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MIHR
PIPRA
Fiocruz, Brazil
bioDevelopments- Institute
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Technology and Product Licensing
Summary and Overview
Krattiger A, RT Mahoney, L Nelsen, JA Thomson, AB Bennett, K Satyanarayana, GD Graff, C Fernandez and SP Kowalski. 2007. 11: Technology and Product Licensing.In Executive Guide to Intellectual Property Management in Health and Agricultural Innovation: A Handbook of Best Practices (Krattiger A, RT Mahoney, L Nelsen et al.). MIHR (Oxford, UK), PIPRA (Davis, USA), Oswaldo Cruz Foundation (Fiocruz, Rio de Janeiro, Brazil), and bioDevelopments-International Institute (Ithaca, USA). Available online at www.ipHandbook.org.
© 2007. A Krattiger et al. Sharing the Art of IP Management: Photocopying and distribution through the Internet for noncommercial purposes is permitted and encouraged.
Buyers want to get the most for their money; sellers want to get the most for their products. Put differently, no one wants to pay more for an item than what is necessary. And sellers expect a fair price for their products.1 These universal pricing concerns apply not just to food, shelter, and any other goods and services, but also to intellectual property. As a licensee, how much should you pay for a license? How much should a licensor charge for a license? And what form should payments take? Royalties on products sold? Fixed payments per year? Equity in a business? Provision of services (bartering) or some other form of remuneration? And what exactly are you paying or charging for? Answers to these questions are always complex.
The chapters in this section offer some points of reference from which to explore these and other questions that emerge during IP licensing transactions (a license being the transfer of certain property rights between two or more parties under a specified sharing of rights and obligations between those parties). These considerations apply to companies and public sector institutions alike. With a license, as distinguished from a sale, possession of property does not transfer but remains with the original owner.
Negotiation is one way to establish the terms under which a transaction takes place. But negotiation is just one aspect of establishing the terms of a specific transaction. Preparation for a negotiation can—or should—require at least ten times more time than the actual negotiation, since the goal of a negotiation is to formulate an agreement that meets the needs of both the licensor and the licensee in a manner that ensures mutually beneficial future relationships between the institutions and individuals. Anticipating the other party’s needs and wants, and considering alternatives for resolving possible competing interests, is just one aspect of the preparation. Price, quite often, will not be the most difficult aspect to negotiate. Other terms can be more critical and of greater relevance, and value.
The first chapter by Freeman2 discusses the central issues that licensors and licensees need to consider before negotiating agreements. After providing an overview of licensing in the field of biotechnology, he considers the main components of a license agreement, highlighting concerns specific to the field of biotechnology. A license agreement will include several key components:
- The background section sets out the factual predicates for the license, including the names of the parties, the effective date of the agreement, and the parties’ motivations and expectations.
- The definitions section explains key terms used in the agreement.
- The grant section establishes whether only the licensee may practice the invention (an exclusive license) or whether others may practice it. This section may stipulate rights to sublicense or rights to assign, or it may say that there are no such rights.
- The section on fixed payments and royalties sets out payment terms of the agreement.
- The confidentiality section specifies provisions for and restrictions on the disclosure of information shared between the parties.
- A section on enforcement against infringers specifies which party shoulders the burdens and realizes the benefits of enforcing the licensed patent against infringers. This enforcement often involves allocating the risks and rewards of the overall success of the venture.
- The term of the agreement and termination procedures should be fully spelled out. As with most licenses, the biotechnology license will often have a term that coincides with the patent term.
Freeman discusses a series of other points that require special attention, including the complexities of confidentiality clauses that are particularly pertinent when working with academic and public sector research institutions. Finally, to help make negotiations easier and more realistic, the chapter discusses incentives for licensors and licensees and considers some of the finer issues of developing collaborations.
Cahoon3 addresses issues related to agricultural biotechnology (agri-biotech) licenses. Although these license agreements are similar in many ways to other kinds of license agreements, agri-biotech license agreements have some unique elements. The chapter explores the basic nature and purpose of a license agreement, and preferred licensing methods and terms are suggested. The chapter then turns to the complex—but highly important—singularities of agri-biotech licenses, focusing on such issues as multiple property types that cover a single technology and/or product, freedom-to-operate issues that may drive anti-royalty-stacking provisions, philanthropic and humanitarian-use clauses, and stewardship obligations. The chapter emphasizes the uniqueness of agri-biotech licenses in regard to the concept of field of use, which may be broadly or narrowly defined.
The complex and rapidly evolving nature of agri-biotechnology requires (at the moment) that each license agreement be tailored to the particular context in which the invention will be used. Still, such licenses do not have to be invented from the beginning, and Cahoon’s chapter elucidates both the common and unique aspects of agri-biotech licensing. For practical purposes, any organization engaged in high-volume licensing will find it useful to develop its own internal template agreements4 that are then modified and adapted to suit each special circumstance.
In addition to the more generic licensing aspects, this section of the Handbook contains a series of chapters that review more specific IP licensing strategies. The in-licensing and out-licensing of plant varieties are the two sides to the licensing equation. In-licensing of plant varieties can increase market share, building a competitive advantage by providing for customer needs. In-licensing varieties also enhances or completes a company’s variety portfolio, both for in-house breeding programs (facilitating access to breeding materials) and for in-licensed varieties ready for commercial distribution. The most common reason for out-licensing varieties is for a company to maximize return on investment by allowing others to produce and sell varieties in markets that cannot be reached satisfactorily through the current marketing setup.
Importantly, the licensing of varieties is increasingly becoming more important for public sector breeding institutions. These are often funded, at least in part, by governments, and so they have a fundamental mission of serving the public interest. The same applies to the Centers of the Consultative Groups on International Agricultural Research (CGIAR). These institutions are eager to ensure that resource-poor farmers have the greatest possible access to value-added crop varieties. The central question here is how can these public sector breeding institutions provide broad access to improved germplasm? How can a combination of plant variety protection (PVP) and licensing accelerate the dissemination and adoption of improved varieties?
Private sector licensing expert Nilsson openly addresses plant variety licensing, sharing the experiences and approaches of a private sector entity. Nilsson5 illustrates how plant variety licensing is a practical tool that plant breeding companies (in the private sector) or institutions (in the public sector) use to commercialize or provide access to their products (crop varieties). Licensing also facilitates technology transfer (where technology is defined as know-how, improved germplasm, a range of breeding tools, and genes) in a simple delivery mechanism:
- the seed as a vehicle for technology transfer
- the seed itself as a commodity-embedding technology
Nilsson provides practical guidance for in-licensing and out-licensing crop varieties, with a special focus on developing countries. Because of decreased funding of public sector breeding, the seed sector is gradually being served by private companies, often small-scale and local enterprises. This has created increased demand for new varieties, and seed companies are seeking to in-licence varieties while private sector breeders may desire to out-license their varieties. Capacity for negotiating and executing license agreements, therefore, is becoming all the more critical. In an organized, detailed, and understandable fashion, Nilsson’s chapter presents the fundamentals of seed licensing, emphasizing how the licensee and the licensor should focus on the practical content of a license agreement: exclusivity to plant material and territory, plant variety protection, variety trials, national registration, royalty payments, and information transfer.
The best licenses are those that recognize that relationships—like markets—are not static. An agreement should thus include sufficient flexibility for evolution. The agreement should reflect changes in the market, competitors, technology, seed legislation, and PVP laws. Enabling such flexibilities is perhaps the greatest art in drafting and negotiating variety licensing agreements.
Overall, the successful licensing of varieties is contingent on the strength of PVP legislation. A PVP framework generally supports the interests of the variety owner and the farmer, facilitates the transfer of technology, and provides incentives for further investments in the development of new plant varieties. In many countries, PVP legislation is based on the Convention of the International Union for the Protection of New Varieties of Plants (UPOV). The relevance of UPOV in accelerating access to improved varieties is its harmonization and documentation of a PVP aspect that facilitates licensing by foreign seed companies and public sector institutions alike.
Due to numerous complexities in terms of geographical, cultural, and paradigmatic distances, prospective licensors and licensees frequently spend a lot of time becoming acquainted and developing a certain level of trust. Over time, they reach a point where they are speaking the same language of contracts and licenses, and they reach a satisfying agreement. This lengthy process, however, can deter or derail licensing efforts. Companies may not wish to invest such time and energy, because even commercial licenses with entities in the developing world simply take up too much valuable management time and resources; the necessary funds for extended and repeated face-to-face meetings are simply unavailable.
A complementary approach is therefore needed—a way to bridge this communication gap and more rapidly arrive at a common language. Modern computer and Web technology might provide an answer. The chapter by Krattiger, Dodds, and Bobrowicz6 examines the potential of a software decision tree linked to template contract language that allows individually customized contract documents to be generated and that could ameliorate many of the aforementioned problems. Provided that some key players agree to the basic template, an appropriate software package could improve opportunities for assembling a greater array of potential partners. A test version of such a computer-generated contract template (CoGenCo) system has been developed and could be a pragmatic step toward increased licensing of proprietary and finished varieties that may or may not incorporate proprietary technologies for input or output traits. The CoGenCo system is aimed at establishing a certain international standard license, that is, a standard that all understand and agree on. In this way, a meeting of the minds is facilitated and accelerated. A standard license can be downloaded for free from the online version of the Handbook.7
The approach of CoGenCo is to facilitate the awarding of out-licenses of germplasm to developing country institutions, including by and for the CGIAR and national programs. Under the legally binding terms of CoGenCo-generated license agreements, several entities in a given country could compete against one another on price in poor countries but would not be allowed to compete against the patent holder in developed countries, in which revenues and the incentives for developing new varieties and new technologies would be undiminished. Under appropriate circumstances, the germplasm and/or traits could be licensed royalty free. Use of out-licensing in this way separates these fundamentally different markets and promotes access to improved germplasm and technologies, all by reaffirming various statutory protections as indispensable for successful agricultural research and development.
Moving on to other forms of IP licensing, the licensing of trade secrets presents an entirely different set of challenges. A trade secret (also called know-how in certain jurisdictions) is any proprietary technical or business information, often embodied in inventions, know-how, show-how, and tacit knowledge. The most common definitions agree on three requirements that should be met for enforceable trade secrets to exist. The proprietary information should be:
- Secret in the sense that it is not generally known in the trade
- Valuable to competitors that do not possess the information
- The subject of reasonable efforts to safeguard and maintain the information in secrecy
Everyone knows that trade secrets are secret. Patents, on the other hand, require inventions to be publicly disclosed. But does this mean that these two forms of IP protection cannot be used together? The chapter by Jorda8 argues emphatically that trade secrets are complementary to patents. By using both trade secrets and patents, the combined IP protection is stronger than if either one were used alone. But how is it possible to use both patents (which are publicly disclosed) and trade secrets (which are kept secret) to protect something? In practice, there is no conflict between the two. Patent applications are usually filed early during the research stage to get the earliest possible filing or priority date. The patent claims tend to be narrow to achieve distance from prior art, and the specification normally describes rudimentary laboratory experiments or prototypes and/or embryonic embodiments of an invention. The best mode for commercial manufacture and use are almost invariably developed later. The results of such later research need not be disclosed to obtain the patent on the early invention and can be kept as trade secrets.
As a practical matter, therefore, patent licenses are most valuable when coupled with access to associated know-how. A patent license alone is often inadequate for commercial development of a technology. This associated know-how is immensely important and should be part of licensing agreements; effective technology transfer requires not only patent licensing but also, and perhaps more importantly, trade secret licensing.9
Anyone engaged in product development, including developing countries in particular, will want to keep in mind that trade secret protection operates without delay and without undue cost. Patents, on the other hand, are territorial and thus expensive to obtain and maintain, and they can be acquired only in certain countries.
When considering the forms of IP protection available for plants, what usually comes to mind are PVP and utility patents. But as the chapter by Tucker and Ross10 points out, trademarks are an effective form of IP protection for plants and plant products, either used alone or in combination with one or more other forms of IP rights protection. Furthermore, trademarks can be used to effectively protect IP rights for plant varieties internationally. Similarly, the value of trademarks for varieties and products from developing countries can be tremendous. The relative strength of trademarks is determined by how distinctive the mark is. When consumers see the trademark, they are able to easily distinguish the goods or services of the trademark owner from the related goods or services of competitors.
Two international agreements, the Madrid Arrangement and the Madrid Protocol govern international trademark registration. For plant trademarks, understanding and utilizing these provisions will become increasingly important to developing countries. Many tropical and subtropical regions are rich sources of novel fruit products, and an owner of such a product will want to adopt a strategy that both stimulates global demand for the product and maximizes commercial returns. Trademarks will be integral for such IP rights protection and global marketing strategies. In particular, three critical aspects should be considered if new branded fruit products are to be successfully launched from developing countries:
- Determine what is to be trademarked.
- Promptly register the trademark in the countries in which it will be used.
- Enforce the trademark.
A successful global trademark program, built around exciting products, may be more achievable than a PVP-based strategy that relies only on licensing for returns. Instead of managers and lawyers securing licensing deals, the market itself can fuel value creation in the trademark. If successful, the returns can be tremendous.
Shifting topics once again, a very important and quite difficult aspect (especially for public sector entities) is the granting of options and rights of first refusal. As either a stand-alone agreement or as a clause within a broader agreement, options are a unique way of granting rights to intellectual property. The chapter by Anderson and Keevey-Kothari11 provides a detailed discussion of the various forms of options, with tips and strategies, sample causes, and template agreements. The chapter delves deep into the legal and commercial promises and perils of granting options and concludes with a helpful section on administering options.12
Of special interest to university administrators and technology transfer professionals will be the sections on incorporating options as a part of research agreements. Universities in the United Kingdom and the United States have different approaches to handling privately sponsored research. In the United Kingdom, sponsors are often granted an option to acquire a license to develop and commercialize results, or the sponsor might in some cases own all the results. In contrast, a university in the United States normally retains ownership of any intellectual property resulting from its own research, though the university may grant rights to a sponsor to commercialize results. This emphasis on university control of research in the United States stems, in part, from provisions in the Bayh-Dole Act that prohibit universities from transferring ownership of intellectual property created from government-funded research.
Also instructive to university personnel will be the chapter’s discussion of where and when not to grant a pipeline agreement to a university spinout company. A pipeline agreement generally refers to an option granted to a university spinout company to acquire rights over intellectual property that may, in the future, be generated by university faculty. Although a pipeline agreement may make sense, universities should be careful to stipulate how pipeline intellectual property will be identified. They will likely want to limit the agreement to intellectual property generated by specific faculty members and their labs. Universities should also recognize that in some cases spinouts may not be the licensee of choice and should therefore craft pipeline agreements with care.
Licensing is about choices, and it can be argued that no choice is more important than the field of use granted in a license. When licensing complex technologies, the licensor usually can partition patent rights based on time (duration of license grant), location (where rights may be practiced), and field of use. Shotwell13 explains and clarifies the last of these three considerations. By partitioning a bundle of patent rights and distributing them to one or more licensees, field-of-use licensing maximizes value, optimizes delivery, and facilitates the most effective use of new technologies, whether in agriculture, biotechnology, pharmaceuticals, vaccines, or diagnostics.
With field-of-use licensing, the licensor gains greater control while maximizing the use and value of the technology. However, field-of-use licensing requires more work. The technology licensor should identify, motivate, negotiate with, and manage more than one licensee—and quite possibly many. Nonetheless, this hard work can increase royalty streams to the licensor, since multiple licensees, each with different and specialized access to the technology, can efficiently speed different types of products to market.
When using field-of-use licensing, a licensor should be flexible. For example, even if a licensor envisions only one possible field of use for an invention, it makes sense to specifically limit a licensee to just that field. This is because technology changes so rapidly that a new use for the invention has a very good chance of developing later during the life of the patent. By limiting licensees to a particular field, a licensor retains the ability to work with the best possible licensee(s) for a new use when it arises.
Shotwell recommends that the licensor retain control over patent prosecution, while seeking to fairly distribute costs over field-of-use licensees. When considering reimbursement, the field-of-use licensor should manage patent expenses creatively. For example, the licensor can cover patent expenses up front, later reimbursing them from the royalty stream, or, if costs are to be reimbursed by the licensees, language can be used to include future licensees in that reimbursement.
One of the complexities of field-of-use licensing is that it raises the important question of how to deal with patent infringement/interference problems with multiple licensees. As with patent costs, the simplest approach is for the licensor to carry interference and infringement costs alone, recovering them through royalties or settlements. This approach retains more control for the licensor and correspondingly less for the licensees. Another approach to address possible infringement and interference actions would be to work out a mechanism to share the costs and management of these activities with one or more licensees.
Possible problems with field-of-use licensing include rights that overlap across licenses. This can arise from different interpretations of the rights granted under licenses or from unexpected future technical developments. It is therefore wise to lay the groundwork for resolving disputes related to these types of potential issues.
Licenses that include royalty stacking and royalty packing clauses are becoming more ubiquitous because virtually all products developed now using biotechnology, genetic engineering, and chemistry are technologically complex and incorporate many different inputs. As if this were not enough, there is also the added consideration of relevant IP rights, held by third parties that may be attached to these many inputs. For example, a vaccine might be identified and tested using proprietary research tools with IP rights owned by several companies. Later, the vaccine might be produced using patented recombinant techniques and proprietary DNA sequences. Transformation vectors might be owned by others. Production of the vaccine might employ a proprietary cell line. The vaccine might be packaged with one or more proprietary adjuvants and then be delivered using a patented device. Hence, when the vaccine is ultimately “ready for use,” it will likely be subject to royalty obligations to several different companies, or licensors. A dilemma results, as the various licenses involved can combine to impose aggregate royalty obligations, perhaps up to 20%, and sometimes more, of the selling price of the product. There will also be separate reporting and accounting obligations to each of the licensors. Similar problems arise in agriculture when a genetically engineered crop might be made using proprietary varieties, vectors, gene sequences, and research tools—each with IP rights owned by different entities.
Jones, Whitham, and Handler14 discuss two scenarios that can arise when multiple royalty rates are attached to one product—royalty stacking and royalty packing:
- Royalty Stacking. A biotechnological product might have multiple patents attached, and thus require multiple licenses in order to make, use, or sell the product.
- Royalty Packing. With some biotechnologies, it usually is necessary to combine one technology with many other technologies. (In this situation, the royalties imposed on each of the proprietary products that are administered will be “packed” together.)
The chapter then presents several techniques for managing royalty stacking and packing:
- Royalty Ceiling. A licensee may seek a ceiling for royalties in agreements it makes with licensors.
- Royalty Floor. A licensor may seek a floor below which its share of the royalties may not be reduced.
- Variable Royalties. Licensees and licensors also might agree to have variable royalties that are conditioned on the importance of the technology in relation to the creation of the product.
- Royalty Alternatives. Finally, alternatives to royalty bearing arrangements can also be considered; these include lump-sum payments and patent pooling.
The last point shows that managing royalty stacking and packing does not necessarily require royalty streams. For example, a lump-sum payment for the use of a research tool may be an optimal way to disseminate and exploit a patented technology. Some technologies may be best assembled in patent pools that provide either free use of or fixed-price access to the technologies. Patent pools can thereby facilitate R&D using a variety of proprietary technologies without the need to negotiate licenses.
As all of the above chapters make clear, in our post-TRIPS environment, leaders in developing countries who seek to improve economic development and public health are advised to be well-versed in the details of global IP management. Unlike the past, today no country can comfortably remain isolated from the global IP system. Yet among many public sector institutions in developing countries, knowledge of IP licensing practices is often insufficient. To address this gap in expertise, the chapter by Satyanarayana15 lays out several of the important features of in-licensing agreements, common problems faced by developing countries in constructing and implementing these agreements, and ways to avoid these common pitfalls.
In-licensing by public sector institutions is a useful, if complex, method for bringing technologies into the public sector through patent license agreements with the private sector. Although the interests of the private and public sector entities involved in these agreements will almost necessarily be in tension, it is possible for a well-crafted license to allow all parties to feel as though they have benefited from the agreement. From a public sector perspective, as Satyanarayana argues, the goal is ultimately to provide a product (be it a vaccine, drug, or new agricultural crop) to people who would not have access to it without government support. For developing countries, the good news is that legal expertise is often locally available, since many firms are already familiar with basic licensing procedures. The trick is to put this knowledge in the service of public officials to develop a comprehensive and effective plan to license and develop much-needed-technologies. These strategies include:
- developing a business strategy that balances the needs of the public sector with the needs of the private sector
- developing a marketing strategy that prices products realistically and is based on good market research to aid valuation
- forming partnerships with other suitable agencies to help manufacture and market new products
- making sure legal, business, and scientific experts are working together for optimal success
- establishing, as an important initial step, a national technology transfer office
The final chapter by Bobrowicz16 offers a useful checklist for negotiating licensing agreements. For the seasoned technology transfer professional or contract attorney, the idea of preparing a detailed checklist for every licensing agreement may seem like unnecessary busy-work. Yet these same professionals could probably relate stories where a missed detail or vague contract provision led to a costly and protracted legal battle. Given the high stakes, it is certainly in the best interest of those involved in IP deal making to make sure that every last detail is checked and rechecked. When multiple deals are being negotiated at once, it is only reasonable to assume that something could get missed. To help avoid this unfortunate and potentially costly error, this chapter provides a comprehensive, yet flexible, checklist that can be deployed to help manage the details of license agreements. Although the author provides a template for most elements of the license, she is quick to note that users should feel free to alter the checklist to suit their particular business practices.
The checklist covers all the major elements of a standard IP license, particularly as used in agriculture, starting with a section detailing the most basic, yet crucial, matter of getting all the parties’ pertinent contact information. Sections covering clauses, definitions, rights granted, sub-licenses, improvements, warranties, and infringement, and other matters are discussed, with useful sample checklists included for each component. The chapter concludes with a consideration of boilerplate sections, including confidentiality and arbitration stipulations. Although each section is annotated, an online version can be downloaded without accompanying text.
In sum, licensing is about the development of relationships. As important as the terms of agreements are, few are more important than the long-term opportunities offered by forging good partnerships, be they between companies or between public and private sector entities. Negotiating an agreement is just the beginning of what may—or should— become a long-lasting and beneficial relationship.
Endnotes
1 In an ideal world, exchanges would take place based on “fair” and “equitable” pricing, in both the eyes of the seller and buyer. But equitable exchanges are at least in part based on perceived moral obligations that are difficult to capture in financial and market terms. Such nonmonetary and moral perceptions, often strongly personal-, cultural-, and even religion-based, are important, but there is no system, at least for the moment, for weighing different perspectives on morality or ethical grounds or for translating them and making them work in the marketplace. To be sure, it can be satisfying to the buyer and seller when each perceives a transaction to have been equitable. And we need to strive for better balance in an inequitable world. But how much is owed to whom and for what and how to achieve general satisfaction has surely eluded our modern society (and, indeed, has eluded societies for centuries, if not millennia). We can all support equity, or at least pay lip-service to it, but it is far more difficult to determine what equitable transactions, in fact, consist of.
2 Chapter 11.1 by JW Freeman titled Licensing Biotechnology Inventions, p. 991.
3 Chapter 11.2 by RS Cahoon titled Licensing Agreements in Agricultural Biotechnology, p. 1009.
4 The online version of the Handbook provides a large number of template agreements from myriad organizations. These templates include confidentiality agreements, material transfer agreements, contract research agreements, collaborative research agreements, and a range of licensing agreements.
5 Chapter 11.3 by M Nilsson titled The In- and Out-Licensing of Plant Varieties, p. 1017.
6 Chapter 11.4 by A Krattiger, J Dodds, and D Bobrowicz titled Potential Use of a Computer-Generated Contract Template System (CoGenCo) to Facilitate Licensing of Traits and Varieties, p. 1029.
7 www.ipHandbook.org.
8 Chapter 11.5 by KF Jorda titled Trade Secrets and Trade-Secret Licensing, p. 1043.
9 This is perhaps the principal reason why (1) most issued patents are not practiced in developed countries although their information is freely available on the Internet and (2) why compulsory licensing has tremendous limitations.
10 Chapter 11.6 by WT Tucker and GS Ross titled Use of Trademarks in a Plant-Licensing Program, p. 1059.
11 Chapter 11.7 by M Anderson and S Keevey-Kothari titled Commercialization Agreements: Practical Guidelines in Dealing with Options, p. 1069.
12 These include practical suggestions for keeping track of options, including tips for writing standard operating procedures (SOP), generating nondisclosure agreements, developing a useful database for data, and if and when necessary, calling in legal professionals for more-specialized advice.
13 Chapter 11.8 by SL Shotwell titled Field-of-Use Licensing, p. 1113.
14 Chapter 11.9 by KJ Jones, ME Whitham and PS Handler titled Problems with Royalty Rates, Royalty Stacking, and Royalty Packing Issues, p. 1121.
15 Chapter 11.10 by K Satyanarayana titled In-Licensing Strategies by Public-Sector Institutions in Developing Countries, p. 1127.
16 Chapter 11.11 by D Bobrowicz titled A Checklist for Negotiating License Agreements, p. 1133.
Abstract
A Checklist for Negotiating License Agreements
by Donna Bobrowicz
Abstract:
This chapter provides a road map for licensing professionals to identify the most common terms, contractual obligations, and other provisions that are likely to be encountered in crafting a license agreement. Emphasis is placed on agricultural technology licenses. Since most people engaged in deal making are involved in multiple deals at the same time, important aspects can be forgotten or overlooked at any time and for any deal. The checklist format allows the licensing practitioner to check off each item once it has been addressed to the parties’ satisfaction. While expansive, it does not necessarily fit all contexts and is therefore intended to serve as a basis from which institutions and individuals can develop their own checklists.
Abstract
Commercialization Agreements: Practical Guidelines in Dealing with Options
by Mark Anderson, Simon Keevey-Kothari
Abstract:
An option to acquire rights in university intellectual property (IP) may be encountered in several guises: as a stand-alone agreement, as a clause within an agreement (for example, a sponsored research agreement or a material transfer agreement), or as a “pipeline,” or IP framework, agreement for a university spinout company. Although the grant of an option may often form quite a small part of a larger agreement, the grant can raise important issues in terms of an organization’s IP commercialization strategy. This is especially true of pipeline agreements that are, effectively, a specialized form of option agreement. The purpose of this chapter is threefold:
- to provide an introduction to options, and their uses, and including legal, practical, and negotiating issues
- to provide suggested templates along with guidelines concerning completion of the templates
- to consider and discuss some of issues that are problematic or of particular concern to universities.
The chapter attempts to provide information that is useful for both the beginner and the experienced research-contracts or technology transfer professional. The breadth of material covered may give the mistaken impression that university contracts are wrought with legal and commercial difficulties. Usually, this is not the case. But sometimes differences of expectation, practice, or legal culture can arise between parties negotiating an agreement, particularly in international transactions.
Abstract
Field-of-Use Licensing
by Sandra L. Shotwell
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
The In- and Out-Licensing of Plant Varieties
by Malin Nilsson
Abstract:
Variety licensing is a tool for plant breeding companies and institutions to commercialize their varieties and to transfer technology to farmers efficiently. As the seed industry becomes increasingly privatized, interest in in-licensing new varieties, both from national and international sources, is likely to increase. Likewise, financial pressure on public sector breeding will increase the need for the targeted commercialization of varieties through out-licensing. As the seed sector becomes more transparent, the market should see more foreign investment from companies who wish to make their varieties available through licensing. That, in turn, should promote local seed production and variety testing. The licensee and the licensor should focus primarily on the practical content of the license agreement, specifically, exclusivity to plant material and territory, plant variety protection, variety trials, national registration, royalty payment, and information transfer. The purpose of this chapter is to provide guidance for prospective licensors and licensees in the practical issues of in- and out-licensing of varieties.
Abstract
In-Licensing Strategies by Public-Sector Institutions in Developing Countries
by Kanikaram Satyanarayana
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
Licensing Agreements in Agricultural Biotechnology
by Richard S. Cahoon
Abstract:
Though similar in many ways to other kinds of license agreements, agri-biotech licenses have some unique elements that require special attention. Considering first the similarities, this chapter looks closely at the typical boilerplate language that all license agreements share and outlines the basic structures and concerns of all such agreements. The chapter then turns to the singularities of agri-biotech licenses, focusing on such issues as multiple property types that often cover a single technology and/or product, freedom to operate issues that drive anti-royalty-stacking provisions, philanthropic- and humanitarian use clauses, and stewardship obligations.
Abstract
Licensing Biotechnology Inventions
by John W. Freeman
Abstract:
After providing an overview of licensing in the field of biotechnology, the chapter carefully examines the key components of a license agreement, particularly in relation to the field’s unique concerns. The chapter raises a number of issues that licensors and licensees should consider when negotiating patent license agreements. It offers precise definitions of key terms, points out areas of the agreement that merit special attention (including the relative merits of exclusive and nonexclusive licensing), considers the difficult question of how to determine a patent’s value (especially when the patent is being used for screening purposes), and gives much-needed attention to the complexities of confidentiality agreements, especially those involving academic research institutions. To make negotiations easier and more realistic, the incentives for licensors and licensees are discussed, as are some of the finer points of development collaboration. In addition, the author offers some advice about how to define patent misuse, offering some helpful suggestions about what to do should things go bad. The goal of this chapter, however, is to ensure that agreements succeed.
Abstract
Potential Use of a Computer-Generated Contract Template System (CoGenCo) to Facilitate Licensing of Traits and Varieties
by Anatole Krattiger, John Dodds, Donna Bobrowicz
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
Problems with Royalty Rates, Royalty Stacking, and Royalty Packing Issues
by Keith J. Jones, Michael E. Whitham, Philana S. Handler
Abstract
Trade Secrets and Trade-Secret Licensing
by Karl F. Jorda
Abstract:
Exploiting the overlap between intellectual property (IP) categories, especially between patents and trade secrets, is an important facet of IP management. Patents (which require full disclosure) and trade secrets (which are kept confidential) are not incompatible. On the contrary, they can complement one another: patents protect inventions and trade secrets protect collateral know-how. Using patent and trade-secret protection together in a synergistic manner results in a potent exclusivity. Moreover, as licensing has become the preferred instrument for technology transfer, most technology licenses are hybrids, covering both patents and trade secrets. This situation has evolved because licenses that cover patents but do not allow access to collateral know-how usually do not permit patented technology to become commercialized. Despite the ease of obtaining trade-secret protection—immediate efficacy and low cost—this type of IP protection is too often neglected.
Abstract
Use of Trademarks in a Plant-Licensing Program
by William T. Tucker, Gavin S. Ross
Abstract:
The principal forms of IP rights protection for plant varieties are plant patents, plant variety protection patents (PVPs), and utility patents. However, trademarks can also provide long-lasting and significant protection for plant varieties. One advantage that trademarks have over the statutory forms of IP protection for plants (plant patents, PVPs, utility patents) is that trademarks can be protected indefinitely, as long as the product is marketed and the trademark enforced. The most important agreements dealing with international trademark registration are the Madrid system and the Madrid Protocol (of which the United States is a signatory). Licensing of a trademark can either stand alone or be combined with another form of IP rights protection, such as with a hybrid PVP/trademark license.
Abstract
Business Partnerships in Agriculture and Biotechnology that Advance Early-State Technology
by Martha Dunn, Brett Lund, Eric Barbour
Abstract:
Given the expertise of large agricultural companies with respect to product development from cutting-edge research, these companies often choose to in-license technologies from small biotechnology companies and universities rather than relying solely on in-house efforts. This chapter provides an overview of the interest of large industry players in sourcing early-stage technologies from companies, how best to communicate those opportunities to companies, and what to expect in terms of valuing the technology and structuring a licensing deal. Large companies are generally interested in creating new products or new technologies that are commercially viable and that help establish sustainable agricultural economies. But, in addition, they generally support providing products and technologies that bolster subsistence farming and humanitarian efforts, while recognizing the need to protect the company’s intellectual property against unauthorized uses for commercial or other unintended purposes.
Abstract
Ensuring Developing-Country Access to New Inventions: The Role of Patents and the Power of Public Sector Research Institutions
by Lita Nelsen, Anatole Krattiger
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
Facilitating Assembly of and Access to Intellectual Property: Focus on Patent Pools and a Review of Other Mechanisms
by Anatole Krattiger, Stanley P. Kowalski
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
Facilitating Humanitarian Access to Pharmaceutical and Agricultural Innovation
by Amanda L. Brewster, Stephen A. Hansen, Audrey R. Chapman
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
A Guide to International Patent Protection
by Ann S. Viksnins, Ann M. Mccrackin
Abstract
Intellectual Property and Technology Transfer by the University of California Agricultural Experiment Station
by Gregory D. Graff, Alan B. Bennett
Abstract:
One of the primary missions of the University of California Agricultural Experiment Station (AES) is to create knowledge and develop technologies that improve the productivity and environmental sustainability of agriculture in California. In addition to the public release of information and the educational activities of cooperative extension services, the University of California places the inventions of AES faculty directly into commerce through the process of patenting and technology transfer. This channel is particularly useful—and often essential—when further financial investments are necessary to develop the technology for practical applications or to manufacture, market, and distribute new products that incorporate the new technology. This report documents the patenting and formal technology transfer activities of the University of California Agricultural Experiment Station over the last 40 years.
More than 800 inventions have been reported by AES researchers between 1960 and 2001. These inventions are categorized into the five broad technology areas: biotechnology (49%), plant varieties (19%), chemicals (14%), equipment/machinery (13%), and environmental (1%). Biotechnology inventions were entirely absent until the mid-1980s, but the category has grown rapidly over the last 15 years. The growth in the number of biotechnology-related inventions has occurred not at the expense of inventions reported in the areas of plant varieties, agricultural equipment, or novel chemicals, all of which have shown a relatively stable level of activity.
Financial returns from the licensing of AES inventions was US$1.4 million in fiscal year 1982 (2.5 million in 2001 dollars) but had grown to US$12 million by fiscal year 2001. After accounting for expenses associated with patenting new inventions and distribution of a share of income to inventors, AES inventions returned over US$6 million to the university in fiscal year 2001. Since 1982, the cumulative financial return has totaled US$105.2 million in fees and royalties. About 87% of that income has been derived from the licensing of plant varieties in spite of the fact that they compose only 19% of the AES inventions, indicating the commercial importance of UC plant varieties. To date, relatively few biotechnology- or environmental-related inventions have been commercialized, but the extensive and growing UC portfolio in these areas should provide a strong base for future licensing activity.
Abstract
IP Portfolio Management: Negotiating the Information Labyrinth
by Jeremy Burdon
Abstract:
The management of intellectual property is all about managing innovation with the procedures and processes that are required to turn that innovation into valuable patent rights. A truly strategic approach to IP management will span conception to product market release. Integrating IP management into the R&D, advance development, and product development cycles seamlessly provides opportunities to gain and enhance IP protection while offering the potential to reduce risk and lower costs. The following chapter discusses some of the key elements of IP portfolio management and how the combination of the right IP tools, procedural know-how, and organizational attributes and behaviors can contribute to successful implementation.
Abstract
Negotiating an Agreement: Skills, Tactics, and Best Practices
by Richard T. Mahoney
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
Open Source Licensing
by Janet Hope
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
Patent Licensing for Small Agricultural Biotechnology Companies
by Clinton H. Neagley
Abstract:
A small agricultural biotechnology (agri-biotech) company needs to establish a strong IP portfolio. Such a portfolio provides a foundation for R&D, encourages outside investment and funding, and supports product commercialization. An important step in establishing an IP portfolio is in-licensing patent rights from third-party patent holders. Nonexclusive licenses typically give a company freedom to operate and open up the possibility of creating commercializable products. Exclusive licenses give a company an exclusive position for commercialization under the patents in question.
This chapter discusses in-licensing as it applies to small agri-biotech companies. It describes the types of technologies that may be subject to in-licensing, the procedures attendant upon in-licensing, and the terms that may be delineated by in-licenses.
Abstract
Patenting and Licensing Research Tools
by Charles Clift
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.
Abstract
Pragmatic and Principled: DNDi’s Approach to IP Management
by Jaya Banerji, Bernard Pecoul
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
Product Development and IP Strategies for Global Health Product Development Partnerships
by Sandra L. Shotwell
Abstract:
The mission of global health product development partnerships (PDPs) is to develop effective, affordable health products and make them available and affordable to those in need. The not-for-profit product development partnerships (PDPs) often seek for-profit partners to access essential technology, expertise, and resources. These may be early-stage companies, leveraging philanthropic and government resources to develop a platform technology or established companies building out from existing markets or testing new technologies. Such not-for-profit/for-profit partnerships require unique product development and IP (intellectual property) strategies that both recognize the company’s need for commercial benefit and deliver important health products to developing countries.
Abstract
Reservation of Rights for Humanitarian Uses
by Alan B. Bennett
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
Specific Issues with Material Transfer Agreements
by Alan B. Bennett, Wendy D. Streitz, Rafael A. Gacel
Abstract:
In the health and agricultural sciences, biological materials were once freely and widely exchanged. But more and more, these materials have gained commercial value. Public sector institutions, as well as private companies, have recognized, therefore, that proprietary protection of these materials may be necessary. Material transfer agreements (MTAs) are legal instruments that define terms for the transfer of tangible biological materials between or among two or more parties. MTAs are bailments that transfer possession but not title: the party who transfers the materials retains full ownership; the party who receives the materials holds them in trust. Transfer is governed by contract, ideally specifying the term of the transfer, how the materials may and may not be used, and other related issues, such as confidentiality. In addition, an MTA may contain licensing provisions for the transfer of embedded intellectual property (IP) rights (patent rights). Hence, an MTA can be a hybrid instrument, covering the transfer of both tangible property (via bailment and contract) and intangible property (via licensing of patent rights). Biological materials transferred using MTAs include reagents, cell lines, antibodies, research tools, insertional mutant populations, genome sequence databases, novel vectors, and plant genetic resources. Due to divergent institutional priorities, material transfers between the private and public sectors are generally more complex than those between public sector institutions.
Abstract
Technology Valuation: An Introduction
by Robert H. Potter
Abstract:
This chapter explains the basics of the various ways of estimating value of a new technology, focusing on the importance of agreeing on the value before finalizing a technology transfer deal. Indeed, value is simply the negotiated amount arrived at between two parties. Although there are many ways to place a value on a technology, most licensing deals focus on royalty amount, since it spreads the risk between the technology provider and the developer. The percentage assigned to royalty has to be negotiated. Several factors will affect royalty value: level of market demand, the improvement the technology can bring to the final product, whether or not other investments will be needed to develop the final product, and, most importantly, the predicted rate of uptake in the marketplace. Some understanding of these factors, or at least the procedures used to estimate them, will enhance one’s ability to negotiate a deal that will both help bring the technology to market and nurture the relationship between the parties, thus facilitating any future technology transfer deals.
Abstract
Using Milestones in Healthcare Product Licensing Deals to Ensure Access in Developing Countries
by Joachim Oehler
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
Valuation and Licensing in Global Health
by Ashley J. Stevens
Abstract
What Does It Take to Build a Local Biotechnology Cluster in a Small Country? The Case of Turku, Finland
by Kimmo Viljamaa
Abstract:
There seem to be new biotechnology initiatives springing up in almost every country and every region, no matter how big or small. This is the case for both developed countries and many developing countries. At the same time, many studies seem to suggest that the industrial dynamics of the biotechnology sector strongly favor only a few globally important locations. These are characterized by well-established relations between small R&D companies and the presence of venture capitalists, big multinational corporations, and service providers. The tendency of biotechnology clusters to form in certain locations raises some questions. Can all these new initiatives be successful? Can biotechnology research clusters develop and prosper on a smaller scale? The aim of this chapter is to discuss ideas for building successful biotechnology clusters in less-developed places. Using the example of Turku, Finland, the chapter analyzes how public policy and local activity can “fill the gaps” in the innovation system, thereby facilitating the emergence of a biotechnology industry. Although this case study is from a developed country, many developing countries face similar challenges to those Turku has faced.
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