Intellectual Property Rights:

Problems and Solutions

Anatole F. Krattiger

Adjunct Professor, Cornell University

Research Professor, Biodesign Institute & Sandra Day O’Connor College of Law at ASU
International Consultant (bioDevelopments LLC)

Transgenic plants for food security in the context of development

 Pontifical Academy of Sciences, Vatican, Rome
15-19 May 2009

intercontinental Consultants
(c) 2009. Anatole Krattiger.

These slides may be used freely for any educational and non-profit uses,
provided the source is properly acknowledged.

For any commercial uses, please contact:

Anatole F Krattiger
Cornell University
Biodesign Institute & Sandra Day O’Connor College of Law at ASU
bioDevelopments LLC (International Consultant)
PO Box 26
Interlaken NY 14847, USA

Phone +1-607-532 4413

Fax +1-212-504 8287
Skype Anatole35
anatole@bioDevelopments.com or afk3@cornell.edu
Main take-home message

Authoritative and ethical stewardship of

intellectual property is at the core of
partnerships and will become increasingly
important in the management of the
“knowledge commons”.

Institutions working for the “public good”

operate at the nexus of public and private and
should take IP management more seriously as
a critical component in any strategy aimed at
directing innovation to the poor.
1. What is IP?

2. What are they key problems with IP?

3. Solutions are “beyond” IP:

Principles of innovation management

4. Golden Rice case study

5. Conclusions: Managing the “Knowledge Commons”

Intellectual property

• A legal concept: Copyright, trademarks and geographic

indications, patents, trade secrets, plant variety
protection

• A social construct that defines “intangible” borders (as

opposed to tangible, real property borders)

• A business asset that can be valued and traded

• An instrument to achieve humanitarian objectives

• A policy tool to foster investments in innovation

Effects of the introduction of PVP

International. Pers. Comm.

Source: Pioneer Hi-bred
Private sector investments
into corn breeding (excl. biotech
(US$, millions, 2000 equivalent)

Source: Agricultural Statistics,

NASS, USDA, various years.
Yield index of major crops
(1930 = 1.0)
But…

To benefit from stronger plant variety protection:

1. Vibrant public sector breeding

2. Farmer choice (competition & antitrust)

3. Healthy farm economies

Plato (400BC)

Virtue … unity … community … abolish the private.

The Republic
Plato (400BC) Aristotle (350BC)

Virtue … unity … community …

abolish the private.

Wrong objective and

impracticable:

The roots of evil are in men’s

(sic) inherent wickedness.
Aristotle, Politics
The Tragedy of the Commons

Even supposing that it were best for the community to have

the greatest degree of unity, this unity is by no means proved
to follow from the fact 'of all men saying "mine" and "not mine"
at the same instant of time,' which, according to Socrates, is
the sign of perfect unity in a state. . . That which is common
to the greatest number has the least care bestowed upon
it. Every one thinks chiefly of his own, hardly at all of the
common interest. . . Everybody is more inclined to neglect
the duty which he expects another to fulfill. . .
Aristotle, Politics, II
Tragicomedy?

Compare:
• Tragedy of the Commons
• Tragedy of the Anticommons
M Heller & R Eisenberg, 1998
• The Gridlock Economy
Heller, 2006
• “Communal” resource management
(land, fisheries, airwaves, etc)
The Contribution of the Romans

The Romans
embedded
property
rights (dominium)
into elaborate
laws.
The Middle-Ages

Self-denial…

Property is the
source of evil,
capable of
corrupting the
soul and leading
to sin.

Ciborium of S. Giorgio in Velabro, Italy,

with frescoes of Cevallini.
St. Augustine of Hippo (400 AD)

A property-less society can

only exist in Paradise.

It requires perfection to
succeed.
Monarch of Medieval Europe Issues First
Monopoly

The Venetian Republic grants monopoly in 1443 to conveyor

belt inventor (Inventor Bylaws, 1474).

The British Crown follows in 1623 (Statue of Monopolies).

The first US Patent: 1790

Right enshrined
in US Constitution:

… promote progress of
science and useful arts

… exclusive right for

a limited time
Industrialization and the 19th Century

• Those who wanted to acquire industries were leading the

debate to create the Paris Convention in 1883:

…for the protection of industrial property… and the

repression of unfair competition…
Many unresolved issues

Eg. Interface of “western” system with other cultures

Principles Themes of Property Discussions

Balance between

Politics Stability Freedom, social

unrest

Ethics Fruits of one’s No equal

own labor opportunity

Economics Efficiency Wasteful

competition,
gridlock

Psychology Self-esteem Greed

Take-home lessons #1

 IP is a compromise, an imperfect solution. In absence of

alternative, the best we have.

 Search for balance has accompanied societies for

millennia.

 IPRs are instruments of public policy to confer

economic privileges on individuals or institutions
for the purposes of contributing to the greater
public good. The privilege is a means to an end,
not an end in itself.

 The devil is in the details on how this balance is struck

1. What is IP?

2. What are they key problems with IP?

3. Solutions are “beyond” IP:

Principles of innovation management

4. Golden Rice case study

5. Conclusions: Managing the “Knowledge Commons”

Key problems of IP to achieve food security

Industry:
– Incentives are not always at the right place
(the “wisdom” of the “herd”)
– Broadly accepted codes of ethics lacking in regard
to IP management
– Insufficient experience in managing technologies for
dual purposes (economic and humanitarian)
– Liability law (tie-in of IP with product liability), due to
“expression” of IP in material property
Key problems of IP to achieve food security

Industry

Donor organizations:
– Slow in funding IP capacity building in the public
sector
– Late in requiring sound IP management plans
(eg. Bill & Melinda Gate Foundation’s “Global
Access Strategy”)
Key problems of IP to achieve food security

Industry

Donor organizations

Governments:
– Slow in adapting to changing circumstances and
new technologies
– Unresponsive to public sector needs
– Weak in enforcing anti-trust regulations
(competition, collusion, etc)
Key problems of IP to achieve food security

Industry

Donor Organizations

Governments

Public sector:
– Mistrust vis-à-vis private sector
– Though of IP to be the sole purview of the private
sector for too long
– Slow in uptake of IP management policies and practices
– Misunderstanding of public good and private good
A public good is…

1. Non-rivalry in consumption
(a good whose use by one person does not compete with or rival its use by
another person)

AND

2. Non-excludable
(no person can exclude other persons from its use)
Take-home lessons #2

 Public and private goods meet every day at the

intersection of IP.

 Private is not the opposite of public.

 A public good is never (or rarely) free.

1. What is IP?

2. What are they key problems with IP?

3. Solutions are “beyond” IP:

Principles of innovation management

4. Golden Rice case study

5. Conclusions: Managing the “Knowledge Commons”

Innovation is…

 Doing something that creates (more) value.

6 components of innovation management

Research, Regula- Manu- Domestic Export

Sci & Tech tions IP facture Market Market

Research

Development

Commer-
cialization

Source: Mahoney 2004

 Important roles by public and private sectors

Research, Regula- Manu- Domestic Export

Sci & Tech tions IP facture Market Market

Research

Development

Commer-
cialization

Role of Public Role of Private

The innovation management framework:

• Interconnected (progress in one requires progress in

others)

• Implemented through networks

• Dynamically linked (absence of one cannot be

compensated by emphasis on another one)

• Global Access Strategy or Innovation Management is all

about STEWARDSHIP.

• “PDPs” in health were set-up for this purpose.

What are Product-Development Partnerships?

• Using private sector approaches and resources to

tackle R&D challenges

• Target one or more neglected disease

• Focus on products suited for use in developing countries
• Take candidates through to the commercialization
value chain
• Primarily pursuing public health objectives
• Employ multi-candidate/portfolio management approaches:
– Business Plan, Scientific Blueprint, Pharmaco-Economic Analysis,
Rigorous “Go—No-Go” Milestones.
Global Access Strategy

eg. A live recombinant attenuated Salmonella anti-

pneumococcal vaccine for newborns

“… an innovation management plan to achieve a

beneficial public health outcome.” Krattiger, 2005
 Development Overview
First 4 year of the anti-pneumococcal vaccine
2006 2007 2008 2009 2010

First Generation RAStyV Engineering & Characterization

First Generation RAStyV Evaluated in Human GNG

S. typhimurium & other Salmonella vectors

Engineering & Characterization

Discovery & Characterization of

new S. pneumoniae Ags
Seroepidemiology Study

Reagents Generation

Plasmids Construction &

Characterization

New Vaccine Candidates

Engineered and Characterized

Second Generation RASV Evaluated in Human GNG

Principal outcomes

Broad
Developing and delivering an anti-pneumococcal
vaccine for newborns, particularly for developing
countries

Specific
 Availability of specific vaccines
 A platform for other vaccines
 Ensure Access: affordability
acceptability
adoption
Principal components of ASU’s GAS

1. Science and research

2. Regulatory aspects
3. IP management
4. Production/Manufacture
5. Meeting national needs
6. Trade/export markets
3. IP management

Key drivers
 Ensure necessary incentives are available for
product development, clinical trials, manufacture
and distribution/marketing
 Make scientific and technological advances
available as widely as possible
 Use IP as a tool to facilitate global access and
widespread adoption
Principal Tools
• Project-related IP policy
• In-licensing strategy to obtain FTO
• Patenting strategy
• Licensing strategy
• Confidentiality and protection of regulatory data, if
helpful
• Branding strategy (trademarking)
• Laboratory notebook and invention disclosure policy
• Patent enforcement and infringement policy
• Law, jurisdiction, dispute resolution, indemnification,
liability, insurance.
• Etc.
Major issues to be resolved (triggered by milestones)
• What background IP is available and necessary
• Willingness to pay: developed country and higher
middle income countries
• Manufacturing capabilities in developed an
developing countries
• Financing of production capabilities
• FTO strategy
• Source of value
Some elements for negotiation/incorporation into
licenses with public sector goals

Rights to Practice IP rights included Duration

Field Degree of exclusivity
Territory

Commercial Data Product/Material SOPs

Production

Future Improvements From Licensor From other Licensees

From Licensee Rights to Payment(s)
for

Right to Sublicense Conditions for Improvements

Split of fees Grant backs

Patent Expenses Maintenance Costs Prosecution Costs

Foreign filings Defense of Patents
General Indemnity Product Liability Ownership Issues

Quality Control Testing Trademark Policing

Laboratory Services

Regulatory Approval Pre-Clinical Data

Clinical I-IV Dossiers

Infringement Issues Studies and opinions Suits (against infringers,

Freedom to Practice by third parties)
FTO strategies
 Legal/IP Management Strategies
1. License in
2. Cross-license
3. Oppose third party patents
4. Seek nonassertion covenant
5. Seek compulsory license

Krattiger 2007.
FAKE… itz the new REAL!
Source: http://go.to/funpic
FTO strategies
 Legal/IP Management Strategies
1. License in
2. Cross-license
3. Oppose third party patents
4. Seek nonassertion covenant
5. Seek compulsory license

 R&D Strategies
6. Modify product
7. Invent around

Krattiger 2007.
Source: lachschon.de
FTO strategies
 Legal/IP Management Strategies
1. License in
2. Cross-license
3. Oppose third party patents
4. Seek nonassertion covenant
5. Seek compulsory license

 R&D Strategies
6. Modify product
7. Invent around

 Business Strategies
8. Wait and see
9. Abandon project
10. Merge and/or acquire
Krattiger 2007.
© Jim Lavrakas, 2000.
FTO strategies

 In Practice:

A combination of several options implemented

concurrently
Marketing and branding
• Conduct of large scale vaccine-introduction trials
• Consensus on the need for the vaccine
• Recommended use practices
• Assurance of adequate and competitive supply
• Creation and sustenance of funding mechanisms to
procure the vaccine
• Effective communications with health professionals,
scientists, and the public about prevention and
control
• Establishment of advocacy groups
Take-home lessons #3

 The 6 principal factors of innovation are interconnected.

 Innovative organizations build and maintain networks

that allow them to address each of the factor.

 Innovative organizations are largely characterized by the

number of “connections”

 Cross-sector (public/private) cooperation is essential.

1. What is IP?

2. What are they key problems with IP?

3. Solutions are “beyond” IP:

Principles of innovation management

4. Golden Rice case study

™
5. Conclusions:
The IP situation with golden rice

• ~70 patents and patent applications might be applicable

to golden rice when all patents issued in or applied for
in all countries were considered.
 
• A dozen material transfer agreements were also
identified, 1 of which needed a license.

• The published analysis, and legal opinion, concluded

that, in practice, only a few patents were applicable in
developing countries.
Kryder et al., 2000  
Resolving the IP constraints with golden rice

1. Assembly of IP and tangible property rights:

- within a few months, in licensing, for humanitarian use,
led by Zeneca (Adrian Dubock), of key IP components
(Bayer AG, Monsanto, Novartis AG, Orynova BV, Zeneca Mogen BV, others)

2. Out-licensing, by Syngenta, via the inventors, the

bundled IP to public sector institutions in developing
countries:
- Bangladesh India, Indonesia, Philippines, Vietnam and
many more
- Policy support from Syngenta’s chairman, Heinz Imhof
Krattiger & Potrykus, 2007
Principal terms of the humanitarian license

• For use by resource-poor farmers

(< US$10,000/year from farming)
• Use of public varieties
• No technology fee
• Farmers are allowed to reuse harvested seeds
• No release in countries lacking biosafety regulations
• Export to licensees for research and use is permitted
• Improvements:
– Humanitarian use allowed (Syngenta already licensed many
improvements)
– Commercial rights to improvements are granted back to
Syngenta
Take-home lessons #4

 A case study on how public & private sector innovations

can be put to work to help the poor with focused public
sector IP management.

 The preliminary FTO “analysis” of golden rice served as

a wake-up call for the public sector, and donors.

 Other constraints are much more critical (eg. biosafety)

but failure to address IP would make IP critical.
1. What is IP?

2. What are they key problems with IP?

3. Solutions are “beyond” IP:

Principles of innovation management

4. Golden Rice case study

5. Conclusions: Managing the “Knowledge Commons”

www.ipHandbook.org
Broad conclusions

1. Move away from IP management.

Place emphasis on knowledge management.

2. Government policy everywhere should be focused on
maximizing the public good which should include
appropriate private incentives.
3. Public sector institutions should explicitly manage IP
with the dual goals of creating economic value and
achieving humanitarian goals.
Specific conclusions for food security

1. IP management is an effective, and essential tool, in

achieving humanitarian objectives.

Proven approaches include:

– donations
– different types of product-development partnerships
– creative licensing practices through
various forms of market segmentation

 All require IP management!

2. Insufficient attention has been paid by the public sector
to managing IP.

This lack of focused attention must be corrected.

Public sector must appreciate how it can use its own IP

—and leverage that of others—to help meet its social
mission.
3. PVP and plant genetic resources:

The trend of restricting germplasm flow is one of the

most important threats of future progress in plant
breeding.

The open exchange of plant genetic resources for

breeding purposes, particularly by the public sector,
must be maintained/improved.
4. “Downstream” responsibilities require larger networks.

Collaboration with the private sector, both upstream

and downstream, should often be build much earlier in
the innovation continuum.

Authoritative IP management is an important pre-

requisite for this.

Donors have an important role to play in applying

pressure on leveraging an innovation network of
outsiders.
5. “Knowledge management”

The need for models in creatively managing the

“knowledge commons”.
How can we leverage a growing network?
Anatole F Krattiger
Cornell University
Biodesign Institute & Sandra Day O’Connor College of Law at ASU
bioDevelopments LLC (International Consultant)
PO Box 26
Interlaken NY 14847, USA

Phone +1-607-532 4413

Fax +1-212-504 8287
Skype Anatole35
anatole@bioDevelopments.com or afk3@cornell.edu