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Protect to multiply

Protection of intellectual property expands social benefits of research

Three years before the National Congress approved the Brazilian law on patents, the Brazilian Agricultural Research Corporation (Embrapa) was beginning to draw up a set of rules for protecting the knowledge generated in the more than 500 lines of research pursued over 32 years. It was a question of special care with its scientific heritage, a practice at the time quite uncommon amongst public research institutions.

When Brazil joined the Trips (Trade Related Aspects of Intellectual Property Rights) agreement – a position imposed for the country to join the World Trade Organization (WTO) – and when laws were published on intellectual property and on cultivars, as from 1996, Embrapa had already created an innovation nucleus, drawing up standards for protecting its genetic material and defining the conditions for relationships with public and private partners for the development of new varieties of plants, recalls Elza Cunha, the director of Embrapa’s Intellectual Property area between 1993 and 2002.

The concern with protecting knowledge and with creating rules for the relationship with public and private partners was not exclusive to Embrapa. The Oswaldo Cruz Foundation (Fiocruz) started the implantation of its rules at the end of the 1980’s and formalized them in 1994. Since then, the 63 projects protected have resulted in 64 patents already granted – 14 in Brazil and 50 abroad – and 118 requested – 54 in Brazil and 64 abroad -, tells Maria Celeste Emerick, Fiocruz’s coordinator of Technological Management and Innovation. In Embrapa’s case, the policy adopted has generated 129 patents, 89 of which abroad.

These results, besides giving the measure of the dynamics and quality of the researches of the two institutions, may contribute towards an evaluation of the strategic role of the protection of intellectual property in the dissemination of knowledge.

Price control
The registration of a patent calls for the detailed publication of the technology. When it is a question of an original invention that has an industrial application, the product of the knowledge will remain protected in the country of origin or abroad for a determinate period, on average 20 years, during which the inventor may exploit it commercially or license it in exchange for the payment of royalties, before it falls into the public domain. “Everybody has access to the formula, and this helps with the advance of knowledge”, argues Sérgio Salles Filho, a researcher from the Scientific and Technological Policy Department at the State University of Campinas (Unicamp).

Besides contributing towards the dissemination of new technologies, the examples of Embrapa and Fiocruz show that the patent can be a crucial tool for providing support for public policies. The protection of cultivars – a sui generis modality of patent -, for example, conferred on Embrapa a strategic position in the Brazilian market for seeds.  The company holds, for example, 23% of the protected cultivars of soybeans and, if the partnerships entered into with ten foundations of seed producers are computed, this percentage reaches 36%. Embrapa’s strong presence in this market has limited the process of denationalization and privatization of the sector, given second wind and competence to Brazilian seed producers, and has also contributed towards the control of prices. Were it not for the policy of patenting, the major multinational companies would prevail in this market.

In the case of Fiocruz, the patenting policy has qualified the institution for transferring technology to partners, licensing the practice of research, and producing immunobiologicals at its two factories, and thereby guaranteed the supply of a portion of the market for vaccines, diagnoses and medicines, allowing the country to negotiate prices with major pharmaceutical manufacturers.

Evaluated from this perspective, the social impact of the intellectual property policies contradicts arguments from some sectors of the academic world for which patenting is incompatible with the public nature of the knowledge produced at the universities and research institutes. “Knowledge is power. If published without protection, in the guise of increasing the social benefits, who will use it in the most rapid and efficient way” It will certainly be those that are best positioned for the use of this knowledge, who are usually not the most needy”, explains Salles Filho. It is a function of the public sector, says he, to offer technology, to protect it, to create and expand business for generating wealth, and not to “feed inequalities” in the use of knowledge. “The fundamental question is about the appropriation of the value generated by knowledge, and not the appropriation of knowledge in itself.”

In Embrapa’s case, the policy for protecting intellectual property had effects on income as well. There are no restrictions on the sharing of invention patents with public or private partners, but Embrapa does not divide ownership of cultivars with companies. In this case, it grants a user license with exclusivity for commercial exploitation for a period of from eight to ten years, through the payment of royalties. The rule is valid for the contracts signed with the ten seed producing foundations, like Monsanto, and will be valid for the contracts under negotiation with Basf, Syngenta, Bayer and Delta Pine.

The protected cultivars have generated an average of 2 thousand contracts a year and resulted in royalties worth between R$ 11 million and R$ 13 million, one fifth of the budget for the company’s costs between 1993 and 2002. “We adopted an aggressive licensing policy”, Elza Cunha recalls. “And Embrapa has not yet begun to license transgenic products. Can you imagine what the company is going to earn with this?”, she asks.

Fiocruz has started to review its intellectual property protection standards. Maria Celeste wants to implement more rigid procedural rules for standard operations, for recognizing a certain “informality” in the relationship with researchers. “We are going to perfect the interview with the inventor and transform it into a notification for the invention and the management mechanisms”, she exemplifies.

The foundation has now created a commission for evaluating projects that will be patented. “We have eight patents negotiated, but some do not have an exclusive user license.” They are patents with low added value that, from the financial point of view, have ludicrous results, she admits.

Fiocruz is also investing in the qualification of its staff. Research and development has gained the status of a discipline in Fiocruz’s postgraduate course, and there is now a course in Intellectual Property and Public Interest, given in partnership with the Law School of the Federal University of Rio de Janeiro (UFRJ). “We also have three research projects with the support of the National Council for Scientific and Technological Development (CNPq) and the Carlos Chagas Research Support Foundation of the State of Rio de Janeiro (Faperj): Intellectual Property in Genomics, Proteomics and Information Technology; Intellectual Property in Nanotechnology; and Intellectual Property and Cells”, says Claudia Chamas, the coordinator of the Bioscience discipline at the Oswaldo Cruz Institute.

Salles observes that the public research institutes must not adopt patenting policies merely as a way of generating income. “But they have an obligation of working with the protection of the knowledge generated in research, otherwise they will be wasting public money. Licensing generates income, increases the capacity for investment, and, above all, brings greater social benefits than if there were simply an indiscriminate release of knowledge”, he says.

The patent is also a strategic tool for the transfer of knowledge generated in universities and research institutes to provide support for the development of business innovation. The Technological Research Institute ( IPT), in São Paulo, and the Federal Universities of Minas Gerais (UFMG) and Rio Grande Sul (UFRGS) and the State University of Campinas (Unicamp) are amongst the institutions that have already adopted intellectual property protection policies and created innovation nucleuses or agencies to draw closer the relationship with strategic partners.

Unicamp, for example, created its Innovation Agency (Inova Unicamp) two years ago. With 400 patents deposited – 46 now granted -, Unicamp has kept the first place amongst the 20 largest patent depositors in the state of São Paulo between 1994 and 2001. At least 41 technologies have now been licensed in different sectors of the market during the 25 months of Inova’s activity, including anesthetics; a system for treating industrial effluents; and a radiofrequency receiver, amongst others, according to Rosana Di Giorgio, the Industrial Property director. “All the contracts signed between the universities and the market – and not just the licensing contracts – do not represent a significant income. They amount, at the most, to 7% of the universities’ budget”, she reckons.

The financial results recorded by Unicamp corroborate the idea defended by Salles that the public research institutions should not base their patent policy on the expectation of income. “The strategic mission of the university is to disseminate knowledge, and the patent is one of the instruments for this dissemination”, underlines Carlos Henrique de Brito Cruz, FAPESP’s scientific director.

Using data from American universities, Brito estimates that the academic patent requires average investments of US$ 1 million, compared to the average US$ 100 thousand for the industrial patent, which, in the majority of times, is incremental and defensive. “In the United States, no more than ten universities earn more from industrial property than they spend”, he says. For each one of the 281 patents deposited by the University of California in 1999, for example, it was necessary to invest an average of US$ 6.6 million in research and development. And each one of the 715 technologies licensed at the same university generated, on average, US$ 102.6 thousand a year, according to statistics for 1999.

“The academic patent has to be innovative because it is derived from scientific discoveries, while the industrial ones, in general, are incremental.  For their potentially revolutionary nature, the academic patents are strategic for the advance of innovation and essential for the protection of the public investment that generated them”, Brito observes.