Adapting IP to an evolving agricultural innovation landscape

By Dr. Michael A. Kock, Head of Intellectual Property, and Christine Gould, Global Public Policy Manager, Syngenta International AG

More than ever, innovation is needed to meet the challenges of a rapidly-growing world population which is poised to increase from 7 billion today to almost 9 billion by 2050. Higher calorie demand and an increased use of crops for biofuels will require agricultural production to increase by 70 percent by 2050 (OECD-FAO Agricultural Outlook 2010-2019). Climate change and decreasing availability of water and farmland will add further complexity to the situation. We need to meet this challenge by producing more with less - less land, and fewer inputs, including less fertilizer. This will only be possible if we maximize agricultural innovation in areas such as seeds, biotechnology, crop protection, resource-saving agricultural practices, storage and transportation. Similarly – and even more importantly given the complexity of this endeavor – we need to develop solutions that make it possible to integrate the variety of innovative elements that are often owned by different parties into fully integrated solutions. While most agree with the need for innovation, there is a fierce debate about the role of intellectual property (IP) in this context.

An expanding global population, climate change
and a finite natural resource base will require
agricultural production to increase by 70 percent
by 2050. Innovation is central to meeting this
challenge. (Photos: Courtesy of Syngenta)

IP rights for plant-related innovations

It is clear that IP as such does not feed the world. However, it does provide the invisible infrastructure that enables innovation and progress in plant breeding.

Only a few decades ago, plant breeding was an empirical science based on trial and error. Today’s plant innovations are developed using sophisticated science and technology, including cell biology, genome and proteome research, gene mapping, marker-assisted breeding and hybridization. Developing new crop varieties is a lengthy and costly process, with plant science companies investing approximately 15 percent of their annual turnover in seed-related research and development activities. The development of beneficial traits is expensive, time consuming and risky: even for non-genetically modified traits it can take 8-10 years and many millions of euros to bring them to market. Since the resulting seed products can be easily reproduced by farmers and “copied” by competitors, some form of enforceable commercial protection is required – otherwise there would be no incentive to make such investments.

The need to protect the IP rights of plant breeders was recognized by legislators as early as the 19th century. Until 25 years ago, plant-related innovations were almost exclusively protected by plant variety protection (PVP). The PVP right protects the specific variety as characterized by its essential, often phenotypical, characteristics. Only varieties with properties resembling all of those characteristics are protected. PVP can be seen as a type of “copyright” for plant varieties in that it prevents the unauthorized copying (propagation) of a protected variety for commercial purposes.

PVP laws contain a statutory breeders’ exemption that allows for the use of a protected variety for breeding other varieties, and also enables competitors to “extract” and use individual characteristics or genes. While PVP protection is necessary and well adapted to protect certain achievements in plant breeding, it is neither suitable, nor intended, to protect specific genes or traits or improved methods of breeding.

For new traits derived from highly technical processes such as genetic modification or complex marker-assisted breeding, the patent system is an essential protection tool. It has higher requirements for protection, such as novelty and inventiveness. An important benefit of the patent system is the disclosure requirement, which enables other breeders to work with, and further improve upon, prior inventions.

Together, PVP and patents form a synergistic and complementary IP system. Each protects different facets of plant innovation: PVP protects a new plant as a whole but cannot protect a single part, such as a specific gene, and patents protect the part, but (in general) not the whole.

National laws governing the patentability of plants vary significantly among countries (see http://tinyurl.com/d5knqoo). The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) administered by the World Trade Organization (WTO) requires countries to provide protection for plant varieties “either by patents or by an effective sui generis system or by any combination thereof (TRIPS Article 27(3)(b).” WTO members may also exclude “essentially biological processes for the production of plants” from patentability.

Recently, the Enlarged Board of Appeal at the European Patent Office (EPO) interpreted this exemption in the precedent-setting "Broccoli" (G2/07) case. They found that a breeding process “is, in principle, excluded from patentability,” if it “contains or consists of the steps of sexually crossing the whole genomes of plants and of subsequently selecting plants.” It does not matter how technical or inventive a breeding process is. This lack of patent protection for methods of marker-assisted (smart) breeding may cause innovators to protect their innovations as trade secrets. This would negatively affect the speed of innovation insofar as there would be no public disclosure of such innovations as is required under the patent system.

Shaping the future

While the impact of patents on traditional plant breeders is currently limited, it is fair to assume that the progress of science in breeding will lead to an increasing number of patents, which in turn may decrease breeders’ freedom to operate (FTO). Under PVP, infringement is essentially caused by what a breeder does, whereas under patent law, it is caused by what a breeder uses. In contrast to the PVP regime a patent infringement can occur “accidentally” and even unintentionally without using a competitor variety.

Today’s plant innovations are developed using sophisticated science and technology. Developing new crop varieties can take 8 to 10 years and costs millions of euros.

While FTO diligence is common in all areas of technology, it requires a change in the ways breeders work. For example, breeders will need to place greater emphasis on building legal and IP capabilities, monitoring FTO and IP landscapes, filing for oppositions and negotiating licenses. Avoiding these changes by calling for the abandonment of patents in this area is a short-sighted solution that will have unintended consequences for innovation. Abandoning patents is akin to “killing the goose that lays the golden egg.” Current technology may become freely available, but there will be no incentive for future innovation.

Moving towards inclusion

Thus, the plant breeding industry and legislators face a dilemma: without IP, companies lack the incentive to take the risks necessary for successful innovation; without broader access to technology, the innovation life cycle and development of integrated solutions will be hampered.

IP is a tool developed by society to foster innovation. In and of itself, it is neither good nor bad. It is the way in which it is used that determines whether it has a constructive or a destructive impact. The current negative perception of the patent system arises primarily from its use to exclude others. However, patents can also be used in a positive, constructive way, for example, to foster licensing and technology exchange. The key challenge is in re-calibrating the use of the patent system to maximize its benefits (by preserving incentives for innovation and knowledge sharing) while minimizing any limitations in terms of access. Such change will only be possible by adopting an approach that moves away from using IP as a means for exclusion towards its use as a means for inclusion.

Integrated solutions

Today’s world is characterized by an unprecedented push towards openness; collaboration and integration are viewed as fundamental drivers of innovation. While the seed industry is limping somewhat behind other industries, such as the electronics industry, with respect to technology integration, the need for open innovation is unquestionable in this sector. Modern agricultural solutions require integration of multiple innovations in the areas of, for example, seeds, biotechnology, crop protection, grain storage and transport.

Modern agricultural solutions require
integration of multiple innovations. Syngenta
is facilitating this process within the seed
industry with the recent launch of its
TraitAbility e-licensing platform and is also
leading an industry-wide licensing initiative.

Developing a new seed variety also requires integration of many beneficial traits such as resistance to biotic and abiotic stresses, higher yield and nutritional value. No single entity – not even large multinational companies – has all the elements in hand to effectively meet the diverse needs of farmers around the world.

Keeping pace with an evolving innovation landscape

Just as inhabitants need to adapt to a changing natural environment, so too does the IP system need to keep pace with an evolving innovation landscape. If IP stakeholders are unable to develop and adapt the use of IP to this changing environment, the system risks losing societal support and may eventually become “extinct.” As noted by Charles Darwin, the father of the theory of evolution, it is not the strongest who will survive in a changing environment, nor the most intelligent, but the one most responsive to change.

Adapting the IP legal framework to present-day realities is crucial to ensuring the creation and broad dissemination of plant breeding innovations. However, with the globalization of the breeding industry, the chances of establishing harmonized and flexible legal changes rapidly are very small. That said, there is nothing to stop IP owners and users from proactively and pragmatically adapting their use of IP within the current legal framework.

New approaches to improving access

Syngenta is taking the lead in the seed industry in this regard and is currently developing two new approaches to making patented seed-related innovations available, providing “free access but not access for free” under standardized, fair, reasonable and non-discriminatory (FRAND) terms. Given the regulatory complexity of the agreements, particularly with respect to stewardship and liability, these initiatives are confined to non-genetically modified plants.

The TraitAbility e-licensing platform

The first initiative, the Syngenta e-licensing platform, TraitAbility, makes available some of the company’s most important native trait technologies and a range of research tools for biotechnology. Interested parties can easily obtain a license (through an electronic shopping-mall similar to the Amazon or iTunes e-stores).

Some of the benefits of the Syngenta e-license system include:

• Easy and quick access to licenses via the Internet; no need for lengthy and complex negotiations;
• Transparent, fair, reasonable and non-discriminatory (FRAND) licensing conditions, applicable to all plant breeders or other interested licensees;
• Access to a portfolio of patent-protected enabling technologies that can be used for breeding any crop, including:
  • a free research license for academic or not-for-profit parties
  • a standard license agreement for other entities, with commercial terms adapted to the licencee’s size (e.g., small, medium or large);
• Access to a portfolio of patent-protected native traits relating to Syngenta’s commercial vegetable varieties. This allows:
  • transparency regarding Syngenta commercial varieties that contain the patented traits, thus reducing the risk of breeders unintentionally using a variety with a patented trait to develop a new variety
  • free access to licensed native traits during development and breeding of new varieties
  • royalty payable only if the newly-developed and commercialized variety contains the patented native trait.

Developing an industry-wide licensing platform

Syngenta is also working with its partners, including small and medium-sized seed companies, to design an industry-wide licensing platform for vegetable traits. The aim again is to ensure easy access to these traits using transparent licensing conditions that carefully balance the interests of patent holders and licensees. This initiative enables the integration (stacking) of innovations from different parties and eliminates any risk that royalty payments may become a limitation to the development of an integrated solution.

To ensure it is widely adopted, the initiative includes a “pull-in” mechanism requiring licensees to make their own patents available to the platform. It operates on a “give-and-take” basis whereby each party that accesses a patented technology via the platform is required to provide access to their own patents under the terms of the platform. Everybody, irrespective of patent ownership, can participate in the platform. The initiative is not intended to replace bilateral licenses but rather to provide a safety net should bilateral negotiations fail. A concrete proposal detailing the industry licensing platform was submitted for review by the competent competition law authorities.

Creative solutions needed

The challenges of meeting the food, feed and fuel needs of a rapidly growing global population are unprecedented. The global challenge to produce “more with less” requires the creation and integration of agricultural innovations, not only in the developed world but especially in developing countries.

“IP bashing” has become fashionable, but abandoning IP is a short-sighted and risky business. It ignores the fact that it is possible to think out of the box and find new ways of using the IP system to incentivize innovation, while also improving access to beneficial innovations. A sincere effort to tackle the innovation needs of the agricultural sector can only be made by the consolidated efforts of all stakeholders, including legislators and technology developers. We must work together to find creative solutions to leverage inventions – not by blocking others from using them but by making them broadly accessible. Only through such an alliance can the current perception of “no patents on life” – born of a myth based on a fundamental misunderstanding of the patent system - change to “more patents for life” and support the positive contribution IP can make in fostering innovation for the benefit of all.