Case studies of public or nonprofit agricultural innovation blocked by domestic IPRs

For the public and non-profit agricultural research sector, any direct effects of IPRs on the overall research are difficult to measure objectively. Indirect indicators such as citations number in the thousands, but there is, in the end, only a handful of commercialized products (several of which, of course, are highly valuable). Thus a direct statistical analysis of effects of IPRs on public sector agricultural biotechnology innovation through to adoption on farmers' fields is impossible at this time, even if we include information on private sector experience. To discuss the issue further, case studies, anecdotes and the opinions of industry participants are considered.

In the USA and some other developed countries, there is some evidence that university research projects designed to produce new crops with modern biotechnology have been shut down because of refusal of IPR-holders to permit commercialization of varieties incorporating their IP. Cases involving University of California researchers include transgenic tomatoes modified for long shelf life, and transgenic fungus-resistant strawberries. Development was stopped due to problems with freedom to operate, shattering the confidence of the producers who helped finance the projects in capacity of the University to successfully breed and commercialize new transgenic cultivars (National Research Council, 1997, pp. 8-9; Wright, 1998).

Reports indicate that similar impediments to commercialization, in the form of refusal of freedom to operate, have been encountered in the development of herbicide-tolerant turf grass at the University of Michigan (Erbisch, 2000) and of a herbicide-tolerant lupin in Australia (Lindner, 1999). The point of these examples is not that they would all have been commercially successful given freedom to operate, but that freedom to operate was in these cases a serious barrier to a system of non-profit innovation that has responsibility for development to the point where innovations could be made available to farmers in the field.

Why do these roadblocks occur? Economists expect that when there are gains to be made from a trade, the trade will occur. The owner of the key IPR might have been concerned with protecting itself from liability or from damage to its reputation due to misuse beyond its control. In some cases the expected financial gains, given the size of the market, might have been less than the cost in time and money to the IPR owner (public or private) of making and enforcing an agreement. Or perhaps the patent-holder saw no reason to help out a potential competitor, for little financial return, in a market that could one day be of financial interest to the patentee.

The examples discussed are few and anecdotal. They are also rather old; new non-profit attempts at bringing new biotechnology applications to the farmers are hard to find, at least in part because of IP problems. But in recent conversation, scientists who have experience with start-ups and public sector development in this area generally strongly support the view that IPR thickets, along with testing costs to meet registration and regulatory requirements, are two serious impediments to development of transgenic cultivars for agriculture and horticulture in the USA, for all but the most lucrative markets. At present, there is more optimism with respect to genetic engineering for health-related markets. But at the University of California, Berkeley, problems with freedom to operate in 2003 played a part in the failure to commercialize transgenic wheat lines that were shown to be less allergenic in an animal model.14 Never the less in the lead countries, at current regulatory costs, consumer acceptance and financial constraints have been more important than freedom to operate given proliferating patents and other IPRs.

0 0

Post a comment