Specific Strategies and Mechanisms for Facilitating Access to Innovation

Abstract: An explicit reservation of rights in a commercial technology license can ensure that the licensor’s institutional objectives to support humanitarian applications of its technology are not inadvertently blocked or sidetracked by overly broad terms in the commercial license. Many universities routinely use a reservation of rights to guarantee continued use of licensed technologies within the ongoing research or educational programs of the university. Clauses included in license agreements to reserve rights for humanitarian use of technology are still rare, but awareness is increasing of the utility and importance of such clauses, particularly as philanthropic-research sponsors begin to require grantees to ensure that results and discoveries will be made available for humanitarian purposes. The structure of a clause to reserve rights for humanitarian use ideally both expresses the philosophical intent of the licensee and clearly defines the boundaries of humanitarian use, particularly in relation to commercial use.

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 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: Research tools encompass a wide range of resources, including genes/gene fragments, cell lines, monoclonal antibodies, reagents, animal models, growth factors, combinatorial chemistry and DNA libraries, clones and cloning tools such as polymerase chain reaction, methods, laboratory equipment and machines, databases and computer software. Access to research tools is integral to advancing progress in biotechnological R&D, in both the biomedical and agricultural sciences. However, a complex web of research tool patents has arisen as a result of the revolution in molecular biology and coincident changes in public policy and patent law. These patents can pose a potential block to accessing research tools. For developing countries, several approaches can be formulated and then implemented in order to overcome potential problems associated with research tools. These include changes in patenting policies, research exemptions in patent law to reduce the risk of infringement in R&D, compulsory licensing to allow access to upstream technologies, and institutional adaptations to facilitate access to needed technologies, such as guidelines intended to promote more appropriate behavior by participants in the system. With carefully formulated, multitiered approaches, research tool patenting and licensing (and its possible impact on innovation in health and agricultural research) may be effectively managed.

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Abstract: This chapter provides an introduction to open source software licensing. The chapter seeks to demystify the concept of open source so that intellectual property (IP) owners and managers can decide whether an open source approach is worth pursuing. The chapter explains the principles of free and open source software licensing and outlines the decisions that an innovator must make when deciding which strategy to use for developing a new innovation. Also explained are the differences between open source and public domain, and between the uses of the terms copyleft and academic to describe open source licenses, as well as the incentives (financial and otherwise) for open source licensing. Finally, the author identifies important considerations regarding the possibilities for open source licensing in fields other than software development, particularly biomedicine and agricultural biotechnology.

Abstract: When public–sector organizations and public–private product development partnerships (PDPs) manage intellectual property (IP), they need to balance the commercial interests of private–sector manufacturers with the public sector’s mission to obtain access to products at the lowest possible cost. An important tool for achieving this balance is the detailed definition of contractual milestones, which should clearly specify the terms for pricing to the public sector, territory and exclusivity, regulatory work, and time to market. Milestones should not, however, be cast in stone. Based on detailed analyses of market conditions, milestones need to remain adjustable throughout the life of the contract. When well defined, milestones can be used to ensure the availability of the most modern healthcare products to the developing world. After all, for the public sector, successful IP management is defined by how many poor people a product will reach, how easily it will be available to them, and who and how many will be able to afford the product. Accordingly, out-licensing intellectual property from public–sector-based organizations to private–sector partners requires the licensor to actively guard public–sector interests.

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: For smallholder farmers in Africa, yields of major staple crops (maize, sorghum, millet, cassava, cowpea, bananas/ plantains) have remained stagnant or even declined in the past 40 years. Numerous biotic and abiotic stresses have contributed to this dire trend. Local research efforts to overcome these stresses have been hampered by declining support for agricultural research, limited access to elite genetic material and other technologies protected by IP rights, and the absence of commercial interest in these crops from private owners of agricultural technologies. The African Agricultural Technology Foundation (AATF) is a new initiative addressing the challenge of reversing the negative trend in agriculture by negotiating access to proprietary technologies and facilitating their delivery to smallholder farmers in Sub-Saharan Africa.

This chapter addresses the IP issues and partnership arrangements associated with the access, development, and deployment of agricultural technologies in Sub-Saharan Africa by AATF. The chapter explores the model developed by AATF, which incorporates the acquisition, development, and deployment of new technologies from private sector partners, to try to address the agricultural needs of resource-poor smallholder farmers in Sub-Saharan Africa.

Abstract: Voluntary patent licenses are often difficult for institutions to obtain, particularly those in developing countries. This chapter discusses why, how, and by whom compulsory patent licenses may be obtained and used. The main focus is on patented research tools rather than patented end products.

Abstract: IP (intellectual property) rights can reward innovators and encourage investment in developing new products and services. However, the exclusionary power of IP rights can sometimes have negative effects, making technologies less accessible and, thereby, potentially impeding innovation. To make informed decisions about how to balance access and protection requires an understanding of both the traditional IP rights system (patents, copyrights, trademarks, and trade secrets) and alternative mechanisms for preserving access to technologies. This chapter provides a brief introduction to the public domain and defensive publishing and examines issues concerning the choice behind the choice of whether to publicly disclose or to patent an innovation. Discussing the strategic use of defensive publishing in IP management, the chapter considers both the utility of defensive publishing and its limitations for supporting broad innovation. After an examination of the public domain and how it relates to other open-access concepts, such as open source and the commons, the chapter focuses on the practical considerations involved when using public-domain technologies and defensive publishing to manage intellectual property.

Abstract: Patent applications should be organized and drafted with a long-term objective that carefully considers the multiple possibilities, and opportunities, of field-of-use licensing. This is particularly the case in the agricultural, pharmaceutical, biochemical, and chemical disciplines, as inventions can have multiple applications that are sometimes impossible to foresee. Technology managers must, therefore, focus strategically, not only on the basic idea of an invention but broadly, in order to consider the various ways such an invention might be put into more widespread and more profitable use. Therefore, the more details, examples and alternatives that are thought through and then disclosed in the patent application, the greater the opportunity for future divisional or continuation applications, as well as future claims that can be exclusively (field-of-use) licensed. By making all of the institution’s licenses, in effect, field-of-use licenses, the technology manager retains the ability to take a possible future use and license it to someone else, maximizing the benefits of the inventions and generating higher royalties for the institution.

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: Field-of-use licensing provides the licensor with greater control over the use of its intellectual property, while maximizing the use and value of the technology. In order to maximize the use of a given technology, managers will have some additional work to do as they identify, negotiate with, and manage more than one licensee. Special issues related to multiple licensees in distinct or overlapping fields will have to be handled with forethought and a balancing of interests. When is field-of-use licensing worth the extra effort? When more than one company is needed to fully develop a technology’s potential, when different licensees are needed to address different markets, or when field-of-use licensing has the potential to significantly increase the financial return from a technology. In all of these situations, field-of-use licensing can produce better results for everyone involved.

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: This brief case study describes how the International Centre of Insect Physiology and Ecology (ICIPE) helped African growers maintain access to foreign markets and improve livelihoods by being able to achieve standards certification for agricultural export commodities. The process involved a characterization of the problem and a conceptualization and execution of a solution. The solution included creating a regional certification body in East Africa capable of providing globally recognized certification at costs that were locally affordable. The level of technical know-how needed by the certification body in order to be effective was significant, so the expertise of ICIPE was instrumental in creating the local certification body. Ongoing certification services provided by the certification body are highly market oriented, and because of this orientation the group was spun off as a private company, as Africert Limited.

Abstract: PATH is an international, nonprofit organization that creates sustainable, culturally relevant solutions, enabling communities worldwide to break longstanding cycles of poor health. By collaborating with diverse public and private sector partners, PATH helps provide appropriate health technologies and vital strategies that change the way people think and act. PATH’s work improves global health and well-being. Over the past 28 years, PATH has demonstrated that public–private partnerships (PPPs) can effectively address unmet public health needs, particularly when managed with a clear understanding of both public and private sector objectives. Indeed, collaboration between public sector and private sector partners is an especially valuable way to develop and advance appropriate health technologies for use in developing countries. When developing and managing PPPs, PATH recognizes that intellectual property (IP) is an especially important component in the range of variables that affect the economic, technical, and programmatic feasibility of a new health technology intervention. Our goal, therefore, is to incorporate IP considerations as a fundamental part of the PPP process. We seek to manage IP strategically to avoid or quickly overcome any IP-related roadblocks. Using three case studies, this chapter illustrates PATH’s strategies for private sector collaboration, as well as PATH’s approaches to managing IP.

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Abstract: License negotiations involve substantial real or potential value. They therefore should be supported by a team of experts. The essential skills and expertise needed for conducting successful negotiations include: business strategy and development for leading the negotiations, marketing for estimating commercial potential, law for evaluating IP and patents and carrying out a variety of related tasks, science and medicine for evaluating new and potential health products, manufacturing and production know-how to determine equipment and additional training needs, and finance for analyzing input from other experts on the team to combine into a comprehensive report. The strength of such a team is in its interdisciplinary composition; each of the skill areas can complement the other. From the perspective of international licensing, licensors can seek to improve the availability of health products in developing countries, possibly moving from the “traditional” approach to licensing toward one that incorporates public sector needs. The best approach for a public sector organization negotiating an agreement with a private sector entity is usually to offer initial terms that the organization would be willing to agree to if it were on the other side of the table. Negotiating a fair licensing agreement should not be seen as a process of “bargaining.” Rather, a licensing agreement is establishing, in written form, the rules of operation for an ongoing relationship where mutual trust and confidence will be necessary for success.

Abstract: The mission of the Drugs for Neglected Diseases initiative (DNDi) is to develop safe, effective, and affordable new drugs for patients suffering from neglected diseases and to ensure equitable access to these drugs. DNDi believes that intellectual property (IP) rights should not pose a barrier to access to these medicines. Hence, a balanced approach to IP management is critical for effective implementation of DNDi’s mission. The organization has written an IP policy that both encapsulates and articulates DNDi’s approach to IP based on core principles and beliefs. The policy reflects the DNDi philosophy, vision, and mission, ensuring that its products are accessible and affordable to patients who need them most. DNDi recognizes the reality of IP and seeks to implement its humanitarian mission using best, pragmatic practices for IP management. Indeed, DNDi has already demonstrated that this is feasible, having successfully negotiated with both private and public sector institutions in order to actualize its principled mission.

Abstract: This chapter introduces technology managers to certain key issues and to six methods of valuation and pricing. The value of a technology to a buyer (licensee) depends upon how it is to be commercially employed, taking into account the cost of development, the time the technology takes to generate returns, the extent of such financial returns, and the risk involved in the process. At the time of a licensing/sale transaction of an early-stage technology many, perhaps all, of such factors need to be assessed and quantified by making judgments about how the future will unfold with respect to the technology being developed. This assessment and forecast assessment are the essence of all pro forma business models. Valuing license rights for early-stage technologies is in this sense no different than making other future business forecasts, though the details may differ because the forecast time horizon may be longer, the uncertainties may be greater as to the market size and profitability, the operating performance of the technology as it will be used in commercial operation may be less well defined, and other factors. The price paid for a technology transferred between parties is the amount of money (present and future) and/or the financial value of noncash assets given in exchange for the transfer of the technology, which can only occur if both the seller (licensor) and buyer (licensee) have by some process reached a common, present understanding of value that makes agreement possible.

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.