Transcript Clearing house for IPR- the cases of agricultural and medical biotechnology

Clearing house for IPR- the cases of
agricultural and medical biotechnology
Gregory Graff
David Zilberman
Department of Agricultural and Resource
Economics
University of California
Berkeley, California
Overview
The case for Clearing house
The MIHR and the AATF
Agricultural biotechnology
specialty crops
 Developing countries

Implications

On IPR and Clearing houses
Patents allow gains from innovation and
access to and diffusion of new information.
They are especially effective for product
innovations -the public knows the principles behind a product
and the innovators earns monopoly profits
In cases of Process Innovations the exclusivity
of patents may prevent further innovations,
leading to the Tragedy of Anti Commons
Clearing house are introduce to reduce this
problem.
On Patents and innovations
Patent are statements of concepts that
are novel and useful.
Commercialization of most patent
requires significant extra investment.
Most patents are not earning income.
The patent system provide not only
incentives for research but mostly for
development and commercializationPatent ownership is an asset essential for obtaining
finance for further technology development
Division of labor among
institutions
Many innovations are originated in public
research organizations (Universities,CGIAR,ARS )
Sometimes start ups Develop innovations &
multinationals (agribusiness,PHarma)
commercialize them. Multinationals may also
develop and do discovery research.
Alternative Channels of innovation increase
competitiveness and increase rate of
innovation relative,to sole private sector activities.
Privatization of rights to
patents & further development
The Bayh-Dole act (which allows U.S. universities to sell
the rights to patents generated with public
funding)contributed to commercialization
of
university generated biotechnology
innovations- but transferred control of
enabling technologies to private hands-who
may restrict access to these innovations.
Lack of access to technologies impede
commercialization of innovations that use
them.
Cohen Boyer vs Agri-bacterium
The Cohen Boyer patent (for the basic
process of medical genetic engineering) has not
been licensed exclusively. It generated
revenues (close to $100 mil)and enabled
further applications.
Agri-bacterium (a crucial process for planting
genes in plants)was discovered at Wash
State and exclusively licensed.
Lack of access to this technology thwarted
commercialization of some innovations.
Innovators and OTTs wait to expiration of the patent
before issuing dependent technologies (to avoid hold
up).
Ownership of Patents vs
licenses
Figure 3. Proportions of value-weighted U.S. agricultural biotechnology patents
attribut ed to pare nt entities
Public Sector
22%
Monsanto
19%
Du Pont
10%
The ТBig FiveУ
Dow
7%
Rest of Private
Sector
34%
Syngenta
5%
Aventis
3%
More on Ownership of Patents vs licenses
Number of ag biotechnology IP documents assigned to organizations
Organization type
U.s.
EU
JP
PCT
Total
Private Sector:
Companies
Independent inventors
Private sector subtotal
3,192
34
3,226
2,092
37
2,129
2,909
120
3,029
2,169
73
2,242
10,362
264
10,626
Public Sector:
Academic
Government
Management companies
Public sector subtotal
806
194
25
1,025
468
200
49
717
176
322
16
514
819
273
62
1,154
2,269
989
152
3,410
Undetermined
68
65
142
83
358
Total
4,319
2,911
3,685
3,479
14,394
Ownership of patents and control of
technology
The Public sector owns a large percentage of
ag biotech patents,yet we do not know the
ownership of licenses that represents actual
control of technology.
Research vs commercialization licensesPublic sector may obtain research license to
enabling technologies,but implementation of
innovations resulting from research are
difficult without license to commercialize.
Globalization and IPR
Patents apply only where they are
registered,so technologies can be
commercialized in many developing countries
without concern for most IPR, if resulting
products are not exported.
Globalization leads to introduction of IPR
systems throughout the world, and IPR may
be more constraining in in Developing
countries in the future.
Private vs. public researchers
and IPR
The private sector recognizes IPR
constrained as part of the cost of doing
business. New projects are not introduced
without “freedom to operate”
Public sector researchers do not have the
apparatus to address IPR constrains as they
conduct their research. Therefore, the
resulting innovations may not easily
commercialized.
Objectives of clearing house
for IPR
Reduce transaction cost for the
commercialization of innovations


Increase transparency about ownership of IPR
Provide mechanisms for fast negotiation of access
to IPR
Expand set of technologies accessible (for
research and product development).
Improve technology transfer mechanisms and
practices (mostly in public sector institution)
Management of Intellectual Property in
Health R&D (MIHR)
Motivation: to gain access to IPR to develop cures to diseases
afflicting the poor (TB,Aids, Malaria)
Areas of work:



Identification and codification of best practices for
licensing to achieve the goals of the public sector.
The provision of training to scientists, universities
and research institutes in managing IP to benefit the
public sector, in both developed and developing
countries.
Consulting services to developing and developed
country groups concerned with research and
product development.
Dimensions of of MIHR




Constituency:Developing country R&D institutions that
may need assistance crafting the basics of a specific IP
transaction or may seek general capacity-building
training.
International R&D programs with a need for consultancy
work.
Developed country R&D institutions that desire
assistance to more effectively achieve their social
objectives.
Partners Other organizations are complementing MIHR
in developing public sector IPR portfolio for the diseases
of the poor.
African Agricultural Technology
Foundation
Purpose:The African Agricultural Technology Foundation is
being created to facilitate the development, testing, distribution
and marketing of new, technologically sophisticated crop
varieties that address the food security needs of subsistence
farmers in sub-Saharan Africa. It will be run by Africans to
address African needs
Need:Scientists in public research centers currently face the
complex and expensive proposition of approaching many companies
and institutions to secure the use of research tools, technology
components and expertise needed to develop new crops aimed at the
public good. The purpose of the AATF is to facilitate the transfer of
agricultural technology properties for use in public agricultural research
and to reduce transaction costs by helping scientists navigate through
issues such as intellectual property rights (IPR), regulatory
requirements, and distribution
How AATF will work-1
The AATF will use a demand-driven approach to identify new
traits that are needed to improve strategically important African
crops. a need for new crop traits is identified, the AATF will
determine whether companies hold technologies that could
provide those traits. The Foundation will then work with
appropriate parties to develop a feasibility study that will assess:
1) social and cultural acceptability; 2) technical feasibility 3)
regulatory issues; 4) seed production and distribution problems;
and 5) potential markets. Although the AATF will not be a
primary funding source for most project Once activities, it will
help finance the feasibility study and will help mobilize resources
for other project components. If a proposed project is shown to
be feasible and likely to have a significant food security impact,
the Foundation will then help the parties develop a more
comprehensive project business plan, including funding,
research design, regulatory approval (if needed), and
distribution strategies.
How AATF will work-2
After the business plan is developed, the Foundation will work
with the technology owners and other project partners to
negotiate an overall license. The license will be granted directly
to the AATF for a specific purpose and for use by specific
institutions as set out in the business plan. The AATF will then
grant a series of sub-licenses to different institutions for
research, regulatory testing, and, finally, if found safe and
approved by the country in which the crop will be used, for
distribution Although the Foundation will not conduct research
or regulatory testing, and will not be directly involved in
distribution, it will facilitate partnerships and monitor participant
institutions at each of these stages to assure that the terms of
the licenses are respected.
Developing countries & minor
crop
Most ag biotech is developed for major crops
in the north
Private companies in developed countries
hold IPR for many GMO innovations
There is a risk that Africa will miss the gene
revolution as it missed the green revolution.
Specialty crops may not attract investment in
agricultural biotech & under-utilize it
Clearing house to ag biotecha generic approach
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Obtain rights to many enabling technologies and allow
access to users in developing countries or specialty crops
Provide the information about ownership of IPR and
solution to IPR barriers)
Serve as the middleman in transactions between owners
of IPR and users.
Identify and provide best practices for technology transfer
to ensure precise technology transfer agreements.
Provide education and training, particularly in developing
countries, on the use of intellectual property and
mechanisms to assure freedom of operation in developing
new technologies
Rockfeller and Mcknight foundations
perspective:Clearing house for Agricultural
Biotechnology for Subsistence Crops-major issues
How to obtain “freedom to operate” for new
varieties?—. There is a need for expert advice on research choices
(front-end questions such as which promoter or transformation system
to use) as well as guidance at the end of the research process about
how to expeditiously negotiate IP clearances for a finished product.
How can researchers in developing countries gain
access to the latest advanced agricultural
technologies?—Researchers in developed countries are hesitant
to share technologies with developing country colleagues for fear of
jeopardizing important relationships with the private sector and/or
placing their own institutions at risk.
How can approvals for humanitarian use or other
public benefit be streamlined?—Many licenses are broadly
written to include multiple geographies and crop applications,
either excluding potential humanitarian or public benefit use or
requiring public sector researchers to make time consuming and
costly requests that an exception be made on their behalf.
A two component solution
Create a clearinghouse to advise researchers,
administrators, and technology managers about
practical IP management strategies that will result in
quicker decisions, lower transaction costs, and
ultimately, the development and dissemination of
plant varieties using biotechnology that address
hunger (subsistence crops) or contribute to more
vibrant state economies (minor commercial crops).

Create a mechanism such as a technology
pool to grant researchers broader access to
agricultural biotechnologies and materials for
specific purposes.
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Unsolved questions
How should the clearinghouse’s services be
developed?
Who will provide the services?
How should it be funded?
How should the potential liability associated with
the granting, and use of licenses be managed?
How will issues such as biosafety (particularly in
relation to the release of genetically modified crops in
developing countries) be addressed?
Obtaining Access to Ipr from
public and private sector
Developing countries may have easier
access to companies IPR than university IPR.
Consideration for License distribution vary
among owners of IPR. Therefor there are
separate clearing house organizations are
designed for public and private sector
The organizational structure may change as
technology mature. We may see in the longer
run emergence of several blocs that will swap
rights to enabling technologies
Bio-diversity &biotechnology
Biotechnology was introduced in developed
countries, relying on bio-diversity of developing
country. LDC’s worry exclusion & high price of
products based on their resources.
LDC’s need access to the technology of developed
countries. There is opportunity to arrange mechanism
of trade of access to biotechnology with rights to
utilize bio-diversity.
Arrangement for payment for access to bio-diversity
should be established. Local population should be
given some of the proceeds to provide incentives for
conservation.
Lessons for Economics
Understanding of economic/ institutional
details needed for relevant analysis (in our
case technology transfer institutions and IPR details)
We can make a difference by introducing
proposals for institutional change and
communicate them to practitioners and in
interdisciplinary forums.
Analysis of institutional design and
impacts are important economic research
topics.
A Perspectives on clearing
houses, IPR and
biotechnology
IPR is part of the constraints for the adoption
and development of biotechnology in minor
crops and LDC’s.
Consumer acceptance is a much more
important issue.
The two are related-some activists oppose
Biotech because it is seemed to be
“corporate technology”.
Low profitability of minor crops may be the
main reason for low interest in biotech,
The Future of I PR in
BIOtech
Resolution of IPR issues
will reduce the costs and
accelerate the introduction of new technologies when
the economic conditions will be ripe.
As patent rights for basic technology will expire some
tensions will be reduced.
More stringent patent requirement will reduce IPR
pressures.
Public sector institutions will develop technology pools
and arrangements for swapping technologies with
private sector players
Still, access to Ipr will be costly, and private players
will use their Ipr assets to earn income and promote
their technologies