The Agricultural Biotechnology Intellectual Property Database Linking Technologies Ownership and Intellectual Property Rights

Conquering The Coming Collapse

Conquering The Coming Collapse

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The ABIP database was developed jointly by researchers at the USDA/ERS and the Rutgers University Department of Agricultural, Food and Resource Economics. It assembles data on several different types of IPRs: US utility patents, plant patents, PVPCs and results of field trials for deregulatory release of genetically engineered varieties.

There are several reasons to bring together these different types of intangible assets. First, the different types of IPRs reflect success at different stages of the innovation process: (i) utility patents can apply to earlier stages of innovation; (ii) PVPCs are possible only after an innovation has been successfully incorporated into a cultivar; and (iii) deregulatory release is a final stage before commercialization of a product. Study of the different types of IPRs provides information on the pathways of innovation. Furthermore, the applicability of different types of IPRs to plants has changed over time. The Plant Variety Protection Act (PVPA) was implemented in 1970 and the first PVPCs were issued in the early 1970s. The US Patent and Trademark Office (PTO) ruled that plants could be patented under utility patent law in 1985. Although a few isolated plant cultivars had been patented before 1985, utility patenting of plants began in earnest only at that time, and it was only in 1996 that the number of utility patents granted for plants surpassed the number of PVPCs granted for the first time.

Second, describing different types of IPRs allows users of the database to analyse where the IPRs overlap, and to gain a more accurate understanding of the use of IPR. This also allows a more accurate description of concentration of ownership, both within and across IPR types.

The main focus of the database is on utility patents. Utility patents are the most powerful form of IPR, with maximum flexibility in subject matter and timing of application. For example, separate patents can apply to a specific gene sequence that codes for a plant trait and to a plant that contains that trait; a PVPC can apply only to the plant (and its germplasm). Furthermore, either patent could conceivably be applied for at an earlier date than a PVPC, which must demonstrate stable hereditability over plant generations. PVPCs also require certain exemptions for saved seed that patents do not. The main limitation of plant patents is the narrow class of inventions they cover, mainly non-tuber plants with novel characteristics obtained through asexual reproduction.

The PTO has issued a growing number of utility patents in all areas, but Fig. 9.1 shows that the growth of agricultural biotechnology patents has been even more rapid. The PTO issued 15 7,739 utility patents in 2000, more than double the number issued in 1976 (70,244). The average increase in the annual rate of utility patents issued was 4.2% between 1976 and 2000. The comparable rate for agricultural biotechnology patents was 15.9%. US agricultural biotechnology patents started from a much lower base: the ABIP database identified only 54 agricultural biotechnology patents issued in 1976. In 2000, the PTO issued 1438 agricultural biotechnology patents. Factors that increase patenting activity in general, such as technological opportunity, court decisions on patentability, strategic importance of patent protection and PTO examiner resources, are important factors in the agricultural biotechnology sector as well.

A unique aspect of the ABIP database is its technology classification system. This system divides the patents into more than 60 classes and subclasses and indicates which patents belong to multiple classes. The classes were designed to identify major technological and agronomic inventions. The system identifies patents with scientific and commercial significance. Figure 9.2 shows the number of patents issued in nine major classes of agricultural biotechnology from 1976 to 2000.

The sharp increase in patents has not been confined to any specific technology area within agricultural biotechnology. Instead, rapid growth is common across

Fig. 9.1. The upward trend in agricultural biotechnology patents has outpaced the overall upward trend in patenting throughout the US economy. (From data compiled from records of the US Patent and Trademark Office.)

Year

Fig. 9.1. The upward trend in agricultural biotechnology patents has outpaced the overall upward trend in patenting throughout the US economy. (From data compiled from records of the US Patent and Trademark Office.)

0 1000 2000 3000 4000 5000 N um ber of patents

Fig. 9.2. In all technology classes, the number of agricultural biotechnology patents issued has increased rapidly in recent years. (From data compiled from records of the US Patent and Trademark Office.)

Genomics

Genetic transformation

Metabolic pathways and biological processes, DNA scale

Metabolic pathways and biological processes in plants

Metabolic pathways and biological processes in animals Patented organisms, non-plant

Pharmaceuticals

Protection, nutrition and biological control of plants and animals

Plant technologies

0 1000 2000 3000 4000 5000 N um ber of patents

Fig. 9.2. In all technology classes, the number of agricultural biotechnology patents issued has increased rapidly in recent years. (From data compiled from records of the US Patent and Trademark Office.)

1976-

-1980

1981-

-1985

1986-

-1990

1991-

-1995

1996-

2000

all technology areas. Genetic transformation technologies and plant technologies had the highest number of patents, but all technology areas showed rapid growth during 19 76-2000. Genomics, the technology with the fewest patents, had no patents in the first 10 years of the sample, but then increased at a pace comparable with other technologies.

Analysing the information available on patent assignees of agricultural biotechnology patents, it is evident that private sector firms had many more patents than either public or non-profit institutions (Fig. 9.3). Private sector firms were assigned approximately twice as many patents as all other institutions combined, with 7382 (66.9%) out of 11,02 7 patents for which assignee information is available. The Bayh-Dole and Stevenson-Wydler Acts were in effect during this period, so inventors with publicly funded research at non-profit institutions (including universities) and federal laboratories were permitted to obtain patent rights. Cumulative private agricultural research expenditures during 197619982 were only 11% higher than cumulative public expenditures (Caswell and Day-Rubinstein, 2006). Higher patenting in the private sector probably reflects different approaches to utilizing IPRs, but might also indicate different areas of research emphasis. Further research on the differing roles among public, nonprofit and private sectors would help explain diverging patent behaviour.

The data also show that a significant share of US patents is assigned to non-US entities. This suggests the importance of multinational companies in carrying out agricultural biotechnology. Europe is the principal source of non-US patents. Because of the different regulatory regimes in Europe and the large US market,

Foreign government [J

Foreign non-profit and universities jQ

Foreign commercial firms

US Federal Government i99i -i995

Oi996-2000

US non-profit and universities

US commercial firms

0 iooo 2000 3000 4000 5000

0 iooo 2000 3000 4000 5000

Number of patents

Fig. 9.3. Commercial firms account for the largest number of US agricultural biotechnology patents. (From data compiled from records of the US Patent and Trademark Office.)

European-based multinationals might often choose to protect their inventions through the US patent system.

A unique aspect of the ABIP database is its description of the changes in ownership among assignee firms. This allows researchers to establish ownership histories for each patent in the database, tracking changes in ownership that result from mergers, acquisitions and spin-offs of patent assignees.

Figure 9.4 presents data on concentration in ownership of agricultural biotechnology patents. The lines represent CR-10 ratios - the percentage of all agricultural biotechnology patents held by the top ten patent-holders - of cumulative issued agricultural biotechnology patents. The bottom line indicates the CR-10 ratio based on the entities most frequently named patent assignees. (The individual firms, non-profit organizations and government entities comprising the top ten vary over time.) This line gradually decreases from approximately 50% to 20% during 1976-2000, as rapid innovation in the agricultural biotechnology industry saw contributions from a diverse set of private, public and non-profit entities.

The top line of Fig. 9.4 adjusts the CR-10 ratio for patents assigned to subsidiary firms, using ABIP ownership histories that began in 1988. In several cases, firms that are not among the top ten assignees based on their own patents have acquired majority stakes in other firms with significant patent rights. Figure 9.4 shows that the apparent decrease in concentrated patent ownership masks significant consolidation. After a number of mergers and acquisitions in the 1990s, the top ten patent-holders controlled 38.3% of agricultural biotechnology patents. This is more than double the number held by the top ten named assignees (18.3%) (i.e. unadjusted for changes in ownership).

Figure 9.4 indicates the significant changes in ownership of IPRs resulting from changes in agricultural biotechnology industry structure. It also illustrates the ability of the ABIP database to track these changes.

Fig. 9.4. Overall concentration of ownership of agricultural biotechnology patents has increased since 1995 after accounting for mergers and acquisitions within the industry. (From data compiled from records of the US Patent and Trademark Office.)

Year

Fig. 9.4. Overall concentration of ownership of agricultural biotechnology patents has increased since 1995 after accounting for mergers and acquisitions within the industry. (From data compiled from records of the US Patent and Trademark Office.)

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