January 31, 2009

The infinity of biotechnological creativity

Some time ago (available here and here ), I wrote about how the coupling of intellectual property rights to intangible offers create an ‘artificial scarcity’, that makes an offering seem more valuable than an object that exists in abundance. I would like to continue in this post where I left off in November, by discussing how biotechnology can create not only nondurables but also durable goods, by creating IP strategies aligned with the goals of your company or organization. The case in point for this discussion is agricultural biotechnology, and due to the diversity of our readers, I find it appropriate to give a short introduction to some of the different types of right-based layers. I have categorized those that I could think of as 1) true intellectual property systems, 2) quasi-intellectual property systems, and 3) non-intellectual property systems.

Right-based control in agricultural biotechnology
True intellectual property rights in agbiotech are in total way too many to all be included here, especially since there are many variants for each of them, however, for the sake of discussion - some of them are; US utility patents (the right to exclude others from manufacture/ produce, use, sell and offer for sale, in addition to prevent others from importing the invention ), US plant patents (right to exclude others from asexually reproduce, sell or use protected plant varieties), EPO product patents claiming a transgenic plant (i.e. not a plant variety), EPO product patents claiming genes (i.e. traits in plants), Australian plant patents, etc.

Quasi-intellectual property rights is certainly a vague definition which is highly arguable, but I decided to place plant breeder’s right (PBR) under this category as it certainly fits into the intellectual property category from the following articles;
The status of being a holder of a breeder’s right provides the right to exclude others from any of the acts stated in Art 14 (1-4), for a duration of 25-30 years.
Art 14 (1-4) comprises;
• Production or reproduction (multiplication),
• Conditioning for the purpose of propagation,
• Offering for sale,
• Selling or marketing,
• Exporting,
• Importing,
• Stocking for any of the purposes above.

However, the reason for my exclusion of PBRs from the “true IP” category is because of the ‘Breeder’s exemption’ that states that a protected plant variety shall be available without restrictions, for use by others (e.g. re-sowing by farmers, other breeders, etc.) as starting material for the development of new plant varieties. This exemption creates many societal benefits, but nevertheless positions PBRs in a quasi-state in relation to true IP.

The last category include a number of different forms of protections many of which have very interesting features (which I may discuss more about in another post), such as; European variety registration (being listed in the Common Catalogue is a prerequisite for being allowed to market a variety within the EU) which prevents competitors to register a copy of your seed, legislation to uphold trade secrets, and contractual structures preventing farm-saving of seed (where so-called bag-tags or “seed-wraps“ are an interesting US solution borrowing its concept from the familiar shrink-wrap solution in software).

Durables and non-durables goods in biotech
The existence of so many different types of right-based systems in combination with the diversity of actual technologies and application areas (e.g. different crops/feedstocks), creates an immense potential for the creative entrepreneur when outlining an IP strategy.

Let’s then say that a biotech entrepreneur then starts out with a gene that provides an insect-resistant trait for a number of crop types. The entrepreneur could then decide that she would like to create a premium priced seed by incorporating the trait into a hybrid seed of, for example corn or sorghum, that will have a high yield, but will serve as no good for farm-saving and being replanted next season. Hence, a nondurable has been created.

On the other hand, the same trait could be incorporated into a crop planted as an open pollinated variety , e.g. wheat, soybean or cotton, which will create a self-replicating durable good that can be replanted with the trait somewhat conserved.

Finally, by applying different types of right-based protections other forms of control can be attained, such as prevention of farm-saving by having a US utility patent or a bag-tag attached to the seed bag when it is sold. The European protections could be a combination of plant variety protection (for the variety) and a patent for the specific trait. In addition to a number of right-based control layers there are also technical layers that may restrict propagation, e.g. so-called ‘terminator technologies’, and technical solutions to enable hybrid propagation, e.g. apomixis . However, this post is already way too long so I will just conclude by saying that the potential of biotech and IP seems to be endless, and I look forward to see what the future will bring.

Tobias Thornblad




3 comments:

  1. Very interesting!

    How would inventions be protected in countries that aren't part of the PCT? The third world is currently surviving on farming; does the lack of IPRs in these countries exclude them from using the new crops?

    This brings new dimensions to seed financing!

    ReplyDelete
  2. Niklas,
    Thank you for your shown interest.

    It is certainly more tricky to ensure control in countries where intellectual structures are still lagging (I assume that you are referring to countries where the national protection is undeveloped leading to both exclusion from PCT as well as a poor administrative system altogether).

    What is important to remember though is that IPRs only provide one way to structurally control innovations - i.e. through registering right-based property. Protection of innovations is still possible through contractual structures (assuming that contract law is enforced on a national level) or by 'softer means' which may include a strong position in a development network that creates a market dominance.

    It is an interesting question that you ask. I don't think that the lack of IPR structures - per se - will exclude them from using the new crops. The problem lies in the discouragement for IPR holding companies to enter these markets - since licensing will be tricky if not impossible. Farmers can still import seeds incorporating technology to their country, so a lot of the transaction costs in providing farmer benefits in these countries will be through the necessary negotiations for market access.

    Bridging the gap between developing and developed countries will never be an easy task. The organization PIPRA provides one interesting model for how this at least may be facilitated.

    (sorry for the very late response)

    Tobias Thornblad

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