did recognize the fact that there was a patent fight and the discussion was we have to do more research on who holds the patent on intermittent wipers and how it can be that i thought maybe i shouldn't share this idea with bahrain and saudi arabia and other countries maybe i should just keep it here so that we develop all these ideas and that they not become the capital of solar okay because solvable problem and it also solves the problem of us sending uranium and petroleum to countries that could be subject to political instability over the next fifty years which instability would then  create real problems for us as well in the transfer of nuclear bomb making material to third world groups that many of these countries as you know are already subsidizing at least indirectly so i just think the sooner we solve this problem and i would like to work on this as an issue because i think almost everyone at this table really does believe that solar is the future and it could become the single largest manufacturing sector in the history of the grossly negligent about how they use energy because it is so cheap now they are beginning to realize that we will work on that i really applaud you for taking that effort and maybe there is an idea for another patent maybe if you continue thinking on it the chairman is this a patent in the control of the united states are you aware of that is the workshop the three day workshop on the intermittent dust removal technology is that an american technology that they were discussing mister rao the initial patents i believe we are doing some research on it the workshop you a lot of times people say well you know this is the equivalent of our putting a man on the moon but in a lot of ways that kind of overstates the case because we are talking about batteries we are talking about you know incremental additions on already existing technologies with additional breakthroughs kind of like in the chip industry how there is moore's law and it just keeps improving every year or so the same thing is true here with incremental new technology breakthroughs that keep improving by another eighteen percent per year the efficiency of solar or wind or other technologies which seems to be the difference between the hivaids patent protections and the clean energy patent protections as you see the differences in other countries around the world in terms of those technology transfer issues sure my pleasure i went into this in some more detail in my written testimony than i did orally and i would recommend that people also look to that but i think some of the most significant differences are that often in the pharmaceutical area to deal with a particular disease there may be just one fix that is developed one drug that really works there is a lot of effort to find the one thing the silver bullet if you will and what people are fond of saying is that with respect to climate change it is not going to be a silver bullet it is going to be silver buckshot and the examples that you see say in the solar area or the wind area where there are lots of different companies with lots of different ways of addressing the problem of reducing emissions or making the products more efficient that is quite different from the medicine area but i do think it is important in thinking back to representative sensenbrenner's question about the negotiations there is a lot of monopolistic situation with the few large companies that were making they had to make incredible investments in the research to develop these products but then there were significant financial benefits when you had that patent and there was a fair amount of obvious human misery that could be avoided if the medicines could be made available more cheaply and it was this is getting into anecdotal information but i think one of the stories that i remember being bandied about a lot was that when the patent was about to expire a minor change to the product could extend the patent period again so it was looking like it was companies going out of their way to preserve their market share and make it harder for generics to come on line and i think in the area of human health that was seen by many developing countries as unacceptable the good news is that in the wto ministerial the governments got together and came up with a decision about access to medicines that recognized that there were flexibilities in the trips agreement and in situations like this they really ought to be used  of the negotiation why is it important for the united states to be a leader in resolving these issues in your opinion ms haverkamp i would slightly amend your description of intellectual property as one of the four main pillars one of the four main pillars is the transfer of technology and intellectual property is one piece of that the transfer of technology involves also the capacity building the access to information a whole suite of issues and transfer of technology and addressing that is critical to getting an agreement in copenhagen because it is if you will the developing country's side of the deal that we need to make we are wanting them to reduce their emissions they wanting the technology and financial assistance to be able to do that and it is in our self interest as the united states to come up with solutions in the tech transfer area because as many people have said even if our emissions went to zero if all the developed country emissions went to zero by two thousand and fifty you aren't going to avoid dangerous climate change unless the major developing countries soon also get their emissions leveled off and in a downward path and so we need to find the ways to share technology share know how with them so that they can do that as well and i think the private carbon market can be a big player in making that happen the chairman so we can have the audience watching on television  that there was a range of agreements around intellectual property that are administered by the world intellectual property organization wipo but i think trips has been considered the most significant in creating the incentive for countries to you can put that into english for our viewing audience ms haverkamp i am sure my colleague would like to help as well but i think that one way to say it is that the trips agreement when countries join the wto they take on an obligation to write into their domestic law strong intellectual property protections and if countries do not pass those how significant these issues are and whether and what kind of fixes might be needed but i think that climate change is a problem that requires that needs to be addressed across multiple fora and the u n climate negotiations  does not have the sufficient expertise or involvement of all the right ministries to address all the issues so i think that the ip issues are coming up here but it may well be depending on the kind of concerns emerge that the other fora like the wto trips agreement would be an appropriate place to address it i think also that is just a political reality that i don't think you are going to get consensus to address obstacle here it is what is going to get us innovation when you start looking through the case by case country by country examples you find that certainly in the least developed countries patents aren't the problem many of the technology solutions aren't patented of ip perhaps it probably won't be a bad idea to actually make this a trade issue because at the end of the day ip without commercialization doesn't really mean much ip for the sake of ip is not going to get us taking satisfaction in these history and english books that we are reading and here for just one brief moment it only lasted until i recognized you again i got great satisfaction so sometimes i actually has been tried by the world business council on sustainable development they call an eco patent pooling but they don't incentivize the innovators it is more just to share ideas but the clearinghouse that i was talking about actually does incentivize and this is exclusively for climate change ready technologies now across the board you take this out of this realm of debate because while we are debating we are polluting we are actually making this war of the worlds of a play so  my idea was actually if you add this green bank i think it was actually i called it funding but made this a part of the wto effort where the clearinghouse actually takes responsibility you pay for play you get in if you have an idea you get in and you can actually take  ip as well it lets innovators actually take advantage of ideas around the world the interesting thing it is not about the large companies alone i think the backbone of our economy and most other economies is what i call the smes the small medium enterprises innovation comes out of there of exchanges work but for the real big breakthroughs which are the ones that are actually going to matter to us all the incremental stuff added up will not get you to solar that competes with existing electricity there needs to be major innovative breakthroughs and those are happening but those people probably won't want to put those in and one final point the difference between the hiv issue and what we are talking about is the r and d costs are great on both but the deployment cost on these energy solutions is very large so one biofuels plant that is just a demonstration plant in the u s costs more than the total yesterday with doctor emanuel sachs who is an mit professor who created the technology that led to the creation of the company evergreen solar company and what he did was he presented us a chart which showed how the cost of generating a kilowatthour from solar had dropped from five dollars down now to about twenty cents and that it improves about eighteen percent per year technologically and that with his new company one thousand three hundred and sixty six which is a new company in lexington massachusetts with his new state of the art technology making an other poor country i just don't want to be compelled to do it so the question is what are the right incentives to do that the chairman and how would you be compelled mister nelsen if somebody told me that i had the license you know that i had to give away my technology to some world body versus  some incentive structure which i think could be created to get me to do that the chairman you would lose your incentive to further invest here in the united states if you were compelled then to transfer the technology overseas  would have suspicions that our friends in competing strategic countries would take advantage of those situations to make fungible assets like fuels other places the chairman okay that is great so here is what i would like of you to do we will start in reverse order of the opening statements ask each of you to give us the one minute you want us to remember as we are moving forward on these issues in the one hundred and thirty days up to copenhagen the select committee will be in copenhagen and we will be working on the effort to have a bill put on the president's desk before he goes to co please give us your one minute closing bit of advice doctor esper we will begin with you mister esper great thank you mister chairman my one minute synopsis is this technology is crucial to addressing climate change and if we want the advanced technologies that are going to get us there what we need to do is preserve an ip system that has generated technologies over the decades and so as we look at what is happening now at the unfccc more broadly it is critical that the united states make clear that ip rights are not on the table for negotiation or for undermining and i think the congress can play an important role in that through passing legislation as you have already done through speaking to the administration asking them to come forward offering statements of your own but making clear to our partners both in the developed world and in the developing world who look to us for leadership that ip rights are the solution not the problem and we should focus on the real problems that myself and various others here have outlined today thank you i agree tech transfer is technology is critical to solving the climate change problem tech transfer is critical to that what will make that happen are policies u s government policies that cap bill represents similarly in developing countries however much technology we develop and are able to send it won't go to developing countries unless they have domestic policies and incentives that require it to be used there as far as the u n climate negotiations i think they have been very much at a rhetorical stage everyone is waiting for the united states to come to the table now that the u s is here we need to move the negotiations into a much more thoughtful get down into the details stage of discussion and i think that for the ipr issues it is time to get more concrete get beyond the rhetoric to what are the specific concerns that are motivating what are the examples that are motivating countries are going to be breakthroughs and they are going to be the solution to climate change and they are also going to be what is going to allow us to lead the next ten or twenty years of the economy in the world they are going to create what got us here necessarily won't get us there we have to look at ip very very differently so we have successes over the past decade i think this is going to be very different i would like to propose that we do actually look at an ip exchange  contribute i would like to propose that we take that to the next level and propose it if not things will continue to happen in china and saudi arabia and india without the u s presence in there and that probably will be detrimental to us thank you  you we clearly have a challenge before us we want to protect intellectual property rights we want to make sure that inventors in the united states have an incentive to continue to invent and that investors have an incentive to invest in those inventors and we have to make sure that we properly analyze the markets that we are talking about ms haverkamp i think keeps pointing out that we need to create a domestic marketplace for the products that we are inventing here in the united states what is the point of becoming the world leader in solar and wind if we don't actually not only invent them but then deploy them here and create the markets here create the manufacturing jobs here which is what the waxman markey bill is all about to create those incentives for the development of a domestic marketplace even as we then create the rules for the transfer of the technologies into the international marketplace to make sure that the inventors here benefit but also that the world is presented with a solution to the climate change problem that will affect unfortunately poorer countries more gravely  than the wealthier countries and that is the balance we have to strike here i think we have to respond to this and embrace the opportunity of the challenge and to do so in a telescoped time frame  we have to engage china to make sure that china as a special case understands that we need to have some regime of protection of intellectual property put into  so that we create the conditions for innovation here while we have a mechanism perhaps an international green bank that we can work through as a concept to be able to ensure that  this technology is transferred but with proper compensation for those who have taken the risk and have the ability to create so that is really the framework for our challenge going forward for the rest of this year with the world gathering one hundred and ninety nations coming to copenhagen i think they will be looking to the united states to frame this correctly but they will also be looking to china to see if we get the proper response from them  so that we can be the world leaders in that negotiation your hearing has been very helpful to us in the framing of the issue we would like to stay close to you over the next one hundred and thirty days so that you can help to illuminate the choices that our