Companies don’t invest in green tech because the cost outweighs the monetary benefit – prizes solve.

The underlying principle for advocating a patent rewards system for clean and sustainable technologies is that a cleaner environment constitutes a public good (meaning, one individual’s use does not reduce another’s use), and that positive externalities undercut demand for environmentally friendly products and services [41]. In other words, profit-maximizing firms do not subscribe much weight to the environmental benefit of a technological investment towards the social value and benefit on numerous third parties and to society, but instead are focused on the direct costs. Thus, if businesses are not willing to pay for clean and sustainable technologies that reflect their social value, then the patent system may not incentivize development of such technologies to a socially optimal value.

Instead, an alternative type patent system — a parent rewards system — could bring private incentives in line with the social value of an invention, and could be wove into the existing patent system [18]. Similar to inventions concerning national security, which may not receive patents, a patent reward system would provide a monetary reward based on the importance of the invention. While valuing the environmental benefit may be difficult, it already exists in some administrative agencies. In effect, such a rewards proposal is akin to a prize, where an inventor is paid an amount in the form of prize and the invention is then placed into the public domain, and then the invention is placed into the public domain [42]. While a would allow the government to acquire rights to patent, compensate the inventor directly, and would enable the government to force licensing of the invention or use the invention itself, it would generate a significant shift from the current patent regime [18]. A patent rewards system has not been implemented by any country and generated mostly scholarly debate.