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Elements of Intellectual Property Protection in Plant Breeding and Biotechnology: Interactions and Outcomes Stephen Smith Dupont Pioneer

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Elements of Intellectual Property Protection in Plant Breeding and Biotechnology: Interactions and Outcomes Stephen Smith Dupont Pioneer Economics Publications Economics 4-15-2016 Elements of Intellectual Property Protection in Plant Breeding and Biotechnology: Interactions and Outcomes Stephen Smith DuPont Pioneer Sergio H. Lence Iowa State University, [email protected] Dermot J. Hayes Iowa State University, [email protected] Julian Alston University of California, Davis Eloy Corona BaFoylerlo Cwr othipSciens andce LP additional works at: http://lib.dr.iastate.edu/econ_las_pubs Part of the Agricultural and Resource Economics Commons, Growth and Development Commons, Plant Breeding and Genetics Commons, and the Regional Economics Commons The ompc lete bibliographic information for this item can be found at http://lib.dr.iastate.edu/ econ_las_pubs/580. For information on how to cite this item, please visit http://lib.dr.iastate.edu/ howtocite.html. This Article is brought to you for free and open access by the Economics at Iowa State University Digital Repository. It has been accepted for inclusion in Economics Publications by an authorized administrator of Iowa State University Digital Repository. For more information, please contact [email protected]. Elements of Intellectual Property Protection in Plant Breeding and Biotechnology: Interactions and Outcomes Abstract Public and private investments in plant breeding have a proven track record of increasing agricultural productivity, significantly contributing to economic well-being or social welfare. Substantial investments in research and development are required before a new plant variety can be developed and released, which the private sector can only recoup through commercial sales coupled with property rights. We previously published outcomes from economic modeling implementing different categories and hypothetical variants of intellectual property protection (IPP) in the field of plant breeding and biotechnology. Our goal here is to portray these outcomes using examples that will be more immediately familiar to the plant-breeding and policy-making communities. In so doing, we do not add to the analyses and arguments already presented. Our objective here is to make more accessible to a broader audience subject matter already presented in a more formal economic format by Lence et al. (2015). We found that plant variety protection (PVP) and utility patents played important and complementary roles in promoting and adopting innovation. Voluntary licensing under patents had a major contribution to social welfare. Periods of protection longer than the current life span of a utility patent did not contribute maximally to the stock of social welfare. We performed a reality check comparing different types of innovation and assessment of time and risk to commercialization. We hope that this information can contribute to more effective implementation of IPP to further promote genetic gain and thus enable commercially funded plant breeders to maximally contribute to the benefit of society on a global basis. Disciplines Agricultural and Resource Economics | Growth and Development | Plant Breeding and Genetics | Regional Economics Comments This article is published as Smith, Stephen, Sergio Lence, Dermot Hayes, Julian Alston, and Eloy Corona. "Elements of Intellectual Property Protection in Plant Breeding and Biotechnology: Interactions and Outcomes." Crop Science 56, no. 4 (2016): 1401-1411.doi: 10.2135/cropsci2015.10.0608. Posted with permission. This article is available at Iowa State University Digital Repository: http://lib.dr.iastate.edu/econ_las_pubs/580 Page 1 of 30 Crop Science 1 Elements of Intellectual Property Protection in Plant Breeding and Biotechnology: 2 Interactions and Outcomes 3 Stephen Smith, Sergio Lence, Dermot Hayes, Julian Alston, and Eloy Corona 4 Stephen Smith DuPont Pioneer, 7300 NW 62nd Ave., Johnston , IA, 50131, 5 ([email protected]); Sergio Lence, Department of Economics, Iowa State 6 University, 368E HeadyFor Hall, Ames, Review IA, 50011. ([email protected]); Only Dermot J. Hayes, 7 Department of Economics, 568CHeady Hall, Ames, IA, 50011. ( [email protected] ); 8 Julian Alston, Agriculture and Resources Economics, 2157 Social Sciences and Humanities, 9 University of California, Davis, 95616.( [email protected] ); Eloy Corona, Bayer 10 CropScience LP, 2 TW Alexander Drive, Research Triangle Park, NC, 27709. 11 ([email protected]). 12 Abbreviations: R&D, Research & Development; IPP, Intellectual Property Protection; PVP, 13 Plant Variety Protection; IP, Intellectual Property; PBR, Plant Breeders’ Rights; TRIPS, Trade- 14 Related Aspects of Intellectual Property Rights; EU, European Union; WTO, World Trade 15 Organisation; UPOV, L’Union internationale pour la protection des obtentions végétales; OAPI, 16 African Intellectual Property Organization; EDV, Essentially Derived Variety; NPGS, National 17 Plant Germplasm System; SMTA, Material Transfer Agreement; IT-PGRFA, International 18 Treaty for Plant Genetic Resources for Food and Agriculture; TPE, target production 19 environment. 20 ABSTRACT 21 Public and private investments in plant breeding have a proven track record of increasing 22 agricultural productivity and thereby significantly contributing to economic well-being or social 1 5585 Guilford Rd., Madison WI 53711 Crop Science Page 2 of 30 23 welfare. Substantial investments in Research and Development (R&D) are required before a new 24 plant variety can be developed and released, which the private sector can only recoup through 25 commercial sales coupled with property rights. We previously published outcomes from 26 economic modelling, implementing different categories and hypothetical variants of Intellectual 27 Property Protection (IPP) in the field of plant breeding and biotechnology. Our goal here is to 28 portray these outcomes in a manner and using examples that will be more immediately familiar 29 to the plant breeding Forand policy making Review communities. We Only found that Plant Variety Protection 30 (PVP) and utility patents played important and complementary roles in promoting and adopting 31 innovation. Voluntary licensing under patents had a major contribution to social welfare. Periods 32 of protection much longer than the current life-span of a utility patent did not contribute 33 maximally to the stock of social welfare. We performed a reality check comparing different 34 types of innovation and assessment of time/risk to commercialization. We hope that this 35 information can contribute to more effective implementation of IPP to further promote genetic 36 gain and thus enable commercially funded plant breeders to maximally contribute to the benefit 37 of society on a global basis. 38 Introduction 39 Public and private investments in plant breeding have a proven track record of increasing 40 agricultural productivity and thereby significantly contributing to economic well-being (Fehr 41 1984; Frisvold et al., 1999; Duvick, 2005; Rubenstein et al., 2005; British Society of Plant 42 Breeders, 2010). The application of intellectual property protection (IPP) in the field of plant 43 breeding and biotechnology is an issue of abiding interest to many including those in academia, 44 business, private and public sector research, policy makers, and non-governmental organizations 45 (NGOs). For example, see Leskien and Flitner (1997), Bioversity International (1999), Cohen 2 5585 Guilford Rd., Madison WI 53711 Page 3 of 30 Crop Science 46 (2000), Rai and Mauria (2004), UPOV (2005), Llewelyn and Adcock (2006), World Bank 47 (2006), Wright (2006), Tripp et al. (2007), Louwaars et al. (2009), SGRP (2010), Dutfield 48 (2011), UN HRC (2011), Blakeney (2012), ISF (2012), JIC (2012), Lieberherr and Meienberg 49 (2014). 50 Means to Obtain IPP in Plant Breeding and Biotechnology 51 There are four majorFor approaches Review that plant breeders canOnly use to obtain IPP. These are: 1) 52 contracts, 2) trade secrets, 3) Plant Variety Protection (PVP) or Plant Breeders’ Rights (PBR), 53 and 4) Utility Patents. The United States also provides PVP-type protection for varieties of 54 asexually reproducing non-tuberous species through the 1930 US Plant Patent Act (35 U.S.C.§§ 55 161-164). Contracts include bag-tag “shrink-wrap” type protection or use in contractually 56 “closed-loop” systems. Trade secrets can help provide protection, particularly for parent lines of 57 hybrids. The biology of hybrids also encourages farmers to annually purchase new seed because 58 the harvested seed is a result of one generation of inbreeding which reduces yield potential. 59 Under the 1995 Trade-Related Aspects of Intellectual Property Rights (TRIPS), member 60 countries may exclude plants and animals from patentability. For example, utility patents on 61 plant varieties per se are not available in the European Union (EU) although utility patents 62 around genetically modified traits and native traits are possible in that region. Countries that 63 exclude plants from patentability are obliged by their membership of the World Trade 64 Organisation (WTO) to provide an effective sui generis IPP system; e.g., PVP. WTO members 65 may also exclude “essentially biological processes for the production of plants” from 66 patentability. PVP is a sui generis form of protection prescribed by the L’Union internationale 67 pour la protection des obtentions végétales (UPOV). As of June 2015, there were 72 UPOV 68 members (UPOV, 2015); two of which (the EU and the African Intellectual Property 3 5585 Guilford Rd., Madison WI 53711 Crop Science Page 4 of 30 69 Organization [OAPI]) are intergovernmental
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