Info Service on Biodiversity and Traditional Knowledge (Aug12/01)
Intellectual Property Policies and “Non-Commercial” Access to Genetic
Resources Under the Nagoya Protocol
While “non-commercial” research sounds as if there are no financial stakes, there are substantial dangers for provider countries inherent in this provision of the Protocol. Careless implementation could easily lead to valuable resources being spirited out of the country under the guise of “non-commercial” access, only to be converted into patented products and profits once the resources are beyond the county of origin’s effective control.
The reason why this is a dangerous problem is that the distinction between “non-commercial” and commercial research is always difficult, and frequently impossible, to make. This means that the circumstances under which simplified access should be granted are unclear and may be impossible to predefine.
In fact, through a combination of law, policy, and employment contracts, the concept of “non-commercial” research in the sense of the Nagoya Protocol no longer exists at most Northern universities and research institutes, despite the fact that they are not-for-profit entities.
This paper situates academic and other non-profit biodiversity collectors in the commercial and intellectual property systems. To shed light on the policies that many academic bioprospectors are bound to, this paper briefly discusses pertinent provisions of the intellectual property policies of universities in a number of developed countries, from Australia to Norway. While policies vary from country to country and from institution to institution, common themes can be found that bring into doubt the very existence of “non-commercial” research at many institutions.
B. The current situation of Northern universities and other non-profit research entities with respect to biodiversity patents and research commercialization
While some companies directly collect biodiversity for research and product development, more acquire biodiversity, and rights to it, through an intermediary, such as an academic, a gene bank, a botanical garden, or some other collector or ex-situ collection. Most of these entities are not-for-profit institutions. Their work, however, is bound to commercial interests in their role as resource and intellectual property “re-providers” (partners) with industry.
In addition, while use of genetic resources may be contemporaneous to collection, it may also occur years or even decades later. For example, a pharmaceutical company may open a line of research that leads it to study a botanical garden plant collected a century ago, before the contemporary research was even remotely conceived. This “new use” issue poses conundrums for access and benefit sharing laws – how to anticipate future changes in the purposes to which samples are put to use?
Public and private universities and other not-for-profit entities are not only partners to industry, they are increasingly in business for themselves. To maximally capitalize on research, they require employees to report all inventions and take ownership in them. In some countries, particularly those that have laws modeled on the US Bayh-Dole Act (such as Japan), the patent and marketing process isn’t optional: Universities are required to commercialize results of publicly funded research.
Yet the myth of the professor’s intellectual autonomy and non-commercial orientation persists. In reality, in many fields in the biological sciences in many developed countries, if a professor’s research consistently does not produce marketable results, the professor may lose his or her job. If not, he or she may be relegated to the smallest office, an unequipped laboratory, allocated the least staff support, marginalized to a lifetime of teaching of introductory courses, or other forms of academic penury. Thus, to maintain the good graces of his or her employer, the life sciences professor’s job is increasingly about making money.
The professors and other researchers who are the human face of bioprospecting are therefore subject to sophisticated institutional intellectual property rules that incentivize patent claims and provide personal economic benefits. These rules must be followed as a matter of contract and/or employment law.
In other words, although not-for-profit research entities might claim “non-commercial” institutional objectives, often they nevertheless patent and profit from biodiversity research, alone or in cooperation with the private sector. They may even be prohibited from overlooking commercial possibilities by laws that require patenting and marketing inventions.(1) They are definitely not “non-commercial” users in the sense of the Nagoya Protocol.
Bioprospectors may not be free to negotiate provisions of access and benefit sharing agreements, particularly intellectual property provisions, as they are bound by rules made by the administrators who manage such functions at their institutions. And at a time of constrained public budgets, those university officials are often under pressure to “show the value” of public research institutions (and private institutions receiving public grants) with intellectual property income statements.
These preexisting commitments and other limitations on the power of bioprospectors to structure ABS agreements may not always be clear to resource providers, who may cling to naïve ideas about academic disinterest in profit. It means, however, that if a professor or other “non-profit” collector negotiates an access and benefit sharing (ABS) agreement, and makes pledges about “non-commercial” research, the bioprospector may be exceeding his authority in doing so, and the agreement may not be valid or enforceable.
Therefore it is necessary to be wary when negotiating access to biodiversity with representatives of not-for-profit research institutions, particularly from the North, where they are likely to be subject to aggressive intellectual property policies. It follows that it should never be presumed that a “non-commercial” institution, such as a university, should merit “non-commercial” simplified access to genetic resources in the sense of the Nagoya Protocol’s Article 8.
C. Some typical intellectual property and innovation-related policies at Northern not-for-profit research institutions
While there is some variation between countries and institutions within them, there are a number of common legal and policy aspects related to innovations that can be found at most Northern non-profit research entities. These include:
1. Inventions belong to the employer
Many non-profit research institutions require their researchers to assign rights to inventions to the institution, as a condition of employment. For example, the policy applicable to all campuses of the University of California, which is typical for a university in the United States, reads:
An agreement to assign inventions and patents to the University, except those resulting from permissible consulting activities without use of University facilities, shall be mandatory for all employees… (2)
In Norway, the University of Oslo places a similar obligation on its researchers, whose contracts establish that the University “is entitled to acquire all rights” to work outputs, including “patentable and non-patentable inventions”, “other technology which has potential for commercial exploitation”, “varieties of plants”, and “physical objects made from organic, inorganic or biological material, including substances, organisms and crops”. (3)
Universities have learned the hard way that if they wish to profit from professor’s inventions they must use such aggressive terms in their policies and contracts with their employees, and enforce them.
In 2010, Australian universities learned this in a case that has reverberated in other parts of the world. In the University of Western Australia (UWA) v. Grey, the university lost a legal battle for a share of the proceeds from a cancer treatment developed by one of its professors and sold to a drug company.(4) The reasons why UWA lost the case included failure to strictly implement its own intellectual property policies and because the professor’s employment contract did not stipulate that inventions must be assigned to the University. (5)
It’s thus unsurprising that Australia’s University of Sydney bluntly “asserts ownership of all intellectual property created by a staff member in pursuance of the terms of his or her employment”. (6)
Germany, Sweden, and some other countries have slightly different situations. In Germany, for example, public university employees are afforded greater rights over their work, however, the country’s Law on Employee Inventions allows universities to “demand a reasonable share of the proceeds” in cases “where the employer made available special resources for the research work” (presumably money, staff, and/or specialized facilities). (7)
In the policies reviewed in the course of preparation of this paper, none were found that appeared to enable a research employee to negotiate the rights of his or her institution. Academic bioprospectors from the North are therefore unlikely to possess authority to execute ABS agreements on behalf of their institutions, and may not have ownership of research results, even if the bioprospector is collecting materials for his or her own use.
2. Duty to report innovations to the employer
The same rules under which employers claim the inventions of their employees also typically require academic researchers to report potentially commercial discoveries to their institution’s technology transfer office. In other words, professors typically cannot legally keep patentable results to themselves, or transfer them to somebody other than their employer without the employers’ agreement.
At the University of California, all employees “shall promptly report and fully disclose the conception and/or reduction to practice of potentially patentable inventions to the Office of Technology Transfer or authorized licensing office.”
Similarly, the UK’s Oxford University demands that all of its researchers report any inventions to the University, which then either assigns rights to a funding agency or company (if required by preexisting research contract), or the University may claim the invention itself, whereupon rights go to Oxford’s technology commercialization office. (8)
At the University of Tokyo, a duty to report exists,(9) while in Spain, national law obligates university researchers who invent anything to immediately report their inventions (and assigns ownership of the inventions to the university). (10)
3. Researchers (and technology transfer offices) incentivized to claim inventions by profit sharing
Although there are cases where university researchers may keep at least some rights to their own inventions (e.g. Germany), more typically the researcher and his or her institution will have a pre-existing arrangement that spells out terms for profit sharing from patents assigned to the university. At some institutions these terms are fixed, while at others they may vary from department to department or even researcher to researcher.
At Oxford University, a published regulation spells out specific terms for division of net revenues (subject to modification under funding agreements): (11)
net revenue Researcher(s) General Revenue Account Department(s)
Similar arrangements are made in the United States, including making income-based financial incentives to university technology transfer offices. For example, at Texas A&M University, profit sharing arrangements in the University’s agricultural research division allocate 37.5% of proceeds to be paid as personal income to the inventor(s), 37.5% to furthering the research that resulted in the patent, and 25% to the University’s Technology Transfer office.
Interestingly, none of Texas A&M’s patent income is allocated to educational purposes, much less to providers of biodiversity, and the technology transfer office’s income is linked to licensing agreements. This creates a strong incentive for technology transfer officers to find, take over, and market research from the University (and raises questions as to if such arrangements are suitable for a public educational institution).
In Spain, the same law that assigns professor’s inventions to universities also mandates profit sharing with professors, the details of which are defined by institutional policies adopted by each research campus.
BOX: University patent data from the United States
The Association of University Technology Managers (AUTM) is, in effect, the trade group and lobbying branch of university technology transfer staff in the United States. It conducts an annual survey of its members to highlight the income that technology transfer offices generate for US schools. While some of the data should be interpreted cautiously - for example, university technology transfer offices often ‘forget’ to deduct their substantial operating costs from their income figures – the survey does provide an overview of patenting activity by US universities.
to the latest available annual (2009) survey (12):
• That year, US universities filed 8,364 new US patent applications and 1,322 new overseas applications. The total number of pending US patent applications from AUTM members was over 18,000. In 2009, the universities received 3,419 granted patents.
• Many of those patent applications were in biodiversity-relevant fields, including: 1,388 in biological sciences, 3,272 in medical sciences (including pharmaceuticals and vaccines), 225 in veterinary science, 128 in environmental science, 348 in agrochemistry, and 698 in “other life sciences”.
• As a proportion of the total number of university patent applications, biodiversity-relevant research sectors outstripped all other fields of science in number of patent claims filed. Medical applications constituted nearly a quarter (24.5%), and non-medical life sciences another 15.6%. There were substantially fewer applications from other areas, including the fields of computer science (9.6%), electrical engineering (7.8%), and mechanical engineering (5.1%).
aspects of policy and law vary from country to country, across the
North, it can consistently be observed that academic bioprospectors:
Further complicating matters is the fact even if a particular project is genuinely intended to be non-commercial in nature (e.g. a purely taxonomic study), the possibility of incidental discoveries cannot be ruled out, nor in many instances can commercial research by onward recipients necessarily be stopped. There are no provisions in university intellectual property policies reviewed for this paper to exempt incidental discoveries from the same processes applied to more anticipated research results.
Thus, even the most academically minded professor, with no personal commercial intent, is likely to be bound to report and patent an accidental or otherwise unintended discovery. These problems are, to an extent, anticipated by the Protocol’s Article 8 with the phrase “taking into account the need to address a change of intent for such research”.
So in almost all circumstances, academic research cannot be considered to be “non-commercial” in the sense of the Protocol’s Article 8. As many universities look to patents for a greater proportion of their income, the possibility of non-commercial research by these institutions is increasingly precluded by an unfortunate mixture of laws, policies, and labor contracts.
Another result of these policies and laws is that the professor or other researcher who is seeking access to biodiversity is unlikely to be legally competent to execute the associated ABS agreement, because she or he is not permitted to negotiate terms or to commit the institution. These powers are more likely to lie with the technology transfer officers of not-for-profit research institutions.
With these circumstances in developed countries, provider countries must presume in their national ABS laws that academic researchers have commercial intent, without regard to the fact that they come from public and/or not-for-profit institutions.
then, should a biodiversity collector be afforded the simplified access
procedures required by Nagoya Protocol Article 8? And what should
those procedures look like? This paper suggests two possibilities:
In this case, the “simplified” access procedures offered under national law for “non-commercial” requesters would not greatly diverge from those offered to commercial requesters. That is, they would contain the same conditions for access and requirements for benefit sharing as those imposed upon companies. In this case, the procedure might still be described as simplified because it would not be necessary to, for example, request information on ownership or certification of good legal standing from a well established public entity.
Alternatively, a Party to the Nagoya Protocol may wish to offer a substantially simplified procedure for genuinely “non-commercial” access but place very high requirements upon the bioprospector in order to qualify for it. The legal enforceability of these requirements would have to be certain, and they would need to contain an unalterable commitment on the part of the bioprospector and his or her institution not to seek intellectual property rights or other commercial benefit from the samples taken, the progeny, parts, and derivatives thereof, nor from research results. The bioprospector must also be enjoined from transferring the samples, progeny, parts, and derivatives to any 3rd party, including by means of sequence data.
Such requirements would also mandate the destruction or return of samples upon completion of the non-commercial research specified in the access agreement or, in any event, on or before a specific date. As an added assurance, the requirements for simplified access could require reporting and assignment of all intellectual property generated from use of the biodiversity to the competent authority and/or relevant indigenous people or local community in the country of origin.
While such requirements would enable offer of a substantially simplified access procedure, the laws and policies governing most academic institutions in developed countries would not permit them to avail themselves of it. So a simplified access procedure with such assurances would likely be infrequently utilized. While this is unfortunate, it is an appropriate situation so long as Northern universities persist in policies that do not permit their employees to conduct genuinely non-commercial research, and which mandate patenting biodiversity and related research results.
(1) The controversial reasoning behind such laws is that public investment in educational and research institutions is best served by their aggressively patenting and selling discoveries.
(2) University of California System 1997. Patent Policy (updated 2008). URL: http://www.ucop.edu/ott/genresources/pat-pol_97.html
(3) University of Oslo 2006. Agreement between The University of Oslo and Employee at the University of Oslo Regarding acquisition of rights to work results. URL: https://www.uio.no/for-ansatte/ansatt/stilling/rettigheter_til_arbeidsresultater/acquisition_work_results.pdf
(4) The technology, used to treat liver cancer, is the main asset of Sirtex, a publicly traded company worth approximately AUD $350 million as of mid-2012.
(5) See: Freehills Law Firm 2010. UWA turns grey – ownership of IP (web page), 12 February. URL: http://www.freehills.com/5790.aspx
(6) University of Sydney 2010. University of Sydney (Intellectual Property) Rule 2002 (as amended). URL: http://sydney.edu.au/policies/showdoc.aspx?recnum=PDOC2011/108&RendNum=0
(7) WIPO n.d. Law on Employee Inventions (WIPO translation of communication from German authorities). URL: http://www.wipo.int/clea/docs_new/pdf/en/de/de039en.pdf
(8) Oxford University 2011. Regulations for the Administration of the University's Intellectual Property Policy. URL: http://www.admin.ox.ac.uk/statutes/regulations/182-052.shtml. See also: Oxford University Statute XVI: Property, Contracts, and Trusts. URL: http://www.admin.ox.ac.uk/statutes/790-121.shtml
(9) University of Tokyo 2004. University of Tokyo Intellectual Property Policy. URL: http://www.ducr.u-tokyo.ac.jp/en/materials/pdf/UTokyo-IPPolicy.pdf
(10) Law 11/1986 (20 March), Title 4, Article 20. URL: http://noticias.juridicas.com/base_datos/Admin/l11-1986.t4.html
(11) Oxford University 2011.
(12) AUTM 2010. US Licensing Activity Survey Highlights: FY 2009. URL: http://www.autm.net/FY_2009_Licensing_Activity_Survey/5879.htm