4.1. How does the CGIAR motivate owners to share proprietary technology?
4.2. Respect for Patents
4.3. How does the CGIAR decide when to seek Protection for its Technologies and Materials?
Whether the Centres are seeking to use the proprietary science of others, or to protect their own developments, the same fundamental criterion applies: will what they do advance the mission of the CGIAR? If not, it is a diversion, either wasteful of effort or even dangerous.
Examples of science that the Centres have already found useful are molecular markers and diagnostic probes. Work in crops of less or no commercial importance (e.g. yams, cowpea, cassava) will be particularly relevant.
In the event that the Centres decide that they need access to proprietary technology of others to deliver benefits to the poor, how can they negotiate such access? Will it be freely available?
4.1.1. Current Situation
4.1.2. Why should companies license?
4.1.3. When will companies be unwilling to license?
4.1.4. How can markets be segmented?
It is perhaps remarkable that the two main sources we consulted 8 did not suggest major difficulties for the CGIAR in getting access to proprietary technology: at least for non-commercial outlets isolated (segmented) from commercial markets The International Service for the Acquisition of Agri-Biotech Applications (ISAAA) was established to help developing countries obtain the benefits of biotechnology. Its President, Dr. C. James, told us that he had not had any experience of being refused access to others' biotechnology, whereas in the Panel's survey (Appendix C-2) both industry and universities expressed general willingness to negotiate licenses.
8 It should be noted that the views of ISAAA and those who answered the Panel's surveys are mostly of people from the North, from research organizations and from the private sector. We did not seek out the views of farmers, indigenous organizations or scientists in the South not linked in some way to NARS or the CGIAR.
These opinions, from two sources only, must clearly be treated with caution. Part of Dr. James's skill in arranging deals no doubt lies in carefully preparing these in advance: he would not ask for licences that he thought there was no chance of getting. Similarly, the Panel's surveys were conducted anonymously, and asked staff at working (rather than policy) level about generalities. If a particular item of important technology had been considered, or different staff polled, answers might have been different. Nevertheless, for whatever weight may be put on them, the results are encouraging.
There are several reasons why owners would be prepared to make technology available to the CGIAR for use in developing countries, either freely or on concessional terms
Firstly, it is an opportunity to demonstrate to the world that the technology works and has advantages. This is of course balanced by a risk that the demonstration fails, not showing any advantage (or, much worse, actually doing harm 9) causing the technology, and its owner, to be discredited.
9 While no responsible company will run a substantial risk of an introduction doing significant irreparable harm, of course all other parties concerned with any introduction of this nature must check for themselves that such harm will not result. This is because there are disagreements about what risks exist and how serious they are, and in the nature of things the owner of the technology may tend to underestimate rather than overestimate these.
Secondly, where GMO technology is in question, offering to demonstrate usefulness in the country can help to prepare it for wider applications of genetic technology, by encouraging the putting in place of legal regulations on safety and intellectual property.
Thirdly, companies will be interested in forming partnerships with developing country partners. The CGIAR may be able to help them with this. Licensing will be a way for companies without a market presence in a particular country to introduce themselves and become known, and for those who already have such a presence, to strengthen and extend it.
Fourthly, philanthropic motives should not be overlooked. Companies as such may not have such motives, but their managers often have. Such managers typically believe very strongly in the benefits of what they are doing, quite apart from its potential for profits. They are very willing to share these benefits with fellow human beings, provided it does not cost them too much. This brings us to a crux.
From the Panel's survey (Appendix C-2), it will be seen that companies are unwilling to license if it leads to their losing control over the licensed technology. Lack of control may cause technical problems: for example, in the case of Bt corn it could result in the companies being unable to ensure a suitable management regime that would minimise the build-up of insect resistance. It will also cause major commercial problems if the licensed technology is used to compete with the licensor in profitable markets.
A necessary condition for commercial owners to be willing to license their technology at all will be the ability for them to segment markets. If owners can retain profitable markets, where farmers find it pays them to buy improved seed at a premium price, they will be able to license those who need the technology but cannot afford to pay for it. However, if they cannot segment markets, so that what they provide free or cheaply to the poor is then sold on, and competes with them in commercial markets, they will lose the latter and go out of the business of innovation. If they cannot segment markets, they can only supply at one price, which will be more than the poorest can afford. (See Appendix D-4: also Lanjouw, 1997).
Technology markets can be segmented in two main ways, by product or by territory. Both depend on intellectual property rights, in varying degrees.
ISAAA gave us an example of product segmentation. They brokered a deal 10 between Monsanto and the Mexican government to license Monsanto's antiviral GM technology for use in potatoes. The technology was made available, free of charge, to Mexico for use in two locally grown potato varieties. There is no export market for these varieties, and little trade in them in Mexico, so they would not compete in markets in which Monsanto could charge an economic price. Here the segmentation was probably not dependent primarily on IP rights, so much as the difficulty of transferring the technology out of the varieties in which they were sold. Similar arrangements can be visualised in other crops, particularly crops which are of more importance for subsistence than for trade (e.g., plantain, cassava, consult also the crop statistics given in Appendix C-3).
10 This deal is cited solely as an example of the circumstances in which owners may be willing to license proprietary technology. The Panel is not judging any other merits it may have or problems it may pose.
However, if proprietary technology is to be used widely for the benefit of the poor, it will be used in at least some crops that have substantial trading value. If markets for these are to be segmented, owners contend it will need to be done by formal intellectual property, typically patents or plant variety rights. 11 Such property can be made available under limited license, and not (say) for export. It is implied that export could then be prevented by use of IP rights in the importing country.
11 MTA's are not enough here. While MTA's make life just as difficult for large organizations as formal IP, they are of little use in this situation. This is because the remedy against breach of an MTA is primarily against the organization who signed it, rather than the person (or chain of people) who obtained material from them. If material gets out in breach of an MTA, there is often little to be done, even when it is known exactly what happened (not the usual case). For a patent, however, the source of the material typically does not have to be proved: only what it consists of.
The CGIAR may be able to take advantage of this situation to procure access to proprietary science for use in developing countries.
Two somewhat polarised views have been expressed about how Centres should regard patent rights to technology of other parties. According to the first, the Centres do not need to concern themselves unduly. They are using patented technology, but for research purposes; this is at least within the spirit of the patent laws, if not necessarily the latter in all cases. The owners of the technology are in many cases aware of this and have not objected; in any case owners are unlikely to sue, because of the bad publicity it would cause them.
A second view is based on ethics. It is that the Centres, as bodies supported largely by public funds, have a duty to behave in an exemplary manner. This means that they must fully respect all rights of all parties, including intellectual property rights. If a patent has been granted on a technology, that indicates it is proprietary, and permission is required to work with the technology. According to this view, the possible invalidity of a patent, or even the fact of its non-existence in certain territories, so giving no legal rights in those territories, would be irrelevant.
In our opinion, the second view is closer to the attitude the Centres should take. It may be true (we have not taken detailed professional advice) that in most countries most research work on patented inventions is covered by a 'research exemption'. But there are probably exceptions. In any case, research is not the main problem. The Centres are producing products for use by their clients. If their clients are not free to use those products, because of the methods or starting materials employed in producing them, the work of the Centres is wasted.
It will not do, therefore, to be casual about intellectual property. Even if the Centres are not sued themselves (and owners of IP who felt that their rights were being flouted might not be so complacent as has been suggested), their clients are at risk. While they have no obligation to police the private rights of commercial companies. Centres must not waste their energies in producing products which cannot be exploited for legal reasons.
However, this does not mean that all patents have to be respected everywhere without regard to other considerations.
Firstly, a patent is granted by a national authority in respect of a specific territory. The principle of territoriality is well recognised. Each country grants patents in respect of its own territory, as part of its national sovereignty. No country, or patentee, expects a patent in one country to give world-wide rights. There is no legal or ethical basis for ceding rights to a patentee outside the territory for which the patent is granted.
Secondly, a patent is a restriction on the freedom of others, and as such must be carefully scrutinised. Patent offices have the prime responsibility to do this, but they are neither omniscient nor infallible. It can happen that a patent is granted which ought not to have been 12. Where it is clear that this has happened, it is wrong to collude in the patentee's unjust claims. A policy of accepting all patents at face value would be unjust. This is quite different from encouraging the Centres to take technical or legalistic objections to prima facie valid rights.
12 To give examples of patents which may fall into this category risks being gravely unjust. However, examples are necessary in order to make our meaning clearer. We quote two patents which have excited widespread comment and concern. Both are currently being reviewed by the issuing office: the results of the reviews may indicate whether the concern was justified.US Patent 5,401,504 on turmeric for wound healing
US Patent 5,159,135 on all genetically transformed cotton
Another possibly useful distinction is between bare patent rights and technology packages. Where the Centres co-operate directly with technology owners, and receive from them know-how, samples, vectors, as well as patent rights, they are receiving a package of technology, and clearly will regard that package as the property of the owner, to be used only as the owner allows. However, a patent in itself does not give full ownership of technology, only specific rights in the territory in which it is granted: the legal right granted must be given full credit, but there is no basis for treating the patent as morally equivalent to absolute and universal ownership of the technology.
4.3.1. Would intellectual property protection facilitate and/or ensure delivery of benefits to the poor?
4.3.2. Would intellectual property protection be necessary to ensure access to benefits for the poor?
4.3.3. Could intellectual property protection provide rights in a fundamental new technology and/or material which could be used to obtain access to others' intellectual property?
4.3.4. Is partnering with other institutions required to further develop the technology and/or material?
4.3.5. Can delivery and access to the poor be accomplished by publishing or otherwise making the technology and/or material publicly available?
Currently it is the exception rather than the norm for the CGIAR to seek protection for its developments. This may well continue: what is important is that each instance of protection be justified by agreed criteria.
The CGIAR needs to establish a set of mission-based criteria for determining when it would be appropriate for the centres to seek intellectual property rights for their developments. Based upon the current guiding principles, these criteria could be set forth as a series of questions, as follows:
In any situation where a private sector partner would be needed to deliver benefits, and where that partner must make substantial investments to further develop the invention or material, then the availability of intellectual property rights can provide an incentive to make such investments. One example would be the development of a new vaccine. This situation might also exist for certain agricultural equipment, where the private partner must incur the costs of manufacture, especially if the potential market is small or geographically isolated. Another example, in the opinion of some Panel members, would be in plant variety development. There are several examples of known varieties with valuable properties which are not in use. Even when a breeding programme is complete, making plant varieties available for sale needs some further investment in demonstration and seed production. Joint ventures with small private companies (under conditions ensuring maximum distribution at minimum price) could promote such investment: some protection for the varieties would encourage the private partner to take part.
In some cases, intellectual property protection could be used to obtain access to technologies or materials protected by others, but essentially derived from CGIAR developments. For example, a single gene could be transferred into a CGIAR-developed plant variety. Protection of the original variety would provide a legal basis for obtaining access to the improved variety. Rights to the variety can also provide a means for market segmentation, based upon territories, thus enabling the CGIAR to make the improved variety accessible to those who cannot afford to pay.
An example of such a fundamental new technology would be the gene(s) for apomixis, which would be of value to multiple potential private partners. Such technologies could be used as bargaining chips to gain access to privately-owned intellectual properties. Ownership of such technologies by the CGIAR also provides a means for market segmentation.
We are talking here of technologies which arise in the course of research directed to the CGIAR's mission. We do not consider that research specifically directed to generating such technologies, specifically for use as bargaining chips, could be justified.
Many potential partners, including the NARS, will be interested in obtaining intellectual property rights for improvements and further developments made in joint ventures. CGIAR rights provide a way to reserve rights for certain mission-oriented applications.
If the answer to this question is clearly "yes," then protection should definitely NOT be sought. The technology or material should be made publicly available as soon as possible, and as widely as possible, in order to prevent others from obtaining ownership of similar developments. If the answer is maybe, based upon uncertain responses to the preceding questions, then judgement is required: application for protection should sometimes be made in order to keep all options open. If the answer is clearly "no," based upon affirmative responses to the preceding questions, then protection should be sought in order to further the mission of the CGIAR.
