KRATTIGER, Anatole

Abstract: Public-sector research institutions can use a variety of agreements to protect and manage intellectual property. These agreements are powerful tools to foster competition in the private sector and reduce prices for consumers in developing countries. This chapter provides an overview of the following types of major agreements—confidentiality, material transfer, development (in which the licensee is responsible for further development), co-development (in which two parties collaborate on continued development), and distribution—explains the functions of those agreements, and suggests strategies for their effective use. The chapter also discusses the meaning and usefulness of the standard elements and formulas found in such agreements. It explains the meaning and significance of the terms and language used and discusses such key issues as product liability, fees and royalties, and arbitration. The chapter emphasizes the importance of establishing and maintaining trust when negotiating and implementing agreements.

Abstract: Confidentiality agreements (also called nondisclosure agreements, confidential disclosure agreements, and secrecy agreements) are contracts that govern the disclosure of confidential information by one party (the disclosing party) to another party (the receiving party). Confidential information is exchanged for a promise of secrecy. The disclosure may be unilateral, bilateral or multilateral. Confidential information disclosed in a confidentiality agreement might pertain to scientific research results and data, chemical compositions and formulas, software development information, recipes, laboratory methodology, and manufacturing techniques trade secrets (in the form of valuable know-how and/or show-how). The confidential information has value precisely due to the fact that is known to only a few, that is, open disclosure will be injurious to this value. Confidentiality agreements often precede licensing negotiations or the acquisition of IP (intellectual property) rights and serve to strike an appropriate balance between the needs of the disclosing and receiving parties. A confidentiality agreement can either stand alone or be included as part of a broader agreement. An appropriately drafted confidentiality agreement should contain a list of standard provisions and exceptions. In special cases, where the disclosing party wishes to carefully protect the confidential information, the agreement might also include extra strong clauses and articulated security provisions.

Abstract: If universities adopt sound licensing practices, the universities will not only help stimulate investment in research on diseases that primarily afflict the poor in developing countries, but also ensure that the products of the research are affordable and widely available in those countries. Ensuring global access is one of the central goals of intellectual property management. But universities confront two main obstacles in their efforts to achieve the goal. First, university administrators, technology transfer officers, and business people are too often unaware of both the need to ensure access to new health technologies in developing countries and the manner in which patenting and licensing practices can be an integral component of global access strategies. Second, there is only a short history of experience in incorporating such concerns in negotiating licenses, so no best practices have yet evolved. This chapter offers a few possible approaches to ensuring broad access to university inventions while preserving incentives to development, including patenting inventions in a select list of developing countries. The chapter concludes by urging all of the players in this field to build upon their own experience and to take creative risks in the pursuit of new solutions.

Abstract: This chapter reviews different forms of IP (intellectual property) “assembly” mechanisms (royalty-collection agencies, information clearinghouses, technology clearinghouses, open-source innovation clearinghouses, honest brokers, and other forms of facilitators, IP management services, IP commercialization agents, the services of merchant banks and venture capital enterprises, and patent pools). Emphasis is placed on patent pools, which are voluntary agreements between two or more patent owners to license one or more of their patents to one another or to third parties. Although there are many forms of patent pools, such arrangements fundamentally consist of the interchange (cross-licensing) of rights to essential patents by a number of entities, as well as an agreed framework for out-licensing the pooled intellectual property to each other and/or to third parties, including an agreed-pricing and royalty-sharing scheme.

There are both benefits and risks associated with patent pools. Benefits include greater ease with respect to resolving patent conflicts, making assembled patents in the pool available to others, and resolving disputes over blocking patents. Risks include antitrust liability. Under certain circumstances, patent pools have application in the area of humanitarian licensing as instruments of assembly of intellectual property.

Abstract: Freedom to operate (FTO) is—first and foremost—a strategic management tool. It is the synthesis of scientific, legal, and business expertise coupled with strategic planning. Strictly speaking, however, FTO is a legal concept. It is a legal opinion by patent counsel on whether the making, using, selling, or importing of a specified product, in a given geographic market, at a given time, is free from the potential infringement of third-party intellectual property (IP) or tangible property rights. As such, it is one type of input among many that managers use to make strategic risk-management decisions in relation to R&D and product launch. For academic and public research institutions, bringing products to market is often not a main goal. However, as a portion of their research moves downstream into product development, FTO becomes—or should become—an integral component of their endeavors. This is particularly relevant for product-development partnerships (PDPs) in health and for various public–private partnerships (PPPs) in agriculture, as well as for the Consultative Group on International Agricultural Research (CGIAR) and national agricultural research systems (NARS), all of which are concerned about global access.

Research exemptions exist in many jurisdictions, so most university research does not generally need to be concerned with FTO unless product development takes place. But PDPs, such as the Malaria Vaccine Initiative or the TB Alliance, are in a different category since their purpose is directly related to the distribution of products in the developing world. This chapter discusses three main categories of options that are available to reduce risk and obtain a manageable level of FTO. In practice, a combination of two or more options will often be pursued concurrently. These are:

• Legal/IP management strategies: license-in, cross-license, oppose third-party patents, seek nonassert covenant, seek compulsory license
• R&D strategies: modify product, or invent around
• Business strategies: merge and/or acquire, wait and see, abandon project

Each option presents its own risks and opportunities. Any action—including the decision not to take action—carries risk. Delaying the licensing of third-party intellectual property, for example, could lead eventually to expensive licensing terms, the inability to obtain a license, or the possibility of being sued for patent infringement. But for some organizations, such as those developing genetically modified crops, the reverse may be the case. For the public sector, the challenge will be to balance the various types of risks that each option presents.

The chapter concludes by urging the public sector to judiciously evaluate whether and when FTO concerns should be considered, and to build in-house capacity to conduct patent searches and cursory FTO analysis (as opposed to legal opinions). This will lead to benefits like better competitive intelligence and culture change in public sector organizations engaged in product development. An FTO strategy, therefore, is a plan that begins with research and evolves into an attitude throughout a product’s R&D and commercialization/distribution cycle.

Abstract: Emphasizing patents and patent searching, this chapter will put readers on the initial path to understanding and protecting intellectual property (IP). By exploring patent information on the Web site of the European Patent Office and other Web sites listed in this chapter, the reader can begin to learn by doing and quickly gain experience that should improve his or her searching skills. Other resources dealing with IP in general are described. This collection is by no means exhaustive, given the vast amount of information on IP that is present on the Web, but the sites listed here should be valuable in accessing unbiased, useful information about the IP landscape, especially for key areas of technological interest. The value of IP searches for a typical technology transfer office is also discussed.

Abstract: The last decades have seen a revolution in knowledge management, library services, and information resource database configurations. The use of integrated computer networks and the ability to produce and distribute information have had far-reaching implications for IP (intellectual property) protection. In order to demonstrate IP laws and their application, this chapter will use, as its primary example, Geographic Information Systems and Remote Sensing (GIS/RS), a technology that presents interesting and complex IP issues.

Abstract: In ever-increasing numbers, institutions are establishing technology transfer offices (TTOs). These offices serve a variety of functions, all of which must be integrated to cost effectively transfer technologies and to benefit the institutions. A critical function of the TTO is to proactively manage intellectual property (IP) issues pertinent to crops. Crops can be covered by more than one form of IP rights protection, often simultaneously. These rights protections include trademarks, trade secrets, plant and utility patents, and plant variety protection (PVP). Closely related is the importance of careful and organized gene-bank management, a critical component of an overall IP and tangible property management system. PVP provides one type of protection that allows TTOs to responsively serve clients and generate revenue. PVP is a form of IP rights protection for crops with potentially global applications, and either a PVP office, or a PVP subsection in the TTO, would be wisely established by an institution. In addition, this chapter provides important information to assist in establishing a national PVP office and in the selection and implementation of various types of IP rights protection for crops and germplasm.

Abstract: Licensing between companies of both traits and varieties is routine, and there is no reason that it should be anything other than routine between companies and public sector institutions, as well. Some public entities struggle to gain experience in this area. This leads companies to shun negotiations and, even, discussions. Yet opportunities for the public sector to in-license traits (in the form of well-characterized and deregulated transgenic “events”) and varieties are vast and could lead to earlier access with respect to transgenic events (through backcrossing into local varieties) and to improved varieties for subsistence farmers. In order to improve the ability of the public sector to both in-license and out-license germplasm, a test version of a software program, the “Computer Generated Contract Template System” (CoGenCo), was developed. It aims to facilitate the exchange (or licensing) of commercial varieties by “walking” potential licensors and licensees though a systematic list of questions and tested parameters. CoGenCo is a pragmatic way of increasing the licensing of both finished varieties and germplasm containing transgenes for backcrossing, and its flexibility would make it especially suited for use in developing countries. This chapter explains the concept behind the software’s test version and leads the reader through its use. The authors very much welcome comments and suggestions about the software and look forward to collaborating with interested parties to further develop CoGenCo into a comprehensive and widely available system.

Abstract: Recent national and international changes in intellectual property (IP) legislative frameworks are likely to have profound effects on the ways in which health and agricultural innovations reach the poor and on how public and private research and development institutions pursue their work. Whereas IP rights are sometimes viewed as creating barriers to access to innovations in health and agriculture, we argue that it is not intellectual property, per se, that raises barriers, but rather how intellectual property is used and managed, particularly by public sector institutions. Above all, we argue that intellectual property is only one of six components of innovation. It is rarely the most important component.

The chapter reviews recent dramatic developments in institutional aspects of intellectual property, as well as global policy shifts and international studies that, among other outcomes, affected the environment for the creation of MIHR and PIPRA. In the field of health, changes have been particularly pronounced with the founding of a new form of institution for innovation: product-development partnerships (PDPs). As a result, we make the case for a fundamental shift in the way in which IP management in health and agricultural innovation is viewed and conducted. In addition, we argue that IP management should be seen as an important element in developing countries’ strategies to become more innovative in addressing diseases of poverty, the alleviation of poverty, and malnutrition. The public sector can employ new ways to achieve its goals within the evolving IP framework. These new ways can help it better mobilize the resources to take a product through the process of innovation. These new ways should include, a) creative licensing practices that ensure global access and affordability, b) improved institutional IP management capabilities, c) the formulation of comprehensive national IP policies, and d) the strengthening of IP court systems and patent offices.

These are what best practices in IP management are all about, and what this Handbook seeks to help bring about and promote.

Abstract: The public sector is making substantially increased investments in health technology innovation through public/private partnerships to bring improved health technologies to underserved people in developing countries. These product-development partnerships, however, face a common problem: how to manage intellectual property (IP). Such management involves many issues. In relation to a case study, presented in this chapter, of plant-derived hepatitis B virus vaccine, the challenges involve obtaining freedom to operate, securing new intellectual property, and deploying intellectual property to developing countries. We conclude that while challenges abound, the IP issues are fairly clear and can be addressed with straightforward IP management approaches. The cost of managing the intellectual property is expected to be minimal on the price of the finished vaccine. In the medium term, an IP protection strategy might offset costs and generate modest income. Most important for the partnerships is to develop a clear, transparent IP policy, with emphasis on the licensing principles, so that products can be made available to developing countries at affordable prices.

Abstract: This chapter presents the main forms of statutory intellectual property (IP) protection with emphasis on utility patents, trademarks, geographical indications, copyright, and trade secrets. Basic questions with regard to who can get protection, the subject matter of each form of protection, statutory requirements, and certain exceptions. The chapter concludes with short sections on institutional aspects including employee agreements, how to mark the protected intellectual property, how to integrate the various rights, and how to identify infringement. The authors conclude that the form of protection chosen for a given invention should be guided by the mission of the institution (whether public or private), the purpose of the work it conducts, and the nature of the invention, or other IP, that will be subject to IP rights protections.

Abstract: This chapter provides an overview of training opportunities that developing country institutions can explore to start to address problems related to a smooth implementation and execution of all intellectual property-related aspects (policy, management, procedures, and so forth). The chapter offers to institutions guidelines for evaluating training needs and reviews different kinds of training programs, identifying the pros and cons of each. IP management training is a long-term investment, but a cost-effective one, leading to better utilization of third-party IP resources, more effective internal IP management policies and procedures, and higher efficiency in regard to out-licensing and partnership development. The chapter emphasizes the importance of strategic and practical training programs related to participants’ responsibilities within an organization. Finally, multidimensional case studies are provided to illustrate the myriad issues that may arise with respect to the management of intellectual property.

Abstract: Nonassertion covenants (nonasserts for short) grant permission to third parties to practice a patent they would otherwise infringe. Legally, nonasserts are patent-infringement settlement agreements that are designed and drafted with the purpose of preemptively resolving future infringement disputes. Nonasserts can take three forms: (1) an agreement between two parties, (2) an agreement among several parties, or (3) a public statement. A non-assert can specify the release of only certain patent rights or fields of use, or it can be broad and specify release for entire patent families, including future inventions in a certain area. Public statements effectively place rights to patents, or elements thereof, into the public domain. Nonasserts nevertheless need to specify, precisely, which rights are granted in order to avoid ambiguity that could lead to equitable estoppel.

Nonasserts can have wide-ranging implications in terms of enhancing public sector R&D. One application could be with patent rights covering research tools that are critical for accelerating the development of essential biotechnological applications. Specifically targeted non-asserts can also be effective instruments for industry to permit the use of patented inventions anywhere in the world, provided such use is for the express purposes of addressing specific humanitarian needs in developing countries. This could have broad-ranging and significant positive impact, as this approach reduces transaction costs, encourages innovation to help the poor, and accomplishes this without any loss of commercial opportunities.

Abstract: In this chapter, the revenue consequences of varying collection fees and royalties with regard to germplasm prospecting contracts are demonstrated. Principal factors are the uncertainty of finding marketable products and the value of these products. Negotiation factors are finding a good balance between collection (initial) fees as opposed to royalty (delayed) payments. Emphasizing collection fees reduces total payments except when national interest rates are very high. Reducing the risk of failure through in-country screening, including the use of indigenous knowledge, is a potentially valuable activity. Issues for contract negotiators are outlined and the implications for biodiversity conservation discussed. Conceptually, the highest valuation approach, royalties, will most encourage conservation, but as the future is typically heavily discounted, collection payments may get more attention and be most effective. Policy considerations for national governments, nongovernmental organization (NGOs), and development agencies are reviewed and it is concluded that grants/loans and training/equipment for in-country screening should be given a high priority as a potentially viable activity in the long term.

It should be noted that the figures and calculations in this chapter are merely for illustration. The valuation of samples, and by extension a country’s biodiversity, is a negotiation and will depend on many factors, including alternative investment options by a company, alternative technologies that could be used for lead compounds, interest rates, and a range of risk factors, such as the political situation in a given country surrounding the national debate on bioprospecting. The latter point is a key factor: valuation is always a calculation that has important political consequences. Another complicating factor is the need for confidentiality with which a country and company will hold its overall business estimates. Neither a company nor a country will be likely to share their valuation basis purely for negotiation purposes and because neither want to tip off other entities about the opportunity. It is therefore concluded that, from a practical perspective, the proper valuation is the one that (1) provides the country with compensation and other benefits such that it does not feel taken advantage of and can withstand criticism from its constituents and (2) provides the licensee (typically a company) with a reasonable cost of obtaining the crucial raw or semifinished goods it requires as an input to its business.