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Honda Should Lose Patents if It Will Not Remove Sales Restrictions on Natural Gas and Hydrogen Vehicles

Improving automobile performance and alternative fuel has long been plagued by calculated patent sequestration and the use of restrictive licensing agreements, too often designed to keep good technology suppressed. Critics of the auto establishment like to talk about the advanced battery designs, alternative fuel systems, nanotechnology and other technical accomplishments sequestered by energy and automotive companies for the sole purpose of keeping them off the market. We see this now in dramatic fashion with the Japanese auto marvel, Honda, which is so visibly restricting sales of its two alternative fuel vehicles, the Civic Natural Gas GX and the Hydrogen Clarity.

As part of a plan to get off of oil rapidly, the nation needs to establish an Energy Patent and License Intervention Office so government action can enable good energy technology to rapidly proceed in the marketplace. This office would be empowered, on public complaint, to investigate whether alternative fuel technology was being expeditiously deployed in the marketplace, or withheld. For example, such an office could examine Honda’s license agreement with Plug Power for the Home Energy Center, or Fuelmaker for the Phill unit to determine whether the country could benefit from the more rapid deployment of the technology. Such an office could compel the patent holder to grant compulsory licenses so that the technology may be exploited for the sake of the country, and encourage competition. Under this scenario, a third party would be authorized to exercise the patent, but required to pay a fair fee to the original holder.
 
In other words, in a true emergency, if the technology was workable, the controlling company would be obligated to deploy it or see it deployed by another company. In everyday parlance, “use it or lose it.”

The concept itself is a so-called “compulsory license.” Such a license is an “exception” to patent law generally imposed by a court or agency of government to address a special crisis or inequity, failure to commercialize following government funding, abuse of patent or a wartime condition. There are several controversial precedents reserved for wartime, a health crisis or the technical advances of the digital age, but they have never been applied to a fuel crisis.

British Petroleum came into being when, during and after World War I, the Anglo-Persian Oil Company was empowered by the British government to take over enemy property. In this case, the enemy property was a German company operating in England, called “British Petroleum.” Eventually, through various machinations, the same corporate hegemony allowed Britain to seize Turkish oil interest in Iraq.

The patents and trademarks of Bayer Aspirin were seized from Germany by the United States as enemy reparations after World War I. The German company did not regain the rights to its own patented and trademarked aspirin until 1994 when it purchased the American pharmaceutical giant, Sterling Winthrop, which had gained control of Bayer Aspirin. Thus, Bayer regained the right to its own product in the U.S. market.

Under the 2001 Doha Declaration of the Trade Related Aspects of Intellectual Property Rights Treaty adopted by the World Trade Organization, governments have the internationally recognized right to implement the “health emergency” provision and grant compulsory licenses for pharmaceuticals. Brazil and other countries have invoked this notion to produce AIDS medicines. The United States has debated the same right in the event of an anthrax attack. The concept of a compulsory license has also been embraced by the Copyright Office for certain dramatic and musical performances to be webcast where the rights are withheld. Courts provide this remedy where a market injustice justifies it.

Section 308 of The Clean Air Act provides that the EPA Administrator may ask the Attorney General to certify to a federal district court that a patent holder be ordered to license a patent to a third party under terms and conditions determined by the court if various conditions are met. Legal experts say these conditions include: that the patent is necessary for compliance with the standards of the Clean Air Act,  intended for public or commercial use but not reasonably available, that no reasonable alternatives to licensing the patent exist for meeting the specified standards, and failure to license the patent may cause reduced competition or monopoly conditions.

In a genuine oil emergency, where the safety and health of the public is at stake, freeing up dormant alternative fuel technology could be a justifiable tool to expediting the switch away from oil.

Honda should move on its technology for the good of the nation before the nation is compelled to consider cancelling those patents.


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