Home > Topics > Bioprospecting, Traditional Knowledge, and Benefit Sharing > Deal Making in Bioprospecting > Editor's Summary, Implications and Best Practices

International agreements such as the Convention on Biological Diversity (CBD) and the International Treaty on Plant Genetic Resources (ITPGR) provide a broad framework for protecting and utilizing the genetic resources embodied in natural and agricultural biodiversity. However, international agreements do not provide detailed guidance on how to structure relationships between individual parties involved in commercial bioprospecting activities. Companies involved in the exploration, screening, and utilization of genetic resources from areas with rich biodiversity have begun to accumulate experience in structuring such relationships, including the selection of countries, the selection of partners, and the drafting of terms in Biodiversity Access Agreements (BAAs) that govern these relationships.

The three guiding principles for a successful relationship are,

1. a commitment to maintaining a fair, trusting, long-term relationship;
2. efficient and reasonable permitting; and,
3. equitable sharing of benefits between the company and its collaborators in the host country.

The main factors by which companies choose countries for bioprospecting activities include the existence of unique and protected ecosystems, the existence of a tractable legal framework, sufficient political will, fair and equal treatment for all access seekers, and strong domestic scientific partners. The main factors by which countries choose among foreign companies and universities who are seeking access include those potential partners’ appreciation of biodiversity, their active adherence to international conventions and best practices, and their established track record.

Biodiversity Access Agreements (BAAs) contain basic elements common to all standard contracts. These include:

• identification of the parties to the agreement,
• specification of the duration and legal jurisdiction of the agreement,
• specification of the contributions to be made by each party, including their relative values,
• specification of the rights and responsibilities of each party,
• terms for financial payments and other non-financial forms of compensation.

The main tenants characterizing a successful BAA include:

• a clear definition and assignment of legal rights to all genetic resources involved,
• prior informed consent from all domestic parties affected by the bioprospecting (including landowners and managers),
• clear rights to patent and commercialize products derived from discoveries made,
• confidentiality,
• a lack of competition among the partners to the agreement,
• no transfer of proprietary technologies or technical capacity involved under the agreement to third parties,
• no exclusivity requirements (which encourages similar projects with other partners).

Identification of the parties to the BAA can be complicated because there may be multiple agencies within a country that have authority over access to genetic resources. There may also be multiple parties, such as landowners or firm managers, that may have legal recourse to prevent access or to receive compensation if and when they are affected by biodiversity prospecting. Each country that is signatory to the CBD has a responsibility to establish a National Focal Point for Access and Benefit Sharing, which should be able to identify all necessary authorities and potential claimants.

Specifying the duration of the BAA is important to provide a natural termination or to prompt periodic review and conditions for renewal, as well as to define how to dispose of any intellectual property and ongoing agreements or responsibilities that survive the BAA. The jurisdiction of the BAA defines what country’s laws govern the contract, which international conventions are binding, and what kinds of dispute resolutions mechanisms are available.

Contributions of each party included in a BAA are the specific activities that each party will undertake, such as sampling, cleaning, and analyzing. It is very important to reach an understanding about the relative importance or value of each party’s different contributions, because this will directly inform questions of equitable sharing of any benefits that arise from the collaborative activities, including royalty payments and other financial compensation. Since most bioprospecting is an early stage discovery activity, the level of uncertainty is very high, and any valuation is very crude. It is more important, and perhaps more appropriate, to agree upon a methodology or set of principles for how the different kinds of contributions will be evaluated and weighed in the event of a commercial success.

The rights of each party that need to be spelled out in a BAA include rights to retention or distribute samples, rights to intellectual property under different scenarios or conditions of discovery and invention, and rights to publish discoveries and inventions. Responsibilities of each party include the handling of reporting, communications, and administrative filings.

“Benefit sharing” is the term generally used in BAAs to specify the allocation of returns to the collaborative activities governed by the contract. Given the nature of the activity and the regions where bioprospecting is often conducted, the full scope of returns is understood to include both financial and non-financial components (that is, different sources of potential value to the various parties to the agreement). The possible returns can also be differentiated roughly into short-term, medium-term, and long-term timeframes. A BAA thus has enormous flexibility in terms of structuring the terms of compensation to the parties. While advanced payments, sample fees, running royalties, and milestone payments—terms typical of many technology agreements—are available instruments for financial benefit sharing, there are many more possibilities, including provision of equipment and infrastructure, sharing of IP rights or rights to product sales, funding of related research, or assistance with conservation services.

Despite progress on the technical side, a BAA almost always creates controversy. The natural response of governing authorities is to move slowly, fearing criticism from competing domestic interests and international watchdog groups for undervaluing their biodiversity and not supporting economic development. Many such groups consider the private sector to be inherently corrupt; thus, no matter what benefits are offered they are perceived as inequitable. Ironically, this reaction reflects negatively on those companies taking the lead in supporting the CBD and creates strong disincentives to engage in bioprospecting or share information about such endeavors. This in turn decreases the very value of biodiversity resources.

In the end, the commitment of both parties to a sustainable and rational use of biodiversity in a way that both encourages commercial development and protects the unique resources of the earth is at least as important as any technical aspects of dealmaking. However, due diligence by all parties in crafting a solid agreement that is robust to scrutiny and that transcends mere short-term interests is essential to fostering the trust required for collaboration and achieving true progress in the exciting field of bioprospecting.

Key Implications and Best Practices

Given that IP management is heavily context specific, these Key Implications and Best Practices are intended as starting points to be adapted to specific needs and circumstances.

For Government Policymakers

• Encourage companies that are not complying with the Convention on Biological Diversity (CBD) objectives and national legal frameworks to seek legal access to biodiversity and share benefits from their research with those samples. Applaud companies that are leaders in securing legal access through partnerships with local research institutes and sharing benefits with them.
• Ensure that national policy regarding bioprospecting is grounded in, and consistent with, the CBD, the TRIPS Agreement, as well as other pertinent international laws and policies.
• Clarify the roles of appropriate authorities in the bioprospecting permit granting process. Simplify the process, and appoint a national focal point for biodiversity access. The permit process should be efficient and transparent. If the system is not simple and is slow, bioprospectors or commercial researchers may either avoid research in a nation or will find ways to circumvent the system.
• Clear legislation on intellectual property, with demonstrable enforcement, will help to ensure harmonization of national, regional, and local legal and administrative procedures governing access to and transfer of genetic material.
• Identify the biodiversity assets and know what they offer potential commercial partners in terms of unique ecosystems, habitats, and endemic species. Identify key scientific capacity, and know the experts, both domestic and foreign, who can advance the development of these biodiversity resources into commercial products.
• Encourage local entrepreneurship through tax incentives for collaboration and capacity building, and seed funding for new venture creation. Support efforts by local life science institutes (and when applicable their commercial partners) to secure grants to facilitate and assist such Biodiversity Access Agreement (BAA) efforts.
• Remember that trust and rational behavior are essential for making BAAs work. Companies and collaborators must have the common goal of making the deal work for sustainable commercial use of biodiversity.

For Senior Management (university president, R&D manager, etc)

• Avoid overly ambitious and unreasonable demands for royalties. Given the complexity of the industry and the enormous variety of applications and products that could be developed through the Biodiversity Access Agreement (BAA), it is very difficult to know the profit margins for the company, product, or application ahead of time. Technology transfer (training, technology licenses, equipment, supplies) and information and data sharing may, in the longer term, be more important than royalties.
• Develop and maintain working relationships with government permit authorities to promote trust and cooperation for BAAs within the country.
• Provide researchers and students with the requisite skills (or potential) to collect samples according to protocols and to isolate strains from samples.
• Suggest non-monetary benefits that companies could provide, such as capacity building and technology transfer, which would be of greatest use to the institution. This will enable flexibility in benefit sharing and sustainability in the R&D relationships.
• Host meetings to discuss BAAs to:
  i) stimulate thinking among the scientific community about the country’s biodiversity potential; and
  ii) to explain to those not familiar with the idea, that commercial use of biodiversity can be sustainable, profitable and equitable without detriment to the resource.
• Explore and encourage faculty relationships with academic institutions or research institutions both domestically and internationally to facilitate the development of BAA collaborations in cooperation with them.

For Scientists

• Identify unique strains within existing collections and unique (for example in terms of temperature, acidity, salinity, moisture, mineral content) habitats that are accessible by the local life science institute (university, institute, government agency, nonprofit organization, and/or company).
• Stay informed on potential commercial applications of microbial biodiversity and reference that to current and potential inventory in national, university, or institute collections.
• Teach Biodiversity Access Agreement (BAA) company counterparts the unique aspects of biodiversity in your country.
• Act quickly on requests from the BAA company. The life science industry is extremely competitive, and if the BAA company is not able to receive samples quickly then they may lower the number of samples they request as well as lower the number of projects that incorporate samples acquired through the BAA.
• Provide accurate data. If the BAA company finds that the data collection is sloppy and/or haphazard then they may be disinclined to incorporate the samples into their research efforts.

For Technology Transfer Officers

• Well-drafted Biodiversity Access Agreements (BAAs) require careful attention to detail, a clear understanding of your counterpart’s goals, and a reasonable appreciation for any potential value arising from the deal. Therefore, become familiar with not only the details of drafting a BAA, but also create an agreement that is win-win, start to finish.
• Clarify the IP position of the country, institute, university, and individual researcher regarding discoveries resulting from genetic research and BAAs.
• The BAA company may not be eager to share intellectual property with your university or research institute. However, it is ultimately the strength of the company’s intellectual property that will benefit the BAA university or institute. More highly valued intellectual property will confer greater and real (that is, royalties) benefits to the BAA university or institute.
• Monetary and non-monetary benefits may both be attractive to the university or institute; both, therefore, should be thoughtfully considered.
• Follow protocols closely, and when possible improve the protocol, sharing those new ideas and methods with the BAA company. This will increase their confidence in your institution as a partner and you as a colleague.
• Packaging and shipment of the samples is critical to a successful partnership. If the samples arrive in a dilapidated state or have been delayed because of missing paperwork then the company may not be able to use the samples.
• Make sure that you understand the access and benefit-sharing legal framework, both in substance and procedurally, of your own nation, so that you can guide your commercial counterpart to establish a collaboration that is in compliance with local and national laws and regulations.