Innovation and IP Management: A Contextual Overview

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: This chapter presents a theoretical framework to explain the role of intellectual property (IP) in innovation and applies the framework to the growth of the pharmaceutical industry. Developing countries progress through stages of capability to reach the status of Innovative Developing Country (IDC). To reach the status of an IDC, countries need to give concerted attention to six components of product innovation: R&D in the public and private sectors, regulatory mechanisms for drugs and vaccines to achieve safety and efficacy, the ability to manufacture to high standards new health technology products, national distribution systems in both the public and private sectors, international distribution systems (including supply of drugs and vaccines through international organizations such as UNICEF, the operation of global funds, and trade among countries), and systems for managing IP.

An analysis of pharmaceutical innovation in Korea’s vaccine industry concludes that its success in developing its impressive capabilities was achieved by paying close attention to all six components of innovation. Yet unknown is the extent to which the Agreement on Trade-Related Aspects of Intellectual Property will stimulate or thwart progress in the other innovation components when IP is quickly moved to an advanced stage.

Abstract: The benefits of technology transfer are everywhere apparent, and perhaps the best news—as this Handbook’s compilation of case studies demonstrates—is that these benefits are already reaching developing countries. Building on the success of the U.S. Bayh-Dole Act, countries everywhere are seeking to better utilize the research capacities of their universities and public research institutions. The growth of such technology transfer initiatives is inspiring, as are the innovative varieties of partnerships that have developed to ensure that the world’s poor benefit from the global intellectual property system.

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: Ethical concerns and controversies about patenting are playing an increasingly prominent role in the development and applications of the biosciences. Despite the growing importance of ethical issues, there is currently no consensus or clarity on the ethical principles that should guide patenting of human, animal, and plant genes and cells. The three major areas of contention are: (1) whether some or all patents on genes and cells are unethical per se, based on concerns such as commodification, dignity, and similar concepts; (2) how tissue samples are collected, particularly in reference to the principles of prior informed consent and benefit sharing; and (3) how patents are used to restrict access to medical and agricultural use of biotechnology innovations. Given the lack of any agreed guiding principles for navigating these issues, policy-makers, decision-makers, scientists, and users of biotechnology have no choice but to address these contested ethical concerns using a case-by-case approach.

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Abstract: This chapter describes the current status of IP (intellectual property) management in the areas of health and agriculture in India with a focus on post-2005, at which time India became fully complaint with the Agreement on TRIPS (Trade-Related Aspects of Intellectual Property Rights). The major policy trends existing in India include (1) public sector expenditure for R&D is on the rise and is currently about US$5.0 billion (one US$ equals about 4 Rs); (2) pharma industry R&D expenditures were on the rise and had reached Rs 15.0 billion, or close to 4.0% of their turnover; (3) several major policy initiatives had been undertaken by the government, including the National Health Policy (2002), National Policy on Indian Systems of Medicine and Homeopathy (2002), and National Biotechnology Policy (2005). Other major initiatives to promote IP generation include the creation of a Central Drug Administration, a new national body for the registration of medical devices, a National Registry for Clinical Trials, and a law similar to the Bayh-Dole Act that provides for the sharing of IP with inventors. The Departments of Science and Technology and Biotechnology, the Council of Scientific & Industrial Research, the Indian Council of Medical Research, the Indian Council of Agricultural Research, and so forth, have initiated large R&D programs in the health sector for the generation of new diagnostics, vaccines, and drugs largely focused on current health problems of India. A few indigenous products are being tested for safety and efficacy before use in the public health system. A new thrust and focus are being given for public–private partnerships involving both national and international partners. In agriculture, besides a substantial allocation of funds for R&D, two new initiatives—the National Agricultural Innovation Project (NAIP) and the Indo-U.S. Agricultural Knowledge Initiative (AKI) were started in 2005. The NAIP is a World Bank-supported project worth approximately Rs 11.7 billion that is expected to strengthen basic and strategic research in agriculture in India. The AKI is expected to address a large number of issues including education, research services, and commercial linkages in agriculture.

Abstract: In the last decade, product development partnerships (PDPs) have become significant components of efforts to develop and disseminate therapies for diseases in the developing world. PDPs seek to fill a gap left by the private sector—a gap that leaves 90% of the world’s disease burden with only 10% of the world’s research money—through innovative, comprehensive partnership strategies that tap into the strengths of both the private and public sectors. This chapter, based on the proceedings of a conference titled Ensuring Global Access through Effective Management of Intellectual Property in 2006, provides an overview of the history and approaches of numerous PDPs. The chapter is anchored by reports from eight different PDPs and aims toward explaining what potential problems to guard against, what does not work, and—above all what does work—when the public sector plugs into the dynamism of the private sector to try to meet the health and agricultural needs of developing countries. Recognizing that there is no single business model, PDPs employ a common toolbox to manage intellectual property for global health outcomes. It includes defining a discrete territorial market; establishing distinct structures for public sector and private sector markets; determining field of use in a strategic manner; establishing royalty rates to optimize incentives; and providing for access to the developed technology in the event that the research/industry partner abandons the project. Other key areas of discussion, where parallels between PDPs exist, include global-access strategies, pricing issues, the importance of market segmentation, production capacity, strategic early-stage licensing, the IP landscape, and systemic challenges. Collectively, PDPs have broadened the creative understanding of practical ways to resolve the public-policy dilemma of balancing private incentives to generate needed R&D investment with the goal of access to those in need.

Abstract: Because certain patenting and licensing strategies can inhibit the development and dissemination of products for developing countries, intellectual property management strategies need to be developed that can help remove some of these obstacles. It is equally important to apply creative patent management strategies that actively promote access to needed products in developing countries. Care must be taken, however, to ensure that patents on research inputs do not discourage or unreasonably increase the cost for product development that targets needs in small or unprofitable markets. The American Association for the Advancement of Science project on Science and Intellectual Property in the Public Interest convened a working group to explore these issues in 2004. This chapter draws upon the expertise of that group to identify licensing strategies that are effective in promoting humanitarian access to health and agricultural product innovations and expanding their use among poor and disadvantaged groups, particularly in low-income countries. The chapter encourages more public sector IP managers to understand and employ strategies that will achieve these goals and seeks to help private sector licensees to understand the rationale behind and potential benefits of such strategies. Indeed, humanitarian licensing strategies should more and more become the norm by contributing to the development and dissemination of essential medicines and agricultural technologies for developing countries.

Abstract: In the past, it was possible for some countries to ignore IP (intellectual property) management while pursuing economic development and improved public health. Globalization, however, has brought the world closer and closer together, and with the advent of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), no country can afford to be isolated from the global IP system. This chapter explains how developing countries can use this new system to their advantage through in-licensing technologies (that is, bringing technology into the public sector through patent license agreements). Offering an overview of the usual requirements of a license agreement, the chapter also considers issues that are uniquely relevant to public-sector institutions in developing countries as they negotiate such licenses.

Abstract: For the People’s Republic of China, intellectual property (IP) is a new legal and social concept. Formal legislation was first introduced in the 1980s and was later strengthened. Due to recent publicity, however, social awareness of IP rights in China has grown. Following a series of ministerial and commission rules concerning technology transfer, universities now usually own the IP resulting from government-funded research. Not surprisingly, the number of patent applications filed by Chinese universities has increased rapidly, exceeding 13,000 in 2004. But such numbers may reflect a trend for researchers and institutions to use patents as a way of enhancing their reputations, rather than for actually transferring or commercializing technology. Most universities still lack institutional IP policies and independent offices responsible for IP management. Rates of technology transfer and commercialization, while difficult to observe, remain low. Still, some world-class universities, such as Tsinghua University and Beijing University, have become adept at IP management. These are both an exception to and an example for other universities in China, having successfully adapted IP management policies and practices to the country’s legal and economic circumstances.

Abstract: The Cohen-Boyer licensing program, by any variety of metrics, was widely successful. Recombinant DNA (rDNA) products provided a new technology platform for a range of industries, resulting in over US$35 billion in sales for an estimated 2,442 new products. Over the duration of the life of the patents (they expired in December 1997), the technology was licensed to 468 companies, many of them fledgling biotech companies who used the licenses to establish their legitimacy. Over the 25 years of the licensing program, Stanford and the University of California system accrued US$255 million in licensing revenues (to the end of 2001), much of which was subsequently invested in research and research infrastructure. In many ways, Stanford’s management of the Cohen-Boyer patents has become the gold standard for university technology licensing. Stanford made pragmatic decisions and was flexible, adapting its licensing strategies as circumstances changed.

Abstract: This chapter presents an operational model used by Fundación Chile to develop commercial biotechnology products. The first section highlights the challenges faced by a developing economy of which the main crops are so-called orphan crops. Fundación Chile’s experience has shown that establishing public–private collaborations and a solid international network are critical to overcoming obstacles and increasing the probability of success. Indeed, accessing various technology components and managing intellectual property and regulatory issues are serious challenges for a small, export-oriented economy like Chile, and Fundación Chile’s response has been to implement a model that includes the participation of companies and local research organizations with specific expertise at different points along the value chain. International agencies complement the activities and contributions of these local organizations. The chapter’s second section gives some specific examples of new products being developed with the new tools of biotechnology.

Abstract: Technology transfer is a rewarding process for the university, researchers, students, the business community, the public, and the professionals who make it all happen. Technology transfer brings new products, services, and jobs. But it is a complex process, one that requires sustained dedication at every level. This chapter offers advice about some of the most important policy and strategy issues: five are economic issues and five relate to implementation. The chapter concludes with a discussion of technology transfer pitfalls caused by unrealistic expectations. The chapter emphasizes the role of senior management in changing the IP (intellectual property) culture, the need for transparent conflict-of-interest policies, and the importance of sufficient autonomy and infrastructure support for technology transfer officers.