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

1
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

2
Overview

• The case for Clearing house
• The MIHR and the AATF
• Agricultural biotechnology
• specialty crops
• Developing countries
• Implications

3
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.

4
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
  commercialization-Patent ownership is an asset
  essential for obtaining finance for further
  technology development

5
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.

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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.

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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).

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Ownership of Patents vs licenses
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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 3,192 2,092 2,909 2,169 10,362
• Independent inventors 34 37 120 73 264
• Private sector subtotal 3,226 2,129 3,029 2,242 10
  ,626
•      
• Public Sector    
• Academic 806 468 176 819 2,269
• Government 194 200 322 273 989
• Management companies 25 49 16 62 152
• Public sector subtotal 1,025 717 514 1,154 3,410
•      
• Undetermined 68 65 142 83 358
•            
• Total 4,319 2,911 3,685 3,479 14,394

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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 licenses- Public
  sector may obtain research license to enabling
  technologies,but implementation of innovations
  resulting from research are difficult without
  license to commercialize.

11
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.

12
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.

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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)

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Management of Intellectual Property in Health RD
(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.

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Dimensions of of MIHR

• ConstituencyDeveloping country RD institutions
  that may need assistance crafting the basics of a
  specific IP transaction or may seek general
  capacity-building training.
• International RD programs with a need for
  consultancy work.
• Developed country RD 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.

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African Agricultural Technology Foundation

• PurposeThe 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
• NeedScientists 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

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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.

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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.

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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

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Clearing house to ag biotech-a generic approach

• 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

21
Rockfeller and Mcknight foundations
perspectiveClearing 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.

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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 clearinghouses 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?

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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

25
Bio-diversity biotechnology

• Biotechnology was introduced in developed
  countries, relying on bio-diversity of developing
  country. LDCs worry exclusion high price of
  products based on their resources.
• LDCs 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.

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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.

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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 LDCs.
• 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,

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The Future of IPR 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