Biodiscovery Management In Australia

1
Biodiscovery ManagementIn Australia

• Legal frameworks, Contracts and Agreements for
  Access to Genetic Resources and Benefit-sharing

2
Scope of Presentation

• Why did Australia decide to make its genetic
  resources available for commercialisation?
• What is is its general approach?
• How will it work in practice?

3
Drivers for InvolvementEconomic

• Harness a new potentially valuable resource
• E.g. the value of genetic resource derived drugs
  to pharmaceutical industry US75 billion (1997)
  or NZ150 billion.
• Attract investment in burgeoning, worldwide
  Biotechnology Industry - 5000 firms with US200
  billion capitalisation (1999)

4
Drivers for Involvement International

• Convention on Biological Diversity including
• Article 3 - sovereign rights over natural
  resources,
• Article 15 facilitate access and obtain fair
  and equitable benefit sharing, and
• Article 8(j) - protection of Indigenous
  biodiversity knowledge and benefit-sharing from
  its use

5
Drivers for InvolvementDomestic

• National strategy for the Conservation of
  Australias Biological Diversity
• Obj 2.8 Ensure that the social and economic
  benefits of the use of genetic material and
  products accrue to Australia
• Obj 1.8.2 use and benefits of traditional
  biological knowledge.
• National Biotechnology Strategy
• Access to Biological Resources (page 26)

6
Drivers for InvolvementDomestic

• October 2002 all Australian Governments adopted
  the Nationally Consistent Approach for Access to
  and the Utilisation of Australias Native Genetic
  And Biochemical Resources
• Support from Bailey Inquiry (House of
  Representatives Standing Committee on Primary
  Industries and Regional Services Report
  Bioprospecting Discoveries changing the future

7
Character of Australias Biodiversity

• Australia is one of 17 Mega-biodiverse countries
• it has 10 of the worlds biodiversity
• much of this is endemic - eg 85 of its marine
  species
• Its a developed country but its biodiversity is
  rich, often unusual, ancient, rare, or
  inadequately known to science

8
Resulting in Australias Policy Goal

• to maximise, economic, social and environmental
  benefits from the ecologically sustainable use of
  genetic and biochemical resources whilst
  protecting its biodiversity and natural capital

9
Answer to first question

• The CBDs obligation is also an economic
  opportunity

10
Developing an Australian Approach

• Australian Policy Context - other factors
• Biotechnology Industry US750 million, 198
  firms, 6th in the world but its companies are
  small and mostly burning capital
• Australias has a federal system of government
• most of the genetic resources for its agriculture
  sector come from overseas
• good science,but often poorly commercialised
• conservative venture capital market

11
Australias comparative advantages

• its mega biodiversity
• a well established system of commercial and
  intellectual property law in Common Law tradition
• honest and stable public administration
• a developing, coherent, legal framework to
  facilitate access, and
• a strong science and research base offering
  collaborative opportunities

12
Achieving Australias aimsby

• Facilitating access to genetic resources
• Encouraging investment - domestic and foreign
• Encouraging collaboration with Australian science
• Building physical and intellectual infrastructure
  eg bioinformatics

13
Access and benefit-sharing Agreements - Past
international experiences

• high transaction costs
• complex and sometimes onerous
• focussed on monetary gains
• time consuming
• favours large companies, universities public
  bodies etc
• unable to successfully deal with Traditional
  Knowledge

14
Access and benefit-sharing Agreements - Past bad
experience

• Governments tend to have a one size fits all
  approach and agreements have little regard for
• the nature of the collector
• the purpose of the collection
• cost of doing business
• contract monitoring

15
Developing an Australian Approach

• Central control separating permits from
  Benefit-sharing Agreements
• All applicants must apply to a single authority
  for a permit.
• Permits granted by if
• collection is ecologically sustainable and
• a benefit-sharing agreement has been reached with
  resource provider
• (NB delegated PIC may mean provider is a
  different body to permit authority)

16
Developing an Australian Approach

• Permits
• simple to apply for
• decision within set time limits
• required information defined
• usually nominal cost or fee

17
Developing an Australian Approach

• Benefit-sharing agreements
• Based on normal commercial law
• Must be flexible, to suit the interests of both
  parties and circumstances of the proposed
  activity
• Publish examples of various model conracts

18
Balancing Benefits in Agreements-random collection

• Negotiation factors to take into account
• random sampling produces 1 product for 1- 10,000
  to 100,000 samples
• face value of samples low, but ensure royalty
  provision represents market rate
• focus on low cost benefits to collector, high
  reward to owner eg taxonomic voucher specimens,
  parallel collecting, local employment, knowledge
  transfer, management intelligence

19
Balancing Benefits in Agreements

• whether ownership of samples is retained
• low cost licence for specific uses -the more uses
  the more valuable the licence
• early milestone payments low
• milestone notification
• infrastructure investment offset against cost of
  access
• local partners
• intellectual property 3rd party transfer

20
Focussed collection

• Factors which add value increase probability or
  which reduce cost of collection, namely
• traditional knowledge about location, state and
  properties of biota
• whole of species bioinformatics
• location taxonomic information
• recollection opportunities
• prior art about related species

21
Focussed collection

• Success effect area of one discovery leads to
  interest by others
• eg Yellowstone National Park in US following
  commercialisation of Thermus Aquitas, Great
  Barrier Reef following discoveries in cone
  shells, sponges and corals

22
Non commercial science non application of
benefit-sharing agreements

• Science community reports increasing difficulty
  obtaining access to genetic resources worldwide
• solution exclude non-commercial scientific
  research from benefit-sharing requirement
• use permits to control activity but provide
  safeguards against biopiracy

23
Non-commercial scientific research - approval
criteria

• collection is ecologically sustainable
• must have the providers permission
• must provide a copy of all research outcomes to
  provider or publish
• offer taxonomic specimen to approved body
• must enter a benefit-sharing agreement if any
  wish to commercialise
• deterrent penalties

24
Maximising value

• encourage race to develop discoveries ie. be
  reluctant to grant exclusive rights over access
  to specific species unless rewards for doing so
  exceed probable gain from competition
• re-collection confidence - protect collection
  area
• publish species data about areas have clear
  rules and procedures.

25
Maximising value

• Reducing transaction costs increases value
• this is particularly important to small firms
  with limited capital.

26
Intellectual Property

• Value of intellectual capital is traditionally
  crystallised when IP is taken out, however also
  consider
• venture capital or development capital step when
  discoverer seeks market funds
• an agreed statement of provenance accompanying
  but separate from IP may increase success by
  reducing commercial risk to any capital provider.

27
Intellectual Property

• Ownership - some recent experience it has been
  found that some companies, particularly small
  companies, prefer the provider (a state
  Government) to retain ownership of IP and grant
  an exclusive licence
• their reasoning being that the provider is better
  placed to police and defend any encroachment on
  the IP than its creater

28
Sharing Experiences

• Over the next few months Australia will be
  circulating within Australian governments draft
  encyclopaedia of contractual terms and examples
  of model contracts applying those terms to
  various situations.
• These will be later published and made available
  to the WIPO IGC Data base

29
Summary and conclusion

• Australia is likely to be the first
  megabiodiverse OECD country to apply the Bonn
  Guidelines
• it faces all the policy issues arising under the
  CBD as it is a user, a provider, a developed
  country with unexplored biota, a country with
  delegated PIC and one with Indigenous peoples
  with recognised rights
• it is on a learning curve and is determined to
  share its experiences

30
Summary and conclusion

• Australia has always been a biological laboratory
  for nature
• over the next few years it is going to be a
  laboratory for implementing the third objective
  of the CBD
• Its also working to be a favoured place to
  undertake research
• it will only succeed if it takes a flexible
  realistic approach to contracts and the
  utilisation of IP.