Exclusive rights, inclusive goals? Intellectual property challenges in circular transitions

For decades, Intellectual property rights (IPRs) such as patents have been essential tools for businesses, allowing innovators to protect their ideas and maintain a competitive advantage. However, these protections can inadvertently slow progress towards a more sustainable, circular economy. Through interviews with industry leaders, Utrecht University research shows that companies are finding innovative ways to balance protection and collaboration.

The researchers interviewed 20 employees from 17 companies recognized for their commitment to the circular economy by the award program “The Circulars”. “We were interested in how companies dealt with the tensions arising from the use of intellectual property rights with circular innovations” say authors Giovanna Capponi, Carolina Castaldi & Laura Piscicelli.

They saw that many companies stick to traditional IPR strategies. While IPRs can incentivize sustainable innovation, they can be at odds with the long-term aim to transform a circular economy – one that prioritizes reusing, repairing, and recycling materials to minimize waste.

Business as usual

Companies often struggled to balance both worlds – on the one hand protecting IPRs as best practice in business and on the other hand diffusing circular innovations as an overarching goal towards a circular economy. “Even circular pioneers often prioritize short-term advantages, which ultimately slows down real sustainable change in the economy” says Piscicelli.

Inspirational exceptions

“Companies who embrace the challenge try to do everything simultaneously - competing while collaborating and protecting IPRs while diffusing innovation,” says Capponi. For example, these companies may protect their circular innovations with IPRs but not enforce them. Or they may collaborate with others for greater efficiencies in the circular sector but hold back small details to remain competitive.

Ambitious organizations may actively collaborate in multi-stakeholder initiatives instead of competing, even implementing an ethical screening to ensure they work with like-minded organizations. One startup in particular publicly shares their circular innovation in scientific articles for example, which makes it impossible for others to patent the innovation yet makes it accessible to everyone.

Societal impact

The researchers note that companies often do not question standard IPR strategies and how they contradict with long-term systemic change. “If circular innovators continue to approach business as it has always been done, a transformative systemic change of the economy is not going to happen” say the researchers. “However, organizations that actively try to fit business and societal responsibility under one hat can serve as inspiration for other circular innovators.”