Summary and Overview
Krattiger A, RT Mahoney, L Nelsen, JA Thomson, AB Bennett, K Satyanarayana, GD Graff, C Fernandez and SP Kowalski. 2007. 17: Putting Intellectual Property to Work: Experiences from around the World. 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.
“By far the best proof is experience,” wrote Francis Bacon. Given the experience of countries—both developing and developed—that have used intellectual property, IP (intellectual property) protection, and IP management to stimulate innovation, there is ample proof that good IP management has benefited multitudes of people around the world with new technologies, products, and services. Innovations in health and agriculture have greatly enriched lives. But does this experience apply to all countries? If the best proof is experience, then what can be said authoritatively about the effects of using IP systems wisely in developing countries?
The 28 case studies in this section of the Handbook (and the 21 case studies in the insert of this Executive Guide and more online) demonstrate that a great deal can be said. Developing countries already have a vast amount of experience with IP protection, and this experience proves that they can use intellectual property to their advantage. With more chapters than any other section, this portion of the Handbook amply reveals how developed and developing countries alike are deploying and adapting IP management to meet their needs. Tapping into the dynamism of product development partnerships (PDPs) and utilizing the potential of their universities, public sector institutions, and private companies, many developing countries are quickly and creatively building on the experience of their own institutions, of neighboring countries, and of countries around the globe.
Experiences From Around The World
Satyanarayana describes India’s experience in the pharmaceutical sector. According to Satyanarayana,1 during the past 50 years, India has made great strides in science through a series of policy initiatives promoting high-quality research. But especially since 2005, when India became fully compliant with the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), big changes have occurred. India’s rigorous IP rights regime and professional IP management in both private sector companies and public sector research institutions are driving success. But this is only part of a larger coordinated attempt that includes increased public and private R&D expenditures, new policies governing traditional medicines, overhauled regulatory regimes for new drugs and biotechnologies, initiatives to emphasize and build on already competitive regions or technologies, and newly created governmental, research, and educational institutions.
In the pharmaceutical sector, the effects of these policies can be seen in:
- a shift in the Indian pharmaceutical industry from an approach based solely on the low-cost manufacture of generic drugs to research-driven innovation of novel drugs for the global market
- the emergence of an entrepreneurial biotechnology sector in India
- the consideration by multinational pharmaceutical companies of investing in R&D and manufacturing operations in India
In agriculture, these effects are apparent in a rich pipeline of new innovations that promise to make India’s agricultural sector more competitive and profitable. Besides a substantial allocation of funds for R&D by the government, two new initiatives were started in 2005: the National Agricultural Innovation Project (NAIP) and the Indo-U.S. Agricultural Knowledge Initiative (AKI).
India’s transition from a protected economy to an open, global economic power has prompted the government to take a series of steps to address the new challenges of globalization, and the lessons it has learned apply broadly to many developing countries. Strengthening R&D, establishing policies to create and manage intellectual property, and fostering PDPs are all important steps for making important health products available for public distribution available in all countries.
According to Wolson,2 technology transfer offices (TTOs) are a crucial part of IP management in South Africa. But a number of problems challenge nascent TTOs there: a weak flow of invention disclosures, skepticism or a lack of awareness among faculty about the TTO’s role, low levels of research funding, high patenting costs, few experienced technology transfer practitioners, and unrealistic expectations about financial returns. Indeed, many there believe that the main motivation for undertaking technology transfer activities at a university is to generate income.
Solutions to these problems are being addressed organizationally by the Southern African Research & Innovation Management Association (SARIMA), legislatively by the Framework for Intellectual Property Rights from Publicly Financed Research (the Framework), and financially through the Innovation Fund. Established in 2002, SARIMA is a stakeholder organization providing a platform for those from government, academia, and industry with an interest in using research and innovation management to foster networking and promote common interests. The Framework is intended to bridge the “innovation chasm”: the gap in South Africa between knowledge generators (in particular, universities and research institutions) and the market. It calls for a consistent approach to protecting intellectual property developed with public financing and draws heavily on the U.S. Bayh-Dole Act. Of course, as other countries have discovered, the Bayh-Dole Act cannot simply be imported. Its principles must be adapted to local frameworks and needs. In South Africa, for example, research funding comes mostly from external sources and requires a different structure for determining the use and ownership of project intellectual property.
TTOs in South Africa have already met with success. Some have been operating for several years and more are being launched. A vibrant stakeholder organization provides a platform for networking and professional development in the field, and links have been forged that strengthen international research collaborations and technology transfer partnerships. All of this has government support.
Other chapters in this section describe the experiences of Brazil,3 Chile,4 China,5 the European Union,6 and Japan.7
Public Sector Institutions and Universities
Salicrup and Rohrbaugh8 provide more evidence of the ability of for-profit and nonprofit institutions in developing countries to bring new products to market that meet critical regional public health needs. The authors discuss the technology transfer and licensing approach of the U.S. National Institutes of Health (NIH). The institution’s technology transfer experience has shown that many combinations of licensing strategies can be used to segment the world market to meet each region’s needs. Even when patent protection is unavailable, unique biological materials (for example, an essential component of a vaccine) can be licensed for commercial use.
Institutions in developing countries have been found to be dependable licensees and partners. With careful review, a capable institution with commercialization capabilities may be found, and one should keep an open mind because, depending on the country, it may be a for-profit company, a nonprofit or government entity, or a semi-privatized company. NIH has several examples of different strategies involving various types of institutions that have reached the early stages of the commercialization process.
While discussions continue about IP capacity building in developing countries, some leading institutions are simply forging ahead and building their own capacity. The State University of Campinas, or Unicamp, one of the leading research universities in Brazil, is an example described by Ceron Di Giorgio.9 A large university with a diversity of affiliated research institutes, Unicamp has moved up the patenting league tables in recent years to become the single largest patentor in Brazil. The university’s current portfolio includes almost 50 granted, and 400 filed patents. Unicamp emphasizes chemistry, which accounts for close to half of its portfolio, and engineering, which accounts for a third. In addition, Unicamp conducts significant research in the life sciences (for example, a soy-based phytoestrogen for hormonal therapy licensed to a Brazilian pharmaceutical company).
These major advances in technology transfer at Unicamp are largely due to the efforts of its new technology transfer office, Inova Unicamp, founded in 2003. Inova began its operations by assessing all of the technologies being researched in Unicamp’s many laboratories and institutes. It then aggressively pursued new patent applications and licensing deals for the most promising technologies. In the short space of two and a half years, the office signed 128 technology transfer agreements with both private industry and government agencies. It also saw ten start-up companies in the university’s business incubator become self-sustaining.
What lies behind these successes in Brazil? New public policy. In particular, the work of Inova is directly informed by two pieces of legislation. A 1996 law gave the university ownership rights to employee inventions. A 2004 law on innovation, however, gives the university the option to either hand over title to the employee inventors, or share 5%–33% of any royalties with them. In addition, the government has instituted a number of sector-specific incentives to support innovation in Brazil, including tax deductions on royalty payments, R&D investments, and foreign IP filing fees, as well as subsidies to firms to help pay scientists’ salaries.
The 2004 innovation law requires all government universities and R&D institutions to open an IP management or a technology transfer office. One major consequence of these policies will likely be increased patenting and licensing activities at universities throughout Brazil. Currently, Unicamp’s rapid establishment of a functioning technology transfer office stands as a sterling example for other institutions in Brazil to emulate.
Other case studies in this section of the experiences and approaches of a range of institutions include: Arizona State University10 in the United States, Chinese Universities,11 the Donald Danforth Plant Science Center12 in the United States, the National Health Service in England,13 Stanford University’s Office of Technology Licensing,14 the University of California System,15 and the University of California Agricultural Experiment Station.16
Product Development Partnerships (PDPS)
Banerji and Pecoul17 describe the Drugs for Neglected Diseases Initiative (DNDi) that seeks to give patients in developing countries the opportunity to directly benefit from new products of drug R&D for diseases that lack a viable market. Only a tiny fraction (1.3%) of the drugs that came to market from 1975 to 2004 targeted tropical diseases (such as human African trypanosomiasis, Chagas’ disease, leishmaniasis, helminthic infections, schistosomiasis, onchocerciasis, malaria, and tuberculosis) that all together make up 12% of the global disease burden and kill more than 35,000 people a day. The drugs that do exist are either inaccessible to patients or unbearably costly. DNDi believes that drug research can exist in the public domain, and that patented products do not always benefit those who need them most.
As clearly articulated in its IP Policy statement, DNDi is committed to managing intellectual property to pragmatically and effectively advance its mission of providing the most vulnerable populations in developing countries with equitable access to critically needed medicines. As the preamble of DNDi’s IP policy states:
The DNDi IP approach will be pragmatic, and decisions regarding the possible acquisition of patents, ownership, and licensing terms will be made on a case-by-case basis. DNDi will put the needs of neglected patients first and will negotiate to obtain the best possible conditions for them. The DNDi’s decisions regarding IP will contribute to ensuring access and encouraging further innovations.
DNDi has led two successful campaigns to negotiate terms that allowed them to get important drugs to the world’s neediest people at minimal cost. In the first case, DNDi approached French pharmaceutical giant sanofi-aventis in 2003 to develop artesunate-amodiaquine, a fixed-dose combination therapy for chloroquine-resistant malaria. The negotiation process eventually led to a contract with very favorable terms for DNDi; the drug was made available for production by generic manufacturers with no payment owed to either sanofi-aventis or DNDi, and sanofi-aventis agreed to supply the drug at cost to the public sector, NGOs, and international organizations. In the second case, DNDi successfully collaborated with the University of California, San Francisco’s (UCSF) business development office to support research leading to treatments for the lethal human African sleeping sickness. While conventional wisdom holds that a university should always seek the largest possible return on research investment, DNDi was able to convince university officials of the seriousness of its mission, and a compromise was reached that advances the effort to bring new treatments to persons suffering from this deadly and largely neglected disease.
In pursuing its humanitarian mission, DNDi has learned that it is crucial to thoroughly familiarize all parties with the organization’s aims and guiding principles. By the end of contract negotiations with UCSF, for example, decision makers expressed great personal satisfaction at helping to advance DNDi’s work. Through similar efforts DNDi hopes to have developed and made available, by 2014, six to eight field-relevant treatments.
Boadi and Bokanga18 describe the building of public-private partnerships in Africa by the African Agricultural Technology Foundation (AATF). AATF emerged from a Rockefeller Foundation initiative in the early 2000s following a wide-ranging and unprecedented consultation among African, European, and North American stakeholders who were, and are, actively seeking to improve food security and reduce poverty in sub-Saharan Africa. AATF recognizes that new and unique public-private partnerships (PDPs) are needed to remove many of the barriers that have prevented smallholder farmers in sub-Saharan Africa from gaining access to existing agricultural technologies. Focusing on the creation of these PDPs, it promotes efforts to create sustainable markets and seeks to dramatically improve access to agricultural technologies, materials, and know-how.
AATF has two unique characteristics: first, it is prepared to in-license technologies from the private sector, which it then sublicenses to its partners. This is no small issue and requires careful considerations of a range of issues, including liability. Second, AATF strongly focuses on downstream activities or, to put it more broadly, on technology stewardship. This includes facilitating access to local, national, and regional markets for products based on transferred technologies. The goals are to create more sustainable technology transfer mechanisms and to allow national institutions to more effectively absorb new technological concepts and adopt them for productive use.
But the fundamental raison d’être of AATF goes much deeper than “merely” IP management. As Gordon Conway, then president of the Rockefeller Foundation, put it in the AATF annual report of 2005:
We should examine the current system and ask ourselves, ‘How can those who care about the fate of the small-scale farmer make technological options more available?’ The rise of a sophisticated global IP system covering many building block technologies has meant public researchers [in Africa] have little access to new ideas and tools in their field. Left to its own devices, the gap is likely to grow—with wealthy nations’ farmers using techniques that are ever more sophisticated and poor farmers left with the same tools they have used for centuries.
Other case studies sharing PDP experiences describe PATH,19 and ICIPE,20 a nonprofit that partnered with Africert Ltd in transferring standards certification know-how, critical for the introduction of new products.
Focus on Solutions: Accelerating Product Development and Delivery
Numerous partnership efforts are underway to accelerate access and delivery for agricultural and health products in developing countries. For example, in the tropics, where just about everyone eats eggplant, it is commonly infested by eggplant fruit and shoot borer (EFSB), which inflicts a 70% crop loss. Conventional efforts to breed for resistance have been unsuccessful, so farmers rely heavily on pesticides. These chemicals, however, are expensive, and the pest is becoming more and more resistant to them. Moreover, some pesticides damage the environment and/or are illegal.
Recently, a new solution to the problem of EFSB was developed in partnership with many organizations, writes Medakker and Vijayaraghavan,21 including by MAHYCO, a private Indian company. It was the first company in India to develop a transgenic hybrid eggplant genetically engineered with a gene that provides resistance to EFSB. The gene (cry1Ac) is obtained from the bacterium Bacillus thuringiensis (Bt). A spore-forming bacterium, Bt produces crystal proteins (called Cry proteins) that are toxic to many species of insects, including EFSB. Cultivation of the hybrid eggplant reduces the need for pesticide applications.
This breakthrough was made possible when MAHYCO obtained the rights under license for the use of the Bt cry1Ac gene technology for insect pest management from the Monsanto Company. The license also allows for sublicensing of the technology on a royalty-free basis to a partnership of public institutes and agricultural universities in India, Bangladesh, and the Philippines. This consortium is developing a nonhybrid form of Bt eggplant for use by farmers in developing countries. The nonhybrid form will be less expensive, but the yield is higher for the hybrid technology. Therefore, more farmers might choose the hybrid technology.
Commericial release of the first transgenic Bt hybrids developed by MAHYCO is planned for India by the end of 2007, after the fulfillment of all regulatory requirements. The transgenic Bt open-pollinated varieties under development by the public-private partnership are expected to be commercialized about six months later. This approach to EFSB is an excellent example of how biotechnology applications can be concurrently commercialized for the market and subsidized for poorer market segments.
In health, a prominent example of improvement regarding access to innovations in health is the PATH Malaria Vaccine Initiative (MVI), a program funded by the Rockefeller Foundation that analyzed whether consolidating patents in the malaria vaccine field could streamline access by advancing and accelerating the development of vaccines. The project was designed to ensure market access for the malaria vaccine candidates that are most likely to receive regulatory approval and be developed as products. The study, described by Shotwell,22 assessed the status of the relevant patents, determined their availability for licensing, and explored the potential of patent consolidation or technology trust to enhance access to the vaccine. Developing a broad-based technology trust for existing malaria antigen patents was not recommended. Instead, several other steps were recommended for consolidating available rights and improving access with regard to future patent families.
Before this study, MVI had identified some potentially obstructive IP issues for a malaria vaccine for developing-country markets. Public and academic institutions—institutions with missions that in many cases include some form of public benefit—hold many of the patents related to malaria antigenss. As the study’s findings reveal, with few exceptions the patents held by public and academic institutions have been assigned or exclusively licensed to private companies and, therefore, are currently unavailable for licensing from the original public institution patent holders.
While it may be possible to sublicense these malarial antigen patents from the current private holders of the technology, it is likely to be more difficult and costly; engaging the patent holders to contribute to a patent pool or clearinghouse also might be challenging. Moreover, a patent pool for a malaria vaccine might generate further obstacles: potential antitrust issues, real or perceived, might trigger scrutiny by the U.S. Department of Justice and the Federal Trade Commission. And while the concept of a technology trust or patent pool may be useful for patents filed in the future, even some of those would be under option for license by the private companies holding the current patents. Finally, the number of high-priority cases for any malaria antigen is small, as is the number of entities likely to seek access to any given patent family. This makes the expense of a patent pool even less justifiable. Taking all of these things into consideration means fewer missteps and faster progress towards a vaccine for malaria.
Other chapters in this section provide case studies of licensing experience related to the Cohen-Boyer patents at Stanford University,23 IP issues related to molecular pharming, specifically for plant-derived vaccines,24 corn/maize breeding and the impact of biotechnology on the breeding and commercialization process,25 the University of California’s Strawberry Licensing Program26 (the most successful program in terms of the generation of licensing revenues of any U.S. university), the successful resolution of IP constraints that led to the introduction of virus-resistant papayas,27 and a project on the somatic embryogenesis of grapes in Chile.28
If indeed the best proof is experience, then the case studies described here, in the Handbook, and in the insert of this Executive Guide do indeed speak for themselves. The experiences represented by these case studies provide all the evidence needed to spur further efforts to build upon the IP strengths of developing countries. Many forward-thinking people have seen the possibilities, and this section broadly maps out work that is already underway around the globe to make these possibilities into realities. Such experiences offer the most powerful proof of the benefits that can be obtained through creative IP management in developing countries and indeed around the world.
1 Chapter 17.5 by K Satyanarayana titled Current IP Management Issues for Health and Agriculture in India, p. 1605.
2 Chapter 17.7 by R Wolson titled Technology Transfer in South African Public Research Institutions, p. 1651.
3 Chapter 17.1 by CI Chamas, SM Paulino De Carvalho and S Salles-Filho titled Current Issues of IP Management in Health and Agriculture in Brazil, p. 1563.
4 Chapter 17.2 by C Fernandez, MR Moynihan titled A Model for the Collaborative Development of Agricultural Biotechnology Products in Chile, p. 1577.
5 Chapter 17.3 by Z Chen, W Gao and J Xu titled IP Rights in China: Spurring Invention Driving Innovation in Health and Agriculture, p. 1585.
6 Chapter 17.4 by A Blaya titled Experiences from the European Union: Managing IP Under the Sixth Framework Programme, p. 1593.
7 Chapter 17.6 by J Chapman and KN Watanabe titled Current Issues of IP Management for Health and Agriculture in Japan, p. 1621.
8 Chapter 17.12 by LA Salicrup ML Rohrbaugh titled Partnerships for Innovation and Global Health: NIH International Technology Transfer Activities, p. 1709.
9 Chapter 17.16 by R Ceron Di Giorgio titled From University to Industry: Technology Transfer at UNICAMP in Brazil, p. 1747.
10 Chapter 17.8 by PJ Slate and M Crow titled The New American University the Role of “Technology Translation”: The Approach of Arizona State University, p. 1661.
11 Chapter 17.9 by H Guo titled IP Management at Chinese Universities, p. 1673.
12 Chapter 17.10 by KR Schubert titled Application and Examples of Best Practices in IP Management: The Donald Danforth Plant Science Center, p. 1683.
13 Chapter 17.11 by T Bates titled IP Management in the National Health Service in England, p. 1697.
14 Chapter 17.13 by N Page titled The Making of a Licensing Legend: Stanford University’s Office of Technology Licensing, p. 1719.
15 Chapter 17.14 by AB Bennett M Carriere titled Technology Transfer at the University of California, p. 1729.
16 Chapter 17.15 by GD Graff and AB Bennett titled Intellectual Property and Technology Transfer by the University of California Agricultural Experiment Station, p. 1739.
17 Chapter 17.19 by J Banerji and B Pecoul titled Pragmatic and Principled: DNDi’s Approach to IP Management, p. 1775.
18 Chapter 17.18 by RY Boadi and M Bokanga titled The African Agricultural Technology Foundation Approach to IP Management, p. 1765.
19 Chapter 17.17 by S Brooke, CM Harner-Jay, H Lasher and E Jacoby titled How Public-Private Partnerships Handle Intellectual Property: The PATH Experience, p. 1755.
20 Chapter 17.20 by P Munyi and R Nyagah titled From Science to Market: Transferring Standards Certification Know-How from ICIPE to Africert Ltd, p. 1783.
21 Chapter 17.25 by A Medakker and V Vijayaraghavan titled Successful Commercialization of Insect-Resistant Eggplant by a Public-Private Partnership: Reaching and Benefiting Resource-Poor Farmers, p. 1829.
22 Chapter 17.21 by SL Shotwell titled Patent Consolidation and Equitable Access: PATH’s Malaria Vaccines, p. 1789.
23 Chapter 17.22 by MP Feldman, A Colaianni and C Kang Liu titled Lessons from the Commercialization of the Cohen-Boyer Patents: The Stanford University Licensing Program, p. 1797. The online version of the Handbook also lists one of the Cohen-Boyer licenses.
24 Chapter 17.23 by A Krattiger and RT Mahoney titled Specific IP Issues with Molecular Pharming: Case Study of Plant-Derived Vaccines, p. 1809.
25 Chapter 17.24 by V Gracen titled How IP and Plant Breeding Come Together: Corn as a Case Study for Breeders and Research Managers, p. 1819.
26 Chapter 17.27 by AB Bennett and M Carriere titled The University of California’s Strawberry Licensing Program, p. 1833.
27 Chapter 17.27 by M Goldman titled The IP Management of the PRSV-Resistant Papayas Developed by Cornell University and the University of Hawaii and Commercialized in Hawaii, p. 1837.
28 Chapter 17.28 by C Fernandez titled Fundación Chile: Technology Transfer for Somatic Embryogenesis of Grapes, p. 1845.