Institutionalizing Intellectual Property and Innovation

Management in ICAR/NARS

N.H.Rao
National Academy of Agricultural Research Management
Hyderabad

Learning Objectives
Perspective
Innovation as a key driver of growth
Changing perspective of agricultural research
IP Scenario in India
IP policy context
IP and Technology management framework for ICAR/NARS
Institutional environment for innovation
guiding principles for IP and innovation management
key elements of IP policy and technology commercialization
implementation

Innovation is the key driver of economic growth and rise in living

standards
Measuring Innovation - GII
Innovation:
Creation of new value for the world
through new technologies, new
business models, new products and
services, or new forms of social
entrepreneurship
Innovation accounts for :
US - 3/4 of growth rate since end of
World War II
UK 2/3 of private-sector growth
between 2000 and 2007
Global: 90% of the variation in growth of
income per worker across nations

India - GII rank 2015: 81

Source: ITIF, 2016; Global Innovation Index, 2015

Technology and Innovation in ICAR/NARS

Technology Spectrum
High yielding and resilient crop varieties and planting materials
Biotechnological products, diagnostic kits, biofertilizers, bionutrients,
biocontrol (IPM models), etc.
Animal and poultry breeds and fish strains
Improved dairy, poultry and fisheries technologies
Vaccines & Diagnostics, Animal Nutrition, Livestock products
technologies and Veterinary medicine
Improved farming tools, equipments and processing machineries
Postharvest processing technologies and value added products
Natural resource management technologies
Computer software and data sets
Other processes and products of agriculture and allied sectors

IP and Technology Transfer in public systems

Purpose
Quickly bring the knowledge and technologies generated to social and
economic use (accelerate innovation)

influence the development of new technologies

Mechanisms

Publications/presentations/public disclosures/ extension

Patents

Other IPR

Agreements/Contracts
PPP
Material Transfer Agreement
Confidentiality Agreement

Marketing licensing

Changing structure of agricultural research

Agricultural Research Systems are
increasingly driven by:
Changing structure of demand :
consumer preferences of rising middle
class
need to leverage the agricultural value
chain in favour of the farmer
Changing structure of R&D investment

Source: IFPRI, 2015; GAP Report, 2014; KPMG, 2013

Changing
Research
systems
structure:
NARS to
NAIS

Changing structure of investment in agricultural research : by sector

Global - private sector
India

Source: IFPRI, 2015; USDA, 2014

R&D investments (2006)

6-15% of sales

Private investment in research in seed biotechnology

Syngenta

Note: relatively high share of D in R&D

US $ million
R in%R&D
Crop
Seed/
Total (R&D as
of
protection biotechnology sales)
730
110
840 (11%) 126
500
310
810 (11%) 122

Monsanto

40

490

530 (10%)

80

Pioneer

215

312

527 (11%)

79

BASF

340

93

433 (10%)

51

CGIAR

425

ICAR (XI FYP)

~ 500

Company
Bayer

257

Adapted from : Spielman, 2007 and K Sharma, 2014

Increasing share of private sector in crop hybrids

Source; IFPRI (India), 2014; Pal et al, 2014

Patents: high share of private sector in agriculture (2007-12)

Source: Ankita, etal, 2015 (AERR)

Patent Scenario in India

patents granted in 2014 : ~ 6000 (<15% of applications)

largest number of pending applications (202000) in mid-income countries
(USA: patents granted in 2014: 415000 (~52% of applications); 1.17 million pending) ;
(China patents granted in 2014: 235000 (~25% of applications); pending ?)
Total operational patents: ~ 50000 (USA, > 2.5 million; China ~ 1.2 million; global 10.2 m)
Agricultural patents: ~ 1000
ICAR patents: 55

ICAR patents (2000-2014)

Total 42
(No patent granted for applications filed after 2010)

Source: Kandpal, etal, 2015 (JIPR))

Publications scenario in India: MS submissions and

acceptance rates
Global Share of Research
Output by Field

global

Indias share of submissions has increased by 2 % (next only to Chinas 5.5%)

but, < 20% of submissions were accepted in 2010 (among lowest 3 countries)
acceptance rates are coming down

13

Source: Thomson-Reuters, April 2012, Feb 2013

Key factor in IP management: Costs of patenting to

commercialization and revenues
High costs of technology protection and
commercialization
Annual research expenditure per patent
in top 30 universities in USA: US $ 3 to
26 million
Annual research expenditure per startup company in top 30 universities in
USA: US $ 21 to 379 million

Source: AUTM Survey, 2012

Only a few universities are generating

significant returns from licensing activities

Emerging trends - recent emphasis on start-up driven economy

patents act as catalyst to set
startups on a growth path by:
facilitating their access to capital
reducing uncertainty
alleviating information asymmetries
in the market
delays in patent approvals adversely
affect capital approvals and firm
growth
Can present institutional environment
for IP protection and licensing support
technology driven Start-up economy ?

Source: Farre-mensa et al, USPTO, 2015

Effect of patent grants on firm growth

IP policy Drivers- costs

High costs of technology protection and
commercialization
Annual research expenditure per patent in
top 30 universities in USA: US $ 3 to 26
million
Annual research expenditure per start-up
company in top 30 universities in USA: US
$ 21 to 379 million

only a few universities are generating

significant returns from licensing activities
Source: AUTM Survey, 2012

Bridging the research innovation gap: crossing the valley of death

research can take place anywhere (universities, public institutions)
innovation generally takes place in firms (private sector)
Two distinct barriers impede innovation: Technology valley of death &
Commercialization valley of death

Licensing technologies to private sector, promoting entrepreneurship and

building publicprivate partnerships can bridge the two valleys of death and
accelerate innovation

ICAR Institutional Environment Vision 2050

Vision
Lead India towards sustainable
food, nutritional, environmental and
livelihood security through
agricultural research and education
Mission
Harness the power of science and
innovation for food security, food
safety, farmer prosperity and
enhance natural resources base to
promote inclusive growth and
sustainable development

Strategic framework

ICAR 2050 (contd..)

Strategic Focus: Research/education/Technology transfer
farmer first increase farmer share of total value created
Sustainable food security through sustainable intensification of agriculture
(SIA)
generate fundamental knowledge and novel technologies that enhance
productivities, efficiencies and natural capital (focus on new sciences,
systems & knowledge intensive approaches across scales - ecosystems,
landscapes)
Build resilience to stresses (biotic/abiotic)
Build resilience to climate change climate smart agriculture
Organizational change (structures, systems and culture):
accelerate innovation: transform NARS to a more pluralistic NAIS through
PPP

Implementation: Create Multi-institutional platforms

Research platforms in new sciences and critical areas:
genomics, water; molecular biology; hybrids; agro-biodiversity; biofortification; technology management; conservation agriculture; data
platforms; NICRA
Extension platforms focusing on entrepreneurship
ARYA
ABI
Innovation fund for grass root innovations
Education platforms
MOOCs
NAEP

IP Policy framework
Policy =

Principles
Guidelines
Rules
Mechanisms

to guide stakeholders in decision making

- priorities, objectives, strategies,
instruments, and accountability

Policy Hierarchy
National economic policy
(vision of societys future)

National agricultural policy

Agricultural research policy
(organization)
IP policy

Guiding principles of public policy :

vision of societys future and guided by the basic principles of effectiveness,
transparency, equity, consistency, comprehensiveness and public good
evolutionary process (influenced by legal/judicial processes)

IP policy and IP management decisions

The main purpose of an IP policy is to provide a consistent, transparent and
accountable basis for strategic and tactical decisions related to IP management
Strategic decisions:

Tactical decisions

prioritizing research investments

What form of IP protection?

ownership of IP arising from research

How to value innovations ?

How, when and where to protect
and for how long?
When and how to license/
commercialize technologies?
How to allocate credit and share
benefits?
How to maximize freedom to
operate for research and
technology transfer?
How to engage in confidential
discussions with collaborators?
How to negotiate MTAs/
collaboration agreements?

licensing and technology transfer conditions

forging collaborations and PPP
increasing national competitive advantage
ensuring speedy technology transfer to
small and marginal farmers
incentives and rewards for inventors and
others to create a culture of innovation
associated organizational and institutional
changes
guiding national IP policy on agriculture
related issues

IP policy Drivers complex IP regime

International:
TRIPS patents, copyright, TM, TS, GI, designs
PVP

sui generis systems/UPOV

CBD origin, national rights to natural resources,

traditional knowledge, PIC, equitable
benefit sharing
FAO-IT plant genetic resources

Protect products
of innovation
Protect natural
resources sources of
products

PCT standardized patent application and search process

to facilitate quick international protection
National Institutional mechanisms: Patents Act, PPV&FRA, other IP related
Acts, NBDA, SBDA; (conformity with TRIPS, CBD, FAO-IT)
Compatibility between TRIPS and CBD/FAO-IT (?)

IP policy Drivers- Fragmentation of IP and Freedom to Operate

Freedom to Operate (FTO) is the

Some points of concern:

ability to proceed with the

patenting of enabling or platform

technologies in certain fields such as
biotechnology, nanotechnology, software

research, development and/or

commercial production and
marketing of a new product or
process with a minimal risk of
infringing the unlicensed
intellectual property (IP) rights of
third parties.
(NIH)

lack of information on license status of

technologies - although patents and
patent applications are disclosed,
license agreements are often not
simply determining where a researcher
has freedom to operate (FTO) is
becoming more difficult - with important
implications for infringement,
particularly because patent infringement
happens routinely at every university
with biotech research(Yancey & Stewart,
2007)

FTO - costs of infringement; implications for research exemption ?

Eg. Monsanto-Dupont case, Aug 2012:
A federal jury awarded $1 billion in damages to the crop biotechnology leader Monsanto,
saying that its arch rival DuPont had willfully infringed a gene patent covering Roundup
Ready soybeans..
DuPont had attempted to develop an alternative glyphosate-resistant gene and decided
to combine that gene with the Roundup Ready gene licensed to it by Monsanto, saying
the combination worked better.
DuPonts license to use the Roundup Ready trait precluded combining it with another
trait for glyphosate tolerance
DuPont had not sold any seeds that infringe Monsanto's patent for genetically modified
Roundup Ready soybeans. The infringement is based on some Roundup Ready
soybeans they developed but did not sell and the award was based on the royalties that
DuPont would have paid had it negotiated a license ahead of time.
March 2013: The companies agreed to drop antitrust and patent claims against each other
while forging the new collaboration, and agreed to toss out a $1 billion jury verdict .
DuPont will make at least $1.75 billion in royalty payments over several years in
exchange for broad access to Monsanto's leading genetic technology for the
development of new agricultural seed products - Reuters

Framework for institutionalizing IP policies

guiding principles: consistent with national policies, organizational vision,
mission, and stakeholder expectations
policy design: consistent with institutional environment - organizational
structure, systems, IP generating capacity; partnerships
policy guidelines: organizational level, individual level; each category of IP
institutional mechanisms:
best practices for identification, evaluation, protection, licensing,
commercialization of IP (recording, inventory, CAs, timelines for
decisions, avoiding conflict of interest, ensuring FTO use of third
party IP)
Facilitation: patent search, identification of partners, market research
for valuation of IP, deal with administrative legal issues
capacity building
review and revision

IP policies of Public Agricultural Research Systems

Public systems generally favour full disclosure:
USDA-ARS:
in general publications and other methods of technology dissemination will
be preferred to facilitate technology transfer
public release of plant varieties is preferred
animals or research tools will not be patented
most protection will be as patents if protection is necessary
CGIAR:
all research products are international public goods and full public disclosure
is the preferred strategy
licensing guided by technology access for resource poor

ICAR- Key elements of IP policy guidelines

ownership: ICAR sole owner for ICAR funded research; joint owner for IP from
partnerships scientists identified as inventors; benefit sharing with inventors
as incentives
Protection will be sought for all IP worth protecting
Technology transfer/publication only after filing for protection
If protection is not sought, bring knowledge into public domain quickly
In-licensing and pooling of IP resources for public use
Encourage public-private partnerships
Instruments for IP sharing and partnerships (MTAs, MoUs, etc.)
IPR compatible system of research institutionalize reporting and monitoring
IP watch patent search, databases, inventory, market watch

Forms of IP recognized

patentable: microorganisms; microorganism based formulations; genetically

engineered microorganisms; novel genes from microbial and higher biological
systems; research tools of genetic engineering (primers, constructs and gene
transfer tools like gene gun); novel dairy/horticultural products, improved
dairy, poultry and fisheries technologies; agrochemicals; high value
compounds from living terrestrial, aquatic systems; diagnostic kits; improved
tools, equipment and machinery; post harvest technologies; information
systems and software; patentable part of know-how
PVP: for field, horticultural and agroforestry crops including new, extant, EDV
and transgenic varieties
Improved breeds/strains of Animals/poultry/fish cannot be protected

ICAR- IP Management:

CTMC/AgroInnovate India Ltd at ICAR HQ; ZTMCs/BPDUs in regions;

ITMCs and ITMUs in Institutes/TBIs/ABIs
Delegation; Decentralization to Institutes ITMCs (national protection)
Specific Procedures for each category of IP Patents, PVP, Copyrights, etc.
Confidentiality agreements
Budget for IP management
Dispute resolution
Promote public-private partnerships and scientist entrepreneurship
Templates for MOUs, CAs, MTAs
Create awareness, monitor, review, and update IP policies

ICAR - Commercialization of technologies

ITMCs will advertise IP enabled ICAR technologies

Technology disclosure through CAs
Licensing or agreements for commercialization by ITMCs; exclusive or nonexclusive licenses
ITMCs will decide license fees based on cost of IPR protection and
maintenance; cost of production and handling; other institutional costs
No standard formulae available marketability, technology access main
criteria
foreign licenses by CTMC

A general approach to IP protection

Fig Source: Daizadeh et al, 2003; Nature Biotechnology, Oct 2002

Institutionalizing IP management for accelerating Innovation:

2 Examples .

Institutional processes: How to decide to patent an Invention

an example from USDA
Patent process begins when an invention report is submitted by an ARS scientist.
Each scientist has an assigned patent adviser, who is available for consultations regarding
issues of patentability.
Invention reports are submitted through the scientists line managers, who approve the
invention for patent filing, subject to the recommendation of a Patent Review Committee.
Each committee consists of ARS scientists and representatives of the Office of Technology
Transfer, who participate in the discussions as nonvoting members.
For each invention report submitted, the Patent Review Committee considers the following
questions in deciding whether to recommend patent protection:
Is there current commercial interest in the invention or a high probability of
commercialization in the future?
Is the magnitude of the market relative to the costs of commercialization large enough
to warrant a patent?
Would a patent likely play a significant role in transferring the technology to the user?
Would a patent be enforceable; i.e., is the invention drawn to, or does it employ, a
unique and readily identifiable material or device which could be bought or sold?
Is the invention of sufficient scope to justify patenting?

Source: USDA

Commercialization (patents, biological materials, varieties )

Not a bidding process
Total licensing fees to partially cover the technology transfer program costs
Licenses to commercial partners with facilities, personnel and expertise to develop and
market inventions
License applicants must demonstrate a willingness to expend reasonable efforts and
resources to commercialize the inventions
Preference for small enterprises
License fees and royalties negotiated by the PA based on policies and objectives set forth
by US Congress for all Federal agencies:
on case by case basis
depend upon several factors: scope of the rights granted, size of potential market, time
and financial investments required by licensee to bring a product or service to market
Business terms: license execution fee; royalties (minimum annual royalties + running
royalties based on sales); mile stone payments; patenting costs
inventor not involved to avoid conflict of interest
Licenses can be exclusive, non-exclusive, partially exclusive
Public notice for any objections
License applicant provides:
- description of products expected from license
- time line, milestones
- best estimates of market size, growth potential, profitability
- manufacturing, marketing, technical resources

Distribution of and uses for license revenues

Established by Federal statute and is the same for all inventions
Individual agencies have some limited flexibility to develop specific policies.
First $2,000 of license revenues received for an invention each calendar year, plus at
least 15% of the remainder, must be paid to the inventors as a personal award
(limited to $150,000). The remainder can only be used for technology transfer
activities, such as patent costs, etc.
ARS does not attempt to recover the salary costs of those who prepare and
prosecute patent applications (objective is to keep transaction costs low).
In FY 2011, ARS reported 337 active licenses of USDA technologies, with 130 of
these (39%) producing at least one product in the marketplace broadly available to
the public.
The median revenue from these licenses is only about $5,000, illustrating the value
of these public private partnerships in creating business opportunities at low
transaction costs.

Institutional processes: Syngentas e-licensing system

Key elements:
Portfolio :
patented enabling technologies which support plant breeders
native traits in commercial varieties
Easy and quick access to licenses via internet; no complex negotiations
Transparency of FRAND (Fair, Reasonable and Non-discriminatory) licensing
conditions
Applicable to all plant breeders or other parties interested in a license
A free research license for academic or not-for-profit parties
A standard license agreement for other entities with commercial terms adapted for
small, medium and large entity sizes
"Free access" for licensed native traits during development and breeding of new
varieties
Royalty payment only due if the newly-developed and commercialized variety
contains the patented native trait.
Source; http://www3.syngenta.com/global/e-licensing/en/e-licensing/About/Pages/About.aspx

Syngentas e-licensing system licensing and financial terms

Licensee will be granted a non-exclusive commercial license, under the Patent Rights,
to use the technology for research, breeding and commercial purposes
Each technology belongs to either License Class A (premium) or B (basic)
For Native Traits Technologies:
Standard License terms allows the use of commercially available Syngenta varieties to
access the licensed trait for research, breeding and development of new varieties.,
Licensee will pay for each
"differentiating" trait (Class A): a fixed fee per unit of seed
"basic" trait (Class B): a fixed royalty percentage.
When applicable a trademark license will be part of the standard agreement
For Enabling Technology: Licensing dependent on Class and entity size
Enabling technology - License class A

Enabling technology - License class B

Suggested Check list of indicators for institutionalization of IP management

Institutional vision and mission defined
Guiding principles of IP policy listed
IP Facilitation centre (ITMU) constituted and staff trained
IP management budget allocated
IP management general guidelines issued
IP management guidelines for specific categories of IP issued
IP management administrative guidelines issued
IP inventory and audit completed
Existing databases, software , websites, multimedia products, CD-ROMs and
publications protected by copyright
Copyright provisions clarified and management regularized for different
categories
Existing plant varieties protected as extant varieties
IP portfolio of existing commercializable IP available
IP decision-making flowcharts available
IP awareness/capacity building programmes initiated with scientists/ faculty
IP/patent search facilities made accessible
record books/registers designed to maintain research records, and made available
IP disclosure forms designed for scientists to intimate IPMC about new IP
Materials Transfer Agreements standardized

Check list of indicators for institutionalization of IP management

Guidelines for use of third party IP in place
Templates for confidentiality agreements (CAs) available
Proforma and guidelines for MOUs for negotiating collaboration with private sector
standardized
Proforma and guidelines for MOUs/agreements for negotiating collaborationwith other
national and international organizations
Mechanisms for valuation of IP in place
Guidelines for sharing of incentives (between inventors and organization)
IP policies, management guidelines and MTAs/MOUs/CAs made available online
Compliance by scientists and employees in routine use of MTAs, CAs
Compliance by research managers in observing guidelines, MoUs, and other
agreements for collaborations with private sector and other organizations
IP matters coordination with other agencies ICAR, IP granting agencies/offices, law
firms
Procedures for protecting infringements against IP owned by the institution
Capacity building initiatives
No of technologies patented/plant varieties protected
No. of technologies commercialized
Institutional earnings from royalties and commercialization

The sign of things to come:

Many of the leading institutions in public sector plant breeding have ceased to produce
finished cultivars and are concentrating on methodology development, applying the
discoveries of basic biology to crop improvement.
.. over the past few decades the USDA/ARS has chosen to concentrate on basic
science, eliminating or curtailing nearly all the cultivar development programmes on
minor crops..
Today the USDA/ARS devotes only 12% of its plant breeding science person years to
cultivar development ..
Change is coming quickly in some areas. The major firms in the private sector are
interested in partnerships with the public sector that offer a first look at new ideas.

The UC Berkeley had completed an unprecedented deal to sell access to an entire

Department. For $ 25 million up-front for new campus laboratories and $ 25 million in
research funds over the next five years, the Swiss based biotech giant, Novartis (now
Syngenta), gets to observe the work of 32 faculty members and nearly 200 graduate
students and post doctoral Fellows in the Department of Plant and Molecular Biology.
Novartis also gets first crack at negotiating rights to take the Departments discoveries
to market.

Coffman et al, 2003

Institutionalizing innovation management is much more complex.

IP management is only one
component
Involves institution + much
wider range of stakeholders
GII components provide
some direction

Thank You