ENVIRONMENTALLY AND SOCIALLY SUSTAINABLE DEVELOPMENT Rural Development 1 9836 Work in progross for public discussion September 1999 Intellectual Property Rights in Agriculture The World Bank's Role in Assisting Borrowaer and Member Countries i~~~~ Uma Lele William Lesser Gesa Horstkotte-Wesseler Editors ENVIRONMENTALLY AND SOCIALLY SUSTAINABLE DEVELOPMENT Rural Development Intellectual Property Rights in Agriculture The World Bank's Role in Assisting Borrower and Member Countries Uma Lele William Lesser Gesa Horstkotte-Wesseler Editors The WorldBank Washington, D.C. Copyright © 2000 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, US.A. 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Photographs by permission of the Consultative Group on International Agricultural Research (CGIAR) Secretariat. Uma Lele is an adviser in the Rural Development Department of the World Bank. William Lesser is a professor in the Agricultural Resource and Managerial Economics Department, Cornell University. Gesa Horstkotte-Wesseler is a junior professional officer in the Rural Development Department of the World Bank. Library of Congress Cataloging-ir-Publication Data Intellectual property rights in a 'culture: the World Bank's role in assisting borrower and member countries / Uma Lele, Wiliam Lesser, and Gesa Horstkotte-Wesseler, editors. p. cm. - (Environmentally and socially sustainable development. Rural Development) ISBN 0-8213-4496-X 1. Intellectual property-Developing countries. 2. Agriculture- Research-Law and legislation-Developing countries. 3. World Bank. L Lele, Uma J. II. Lesser, William. m. Horstkotte- Wesseler, Gesa, 1965- . IV. Series: Environmentally and socially sustainable development series. Rural development. K1401.1567 1999 630(.7'2-dc21 99-15437 CIP , The text and the cover are printed on recyded paper. Contents Foreword v Preface vi Acknowledgments vii Contributors viii Abbreviations and Acronyms ix 1 Intellectual Property Rights, Agriculture, and the World Bank I William Lesser, Gesa Horstkotte-Wesseler, Uma Lele, and Derek Byerlee 2 Perspectives from International Agricultural Research Centers 22 ISNAR Joel I. Cohen, Cesar Falconi, and John Komen 22 CIMMYT Peter Ninnes 29 Appendix T. G. Reeves 31 3 Perspectives from Industry 34 Monsanto Richard H. Shear 34 AgrEvo David L. Richer and Elke Simon 38 4 Perspectives From National Systems and Universities 44 Brazil Maria Jose Amstalden Sampaio 44 India Jayashree Watal 52 Appendix S. M. Ilyas 61 United States Land-Grant Colleges Frederic H. Erbisch 66 5 A Model for Internationally Owned Goods 72 BioBanana Gabrielle J. Persley 72 6 Summary and Implications for the World Bank 76 Uma Lele, William Lesser, and Gesa Horstkotte-Wesseler Appendix. Workshop Participants and Creation of an IPR Network 83 iii iv Intellectual Property Rights in Agriculture Boxes 2.1 CIMMYT, apomixis, and the private sector 30 4.1 IPR and related legislation being discussed or in preparation 46 4.2 Suggested role for the World Bank in support of IPR implementation 50 4.3 Patent on Basmati rice 59 Tables 2.1 Southeast Asia policy seminar: conclusions from national working groups regarding IPR 23 2.2 Applications of proprietary technologies by responding IARC, grouped by commodity category 24 2.3 Examples of public-private sector partnerships in international agricultural research 25 2.4 Patenting process and time line 27 3.1 Correct timetable for product development 35 4.1 Proprietary technologies being used by EMBRAPA, June 1998 48 Foreword T he growing involvement of the private sec- tor in agricultural research among the Bank's cli- tor in worldwide agricultural biotechnol- ent countries and because there has been a steady ogy research and the WTO requirements drop in recent years in the rate of growth of pub- for member countries to establish intellectual lic sector funding in agricultural research. This property rights (IPR) regimes by 2000 (some by is happening despite the potential threat to nearly 2005) make the issue of IPR an urgent priority in 100 million resource-poor rural households de- and for developing countries. pendent on farming, who are served by the pub- As the largest lender for agricultural research lic sector. Public/private partnerships in research the World Bank has an important role to play in in the future would need to serve the interest of assisting its client countries to strengthen their these farmers. IPR regulations and enforcement policies. The It was felt vital to address the challenges sur- challenge of assisting developing countries is rounding IPRs to protect food security and to made quite complex by the rapid changes in ensure uninterrupted supply of new technologies trade practices, the wide variation in the stage to resource-poor farmers. of development of the Bank's client countries, This volume contains valuable insights into the and the evolution of global agreements on the complex area of intellectual property rights in rights of different stakeholders with regard to agriculture and will help give urgently needed plant genetic material. Private sector investment direction to the Bank and to its member and bor- in agricultural research crucially depends on the rower countries. protection of intellectual property. The World Bank decided to organize a major workshop on IPRs, bringing together a number of informed individuals representing major in- Ian Johnson stitutions with a stake in IPRs. The Bank took Vice President this initiative because there is increasing concern Environmentally and Socially about the rapidly growing role of the private sec- Sustainable Development v Preface Intellectual Property Rights (IPR) in agricul- The introductory chapter discusses gaps in ture and the possible role that the World Bank knowledge about the effects of IPR and priority might play in assisting its developing coun- research areas, approaches to strengthen national try borrowers/members were the main topics of IPR systems in the short and long terms, identi- a workshop held June 11-12, 1998, in Washing- fication of practical hurdles to implementing ef- ton, D.C. fective IPR systems, and effective incorporation The goal was to develop a better understand- of IPR within the scientific community, includ- ing of the perspectives and the challenging prob- ing the Consultative Group on International Ag- lems some of the key stakeholders face with ricultural Research and the national agricultural regard to agriculturally related IPRs and to de- research systems of developing countries. fine possible roles for the Bank to help its bor- Recommendations for possible research and rower/member countries. The emphasis was on operational support by the World Bank are dis- developing countries, and areas of particular in- cussed in the various chapters, and summarized terest included problems faced by these countries in the concluding chapter. in implementing effective IPR systems and in identifying areas where further research and op- erational support by the Bank, through research, policy advice, and lending activities, would con- Uma Lele, William Lesser, tribute to this goal. and Gesa Horstkotte-Wesseler vi Acknowledgments T his publication grew out of a workshop challenge of IPRs in the World Bank's lending on intellectual property rights (IPR) and function, as distinct from the Bank's role in the the role of the World Bank. The idea for CGIAR. He lent strong support to organizing a the workshop and this publication originated in workshop that would explore implications for the discussions among Alberto D. Portugal, presi- Bank as a lender and policy advisor to its mem- dent of EMBRAPA and the head of the Brazilian ber and client countries. Carlos Primo Braga, a National Agricultural Research System; Fran- leader in the area of IPR in the World Bank, en- cisco J. B. Reifschneider, director of EMBRAPA's couraged exploration of the special case of agri- Secretariat for International Cooperation; and culture. Gregory Ingram, director of the World Uma Lele of the World Bank, who manages the Bank's Research Committee, and the Agricultural Brazil Agricultural Technology Development Knowledge Information Systems (AKIS) thematic Project (PRODETAB) funded by the Bank. These group in the World Bank's Rural Development discussions helped clarify Brazil's needs in agri- Family (RDV) provided funds for the workshop culturally related IPR, the likely effect of IPR on and for this publication. Alex McCalla, director private sector investments, and public/private of RDV, supported publication of this volume, partnerships in agricultural research in Brazil. and RDV partially contributed to its cost. The discussions also focused on how the World Robert Sherwood offered extensive comments Bank might assist Brazil to establish a sound on an early draft of the introductory chapter, and IPR regime. John Barton helped with some of the implications Ismail Serageldin, chairman of the Consulta- of the workshop for the World Bank. Reginald tive Group on International Agricultural Re- Maclntyre provided valuable editorial input, as search (CGIAR) and then-vice president for did Virginia Hitchcock and Alicia Hetzner. Jason Environmentally and Socially Sustainable Devel- Yauney provided strong staff support through- opment at the World Bank, recognized immedi- out the project. This volume was desktopped by ately the importance of the rapidly emerging Gaudencio Dizon. vii Contributors Derek Byerlee, Rural Development Network, William Lesser, Department of Agricultural, Re- World Bank, 1818 H Street N.W., Washington, source, and Managerial Economics, Cornell D.C. 20433 U.S.A. University, Ithaca, New York, U.S.A. Joel I. Cohen, Intermediary Biotechnology Ser- Peter Ninnes, Centro Internacional de Mejora- vice, International Service for National Agri- miento de Maiz y Trigo, Apartado Postal 6-641, cultural Research, P.O. Box 93375, 2509AJ The Lisboa 27, 06600 Mexico DF, Mexico. Hague, The Netherlands. Gabrielle J. Persley, Bioalliance Australia Lim- Frederic H. Erbisch, Office of Intellectual Prop- ited, P.O. Box 1101, Toowong, Brisbane, erty, Michigan State University, East Lansing, Queensland, Australia. MI 48824 U.S.A. Timothy G. Reeves, Centro Internacional de Cesar Falconi, Intermediary Biotechnology Ser- Mejoramiento de Maiz y Trigo, Apartado Postal vice, Intemational Service for National Agri- 6-641, Lisboa 27, 06600 Mexico DF, Mexico. cultural Research, P.O. Box 93375,2509 AJ The David L. Richer, Hoechst Schering AgrEvo Hague, The Netherlands. GmbH, Hoechst Works, K801, D-65926 Frank- Gesa Horstkotte-Wesseler, Rural Development furt am Main, Germany. Family, World Bank, 1818 H Street N.W., Wash- Maria Jose Amstalden Sampaio, Brazilian Agri- ington, D.C. 20433 U.S.A. cultural Research Corporation (EMBRAPA), S. M. Ilyas, Indian Council of Agricultural Re- Caixa Postal 040315, 70770-901 Brasilia DF, search (ICAR), Krishi Bhavan, New Delhi Brazil. 110001, India. Richard H. Shear, Monsanto Company, 800 North John Komen, Intermediary Biotechnology Ser- Lindbergh Blvd., St. Louis, MO 63167 U.S.A. vice, Intemational Service for National Agri- Elke Simon, Hoechst Schering AgrEvo GmbH, cultural Research, P.O. Box 93375, 2509AJ The Hoechst Works, K801, D-65926 Frankfurt am Hague, The Netherlands. Main, Germany. Uma Lele, Rural Development Family, World Jayashree Watal, Institute for International Eco- Bank, 1818 H Street N.W., Washington, D.C. nomics, 11 Dupont Circle, N.W., Washington, 20433 U.S.A. D.C. 20036-1207 U.S.A. viii Abbreviations and Acronyms ARIPO African Regional Intellectual IARC International agricultural Property Organization research center (Harare) ICRIER Indian Council for Research on CBD Convention on Biological International Economic Diversity Relations CGIAR Consultative Group on Interna- ICRISAT International Crops Research tional Agricultural Research Institute for the Semi-arid CGRFA Commission on Genetic Re- Tropics sources for Food and Agricul- IITA International Institute of Tropi- ture (FAO) cal Agriculture CIMMYT Centro Internacional de INIBAP International Network for the Mejoramiento de Maiz y Improvement of Banana and Trigo (International Center Plantain for Maize and Wheat INPADOC International Patent Documen- Improvement) tation Center CIP Centro Internacional de la Papa INPI National Institute for Industrial (International Potato Center) Protection (Brazil) DNA Deoxyribonucleic acid IPGRI International Plant Genetic ELISA Enzyme-linked immunosorbent Resources Institute assay IPM Integrated pest management EMBRAPA Empresa Brasiliera de Pesquisas IPR Intellectual property rights Agropecuarias (Brazilian IRRI International Rice Research Agricultural Research Institute Corporation) ISNAR International Service for EPO European Patent Office National Agricultural ESDAR Environmentally Sustainable Research Development Agricultural KARI Kenya Agricultural Research Research and Extension Institute Group (World Bank) LGC Land grant college FAO Food and Agriculture Organiza- MTA Material transfer agreement tion of the United Nations NARO National agricultural research GATT General Agreement on Tariffs organization and Trade (now WTO) NARS National agricultural research GDP Gross domestic product system ix Abbreviations and Acronyms x NGO Nongovernmental organization RFLP Restriction fragment length OAPI Organisation Africaine de la Pro- polymorphism priete Intellectuelle (Yaounde) TRIPs Trade-related aspects of OECD Organisation for Economic Co- intellectual property rights operation and Development UNCTAD United Nations Conference on ORSTOM Institut Francais de Recherche Trade and Development Scientifique pour le Develop- UPOV Union Internationale pour la pement en Cooperation Protection des Obtentions (France) Vegetales (Convention for the PBR Plant breeders' rights Protection of New Varieties PCT Patent Cooperation Treaty of Plants) PGRFA Plant genetic resources for USDA United States Department of food and agriculture Agriculture R&D Research and development WIPO World Intellectual Property RAFI Rural Advancement Founda- Organization tion International WTO World Trade Organization 1. Intellectual Property Rights, Agriculture, and the World Bank William Lesser, Gesa Horstkotte- Wesseler, Uma Lele, and Derek Byerlee A fter initial reluctance, many developing developing countries to establish effectively func- ,,A,countries are modifying their intellectual tional protection (that is, reaching a point where property systems. Those that are mem- the private sector develops sufficient confidence bers of the World Trade Organization (WTO) to increase investments in science and technol- must make intellectual property rights (IPR) ogy in developing countries, as well as to transfer regulations conform with the TRIPs (Trade- key technologies there). Related Aspects of Intellectual Property Rights) Complicating this process, and any consider- agreement by January 1, 2000. Least-developed ation of a supportive role for the World Bank, is countries have an additional five years to meet the existence of large gaps in our knowledge of the same goal. All countries have until 2005 to IPRs in agricultural technology. The issues of IPRs implement protection for new areas of technol- in agriculture are complex, more than in any other ogy. More generally, globalization, expansion of sector, particularly pertaining to developing international trade and competition, increased countries. They involve a range of stakeholders foreign direct investment, and growing interna- with a diverse set of views, bargaining positions, tional pressure, particularly from the United and vulnerabilities, and are therefore laden with States, are compelling many developing coun- controversy and emotion. tries to enhance their IPR protection. At the same time these countries face a rapid rise in the num- Uniqueness of Agriculturally Related IPRs ber of IPR-related disputes and sanctions involv- ing their own industries, research scientists, plant Agriculture is unique because of its diversity and genetic material, and uses of indigenous knowl- location-specific requirements, necessitating ad- edge (Lourie 1998). One school of thought main- aptation of technologies to a range of agroeco- tains that developing countries with effective logical conditions. A large number of poor IPRs will attract more research and development households in developing countries derive their (R&D) spending, particularly from the private livelihood from resource-poor areas with difficult sector. A second widely held view disputes this agroclimatic conditions. Ensuring their access to conclusion, maintaining that, at the extreme, IPR technologies is therefore crucial for poverty alle- amounts to economic colonialism. viation. A combination of the rapid advances in Legislation without implementation is of little science and the number of applications of pro- value. Capacity to implement IPR legislation is prietary rights has led to an unprecedented essential and urgently needed. Implementation growth in private sector investment in agricul- requires a complex and sophisticated infrastruc- tural technology, estimated at US$7 billion in 1996 ture that is lacking in most developing countries. (ISAAA 1996). This has resulted, in a matter of Even with the best of intentions, and whatever just a few years, in unforeseen increases in acre- level of protection is sought, it will take time for age under disease- and pest-resistant transgenic 1 2 Intellectual Property Rights in Agriculture materials, mostly in industrial countries. In the and enhance the quality of natural resources, in- United States in 1998, nearly 50 percent of cot- cluding germplasm, as the only way to meet the ton, 40 percent of soybean, and 20 percent of corn growing domestic demand and international acreage were planted to trans-genic varieties competition. The second challenge is to ensure (Kilman and Warren 1998). Some researchers ar- continued free access for the poor to emerging gue that this is in part a result of the public sec- technologies while conserving vital germplasm tor in industrial countries placing a lower priority for use by plant breeders. In both instances, the on agricultural research during a period of con- new bioscience would be of considerable value strained budgets (Woteki 1998). if access to the poor were provided. The green revolution technology of the 1960s Many large developing countries are increas- of high-yielding cereal seed varieties resulted in ing their investments in agricultural research a shift in productivity growth and commercial- while introducing major reforms in their national ization of agriculture in many developing coun- research systems. The reforms emphasize a shift tries, an experience that could suggest what will to increased partnerships between the public and happen with biotechnology. There are, however, private sectors at the national and international several key differences that could change the levels. The World Bank presently supports these outcome. Public goods research, at national and reforms through loans and credits in Brazil, international levels, played a crucial role in pro- India, and Indonesia. Similar reforms are pos- viding free and open access to green revolution sible with World Bank assistance in China. technology for a large number of subsistence Brazil, India, and Indonesia are also experi- farmers. The scientific work of the Consultative encing large private investments in their seed Group on International Agricultural Research industries. The acquisition of some of the larg- (CGIAR) was anchored strongly in the public sec- est seed companies (for example, Agroceres in tor research systems of industrial countries, with Brazil) by multinational corporations (for ex- much of the early improved germplasm evolv- ample, Monsanto) may well have a more pro- ing from research initiated by the public sector found effect on public sector research strategies in industrial countries. Presently, public sector of the national agricultural research systems agricultural research is more limited at all levels. (NARS) by determining the long-term compara- Despite the impressive achievements of the tive advantage of public vis a vis the private sec- green revolution, nearly 1 billion poor people in tor than the current reforms of the public research developing countries still derive their sustenance system per se. from agriculture using their own traditional plant Public sector support by industrial countries genetic material. It is an important mission, and to the international and national agricultural re- a challenge for public sector researchers of de- search systems of developing countries is in a veloping countries, the CGIAR system, and the steady decline, while the challenges facing inter- World Bank to ensure that these households have national agriculture have become more diverse. free access to these improved technologies. De- These range from the maintenance of biodiversity veloping technologies for these farmers requires and the management of natural resources to pov- considerable capital, including the collection, erty alleviation and productivity enhancement characterization, and enhancement of genetic (Lele 1998). Expanding proprietary science, market material. The benefits take time to materialize segmentation by product, geographical areas and size and are difficult to capture, making such invest- class of farmers, between industrial and developing ments unattractive to the private sector. Rapid countries, and within developing countries, is increas- population and income growth in developing ingly the name of the game in R&D. An important countries has resulted in a higher demand for goal that must be pursued is access to genetic resources food and fiber. This can be met only by contin- for the global common good, despite restrictions im- ued increases in agricultural productivity, under posed by national and international public research conditions of increasingly scarce and often dete- systems as they seek enhanced protection through IPRs riorating land and water resources. The agricul- for themselves. tural sector of developing countries thus faces a Some public sector researchers, because of lim- dual challenge. The first challenge is to sustain ited resources, have sought support from private Intellectual Property Rights, Agriculture, and the World Bank 3 firms, thereby blurring the role of the public sec- As a case in point: a Cornell University scien- tor. A recent survey indicated that (a) 12 percent tist developed genetically engineered resistance of U.S. university scientists conducting private to papaya ring spot virus, a devastating global sector-funded research reported generating trade disease for which there is no known natural re- secrets; (b) 24 percent indicated that research sistance. A number of national programs, includ- could not be published without consent of the ing those of Brazil and Thailand, invested in the sponsor; (c) 44 percent reported that to some de- development of variants with resistance to local- gree industry support undermines intellectual ized strains of the virus. However, it was later exchange; (d) 30 percent stated that future com- recognized that the final product incorporated mercial application had influenced their choice eleven protected products of which Cornell of research topics; and (e) 70 percent felt that such owned just one. Negotiations over the commer- support shifts emphasis too much towards ap- cial use of the other ten have not all been com- plied research (The Lancet 1993). pleted following three years of effort (Walter These issues are of relevance to developing Haeussler, Director, Cornell Research Founda- countries and the CGIAR centers because part- tion, May 1998, personal communication). Par- nerships are taking many new forms, including: ticularly problematic for many researchers * Private investment in input industries in de- has been receiving permission for the use of veloping countries (for example, Monsanto's Monsanto's popular 35S promoter. However, purchase of Agroceres) there are no clear alternatives to the current use * Private firm support of research of the type of research MTAs. Negotiating commercializa- previously financed by the public sector in in- tion agreements for every component product dustrial and developing countries (for ex- prior to initiating research is impractical given ample, Novartis' rice genome project; see the failure rate of projects, and recreating pro- below) tected materials like the 35S promoter is costly * Developing country collaborative research in and time consuming. This situation of unclear industrial countries (for example, Brazil's rights has raised serious questions about the emerging LABEX program with the U.S. De- roles and opportunities of public sector agri- partment of Agriculture (USDA) and U.S. cultural research, and the optimal forms of universities supported by the World Bank partnerships. and possibly in the future with France and For many years patent litigation in agricultural Japan) biotechnology appeared unlikely given high liti- * CGIAR collaboration with industrial coun- gation costs and modest profitability, at least tries' research institutions and universities, compared to the pharmaceutical industry the multinational private sector, and devel- (Eberhart and others 1998). Barton (1998), how- oping countries. ever, reports that this situation has changed radi- These new partnerships have raised issues for cally with multiple disputes under litigation. the public and private sectors: on the one hand, Barton contends that the existence of a number maintaining control of developments and recoup- of overlapping and competing broad patents con- ing investments, and on the other, fulfilling the tributes to oligopoly, the domination of the in- special public sector mission. dustry by a small number of firms (for example, Public sector researchers in industrial and de- Monsanto had an estimated worldwide agricul- veloping countries increasingly find their work tural biotechnology market share of 77 percent controlled by overlapping material transfer in 1998) (Reuters 1998). Oligopoly can lead to agreements (MTAs) and IPRs. At the level of declining incentives for research investments by products and processes IPRs are the major de- all firms, including industry leaders. The counter vice employed. At the research level contracts argument is that concentration offers sufficient known as MTAs are often used. A research MTA profitability to permit continued research invest- provides permission for research with a speci- ments. Dominant firms are also in a position to fied component technology, but permission for purchase small start-ups for significant sums, commercialization, if needed, will be based on encouraging new start-ups. This Schumpeterion subsequent negotiations. theory, however, has not been empirically sup- 4 Intellectual Property Rights in Agriculture ported in other sectors, which show that the most improved materials and technologies, unless ab- innovative industries are characterized by mod- solutely necessary to ensure access by develop- erate size and concentrations of firms (literature ing countries. But in the face of rising IPR use, review in Scherer and Ross 1990). According to the Centers must be guided by the competing Barton (1998), an important policy issue for the needs to (a) establish collaborative research with United States and the world is to identify ways advanced laboratories; (b) ensure product devel- to reverse this oligopolistic trend and its conse- opment and distribution; and (c) forestall pro- quences, while maintaining the strength of the tection of CGIAR-generated technologies by IPR incentives to encourage research. others (Hawtin and Reeves 1998). IPRs have to The search for a remedy to the oligopolistic be utilized without undoing the CGIAR's fun- trend was made more difficult because IPRs have damental position regarding free access by de- had only an indirect effect on vertical control veloping countries to knowledge, technology, within the seeds sector. In the case of Monsanto, materials, and plant genetic resources. Presently, vertical control was extended largely through germplasm recipients of CGIAR center materi- acquisitions-16 in 1997 and 2 major ones in 1998 als must, among other things, agree to require prior to the Monsanto/American Home Products that all subsequent parties to whom the material merger. The complete acquisition of Delta and is transferred also honor the same conditions. Pine Lands (not approved at the time of writing), Alternative agreements are under discussion (for for example, will give Monsanto an estimated 80 example, the use of umbrella agreements to cover percent share of the U.S. cotton seed market multiple shipments to any one country). An im- (Kilman and Warren 1998). Those acquisitions portant question is whether developing countries were driven in part, Lesser (1998b) argues, by the will be restricted in the use of CGIAR materials very high Monsanto share price and price-earn- as those materials are more directly controlled ing ratio, making stock-based acquisitions very under IPRs and related systems. economical at the time. Moreover, Monsanto's The CGIAR faces a number of issues that pro- earlier success led to rapid run-ups in the price vide useful models for developing countries, in- of seed company stocks-DeKalb, for example, cluding (a) the status of the ex situ materials jumped 10 times in market capitalization follow- acquired before the CBD was adopted, an issue ing Monsanto's initial purchase of 40 percent in to be resolved under the renegotiation of the In- February 1996 to full acquisition in 1998. IPRs ternational Undertaking (IU) on Plant Genetic contributed to the share value of Monsanto, but Resources of the FAO Commission on Genetic only indirectly as filtered through Monsanto's Resources for Food and Agriculture (CGRFA); corporate strategy (b) the extent to which the designated material provided by the CGIAR has to be modified be- IPR Issues for CGIAR and NARS fore it may be protected without violation of an MTA; (c) the extent to which patents can be ap- The CGIAR is also facing issues of concentrated plied to plants, varieties, or traits as distinct ownership, and having to negotiate commercial from "cells, organelles, genes or molecular con- use arrangements for technologies licensed in as structs" to which the CGIAR guiding principles well as out. CGIAR leaders are also debating how refer; (d) the controversial issue of "benefit shar- best they can fulfill the mandate of continued free ing" (discussed below) of commercialized access of its technologies to developing countries CGIAR materials with plant breeders on the one in a situation of rapid growth in proprietary sci- hand and the sources of the genetic material on ence. The genetic resources maintained in the the other; (e) regarding d above, the issue of in- gene banks of the Centers are held in trust for centives to invest in improvements to CGIAR the world community in accordance with the materials in the absence of a clear guarantee of Convention on Biological Diversity (CBD). Ma- return, an issue raised particularly by the private terials held in trust by the Centers are to be freely sector seeking clarity in the CGIAR policy; (f) the available in accordance with the CGIAR/FAO cost of monitoring and enforcing unauthorized policy on plant genetic resources. Centers have uses of CGIAR materials in a time of constrained not sought intellectual property protection on support; and (g) ensuring that the CGIAR is not Intellectual Property Rights, Agriculture, and the World Bank 5 violating IPRs or signed MTAs in the cases of pro- * Contracting parties shall provide for the pro- tected technology components. tection of plant varieties by patents and/or by an effective sui generis system (Section 5, Ar- IPRs and the TRIPs Agreement ticle 27(3b)) * Patents may, subject to a proviso, be prohib- In recent years the forms of IPR available, includ- ited in order to protect ordre public or morality, ing those applicable to agriculture and aquacul- including to protect animal or plant life or ture, have been enlarged to accommodate new health (Section 5, Article 27(2)) fields of inventive activity. IPR is typically de- * Plants and animals other than microorganisms fined to include five major forms of protection: and "essentially biological processes for the patents, plant breeders' rights (PBR), copyright, production of plants and animals" may be ex- trademark, and trade secrets. More recent and cluded from patent protection (Section 5, Ar- specialized forms of protection include integrated ticle 27(3b)) circuits. For agricultural applications the princi- * Compulsory licenses may be issued, subject to pal forms of protection used include patents, limitations, in specific cases, including failure PBR, and trade secrets. Extension of IPRs to new to make a licensing agreement after a reason- forms, such as genetically modified living organ- able offer, and subject to adequate remunera- isms, has been accomplished, where permitted, tion, and to judicial review (Section 5, Articles by a reinterpretation of the scope of existing stat- 30 and 31) utes, particularly patents. * For process patents, the burden of proof of in- The extent of IPR protection varies widely fringement may, in some specified circum- across countries. In the United States in particu- stances, be shifted to the defendant to prove lar a wide scope of protectable subject matter that the patented process was not used (Sec- existed. Numerous other countries limited the tion 5, Article 34) scope of protectable inventions, as well as the * Persons shall have the option of preventing length of protection and the conditions under others from using without permission infor- which a license could be granted for using an mation of commercial value so long as reason- invention without the developer's permission able efforts have been made to keep it secret (compulsory licenses). As of 1988, about 50 coun- (Section 7, Article 39) tries excluded pharmaceuticals from patent pro- * Countries are to adopt extensive enforcement tection, and 54 countries explicitly excluded plant procedures which are "fair and equitable," are varieties (WIPO 1990). Among the 37 members "reasoned" but "not unnecessarily compli- of the Convention for the Protection of New Va- cated or costly" (Part III, Article 41). rieties of Plants (UPOV) the international conven- In view of the January 1, 2000, deadline to tion for PBR, only nine are developing countries implement these changes (plus five additional (Argentina, Chile, Colombia, Ecuador, Mexico, years allowed for the implementation of protec- Paraguay, South Africa, Trinidad and Tobago, and tion for product patents in new areas of technol- Uruguay). Other countries, including Brazil, ogy), and with another five years for least- Kenya, and Zimbabwe, have national laws and developed countries, a review of "implementa- many are preparing to join UPOV in the near tion" is scheduled for 1999 (Article 71). Many future. among the most technologically advanced of the Within the context of the Uruguay Round of developing countries-including Brazil, Indone- GATT and the associated TRIPs Agreement, sig- sia, and Mexico-have recently amended their natory countries are required to provide certain patent laws and/or adopted PBR legislation. minimal levels of IPR protection (for details see Others are progressing with the fulfillment of Beier and Schricker 1996). For living forms ap- their commitments. plicable to agriculture, the major requirements include: Evolving Developing Country View of IPRs Subject to the exclusions identified below, pat- ents shall be available for any invention in all Developing countries fully realize the need to fields of technology (Section 5, Article 27(1)) become more proactive in IPR. However, for 6 Intellectual Property Rights in Agriculture many this is new and unknown territory. Initial Developing countries have therefore become reservations still remain among many stakehold- increasingly concerned that traditional indig- ers of research and technology in developing enous knowledge of plant species is being ap- countries, including the NGO community. They propriated by industrial countries through feel that IPRs, based as they are on the Western patents. This was demonstrated for turmeric, concepts of property rights and jurisprudence, when a U.S. patent was granted for its wound- are either unethical or impractical in the cul- healing power, notwithstanding the fact that the tural, historical, and institutional context of powder of the turmeric plant is a "classic developing countries. They are costly to imple- grandmother's remedy" in India which "has been ment, requiring expensive IPR infrastructure applied to the scrapes and cuts of generations of and provision of protection, unfair because of the children" (Agarwal and Narain 1996). The patent monopolistic tendencies of the private sector, and was subsequently rescinded. inequitable because of the existence of a large population of poor farmers who conserve the Research Results Regarding the Roles genetic resources upon which modern technol- and Functions of IPRs ogy depends (Patel 1989; Shiva 1996). There have been concerns also that the IPR protection of plant IPRs may achieve a number of objectives. They varieties reduces genetic diversity (The Crucible can serve as Group 1994; Fowler 1998). A major issue in agri- * A fundamental right of individuals to pro- culturally related IPRs pertains to farmers' op- tect their intellectual property in much the tions to replant, save, exchange, and/or sell same way as laws would protect other forms protected seed, as well as the potential availabil- of property ity of legal mechanisms to protect farmers' tra- * A way of ensuring incentives for innovation ditional varieties (Posey and Dutfield 1996). Some * A way to induce the needed investments to argue that even if IPR would be necessary at a develop and commercialize the invention more advanced stage of development in the fu- * An incentive to disclose information ture, they are not currently a priority (Konan and * A mechanism for protecting the disclosure of others 1995), and may be detrimental to the real- partially-developed inventions, particularly ization of certain objectives (for example, of imi- during licensing talks tating imported technologies to bridge the huge * An aid to technology transfer backlog of technologies generated abroad, and . A way to enable the orderly development of issues related to biosafety) (Doyle and Persley broad prospects (Mazzoleni and Nelson 1996). Some of these concerns will undoubtedly 1997). shape the ways in which developing countries The effects of IPRs on areas such as economic fulfill their commitments to comply with the growth, private R&D investment, technology TRIPs agreement, particularly as it pertains to transfer, and prices are poorly documented and agricultural technology. hence controversial, particularly in agriculture. Concurrent to many of these developments has We reviewed the general literature on the eco- been the ratification of the CBD, which went into nomic and social effects of IPRs to identify key effect in December 1993. The CBD reaffirms the gaps in current knowledge in agriculture that sovereign rights of States over their natural re- require further research. sources, in contrast to the earlier situation when plant germplasm was exchanged as a "Common Economic Growth and Private Investment Heritage of Mankind" among scientists in an open and generally unrestricted manner, with the Some observers of economic development as well exception of some plantation crops. However, as analysts of IPRs (Helpman 1993) consider leap- the CBD does not itself provide a mechanism frogging through imitation as an essential aspect for controlling these resources, whereas patents of the development process for latecomers. Oth- may be used (and possibly misused) for devel- ers have argued that investment in innovation is oped products. arrested to a substantial extent by the absence of Intellectual Property Rights, Agriculture, and the World Bank 7 intellectual property protection, leading to does not suggest high levels of R&D in African slower growth (Gould and Gruben 1996). Even countries; the numbers of patents granted in all worse, due to the absence of a legal and insti- the southern African countries excluding South tutional framework and a tradition of enforce- Africa in 1995 was only 727 (WIPO data are avail- able contracts related to intellectual property, able on their web page, www.wipo.org). This many inventions made in developing countries suggests that other factors, including the avail- are appropriated and commercialized by for- ability of trained scientists and market size, may eigners without adequate compensation for the be the determining factors. Projecting from the inventor. For example, Sherwood, Scartezini, past is hazardous, however, in a situation of dy- and Siemsen (1999) argue that Petrobras, namicscienceandamoreliberalclimateformar- Brazil's national oil company, made important kets in developing countries. inventions in deep-ocean platform drilling but Notwithstanding the current emphasis on IPRs failed to obtain patents, thereby making a gift by the industrial nations, many did not expand of that technology to the oil companies of the their own levels of protection until technological world. Developing country inventors of sophis- development was well under way. Canada, for ticated products routinely file for patents in example, allowed patents for pharmaceuticals industrial countries due to the high cost, long beginning only in 1987. Schiff (1991) found no delays, and low value of the patents in their evidence that Holland or Switzerland was ham- own countries. pered economically during their patentless years The importance of IPR protection clearly var- (1869-1912 and 1850-1907, respectively). Current ies with the level of technological activity. From evidence suggests that strong IPRs are neither a two studies conducted for the World Bank, necessary nor a sufficient condition for R&D Mansfield (1995) concludes that "in relatively investment, at least in certain sectors. Grief high-technology industries like chemicals, phar- (1987), however, showed that in Germany R&D maceuticals, machinery, and electrical equip- investments and patent applications were ment, a country's system of intellectual property closely correlated, suggesting a role for patents protection often has a significant effect on the in stimulating investments. IPRs are typically amount and kinds of technology transfer and ranked low by corporate executives as a stimu- direct investment." This argument would seem lant to private R&D investments. In a review of a applicable to agricultural biotechnology. Braga number of empirical studies conducted since the (1995), in a literature review, concluded that en- 1960s, Mazzoleni and Nelson (1997) conclude that hanced IPRs in a country typically expanded in most industries (pharmaceuticals excepted) imports of protected products and direct invest- patents were not an important incentive for in- ment (see also Henderson, Voros, and Hirschberg vesting in R&D. These results are in general 1996). These cross-sectional studies use aggre- agreement with company surveys of the impor- gated trade and investment data, along with tance of IPR to investment decisions (Nogues rather crude measures of IPR effectiveness. Spe- 1990). cific effects of particular changes in IPR systems Pharmaceuticals may be an exception, mainly on product categories are not known. In particu- because it is a high-profit industry for which ef- lar little is known about the strategic decisions fective IPR protection is an important stimulus made by firms when introducing easily copied to R&D and technology transfer. A more likely products into national markets. explanation is the regulated nature of pharma- The index of patent rights developed for 110 ceuticals. Most of the estimated US$250 million countries from 1960 to 1990 (Ginarte and Park cost of bringing a successful product to market 1997) suggests that high-income countries are on is associated with safety and efficacy trials, a part a higher level of the index than low-income coun- of the regulatory process. Competitors could tries. However, low-income African countries are potentially save two-thirds of that amount in reg- the exception-their index is higher than that of istering another version of a previously approved middle-income countries, due to the adoption of drug, meaning the lead firm could not compete. the colonial system of IPRs. Evidence, however, IPR protection provides a period free from di- 8 Intellectual Property Rights in Agriculture rect competition during which the high initial There are also important differences in the way investment can be recovered. IPRs are, therefore, the private sector might view large and small often considered to be particularly relevant for countries (for example, in terms of the scientific regulated products, such as pharmaceuticals and, infrastructure, including the availability and the arguably, agricultural biotechnology. There is to cost of skilled labor to conduct research and tech- date no direct evidence of the effects of IPRs on nology transfer, and the ability to copy techno- pharmaceutical R&D investment. Canada's ex- logical advances and hence the extent to which perience, for example, has yet to be documented. countries are seen as partners or clients, rather Deolalikar and Evenson (1990), however, found than competitors). These factors in turn may in- that pharmaceutical R&D in India fell by 40 per- fluence the incentive the private multinational cent from 1964-70 to 1980-81, following a weak- corporations would have to invest in research. ening of patent protection in 1970. Although most researchers do not include An important research question in the case of agri- country size among their explanatory variables cultural IPRs is: what is the net benefit for develop- for the impact of IPRs, Maskus and Penunbarti ing countries, of different sizes and stages of (1995) looked at country size in relation to IPR- development, in moving from an essentially non IP induced trade flows. They found that whereas protection regime (often with legislation that is not IPRs have a positive impact on trade in small and effectively enforced) to one that is enforced? large countries, the impact is stronger in large Evidence is limited for agriculture in devel- countries. Important questions: to what extent do oping countries since only Argentina and Mexico IPRs affect the productive activities of small, me- had transgenic crops grown in 1997. There has dium, and large farmers? in what ways are IPRs notyetbeenananalysis of the experiences (Union likely to be exercised among small, medium, and of Concerned Scientists 1997). A study of PBR in large countries? Argentina suggests the importance of IPR pro- tection because "PBR enforcement seems to Technology Development and Transfer have played a role in sales and R&D expendi- tures of domestic companies involved in mar- Developing countries tend to be significant im- kets for self-pollinating varieties" Gaffe and van porters of technology from industrial countries Wijk 1995, 48). (Braga, Fink, and Sepulveda 1998). In the area of In agriculture, particularly in developing industrial property (patents, trademarks, in- countries, effects of IPRs on R&D investments are dustrial designs), less than 5 percent of the 2.1 likely to be specific to the crops and the struc- million patents granted worldwide in 1993 ture of national agricultural systems, and thus went to developing countries (Braga, Fink, and difficult to predict based on experiences else- Sepulveda 1998). In contrast more than 80 per- where. For example, there is a greater likelihood cent of patents granted in developing countries of considerable private expenditures on soybean were filed by residents of industrial countries. in Brazil, which is grown by large farmers and Grief (1987, p. 207) notes that foreign holdings of exported, than on maize and root crops grown patents are higher in smaller industrial countries by low-income farmers in the Northeast. These (Belgium, Canada) than in many developing differences can be explained by the potential com- nations. Indeed, the per capita proportion of mercial opportunities in these different crops. It foreign-owned patents rises with increasing per is quite possible, however, that many of the IPR capita GDP. protected technologies would be scale neutral in Some use this evidence optimistically to argue application on farmers' fields, particularly those that, on the assumption of equal distribution of involving biological manipulations. These, there- inventive minds across the globe, there is a large fore, would be potentially available to small natural resource to be tapped in many develop- farmers provided they have access to informa- ing countries awaiting stronger IPRs to reach tion, finance, and markets. An important ques- their potential. They also argue that in countries tion for the future is: what role, if any, would the with weak intellectual property protection, in- large multinational seed companies play in en- ventors have been discouraged from filing patent suring access by the poor to improved varieties? applications (Sherwood, Scartezini, and Siemsen Intellectual Property Rights, Agriculture, and the World Bank 9 1999). There are concerns in developing countries A finding of interest to developing countries that the IPR offices may be sources of leaks. is that even with the new agricultural biotech- nology crops for which there are few suppliers Price Effects of IPRs (Monsanto may have upwards of a 77 percent market share worldwide), the sharing of rents Patents create a limited right to exclude others between users and seed suppliers is within the from using an invention, but not from the mar- long-prevailing U.S. 50/50 pattern (Flack-Zapeda ket served by the invention. The patent owner and Traxler 1998). More such studies are needed, will often be in a position, at least temporarily, particularly in developing countries, before there to extract higher rents. Price effects of IPRs have is a strong basis for anticipating the effects of been intensely debated, although the underly- potential private sector investments on seed ing issue relates more to the cost/benefit ra- prices. Despite this (clearly limited) evidence, tios of new technologies relative to the existing many countries have justifiable concerns over the ones, and the extent to which markets in infor- undue extension of IPR monopoly power because mation, finance, and commodities enable all they lack effective antitrust protection. (including small) farmers to access the new Undue extensions can include such acts as us- technologies. ing a patented device to require other products The limited evidence drawn from countries or services be purchased from the patent holder with PBRs or with private sector hybrid seed (tying arrangements or full line forcing). These (which can be considered as having a form of bio- issues have not been examined in depth since the logical protection, as hybrids do not reproduce mid 1970s when compulsory licenses were rec- true-to-form and must be replaced annually) in- ognized as one available mechanism to control dicates somewhat higher prices with IPRs. This patent abuses (UNCTAD 1975). Compulsory li- would be expected and necessary to recover pri- censes permit a government to grant a use per- vate R&D expenses, but there appears to be little mit for a patent without the permission of the evidence of excessively high prices with agricul- patent owner. Available evidence indicates that tural inputs. Evidence includes compulsory licenses are rarely granted, but the * USA: PBR prices are above unprotected vari- issue remains open as to whether their existence ety levels but involve a rent sharing between provides a controlling factor in markets, which farmers and breeders (Butler and Marion largely removes the need of enforcement (see 1985). In general, farmers under-invest in pur- Roffe 1974; UNCTAD 1975). chasing seed and suffer yield and income Under the TRIPs agreement (Articles 30 and losses compared to more frequent seed pur- 31), "[Mlembers may provide limited exceptions chases (Knudson and Hansen 1991). Certifi- to the exclusive rights conferred" subject to con- cates of PBRs were associated with a 2.3 ditions of individual merits of requests, substan- percent higher price for soybean seed in New tial efforts to achieve agreement with the owner, York State (Lesser 1994). nonexclusivity, and subject to judicial review. * Argentina: the additional costs of licensed pro- When the request applies to dependent patents, tected varieties were not passed on to farmers the request must be for "an important technical even though PBR legislation requires seed advance of considerable economic significance." dealers to pay royalties and taxes Gaffe and (A dependent patent includes, among other van Wijk 1995). things, a patent for an improvement to a patented * Brazil: prices for high-yielding maize variet- product or process. The owner of the dependent ies were related to yield potential and were invention would require the permission of the significantly higher than public variety prices underlying patent holder to commercialize the (Garcia 1998). improvement.) These issues are quite complex * Mexico: public maize varieties are significantly and need to be interpreted in conjunction with lower priced because of the absence of a need the relevant parts of the Paris Convention (Ar- to cover breeding costs and the target of small- ticles 5 and 10; see Reichman 1993; Heinemann scale as opposed to commercial-size farmers 1996; Straus 1996). An example of a use of (Aquino 1998). compulsory-licensing authority is the revised 10 Intellectual Property Rights in Agriculture Canadian Patent Act (Chap. 33), which provides intellectual property. This uncertainty presents a for a Board to receive pricing information on pat- number of challenges to domestic and interna- ented medicines along with the authority to re- tional negotiators on intellectual property pro- quest a price reduction, among other steps. tection. Beyond the minimum TRIPs and the CBD-related requirements, countries must decide Areas for Further Research what level of IPR protection is appropriate, com- paring the available types of IPRs, and explor- We have identified a number of areas in which ing the various legal possibilities available. The the current level of understanding of the roles appropriate level of national legislation and the and effects of IPRs are insufficient to provide clear practical implementation issues are discussed guidance to countries planning changes in the below. form and implementation of IPRs. In some cases the data needed for the analysis have been avail- Selecting Optimal IPR Protection able for some time. In other cases particularly with regard to commercial agricultural biotech- Sherwood (1997) distinguishes between three lev- nology products and the operation of PBR in a els of IPR protection: (1) nonrobust, (2) TRIPs- number of countries, field data have become compatible, and (3) investment-stimulating/ available only recently, making in-depth analy- robust. The final assumes the judicial systems sis now feasible. Many of the areas raise impor- work effectively. He argues that at nonrobust lev- tant policy and institutional issues, including: els of protection countries are able to encourage * Effects of PBR in developing countries on prod- sales and distribution, assembly, and component uct prices, availability, adaptation for differ- manufacture. However, protection that stimu- ent farm types, and agronomic merit of lates private investment in higher technological protected varieties activities appears to be viable only at a level * Extent of any abuse of IPRs, and uses and con- somewhat above the protection offered by the sequences of compulsory licensing legislation TRIPs agreement. At a TRIPs-compatible level, in overcoming any such problems protection will support imports, as well as cre- * Effects of IPRs on access to state-of-the-art tech- ative expression and somewhat more ambitious nologies, particularly for agricultural biotech- industrial activity. However, only at levels of pro- nology products, to include a more complete tection above the TRIPs requirement is local re- understanding of the transfer strategies of search stimulated, and the development of more multinational firms sophisticated technology likely to be supported * Study of the nature and effect of broad patent by private investors. claims in agricultural biotechnology Sherwood hypothesizes that at nonrobust lev- * Changes in public and private investments in els of protection, investment will be of short du- national R&D programs following strengthen- ration, whereas at robust protection levels it will ing of IPR systems be more durable. Perhaps more vital for sustained * Equality of access to IPR systems by national economic development, minimal employee train- entities, including small firms and the public ing is attempted under conditions of nonrobust sector. protection, whereas training in high levels of The World Bank, with the active participation of technology will be stimulated at robust levels of its borrowers and member countries, is in a strong protection, elevating the human capital of a coun- position to be a catalyst in establishing an interna- try at private expense. Also at robust levels of tional research program to provide additional em- protection, risk capital is mobilized, university pirical information on these and related issues. research results find commercial application, and higher science is likely to be applied to agricul- Strategies to Strengthen IPRs ture, among other areas. Once robust IPRs are in in Developing Countries place, these developments begin to take place naturally, without the need for government in- It is a long and unknown path between adopting terventions. However, these conclusions are legislation and rendering effective protection to based on limited empirical analysis and must be Intellectual Property Rights, Agriculture, and the World Bank 11 interpreted with caution until a more solid data- Countries can choose between patents or PBRs base is established. (different options for implementing plant breed- Sherwood (1997) goes on to contend that trade ers' rights are presented below to protect plant secret protection is perhaps the least studied form varieties). Under the PBR system, governmental of protection with importance for agricultural authorities often leave farmers the freedom to use technology. A trade secret is information of value their own harvested material of protected vari- to the holder for which an effort is made to pre- eties for the next production cycle on their farms. vent unauthorized access. A major benefit of This privilege is referred to as the farmers' privi- trade secrets is that there is no limitation to du- lege but it has become "optional" in the UPOV ration so long as secrecy is maintained. However, Act of 1991, which leaves the matter to national protection (unlike that for patents) does not pre- jurisdiction. The plant biotechnology industry is vent the discovery of the secret by any sort of increasingly resorting to patent law because this "reverse engineering." In other words the secret offers stronger protection than PBR. However, must be undiscoverable after a product is mar- even though the role of the private sector is in- keted and subjected to thorough analysis. creasing, varietal development in developing One IPR option well suited to developing coun- countries is still predominantly the domain of tries may be the petty patent, also known as the public institutions. This system relies on the in- utility model. This form of protection in essence ternational free exchange of plant genetic mate- allows a smaller scope and duration of protec- rial, and on-farm seed saving practices. It may tion for more limited inventions. Thus it is suited face restrictions when plant varieties are pro- to minor improvements or adaptations that are tected under patent or PBR law. within the purview of local artisans in develop- The examination vs. registration choice also ing countries (Evenson, Evenson, and Putnam exists for PBR. The U.S. Plant Variety Protection 1987; Owang 1989). Countries not offering that Office, for example, operates as a modified reg- option may wish to consider it. However, because istration system compared to European countries, many national laws limit petty patents to the which grow out applicant varieties and test for mechanical arts, such patents would not be ap- differences in the claimed distinct attributes plicable to all classes of inventions, including (Lesser 1987). Examination provides clearer those associated with living materials. rights and some buyer protection, but is costly Patent legislation allows scope for choice and slow to operate (two-year trials are common), among alternatives. At one level is the distinc- so there are clear tradeoffs between the two ap- tion between registration and examination sys- proaches. In some countries, concerns over the tems. Examination systems include a detailed examining office's ability to prevent unautho- search of the available literature so that success- rized access to varieties under evaluation is a ful applications have a presumption of validity. disincentive to using variety registration. Registration systems for their part involve only In the past countries have often followed a hi- the recording of applications; any determination erarchy of systems. The U.S. Patent and Trade- of validity is not undertaken until there is a chal- mark Office, for example, initially operated a lenge. Registration systems are inexpensive and registration system, switching in later years to simple to operate, but place a heavy reliance on examination. Conversely, for many years Afri- the court system. Conversely, examination sys- can countries such as Kenya operated under a tems are complex and costly to operate, but pro- "re-registration" system, whereby a Kenyan patent vide more clarity in the rights bestowed. Within could be approved only if one had been issued examination systems there are alternative oper- in the United Kingdom (see Ojwang 1989). Re- ating procedures, such as the use of a national registration, while reducing the responsibilities examination, examination by another major na- of the national patent office, placed a heavy bur- tional office, through the Patent Cooperation den on developing country applicants, who must Treaty (PCT), by a private search firm (for ex- satisfy and pay for a patent in an industrial coun- ample, International Patent Documentation Cen- try where there may be no intention to market ter (INPADOC) in Vienna), or through a regional the protected product. This option, while attrac- IPR office. tive from an administrative perspective, may not 12 Intellectual Property Rights in Agriculture be practical for developing countries unless dif- Also involved are issues of indigenous and tra- ferent fee structures and patentability standards ditional rights (CBD Article 8(j)), where effective are established for developing country nationals. forms of legal protection are sought (Decision IV/ This explains why separate national patent sys- 9). Many argue that traditional forms of IPR are tems have emerged in the post-colonial period. not suited to protect indigenous knowledge. The limitations are: (a) conceptual-traditional knowl- Access Legislation and Benefit Sharing edge is often not embodied in a product, which is the form protected by IPR; (b) procedural- Paralleling these developments in traditional IPR patents require a showing of utility or industrial law, developing countries are concurrently application that could not be provided for many adopting legislation controlling access to genetic unevaluated species; and (c) practical-the costs resources, and providing a basis for benefit shar- of protection are excessive for the great bulk of ing. The CBD specifies that genetic resources are materials that will not have any commercial the "sovereign right" of nations to determine ac- value. Hence, some new systems will be needed, cess, but rather than the right being automati- which could include a role for the World Bank to cally bestowed, parties "shall take legislative, study these issues leading to alternative solu- administrative or policy measures" to achieve tions. An overview of current proposals (UNEP/ equitable sharing and access (Article 15). To date CBD/COP/4/10 and UNEP/CBD/COP/4/23) three entities have adopted comprehensive ac- is summarized in Lesser (1998a), where a pro- cess legislation (UNEP/CBD/COP/4/23, Feb. posal for a system based on revealed knowledge 1998): the Philippines, Andean Pact member na- is also presented. tions (Bolivia, Colombia, Ecuador, Peru, and Ven- ezuela), and Brazil, Costa Rica, and India have Options for Implementing TRIPs legislation in an advanced draft form. Access legislation is closely related to the is- The most pressing requirement for many coun- sue of "biopiracy." In the recent dispute relating tries is the need to comply with the commitments to the patenting of a new hybrid strain of basmati made under TRIPs. The general requirements are rice by an American company, considered by quite specific, but within them are a number of many in India to be a form of "biopiracy," the options that might be considered. Critically, chief executive officer of that company argued TRIPs agreements allow countries to select "an India should have obtained a United States trade- effective sui generis" form of PBR as opposed to mark on the name "basmati" if it was considered patents for plants, a choice many countries pre- a valuable property warranting protection. That fer. Within this context, countries retain at least stance suggests a preemptive behavior in which three choices (Leskien and Flitner 1997; Seiler owners of valued properties must take proactive 1998): steps to protect their assets, rather than relying 1. Join the international PBR convention (UPOV). on deference to informally recognized prior 2. Develop a related national version of PBR claims. Proactive positions will, in turn, require without acceding to UPOV. the availability of appropriate protection mecha- 3. Devise a distinct sui generis applicable to na- nisms. The basmati rice dispute is an example of tional needs. the intricate way in which various IPR issues relat- Each choice has significant potential effects. ing to plant genetic resources can become interwo- The choice of the 1991 UPOV Act, for example, ven: for example, the appropriation of genetic requires protection to be extended to all plant materials that originated in other countries in genera and species within a 10-year period. A possible violation of the Biodiversity Treaty, the national law permits more flexibility but does not patentability of hybridized rice strains, the regis- ensure reciprocal rights in other UPOV member tration of common terms (in Hindi) as trademarks states, which is a major drawback. Countries in other countries, the passing-off of the place of may wish additional information on options origin, and possibly other issues. The basmati rice prior to committing to a particular form of PBR case is discussed in Watal (this volume). legislation. Intellectual Property Rights, Agriculture, and the World Bank 13 Practical Considerations use has been to delay by up to 18 months the time when applicants must pay national filing and The actual implementation of the new IPR legis- translation fees (see below). lation may prove a more complex issue than the The PCT has the benefit of being an existing, passage of the enabling legislation. It takes time ongoing agreement. Regional patent offices re- to develop a good environment, and time is be- quire enabling legislation, as in the case of the coming an important constraint for countries that EPO, for harmonized national patent laws. Even have to comply with TRIPs obligations. Some of then, the EU states have maintained national of- the more practical considerations countries face fices, albeit the number of patents granted has are discussed below. been reduced considerably following the growth of the EPO. The PCT is already extensively used, Regional or Global with 54,000 applications corresponding to over three million national applications in 1997 (WIPO Countries can operate through a centralized 1998). Additional uses of the PCT, administered multi-country office. The best established of these by WIPO, can perhaps best be supported by that is the European Patent Office (EPO), which per- organization. forms search and examination functions for the However, the PCT, while effectively postpon- EU participating nations (as well as for the 95 ing expenditures, does not avoid them. If an in- countries that are members of the Patent Coop- ventor has not succeeded in licensing the eration Treaty; see below). Although applicants invention by the end of 30 months from the first can simultaneously apply for multinational application, full application and translation fees grants, the grant is a "bundle" of national pat- will fall due. Abbott (1993) estimates that trans- ents, rather than a single grant for the designated lation costs double the costs of patents in Europe member countries. More integrated, but on a far compared to the United States, although recent smaller scale, is the agreement between Liech- modifications in European translation require- tenstein and Switzerland under which the former ments reduce those costs somewhat. The delay processes the patent applications for the latter. benefits, although real, are at the margin, because In southern Africa, there are two long-standing the grace period under the Paris Convention al- regional patent offices, the Organisation Africaine lows the applicant 12 months from first applica- de la Propriete Intellectuelle (OAPI), and the Af- tion to apply in other member states (Article 4). rican Regional Intellectual Property Organization This means that the full search and examination (ARIPO), which could serve as models for other costs for all countries in which a patent is sought regions. However, their activities and effective- be paid 30 months following the date of first ap- ness are not well documented (for example, in plication. Perhaps most significant is the fact that 1995 OAPI granted 31 patents and ARIPO 68, the major costs of complex applications like those which suggests that these offices are not very for agricultural biotechnology products are for active (WIPO data)). The EU nations have re- attorney fees and not for processing costs. The cently implemented a centralized PBR examina- attorney fees must be paid at the time of the ini- tion system under which national PBR offices tial application. For the United States the costs specialize in testing specified crop species for all for an agricultural biotechnology patent are about member states. US$25,000, whereas protection across OECD costs On the convention level is the PCT, which per- upwards of US$100,000 (Walter Haeussler, Direc- mits member states to request international tor, Cornell Research Foundation, May 1998, pers. searches and international preliminary examina- comm.). Meller (1998) places the world costs for tions by designated offices. The latter can com- a single invention at US$500,000. A more viable plete most or all of the work typically required strategy for the impecunious inventor may be to of a national patent office. However, although the apply nationally, and seek to license the inven- PCT is quite active, receiving 54,422 applications tion within the 12-month grace period, with the in 1997 corresponding to more than 3 million requirement that the licensee is responsible for national applications (WIPO 1998), its principal the costs of patenting in other countries. 14 Intellectual Property Rights in Agriculture Cost of Patent Acquisition approach reduces public administration expenses associated with the nine out of ten patents that From the relatively small number of patent ap- will never be commercialized. plications in developing countries, it can be as- sumed that there are many more inventions for Patents-by-reference. Many countries face con- which no application is ever filed. Among the siderable difficulty in providing high-quality most important reasons for this phenomenon is technical examination for all patent applications the cost of patent acquisition. In Brazil (this sec- received. For them it has become the practice to tion draws heavily on the Sherwood, Scartezini, wait for the results of patent examinations in and Siemsen (1999) paper "Promotion of Inven- some of the major international examination cen- tiveness in Developing Countries Through a ters, essentially those designated by the PCT. This More Advanced Patent Administration") and being so, some contend that reliance on the PCT elsewhere, patent agents are familiar with innu- system could be taken a step further, if countries merable clients who have approached them seek- were to grant patents more or less automatically, ing advice regarding their inventions, but who and without local examination, once one of the subsequently retreated without applying upon major PCT-designated examination centers learning of the costs. Equally, if not more, impor- grants a patent for an invention. tant than the burden of patent acquisition costs A patent-by-reference system could be created is the timing of those costs when they compete unilaterally by a developing country, without with capital demands for product development. major changes in the current law. It would re- This suggests that patent-related costs should be lieve developing countries of the burden of patent postponed as long as possible, preferably to near examination, and would offer a relatively low- the moment of commercialization. cost way for developing country inventors to Patent acquisition costs include, in part, offi- obtain carefully examined patents in as many cial fees for search, technical examination, and countries as adopt such a system, and would translation. One way to reduce these costs would impose modest fees. This could provide a pow- be to draw more strongly on the global system erful incentive for inventiveness in developing through the PCT (see above). If fully used, na- countries, and would free up public resources tional costs of patent examination could be to create electronic information services to ac- greatly reduced; applicant costs will depend on cess world knowledge on agricultural and other the national and PCT fee structures. For appli- technology. cants, the PCT provides the additional advantage Those who take positions counter to Sherwood's of postponing for up to 18 months the cost of could argue that "rapid patents" are similar to obtaining multiple patents. registration systems (see above). Registration sys- At the national level two concepts have been tems are also vulnerable to a situation under proposed to moderate the level and timing of which there are many patents on the books for patent acquisition costs, namely rapid patents which the scope and indeed validity is not clear; and patents-by-reference. indeed, if validity were in question the owner would be unlikely to request examination. Un- Rapid patents. This concept consists of extend- clear property rights typically chills research as ing authority to the national patent office to grant no one wishes to invest in a product when the patents immediately after an examination of the rights to its use are unclear. Moreover, if an patent application formalities, but without prior unexamined patent is challenged in court, a con- technical examination. Technical examination siderable technical burden is placed on that body. could be requested at a time selected by the Since the courts are considered one of the weak patent holder-before or immediately after the components in developing country IPR imple- grant of the patent, or postponed indefinitely. mentation, the use of rapid patents could exac- This approach gives the applicant a degree of erbate the overall inefficiency of the system. flexibility over time-related patent acquisition Patents-by-reference closely resemble the co- costs, and thus gives the applicant a better chance lonial era-based re-registration system that has to develop the invention. At the same time this been replaced with national systems. Patents-by- Intellectual Property Rights, Agriculture, and the World Bank 15 reference can indeed reduce governmental ad- countries should try to avoid. In Zimbabwe for ministrative costs, and provide a patent of care- example, certification is the responsibility of the fully considered merit. However, that option Seed Services which also produce and market is now available to developing country inven- their own varieties and hence are seen as poten- tors who apply first in a country with a lead- tially biased against other seed producers (Rusike ing patent office. The reliance on industrial 1998). Canada has a system under which PBR country patent offices to make a decision on applicants are responsible for managing and patentability can, however, have two effects. funding variety testing under the supervision of First, it establishes a very high technological the PBR office. standard on the developing country inventor. More fundamental, and problematic, is the A national system could adopt a more limited general functioning of the court processes in ad- standard if that were appropriate. Second, na- judicating IPR law. Some court systems are over- tional governments might be at variance with the burdened to the point that cases are delayed for patentability standards established by some in- years-one level of the Indian court system is said dustrial country offices. One can hardly imagine to have a case backlog of over 1 million. Others the protests that would have been raised if In- do not operate in a transparent fashion, reduc- dia, under a patent-by-reference system, were ing confidence in the rendering of a "fair and committed to grant the turmeric and basmati rice equitable" judgment. These are fundamental is- patents approved by the U.S. Patent and Trade- sues for IPR since it can be presumed that there mark Office! is no effective protection, and hence no business Overall, patentability standards are a signifi- response, unless and until the rights are enforce- cant aspect of national industrial policy. Careful able (affe and van Wijk 1995). consideration needs to be given before ceding it Much IPR is litigated in civil cases. Indeed, to another country under a patent-by-reference most cases are brought by the allegedly damaged system. party seeking compensation. This means that governmental costs are low, but the appropriate Operation and Enforcement courts and practices must be available. TRIPs has several enforcement-related obliga- Building National Consensus tions within its provisions. Some observers pro- pose the use of a specialized court for IPR matters, IPR and related matters are politically controver- but that is not mandated by TRIPs (Article 41(5)). sial and emotional. In the past, thousands of In- The requisite technical competency of a court is dian farmers have marched in protest of PBRs. sometimes used to justify specialization, but ad- Governments have taken positions different from equate expert advice can make up for the lack of small-scale farmers and NGOs, whereas the pri- technical knowledge of the justices. Indeed, no vate sector may represent a distinct third posi- panel can be technically knowledgeable in all tion. The numerous bases for the divisions in subject areas likely to appear before it. Effective perspective include implementation typically entails a complex and * Views regarding the sanctity of life routinely tested web of efficient domestic insti- * Equity within and between countries tutions. In addition to the judiciary system, which * Failure to resolve past differences on compen- is elaborated on further below, national patent sation for genetic resources offices are the most obvious example. One prac- * Divisions between national governments and tical question that arises in the context of PBR is indigenous peoples on access and use of natu- whether these should be handled in a separate ral resources office. In smaller countries it might be expensive * Misunderstandings, such as a failure to under- to set up an independent system when much of stand that PBRs do not affect previously exist- the expertise is in the research system (for ex- ing uses of protected materials. ample, for varietal testing). However, Sherwood Differences in perspectives delay the achieve- (1997) points out that contracted examination or ment of national and international consensus and, testing for a fixed fee has some drawbacks that further, make the implementation of the CBD 16 Intellectual Property Rights in Agriculture difficult. Certainly one of the ongoing areas of suited to protect wild relatives and traditional discussion is that of Farmers' Rights. varieties, which typically lack the stability and The term "Farmers' Rights" arose from the uniformity to qualify for PBR. Hence, some new FAO's Revised Undertaking for Genetic Re- system would seem to be required. sources (Resolution 5/89), where they were de- Conversely, the use value of most accessions fined as "rights arising from the past, present, held ex situ in international collections (the and future contributions of farmers in conserv- "average" accession) is estimated to be small and ing, improving, and making available plant ge- the transaction costs high, so that raising signifi- netic resources." In 1991 an international fund cant sums through sale is also unlikely (see was established for implementing Farmers' Perrings 1995; Lesser 1997). Although the vast Rights, but has yet to receive any substantive bulk of requests for materials from the interna- contributions (Resolution 3/91, Annex 3). tional collections comes from national programs Farmers' Rights have been discussed at every in developing countries (data in Lesser 1997), Conference of the Parties of the CBD to date, but there is considerable quantitative evidence of vast with no consensus on how to proceed. Compli- benefits of the CGIAR materials to industrial cating the discussions are the multiple interpre- countries. The private sector currently requests tations of Farmers' Rights. The term grew out of few accessions, in part due to the use of their pro- an effort to promote acceptance by the interna- prietary collection, and in part due to the CGIAR tional community of its common responsibilities policy discouraging IPRs on CGIAR-supplied towards a Global Plan of Action to develop and materials without ensuring free access by devel- conserve Plant Genetic Resources for Food and oping countries to resultant varieties. That policy Agriculture (PGRFA), and redress perceived in- is currently under review (see below). Overall, equities in the benefits flowing from the provi- the paying base from which to generate funds, sion and use of PGRFA, not as an alternative form even if a system could be implemented, seems of IPR (Fowler 1998). Distinguishing between limited. Thus the matter of Farmers' Rights re- political and legal rights has, however, proven mains controversial with no resolution apparent elusive, as has even the basis for measuring the at this time. economic value of farmers' contributions, whether it be their economic value or proportion IPR Implications for Public Sector Research of genetic material contributed. India, in drafts of a national PBR system (see Damania 1996; also Public sector research can be directly affected by Watal 1996), recognizes Farmers' Rights inter- IPR in several ways: nally with a proposed tax on seed sales, with pro- * The opportunity to patent a discovery is inad- ceeds to be directed to source communities when vertently lost when it is publicly revealed identified, otherwise to conservation. In practice, (Many countries operate under the so-called this operates like a national tax and is quite dis- absolute novelty system where any public re- tinct from the concept of the "North" compen- vealing of the invention prior to the first ap- sating the "South" for the use of genetic resources, plication destroys the opportunity to patent.). which seems to underlie some of the discussions. * A research contract provides for limitations in Some have treated Farmers' Rights as a form the publication of results. of quasi-IPR, but they are distinct in several key * An institution's IPR policy gives it control over ways. IPRs provide specific market success-based the use of employees' inventions, including the incentives for commercialization of products and right to grant exclusive licenses. processes. Farmers' Rights are to compensate for * The broad scope of some recent IPRs in the area "past and present" conservation and develop- of plants and agriculture means a scientist's ment not directly associated with the market research could be infringing IPRs, leading to value for each contribution. Farmers' Rights do possible legal action. recognize "future" contributions as well, but . The development of products using materials again not in terms of individual market rewards. provided under research MTA has in some However, existing IPR legislation is not well cases resulted in an inability of the researcher Intellectual Property Rights, Agriculture, and the World Bank 17 to subsequently secure a commercialization li- tional Centers have no control. Conversely, own- cense, rendering the prior work useless and ership of IPR permits considerable flexibility in raising questions about how to proceed in the use-the open licensing to one group (small-scale future. farmers) with fees required from another (multi- nationals, commodity crops). An IPR portfolio in Needfor Training the Centers could also strengthen negotiations with the private sector at a time when there is Most scientists, science administrators, and in- often more willingness to cross-license than fee- stitutions are unfamiliar with IPRs and their spe- license protected materials (Barton 1998). cific roles and implementation. This calls for more Centers are now responding to this challenge and better training, information dissemination, in a variety of ways. For example, in a CIMMYT/ public education, and curriculum development ORSTOM (Centro Internacional de Mejoramiento in colleges. As resources for research in develop- de Maiz y Trigo/Institut Francais de Recherche ing countries are offered through competitive Scientifique pour le Developpement en Coopera- grant programs that reward public-private part- tion) collaboration on breeding of apomictics nerships, important issues faced by scientists in- through conventional and molecular strategies, clude: which partners (scientists from public the evaluation is aimed at assessing the poten- institutions and private firms contracting re- tial economic impact of apomixis and the assess- search) should receive what benefits and how ment of biological risks. Because apomictic costs should be shared. Not only do scientists lack maize will not change characteristics from gen- exposure to the legal and financial issues, but also eration to generation, farmers can purchase to the ethical issues involved in the establishment seed only once. But for just the same reason, of public-private partnerships. apomixis can enhance the genetic uniformity of In developing countries unlike in their ad- crops. ORSTOM applied for a patent in its and vanced industrial counterparts, training is not CIMMYT's name as a defensive measure to con- sufficiently based on the particular needs of the trol use. However, for such an important devel- individual and institutional clients. Because opment more investment will be required to training lacks the user's perspectives in the spe- achieve broad coverage. Hence, the intent is to cific countries, there is often a dilemma: those seek a third party to undertake these expenses. with particular designated responsibilities for CIMMYT and ORSTOM can provide the third IPRs often lack the necessary human capital, party with a license to use the base technology while those few trained are typically not trained in the industrial world, requesting rights to make to address specific problems in their own coun- it available on a nonexclusive basis in develop- tries, despite advanced degrees from recognized ing countries. This arrangement provides benefits western universities. Once trained they are rarely for the third party, for CIMMYT and ORSTOM, deployed in their home countries to advance in- and the developing country farmers. The NGO tellectual property protection. Addressing train- community has come to hail such agreements as ing and effective utilization of trained scientists the way of the future. and science managers is a major and urgent need. The CIP (Centro Internacional de la Papa) Board of Trustees recently passed a resolution Learningfrom CGIAR-IPR Experience on the "Sharing of Benefits of CIP-Generated Technologies through Intellectual Property The private sector response to the CGIAR policy Rights," in which it recommends that the Center of not seeking IPR protection has important les- strengthen its IPR policy and use any income sons for the public research systems of develop- generated to implement the Global Plan of Ac- ing countries. The private sector considers the tion for the Conservation and Sustainable Utili- CGIAR policy to be ineffective for expanding zation of Plant Genetic Resources for Food and private sector activities and mobilizing support. Agriculture. Furthermore, at the Mid-Term Meet- Not seeking IPR rights permnits private firms to ing of the CGIAR in Brazil in May 1998, a Cen- protect improvements over which the interna- ters' position statement on genetic resources, 18 Intellectual Property Rights in Agriculture biotechnology, and intellectual property rights sentially to assume the Rockefeller role in broadly emerged. It summarizes the current practice of supporting rice research, Novartis is funding Centers with regard to ethical principles, agree- public sector basic research and making the re- ments with FAO, standard agreement forms for sults public. The right is retained for Novartis germplasm acquisition and material transfer, (and any other firm for that matter) to protect guiding principles on intellectual property rights, derivative applications, but the public sector con- interaction with the private sector, and an agreed tribution is clear and basic information remains position statement on biotechnology. in the public sector. That model should be ob- served closely with the intent of finding incen- Monitoring the Germplasm Flow tives to replicate it in other cases. The concept of reserving basic materials for Neither FAO nor the CGIAR currently have ad- public use while commercializing applications equate resources to monitor germplasm flows can be applied in other cases. It might help re- from their collections. In the case of ex situ mate- solve the long-standing impasse between genetic rials, tracking and litigation costs are estimated resource providers and users where the former at US$40-500+ per accession depending on the expects payment but the latter sees the materials methods used. With 800,000 accessions distrib- as either in the public domain or as of limited uted annually, the cost could be US$32-400 mil- value at the individual accession level (Collins lion annually (Lesser 1997). Not only is the cost and Petit 1998). An alternative approach is to re- exorbitant, but financial returns from the sale of serve the materials (with available passport data) materials may be negligible. There is also the is- for open public access, but to sell any character- sue of the capacity to defend claims. In a recent izing information. That approach, while sidestep- case cited by the Rural Advancement Founda- ping the complex issue of genetic resource tion International (RAFI) following a demand ownership, also provides an incentive for pro- from ICRISAT, Australia abandoned PBR appli- grams to invest in characterizing materials that cations based on materials acquired from a des- have little conmmercial value if users must per- ignated "in trust" collection. While such public form the screening. This would create a value- actions receive considerable attention, important added process with the potential of benefiting questions are: Who should monitor and how users and suppliers (for further development of should germplasm use overall be monitored? In this approach see Lesser 1998a). particular, should nongovernmental organiza- There is also an urgent need for skilled nego- tions (NGOs) continue to play the role they are tiators, and better information on standard con- playing now or are other approaches needed? tract terms. These needs, along with possible responses, are further developed in Lesser and Sharing Collaborative Models Krattiger (1994). Presently, no international en- tity is responsible for these needs, a gap that There is a need for a range of models of open could be addressed by the World Bank. One ap- and flexible arrangements between the public proach could be an independent for-fee agent that and private sectors. Monsanto typifies one ap- provides negotiating assistance on request, and, proach to biotechnology. A widely shared view as a participant, could collect information on li- including in the CGIAR centers is that approach cense terms to be made available in a nonattrib- emphasizes significant central control through utable form. Contract terms are not now made ownership and contract (the 1997 Monsanto an- public, so that inexperienced negotiators have nual report lists 16 acquisitions and joint ventures difficulty differentiating between good and bad over a 14 month period; in 1998 Monsanto ac- agreements. quired Delta and Pine Land and DeKalb, two There is probably also a need to identify stan- major seed companies). That is an effective busi- dard (or model) agreements for licensing com- ness strategy, but one that raises questions about ponent technologies, in much the same way that the role of the public sector. In contrast, Novartis the World Bank-financed projects have over has adopted a more open process regarding ge- many years developed some standardization in netic mapping of the rice genome. Operating es- the legal documentation of projects. The present Intellectual Property Rights, Agriculture, and the World Bank 19 approach of "zero based" negotiation for each the center in its Rural Development Family to user is costly in time, meaning that many less sig- deal with the issues involved in the design and nificant agreements are never completed. The implementation of its lending operations as they World Bank could be instrumental in establish- pertain to IPRs and the use of biotechnology more ing an expert panel of public and private sector generally. These implications are explored in the representatives to identify baseline agreements. final chapter of this volume. 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Perspectives from International Agricultural Research Centers ISNAR Joel L Cohen, Cesar Falconi, andJohn Komen Intellectual property rights (IPR) is a broad (WTO), and are bound to introduce international term for the various rights granted by law minimum standards for IPR protection. The ex- for the protection of economic investment in tent to which changes in the IPR legislation of creative effort. The main categories of intellec- developing countries will, in fact, lead to accel- tual property relevant to agricultural research are erated technology transfer and to greater domes- patents, plant variety rights, and trademarks as tic innovation in advanced technology remains well as trade secrets. In most developing coun- to be seen. Consideration of stronger intellec- tries policies for the application IPR to biotech- tual property protection will entail an analysis nology products are still being formulated. Some of costs and benefits-the costs involved being countries have never explicitly excluded living more foreseeable. material from patent protection. Others have re- ISNAR (International Service for National cently adopted IPR for biotechnology, or are dis- Agricultural Research) began work on IPR with cussing IPR legislation in which the inclusion of a research report (van Wijk, Cohen, and Komen living material is proposed. Currently, African 1993), and a series of policy dialogues structured countries are exploring the options and implica- to identify IPR-associated needs as perceived by tions for agricultural research of national policy delegations from developing countries (Cohen, decisions on IPR and biotechnology. Crespi, and Dhar 1998). Based on this informa- One reason agricultural IPR attracts such de- tion, IPR options were identified for research bate is that agricultural development, including managers who must consider if and what pro- the release of improved planting materials, has tection is appropriate for a range of research- benefited from a long history of public sector based innovations, whose needs such protec- "public good" investment. At the core of this sys- tion serves, and how to weigh expected costs tem has been the free availability of plant genetic and benefits. From these seminars, it became resources. Increased IPR protection of agricul- apparent there are at least four important po- tural research does not always seem consistent sitions that must be reconciled with regard to with either the long-standing tradition of pub- IPR: lic-sector investment or with innovations contrib- 1. Scientists' perceived needs to apply for IPR uted by international agricultural research or by 2. Institutional goals and objectives informal or indigenous communities. Many ob- 3. End-user interests regarding the innovation servers fear that invoking such protection de- 4. National policy goals. stroys the "public good" nature of agriculture, Seminar follow-up has included an expanded especially as it relates to the needs of the rural research agenda and an integrated approach to poor. managing IPR for national agricultural research Many developing countries have become organizations (NAROs), focusing on institutional members of the World Trade Organization goals and objectives. This approach is imple- 22 Perspectives from International Agricultural Research Centers: ISNAR 23 mented through management courses address- 1. Examine ways of integrating biotechnology ing IPR, in combination with other requirements into agricultural research, and the overall facing agricultural research administrators in objectives for agriculture developing countries. The results of the ISNAR 2. Identify gaps and needs in research man- policy dialogue and survey process, which are agement and planning for agricultural bio- used to make recommendations regarding the technology management of IPR in international agricultural 3. Develop follow-up initiatives to address research, are given below. the findings and recommendations of the seminars The ISNAR IPR Program 4. Identify potential regional actions, comple- menting the needs and capabilities identi- Beginning in 1994, the Intermediary Biotech- fied by participating countries. nology Service (IBS) at ISNAR initiated a se- IPR was a prominent theme in the seminar ries of regional seminars to discuss options and discussions and was selected as a case-study topic implications of policy decisions regarding bio- for the session on "National Policies: Identifying technology. These seminars support the over- the Issues" in Southeast Asia. This session started all goal for IBS, which is to support innovation with a keynote presentation by an international in agricultural research by responding to policy expert outlining the main issues facing develop- and management needs for biotechnology. The ing countries. The presentation was comple- seminars are one means of encouraging the in- mented by one providing the private sector tegration of biotechnology with broader na- perspective, and one giving the perspective of a tional agricultural priorities. Policy seminars regional NGO. National working groups then have been held in Southeast Asia (Singapore, Sep- discussed the situation regarding IPR for their tember 1994); East and Southern Africa (South respective countries, and identified existing gaps Africa, April 1995); West Asia and North Africa and possible actions to address them. Examples (Morocco, April 1996); and Latin America (Peru, of working group results, showing the wide October 1996). The specific objectives of the semi- range of concerns involved in policy decisions nars were to: on IPR, are given in table 2.1. Table 2.1 Southeast Asia policy seminar: conclusions from national working groups regarding IPR Country Identified gaps Possible actions Indonesia IPR * Elaborate patent law with guidelines for implementation * Draft IPR regulations Philippines IPR * Update laws * Standardize guidelines (include bioprospecting) * Involve government organizations, NGOs, peoples organizations, in formulating policies/guidelines Inadequate information on * Documentation (global) available technologies and IPR * Regional "IPR - gene banking" Singapore Plant Variety Rights To be addressed at the regional level IPR * Legislation forthcoming * TRIPs agreement Thailand IPR * Develop Plant Variety Protection Act * Consider developing protection of traditional varieties and indigenous knowledge Sources: Komen, Cohen, and Lee (1995); lBS Policy Dialogues. 24 Intellectual Property Rights in Agriculture Proprietary Technologies, MTAs, discrete technologies and materials were identi- and Legal Environment fied as in use within eight broad technology cat- egories. Most Centers use these technologies and New products derived through biotechnology, materials in research on several mandated com- especially those coming from the private sector, modities, with 166 applications of proprietary are finding wide use in agriculture. This is made research inputs recorded. Of the technology cat- evident by the number of products reaching fields egories surveyed, three had the broadest appli- and markets in industrial countries, and the cation across Centers: selectable marker genes, amount of ongoing cross-licensing of biotechnol- promoters, and transformation systems (table ogy products by commercial agricultural research 2.2). Applications to cereals and noncereals are organizations. Most of these inputs are protected nearly uniform, whereas noncrop uses are more through some form of IPR. However, develop- limited. ment and use of protected materials is also oc- These data were reconfirmed with each Cen- curring among public, national, and international ter prior to finalizing the report, and clearly agricultural research centers (IARCs) working for demonstrate the important role proprietary and with developing countries. technologies and materials have assumed in IARCs and the NAROs of developing coun- IARC research, as is true for advanced research tries are affected by these trends. Changes in pro- centers globally. Although some proprietary prietary rights as they relate to agricultural technologies and materials are being applied research are particularly relevant to international in a research-only context, others become part agricultural research, because of two related de- of germplasm or products suitable for dissemi- velopments: the increasing importance of bio- nation to NAROs, NGOs, and other IARC re- technology in IARC and NARO research, and the search partners, or even directly to farmers. The growing position of the private sector in interna- results of this survey highlight the challenging tional agricultural research. new environment within which the CGIAR cen- ISNAR was asked, on behalf of the CGIAR ters operate, since many of the proprietary in- Expert Panel on Proprietary Science, to conduct puts have use restrictions. Restrictions on use a survey from December 1997 to February 1998 may become evident at the research stage, or in which all responding Centers indicated cur- not until finished products are ready for dis- rent use of proprietary inputs for biotechnology semination. research. Proprietary technologies and materials For private-public partnerships to be effective, are those that are privately owned, managed, or a clear understanding of the IPR implications of protected through some form of IPR. In total 46 joint technology development and use will be Table 2.2 Applications of proprietary technologies by responding IARC, grouped by commodity category No. of applications by commodity category Technology category Cereals a Noncereals b Otherc Selectable markers 17 25 2 Promoters 18 14 3 Transformation systems 12 14 3 Insect-resistance genes 8 11 0 Disease-resistance genes 6 5 0 Genetic markers 4 4 2 Diagnostic probes 0 0 3 Others 7 6 2 Total 72 79 15 a. Maize, rice, wheat, sorghum, finger millet, pearl millet. b. Bean, cassava, tropical forages, potato, sweet potato, chickpea, cowpea, pigeon pea, groundnut, lentils. c. Diagnostics, livestock health, microbial systems, general technology development. Source: ISNAR (1998); Related Survey. Perspectives from International Agricultural Research Centers: ISNAR 25 Table 2.3 Examples of public-private sector partnerships in international agricultural research Private sector Collaborating International program collaborator Technology institute(s) Agricultural Biotechnol- ICI Seeds (USA) Maize transformation with Central Research Institute ogy for Sustainable Bacillus thuringiensis for Food (CRIFC, Crops Productivity (ABSP) protein genes, for resis- Indonesia) tance to Asian stemborer DNA Plant Bioreactor technology for * Agribiotecnologia de Technology (USA) micropropagation of banana, Costa Rica (ACR) pineapple, coffee, and orna- * Fitotek Unggul (Indonesia) mental palms Feathery Mottle Virus Monsanto (USA) Transformation technology Kenya Agricultural Research Resistant Sweet Potato for for the development of Institute (KARI) African Farmers virus-resistant sweet potato International Service Monsanto (USA) Transformation technology Center for Advanced for the Acquisition of Agri- for the development of Research Studies biotech Applications potato resistant to potato (CINVESTAV, Mexico) (ISAAA) virus X and Y Asgrow Seed Coat-protein technology * Research Center in Cell (USA) for the development of and Molecular Biology melons resistant to (CIBCM, Costa Rica) cucumber mosaic virus * CINVESTAV Pioneer Hi-Bred ELISA kits for local maize National Research Center (USA) viruses for Maize and Sorghum (CNPMS, Brazil) ODA Plant Sciences Agricultural Genetics Insect-resistance genes International Potato Center Research Programme Company (UK) for potato and sweet potato (CIP, Peru) Source: Cohen and Komen (1995). essential. Negotiations over rights regarding use formulated and imposed by the technology should be addressed as soon as possible when supplier. embarking on research partnerships. Capacity for When legal obligations are imposed by MTAs, undertaking such negotiations presents a time- a Center must be in a position to honor those intensive investment, often requiring that scien- obligations. For example, when confidentiality tists be taken away from their research because obligations are imposed, a Center must police the other in-house legal capacity has not yet been handling of the material supplied. This may re- developed. A range of illustrative partnerships quire the establishment of a secure system of is presented in table 2.3. operation and place researchers and visitors un- The most common legal arrangement by which der confidentiality obligations. In the event of a IARCs obtain or provide permission for use of violation of the MTA the IARC is likely to be sued proprietary inputs is through material transfer rather than the responsible individual, because agreements (MTAs), followed by licensing. Staff the Center is the signatory to the MTA. Alterna- at IARCs may wish to review and use standard tively, the supplying firm may bar the violating formats for MTAs, given the range of legal obli- Center from receiving further materials, which gations that are generated, the popularity of the can damage the entire research program. MTA as a means of obtaining proprietary tech- The increasing legal complexity involved in nologies, and the likelihood that MTAs will be the supply of proprietary technologies may raise 26 Intellectual Property Rights in Agriculture matters of contract law, intellectual property law, ments and public expectations regarding inno- biodiversity and biosafety law, technology trans- vations produced with public funds. These of- fer, and competition law (if restrictive provisions fices can also help the national research program are imposed in a licensing agreement). These le- to anticipate the need to scale up, develop, and gal complexities indicate the need for IARCs to move innovations into production (see Erbisch, have a primary legal administrator to ensure the this volume). compliance of staff with obligations generated by The principal objectives of an agricultural re- MTAs, as well as a Center's compliance with the search institute's intellectual property manage- terms of intellectual property licenses. Indeed for ment policy are to create a fruitful climate for 40 percent of the 58 products identified in the innovation and invention, and to create a better survey, no information was available on possible understanding of the available legal rights for the use restrictions. That finding emphasizes the ur- protection of creative effort. As a general rule an gent need to manage better acquired technolo- institute will take the position that research re- gies using knowledgeable legal counsel. Where sults should be published and made available. several IARCs use the same category of propri- However, the institute may be obliged to take etary tools, it may be advantageous to cooperate steps to secure IPRs to its research output as a in the acquisition of those technologies. For ex- means of making it available to farmers. In some ample, the survey indicates that CaMV/35S is the cases IPR considerations may delay research promoter of first choice among the Centers, mak- publication. ing opportunities for coordination evident. Given the complexities of the legal protection New capacity is needed on the part of deci- of IPRs and commercial arrangements for the sionmakers, managers, and scientists to provide acquisition and the exploitation of those rights, clarity on biotechnology policy and research it seems appropriate to centralize aspects of the agenda. A series of management courses for re- management of intellectual property. The re- search directors in selected Asian countries has search institute may choose between a specially been developed, building on past publications dedicated research liaison office (RLO) or an of- and the policy seminars that underscored the ficial within the institute with intellectual prop- need for human resource development. The erty responsibilities. The decision will usually be course ("Managing Biotechnology in a Time of one of.cost and size. Where the research institute Transition") is supported by the Japanese Minis- is associated with a university, the services of a try of Foreign Affairs. The first course was held central university institution may be available. in November 1997 in Indonesia, and included a For example, the University Business Centre of session on "Managing International Technology Universiti Putra Malaysia provides intellectual Transfer and IPR." In the course we specifically property coordination for the agricultural re- concentrate on the practical management of in- search institutes located on its campus. When not tellectual property at NAROs, as reflected in the available, it will probably be advisable to deploy keynote paper prepared by Blakeney (1997). This an officer to perform the intellectual property portion of the course is integrated with negotia- coordination function. tion exercises, and case studies illustrating IPR The main function of the RLO will be to deter- considerations for public-private partnerships, mine if research results should be protected or end-user considerations, and other management not. In the cases that the office decides not to pro- responsibilities. tect the innovation, the rights may be released to the innovator(s), usually subject to a nonexclu- Managing Institutional IPR sive license to use the intellectual property for research in the institute. In those cases where the Selecting from among the several types of avail- office decides to protect the innovation, it will able IPR protection is a complex management work with the innovator(s) in market evaluation decision. In many public organizations, offices and in finding comrnercial collaborators to ex- of intellectual property have been set up to help ploit their intellectual property (table 2.4). The with these decisions. One responsibility of such RLO will be responsible for securing profes- offices is to consider the accountability require- sional assistance under appropriate conditions Perspectivesfrom International Agricultural Research Centers: ISNAR 27 Table 2.4 Patenting process and time line Time line Action by inventor (or RLO) Action by patent office Before first application Invention and preliminary appraisal of patentability First application * First patent application filed in home country * Establishing priority date Within 12 months after first * Further development of invention and Official prior art search application technical/commercial assessment by (novelty search) internal staff, consultants, industrial, and government contacts * Decision taken to proceed or abandon, and costs estimated * Patenting route selected (national, European, international) 12 months after first application * Home filing consolidated Official examination starts; * Foreign applications filed based on precise moment depends on priority application backlog 18 months after first application Official publication of applica- tion (in some countries) At a later moment variable Further prosecution of patent application Patent granted or refused in time by applicant and attorney Source: Cohen, Crespi, and Dhar (1998). of secrecy. The ultimate vehicle for commercial- foreign countries depending on commercial po- ization may be the research institute, through the tential and other needs. RLO, or through the institute's commercial arm. The RLO will ensure the coordination of com- Conclusions and Suggestions mercialization activities and prevent conflicts of for Future Actions interest. In addition, the RLO would be also re- sponsible for ensuring the compliance of a re- Many IARCs and NAROs have formed partner- search institute with terms of any intellectual ships to undertake joint or contractual biotech- property licenses. nology research, thereby receiving access to To enable the RLO to evaluate the commercial proprietary materials. These agreements reflect potential of inventions and discoveries, research- the changing nature of agricultural research. In ers should be obliged to report their research ac- such cases, the relevant technologies or licenses tivities in a timely manner in an appropriate are held by partner organizations that may cover form. This form will capture all preliminary in- the use of proprietary inputs. However, such formation required for initial evaluation, such as partnerships may only cover research. The use assessing the invention's patentability (or other and dissemination of products may be a matter intellectual property protection) and commercial for further negotiation. potential, and fulfilling any obligations to re- Experiences with accessed technologies make search sponsors. it clear that the international agricultural research Due to the high cost of securing and then main- system must adapt to the changing nature of ag- taining patents, the RLO must often delay filing ricultural research. With this evolution must come of patent applications until strong commercial greater clarity regarding policies and practices in interest is evident. Applications may be filed in IPR. This is important for partnerships with the 28 Intellectual Property Rights in Agriculture private sector, as well as for providing clarity to S. R. Tabor, W. Janssen, and H. Bruneau, eds., Fi- other stakeholders. Based on this need, and find- nancing Agricultural Research: A Sourcebook. The ings identified from the ISNAR policy seminars, Hague: International Service for National Agricul- recommendations are proposed for further con- tural Research. sideration by the World Bank and for countries Cohen, f. I., C. Falconi, and J. Komen. 1998. "Strategic Decisions for Agricultural Biotechnology: Synthe- receiving loans. The Bank may wish to provide sis of Four Policy Seminars." Briefing Paper 38. * Support for a research liaison officer network, ISNAR, The Hague. including capacity building, legal expertise, Cohen, J. I., and J. Komen. 1995. "Research Collabora- and consultations that review pros and cons tion, Management and Technology Transfer: Meet- of securing IPR protection for specific case ing the Needs of Developing Countries." In D. W. examples Altman and K. N. Watanabe, eds., Plant Biotech- * Support for seminars/courses that stimulate nology Transfer to Developing Countries. Austin, Tex.: learning and development of legal systems R. G. Landes Co. and expertise equal to that in industrial coun- Crespi, S. 1995. "Intellectual Property in Agricultural tries Biotechnology: Issues for Developing Countries." In J. Komen, J. 1. Cohen, and S. K. Lee, eds., Turning * Advisory capacity representing the full ex- Priorities into Feasible Programs: Proceedings of a Re- tent of legal options (including MTAs), tak- gional Seminar on Planning, Priorities, and Policiesfor ing into account the public good nature of Agricultural Biotechnology in Southeast Asia. The agricultural research, and where appropriate, Hague/Singapore: Intermediary Biotechnology Ser- issues regarding genetic resources vice/Nanyang Technological University. v Mechanisms that help develop and present ISNAR. 1998. "Proprietary Biotechnology Research clear policies and agenda for IPR and con- Inputs and International Agricultural Research." solidate institutional knowledge for acquir- Report of an ISNAR Study Commissioned by the ing technu.ologies. CGIAR Panel on Proprietary Science and Technol- ogy. Briefing Paper 39. ISNAR, The Hague. Komen, J., J. I. Cohen, and S. K. Lee. 1995. Turning Pri- References orities into Feasible Programs: Proceedings of a Regional Seminar on Planning, Priorities and Policies for Agri- Blakeney, M. 1997. "The Practical Management of In- cultural Biotechnology in Southeast Asia. The Hague/ tellectual Property by Research Institutes." Paper Singapore: Intermediary Biotechnology Service/ presented at the ISNAR-IBS course, Managing Nanyang Technological University. Biotechnology in a Time of Transition. Yogyakarta, Van Wijk, J., J. I. Cohen, and J. Komen. 1993. Intellec- Indonesia. tual Property Rights for Agricultural Biotechnology: Cohen, J. I., S. Crespi, and B. Dhar. 1998. "Should I Options and Implications for Developing Countries. Seek Legal Protection for My Research Results?" In ISNAR Research Report 3. ISNAR, The Hague. CIMMYT Peter Ninnes R apid changes are taking place in intellec- ignated materials was endorsed. This approach tual property rights (IPR). At Centro replaces one previously adopted in 1995, an in- Intemacional de Mejoramiento de Maiz y dication of the rapid changes in this area. Fur- Trigo (CIMMYT) we are endeavoring to stay thermore, steps have been initiated for full MTA abreast of developments so that our work for the harmonization among the CGIAR centers. How- resource-poor farmers of the world remains vi- ever, IPR systems vary markedly from one coun- able and relevant. try to the next, and private companies implement CIMMYT's primary objective in the past has country-specific policies, implying that the Cen- been to develop germplasm. Our gene bank con- ters must allow flexibility in any harmonization tains over 150,000 maize and wheat accessions, policies. in addition to materials entrusted by developing countries over many years. During this period CIMMYT and the Private Sector the global thinking on genetic resources has evolved, contributing to the increasingly complex The CGIAR centers' position statement on genetic and scrutinized environment in which we oper- resources, biotechnology, and IPRs developed at ate. For CIMMYT IPR issues relating to germ- the 1998 MTM in Brasilia includes an agreed plasm are critical and our responses to these statement on principles involving Center inter- issues have been positive and proactive. During action with the private sector and others on pro- 1997 we established an IPR Task Force to assist prietary technology. Simply put, CIMMYT seeks CIMMYT management in the following areas: opportunities to accelerate its work for the re- * Revision of CIMMYT's policy on intellectual source poor of the world, and this includes en- property and material transfer agreements tering into partnerships with private companies (MTAs) (for example, see box 2.1 and appendix by * Revision of advice on the implementation poli- Reeves). cies CIMMYT seeks partnerships with the private * Providing recommendations on potential sector that advance its mandate while providing agreements with the private sector. opportunities for private companies to meet their The major change has been to distinguish own commercial objectives. In developing these clearly between "designated germplasm"- partnerships, the CGIAR Guiding Principles and material designated as coming under the 1994 Center Policies must be translated into imple- FAO-CIMMYT Agreement-and CIMMYT- mentation strategies that facilitate the develop- developed germplasm, also referred to as CIMMYT ment and deployment of CIMMYT-generated "research products." technologies. This includes a consideration of In May 1998 at the CGIAR Mid-Term Meeting nonexclusive licensing, although the benefits (MTM) in Brasilia, an approach focusing on des- to private companies may not be immediately 29 30 Intellectual Property Rights in Agriculture Box 2.1 CIMMYT, apomixis, and the private sector CIMMYT's apomixis research is a joint collaborative tic wild relative Tripsacum. ORSTOM filed for a patent with ORSTOM. ORSTOM links French advanced re- in February 1997, an application co-owned by search institutes and CIGAR centers with their de- ORSTOM and CIMMYT (see appendix by Reeves), veloping country partners. The research program, to protect this technology. The defensive patent was aimed at the development of apomictic maize, in- filed so that the technology can be managed for the volves one or more ORSTOM scientists being posted benefit of resource-poor farmers through CIMMYT's to CIMMYT, with additional staff and support provided partnerships with national programs and NGOs in by CIMMYT and ORSTOM. In 1996 a Mexican sci- developing countries. entist joined the team through support from the Gov- Not surprisingly, the private sector has expressed an ernment of Mexico. The primary objective of the interest in the apomixis technology. CIMMYT has been apomixis project is to transfer the gene(s) respon- engaged in extensive dialogue with companies interested sible for apomixis into maize from its closest apomic- in the technology and these discussions are continuing. obvious. However, we believe there are areas furthering the mandate of the Centre and where the Centers have considerable expertise the objectives of the CGIAR. and contacts that can prove beneficial, in particu- lar to provide assistance in developing a regula- CIMMYT currently uses 29 applications of pro- tory framework for the deployment of new prietary technology in working with selectable technologies. markers, promoters, transformation systems, Field and greenhouse trials with Bacillus insect-resistance and disease-resistance genes, thuringiensis/maize have been conducted in and genetic markers. Mexico since 1995 and in the Philippines since late 1997. CIMMYT also works with the Kenyan Lessons Learned, Lessons Offered Agricultural Research Institute (KARI) to develop a research program and protocol using transgenic The following issues may be of interest to the maize in an integrated pest management (IPM) World Bank as it forges new partnerships with strategy to combat Striga, a parasitic weed. Ne- its stakeholders, the CGIAR centers, and indus- gotiations are continuing with a company inter- trial countries: ested in evaluating its technology under field 1. Exclusivity-examples of mutual beneficial conditions in Kenya. To date CIMMYT has taken agreements with the private sector under the view that up-front payments rather than fu- nonexclusive arrangements should be high- ture royalties are preferred; poverty alleviation lighted as models for future collaborations and natural resource protection are the objectives, 2. Legal-the establishment or support by the not the generation of income. World Bank of a service facility or clearing- The "Defensive Protection" clause of the Guid- house on legal and contractual matters ing Principles for the CGIAR Centres on Intel- would be welcomed, in the context of de- lectual Property and Genetic Resources states velopment assistance and loans. In particu- that: lar this "honest broker" service should serve to create more confidence for national pro- The Centres do not see the protection of grams as they enter into agreements with intellectual property as a mechanism for Centers and the private sector securing financial returns for their germ- 3. Distribution-(a) Seed information-There plasm research activities and will not view may be opportunities for the development potential returns as a source of operating of small, national seed companies to be fos- funds. In the event that a Centre secures tered by World Bank financing as a compo- financial returns as a result of the commer- nent of other economic reforms, in part to cialization by others of its protected prop- compensate for differing multinational erty, appropriate means will be used for firm policies in "marginal" markets; (b) Seed Perspectivefrom International Agricultural Research Centers: CIMMYT 31 technology-Seed technology involving in- apomictic maize for over seven years. The pri- secticides, (for example, Bacillus thurin- mary objective of the ORSTOM-CIMMYT apo- giensis for corn-borers) should always mixis project is to transfer the gene or genes include an IPM component. The World Bank responsible for apomixis into maize from its clos- could participate in direct or indirect sup- est apomictic wild relative Tripsacum. The re- port of the implementation of responsible search approaches involve two different and IPM education programs; (c) Biosafety- complementary routes. One is to transfer the The lack of a regulatory framework impedes genes for apomixis into maize from Tripsacum the safe introduction of new technologies. through a conventional "wide-cross" breeding It may be expedient for biosafety regula- approach. Alternatively, molecular strategies tions to be developed on a regional basis have also been developed to identify and isolate rather than on a country by country basis. the apomixis genes in Tripsacum, in order to make Through the assistance of the World Bank, them available not only for maize, but potentially the CGIAR centers and national programs for a broader range of food crops. Research ini- could be organized into regional forums. tiatives are also under way to determine the ap- The private sector also can benefit through propriate strategies for the deployment of the development of regulatory frameworks apomictic crops. This includes the definition of that are often cited as the bottleneck in the novel breeding schemes for apomicts; the evalu- biotechnology delivery system. ation of the potential economic impact of apo- Finally, the development of human resource mixis; and the assessment of the biological risk capacity is an integral component of any new associated with the release of apomictic cultivars technology introductions. The World Bank has a (that is effects on biodiversity). long tradition of capacity building. Progress has been regularly reviewed. Recent breakthroughs have significantly increased the chances of success, but ultimate success is still a Appendix. Apomixis Research: Biotechnology number of years away. for the Resource-Poor-Ethical and Equity Considerations* Why Is Apomictic Maize Important? Apomixis refers to naturally occurring modes of This research is conducted within the CIMMYT- asexual reproduction through seeds. Apomictic ORSTOM project "Equity in Access to Hybrid processes lead to the production of offspring that Vigor for Resource-Poor Farmers." Because are exact genetic replicas of their mother plant. apomictic maize would not change genetically Therefore, in contrast to sexual plants, apomixis from generation to generation (unlike normal offers a unique potential to fix favorable alleles sexual hybrids or open-pollinated varieties), a and allele combinations in all subsequent gen- single purchase of hybrid maize seed (with apo- erations. This could impact directly the current mixis) could enable the resource-poor farmer to efforts to develop high-yielding varieties in de- gain from the benefits of hybrid vigor in his or veloping countries using hybrid crops. Indeed, her crop, and then use the seed from the har- apomixis might potentially revolutionize deploy- vested crop to plant year after year. A once-only ment strategies for hybrids in all major food crops purchase could therefore confer significant yield by (a) limiting the need to purchase seeds yearly; benefits for 3, 4, 5 years or more. This is desir- (b) allowing a drastic reduction in seed produc- able from an equity viewpoint-unlike richer tion costs; and (c) allowing for faster and more farmers, resource-poor farmers often cannot af- locally targeted breeding programs. ford to buy hybrid seed each year. Harnessing CIMMYT and ORSTOM have collaborated on new technology and focusing it on the needs of a research program aimed at the development of the poor also meets the high ethical standards of * Presented by T. G. Reeves at a Workshop on Ethics and Equity in CGIAR's Use of Genetic Resources for Sustainable Food Security, Brazil, April 1997. 32 Intellectual Property Rights in Agriculture CIMMYT, ORSTOM, and the CGIAR. In a recent CGIAR members, they have been formally noted statement by Dr. Miguel Altieri, Chairman of the as the framework within which the Centers carry CGIAR NGO Committee, apomixis was cited as out their work as custodian trustees of global an example of the types of biotechnology most genetic resource collections. appropriate to the needs and circumstances of Under the CGIAR guidelines, there are spe- the resource-poor farmers. cific references to patenting (points 10 and 11) that are pertinent to the apomixis filing. Immediately Issues CIMMYT knew of the defensive patent applica- tion, contact was made with the CEO of INIFAP, To be effectively used for the benefit of resource- the national agricultural research organization in poor farmers, this technology should be freely Mexico, for two ethical reasons: (a) Mexico was available to them through the long-standing part- in the process of becoming a participating part- nerships CIMMYT has with developing country ner in the apomixis research; and (b) Mexico is a NAROs and NGOs. This is the case with all tech- long-standing and gracious host of CIMMYT's nologies produced by CIMMYT. headquarters. A meeting was held between However, ORSTOM and CIMMYT saw poten- CIMMYT, ORSTOM, and INIFAP in March 1997, tial threats to this future free availability, given and there was unanimous agreement that the the likely value of this technology to commercial objective of all parties was to ensure that, if seed companies and the growing number of re- achieved, apomictic maize would be freely cent patent applications for related and unre- available for the resource-poor farmers of the lated inventions being filed, particularly by developing world. A "hands-on" approach to larger companies. proactively protect, for the poor, was seen as more The traditional, and still preferred, approach ethical and equitable than a "hands-off" approach to avoiding third parties patenting and "tying of doing nothing and hoping for the best (but up" technology is public disclosure. This has of- expecting the worst). ten been used by public and not-for-profit orga- This action has been communicated to col- nizations (for example, CIMMYT and ORSTOM) leagues in NARSs, NGOs, and advanced research throughout the world. It is increasingly evident, institutions, and has been praised as an appropri- however, that public disclosure is becoming ate, responsible, ethical, and equitable approach. less effective because broad patent applications are being used to protect wide domains of in- Where to from Here? Some Dilemmas tellectual property around publicly disclosed inventions. At the least CIMMYT and ORSTOM have bought Public disclosure of key facets of the CIMMYT- some thinking time for decisionmaking, but ORSTOM work was imminent in February 1997 given the current IPR environment, not a lot! The with the "defense" of a doctoral thesis based on patent application could be allowed to lapse at this research. Given the overriding objective of any time-the simplest, but not necessarily the ensuring that this technology, if successfully ob- most responsible, approach. However, to effec- tained, should be freely available for its intended tively implement the patent will be an expensive beneficiaries-the resource-poor of the world- process, requiring funds that neither CIMMYT and in light of aggressive IP protection by oth- nor ORSTOM have, nor would want to divert ers, ORSTOM filed a patent application in Paris from other research activities. An option being on February 17, 1997. Any patent arising from investigated is to contract with a third party in- this application would be co-owned by ORSTOM terested in this technology, seeking a "win-win" and CIMMYT. outcome. Early and preliminary discussions with the CGIAR Guiding Principles private sector have identified some interesting possibilities for such an outcome. For example, CGIAR has a set of working principles relating one scenario is as follows: to intellectual property and genetic resources. * CIMMYT/ORSTOMretaintheIPRofapomic- Whilst these have not been fully endorsed by tic maize Perspectivefrom International Agricultural Research Centers: CIMMYT 33 * Company A takes financial responsibility for of a strategic partnership between public/private, execution and defense of the patent and north/south, to harness technology in the * Company A provides "in-kind" additional re- fight for poverty alleviation, food security, and sources (principally access to proprietary tech- protection of our natural resources. nology) to accelerate research and increase the likelihood of success of the apomixis program Conclusions * In return, CIMMYT/ORSTOM would license the technology for Company A to use solely in The environment in which CIMMYT and its part- the industrial world. (Their use of apomixis ners work is changing rapidly. In order to remain would more likely be to increase the efficiency effective and relevant and to meet our mandate of plant breeding and seed production.) it is necessary to respond to that change in many CIMMYT/ORSTOM would be able to (and in- ways, including the establishment of effective deed would!) make the technology freely avail- partnerships with the private sector. CIMMYT is able to partners in developing countries. repositioning in such a way that high standards Such a scenario would be a "win" for resource- of ethics and equity remain paramount in our poor farmers, for Company A, and for CIMMYT/ endeavors for the resource-poor of the world. We ORSTOM. It would also be an excellent example will make all future decisions accordingly. 3. Perspectives from Industry Monsanto Richard H. Shear B iotechnology has been broadly defined as was a living organism did not preclude its pat- any technique or process using living or- enting (Diamond v Chakrabarty, 447 U.S. 303, 206 ganisms to make or alter products and/or U.S.P.Q. 193 (1980)). improve plants or animals. This would include Although biotechnology held great promise in the production of microorganisms for specific the 1980s, results in the form of products came uses, for example, the use of microbes to clean slowly. Indeed, most products in the pharmaceu- up oil spills. In its broadest definition it would tical area were not registered until the late 1980s include traditional plant breeding as well as and early 1990s. Agricultural biotechnology molecular biology, including recombinant DNA. products in the form of genetically modified seed With the advent of recombinant DNA in the late did not become commercially available until the 1970s and early 1980s, it was recognized that bio- mid 1990s. In both cases however, the products technology held the promise of revolutionizing have been widely accepted and appear to be suc- drug discovery, chemical manufacture, agricul- cesses. Products such as erythropoietin, g-CSF, ture, and nutrition. and human growth hormone are widely used. For the first time it was thought to be possible The products Bollgard® cotton and Roundup to make certain proteins having beneficially Ready( soybeans are in great demand by farm- known properties that had been either impossible ers. The speed at which these products have been or too costly to make by traditional chemical tech- discovered and brought to market, however, may niques. Such compounds included human be considered incredibly slow compared to the growth hormone, insulin, and the like. In agri- promise of the future. culture companies such as Monsanto, Ciba-Geigy, Plant Genetic Systems, and others believed that Role of Genomics crops could be "re-engineered" to provide tech- nology for ensuring that the world could be fed In the future, biological advance promises to ri- as future population demands required. This be- val the advances made by the computer indus- lief was so prevalent that entrepreneurial start- try during the past 15 years. One of the reasons up companies, such as Agracetus and Calgene, for this is the use of information technology to entered the race to find ways to improve agricul- foster what is widely referred to as "genomics." ture. Serious R&D, however, did not really begin Genomics is a term used for technological break- in the United States until the U.S. Supreme Court throughs that involve the integration of basic and decided that although patent protection could not applied research in human and comparative gene be extended to naturally occurring living beings, mapping, molecular cloning, large-scale restric- such protection was available to living organisms tion mapping, and DNA sequencing and com- that had been altered by human intervention. In putational analysis. In simple terms genomics other words the fact that the claimed invention provides the ability to study the plant or animal 34 Perspectives from Industry: Monsanto 35 genome, discover and map their genetic compo- millions of dollars. Although genomics holds nents, and annotate the genes with their func- great promise for drug and agricultural discov- tion. This means we should be able to discover ery, there is no guarantee that anything will be quickly which genes are responsible for which discovered or will be discovered before a com- functions, potentially dramatically reducing the petitor. time required to determine bioactivity. Such Furthermore, genomics does not lessen the breakthroughs are critical given the current risks or shorten the rest of the timeline. Neither timeline for conducting biological research of does it reduce the other costs of bringing a phar- plants (9.5-18 years) and pharmaceuticals (5.5- maceutical or agricultural product to the market- 11.5 years) (table 3.1). place. Indeed, these costs continue to be several With genomics the "bioprospecting" time can hundred million dollars. be cut dramatically. Although the timeline shows up to five years, it is of course understood that Role of IPR breakthroughs can occur quickly, slowly, or not at all. For every compound that is successful, In order to provide the incentive for investment 20,000 fail. It should be noted, however, that in such risky and costly R&D, intellectual prop- genomics will not shorten the remaining time- erty protection must be available. Without such line beyond the bioprospecting stage. Clinical protection who would undertake the risk and cost and safety testing will always be required, and involved? The most important forms of intellec- the time required for such tests will not be re- tual property protection to encourage such re- duced because of the great strides available via search are patents and data protection. genomics. Historically, patent and data protection was While it is true genomics will decrease the rather weak in many developing countries. In amount of time for drug discovery, it is equally fact, some of the countries were havens for those true that the investment is huge. Gene mapping, who wanted to prosper from copying the prod- molecular cloning, large-scale restriction map- ucts of inventors' hard work and good fortune. ping, and DNA sequencing can be accomplished Indeed, the lack of compound protection for today, but not without investment in people, tech- pharmaceuticals and agricultural chemicals in nology, machines, computers, and software. This Brazil, India, South Korea, Taiwan, and others will cost any company tens, if not hundreds, of resulted in a great deal of legal counterfeit activ- ity. As a result of the Uruguay Round of the GATT negotiations, and most notably the TRIPs Agree- Table 3.1 Correct timetable for product ment, the environment is changing in many development developing countries. Unfortunately, it is not Plant biotechnology timeline changing rapidly, but change is coming. "Bioprospecting" starts Day 1 Monsanto experienced problems in several Discovery of bioactive lead 1-5 years countries during the 1980s regarding glyphosate, Plant transformation 0.5-1 year alachlor, and triallate production. Indeed, several Greenhouse tests 1 year situations occurred in which products being Field tests 2-4 years called AVADEX® and MACHETE® herbicides Toxicology/residue/safety tests 2-4 years were sold by parties not licensed under any IPR. Backcrossing 3 years In one case the counterfeit product, that is nongenuine product using the proprietor's trade- Pharmaceutical pipeline mark, was diluted so that it did not have the cor- "Bioprospecting" starts Day 1 rect amount of active ingredient, resulting in lack Discovery of bioactive lead 1-5 years of weed control and yield loss. Synthesis/formulation of bioactive 0.5 year If environmental, residue, toxicological, and Initial studies 1 year other safety data are not kept secret and propri- Clinical/safety studies 2-4 years t hda p p Registration 1 year etary, others will copy the data and register to Total 5.5-11.5 years use it for their generic product. These data take many years and millions of dollars to generate. 36 Intellectual Property Rights in Agriculture Consequences of Weak IPR Protection Technology Licensing Generic production does stimulate local produc- The developer will sometimes introduce technol- tion, often at lower prices. Why, then, isn't it in ogy through local subsidiaries, but more often the interest of a country to maintain a weak in- the technology is licensed to a local entity. tellectual property system and encourage local The important negotiated license terms usu- manufacture of newly discovered products? First, ally include the scope of the technology to be li- most companies will not seek registration in a censed, the field of use or uses, transferability of country which will not provide adequate patent the license or sub-rights granted by the agree- protection or protection for efficacy, health, and ment, compensation for the license, and the du- safety data. Whatever the size of the local mar- ties of the licensor and licensee, including how ket, it cannot be large enough to compensate for the technology transfer takes place. The licens- the loss of data allowing competitors to access ing of biotechnological inventions presents some the marketplace in that and other countries. interesting issues when the product being li- Furthermore, the competitor did not spend the censed, genetically modified seeds, can self-rep- time and invest the money to conduct the re- licate. In that case, control of the licensed product search, and thus has an unfair competitive edge becomes of paramount importance. For example, over the technology developer. While this may can the licensor restrict the saving of seed by the be considered a national benefit, it must be re- ultimate customer, the grower? Although plant membered that the new producer lacks health variety protection laws in accordance with UPOV and safety data, does not have any experience in provide for a limited farmers' exemption to save testing the pharmaceutical or seed product, and seed, it is apparent that any business based on ge- does not have the best formulation for the prod- netically modified seed cannot survive long if uct. Any generic production will be at least 5-10 customers need only buy the product once. Accord- years behind the first introduction of the prod- ingly, without some form of saved seed restriction, uct in countries providing adequate intellectual the huge costs involved with agricultural biotech- property protection. Such delayed access has a nology may be difficult to justify, especially in the definite, if hidden, cost. case of varietal, nonhybrid crops. If countries want the latest state-of-the-art tech- If the invention is a genetically modified crop, nology, along with the assurance that the prod- it is often necessary to backcross the desired trait uct works and is safe for its intended use, they into locally adapted germplasm. This can often must provide patent protection for all forms of be done under a research agreement with local inventions, regardless of how or where made. In seed companies. Technology developers will be other words patents should be available for reluctant to enter such research agreements, chemical compounds, pharmaceuticals, genes, thereby blocking transfer, unless there is protec- and animal and plant inventions. Further, coun- tion against the loss or unauthorized distribution tries must provide protection for registration data of the transformed germplasm, and an intellec- if timely access to state-of-the-art technology is tual property system to provide enforcement. The expected. Needed protection includes limits on loss of such technology is too easy and the risks access to government files as well as controls over too great. It is critical, therefore, in licensing employee and former employee data leaks (trade agreements everywhere that enforceable restric- secret protection). tions on transferability of the technology, espe- Finally, any system must include reasonable cially if it is germplasm, be agreed and adhered enforcement mechanisms so that infringement to by the licensee. can be halted. Without effective enforcement an With respect to the actual transfer, it usually intellectual property system will be used initially, makes sense for the licensor to provide the edu- but patent owners will discontinue introductions cation and training needed to provide a smooth, once they realize that proper protection is not fast transfer. In agricultural products, this divi- really available. sion of responsibility is complicated by the fact Perspectives from Industry: Monsanto 37 that the licensor has the knowledge of the tech- veloping country researchers so that technol- nology, but the licensee has the expertise on lo- ogy can be developed for local use. For example, cal agriculture. For that reason the transfer of Monsanto allowed a researcher from Kenya to technology must be supported by the licensor train at its laboratories and bring back to Kenya and the local licensee. This applies independent technology for sweet potato that ensured im- of the form of the transfer agreement, license proved production of that local staple. agreement, joint venture, or other form. The li- censor is needed to ensure that the transforma- A World Bank Role tion of the desired trait is successful, the registration data are supplied, and the licensee What can the World Bank do to encourage the and growers understand the proper ways to use rapid development of state-of-the-art biotechnol- the technology. The licensee is needed to back- ogy in developing countries? I see several things cross the transformed line into local germplasm the Bank is in a unique position to do. First, the and to market/distribute the final product. Bank can use its good offices to encourage the Compensation for the technology is always a development of adequate intellectual property sensitive subject, but generally speaking the more laws. Adequate IPR protection will encourage risk that the licensee shares with the licensor the technology providers to license or otherwise lower the royalty rate. If a licensee wants to ac- transfer greatly needed technology. It will also cess all of the benefits of 10+ years of work, and provide incentives for local companies, at least the millions of dollars spent, that licensee will be in the more developed of the developing coun- asked to pay relatively high sums. If, however, tries, to start investing in R&D of their own, as the licensee is involved from the start and shares well as taking part in collaborations with other in the work, the investment cost, and the risk, research-based organizations at an early stage. the ultimate compensation requested may be In that way, the country will benefit from impor- quite small. Thus, if developing countries want tation of technology and the development of its to ensure access to state-of-the-art technology at own technology. This will result in less depen- relatively low royalty rates, they should encour- dence on foreign technology, better balance of age local industry to become more involved at payments, and more competition in the global an early stage, especially collaboration with firms marketplace. in the industrial countries. Adequate intellectual Second, the Bank can provide the funds nec- property protection will be needed to encourage essary for countries to invest in early collabora- both parties to collaborate. tive work with biotechnology companies. As Any contribution of germplasm as specified noted above, by collaborating early and provid- by CBD occurs early in the research process (table ing risk capital, the royalties for resulting tech- 3.1). In most cases the monetary value of the con- nologies will be much lower. tribution will be dwarfed by the millions spent Finally, the Bank can aid in training so that any subsequently, so that the royalties for germplasm technology transferred is properly used. Without providers will generally be small, sufficient training the benefits of any technology, When competitive conditions allow, many including biotechnology, might not be fully real- companies have provided technology to devel- ized. Indeed, without proper training in insect oping countries royalty-free or with very little resistant management, for example, a valuable payment. This can be done when the use of the tool for insect control minimizing pesticide sprays technology will not compete with, or otherwise may be lost through resistance development. interfere with, the main commercial markets. For Monsanto, like many companies, looks for- example, in Costa Rica, Monsanto transferred ward to investing in the development of agricul- technology for use with plantains. In that case ture throughout the world. When intellectual plantains were used only for local consumption property laws are improved, like those in Brazil, and did not compete with bananas. It was a win- companies such as Monsanto will invest in bio- win situation for the company and Costa Rica. technology, manufacturing, and technology Companies have also provided training to de- transfer. AgrEvo David L. Richer and Elke Simon P overty and hunger are not inextricably con- a combination of classical crop protection and nected. Although poor, a subsistence biotechnology will provide the maximum oppor- farmer with sufficient land, stock, and seed tunity for increasing yields and controlling pests will be able to feed his family. What the farmer and diseases. cannot do, however, is feed the increasing num- In the area of classical crop protection indus- ber of landless neighbors. World population is try recognizes the benefits of making its technol- expected to grow from 5.8 billion to about 8.5 bil- ogy available to developing countries, but does lion by the year 2025. How will this vast popula- so with some suspicion. Without strong intellec- tion be fed? tual property rights (IPR) including effective en- The adoption of advanced agricultural tech- forcement of regulations, licensing technology in nology in the industrial world has enabled farm- some developing countries is tantamount to giv- ers there to achieve considerable increases in crop ing that technology away. yields without expanding areas under cultiva- The developing countries, too, are suspicious. tion. Indeed, there is little additional cultivable Although they are eager to receive technology, land available. By contrast, increases in food pro- they fear the technology provider's demands for duction in developing countries have often been adequate IPR to protect that technology. There is achieved, if at all, with limited benefit from sci- a prejudice against IPR; it is widely believed that entific advances, and often by encroaching upon stronger IPR will increase prices, drain currency dwindling precious natural resources. A policy reserves, and place the farmer-and the nation- of "slash and burn" may provide more land for under the control of the multinationals. There is agriculture, but the benefits are temporary and little, if any, basis for these fears, since the per- the environmental costs no longer acceptable. ception obscures the underlying truth that no In the industrial countries we have technol- farmer will pay more for a technology than the ogy that can help alleviate the food problems of benefit it returns. In truth the technology pro- developing countries. At the present time that vider and the farmer will benefit only by trans- technology lies mainly in the area of classical crop ferring technology at an acceptable price. protection, but biotechnology will become in- The divide between those who would provide creasingly important over the next 10 years. How- and those who would receive is not unbridge- ever, biotechnology alone will not provide a able. Technology transfer can be made simpler complete solution to world food shortages, and and more effective, but it will require greater it is anticipated that chemicals will remain im- understanding on both sides. As always the pub- portant in protecting crops from pests and dis- lic sector will be necessary to assist in the bridge eases for decades to come. In fact it is likely that building. 38 Perspectives from Industry: AgrEvo 39 Key Intellectual Property Rights TRIPs is a significant and welcome step toward strengthening patent protection. Patent laws The problems created by negative perceptions of must be further strengthened to permit claims to IPR (particularly patents and data protection) in products, particularly compounds, and to plants, developing countries are discussed below, as are and also to ensure that patent holders can enforce the special problems that are presented by bio- their patents swiftly and with certainty. Proce- technology. We do not pretend to have solutions dural delays and unsympathetic courts often to all of these problems. We do suggest areas enable infringers to continue their abuse of the where we believe that action is advisable-if not patented technology. These actions discourage essential-and where funding by donor agencies further transfer of essential technology. will promote and assist the introduction of the Those countries that have improved their latest technologies into developing countries. patent laws have already seen an increasing num- ber of collaborative efforts between western mul- Patents tinationals and local companies. There have been, for example, an increasing number of European A patent is perhaps the most important IPR in- companies entering into license agreements with volved in technology transfer. A license to make, Chinese companies for the manufacture of agro- sell, or use an invention protected by a patent is chemicals. Why should an improvement in the the simplest and most widely used method of Chinese patent law make such a dramatic transferring technology from one party to an- change? After all, China always was a large mar- other. ket, whether or not it had a strong patent law. Given the importance of patents in providing The cost of developing a new plant protection access to the latest technology, it is perhaps sur- chemical is over US$150 million; the costs of de- prising that the patent system should be so poorly veloping a new transgenic plant are comparable. perceived in developing countries. One has only And the investment does not end there; product to look at the outcry in India and elsewhere when stewardship is required. Companies need to col- the American company, W. R. Grace, sought to lect reports of adverse effects, and to train and obtain a patent relating to the extraction of an advise local farmers, particularly in developing active component of the neem tree. Indian farm- countries, to ensure products are used properly ers had used the leaves of the neem tree for pest and safely. Product stewardship is expensive and control for centuries, but alarmists-and others labor-intensive, and the companies that sponsor with their own agenda-created panic by sug- their products responsibly in this manner must gesting that Grace would stop farmers from us- recover costs in the relatively short time, perhaps ing their old remedies. This was arrant nonsense; 10 years, of patent life remaining after the first no patent can stop a person from continuing marketing of the product (usually in an indus- something he has done before, but that fact did trial country). It should come as no surprise, not halt the attacks against one multinational and therefore, that companies are reluctant to enter the entire patent system. those markets that provide little or no protection It is against this background that the indus- for their products, and thus allow generic manu- trial world has to persuade developing countries facturers to benefit unfairly from the investment to strengthen their patent laws. Progress has been in research and the product stewardship. This made in the past three years, largely as a result was the situation in China under the former law. of the Agreement on Trade-Related Aspects of Companies were reluctant to permit local manu- Intellectual Property Rights (TRIPs); one of a facture without any realistic means of control, bundle of agreements signed in 1994 under the and as a consequence, China was deprived of the Uruguay Round of GATT. TRIPs laid down cer- technology. Now that China has brought its tain minimum requirements for the protection of patent law closer to the European model and rec- patents, and these minima are at last being in- ognized the need for patent holders to be able to cluded, although often reluctantly and with de- enforce their patents, companies from the indus- lay, into the laws of many developing countries. trial world are not only prepared to consider col- 40 Intellectual Property Rights in Agriculture laborative ventures with Chinese companies, but Pesticides (Rome 1988) addressed the issue as are actively seeking them. follows: There is considerable scope for the introduc- tion and development of new products in devel- All data submitted by a company in sup- oping countries. There are also many local needs port of its request for registration of its prod- and problems, often relating to crops. All of these uct should be treated as proprietary, and require research, and often in research stations should neither be divulged nor used to and universities. Research requires investments evaluate the petition submitted by another that companies are prepared to make only where applicant, unless by agreement with the they can see a benefit. Companies are far more owner of the data or unless a period of pro- likely to invest in those countries providing prietary rights to the data has expired.... strong IPR where the results of their investment Apart from the injustice of allowing com- can be protected. petitors to benefit from the use of data to Of course, not all technology transfer projects which they have no right, the consequences are linked to commercial return. In agriculture of such an action would be to discourage, there will always be a need for projects to im- because it is unrewarding, the research and prove the long-term position of poor farmers in development required for the production of developing countries. In this area the support and new pesticides which are needed, for ex- investment of the major funding agencies, such ample, for the control of new or difficult as the World Bank and FAO, play a major role. pests or to overcome resistance. International agricultural research centers (IARCs) are a particularly efficient conduit for Almost all OECD member countries have in- technology transfer. The achievements of all of cluded data protection in their national law, gen- these public bodies can be extended and acceler- erally providing for at least a 10-year protection ated by encouraging the private sector to match period for registration data. Unfortunately, many their investment and to play a role in the projects. developing countries provide no such protection, Industry will, however, need some certainty-in although they still require submission of the data. the form of strengthened IPR-that its funding TRIPs attempts to deal with the issue, but the of projects will not undermine the investment final provision (Article 39.3) dealing with data that has already been made elsewhere. protection became so compromised during its drafting that it has had minimal positive impact Proprietary Registration Data on the protection of valuable data. Although countries bound by TRIPs are required to pro- Crop protection products are subject to market- tect data-holders from unfair commercial use of ing and use approvals by national regulatory their data, these countries are exempted from the authorities. Before a product can be commercial- requirement to keep data confidential where dis- ized, companies must submit health, safety, closure is "necessary to protect the public." That and environmental data to the registration au- exemption is being interpreted by some devel- thorities who will decide on the suitability of oping countries as permitting their regulatory the product for registration and local sale. The agencies to use protected data when considering development of these registration data usually applications by other applicants for similar prod- takes between 5 and 10 years, and the cost of data ucts. In these countries, third parties may access production alone may be as much as US$100 the data, and achieve rapid approval to sell their million. This is a high-risk investment since suc- own products without having made any of the cessful registration and sale of a new product is investments required of the originator. not a certainty. Rapid approval of imitation products may The data provided to regulatory authorities are appear to be to the benefit of the local farmer, a substantial asset, and must be protected against but in fact, it often results in a flow of substan- unfair use by competitors. For example, the FAO dard products with inadequate instruction for Guidelines for the Registration and Control of their use. Thailand is one country without a Perspectives from Industry: AgrEvo 41 proper registration procedure and without data that began research in the early 1980s are only protection. Its market is flooded with cheap, poor- now seeing the results of their research come quality, and potentially dangerous products, to the mnarket, such as the recent introduction whose unregulated use is causing serious envi- of herbicide-tolerant corn, soybean, and canola, ronmental damage. The situation has been insect-resistant corn, potato, and cotton, and hy- recognized by the Thai Government, and in brid canola. This market will expand rapidly in cooperation with the Thai Crop Protection Asso- the coming decade, and the technology will be ciation, the Government is in the process of intro- incorporated into other crops, particularly cere- ducing legislation providing for the registration of als, rice, sugarbeet, and wheat. products and the protection of registration data. Biotechnology holds great promise for increas- This will stimulate the introduction of modern ing food production. However, the science is com- plant protection products in an orderly market. plex, as are the IPR issues. For example, a single From the farmer's point of view, a generic transgenic insect-resistant corn plant may involve manufacturer offering cheap agrochemicals ap- patents on the transgenic plant, the method of pears to have only benefits. Even problems cre- transforming the plant, the genes contained in ated by poorly formulated products or their the plant, the modification of those genes, pro- improper use can be referred back to the origi- moters to initiate the action of the genes, and nator, rather than to the generic supplier who, in markers to ensure that the genes are in place. any event, has no organization to deal with such There may also be Plant Variety Rights. Several problems. The originator, because of self-imposed different companies often own these various requirements of product stewardship, feels IPRs, and unless these companies can reach obliged to incur the cost and trouble of resolving agreement-and freedom to operate-any one of the situation, another benefit for the farmer. them can block the sale of the plant. Where then is the disadvantage? As companies seek to include more traits into Without adequate protection for their data, each plant, gaining freedom to operate will be- companies will either not market their latest come even more complicated. The technology- products in certain countries, or will defer entry based companies have recognized the problem, until the products have become generic. Where and considerable activity has lead to the restruc- a company has no market, it is unlikely to estab- turing of the seed industry and the evolution of lish or invest in local research stations and dis- the crop protection industry to a crop produc- tribution systems, or to undertake research into tion industry. In the short term these changes will the needs of local crops, terrain, and climate, or not assist the developing countries, but they do to enter into collaboration with local research in- emphasize the need for the creation of indigenous stitutes and universities. The result is that the high-technology seed industries. This should be farmer has no access to the latest technology, and a long-term development aim for all developing scientific education and know-how is not passed countries, and an aim that can be assisted by the to those working on the ground who would im- public sector. prove the farmer's situation if they could. Seed is the vehicle by which this new technol- Biotechnology has as yet made little impact on ogy will be delivered. Seed development has long developing countries. However, when it does, it been a goal of the IARC's classical breeding pro- is likely that the regulatory authorities will re- grams, which can now be improved and ex- quire data on any new technology before sales panded with the powerful new biotechnological are permitted. If these data are not protected, the tools-if these can be transferred to the IARCs technology owner will be reluctant to bring the through collaborative research with the private new technology to developing countries, where sector. Collaborative research agreements should it has potential for considerable benefit. provide the IARCs with the latest developments in biotechnology and with training of personnel, Biotechnology but cooperating companies will require any re- sulting intellectual property to be protected. Such The application of biotechnology to agriculture collaborations have already proved to be effec- has taken longer than anticipated. Companies tive. For example 42 Intellectual Property Rights in Agriculture 1. AgrEvo has entered into a collaboration ticide sprays. However, these tools will not avoid agreement with an Indian research institute the potentially serious problem created by farm- to evaluate specific natural products and ers saving seed as they have always done in the their use in agriculture. AgrEvo provides past. The protective traits in saved seed will, know-how and funding. The Indian insti- without quality control and by crossing with non- tute has the right to commercialize the re- genetic crops, become weakened and lost. The sults of the collaboration in India, and growth of resistant populations of pests and dis- AgrEvo has the right to commercialize eases will be encouraged. This is a problem that them in the rest of the world on the basis of can be alleviated by incorporating the technol- shared profit. ogy into hybrid seed, which has the added ad- 2. AgrEvo's affiliated company, Plant Genetic vantage of giving higher yield. However, hybrid Systems (PGS), has collaborated with the seed must be purchased afresh each year, and in International Rice Research Institute (IRRI) poorer areas, there will be considerable opposi- and the International Potato Center (CIP) tion, even if there is money available, to purchas- in joint R&D projects funded, respectively, ing seed each year. There is a role here for the by the Rockefeller Foundation and the Bel- World Bank and the IARCs. gian AID Agency. PGS provided the par- Much of the responsibility for maintaining the ties with access to its state-of-the-art efficacy and purity of genetically altered plants, technology, and the projects were designed and providing the necessary product steward- to develop this technology and know-how ship, will lie with the breeders and seed distribu- to yield results that were of practical use to tors. The technology providers will, of course, both parties. The commercial rights to these have a major responsibility, although a pres- results in industrial countries were retained ently confused one, since a seed may contain by PGS, and both parties shared the com- technology from several different providers. mercial rights for the developing countries. Where the technology is protected by adequate The IARCs can make germplasm, which has IPR-patents or data protection-so that there is been improved with biotechnology and devel- a possibility of recovering some contribution to oped as a result of such collaborations, available the investment in their technology, the technol- to the NAROs. Direct funding from the public ogy providers will have an incentive to provide sector will attract greater interest and involve- product stewardship as they do now with crop ment of the private sector in these cooperative protection compounds. ventures. The possibility of obtaining patents for Brumby, Pritchard, and Persley (1990) have the results of such projects through strengthened succinctly described the role of the IARCs and patent laws will be a further incentive. the World Bank in furthering the use of biotech- It is necessary to add a word of caution. Even nology: when biotechnology is successfully transferred to the developing countries, a further problem Because the costs of research in biotechnol- remains. Genetically transformed plants must be ogy are considerable, many of the biologi- marketed and cultivated with care, and as with cal processes involved and the novel genetic classical crop protection, biotechnology will need material they have produced are protected product stewardship, and particularly, local man- by patent rights that essentially extend the agement and advice. Without orderly marketing form of commercial protection already well and use, the biotechnological traits will be rap- established for crop breeders via plant va- idly lost or weakened, populations of resistant riety rights. Research groups in developing pests and diseases will develop rapidly, and the countries will need interaction and collabo- benefits of the new technology will be lost. ration with the private companies that are Techniques are in place for managing resis- financing much of the current R&D. This tance. In the case of insects, the use of refuges or will involve emphasis on partnership agree- the use of multiple Bacillus thuringiensis genes will ments in which the advantages of collabo- be important tools in resistance management, as ration are clearly understood by both parties will the occasional use of complementary insec- to the agreements. Much more joint R&D Perspectives from Industry: AgrEvo 43 among universities, public research insti- cessive quarantine laws, import restrictions on tutes, and the private companies of devel- processing and storage equipment, high tariffs, oping and industrial countries appears and discriminatory seed certification legislation likely to provide a promising approach to all need to be addressed. But finally, and inevita- getting biotechnology into member coun- bly, the availability of long-term hard currency tries of the World. financing will be essential. The arguments for such joint R&D have re- Conclusions cently been demonstrated in Colombia. It has been reported there that a network of agricultural We have attempted to provide a basis for discus- research institutions has developed a genetic sion rather than to draw simplistic conclusions. block against the spread of a new barley rust with The subject is certainly complex, but it appears the potential to cause serious yield loss. This to us that the World Bank sponsoring collabora- block was achieved in five years. Traditional tion between the public and private sectors will breeding or the use of farmer-saved seeds would encourage the transfer of technology for the ben- have taken tens, perhaps hundreds, of years to efit of agriculture in developing countries. It will achieve the same end. be further encouraged by the strengthening of As policy analysts have maintained, and as the IPRs, particularly by providing for the possibil- experience of AgrEvo and others confirms, the ity of patents for products and plants, for the transfer of biotechnology to developing countries more certain enforcement of patents, and for ad- can be optimized by private companies working equate periods of protection for registration data. directly with IARCs, and with local institutions. IPR further provides an incentive for proper International funding agencies should give seri- stewardship, necessary to provide effective and ous consideration to the direct financing of safe products and, in the case of transgenic plants, projects between the private sector and IARCs, maintain that efficacy across many generations. universities, and the like to enable them to be- With greater understanding of the issues and come a conduit through which the new technol- with the aid of the World Bank, the public and ogy can flow to the developing countries. private sectors can help ensure that two ears of National governments must also take some corn can grow where one grew before. responsibility and should be urged to assist in the process of introducing the new technologies. Reference In addition to strengthening patent and data pro- tection laws mentioned, governments could take Brumby, P., A. Pritchard, and G. J. Persley. 1990. measures to encourage the development of an "Issues for the World Bank." In G. J. Persley, ed., indigenous seed industry and assist in the pro- Agricultural Biotechnology: Opportunitiesfor Interna- cess whereby germplasm containing the new tional Development. Wallingford, Oxon, U.K.: CAB biotechnology will flow to the farmer. Easing ex- International. 4. Perspectives from National Systems and Universities Brazil Maria JoseAmstalden Sampaio T echnology is increasingly important to the the result has been a complicated web of owner- maintenance of international competitive- ship rights. ness and to national prosperity. The same Brazil recently found itself in the middle of is true at the company level (Chinen 1997). Tech- these confusing but important changes. On the nology development has become an international one hand the government had committed to a business, so that no nation or company can real- strengthening of national IPR law. On the other istically expect to be self sufficient in technology, Brazil is a major agricultural nation that buys and including agricultural technology. These factors, sells technologies developed by the public sec- in turn, have intensified the significance of tech- tor. Internal and external economic changes nology transfer, and of intellectual property forced rapid adjustments in long-standing poli- rights (IPR). In the past, doubts were expressed cies and practices in agriculture. The status and about the acquisition of technology by develop- effects of these changes are outlined below. The ing countries from more advanced nations. Now, short and longer term needs to provide an effi- however, it is clear that developing countries cient and equitable transformation to a system must acquire some of those technologies neces- with enhanced property rights are reviewed, in sary for their development, recognizing that in- the context of an agricultural system long accus- house R&D can be much slower and more costly. tomed to public property resources. A particular technology can often be obsolete by the time it is ready for commercial applica- IPR Legislation in Brazil tion, particularly in fast-moving fields such as biotechnology. Brazil has a long association with IPR. Brazil was The extent to which IPR can be beneficial to a founding member of the Paris Convention in science and its development depends very much 1883. The first "Brazilian Law" related to intel- on the way it is interpreted and implemented lectual property was approved in 1809. More re- within the context of national laws. In agricul- cently, an Industrial Property Code, approved ture/agribusiness any acquisition, transfer, ad- in 1971 and in use until 1996, restricted the rec- aptation, or joint development is and will be more ognition of rights for pharmaceutical and food confused until the issues, rules, and interfaces products and, not surprisingly, for biotechnol- become clearer to all parties involved. For de- ogy-derived ones as well. In 1993 Brazil ratified veloping countries IPR issues could become a the Convention on Biological Diversity (CBD). frightening "bottleneck" on the way to develop- ment. All the steps of the biotechnology devel- Patents opment process involve inventions where IPRs can be obtained in many countries. Because of Following the international negotiations leading the broad scope of claims in "umbrella" patents, to the signing of the WTO (GATT)/TRIPs Agree- 44 Perspectives from National Systems and Universities: Brazil 45 ment in late 1994, the National Congress gave UPOV-91 Act, and specifies the free exchange (but more attention to a proposed new law. During not the selling) of seeds among small farmers' 1995 public hearings took place with good local communities involved in Government-supported press coverage. This lead to the new Industrial programs. Both articles present a challenge to Property Code being approved in May 1996. Law implement. Time and practice will demonstrate No. 9.279, also known as the "Patent Law," be- how best to manage "essential derivation," and came fully applicable in May 1997. The new law the best way to control seed multiplication and gives legal protection to inventions related to exchange (Sampaio 1998). The UPOV Council pharmaceuticals, food processes, and biotechnol- officially approved both modifications (with a ogy (Barbosa 1998). few others) in April 1998, and Brazil requires only The law excludes plants and animals and natu- the approval of the National Congress to become ral biological processes, but allows for the pat- a member of the UPOV Convention. By late 1998, enting of transgenic microorganisms that meet nine species could be protected: maize, sorghum, the three patentability requirements of novelty, rice, bean, wheat, cotton, potato, soybean, and inventiveness, and industrial application. sugarcane. Transgenic microorganisms means those organ- Scientists and business representatives founded isms, except parts or the whole of plants and ani- BRASPOV, the Brazilian Breeders Association, to mals, that express a given characteristic that help implement the Cultivar Protection Law and would not occur under natural conditions, un- establish breeders' legal rights. Many groups are less due to human interference in its genetic com- getting together to develop the appropriate de- position. There remain many important issues scriptors for cultivars of different species such as related to the interface of biotechnology and eucalypts, pines, ornamentals, vegetables, and chemistry that require clarifying decisions by fruit trees. This will help the national service in- INPI, which is linked to the Ministry of Industry, crease the list of protected species. Commerce and Tourism. In April 1998 the Brazilian Government pub- Other Legal Developments lished Decree No. 2.553 establishing the maxi- mum percentage of compensation a potential Although not directly linked with IPR, but cer- inventor can receive from a public sector em- tainly of major importance to the legal framework ployer. Every public institution must now pro- encompassing biotechnology and agriculture/ vide up to 33 percent (1/3) of the earnings from agribusiness, the National Congress approved a the licensing of a patent to the inventor. Imple- Biosafety Law (No. 8.974) in 1995. Congress is mentation should follow soon, and a positive ef- also discussing a proposal to regulate access to fect can already be observed: the measure is biological resources ("Biodiversity Law"), which prompting scientists to speculate about better will also take into consideration the fair and eq- ways to help take a new invention to market. uitable sharing of benefits with holders of tradi- tional knowledge. One of the articles of the Plant Breeder Rights proposal that relates to IPR says: "no patent pro- tection will be awarded to processes or products Since the "Patent Law" excludes plants, Law No. originated from accessions taken from the Na- 9.456 was approved in April1997. It became fully tional Genetic Patrimony in disregard of the active in December 1997, following publication Law." These and related developments are high- of the regulating Decree No. 2.366 and establish- lighted in box 4.1. ment of the National Service for Cultivar Protec- The application of agriculture-related IPR is tion (SNPC), linked to the Ministry of Agriculture new to Brazil, compared with more than 40 years and Food Supply. of experience in industrial countries. A less than The Cultivar Protection Law was prepared in perfect implementation is to be expected in such accordance with the UPOV-78 Act, with two a short period of time. Some of the problems are major differences. It provides protection to essen- related to a lack of specialized human resources tially derived varieties in accordance with the and related infrastructure. 46 Intellectual Property Rights in Agriculture property rights. When the Patent Law is passed, Box 4.1 IPR and related legislation being private investmentby pharmaceutical companies discussed or in preparation is expected to increase dramatically. Law Project No. 306-Access to Biological Re- A similar trend has been observed in the Bra- sources and Associated Traditional Knowledge- zilian seed industry. Following approval of the submitted to Congress in November 1995 Cultivar Protection Law and the new Patent Law, many of the national private breeding programs Project for a New Seed Law-submitted to Congress are being absorbed by the multinational compa- in 1998 nies. It seems only a matter of time before more Law Project for the Access and Use of Human Ge- investment by private industry will take most of netic Resources-to be submitted to Congress be- the commodity breeding programs away from fore 2000 government-funded institutions. Effects on the country's agriculture productivity and competi- Law Project for the legal recognition of Traditional tivns anduthe maneace onvestmetit Knowledge Rights-to be submitted to Congress be- poue cultie adated o ifferent to fore 2000 produce cultivars adapted to different ecosys- tems, remain to be seen. Environmental impact must be carefully monitored as well. One of the justifications given by multinational An Experience to Share companies for the acquisition of breeding pro- grams and related businesses is the need for ver- During the past three years a group of scientists, tical control of the production chain to secure the policymakers, and more than 10 Ministry repre- ownership of genes and processes. A parallel ex- sentatives (designated as "GIPI"-the Inter-Min- planation could be the need to acquire control of isterial Group for Intellectual Property) has been selected tropical germplasm to permit the intro- meeting to prepare IP law projects and related duction of proprietary genes in a better-adapted policies.' Overlaps have been identified between genetic background. legal aspects of the TRIPs Agreement (WTO), Preliminary negotiations are taking place be- CBD and its national implementation phase in tween private multinational companies and gov- relation to patent protection, cultivar protection, ernmental agriculture-related institutions biosafety and biotechnology, biological diversity, represented by the larger universities and by and indigenous knowledge access. The group has EMBRAPA. Partners have little experience in this also been able to make a productive link between new approach, and it will be some time before the legislative and the executive levels of the market challenges can accommodate all in- decisionmaking in the country, which has al- terests. The national seed companies that have lowed for a faster advance in the implementa- not yet been taken over by the multinationals (a tion of IPR-related policies. Because of in-house trend that is rapidly changing the face of the seed participation during the formulation of the poli- market) feel they are going to lose ground, and cies, scientists and policymakers are finding it that it is only going to get worse with the incom- easier to reproduce the information in their own ing new genes made available through biotech- institutes. As items are discussed and approved, nology inputs. The multinational companies have seminars and workshops and the general media a strong interest in the growing Brazilian mar- are helping to disseminate the information. ket, as a window to Mercosul countries (economic bloc formed by Argentina, Brazil, Paraguay, and Effects to Date Uruguay), wanting to secure their positions in a fast and aggressive manner. Partnerships and Excessive market protection was one of the key joint ventures will have to be analyzed as new elements restricting pharmaceutical sector devel- cultivars are launched and grown in the next sea- opment during the 25-year absence of patent pro- son. Brazilian farmers are eager to have access to tection. It was also expected that national firms the newest technology available in order to re- would build up internal capacity unfettered by main competitive. Perspectives from National Systems and Universities: Brazil 47 IPR at EMBRAPA breeding programs (more than 80 species), the review of ongoing contracts with the private seed EMBRAPA's (Empresa Brasiliera de Pesquisas industry, and analyses of the licensing of biotech- Agropecuarias) "Institutional Policy for the Man- nology tools already in use by research teams. agement of Intellectual Property," published in Most tools currently in use are controlled by im- 1996, is summarized as follows: proper material transfer agreements (MTAs), in- * EMBRAPA shall maximize IPR use through the cluding those allowing only for research use, and transfer or licensing of its proprietary technol- which have no provisions for possible future ogy, processes, and products (cultivars, soft- commercial use (see examples in table 4.1). This ware, CD, books, periodicals) but without work should be advanced through the help of compromising its social mission "local" IPR Committees (CLPIs), created during * EMBRAPA shall seek legal protection for the 1997 by all of EMBRAPA's 36 Research Units. technologies, processes, and products derived Because of the diverse nature of EMBRAPA's re- from its research program, giving credit to in- search program, however, it has been difficult to ventors when they are its own employees train personnel fast enough. Units are scattered * EMBRAPA shall authorize the use of its pro- throughout the country and the issues involved tected assets through a royalty-free license only with IPR implementation are complex. In May when its social commitments are in jeopardy, 1998 EMBRAPA decided to create a centralized and then only on approval of the Intellectual unit, similar to the intellectual property offices Property Committee commonly found in American universities. By * EMBRAPA Research Units shall not release September 1998 the Secretariat for Intellectual a new cultivar or disclose any process or prod- Property was fully functional. It will serve as the uct without a decision by the Intellectual technology acquisition/transfer, negotiating, and Property Committee regarding the potential, licensing structure for those processes and prod- convenience, and opportunity for IPR pro- ucts that have any interface with IPRs owned by tection. EMBRAPA or by third parties. A clause of EMBRAPA's Genetic Resources While all these changes are taking place, Policy, which is being prepared to complement EMBRAPA has been presented with proposals the Intellectual Property Policy, clarifies that from private multinational companies interested EMBRAPA will not claim ownership of basic in introducing and expressing their proprietary germplasm accessions received from other coun- genes in the "elite" commodity cultivars (soy- tries and held in trust for conservation and re- bean, cotton, corn, and bean) owned by EMBRAPA. search purposes. Farmers, long accustomed to having access to the To implement the IPR policy EMBRAPA cre- latest technology, have been pressing EMBRAPA ated a special Intellectual Property Committee to launch cultivars containing the new transgenic (CPIE). It meets twice yearly to deliberate inter- traits loudly announced abroad. In addition to nal policies and other IPR issues related to pro- the new intellectual property rules, EMBRAPA cesses, products, and technologies coming out of must also comply with biosafety requirements. the research pipeline. A coordinating secretariat To comply with the Biosafety Law those EMBRAPA maintains an electronic mail link with members. Research Centers working in modern genetic During the initial phase, CPIE has been prepar- manipulation (transgenics) must form a special ing rules for the functioning of laboratories, de- Internal Biosafety Committee (CIBio) and apply ciding on the need for confidentiality in projects, for the Biosafety Quality Certificate (CQB). The grant applications, and with external personnel latter is necessary to qualify the laboratories to such as ad hoc consultants, grantees, undergradu- receive internal and external financial support. ate and graduate students who develop joint re- By the end of 1998, 16 research centers had ac- search projects, international consultants, and tive CIBios. visitors. The value of EMBRAPA's "dominating" culti- New challenges include the urgent prioriti- vars in the seed market has made negotiating the zation of EMBRAPA's large domestication and use of a few herbicide genes with multinational 48 Intellectual Property Rights in Agriculture Table 4.1 Proprietary technologies being used by EMBRAPA, June 1998 Form of Commercial use; Specific tool (examples) protection Research permission possible constraints CaMV135S Patent* License under negotiation Expected to be different for differ- rent shares of the market Gus marker gene Patent* License under negotiation License under negotiation B. thuringiensis genes Patent License under negotiation To be negotiated Coat protein gene for bean Patent deposited No written agreement N.K. Not anticipated Coat protein genes for Patent License under negotiation Not anticipated for poor farmers. papaya To be negotiated for other markets RFLP marker genes Patent MTA Unclear. To be negotiated Kanamycin marker Patent* N.K. N.K. Hygromycin marker Patent* License under negotiation Not anticipated Imidazole gene Patent Research contract License under negotiation Glyphosate gene Patent* Research contract License under negotiation Glyphosinate gene Patent Research contract License under negotiation Fungal resistance genes N.K. MTA To be negotiated Nematode resistance gene N.K. MTA under negotiation To be negotiated Agrobacterium Patent* N.K. N.K. To be negotiated transformation system Biolistic transformation Patent* No written agreement Expected for export crops. To be system negotiated N.K. - not known. *Patenting situation in Brazil still not made clear by INPI. Pipeline under analysis. companies relatively straightforward. Others re- of the protected cultivar, are raising questions lated to pest resistance and nutritional quality are among researchers and managers. Each company under discussion. Each contract, nonetheless, is is reacting differently to different proprietary taking many months to develop because of the traits, with the soybean business serving as the situation. The building-up of mutual confidence first model for negotiation. is an important step that takes time and effort. EMBRAPA, by creating an alternative transfor- Companies are preparing for commercial release mation protocol for Dicotyledonae plants through which, in the case of transgenic plants, will start its Genetic Resources and Biotech Research Unit in 2000-01. It is impossible to predict how these (CENARGEN), produced a technology "bargain- biotechnology-driven traits will be managed by ing" chip that has changed the course of many Brazilian farmers. One of the critical challenges negotiations. As a result EMBRAPA and possibly forEMBRAPAwillbe establishing royalty shares other national programs should invest in the and licensing agreements. The interfaces of the development of their own genes/processes port- intellectual property laws, one regulating the folio to gain easier access to proprietary technol- patent of the gene and another regulating the use ogy owned by third parties. Many companies Perspectivesfrom National Systems and Universities: Brazil 49 have recently shown interest in joint searches for IPR and the CGIAR new genes/molecules/microorganisms to help control tropical diseases and pests. Negotiations During the May 25-29, 1998 CGIAR Mid-Term are being delayed because of the lack of appro- Meeting (MTM'98) held in Brazil, the Consulta- priate legislation. tive Group on International Agricultural Re- Implementing the IPR Policy within EMBRAPA search issued the International Research Centers' has been a major challenge. The new legal back- Position on Genetic Resources, Biotechnology ground requires a dramatic change in the man- and Intellectual Property Rights. Under the Guid- agement of the Corporation's human resources. ing Principles (MTM'98 internal document) for There are new opportunities and chances to the "Intellectual Property Protection of Desig- stimulate scientific production through the dis- nated Germplasm and Center Research Prod- tribution of royalties derived from proprietary ucts," the document mentions that materials supplied technology. The new legislation, however, inter- by the IARCs, whether designated germplasm2 or the feres with researchers' deeply rooted behavioral products of the IARCs' breeding activities, may be used values, such as their need to publish and make by recipients for breeding purposes without restric- readily available all research results. Keeping tion. Recipients, including the private sector, may visitors away from laboratories and caring about protect the products of such breeding through plant the confidentiality of some sets of data have variety protection that is consistent with the provi- caused tremendous changes in the daily routine sions of UPOV or any other sui generis system, and of researchers. A few scientists have easily that does not preclude othersfrom using the original jumped on the new bandwagon, but for most it materials in their own breeding programs. That state- will be some time before they can fully adjust. A ment is very important for a country such as strong capacity-building program will help de- Brazil, which has exchanged multiple germ- velop a better awareness among researchers of plasm accessions with the IARCs over the past the requirements and benefits of the new IPR 25 years. Brazil has not only based its intense program. breeding program on plant material originat- EMBRAPA determined some years ago that ing from many different parts of the world, but, advanced biotechnology, and the development as well, has contributed a large number of ac- of transgenic crops, microorganisms, and even cessions to the system. domestic animals, would play a central role in A related matter is the Centers' position state- its goal of providing for increased sustainability ment on patenting, which reads: cells, organelles, and competitiveness of agriculture/agribusiness genes or molecular constructs isolated from material in Brazil. This would, in turn, contribute to the distributed by IARCs may be protected by recipients country's development and poverty alleviation. only with the agreement of a given Center, and that The increasing use of proprietary technology in the Center will only give its approval after consulta- agricultural R&D requires careful case-by-case tion with the country of origin of the gernplasm where analysis. this is known or can be readily identified. The state- Although responding to the new IPR scenario, ment adds that the consultation would include EMBRAPA continues to study and produce non- consideration of an appropriate benefits sharing proprietary technologies that will be transferred agreement, whether bilateral or multilateral. This to farmers and other clients without constraint. new policy is necessary to bring the CGIAR cen- In fact most of EMBRAPA's technologies fall into ters in line with the Convention on Biological this category. Maintaining trade secrets in agri- Diversity (CBD) which has been signed and rati- culture is inappropriate in most cases, because fied by most of the CGIAR members and part- major research projects are not impacted by the ner countries. Nevertheless, its implementation IPR ruling (for example, soil conservation and may hinder the immediate investment in the de- management, planting and harvesting methods, velopment of genes that could be screened and animal feeding programs, integrated pest man- identified in designated germplasm samples. A agement, and participatory breeding of social necessary clarification is the application of this crops, such as cassava). rule to samples obtained before the CBD came 50 Intellectual Property Rights in Agriculture into force, and to what extent it will interface the granting of funded projects that could with the ongoing discussions related to the bring worldwide experts to teach formal FAO Undertaking. courses to speed up the introduction of the IPR system. Conclusions 2. Dissemination of IPR concepts and proce- dures through workshops, short courses, The introduction of IPRs in the agricultural sec- and seminars in Brazil, and through intern- tor in Brazil is quite recent, therefore there is little ships in patenting offices that support such awareness of IPR issues among researchers, ad- training. This expertise related to biologi- ministrators (managers), and national companies cal matter is not available in Brazil at linked to agriculture/agribusiness, or in any present. Recent experience has shown that other areas of science and technology and indus- even the well-established private patenting try in Brazil. Multinational companies are feel- offices located in Rio de Janeiro and in Sao ing their way around to find out how they can Paulo are only beginning to look at the new operate under the new legal regime. The Brazil- legal framework. ian public has little understanding of the impor- 3. Promotion of better understanding and ef- tance of IPR and, as a consequence, is not yet ficient use of IPR as an important tool for organized to deal with it. According to Briggs technological development. (1998), the role of the public sector on the impact 4. Encouragement of the use of information of intellectual property laws could be substan- contained in patent documents as an instru- tial, but government policies on these issues are ment for technological forecasting. still unclear, in industrial and in developing coun- 5. Establishment of offices in research insti- tries alike. Actions urgently needed in Brazil, tutes and universities to deal with IPR and many of which would benefit from the assistance to promote innovation. of the World Bank, include (G. E. Brandao, Na- 6. Modernization of the National Institute tional Council for Scientific and Technological for Industrial Protection (INPI) and the Development (CNPq), pers. comm.) (box 4.2): National Service for Cultivar Protection 1. Development of national competence in (SNPC). IPR, involving people at all levels, through 7. Modernization of IPR capacity in the judi- cial system through courses and seminars. 8. Establishment of IPR-related research ca- Box 4.2 Suggested role for the World pability in the country. Bank 4.2 Supported rofIPRile menathWor 9. Development of a culture and incentive Bank in support of IPR implementation mcaim icuigtelglfae mechanisms (including the legal frame- 1. Organize and finance specific training workshops work) for venture capital that would allow and expert panels with the participation of devel- for the "incubation" of technologically oping country researchers. based businesses. 2. Support the participation of developing country As a short-term answer for immediate prob- researchers in WIPO and UPOV training courses. lems EMBRAPA would welcome the continua- 3. Support in-service training in IPR offices in the tion of the studies being developed by ISNAR USA and Europe. (Cohen and others 1998) and recently presented 4. Encourage the implementation of a specialized ( electronic data bank to facilitate access to IPR- to the CGIAR's IPR Committee. Many genes and related issues. processes were identified as being in use by 5. Finance IPR-related studies to clarify the use IARCs and in need of negotiation with owners of protected genes and processes in relation to of the technology to be used and distributed to the TRIPs Agreement and WIPO/WTO rules es- NARS (Cohen, Falconi, and Komen, this volume). tablishing the "freedom to operate" territory of If the information acquired by the centralized the most common assets used by developing Advisory Unit to be created by the CGIAR (as countries. 6. Promote the preparation of model MTAs and other recommended during MTM'98) could also be technology transfer contracts. made available to help the NARS, the implemen- tation of issues related to IPR might be greatly Perspectives from National Systems and Universities: Brazil 51 advanced. An expert consultation on matters of Notes contract, intellectual property, and competition law could be held electronically. Agreements with 1. GIPI-the Inter-Ministerial Group for Intellec- on-line databases, which, while presently avail- tual Property is coordinated by the Civil House of the able through the Internet, are not affordable by Presidency of Brazil and includes representatives of most research institutes, could serve as a strong the Ministry of Science and Technology, Ministry of encouragement for the use of the intellectual Agriculture and Food Supply, Ministry of Justice, Min- property system and development of the coun- istry of Industry, Commerce and Tourism, Ministry of try's competence. The discussion of new policies Navy Affairs, Ministry of Foreign Affairs, Ministry of torbesestablishedwithnAmericasn oruniewrsities, re Environment and Legal Amazon, Ministry of Health, Ministry of Institutional Reform, Ministry of Economy garding the development and licensing of pro- and their linked institutes such as EMBRAPA (Agri- prietary products and processes by Brazilian culture), FIOCRUZ (Health), FUNAI (Indigenous researchers supported with Brazilian grants, People-justice), INPI (Industry and Commerce), and could also greatly stimulate the development of IBAMA (Environment). new ventures. 2. "Designated Germplasm" is a list of germplasm EMBRAPA also welcomes the possible devel- accessions, to be reviewed every two years, included opment of a pilot effort to discuss public-private in the Agreement signed on October 26,1994, between relations with regard to technology transfer and each of the international agricultural research centers IPR issues, involving the World Bank, the private of the CGIAR system with the United Nations Food multinationalPcompaRies), and Agriculture Organization (FAO), which placed initiative (agricultural multinational companies), germplasm collections maintained by that Center un- and some developing countries, that could be der the auspices of FAO. done on a matching grant basis. Finally, as MTAs and other licensing agree- References ments become a part of the everyday life in pub- licly funded agricultural research institutions, the Barbosa, D. B. 1998. "Uma Introduqdo a Propriedade development of formal standard formats will Intelectual," vol. II. Editora Lumen Juris. help in the harmonization of basic terms between Briggs, S. P. 1998. "Plant Genomics: More than Food different parties. This should include the private for Thought." Proc. Nati. Acad. Sci. USA 95 (March): sector, helping to guarantee the continuation of 1986-88. R&D projects that depend on the use of propri- Chinen, A. 1997. "Know-How e Propriedade Indus- etary technology. Some of the clauses that have trial." Editora Oliveira Mendes. been proposed for MTAs by governmental re- Cohen, J. I., C. Falconi, J. Komen, and M. Blakeney. search institutes and private companies, for ex- 1998. "Proprietary Biotechnology Inputs and Inter- ample, deprive the researcher of any use of the national Agricultural Research." Briefing Paper 39. technology in question except for research pur- ISNAR, The Hague. pose.Other clauses claim ownership of any pro- Lee, M. 1998. "Genome Projects and Gene Pools: New poses. Or clauselope wie use of the Germplasm for Plant Breeding?" Proc. Natl. Acad. cess or product developed with the use of the Sci. USA, 95 (March): 2001-04. technology. Such trends in science may acceler- Sampaio, M. J. A. 1998. "Propriedade Intelectual de ate dangerous precedents that can conceivably Plantas: a Nova Lei de Protecao de Cultivares e suas culminate in partitioning and protecting all of the Decorrencias Imediatas." BIOWORK, A. Borem, ed. isolated bits of "useful" biology (Lee 1998). A Vicosa, MG, Brasil. wise balance is needed. India Jayashree Watal I ntellectual property rights (IPRs) relevant to the patenting of plants, animals, or even micro- agriculture are identified and the IPR laws organisms or of biotechnological processes relat- covering those rights are described, includ- ing to their production. ing India's international obligations to revise its Presently, biotechnology appears to hold the IPR laws.' Public debate in India on the contro- most potential for productivity-improving ad- versial IPRs, the status of applicable legislation, vances in agriculture. Biotechnology R&D is and prescriptions for public policy on IPRs and largely concentrated in the hands of large multi- agriculture in India are analyzed. Other dimen- national enterprises in the United States, Europe, sions of the current IPR situation in India are dis- and Japan. It is in this particular field of technol- cussed in an appendix to this paper by S. M. Ilyas. ogy that proprietary rights over knowledge are increasingly important. Patents in the United IPRs Relevant to Agriculture States are granted for animals and for human gene sequences, if the criteria for patentability Several IPRs are particularly relevant to agricul- are met. The case law in the United States devel- ture. These are patents, plant breeders' rights, oped rapidly since the early 1980s following the trademarks, geographical indications, and trade grant of a patent for a modified bacteria that ate secrets. oil spills. This gave rise to the patenting of natu- Patents are probably the most important be- rally occurring microorganisms, if a new, inven- cause they provide, wherever they are available, tive, and useful technical intervention was the strongest protection for patentable plants and included. Another landmark case (1987) was the animals and biotechnological processes for their patent granted to the Harvard oncomouse, use- production. Patents give the holder the right to ful in research cancer. The European Union has prevent third parties from making, using, or sell- been slower to allow the patenting of plants and ing the patented product or process. Patented animals due, in part, to opposition from environ- inventions must, however, be publicly disclosed mental activists in the European Parliament. This in the patent documents. These provide a source impasse has now largely been resolved with the of technical information enabling researchers imminent finalization of the new Biotechnology to develop improved products or services. Directive by the European Parliament, authoriz- Products must meet the criteria of patentabil- ing the grant of patents to plants and animals ity: (a) novelty-that which is not known in the with limited exceptions. prior art; (b) nonobviousness-that which in- Many countries have developed plant breed- volves an inventive step; and (c) usefulness-that ers' rights (PBR) to reward conventional plant which is industrially applicable. With some dif- breeding efforts. The scope of such sui generis ferences, the patent laws of all countries follow protection is weaker than patent protection, be- these criteria. However, not all countries allow cause it does not include the right to exclude third 52 Perspectives from National Systems and Universities: India 53 parties from making or using the protected ma- tected as geographical indications. The advan- terial. The right holders can only prevent third tage in such protection is that it is not time- parties from selling or commercially exploiting limited, unlike the case of plant patents or PBRs. the protected material. The criteria used to grant Commercial benefits, however, can be derived such protection are also weaker than those used only when the name becomes reasonably well to determine patentability: (a) distinctness- known. distinguishable from earlier known varieties; Trade secret protection can be used by the ag- (b) uniformity-display of the same essential ricultural sector to protect hybrid plant variet- characteristics in every plant; and (c) stability- ies, for instance, in the form of pureline stocks the retention of the essential characteristics on and/or crossing used, thus allowing a certain reproduction. The novelty and nonobviousness degree of appropriability even in countries that requirements for patentable inventions represent do not recognize PBRs. Trade secrets can be pro- a higher standard. PBR provides protection from tected against third party misappropriation direct copying and encourages breeding efforts through laws relating to unfair competition or to in the private sector. Historically, in most coun- restrictive trade practices or to contract law. In tries, plant breeding was conducted by the pub- the United States trade secrets are protected by lic sector or by international research institutions. State and not Federal laws. Protection of trade The institution of PBRs is relatively recent and secrets is not limited in time but, unlike patents was meant to encourage research by private or PBRs, does not apply if the secret is discov- breeders. ered independently by a third party. The advan- Marks used in commerce can be applied to tage at least to the owner is that, unlike patents, agricultural and industrial products and services. there is no obligation to disclose the inventive or For instance, trademarks are used to market seeds creative ideas to society, nor are there any appli- or spraying services. The essential purpose of a cation formalities. trademark is to distinguish the goods and ser- Some industrial countries protect test data sub- vices of one enterprise from another, thus mitted for obtaining marketing approval of agri- preventing deception of the consumer. Such pro- cultural chemicals (pharmaceuticals are also tection prevents the wrongful use of commercial given such protection in these countries) from use marks and is not limited in time, although regis- by third parties for a limited period of time, gen- tration may have to be renewed from time to erally 5 or 10 years. Such protection gives exclu- time. Almost all countries protect trademarks. sive marketing rights to the originators as an Geographical indications, including appella- incentive to recover the investment made in test- tions of origin, are marks associated with prod- ing such agricultural chemicals. Although devel- ucts originating in a country, region, or locality oping countries also require the submission of where the quality, reputation, or other character- such test data, no exclusivity is conferred on the istics of the product are essentially attributable originator for any period of time. to its geographical origin. Most known geo- graphical indications are applied to agricultural Intermational Intellectual Property Law products, as in the case of wines and spirits. Pro- tection of such marks prevents third parties from Until recently the treaties administered by the passing off their products as those originating in World Intellectual Property Organization (WIPO) the given region. Famous examples are "Cham- constituted the bulk of the international law on pagne" for sparkling wine and "Roquefort" for intellectual property. The relevant treaties for cheese from areas of these names in France, or IPRs related to agriculture are the Paris Conven- "Darjeeling" for tea from this district in India. It tion on the Protection of Industrial Property (1883 is not necessary for these indications to be geo- as revised up to 1967), and related treaties that graphical names, as in the case of "Feta" for deal with areas such as patents, trademarks, ap- cheese from Greece or "Basmati" for rice from pellations of origin, or unfair competition. The India and Pakistan. Plant varieties developed Paris Convention establishes certain minimum with traditional knowledge and associated with standards and procedures for the treatment of in- a particular region can conceptually also be pro- dustrial property, the most important of which 54 Intellectual Property Rights in Agriculture are: (a) national treatment-the same treatment though TRIPs calls for the institution of an effec- for nationals and foreigners; and (b) right of tive suigeneris system of plant variety protection, priority-the according of a grace period in the there is no reference to UPOV or a call to adhere filing of industrial property applications in mem- to any version of it, making it the only excep- ber states. However, it leaves considerable free- tional case in TRIPs where the current interna- dom to individual members to tailor laws tional treaty on the subject is not mentioned. according to national developmental and tech- TRIPs also obliges the patenting of microor- nological requirements. ganisms and microbiological and nonbiological The Union Intemationale pour la Protection processes for the production of plants and ani- des Obtentions Vegetales (UPOV) has a multi- mals. It presently allows, however, the exclusion lateral treaty for the protection of new plant va- from patents of plants and animals and essen- rieties, which it administers in cooperation with tially biological processes for their production. WIPO. The UPOV Convention (1961, as revised In addition, no definitions have been provided up to 1991) facilitates a uniform formulation of in the agreement for the criteria for patentability the extent and scope of PBRs. The 1978 Act was (novelty, nonobviousness, and industrial appli- in force until April 1998, when the 1991 Act en- cability). These would be subject to interpreta- tered into force. There are at present 38 members tion by national patent offices. of UPOV. The 1991 Act substantially enlarges the TRIPs calls for "strong" process patents, strong scope of breeders' rights and allows for restric- in the sense that the rights of the patentholder tions of farmers' privilege and researchers' ex- extend to the product made by the patented pro- emptions. The latter allows the use of protected cess, and where there is a provision for the re- materials in a breeding program, whereas the versal of the burden of proof in any infringement farmers' privilege permits farmers to retain the proceedings. It is yet unclear whether such an harvest as a seed source, both without the con- extension of rights would imply rights over the sent of the PBR owner. The 1991 Act also pro- product, even where such products are explic- vides for a longer term of protection, and expands itly excluded, as is the case for plants and ani- the universe of species/genera of plants for which mals. These provisions, including those for protection is available, although this can be in- plant and animal patents, are to be reviewed troduced in a phased way. Very few developing in 1999 when it can be expected that pressure will countries have instituted plant variety protection, be brought to delete the exclusion for plants and and fewer are members of UPOV (Argentina, animals, but the outcome is uncertain at this Chile, Colombia, Ecuador, Mexico, Paraguay, time. South Africa, and Uruguay (Source: Diversity The TRIPs Agreement also mandates a mini- 13(2 and 3) 1997, 3)). mum level of protection of commercial marks The most recent international standard on IPRs such as trademarks and geographical indications. is the Agreement on Trade Related Aspects of Geographical indications used on wines and spir- Intellectual Property Rights (TRIPs) of the newly its are given an absolute level of protection where formed World Trade Organization (WTO). There use, even without the likelihood of deception of are now 132 members in WTO, with 30 more, in- consumers, is prohibited. cluding China and Russia, seeking membership. For the first time in international law trade se- Although TRIPs obliges the adherence to the sub- crets have also been accorded the status of IPRs. stantive provisions of the Paris Convention, it The TRIPs agreement goes beyond the provisions goes further on several aspects of industrial prop- of the Paris Convention on unfair competition, erty laws. TRIPs obliges nondiscriminatory treat- explicitly introducing trade secret protection in ment in terms of national treatment between international law, and considerably strengthen- nationals and others as well as most-favored na- ing it by extending the liability to third parties tion treatment among nationals of all WTO mem- that induced breach of a trade secret. Further bers. TRIPs further obliges members to either under the TRIPs agreement, test data submitted provide protection for plant varieties either for obtaining marketing approvals of new phar- through patents or through an effective sui generis maceutical and agricultural chemical products is law or through any combination of the two. Al- protected against unfair commercial use. The pro- Perspectivesfrom National Systems and Universities: India 55 visions of this section lend themselves to vari- of proof would, however, have to be in place by ous interpretations (Watal 1998). the earlier date. Such patents are similar in effect Under the TRIPs Agreement the protection to product patents, with the difference that patent granted for IPRs can be tempered by appropri- owners are not protected from patentable meth- ate provisions on compulsory licensing or of com- ods for the production of the product. petition law, particularly those relating to The current Patents Act of 1970 does not pro- practices or conditions of licensing of IPRs that vide for the patenting of plants, animals, or mi- have an adverse effect on trade or transfer and croorganisms, not by exclusion, but because the dissemination of technology (Watal 1998). definition of an invention seems to exclude them. CBD, concluded at the Rio Earth Summit in Even microbiological processes are excluded if 1992, is a recent international treaty relevant to a they involve a method of agriculture or horti- discussion of IPRs and agriculture. Much discus- culture, because such methods are specifically sion surrounds the Article 16 requirements for excluded. However, such applications have compulsory access to, and transfer of, technolo- sometimes been granted patents, at least since gies relevant to conservation under "fair and the mid 1980s as is evidenced by the process most favourable terms." There is a proviso, how- patent granted to Agracetus, a U.S. company, on ever, that such access and transfer shall be con- genetically engineered cotton cells and lines. This sistent with the adequate and effective protection patent was later revoked in the public interest of IPRs, so there is no reason to imagine the forced by the Government of India (Rao 1997). transfer of technology on any but commercial Under TRIPs, India must either introduce pat- terms. Even the provision to cooperate to ensure ents for new plant varieties or have an effective that IPRs are supportive of, and do not run suigeneris law to protect them by 2000. India must counter to, the objectives of CBD is subject to in- also have strong patents on microbiological and ternational law, which now includes the TRIPs nonbiological processes for the production of Agreement. The fair and equitable sharing of plants and animals. India has until 2005 to intro- benefits from the commercial use of genetic/ duce product patents on microorganisms. biological resources, or traditional/indigenous India must also bring the protection of trade- knowledge, is likely to remain as a good inten- marks, geographical indications, and trade secrets tion until there are legal instruments for their up to TRIPs standards by 2000. The current law implementation. on trademarks, the Trade and Merchandise Marks Additionally, there are as yet no generally Act 1958, and the current jurisprudence, particu- accepted means to reward what are called larly under the common law tort of passing-off, community IPRs (CIRs), that is embodiments of is, by and large, in line with TRIPs. Marginal indigenous or traditional knowledge passed amendments are required, however, as in the case down over generations (Gupta 1996). of the registration of service marks and the rec- ognition of well known marks. India's International Obligations on IPRs For geographical indications, the Trade and Merchandise Marks Act 1958 allows for the reg- As a developing country, India has a transition istration of certification marks, certifying quality period of five years, that is up to 2000, for most or origin of a product. Such certification marks provisions of TRIPs. An important exception is can be registered by an organization not produc- the introduction of product patents in areas of ing the particular product, as, for instance, any technology not covered so far, for which modifi- association of producers or traders. In addition cations an additional five years is granted. For geographic indications are protected under the pharmaceuticals and agricultural chemicals prod- common law tort of passing-off. India would need uct patent applications must be accepted from new legislation to provide the higher level of ab- January 1, 1995, and exclusive marketing rights solute protection to wines and spirits required must be granted for a period of five years or un- under TRIPs. In doing so, other Indian products til the product patent is granted or rejected, on or those of interest to India's trading partners can the fulfillment of the required conditions. Process also be granted this higher level of protection, by-product patents with the reversal of burden perhaps on the basis of reciprocity. 56 Intellectual Property Rights in Agriculture Although trade secret protection is available and agreements, including TRIPs. Trade secrets under contract law, and also laws on restrictive fall under the Ministry of Law as well as the Min- trade practices, India may have to introduce istry of Industry (Department of Company Af- the legal basis to extend such protection to cover fairs). The protection of test data for agricultural third parties who induce a breach of trade secrets. chemicals is under the purview of the Ministry India would also have to legislate to protect of Agriculture. The Ministry of Environment and undisclosed test data submitted for obtaining Forests (MOEF) deals with CBD and is respon- marketing approvals for new agricultural sible for implementing national legislation. chemicals. Initiatives for the introduction of PBRs are The Indian government has decided to join the widely recognized as having been spurred by Paris Convention. India also proposes to intro- private seed companies in India in the late 1980s duce national legislation to implement CBD after the adoption of the New Seed Policy in 1988. through the Biodiversity Act, under which the With this policy the Government of India liberal- terms of access to in situ genetic and biological ized the import of seed for joint ventures, includ- resources would be governed (Business Standard ing hybrid seeds, for a number of important crops. 1998). An empirical study has shown that such liberal- ization, including the development of hybrids, Public Debate in India has had a positive impact on private R&D in this sector (Pray and Kelley 1997). Buttel, Kenney, and There has been extensive public debate, of an in- Kloppenberg (1985) have, however, forecast that tensely political nature, on certain legislative the increasingly proprietary nature of plant bio- changes required to implement TRIPs, including technologies and the decreasing role of IARCs those related to agriculture. The latter include the and NAROs will adversely affect the diffusion institution of plant breeders' rights, patents for of such technologies in developing countries. biotechnological inventions, and geographical 'lhe two aspects of incentives for generation and indications. In addition, there has been consid- diffusion of IPRs are not irreconcilable. erable controversy over the implementation of In some circles in India the new policies were CBD to establish the so-called "farmers' rights," seen as a victory for multinational enterprises, and the fair and equitable sharing of benefits from in spite of the fact that there were certain condi- commercialization of biological/genetic re- tions regarding the transfer of the parent lines sources and traditional knowledge and practices and critical breeding materials to the Indian part- originating from India. This public debate has ner of the joint venture (Bhattacharjee 1988). In been characterized by some degree of confusion particular, the TRIPs negotiations, especially in over these various issues. Guided by a strong but biotechnology, were seen as an attempt by indus- narrow base of NGO activists, political parties trial country multinationals to privatize the ge- or at least some leading political personalities netic diversity of developing countries (Menon have taken entrenched positions, forcing policy- 1991; and Sahai 1992). There were vociferous pro- makers to consult such activists before finaliz- tests by some NGO activists against India's man- ing legislation on IPRs. ner of conducting trade negotiations. The TRIPs Responsibility for policy on IPRs related to proposals were seen as patenting of life itself, rais- agriculture is widely dispersed amongst differ- ing ethical as well as socioeconomic questions ent ministries of the Government of India. The (Sahai 1992). Ministry of Agriculture is responsible for legis- An association of farmers in Karnataka at- lation on plant variety protection only. Industrial tacked the U.S. multinational seed company, property, including patents and trademarks, is Cargill Seeds, in early 1993, protesting the entry the responsibility of the Ministry of Industry, the of multinationals into the domestic seed indus- Department of Industrial Development. The Min- try. It was feared that the prices of seed would istry of Commnerce has taken the initiative on the skyrocket and threaten the food security of the legislation on geographical indications, because country. This incident and the subsequent farm- their protection is important for exports. This ers' rally on March 3, 1993, at Delhi marked the Ministry is in overall charge of trade negotiations height of the protest against the plant variety Perspectives from National Systems and Universities: India 57 clauses of the TRIPs Agreement (the so-called establishment of a National Community Gene Dunkel Draft). The Bharatiya Kisan Union (an all- Fund as a mechanism for implementing farm- India farmers' organization) even drew a paral- ers' rights based on a seed surcharge. Through lel between these clauses and the takeover of the this approach, India hoped to show the way to country historically by the British East India an international agreement by attempting to first Company. The case of the patent on products evolve this concept in national law (M. S. derived from the neem plant was used to dem- Swaminathan Research Foundation 1994). The onstrate the theft of traditional knowledge by RFSTE went further and suggested that farmers' multinationals, and the disastrous consequences rights should form a part of the PBR legislation for Indian farmers who would not be able to use and should limit the scope of PBRs generated by neem seeds in traditional ways. It is only much the seed industry. later that some of the myths on the neem-based Given the public outcry on plant variety pro- patents of W. R. Grace were adequately clarified tection, the Government of India opened the draft (Gupta and MacAllister 1996). legislation for debate in early 1994. This draft was The Ministry of Commerce attempted repeat- bitterly criticized as following UPOV 1978, al- edly to clarify that India did not have to patent though it did include provisions on community plants, and that an alternative sui generis system rights and farmers' rights and extensive provi- could be devised to protect national interests. sions on compulsory licenses (Srinivas 1994; This did not placate some NGOs and other ac- Sahai 1994). tivists, however, who suspected that the term "ef- The Ministry of Environment and Forests came fective" would be strictly interpreted to require under tremendous pressure from public action patent-like protection (Shiva 1993). Even an ar- groups to institute implementing legislation for ticle written by the then Director General of CBD. It proposed legislation on biodiversity to GATT, clarifying that standards contained in regulate access to in situ genetic and biological UPOV 1978 which allowed the farmers' and the resources, on conditions of prior informed con- breeders' privilege could reasonably be said to sent, on fair and equitable sharing of benefits, and constitute effective sui generis protection, failed on transfer of technology on fair terms. Many feel to assuage these fears. that traditional knowledge should be registered Concurrently, some scientists and farmer ac- so that it is not incorporated into patents without tivists concluded that India was capable of turn- the knowledge or consent of the concerned com- ing the TRIPs proposals to its advantage due to munities. Consent would be given only after available skilled personnel, variety of agrocli- ensuring fair and equitable sharing of ben- matic zones, and facilities in agricultural research. efits. Others view rural, contemporary innova- This group asserted that farmers had nothing to tions as important for progress in agriculture, and fear, and may only benefit from the implementa- advocate the institution of a new system of IPRs tion of these proposals. (for example, some kind of a global registration The M. S. Swaminathan Research Foundation, system (Gupta 1996)). Following the experience Madras, and the Research Foundation for Science, on the legislation for plant variety protection, it Technology and Natural Resource Policy, New was decided to constitute a committee headed by Delhi (later changed to RFSTE, for Research Foun- Dr. M. S. Swaminathan, to include all the major dation for Science, Technology and Ecology) were stakeholders, including scientists, NGOs, envi- consulted by the Ministry of Agriculture on the ronmentalists, and other relevant government de- 1993 draft legislation on the protection of plant partments/ministries. Regional seminars were varieties (Shiva 1996). The M. S. Swamina-than held to discuss the various issues involved in the Research Foundation prepared alternative draft legislation, although the draft bill itself has not legislation relating to plant breeders' and farm- been made public. The issue of community rights ers' rights, which was discussed at a workshop may be resolved now in the proposed Bio- conducted by that organization in late 1993. This diversity Act and not in the legislation on plant draft attempted to reconcile the TRIPs Agreement variety protection, although there is still consid- with CBD and FAO's International Undertaking erable confusion on this issue. This is, however, on Plant Genetic Resources 1989. It called for the being strongly opposed by NGOs that have been 58 Intellectual Property Rights in Agriculture active in this debate, such as the RFSTE and tect geographical indications, these marks can- the Gene Campaign. The process of consultation not be protected in other countries. TRIPs does is still on in the Ministry of Environment and allow WTO members to deny protection to geo- Forests. graphical indications that are not protected in the Revised plant variety protection legislation, country of origin. India, however, does permit removing farmers' rights but retaining clauses on the protection of such marks through certifica- farmers' privilege and breeders' exemption, was tion marks as well as under the common law tort attempted in 1997. This revised draft has been of passing off, provided it can be proved that the criticized as being modeled on UPOV 1991 de- consumer would be deceived. The problem is that leting the farmers' rights altogether (Dhar and the certification mark system, or even any sui Chaturvedi 1998). There seems to be either little generis legislation, requires the definition of the awareness that the draft biodiversity legislation product being protected. The delay in according incorporates farmers' rights, or a conviction that domestic recognition to the mark "basmati" is farmers' rights have to necessarily be juxtaposed probably more the result of the rice producers of against the PBRs granted to seed companies India being unable to come to an agreement on within the same legislation. It is not yet clear how the definition of the mark "basmati," rather than this issue will be resolved. because the government has not passed sui generis In the meantime the Economic Times (1998) legislation. Furthermore, protection of "basmati" reported that some major European plant breed- as a geographical indication even in the U.S. ers have threatened to deny access to new rose would not have prevented Ricetec from patent- varieties to Indian floriculturists if there is no ing the new formulation in the U.S., but only pre- protection of breeders' rights. The breeders' con- vented from the use of the name "basmati." In cerns are not only because of the royalties lost, any event, the government has under consider- but also because the effect on the quality of the ation draft legislation to protect geographic in- flower, if illegal propagation and multiplication dications in order to meet its TRIPs obligations of the variety was allowed. by 2000. Similar exercises to involve the stakeholders in the drafting of legislation on biotechnological Conclusions inventions have not yet been initiated by the Department of Industrial Development. That De- The classical IPRs relevant to agriculture are pat- partment is charged with the task of amending ents, particularly on biotechnological inventions, the Patents Act 1970 to bring it in line with TRIPs plant breeders' rights, trademarks, geographical by 2000. The public debate on this subject has so indications, trade secrets, and the protection of far been inadequate for the preparation of draft undisclosed test data. Farmers' rights and legislation. This is also the case for the protec- community IPRs are the new forms of intellec- tion of undisclosed information, whether trade tual property at the stage of initial concep- secrets or test data. tualization, where international or national laws The issue of geographical indications became are yet to evolve. India is not a member of the controversial in the wake of a 1997 patent granted Paris Convention or UPOV, but is a member of in the United States to a U.S. firm, on the claim WTO and is therefore obliged to implement the of novel basmati rice lines and grains. In 1996- TRIPs Agreement within the time limits set out 97, India exported about 490,000 metric tons of therein. Most of the TRIPs obligations on these basmati rice valued at about US$358 million, con- relevant IPRs, including strong process patents stituting over 60 percent of the value of India's for biotechnological inventions, have to be in total exports of rice. In this case most Indians place by 2000, and it is only for product patents believe that India should have a strong law to on microorganisms that India has the additional protect geographical indications so that Indian time up to 2005. names are not patented and misused in other Although legislative exercises on a sui generis countries (box 4.3). system of plant variety protection began in There is a widespread belief in India that un- 1993, the legislation is yet to be finalized. More less there is domestic sui generis legislation to pro- recently, India has proposed the enactment of a Perspectives from National Systems and Universities: India 59 Box 4.3 Patent on Basmati rice In September 1997, Ricetec was granted a U.S. patent can made basmati type rice" or "basmati style rice,' with for claiming novel basmati lines and grains that were a clear indication that the product originates from the created from the crossing of the basmati germplasm U.S., does not deceive the public. The TRIPs Agree- (of Pakistani origin), taken from an ex situ gene bank ment accords absolute protection against the use of in the U.S. with an American long-grained variety. geographical indications with the words "type," "style,' Ricetec claimed that the new varieties have the same "kind," only to wines and spirits and to no other com- or better aroma, grain length, and other characteris- modity. In addition if the Courts in the U.S. rule that the tics of the original basmati variety grown in India and name "basmati" is already generic, denoting a variety Pakistan, but can be grown successfully in specified of rice not necessarily associated with any geographi- geographical areas in North America. cal region, there would be no protection available for it. The patent grant came to the notice of the Govern- This is not yet tested in the Courts in the U.S., although ment of India in February 1998, and an Inter-Ministe- APEDA is opposing the registration of the trademark rial Committee was set up under the Secretary, "Texmati" by Ricetec in the U.K. on the grounds that it Department of Industrial Development. The Agricultural would deceive the consumers as rice originating from Export Development Agency (APEDA) of the Ministry India and Pakistan. The fact that GAFTA of U.K. strictly of Commerce has been entrusted with the task of rep- ensures that "basmati" can only be used for rice origi- resenting the rice exporters in any reexamination of nating from India and Pakistan should help India's case. the patent in the U.S. Patent and Trademarks Office The case has not yet been decided in the U.K. Trade- (USPTO), if it is decided that there are sufficient marks Registry. grounds for the reevaluation of the patent grant. The Some observers have expressed an opinion that a Council for Scientific and Industrial Research (CSIR), patent derived from the basmati germplasm amounts which successfully opposed and obtained the revoca- to biopiracy by Ricetec. However, it must be noted that tion of a patent on turmeric in 1997 in the USPTO, is the germplasm was taken from an ex situ collection in assisting as well. the U.S. Under current international law there is no pro- In India the question is: can Ricetec (or any other hibition on the exchange or use of germplasm for com- company) use the name basmati to sell rice that does mercial purposes or otherwise. Therefore, India cannot not originate from India or Pakistan, or can basmati claim sovereignty over germplasm already outside its be protected as a geographical indication? Ricetec has jurisdiction. claimed that basmati is a generic name denoting a variety of rice which, if labeled or advertised as "Ameri- Source: Media reports, February-April 1998. biodiversity law to implement CBD, which is in benefits on varieties derived from them, and also the process of being debated and finalized. An maintain advantages in cross-licensing the results important question is whether farmers' rights and of their research. Steps would have to be taken to community rights will be included in the plant ensure that reasonable compensation is allowed variety protection law or in the biodiversity law to plant breeders. The deployment of skillfully or both. drafted provisions on compulsory licensing and Since the Government of India, as evidenced government use, and the recognition of the mu- from its policies since the mid 1980s, wants to tual interdependence between public sector and encourage investment by private seed compa- private sector research efforts, may resolve the nies, PBRs would help by giving incentives for apparent contradiction between incentives for private research. The issue of whether public research and the subsequent diffusion of such sector research institutions should be allowed technologies at equitable prices. proprietary rights over their research is still con- CGIAR centers already assist in the diffusion troversial, although having such rights and also of technologies, while ensuring reasonable com- disseminating these technologies at reasonable pensation to the rightful owners. Several modali- prices are not necessarily contradictory. At the ties have already been envisaged, such as material ICRIER Seminar many participants agreed that transfer agreements (MTAs), licensing or cross- such proprietary rights would enable public sec- licensing, joint ventures, or private funding of tor research institutions to pre-empt private sec- basic research in the public sector (Lesser et al. tor seed companies from not sharing commercial this volume). IARCs can play a further construc- 60 Intellectual Property Rights in Agriculture tive role in the two-way transfer of technologies TRIPs provisions on undisclosed information. between NAROs and private sector seed compa- This would not only require the conduct of work- nies, through the establishment of technology shops and the setting up of drafting committees, rights banks where IPRs and other rights over but also the building up of mutual trust and re- important technologies are purchased outright by spect, without which these would remain empty IARCs, and distributed through NAROs to farm- exercises. ers in developing countries. There has been a recent vocal demand made On the issue of patents granted on the basis of by sections of the media to introduce sui generis traditional knowledge without acknowledgment, legislation for the domestic protection of geo- there appears to be no solution but to document graphical indications such as basmati rice. The all such knowledge. The National Bureau of Plant fundamental issue, however, is protection for In- Genetic Resources has set up a base collection of dian marks with India's major trading partners, 160,000 samples of germplasm of various crop a possibility available through existing laws of species in a National Gene Bank. It is expected to those countries. In addition, a conscious effort become one of the largest ex situ collections in needs to be made to invest in and build up the the world (National Academy of Agricultural brand equity of Indian markets in order to en- Sciences 1998). The state government of Karna- sure that such marks do not become generic. Fur- taka, in collaboration with the Indian Institute of ther, India should seek to conclude bilateral Science, Bangalore, has also launched a plan to agreements with interested WTO members within map the biodiversity and traditional knowledge the framework of TRIPs, to give better protection in its jurisdiction. In addition, the CSIR in India to products of mutual interest on a reciprocal ba- has already begun with a program to systemati- sis. As long as this is done for specific geographic cally document at least 400 species of plants indications, and as long as India is willing to con- where therapeutic, agricultural, and other uses clude such agreements with other WTO members, are known (Indian Express 1997). there appears to be no inconsistency with the most India has suggested in the WTO Committee favored nation clause of TRIPs. on Trade and Environment that, under TRIPs, CSIR has begun laudable efforts to improve there should be an obligation on patent appli- patent literacy amongst its scientists. This covers cants, of biotechnological inventions based on laws, rules, and procedures, and also an increas- genetic/biological resources or on traditional/ ing awareness of the long-term benefits for the indigenous knowledge, to disclose the country country, particularly from increased domestic of origin and to reveal whether the applicant has R&D and productivity. These efforts are being prior informed consent (WTO 1996). This sugges- made by ICAR also. tion was also proposed for the European Parlia- Although a broad discussion and debate on ment's Biotechnology Directive but was rejected IPR legislation relevant to agriculture is neces- by the Commission as going beyond its intema- sary, TRIPs-compatible laws will mostly have to tional obligations. Such a solution is necessary be in place by 2000. It is therefore time to enact in international intellectual property law, if de- the required legislation and the implementing veloping countries are to be notified and fairly rules and regulations, incorporating all the flex- and equitably compensated for resources and ibility allowed. At the same time this exercise knowledge taken from them for commercial ben- should be undertaken with as much transpar- efit. There is an urgent need to build international ency as possible, to allay fears raised in the consensus on this issue. public debate. The legislative exercises on amending the Pat- There is much to be done for IPRs in agricul- ents Act 1970, particularly on the patenting of bio- ture in India. The tasks that remain to be done technological inventions, should be made more are somewhat daunting, in light of the sharp dif- transparent, with the involvement of all stake- ferences of opinion amongst the stakeholders. holders (scientists, farmer groups, private sector National and intemational organizations have to seed companies, lawyers, and NGO activists). gear up to contribute to this exercise in an urgent Similar exercises are required to implement the and meaningful way. Perspectivesfrom National Systems and Universities: India 61 Appendix* course, entails considerable public debate. The patenting of turmeric and recently basmati rice The Indian Agricultural Research System con- by industrial nations has not only caused debate sists of 59 research institutes (including four in India, but has also helped in expediting action deemed to be universities) of the Indian Coun- on the protection of IPRs, something long over- cil of Agricultural Research, 4 bureaux, 30 na- due. tional research centers, 10 project directorates, The World Bank, through innovative and 80 coordinated research projects with their 200 timely interventions, has been providing criti- centers, and one Central Agricultural Univer- cal help to its member countries, especially its sity and 28 State Agricultural Universities. This borrowers. The need for such help has never system has been providing technical inputs to been greater than when the developing coun- government agencies on protection of intellec- tries have been striving to tailor their policies tual properties being developed in the wake of to conform with the requirements of the WTO the TRIPs Agreement, of which India is a sig- Agreement, while meeting national needs and natory. The measures relate to legislation on objectives. Although the perceptions and mode plant variety protection, amendments to the of actions may vary from country to country, a existing Indian Patents Act (1970), and control broad consensus must emerge on IPR issues. over and protection of biodiversity. Until re- There is much the World Bank can do to assist cently, there was not much appreciation of the its borrowers and member countries to prepare importance of IPRs, due mainly to the concen- for suitable change, or to develop new legisla- tration of research in the publicly funded in- tion in conformity with the WTO Agreement. stitutions, and the position that the benefits of The help could be in the form of regional/na- technologies generated should be available to tional workshops, in collaboration with NARS; people largely without cost. This position was human resource development; strengthening held especially strongly in the agricultural re- the infrastructure of IPR protection establish- search sector, whose clients were resource-poor ments such as patent offices and others; devel- farmers often unable to pay for new technol- opment of centers of excellence on IPRs, ogy. The new improved technologies also had education of policymakers, scientists, and tech- to be demonstrated before adoption. This strat- nologists through publication of literature; net- egypaidhandsomedividends,asevidencedby working (electronically); access to latest the strides made by the country in accelerated developments and grants to NARS to renew food production. and update aging infrastructure. All of these With the signing of the WTO Agreement in areas would have an indirect effect on the pro- particular, and liberalization and globalization tection of intellectual property. of the Indian economy in general, a fresh and urgent look at IPR issues was undertaken. With IPR in India pressing economic, trade, and technology re- alities emerging, especially the challenge of Over 65 percent of the Indian population depend global competition and need for a competitive on agriculture, which also contributes 27 percent edge, a favorable environment was created for of GDP and which contributes substantially to working on policy issues to conform with the export earnings; the protection of agriculture- TRIPs Agreement. related IPRs is therefore an issue that will affect India, with its diverse agroclimatic zones, pro- the lives of millions of extremely poor farmers. vides an excellent test case for developing poli- There has been a wide-ranging debate in India cies on IPR which, appropriately modified, could on this issue, and a consensus has emerged that perhaps be used by other developing countries. the traditional and legitimate rights of farmers The identification of appropriate policies, of should be adequately protected. * By S. M. Ilyas. 62 Intellectual Property Rights in Agriculture Plant Variety Protection ers' Rights Protection Authority, a National Com- munity Gene Fund, compulsory licensing provi- According to Article 27 of the TRIPs Agreement, sions, and additional protection of public interest, a country is obliged to ensure protection of plant and an Appellate Board, among others. The Gov- varieties either by patents or by an effective sui emient is also considering accession to UPOV generis mechanism or by a combination of both. 1978 version which includes breeders' and farm- Since the Indian Patents Act (1970) excludes ag- ers' privileges. The Fourth International Confer- riculture and horticulture from patenting, it is ence on Plant Genetic Resources held at Leipzig required to put into place a sui generis system by (Germany) gave a global endorsement for farm- evolving legislation on plant variety protection ers' rights. The Indian Council of Agricultural by the year 2000. Research (ICAR) has established a National Re- There has been a country-wide debate involv- search Centre on DNA Finger Printing at New ing policymakers, scientists, NGOs, and other Delhi which will be of great use in protecting stakeholders on the appropriate system, which materials in the event of disputes arising due to suits national needs while providing for adequate IPR. Meanwhile, pending passage of this Bill, ar- protection of researchers and farmers. Although rangements have been made to register the new there has been a general consensus, many doubts genotypes with the Bureau of National Plant Ge- exist over the protection of rights of farmers to netic Resources, New Delhi (a unit of ICAR) on a use harvested materials as a seed source the suc- first-come-first-served basis. The registration will ceeding season. One of the most important fac- provide the basis for the claim of breeders' rights tors in increasing productivity has been the timely with the Statutory Authority under the PVP and supply of inputs, especially the seeds of im- FR Act when enacted. proved varieties. Although the public sector seed companies have been doing their best, it has not Amendments in Indian Patent Act (1970) been possible to provide good seed to large num- bers of farmers, particularly small, resource-poor The Indian Patent Act grants only process pat- landholders. Private seed companies are not ents and not product patents in food, medicine, showing much interest in supplying seeds of ce- drugs, and substances provided by chemical pro- reals, legumes, and oilseeds, and are instead con- cess. Under the TRIPs Agreement countries have centrating on vegetable and fruit seeds. It is up to 10 years (from January 1, 1995) to bring therefore necessary for farmers to use, exchange, product patent offerings up to the Agreement re- sell, or otherwise dispose of seed produced on quirements. Notwithstanding this transition pe- their farms. There is a strong case, therefore, for riod, WTO signatory countries are required to exempting small-scale, and resource-poor farm- provide a means for filing applications in the ar- ers. European legislators at one point considered eas of pharmaceuticals and agricultural chemi- allowing farmers with holdings below a certain cals and, on fulfillment of certain conditions, the size to use the harvest as a seed source. The over- granting of exclusive rights for a period of five whelming majority of farms in India are small, years or until the patent is granted or rejected, presenting a strong case for such an exception. whichever is earlier. These provisions were made There is a strong feeling that the legislation by amending the 1970 Act through an Ordinance should not in any way hamper the momentum promulgated in 1994. Under law, the Ordinance of indigenous research efforts to evolve new plant must be replaced by an Act of Parliament, but varieties, as that could have serious implications due to certain unavoidable reasons, it was not, for India's agriculture. so the Ordinance lapsed. According to a Govern- The Government of India has taken due note ment decision, the Patent Office has been receiv- of these concerns while proposing to introduce ing product patent applications in these fields, in Parliament a bill (Plant Varieties Protection and which are held unexamined until January 2005 Farmers' Rights Act-PVP and FR) that seeks to as stipulated by the TRIPs Agreement. provide adequate protection to plant breeders as The Government is actively considering intro- well as farmers. It is understood that the draft ducing in Parliament a Bill amending the Indian proposals also include a Plant Varieties and Farm- Patents Act of 1970 to bring it in to conformity Perspectives from National Systems and Universities: India 63 with TRIPs. The bill is expected to provide ad- a wider deployment of biodiversity in agricul- equate safeguards to protect the interest of the ture, including wild species and currently people. This expectation should also allay fears underutilized crops. It is reported that more than that the floodgates to the patenting of genes, liv- 2,000 species of native grasses, roots, fruits, and ing organisms, and products derived from them other food plants have already been classified as might be opened. However, India is under no "Lost Crops" of Africa. Through advances inbio- pressure to accept patenting of any life forms clas- technology research, resilient crops will be vital sified as plants and animals, although it likely for extending cereal production into marginal has to agree to the patenting of microorganisms lands to support growing populations. and products from genetically engineered micro- The Wealth of India series, a monumental ef- organisms, as stipulated under TRIPs. fort by the Council of Scientific and Industrial Presently, patent protection is available for up Research, has made serious efforts to promote to 14 years, whereas it is 20 years (from the date nontraditional crops, but the work is by no means of application filing) under TRIPs (Article 33). complete. The work is expected to take another Under current law the onus for disproving origi- two years. The same holds for traditional knowl- nality of invention lies with the applicant rather edge in written form and transmitted by word- than with the patent office, as in the USA. To- of-mouth. Efforts have been made recently to gether these result in considerable harassment of assert rights over bioresources, such as the suc- the inventor, and delay. (It takes five to seven cessful effort leading to withdrawal of a U.S. years to obtain a patent in India.) There is a huge patent on turmeric, and earlier upholding a claim and growing backlog of patent applications. against a patent on neem oil given to a European With the rising awareness about the need for multinational. However, the case of patenting of IPR protection, greater numbers of applications basmati rice has caused a public outcry and in- will be filed by Indians as well as by foreigners, duced the Government to take steps to prevent necessitating the revamping of the Patent Office. any recurrence. The Government is taking necessary steps in The Government is considering bringing out this direction. comprehensive legislation controlling national biodiversity to regulate access and the peoples' Protection of Biodiversity rights. A proactive rather than reactive strategy is required. India is one of the largest reservoirs of biodiver- sity. An urgent need has been felt to inventory Role of the World Bank biodiversity to have a complete picture of this valuable resource. Little more than 150 of the The World Bank has been in the forefront of help- world's 248,000 plant species are under commer- ing developing countries with burgeoning popu- cial cultivation. About 20 crops provide 90 per- lations and dwindling resources. These countries cent of the world's food, and just four of them- are also caught up in the tide of globalization and rice, wheat, maize, and potato-supply more than are,losing their competitive edge. The importance half of the daily calories. But diversity-within of the Bank has never been greater than now, and between species-is the basis of most small- when the developing countries are finding it in- scale farming systems. It allows farmers to with- creasingly difficult to cope. There is little time stand vagaries of climate and disease that can remaining to enact appropriate legislation to con- severely reduce productivity. Farmers have pains- form with the TRIPs provisions. The World Bank takingly developed resilient and bountiful agri- could assist countries in helping themselves cultural systems based on biodiversity, and their through a process of revitalization of their insti- knowledge of how to work successfully in com- tutions. Some agriculturally related areas where plex cultural settings. Considering agriculture as the role of the World Bank could be quite effec- merely a matter of commodities and businesses tive in regard to IPRs are: militates against the security people derive from 1. Organizing workshops on IPR issues for crop genetic diversity. Community livelihoods policymakers, scientists, NGOs, and other and the international economy can benefit from stakeholders in collaboration with NARSs 64 Intellectual Property Rights in Agriculture 2. Capacity building through short-term train- 2. At the ICRIER Seminar, several participants felt ing and exchange visits that since there was no separate legislation on the sub- 3. Providing networking means among the ject, the parent lines of the hybrids were not legally players protected in India. However, the protection provided 4.Asnstrengthening for trade secrets or confidential information under 4. Assisting governments in srnteig common law and jurisprudence can be used against statutory bodies overseeing protection of the unfair misappropriation of confidential informa- IPRs-including the modernization of tion, although this would not, unlike PBRs, protect patent offices by equipping them wifth state- against independent discovery. of-the-art technology 3. At the ICRIER Seminar, the representative of 5. Establishing centers of excellence that Monsanto categorically stated that, despite policies to would provide assistance in the develop- encourage private sector investment in the seed sec- ment of the latest technologies. tor since 1989, such investment was forthcoming only in hybrids and not in self-pollinated crops. He argued National Agricultural Technology Project (NATP) that IPR protection was required not so much to pro- tect against theft by farmers but against misuse of other The World Bank supported NATP-a $240 mnil- private sector seed companies. 4. It was felt in the ICRIER Seminar that such ne- lion project being implemented in India (the gotiating teams should have included experts in agri- project, in fact, started in 1997 through retroac- culture and biotechnology. Such experts were, in fact, tive funding). It is one of a kind, and a major mile- consulted by government in formulating its position stone in the support of the World Bank to a NARS. for the negotiations in WTO, although the adequacy It is expected to provide a much needed boost to of such consultations could be debated. Another mat- the efforts of ICAR to take Indian agriculture to ter raised was the need to keep the same trade nego- the next century, by increasing the capability of tiators to ensure continuity in negotiating strategies, a frontier areas t g c l s- problem not unique to India alone. the scientists i frontier areas tnrough critcal sup- 5. At the ICRIER Seminar Dr. Sahai opined that port in the infrastructure, human resource build- the provisions of Article 27.2 of TRIPs could be used ing and assessment, and refinement and transfer to exclude patenting of life forms. However, it was of technology. It also seeks to provide timely help pointed out that in such a case there could be no com- in effecting much needed organization and man- mercial exploitation of such inventions. agement reforms to increase the research man- 6. Evidence given by Mahender Singh Tikait, presi- agement capabilities of ICAR. It is widely dent of the Vharatiya Kisan Union on September15, believed that by the time this project ends, the 1993, before the Parliamentary Standing Committee Indian NARS will be much stronger, better on Commerce, 1993-94, Third Report on Draft of equipped, and more confident to face the chal- Dunkel Proposals, Evidence, Rajya Sabha Secretariat, lequipped, and the cnfidentutorraceytne.cha- New Delhi, December, 1993. lenges of the 21st century. 7. See evidence of the officials of the Ministry of Commerce, particularly that of Shri Anwarul Hoda, Notes now deputy director General of WTO, before the Par- liamentary Standing Committee on Commerce (1993- 1. The author has worked in the Govemment of 94) as cited above. India, dealing inter alia with the TRIPs agreement, in 8. See, for instance, the evidence of ICAR and LARI the Ministry of Industry and in the Ministry of Com- scientists, including Dr. M. S. Swaminathan, ex-direc- merce at New Delhi. The views expressed here are tor, ICAR, and that of Sharad Joshi, farmer activist, based on publicly available material, including news- before the Parliamentary Standing Committee on Com- paper reports, and are not attributable to any institu- merce (1993-94). tion or organization with which the author is or has 9. Evidence of such confusion was seen at the been associated. The author gratefully acknowledges, ICRIER Seminar, where many were confusing farmer's with the usual disclaimers, material and useful com- rights with the farmers' privilege. While it is yet not ments received from C. Niranjan Rao of Indian Coun- clear whether the farmers' rights will form part of cil for Research on International Economic Relations India's legislation on plant variety protection, the lat- (ICRIER), New Delhi. This paper has been revised in- ter is clearly within its ambit. With Monsanto corporating comments received at a seminar held at Corporation's purchase of the terminator technology ICRIER, New Delhi on July 9, 1998 and from the edi- (reported on RAFI's web site, www.rafi.org ), however, tors of this volume. fears of farmers being forced to purchase expensive Perspectivesfrom National Systems and Universities: India 65 seed every time are being expressed in India, and the Pray, Carl, and Tim Kelley. 1997. "Impact of Liberal- utility of the farmers' exemption clause is being ques- ization and Deregulation on Technology Supply tioned. by the Indian Seed Industry." World Bank, Wash- ington, D.C. References Rao, Niranjan C. 1997. "Plant Variety Protection and Plant Biotechnology Patents: Options for India." Bhattacharjee, Abhijit. 1988. "New Seed Policy: Whose Policy Paper 29, for UNDP-funded Project LARGE, Interest Would It Serve?" Economic and Political UNDP, New Delhi. Weekly, October 8, 2089-90. Sahai, Suman. 1992. "Patenting of Life Forms: What Business Standard. "Elections Cast a Shadow on Bio- It Implies." Economic and Political Weekly, April 25, diversity Law." March 5,1998. 878-89. Buttel, F. H., M. Kenney, and J. Kloppenberg Jr. 1985. . 1994. "Government Legislation on Plant "From Green Revolution to Biorevolution: Some Breeders' Rights." Economic and Political Weekly June Observations on the Changing Technological Basis 25, 1573-74. of Economic Transformation in the Third World." Shiva, Vandana. 1991. "Biotechnology Development Economic Development and Cultural Change 31-55. and Conservation of Biodiversity." Economic and Economic Times. 1998. Protect Breeders' Rights Else No Political Weekly November 30, 2740-46. New Roses: MNCs. February 24. . 1993. "Farmers' Rights, Biodiversity and Gupta, Anil. 1996. "Technologies, Institutions, and In- International Treaties." Economic and Political Weekly centives for Conservation of Biodiversity in Non- April 3,555-60. OECD Countries: Assessing Needs for Technical . 1996. "Agricultural Biodiversity, Intellectual Cooperation." In OECD Proceedings of the Cairns Property Rights, and Farmers'Rights." Economic and Conference on Investing in Biodiversity. Paris: OECD. Political Weekly June 22, 1621-31. Indian Express. 1997. "CSIR Goes into Documenting Srinivas, Ravi K. 1994. "Power without Accountabil- Drive after Turmeric Patent Triumph." August 28. ity: Draft Bill on Plant Breeders' Rights." Economic Menon, Usha. 1991. "Intellectual Property Rights and and Political Weekly March 26, 729-30. Agricultural Development." Economic and Political Sutherland, Peter. 1994. "Seeds of Doubt: Assurance Weekly July 6-13, 1660-67. on Farmers' Privilege." Times of India March 15. M. S. Swaminathan Research Foundation. 1994. "Meth- Watal, Jayashree. 1998. "The TRIPs Agreement and odologies for Recognizing the Role of Informal In- Developing Countries: Strong, Weak or Balanced novation in the Conservation and Utilization of Protection?" Journal of World Intellectual Property, 1(2, Plant Genetic Resources: An Interdisciplinary Dia- March): 281-304. logue." Madras. WTO. 1996. "Report of the Committee on Trade and National Academy of Agricultural Sciences. 1998. Environment." Document no. WT/CTE/W/40, "Policy Paper on Conservation, Management and November 7 (available on the WTO web site, Use of Agro-biodiversity." India. www.wto.org). United States Land-Grant Colleges Frederic H. Erbisch T he land-grant college (LGC) concept was Changes in Intellectual Property Use initiated in 1862 to provide broad access at Land-Grant Colleges to training and higher education to all, and particularly to farmers and industrial workers. Because the original LGC was developed to as- TIhe LGC has evolved into an institution that now sist the public, little attention was given to intel- provides a mix of vocational education and sci- lectual properties; generally, new intellectual ence, a compromise that addresses the social role properties were shared with the public with few of the university. or no restrictions. In agriculture a new crop plant The LGC of today provides quality education variety would be made available to the farmer to students from many backgrounds, it conducts at no cost. Some mechanical and equipment in- research to support agriculture and industry of ventions were patented and licensed, but these the future, and it provides services directly to the too were generally provided at little or no cost to public. In agriculture these services include an the farmer/manufacturer. The farmer and indus- agricultural extension service to aid the farmer try, especially commodity groups, became accus- on a daily basis, to provide short courses and tomed to obtaining intellectual properties at little training, and to learn directly the concerns of the or no cost. The statement "land-grant tradition" farmer. or "land-grant way of doing business" or similar The educator in the LGC has gone from a Pro- statements often refer to this "giving away" of fessor of Agriculture, Mathematics and Lan- LGC intellectual properties. These types of state- guages to a specialist in a field of education/ ments are still frequently used by LGC researchers research in an area that supports agriculture. The and industrial representatives when discussing LGC has evolved from a single college/depart- intellectual properties, with the researchers wish- ment into a number of more specialized colleges ing to give away their ideas and industry will- and departments within a larger university en- ing to take them free of cost. vironment. The college farm is now the agricul- The patent system initially provided govern- tural experiment station, where a wide range of mental protection for nonplant invention protec- applied and basic agricultural research is con- tion. The patent system protects ideas and allows ducted. The LGC, because of its educational the innovator to control the manufacture, use, thrust and societal obligations, will continue to and sale of these ideas. It was not until 1930 in change and build for the future. One area of cur- the USA that patent protection was extended to rent change concerns intellectual properties and include asexually produced plants only. Al- intellectual property rights. Recent activities may though more than 5 million nonplant patents serve as a possible model for other public sector have been issued in the United States, fewer than institutions. 7,000 plant patents have been granted. Plant pat- 66 Perspectivesfrom National Systems and Universities: United States Land-Grant Colleges 67 ents have been sought mostly by private sector dentiality. Even federal research support relates companies and not universities. The plant patent to intellectual property, because every govern- has had little impact on universities and their ment-sponsored project carries the Bayh-Dole manner of handling intellectual properties. requirements of disclosing all inventions, provid- Plant variety protection (PVP) was adopted by ing the government with a license, and diligently the U.S. in 1970. This type of protection covered seeking industrial licensees for inventions. Fail- sexually reproduced or reproducing plants. PVP ure to comply with these requirements can re- did not protect hybrids and other nonsexually sult in loss of funding, immediately and in the reproducing plants. The process for obtaining future. PVP is simple and inexpensive, largely due to the The usual collegial exchange of materials has fact that this program is administered by the U.S. also been affected by these uses of intellectual Department of Agriculture. The United States property. Materials are not exchanged unless a also became a member of UPOV, which resulted material transfer agreement (MTA) has been ex- in the revision of PVP rules. Protected under ecuted. The MTA defines ownership of the mate- present PVP rules are sexually reproducing plants rials being exchanged, the conditions under and tubers. Protection includes reproduction and which they can be used, and the liability when sale of seeds of the variety, with farmers being used. The transfer of a gene construct from Michi- allowed to use or replant seed they produce. This gan State University (MSU) to a company with- method of protection had an impact on LGCs out control by an MTA was a painful lesson to a because it allowed them control over the distri- number of researchers. The gene construct was bution of new crop varieties quite inexpensively sent to a friend at a company by a professor who (when compared to patent protection). did the isolating. Researchers at the company In the mid 1980s, protection for certain plant determined the gene construct was valuable and materials was sought through utility patents. This patented it in the company's name. The company type of protection has been used most in connec- pays no royalties to the University, but does give tion with the emergence of plant biotechnology. the researcher a small research stipend annually Isolation of genes, gene constructs, plasmids, and and allows the researcher to use the gene con- gene promoters are the basis for seeking this type struct for research purposes only. Others at the of protection. Through utility patent protection, University cannot obtain the gene construct from the patent owner has more control over varietal the researcher because the company forbids this transformation than if only PVP protection were type of exchange. Any University researcher used. Obtaining patent protection is costly, time wishing to use the gene construct must contact consuming, and requires experts to draft docu- the company and enter into an MTA. It now takes ments to obtain the best possible protection. This in excess of six months to obtain this gene con- type of protection is used extensively by indus- struct from the company even though the re- try and LGCs. searcher who isolated and described the gene Two events, PVP and biotechnology, have construct is just next door. All involved have cer- greatly increased attention to intellectual prop- tainly become aware of intellectual properties erty protection and management. LGCs now rou- and IPRs. tinely review their new intellectual properties to As the significance of recognizing IPRs in- determine the best way to handle them and still creases, it is important to educate all those within serve the public. Another factor increasing use is an organization using and developing intellec- the decline in federal government support for tual properties. Few if any professors/research- agricultural research and the rise of industrial ers received any training in intellectual property sponsored research. For example, industrial management in their advanced degree programs. sponsors of LGC research efforts usually request This education is now necessary and should pro- exclusive access to any intellectual properties vide the researcher with an awareness of IPRs as developed through the use of their funds. In some they affect research activities. Additional educa- instances sponsors will provide proprietary in- tion is generally not provided unless requested. formation to the researcher and demand confi- LGCs and other academic institutions now rou- 68 Intellectual Property Rights in Agriculture tinely provide such educational opportunities. ties developed at the LGC, publication rights, and The Association of University Technology Man- associated matters. It is through these policies agers (AUTM) was established to provide con- that the professors/researchers and intellectual tinuing education to academic intellectual property specialists know how to operate and are property managers who, in turn, educate profes- able to work with those from outside the Uni- sors/researchers at their institutions. versity. MSU policy on publication is to retain Most LGCs and many other academic institu- publication rights for faculty, researchers, and tions have established technology transfer or in- students. In one case a company approached tellectual property offices to offer this education, MSU about transforming a particular type of as well as to provide an interface between indus- plant. The company was willing to pay more than trial and federal sponsors and academic institu- US$80,000 to carry out research and transforma- tions. These offices are another part of an LGC tion, but no type of publication or presentation not anticipated by the founders of the system. would be allowed. The University refused to ac- Employed within these offices are intellectual cept the offer. Negotiations were conducted for property specialists, attorneys, accountants, and over a year, during which the University held to other professionals. For the LGC and the profes- its publication policy. The company finally con- sor/researcher, these professionals handle inven- ceded to the University's position. tion disclosures, copyrights, MTAs, confidential Some groups demand ownership of any intel- disclosure agreements (CDA), research contracts, lectual property developed under their sponsor- licenses, and the occasional intellectual property- ship. MSU's policy is to assume ownership of any related problem. Without this type of organiza- intellectual property developed at the university, tion the LGC would stand to lose IPRs, as well as regardless of sponsorship. The University does sometimes being in violation of others' rights. offer sponsors an exclusive license for any intel- lectual property developed under the research IP Control Systems at LGCs sponsorship. Many sponsors mistakenly believe they provide all the support for a research project, With the use and awareness of intellectual prop- failing to recognize University support includes erties and IPRs increasing, there are numerous the research building, the research laboratory, "situations" that arise and must be handled. One equipment, salaries, training, and libraries. In such situation reported above described the loss truth the sponsor pays only a fraction of the total of compensation to the LGC and professor/re- cost of conducting research. searcher, and the restrictions on the professor's The impact of intellectual properties and their freedom to interact with colleagues because an protection in the biotechnology area is affecting MTA was not used to transfer a gene construct. the LGCs, their programs, and the people they Had the professor been able to consult an intel- serve, especially the farmers. Originally LGCs lectual property specialist before sending out the bred new crop varieties and distributed them gene construct, these problems could have been freely to farmers. Later with PVP in place LGCs avoided and the company could still have re- began controlling distribution of new varieties ceived user rights to the gene construct. The in- through certified seed growers, but still provided tellectual property specialist would have insisted seed to farmers at low cost. LGCs are now being on using an MTA and licensing the gene construct limited in what they can distribute, because with the company. If commercially successful the germplasm used in their breeding programs may gene construct would have provided a royalty contain patented materials. stream to the University and the researcher, and With the advent of biotechnology, along with the University would have reserved the right for industry taking a major role in biotechnology, noncommercial exchange of the gene construct breeding, and distribution, the traditional uni- and patented the construct. versity breeding program may soon be gone. A Appropriate policies must be in place for in- major firm is providing genetically transformed tellectual property specialists and others to work soybean with the transformation units pro- effectively for the LGC and its researchers. These tected by patents, and which are superior to policies define ownership of intellectual proper- non-engineered varieties. How can LGCs com- Perspectives from National Systems and Universities: United States Land-Grant Colleges 69 pete in this market? However, if LGCs terminate 4. Provide the means for the management of- traditional breeding programs, who will train the fice to operate effectively within and out- breeders of tomorrow? side the organization. Although the application of biotechnology is Many of these factors are now impacting agri- only beginning in the animal science area, cultural research at the international and national changes in the animal industry are already af- levels, even in seemingly remote countries. Those fecting farmers. For example, LGC professors/ entities can benefit from the ongoing experiences researchers working on vaccines are developing of the LGCs as attempts are made to accommo- new compounds that can benefit the farmer, but date change while serving traditional clients because of limited markets, large companies will among the poor of the world. not license and take many of these vaccines for- Prior to the early 1980s there was little aware- ward commercially. LGCs do not have the funds ness of the importance of IPRs by universities or or capability to commercialize these products, so farmers, or the general public. Industry was well effective new vaccines are "sitting" on the labo- aware of the importance of protecting its intel- ratory table. At MSU one professor was so frus- lectual property, but usually did not go beyond trated with this situation he set up his own its own research laboratories for new technolo- vaccine company. Although only two years old, gies. During the 1980s a number of changes oc- the new company is successfully marketing vac- curred that created an intellectual property cines large companies would not consider. Does awareness. One of these changes was the passage this indicate a new trend, a trend that means of the, Bayh-Dole Act by the U.S. government, LGCs may have to find ways to directly commer- which gave universities the right to license tech- cialize their own inventions because "big" indus- nologies developed under federal funding. An- try is interested only in large markets? The LGC other was industry reducing or eliminating its role is to serve society. How will it meet this new own research facilities, and needing to either have challenge of the large market requirement and research done elsewhere or to acquire new tech- serve society? nologies outside of the company. As well com- petition between companies increased as did the Lessons Learned and the Future costs of bringing new products to market. Test- ing needed to meet government requirements The major lesson to be learned is that change oc- was especially costly. Major steps in biotechnol- curs and LGCs must adapt to these changes or ogy dealing with gene research and transforma- lose the ability to serve society. Today's changes tion were also important in increasing intellectual concerning intellectual properties affect how the property awareness. LGC uses its technologies and transfers them to In the United States this increased awareness customers. Is this a bigger challenge than LGCs led to universities licensing hundreds of inven- faced previously, or is it simply another step in tions, resulting in a new revenue stream (royal- the evolution of LGCs? The effects of this intel- ties), the start-up of many new companies, and lectual property awareness reach beyond LGCs the employment of thousands in the new and al- and are being felt throughout the agribusiness ready established licensee companies. This pro- world. How can LGCs and others prepare to meet cess of recognition, taking intellectual properties this challenge? forward, and generating new companies is still There are four basic steps I believe need to be evolving. As the process evolves, universities and taken to prepare for the future: industry are learning as they advance the trans- 1. Adopt appropriate policies and measures fer of technology. Those new to technology trans- for handling and managing intellectual fer and IPR will need to talk with representatives properties from industry and academe to learn what 2. Educate and prepare professors, research- "works," what doesn't, and under what circum- ers, and students stances each approach is successful. 3. Develop a means to manage intellectual The key in the awareness and taking forward properties, perhaps through an office dedi- of intellectual properties has been the U.S. Gov- cated to intellectual property management emment, which "untied" various restrictions it 70 Intellectual Property Rights in Agriculture had imposed through its funding of research, and moter, believing it was a public domain promoter, allowing universities and industries to work out now find this use makes their work not commer- the way to handle intellectual properties. Gov- cially viable. The company has said users may ernments planning to support research should license these new applications of its promoter follow the U.S. lead in how it handles intellec- only to the company or to whom they (the com- tual properties. The freedom to take technologies pany) direct. But in no case will the company al- forward and allowing the marketplace to develop low the LGC to market elsewhere any technology its standards will do much to encourage the de- containing its promoter. The researcher must velopment of IPR. know the protection status of any material de- The high cost of taking intellectual properties veloped by others and must report this to the from the research laboratory to the marketplace appropriate licensing officials. has made it necessary for a company to protect One new technology licensed by an LGC con- its properties. For example, bringing a new phar- tained plasmids developed by two different uni- maceutical to market will cost in excess of US$250 versities, one in the United States and one in million. A company could not be expected to Australia. The inventor had informed the licens- spend so much and allow others to copy the tech- ing officer who then, prior to licensing the new nology, or to enter into competition with it. Com- technology, obtained licenses from each of the panies therefore closely guard their technologies. universities, licenses which gave the LGC the In agriculture the advent of transgenic plants right to include the plasmid in the LGC's tech- has led to the development of expensive biosafety nology. The two universities will each receive a testing. The high costs of developing transgenic share of the LGC's royalties. Another genetically varieties and biosafety testing means few com- modified product was brought forward which is panies, especially the smaller ones, can afford to much superior to the existing crop plants of that undertake this work. In a few years there will be variety. The inventor listed plasmids from eight fewer than 10 companies in the world produc- different sources being used to develop this new ing new transgenic varieties. variety! Before the superior product can be li- Because of the costs associated with taking a censed, permission will need to be obtained from technology to the marketplace, while advocating each of the eight sources. the commercialization of new intellectual prop- Licensing without this permission can result erties, managers of intellectual properties must in severe penalties being brought against the carefully review these materials to ensure proper LGC. ownership prior to licensing. This is particularly In LGCs some researchers see the approach to true when using gene constructs, plasmids, and licensing of intellectual properties as an affront the like. An LGC cannot license to a third party to their academic freedom. These individuals any materials that belong to another party. Ma- believe licensing rather than "giving away" in- terials that are described in scientific articles are tellectual properties will adversely affect their usually assumed to be in the public domain, and ability to obtain research funds and interfere with can be used by anyone without restrictions. One scientific publication. This is not true. The office gene promoter was described in a scientific pub- handling intellectual properties is a service or- lication and was made available to the scientific ganization, and will do its best to ensure continu- conmmunity from a number of sources. This pro- ation of the research program and professional moter was and is being used by a number of re- development of the researcher. searchers at LGCs. However, a company had These researchers believe that more people will applied for a patent on this promoter and the benefit if the products of their research are made existence of this patent application was "buried" freely available to everyone. This is often not true. in the United State Patent and Trademark Office The research results are usually not ready for the for several years before being brought to the at- marketplace because they require more work and tention of the scientific community. The patent development. Few companies have the ability to has been issued and the company owning it is do this R&D. Those companies that do are hesi- allowing the use of the promoter for research tant to spend money to take a "free" product to purposes only. Those who have used the pro- market. Others can copy or use the intellectual Perspectives from National Systems and Universities: United States Land-Grant Colleges 71 property since there is no protection, patent or ably the most important part is being able to show otherwise. researchers that the system of licensing really Commodity groups that sponsor research at works. LGCs are requesting exclusive access to the prod- The farmer is beginning to benefit from the ucts of the research they sponsor. They do not awareness of IPRs. Several transgenic plants are want the work products to be "given away." They now being marketed and others will be in the want to use these products for the benefit of their near future. These new plants do or will express members through limited distribution and roy- a "natural" resistance to harmful insects, be able alty generation. In this way the commodity groups to survive certain herbicide applications, toler- can have more funds for other research projects. ate low temperature, be more drought resistant, For researchers and the commodity groups a and produce greater yields. The future holds considerable amount of education is needed. This the promise of many new and exciting devel- education is in basic intellectual property man- opments for the global community and espe- agement and marketing. Many LGCs are doing cially the farmer. The continued recognition this now through seminars, one-on-one discus- and exploitation of IPRs will fuel this exciting sions, printed materials, and other means. Prob- development. 5. A Model for Internationally Owned Goods BioBanana GabrielleJ Persley he World Bank, in consultationwithbanana- ricultural problems. In particular, the feasibility producing countries and the banana export study undertaken by the Bank and its partners _ industry, has developed a business plan for to resolve issues relating to the management of in- a research program that will use modern biotech- tellectual property, anti-trust issues, and regula- nology to address the long-standing disease tory matters may provide lessons for subsequent problems affecting this crop. The seriousness of research programs or other commodities. these diseases results in the excessive use of fun- The World Bank has invested about US$25 gicides and nematicides, with accompanying million in the banana industry in producing risks to human health and the environment. Re- countries. This includes substantial investments cent research results suggest it should be pos- by the International Finance Corporation (IFC), sible to develop new varieties combining the the Bank's private sector investment affiliate, re- export quality of Cavendish fruit with novel lated to improving the efficiency and the genes conferring disease resistance. sustainability of the banana industry in several Most research and development (R&D) on countries of Latin America and the Caribbean, banana and plantain imnprovement has been and Southeast Asia. The World Bank has a vital funded by the public sector in producing coun- interest in assisting in the control of diseases on tries, including by development agencies and the this important crop, reducing environmental CGIAR (Persley and George 1996). Because the damage, and improving worker safety. export banana industry will also benefit from the The Bank is also supporting R&D on banana application of newly available biotechnologies, and plantain through the Banana Improvement it would be desirable to have a mechanism by Project (BIP), which it co-sponsors and manages which that industry could join with public sec- on behalf of the Common Fund for Commodi- tor agencies and development agencies in financ- ties (CFC), and the FAO Intergovernmental ing the next phase of the research, development, Group on Bananas (FAO/IGB), as well as through and delivery of new technologies. After a series its sponsorship of the Consultative Group on In- of consultations during 1996-97, the World Bank ternational Agricultural Research (CGIAR) invited participation in this International Banana (Persley and George 1996). Two of the CGIAR Biotechnology Program (BioBanana). The invi- centers (International Institute of Tropical Agri- tations went to a wide range of institutions in culture (IITA), Nigeria, and the International banana- and plantain-producing countries, and Plant Genetics Resources Institute's (IPGRI) In- companies involved in the banana export trade ternational Network for the Improvement of Ba- (see appendix). nana and Plantain (INIBAP)) undertake R&D on The experience gained in the development of banana and plantain, in relation to plantain this international program may provide lessons breeding at IITA, and R&D networking through for other groups seeking to address common ag- IPGRI/INIBAP. 72 A Model for Internationally Owned Goods: BioBanana 73 The World Bank is exploring ways to work The proposed Agreement between the Bank more synergistically and innovatively with the and the participants sets out the purpose of the private sector in areas of mutual interest, includ- Program, its objectives, research strategies, and ing in biotechnology, where this can benefit the approach, as well as the rights and obligations Bank's developing country member. The Bank is of the participants and the Bank, and the scale of also examining the future needs and opportuni- financial contributions. ties for developing countries to make safe and The Program will operate through a Council effective use of the applications of modem bio- consisting of one representative of each member technology to solve previously intractable prob- institution. The Council lems. It is also reviewing the appropriate policies 1. Reviews the strategy and policies of the and practices on intellectual property manage- Program ment to enable developing countries to access 2. Reviews the progress of the Program, in- and use the products and processes of modern cluding progress of individual research ac- biotechnology. Finally, the Bank is reviewing the tivities financed by the Program, and the needs and opportunities to reduce pesticide use financial situation of the Program through the wider application of integrated pest 3. Considers and approves the annual work management approaches. program and financial plan and budget for In initiating the Program, the World Bank pro- the next year poses to 4. Advises the Bank on the appointment of - Capitalize on the results that are emerging members of the Scientific Advisory Panel. from R&D to date, which demonstrate that bio- The major tasks of the independent Scientific technology could offer solutions to intractable Advisory Panel are to advise on the scientific disease problems content and monitoring of research projects, as * Provide a forum for the interested parties to well as advising the Bank on the acquisition and come together, under the aegis of the World disposition of intellectual property. The Panel will Bank, to address common problems that are include persons with expertise in biotechnology, beyond the scope of any one company, coun- genetics, plant pathology, intellectual property try, or research institution to solve management, and/or regulatory affairs, as well * Demonstrate new modalities of cooperation as in the banana industry, and the transfer of tech- between the public and private sectors by nology to developing countries. The Program's implementing a pilot project. research activities are to be based on an interna- tionally competitive research grants scheme, Governance and Organization similar to that used in BIP. The Program's operations, including the licens- Membership of the Program would be open to ing of IPR as deemed necessary, would be fi- any company, person, or entity engaged in the nanced by contributions from participants to a production, distribution, marketing, or control- Trust Fund managed by the World Bank, in ac- ling diseases of bananas and plantains, and any cordance with the provisions of the Agreement organization that is financing or intends to fi- between the Bank and the Program participants. nance (through the Program or otherwise) activi- Contributions would be renewed on an annual ties in support of banana and plantain. basis for five years, subject to satisfactory progress Members of the Program may include (a) pub- in the research program, as measured through the lic and privatv2 agencies in banana producing meeting of agreed milestones in the research strat- and exporting coantries, including farmer co- egy and operational plan approved by the Coun- operatives; (b) national and international banana cil. The proposed allocation to the Trust Fund to producing and trading companies and other com- achieve the R&D objectives is US$5 million per mercial companies; and (c) development agen- year (1998 dollars), when fully operational. This cies with interests in the social and economic represents approximately 2.5 percent of the development of banana and plantain producing present annual cost of pesticide applications on countries. bananas (currently about US$200 million). 74 Intellectual Property Rights in Agriculture IPR and Regulatory Issues The contract between the Bank and the research institutions will require the necessary regulatory The Bank will require all contracting parties con- approvals and registrations in the appropriate ducting research commissioned through the Pro- countries, for any research supported by the Pro- gram to disclose, transfer, and assign all technical gram on recombinant DNA technology, and the information to the Bank. Where necessary to evaluation of transgenic plants in the glasshouse achieve the objectives of the Program, and after and in field trials. As research moves to larger consultation with the Council and the Scientific scale field trials and ultimately to commercial re- Advisory Panel, the Bank may seek formal intel- lease, the involvement of commercial companies lectual property protection on technical informa- is anticipated. If any laboratory experimentation, tion. Participants would have the right to glasshouse tests, or field trials of transgenic plants nonexclusive, royalty free, nonassignable licenses are to be conducted in producing countries lack- for use in connection with banana and plantain, ing a regulatory system, to enable the safe con- on any such IPRs held by the Bank. duct of such experimentation, the Bank would In order to achieve its development objectives, offer on request to advise on the establishment of the Bank may also license such IPRs to nonpar- the necessary regulatory framework. ticipants, on terms to be determined on a case- by-case basis. In making the case-by-case Conclusions determination, the Bank would consult with the Council and take into account the need to foster Much has been made of the need for international the Bank's objective of making the benefits of the public goods arising from international agricul- research available in its developing member tural research programs. There may also be a fu- countries on reasonable terms. It would also take ture role for internationally owned goods, into account the purpose for which the technol- resulting from jointly funded, public/private sec- ogy would be used, that is subsistence agricul- tor programs. In the present case, an international ture or export. Any revenues accruing through development agency is prepared to hold intel- the issuance of such licenses would be allocated lectual property resulting from research and li- by the Bank to the Trust Fund for the purposes cense it to potential users in developing countries. of the Program. After completion of the Program, For the private sector the approach would be in any income received from licensing would be a manner that is consistent with the agency's distributed annually to former participants in development objectives, and equitable to public proportion to their financial contributions to the and private sector participants in the venture. The Program. experience of the World Bank and its partners The World Bank will own the intellectual prop- in developing the concept of BioBanana and re- erty rights on new technologies, but participants ducing it to practice may yield some valuable will be liable for problems that may develop. It lessons for other interested parties in the inter- is highly unlikely that royalties will be generated national development community. during the five-year project, but may come on stream later. Licensing of proprietary technolo- gies will be treated on a case-by-case basis. This would be the preferred option over comnmercial Appendix. International Banana Biotechnol- agreements being put in place from the start of a ogy Program (BioBanana) project. The present status of any proprietary intellec- Invitation to Participate. The World Bank invites tual property required for banana improvement participation in an International Banana Biotech- is being assessed during the preparatory stage. nology Program (BioBanana). The purpose of the An intellectual property audit is also being con- BioBanana program is to jointly fund research to ducted of the BIP projects managed by the World develop biotechnology-based solutions to the Bank to assess the current status of proprietary major banana pests and diseases, which are, in intellectual property relevant to bananas and order of priority: black Sigatoka, nematodes, emerging from the commissioned research. Fusarium wilt, and viruses. A Modelfor Internationally Owned Goods: BioBanana 75 The concept of establishing a new public/pri- * Transgenic Cavendish plants containing the vate sector initiative in banana biotechnology is novel genes for potential virus resistance. seen as a cost-effective way of addressing the These plants are presently being evaluated major disease and pest problems of banana, given in the greenhouse and will undergo field that there is keen interest and a critical mass of evaluation at several sites worldwide in potential members ready to proceed. 1998-99 Production. Banana is one of the world's top * Sources of resistance to black Sigatoka and to five internationally traded tropical commodities, nematodes have been identified in banana and with an annual export value of about US$5.3 bil- plantain breeding programs at the Interna- lion. Total world export of banana is approxi- tional Institute of Tropical Agriculture (IITA) mately 11.3 million tonnes from 32 countries. in Nigeria, and at breeding programs in Bra- Export dessert bananas represent about 10 per- zil, Guadeloupe, and Honduras. cent of total world production of banana and The first priority is to build on these results to plantain, most of which is consumed as a staple introduce into Cavendish banana cultivars resis- food throughout the humid tropics of Africa, Asia tance to the major fungal disease black Sigatoka, and Latin America. which affects both dessert bananas important to Disease Control. The export banana is suscep- international trade, and cooking bananas and tible to increasingly virulent pest and disease plantain, important as subsistence food particu- problems due to its narrow genetic base. Almost larly in Africa and Latin America. all the intemationally traded dessert bananas are Governing Council. The BioBanana Program the Cavendish variety. Unlike other major com- would be guided by a Council consisting of one modities, there has been little success, using con- representative of each member institution. The ventional methods, in breeding export quality Council would play a key role in determining products with disease resistance. The main threat the policy and strategy of the Program. The to the export banana industry is black Sigatoka World Bank envisages that participants will disease. Despite some 40 years of effort in con- represent a cross section of industry and public ventional breeding, there is no commercially sector institutions involved in banana and plan- acceptable, resistant variety available as a re- tain production, trading, research, and develop- placement for Cavendish. ment activities. Progress Towards Improved Disease Control. Re- World Bank Trust Fund. The Program's opera- cent research results from the Banana Improve- tions would be financed by annual contributions ment Project (BIP) and other sources have from its members to a Trust Fund. demonstrated that the applications of new bio- Scientific Advisory Panel. The Panel would ad- technologies to banana enable novel genes for vise the Council and the World Bank on the tech- disease resistance to be identified, inserted, and nical content of the research program. Projects expressed in banana. These results suggest that would be selected on the basis of internationally further rapid progress is possible to identify, in- competitive grants. troduce, and evaluate new genes for disease re- The aim of the Program is to mobilize the best sistance in banana. available expertise worldwide to tackle the Results of recent R&D supported through BIP threats posed by diseases to banana and plan- and other sources, including the CGIAR, that are tain production. important to the new initiative are: * Commercially enabling technologies to trans- Reference form banana, applicable to both Cavendish banana, the important cultivar of dessert ba- Persley, G. J., and P. George, ed. 1996. Banana Improve- nana, and subsistence cultivars of banana and ment: Research Challenges and Opportunities. Environ- plantain mentally Sustainable Development, Agricultural * Two novel genes potentially conferring resis- Research and Extension Group Series: Banana Im- tance to banana bunchy top virus and bract provement ProjectReport). Washington, D.C.: World mosaic virus Bank. 6. Summary and Implications for the World Bank Uma Lele, William Lesser, and Gesa Horstkotte- Wesseler P rivate investment in agricultural biotech- households needing access to vital planting ma- nology research by seed companies is in terial, and modem science, that makes IPRs in creasing rapidly. The privatization of in- agriculture especially important, relative to IPRs tellectual property, and the associated emergence in industry, including the pharmaceutical sector. of the private sector as the major force in agri- Resource-poor farmers must have free and easy cultural technology generation, is beginning to access to new agricultural biotechnologies, to have a profound impact on farmers and research- ensure food security and improved rural living ers in industrial and developing countries. There standards. is a qualitative difference, however, in the im- Public sector research has traditionally been pact of biotechnology and intellectual property the source of new technologies for small farm- rights (IPRs) on the farmers of developing coun- ers. The development of new biotechnologies, tries. Nearly 100 million poor households in de- however, requires massive investments. Cost re- veloping countries depend on agriculture for covery through proprietary science constitutes an their livelihood. Most of them are resource-poor important incentive for private investments in farmers. From their perspective it is not simply research. With rapidly growing private invest- the productivity growth in agriculture that is im- ment in agricultural research, important ques- portant; agriculture provides food security and tions emerge: their livelihood. These farmers conserve their * How will access to new technologies be as- own seed as planting material, thus ensuring sured to resource-poor farmers, free or at low food security. Technological changes have helped cost? to conserve ever-decreasing land and water re- * What role will public sector research play in sources, and to mobilize new resources into ag- future agricultural development in develop- riculture, particularly for the benefit of the ing countries? resource-poor farmers. New "designer" genes * What types of public-private partnerships will help make this possible. They contain built-in evolve to achieve social objectives? insect and pest resistance. They enable cultiva- * What incentives are needed to ensure contin- tion of crops on previously underutilized and ued public and private investment in agricul- degraded lands. The genetic characteristics of the tural research? traditional plant material used by resource-poor These questions have acquired a special ur- farmers can contribute to the development of gency as public sector investment in agricultural new transgenic materials. This makes the poor research has decreased in recent years, at the na- important guardians of biodiversity even in the tional and international levels. new context of a modernizing agriculture. It is The World Bank has a major stake in the an- this intersection of indigenous knowledge and swers to these questions, being the largest in- resources, the vulnerability of the food-insecure ternational funding agency of public sector 76 Summary and Implications for the World Bank 77 agricultural research in non-OECD countries. The Given the highly dynamic nature of technical Bank has a major challenge to assist its client change and the growing role of the private sec- countries, given (a) the wide range of country tor particularly in biotechnology, developing sizes, (b) the varied stages of NARS development, country scientists in public sector research sys- and (c) the highly dynamic state of technical tems must have continued access to new knowl- change and varied institutional arrangements. It edge to perform effectively their public good is a difficult and complex task to establish IPR function. The effects of the new environment for regimes in developing countries, because of the continued access of developing country scientists diversity of stakeholders, each with differing in- and farmers to new technologies, and their im- terests, and the diversity of international agree- plications for the World Bank assistance to its cli- ments related to IPR. The Convention on ents in technology development and access, are Biodiversity, WTO, and the newly emerging discussed below. farmers' rights regarding plant genetic material, are not easy to reconcile. Notwithstanding these Agricultural Research Environment complexities, the fact remains that developing countries that are signatories must meet WTO Until quite recently, food crop research was al- requirements by 2000 and in some cases 2005. most entirely supported by the public sector, even The World Bank proposed a workshop as a in industrial countries. Commodities such as cof- means to explore the implications of these de- fee and sugar have long been the preserve of in- velopments for the Bank's advice and lending dustry groups, with public support of food crop policy to its member countries. It sought to bring research typically being between 0.5 and 2 per- together informed people from industrial and cent of GDP on a national basis. The national re- developing countries, public institutions, the search investments, with approximately US$400 private sector, WTO, WIPO, and the CGIAR million invested annually in the CGIAR system, centers to supported a broad-based program able to meet * Explore recent developments in IPRs as ap- many of the global food production technology plied to agriculture needs. There are many reasons for the large pub- * Explore implications for the World Bank's lic investment, including the clear public benefit future research and operational roles in this of safe and inexpensive food. Farms tended to important area, including the design and be too small, even in industrial countries, to sup- implementation of the Bank-supported invest- port their own research, so the public 'sector be- ments in the NARS of its client countries. came the investor of last resort. Public sector Participants were selected on the basis of their interest in agriculture has also tended to be a knowledge of IPR and agricultural research is- product of the political power of the large farm sues, representative of a broad spectrum of opin- bloc that benefited from such research. The pri- ion. The private sector representatives strongly vate sector had little incentive to invest, because supported the establishment of broad IPR sys- with open-pollinated crops dominating most tems. Representatives from India outlined the food species, appropriation of benefits was nearly complexity of the challenge in developing a na- impossible. tional IPR policy and institutions, given the com- The private sector became interested in agri- peting demands of the different stakeholders. cultural research when corn hybrid technology Representatives of Brazil outlined the challenges was developed in the 1930s. Within a few de- of the public agricultural research system in the cades, wherever private involvement was permit- face of growing acquisition of seed companies by ted, the hybrid corn sector was almost universally the private sector. The CGIAR representatives privatized in major producing areas. Yet that was highlighted the range of issues affecting the Cen- the exception. Hybridization provided a means ters, which operate at the crossroads of indus- of appropriation of value, while increasing the trial and developing countries, small farmers, yield sufficiently to justify a premium price over national and international programs, and the open-pollinated varieties. The private sector has private sector. long dominated the agricultural machinery and 78 Intellectual Property Rights in Agriculture chemicals sectors. Plant breeding was an excep- three forces coincided. The most significant was tion for many years. the development of agricultural biotechnology, That situation changed in the 1970s with the with the first commercial release occurring in expansion of Plant Breeders' Rights (PBR), a China in the early 1990s. By 1998, an estimated patent-like system applied to plants. That legis- 27.8 million hectares (excluding China) of lation is associated with the creation of about 100 transgenic crops were planted worldwide, with seed-breeding companies in the United States, herbicide and insect resistance the leading traits. and increasing private investment in seed breed- That same year transgenics constituted 36 and ing (Butler and Marion 1985, table A-2). Adop- 22 percent of the U.S. soybean and corn acreage, tion of PBR in developing countries lagged, and respectively. Argentine soybean areas were 55 by 1994 only two countries (in Latin America) percent transgenic, as was 45 percent of Cana- belonged to UPOV, the international convention dian canola area (James 1998). Outside of China, for PBR, with only Argentina showing any in- essentially all of the materials involved are pri- vestment effects of PBR, largely because of en- vately owned (CGIAR System Review Secretariat forcement (Jaffe and van Wijk 1995). Many 1998, 87). countries and regions, such as India and south- Also in the 1990s, the TRIPs requirements of ern Africa, limited private involvement in the the World Trade Organization were adopted, seed sector until quite recently. which established certain minimal levels of IPR India, for example, prohibited the importation protection that countries must have in place by of seed for a wide range of crops until the New the end of 1999 (Lesser and others, this volume). Policy for Seed Development was adopted in That mandate led to the adoption of PBR by a 1988. By 1993 public and private investment in number of countries, so that membership in corn breeding, as measured by numbers of re- UPOV, the international PBR convention, grew searchers, had grown to almost even, 108.5 vs. to 37 in 1998 (from 19 in the early 1990s). Several 92 (Pal, Singh, and Morris 1998, table 14.3). India other countries, including Brazil, have made continues to lack PBR legislation that restricts plans to join in the near future (Sampaio, this private sector investment in open-pollinated seed volume). The patent protection of plants, an al- breeding. Zimbabwe followed a different legis- lowed alternative to PBR under TRIPs, has, how- lative path, in part due to the influence of the ever, remained available only in a limited number large size of farms, and mostly white estate farm- of countries. ers. Zimbabwe adopted a national PBR law in The WTO agreement was but one aspect of a 1973, and by 1995, five multinational firms each general opening of economies and consequent invested more in corn breeding than the govern- globalization, in the wake of the advance of capi- ment and CIMMYT combined (Rusike 1998). talism following the collapse of communism as The maize seed industry in Malawi progressed a major economic force in the 1980s. One promi- along entirely different lines, largely because of nent example among major agricultural nations the dominant smallholder sector. Small produc- is Brazil, which went through a significant eco- ers preferred open-pollinated varieties that could nomic restructuring in 1993, including the adop- be used as a seed source, and white flint variet- tion of a new IPR law in 1996, and PBR legislation ies that were resistant to insect damage under in 1997, along with a major reduction in foreign local storage conditions. The hybrid sector ex- investment restrictions. Within a short period, ported yellow dent varieties worldwide, leaving Monsanto had purchased 16 national seed com- relatively little material available for use in the panies, and has entered protracted negotiations country. Private investment began in 1989 with with EMBRAPA, the agricultural ministry, re- a single firm (Cargill), until the arrival of Pannar garding the introduction of transgenic crops us- in 1993 following a significant deregulation of ing EMBRAPA's proprietary varieties. access and profit repatriation. The public sector, This ongoing transformation of food crop re- using materials from CIMMYT, remains the ma- search from public to private dominance is rais- jor producer of varieties (Rusike and Smale 1998). ing a number of fundamental issues for national Private sector involvement with food crops did programs, for the CGIAR, and for the World not accelerate until the 1990s, however, when Bank. Perhaps the most fundamental of these is Summary and Implicationsfor the World Bank 79 the access of resource-poor producers to the new As these matters advance a number of addi- biotechnologies. There are a number of reasons tional detailed issues will likely require further to question the extent to which the market would discussion, including: be able to supply that group, without several * The benefits of a single service unit in Wash- types of intervention. Issues include the general ington compared with individualized support size economies of new technologies, the addi- at the Center level. tional management requirements of the new tech- * Potential liability associated with IPR owner- nology, greater cash flow aspects implying ship. greater risk for resource-poor producers, the pro- * Costs and funding sources for IPR protection. vision of stewardship for many products (such US University patenting and licensing centers as resistance-delaying approaches for Bacillus have typically found that a 10-year period is thuringiensis crops), the availability of varieties required before the process breaks even and meeting small farmer needs, and IPR issues in begins to generate funds. general. As a group these matters are imposing * Funding sources to defend IPRs from infringe- and can better be approached in their constitu- ment. ent components, with emphasis on IPR and World Bank client countries can learn from the public/private sector partnerships. CGIAR experience. Although that is necessary, The CGIAR, after a lengthy period of abstract- however, it is not sufficient. First, not all the ing itself from the matter, is actively considering Bank's client countries are members of the the management of IPRs. Essentially, the past CGIAR. Second, the bilateral challenges the practice of unconditional release of CGIAR in- Bank's client countries face relative to the private ventions is now recognized as less than satisfac- sector, as well as the CGIAR, are becoming in- tory for a number of reasons, including the creasingly complex. Finally, the client countries realization that it denies the Centers any control are directly accountable to their national stake- over the inventions. Consequently, a decision was holders whose interests they must protect. The made at the Mid-Term Meetings in Brasilia in CGIAR, although with a mission of international May 1998 to reevaluate that policy, and to estab- public goods, is largely funded by industrial lish a centralized IPR entity with as yet unde- countries that do not often agree on key issues of fined responsibilities (for further details see interest to the CGIAR, either amongst themselves Ninnes, this volume). The matter was revisited or with developing countries. The Bank's client in the Third System Review (CGIAR System Re- countries must therefore have an independent view Secretariat 1998), and incorporated into capacity to address the challenges, as they per- Recommendation 4, which reads in part regard- ceive them. ing IPRs and public/private sector partnerships): The World Bank's past project investments The Panel recommends an integrated gene were largely directed to developing public sec- management approach based on tor research organizations and institutions, and * A central coordinating and servicing unit for to training. Because the private sector has become advising IARCs and appropriate NARS a major supporter of agricultural biotechnology * Patenting processes and new varieties, and en- and related research, the Bank now has a major trusting their use under free licensing stake in ensuring that the rules of the game for * A legal entity that could hold CGIAR patents. public/private sector partnerships are structured In related actions, the Systems Review panel in developing countries in such a way that they recommended the strengthening of CGIAR links can ensure fulfillment of the Bank's mission of with the international private sector, but noting sustainable poverty alleviation. This means the that doing so would change the CGIAR's non- small, resource-poor farmers must have contin- partisan, nonideological character. They proposed ued access to the needed materials and knowl- the creation of a foundation to manage funds edge as science and technology advance. Indeed, from nontraditional sources such as royalties the public sector is in a partial crisis worldwide from IPRs, and grants for research not compro- as it is attempting to determine its new role in mising the public interest. The same foundation the increasingly privatized agricultural research could potentially hold title to CGIAR IPRs. arena. Within the context of declining public sec- 80 Intellectual Property Rights in Agriculture tor research funding, private sector control, based the issues of development and transfer of ma- on IPRs and material transfer agreements and, terials appropriate for resource-poor farmers, where permitted, through partial private sector in the context of the growing importance of priority-setting through its research funding sup- biotechnology. port, have left public sector researchers uncer- The private sector is having different effects tain of their appropriate role. The establishment on more traditional parts of agricultural research of partnerships with clear public/private roles such as seed breeding. For example, private com- would help clarify the matter. panies have entered into partnerships on a lim- One area where these issues are evident is the ited basis, particularly where hybrid seed public sector seed industry. The entry of the pri- production is involved, and where benefits can vate sector into corn breeding in several devel- be appropriated. The rapid spread of PBR likely oping countries was discussed earlier. With PBR foreshadows a broader entry of private firms into being extended to most countries, the expecta- open-pollinated seed breeding. Ongoing reform tion now is for greater private sector involvement projects of national seed programs have been in open-pollinated varieties in many countries. developed to accommodate private sector con- This is an area of importance for the Bank fund- cerns, but private firms will not satisfy the needs ing of seed production. Overarching issues in- of all farm types. This means that partnerships clude the appropriate incorporation of the private and split responsibilities require further formu- sector with a quintessentially public good prod- lation in this area as well. uct, such as open-pollinated seeds, where the One of the early tasks for increased Bank in- transaction costs of exclusion can be quite high. volvement in the complex of issues of public/ This is particularly true of the small farm sector private sector partnerships and IPR will be iden- where saved seed (both direct and through local tification of expertise in these areas. Various pos- market sales) is a major seed source. By contrast sibilities exist, from additional in-house staff monopoly public sector control of the sector had, (uncertain given the present fiscal climate), to in many cases, led to a slow release of improved increased use of consultants, to joining with the varieties and often inadequate and untimely dis- proposed CGIAR central resource, although that tribution. Reform often required legislative will take time to develop. The latter possibility changes, plus the abandonment of subsidies that is insufficient because the Bank deals with client tended to entrench the public monopoly. countries whose challenges in dealing with IPRs The structure of agricultural research is evolv- are different from those of the CGIAR. ing rapidly to one with a growing private sector component. In agricultural biotechnology the Possible Future Role of the World Bank private sector is the driving force and is estab- lishing the priorities. Public sector institutions The World Bank can assist its clients in various wishing to work in this area must identify means ways. Several conclusions emerging from the dis- of developing partnerships with private firms for cussions at the workshop are outlined below. access to expertise, materials, and funding. Thus a high priority of the World Bank should be to Gaps in Knowledge and Need for Further Research ensure the fair structuring of those partnerships for its global poverty alleviation mission. The The World Bank could become a catalyst for pro- Bank has currently little in-house IPR capacity moting policy research in IPR issues of high pri- to assist its task managers responsible for the ority in agriculture, and in assessing their impact design and supervision of the World Bank-fi- (for example, on investments, prices, supply of nanced projects. The Bank is now developing technologies, distributive effects, human and sci- greater IPR capacity as an outgrowth of the de- entific capacity development) among industrial mand from client countries such as Brazil and countries, developing countries, and the CGIAR India. IPR is a component, but only one compo- centers. It could support and refine operation- nent, of those Bank-borrower partnerships. Rel- ally an international index (such as the one de- evant for national research and the Bank, but veloped by Ginarte and Park (1997), or the one largely outside the interests of private firms, are by Sherwood (1997)) of intellectual property re- Summary and Implications for the World Bank 81 gimes and improvements/deterioration in them example, as in the Agricultural Technology on an annual basis. This would serve as a means Project in Brazil) as a way of enhancing capac- to measure progress and to identify alternative ity of the national systems. solutions, in much the same way that the Bank uses macroeconomic and other indicators of in- Identifying and Removing Practical Hurdles terest to investors. The World Bank could also to Implementing Effective IPR Systems monitor the increase in private investments in ag- ricultural research and technology transfer, and The World Bank could: clarify its causes as it relates to IPRs. * Diagnose needs, facilitate consensus among important stakeholder groups in each coun- Approaches for Strengthening National try, and help develop action plans IPR Systems * Develop a network of international experts and promote regular consultations through an A preliminary list of areas in which bilateral and electronic forum to support the work of its task multilateral organizations might assist develop- managers and client countries-see list of par- ing countries in reforming their IPR regimes was ticipants at the end of this volume suggested in an electronic conference on IPRs and * Develop standard contracts for licensing com- Economic Development organized by the World ponent materials Bank in May 1998. In view of the CGIAR deci- * Operationalize these contracts on a pilot basis sion at the MTM in Brasilia in May 1998 to estab- through ongoing World Bank projects to stimu- lish a system-wide legal advisory facility, two late private investment in agricultural research efforts could combine forces as appropriate de- in developing countries. pending on the resources the World Bank might able to devote to this effort to: Incorporation of IPRs within the Scientific * Identify and understand the IPR related issues and Related Communities the Bank's borrowers face • Develop strategies for assisting in the reforms The World Bank could: of IPR laws and enforcement procedures, * Create sufficient in-house capacity on a long- taking into account the "TRIPs standards of term basis through regular staffing to perform protection" (for the CGIAR, identify the im- a catalytic role of mobilizing expert consult- plications of the state of affairs in developing ants from outside to assist its task managers countries for CGIAR operations) in developing investment projects in develop- * Promote cost-saving administration of patents ing countries, for example, through the train- and trademarks ing of those concerned with IPRs (scientists, * Educate policymakers and the general public policymakers, administrators, patent examin- about the complex trade-offs surrounding ers, and judges) IPRs, and what TRIPs-related IPR reforms will * Assist developing countries in acquiring ne- and will not accomplish gotiating skills for technology transfer and ma- * Sensitize researchers and small- and medium- terial transfer agreements (needed in the sized firms in developing countries on emerg- CGIAR centers as well as the NARSs) through ing opportunities, and promote linkages enhanced information flow. between research institutions and private entrepreneurs World Bank Training Needed * Review IPR legal systems for their effective- ness by making available judicial reform spe- Training emerged as an important area for World cialists Bank involvement in IPR. The Bank often in- * Evaluate the operations of regional IPR offices cludes a training component in the investment to identify best practices projects it finances in developing countries, but * Finance placing of mid-career national science for IPR there is a serious need for exposure and managers of developing countries in experi- training of Bank staff. Bank task managers need enced patent offices of industrial countries (for to understand the implications of IPRs, as well 82 Intellectual Property Rights in Agriculture as to participate in a network of outside special- develop the Bank's small-core capacity at the cen- ists from whom they can seek help to ensure they ter on agricultural IPRs with a long term view, are able to impart sound advice to borrowing honing the skills of Bank task managers to allow countries. Bank staff need to know more about them to do a better job in this increasingly im- institutional arrangements (for example, in U.S. portant and complex area. And second, devel- land-grant colleges and USDA as well as in opment of appropriate responses in institutional other OECD countries) so they can apply some development for public/private partnerships of this experience when working with devel- requires greater attention at the stages of design oping countries. Bank managers dealing with and implementation of Bank-financed invest- agriculture need to have a deeper knowledge of ments. This calls for an appraisal of policy and the significance of IPRs. This would help ensure institutional arrangements in borrowing coun- quality of public goods research investments de- tries and changes needed therein, in addition to signed by task managers, and funded by the the provision of funds for training of key indi- World Bank. viduals from developing countries on a priority The Bank needs to have a core group in its basis to enhance national efforts. Rural Development Family who, while not ex- perts themselves, would remain at the cutting References edge of IPR developments. They would work with task managers in all the regions to develop Butler, B. J., and B. W. Marion. 1985. "The Impacts of appropriate responses through policy advice and Patent Protection on the U.S. Seed Industry and project design. This means exposure to the more Public Plant Breeding." U. Wisconsin, NC-117, complex problems of countries such as Brazil and Monograph 16. India, where the Bank is currently lending. These CGIAR System Review Secretariat. 1998. "The Inter- national Research Partnership for Food Security and countries have large and capable national sys- Sustainable Agriculture." Third System Review. tems, and yet have had to take the lead in work- Washington, D.C., Oct. 8 (see http://cgreview. ing through IPR problems because they had worldbank.org/cgrevrep.htm). urgent demands arising out of the rapidly chang- Ginarte, J. C., and W. G. Park. 1997. "Determinants of ing international circumstances. They face highly Patent Rights: A Cross-National Study." Research complex social issues-partly as a result of hav- Policy 26:283-310. ing large populations of poor rural households, Jaffe, W., and J. van Wijk. 1995. "The Impact of Plant whose "public goods" rights they must protect. Breeders' Rights in Developing Countries." Inter- American Institute for Cooperation on Agriculture, But the Bank must also work with smaller and Univ. Amsterdam. less developed countries. The latter have less in- Pal, S., R. P. Singh, and M. L. Morris. 1998. "India." ternal capacity to keep up with the challenges in In M. L. Morris, ed., Maize Seed Companies in De- a rapidly moving field, and less capacity to ar- veloping Countries. Boulder, Col.: Lynne Rienner ticulate their needs to the World Bank. The chal- Publishers. lenges in providing assistance are quite different Rusike, J. 1998. "Zimnbabwe." In Morris, ed., Maize Seed in middle-income, larger countries with an al- Companies in Developing Countries. well-established critical mass of internal Rusike, J., and L. Smale. 1998. "Malawi." In M. L. Morris, ed., Maize Seed Companies in Developing capacity, as distinct from the smaller, poorer Countries. countries. Sherwood, R. M. 1997. "Intellectual Property in the Training, therefore, has to have a two-tiered Western Hemisphere." Inter-American Law Review approach: First there must be an urgent effort to 28:566-95. Appendix. Workshop Participants and the Creation of an IPR Network A t the mid-1998 workshop on intellectual * Focus on the role of the World Bank as a property rights in agriculture, many of facilitator. )&,the participants felt that the creation of an informal (mostly electronic) network would: What Can or Should Such a Network Not Do? * Assist developing countries in getting ready to meet the WTO/TRIPs requirements by the . Debate issues in general year 2000 * Provide legal advice * Help develop their capacity to stimulate fur- * Provide business opportunities ther investments in agricultural research . Duplicate efforts (for example, developments through the intellectual property environment in international forums can best be accessed that such a network would provide. directly through these forums). What Can or Should Such a Network Do? Contact Addresses of Workshop Participants * Network members can make valuable infor- mation available to others (for example, inter- Ameur, Charles esting papers; new experiences). World Bank * Developing country members can obtain ad- 1818 H Street NW vice on IPR-related issues from other network Washington, DC 20433, USA members. Tel.: (1-202) 473 2349; * Institutions can disseminate information on E-mail: cameur@worldbank.org their activities (for example, on training: MSU, WIPO). Anderson, Jock * Network members can provide comments on World Bank papers (for example, papers coming from the 1818 H Street NW CGIAR centers). Washington, DC 20433, USA * If network members encounter specific (prac- Tel.: (1-202) 473 0437 tical?) problems related to IPRs, they can ob- E-mail: janderson@worldbank.org tain advice from other network members. * Network members can point out links to other Barton, John H. sources that might have more relevant infor- Stanford University, Law School mation (for example, TechNet; other individu- Crown Quad 237 als not yet included). Stanford, CA 94305-8610 * Network members can debate certain topics Tel.: (1-650) 723 2691 (e-mail conference on well-defined topics). E-mail: jbarton@leland.stanford.edu 83 84 Intellectual Property Rights in Agriculture Bennett, A. Rick Carvalho, Nuno USDA, ARS WTO Rm 102, Building 005 Barc-West Geneva, Switzerland 10300 Baltimore Blvd., Tel.: (41-22) 739 5111 Beltsville, MD 20705, USA E-mail: nuno.carvalho@wto.org Tel: (1-301) 504 5705 Fax: (1-301) 504 5298 Cohen, Joel E-mail: rick.bennett@usda.gov ISNAR P. 0. Box 93375 Berthaud, Julien 2509 AJ The Hague, The Netherlands ORSTOM Tel: (31-70) 349 6158 Ave Agropolis, BP 5045 Fax: (31-70) 381 9677 34032 Montpellier, France E-mail: j.cohen@cgnet.com Tel.: (33-4) 67 41 61 65 Fax: (33-1) 40 36 23 85 De Haan, Cornelis E-mail: julien.berthaudXmpl.orstom.fr World Bank Fax: (1-301) 504 5060 1818 H Street NW E-mail: djb@ars.usda.gov Washington, DC 20433, USA Tel.: (1-202) 473 0347 Braga, Carlos Primo E-mail: cdehaan@worldbank.org World Bank 1818 H Street NW Dodds, John Washington, DC 20433, USA ICARDA Tel.: (1-202) 473 3927 P.O. Box 5466 E-mail: cbraga@worldbank.org Aleppo, Syria Telex: (492) 331208, 331263, or 331206 Bragdon, Susan ICARDA SY IPGRI Tel.: (963-21) 213477, 225112, or Via delle Sette Chiese 142 225012 00145 Rome, Italy Fax: (963-21) 213490, 225105, or Tel: (39-6) 51 89 24 00 744622 Fax: (39-6) 575 0309 E-Mail: j.dodds@cgnet.com Email: s.bragdon@cgnet.com Dryden, Jr. R.N. (Sam) Brandao, Guilherme Euclides Big Stone Partners CNPq 1634 Walnut Street, Suite 301 Av. W3 Norte Quadra Boulder, CO 80302-5400, USA 509-Bloco A-Sala 422 Tel.: (1-303) 449 9696 Brazilia, D F., Brazil Fax: (1-303) 449 9699 Tel.: (55-61) 348 9386 E-mail: bigstonl@ix.netcom.com gbrandao@cnpq.br Echeverria, Ruben Byerlee, Derek Inter-American Development Bank World Bank Environment Division, Sustainable 1818 H Street NW Development Department, Washington, DC 20433, USA 1300 New York Ave., NW Tel.: (1-202) 458 7287 Washington, DC 20577, USA E-mail:dbyerleeCworldbank.org Tel: (1-202) 623 1888 Fax: (1-202) 623 1786 E-mail: rubene@iadb.org Appendix. Workshop Participants and the Creation of an IPR Network 85 Erbisch, Frederic H. Ives, Catherine L Michigan State University Michigan State University Office of Intellectual Property Agricultural Biotechnology for Sustainable 238 Hannah Admin. Bldg. Productivity (ABSP) Project E. Lansing, MI 48824, USA 324 Agriculture Hall Tel.: (1-517) 355 2186 E. Lansing, MI 48824, USA Fax: (1-517) 432 3880 Tel.: (1-517) 432 1641 E-mail: erbisch@pilot.msu.edu Fax: (1-517) 353 1998 E-mail: ivesc@pilot.msu.edu Espinosa, Octavio Development Cooperation (Intellectual Lee, Karen Property Law) Department WIPO 34, Ch. Colombettes Geneva, Switzerland 1211 Geneva 20, Switzerland Tel: (41-22) 338-9960 (direct) Tel.: (41-22) 338 9281 (direct) Fax: (41-22) 338 9770 Fax: (41-22) 338 9898 E-mail: karen.lee@wipo.int E-mail: octavio.espinosa@wipo.int Lele, Uma Fink, Carsten World Bank World Bank 1818 H Street NW 1818 H Street NW Washington, DC 20433, USA Washington, DC 20433, USA Tel.: (1-202) 473 0619 Tel.: (1-202) 458 7648 E-mail: ulele@worldbank.org E-mail: cfink@worldbank.org Leskien, Dan Forno, Douglas P.O. Box 500952 World Bank D 22709 Hamburg, Germany 1818 H Street NW Tel: (49-40) 431 89766 Washington, DC 20433, USA Fax: (49-40) 431 89709 Tel.: (1-202) 473 9406 E-mail: Dan_Leskien@compuserve.com; E-mail: dfomo@worldbank.org 100703.771@compuserve.com Horstkotte-Wesseler, Gesa Lesser, William Henri World Bank Cornell University 1818 H Street NW 405 Warren Hall Washington, DC 20433, USA Ithaca, NY 14853, USA Tel.: (1-202) 458 7915 Tel.: (1-607) 255 4595 E-mail: ghorstkottewesse@worldbank.org Fax: (1-607) 255 6696 E-mail: whll@cornell.edu Ilyas, S.M. ICAR Lewis, Josette Krishi Bhavan USAID New Delhi 110 001, India G/EGAD/AFS Tel: (91-11) 338 9526 Washington, DC 20523-2110, USA Fax: (91-11) 338 9526/7293 Tel.: (1-202) 712 5592 E-mail: smilyas@icar.delhi.nic.in Fax: (1-202) 216 3010 E-mail: jlewis@usaid.gov 86 Intellectual Property Rights in Agriculture McMahon, Matthew Sampaio, Maria Jose Amstalden World Bank EMBRAPA, SAIN 1818 H Street NW Parque Rural, W/3 Norte-Final Washington, DC 20433, USA Brasilia-DF 70770-901, Brazil Tel.: (1-202) 473 8586 Tel.: (55-61) 273 6454 E-mail: mmcmahon@worldbank.org Fax: (55-61) 347 1041 E-mail: sampaio@sede.embrapa.br Ninnes, Peter CIMMYT Serageldin, Ismail Apdo. Postal 6-641 World Bank 06600 Mexico, D.F., Mexico 1818 H Street NW Tel.: (52-5) 726 7503 Washington, DC 20433, USA Fax: (52-5) 726 7585 Tel.: (1-202) 473 4502 E-mail: pninnes@cimmyt.mx E-mail: iserageldin@worldbank.org Ozgediz, Selcuk Seth, Ashok Kumar World Bank World Bank 1818 H Street NW 1818 H Street NW Washington, DC 20433, USA Washington, DC 20433, USA Tel.: (1-202) 473 8937 Tel.: (1-202) 458 1438 E-mail: sozgediz@worldbank.org E-mail: aseth2@worldbank.org Persley, Gabrielle J. Shear, Rick Biotechnology Alliance Australia Monsanto P.O. Box 1101 800 North Lindbergh Blvd. Toowong, Brisbane, Australia St Louis, MO 63167, USA Tel: (61-7) 3365 4939 Tel.: (1-314) 694 3215 Fax: (61-7) 3365-7093 Fax: (1-314) 694 9009 E-mail: g.persley@mailbox.uq.edu.au E-mail: richard.h.shear@monsanto.com Reifschneider, Francisco Sherwood, Robert M. EMBRAPA, SAIN International Business Counsellor Parque Rural, W/3 Norte-Final 7617 Leith Place Brasilia-DF 70770-901, Brazil Alexandria, VA 22307-1928, USA Tel.: (55-61) 274 5000 Tel.: (1-703) 768 4118 Fax: (55-61) 272 4656 Fax: (1-703) 768 4630 E-mail: sci@sede.embrapa.br E-mail: rmsherwood@ibm.net Salerno, Rosina Simon, Elke World Bank Hoechst Schering AgrEvo GmbH 1818 H Street NW Hoechst Works, K 801 Washington, DC 20433, USA D-65926 Frankfurt am Main, Germany Tel.: (1-202) 473 8914 Tel: (49-69) 305 6055 E-mail: rsalerno@worldbank.org Fax: (49-69) 305 2200 Appendix. Workshop Participants and the Creation of an IPR Network 87 Slingenberg, Max von der Osten, Alexander Agricultural Attache CGIAR The Netherlands Embassy World Bank 4200 Linnean Ave. NW 1818 H Street NW Washington, DC 20008, USA Washington, DC 20433, USA Tel.: (1-202) 274-2718 Tel.: (1-202) 473 8918 Fax: (1-202) 244 3325 E-mail: avonderosten@worldbank.org E-mail: slingenberg@was.minbuza.nl Weiskopf, Beate Terry, Eugene GTZ World Bank Dag- Hammarskjold-Weg 1-5 1818 H Street NW Postfach 51 80 Washington, DC 20433, USA 65726 Eschborn, Germany Tel.: (1-202) 473 8544 Tel.: (49-6196) 79 1432 E-mail: eterry@worldbank.org Fax: (49-6196) 797173 E-mail: beate.weiskopf@gtz.de Traxler, Greg Auburn University Winkelmann, Donald L. 203 Comer Hall TAC Auburn University, AL 36849, USA 355 East Palace Avenue Tel.: (1-334) 844 5619 Santa Fe, New Mexico 87501, USA Fax: (1-334) 844 5639 Tel.: (1-505) 988 1284/1285 E-mail: gtraxler@acesag.auburn.edu Fax: (1-505) 988 1285 E-mail: tacwink@newmexico.com; tac- van Schoonhoven, Aart chair@cgnet.com CIAT Cali, Colombia Tel.: (57-2) 445 0000 Fax: (57-2) 445 0073 E-mail: a.schoonhoven@cgnet.com THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433 USA Telephone: 202-477-1234 Facsimile: 202-477-6391 Telex: MCI 64145 WORLDBANK MCI 248423 WORLDBANK Internet: www.wworldbank.org E-mail: books@vworldbank.org ENVIRONMENTALLY AND SOCIALLY SUSTAINABLE DEVELOPMENT Ru; a! Deu e/optnent ISBN 0-8213-4496-X