Industry Says IP Key In Technology Dissemination; Others Call For More African Innovation

A panel of industry representatives presented their views at the World Trade Organization on the diffusion of innovation, calling intellectual property rights key to the process. Meanwhile, another panel looked at innovation as a growth strategy for the global South.

The panel co-organised by the International Federation of Pharmaceutical Manufacturers and Associations, CropLife International, and Innovation Insights was held during the WTO Public Forum focussing this year on innovation and the digital economy and taking place from 1-3 October.

Representatives of five companies – Airbus, General Electric, Monsanto, Qualcomm and Sanofi – were invited to share insights about what factors accelerate innovation and technology diffusion.

Discovering new drugs to put into the pipeline is a constant concern of the pharmaceutical industry and “should be the concern of everyone,” said Robert DeBerardine, general counsel for Sanofi North America. What has been changing over the years of the industry, he said, is that it has engaged in open innovation and partnerships.

The research and development process is very expensive, he said, and the pharmaceutical industry, unlike some other industries, is highly regulated, which he said increases costs. “Before governments say we can sell, we do not have a product,” he said.

“The context of IP in such a highly regulated industry is a very interesting conversation,” he said. “A lot of people say it is not fair to charge people money for a drug that is life-saving and that is actually a very fair point…. But if you want private enterprise to do that then there has to be some return on this investment.”

“We are a private enterprise,” and make this investment, he said. “Hopefully we have a good pipeline, hopefully we are taking these great ideas from the free flow of information that is coming out of the technology environment and are applying it in a way that we are coming up with good products.”

IP, Facilitator of Partnerships, Diffusion

For Allison Mages, senior counsel for IP, procurement and policy at General Electric, the boundaries of innovation have become blurred as technology domains flow easily into one another and “inspiration can come really from just about anywhere.”

The company, which according to Mages powers a quarter of the world’s electrical system, devotes some six percent of its revenues to R&D. Collaborative innovation is a key to increasing innovation success, she said. Emerging markets are embracing this faster than some of their counterparts in terms of technology as it translates into access to new technology and the possibility to enter new markets, she said.

When it comes to getting access to a technology, licensing “will only get you so far,” she said.” It will give you the technology itself but it won’t necessarily tell you how to implement it.” That issue is solved with successful partnerships, she said.

IP is one of facilitators of successful partnerships, the industry representative said. It helps clarify what parties are bringing to a partnership and helps encourage sharing, which in turn will help develop new products faster, she indicated.

Philip Wadsworth, vice president and legal counsel for intellectual property at Qualcomm, said the company’s business model uses a virtuous innovation circle in which the company invents, commercialises, patents its invention, sells its semiconductors, and licences patents to other companies making handsets. It allocates some 20 percent of its revenue to R&D to maintain its competitive advantage.

Mergers and acquisitions are one way of accelerating diffusion of technology, said Wadsworth, along with participation in standards. “You get all of the major players in developing new technologies together and they are actually peer-reviewing their contribution so that the best technology gets in there,” he explained.

Once the technology is adopted, the standards system facilitates the licensing of all of the IP rights around those contributions and all implementers have access to that technology and can make competitive products, he said.

PPPs Diffuse Technology, Monsanto Says

According to Brian Lowry, deputy general counsel for Monsanto, innovation in agriculture depends on local factors. Corn coming from Iowa (US) would not fare well in Kenya, where the climate and farming conditions are different, he said.

To address those questions, Monsanto collaborates with local universities, farmers and national institutions, he said. To illustrate Monsanto’s technology diffusion through a public-private partnership, Lowry presented the Water Efficient Maize for Africa (WEMA) project, which aims to bring two innovations royalty-free to sub-Saharan African farmers. Both technologies are under patents in the United States and other countries, he said.

Transgenes are bred into the seed so the plant can manage drought and water stress and insect pressure, he explained.

He underlined the importance of the right partners in this project: the African Agricultural Technology Foundation, Bill and Melinda Gates Foundation, Howard G. Buffett Foundation, USAID, International Maize and Wheat Improvement Center (CIMMYT) and national agricultural institutions of five African countries, which contributed scientists: Kenya, Mozambique, South Africa, Tanzania and Uganda.

“We are not good at understanding all the local conditions, all the environmental risks, all the infrastructure and distribution problems that may exist in a country where we don’t have a business, so we needed to partner with folks who could help us through that,” he said.

In order to get approval and diffuse the technology to farmers with both traits and know-how of agricultural practices that would maximise potential, Monsanto needed people on the ground understanding how to farm in those environments, manage some of the risk, and communicate with the farmers, he said.

Answering a question from the audience, Lowry said that self-replicating technologies are creating a “very significant challenge” for Monsanto. He gave the example of a transgenic Monsanto soybean brought into Argentina without a patent, used by farmers for 10 years without the possibility of collecting royalties.

Monsanto sought to prevent the import of Argentinean soymeal into Europe in 2005 and 2006 on the reasoning that the soymeal contained DNA sequence of its herbicide tolerant soy not under patent in Argentina. The European Court of Justice then ruled against Monsanto (IPW, European Policy, 7 July 2010).

A recent case pitched Monsanto against a US farmer on the issue of patent exhaustion for self-replicating organisms with the Supreme Court ruling in favour of Monsanto (IPW, US Policy, 13 May 2013).

Too Little Innovation in Africa, Panel Says

Meanwhile, another panel at the WTO forum co-organised by the Consumer Unity & Trust Society (CUTS) International and the Organisation Internationale de la Francophonie looked at innovation as a growth strategy for the global South.

“We know the positive effects of trade liberalisation and openness but we are not able to reap them. What is fundamental is harmonisation of trade policies with other national policies, enabling innovation capacities to appear,” Dominique Foray, professor at the Ecole Polytechnique Fédérale de Lausanne, said on the panel, according to a release from CUTS.

Foray said that the “self-discovering” capacity of entrepreneurs should be fostered, as it would enable innovation, diversification and spill over effects, promoting “smart specialisation.”

Ambassador Pierre Claver Ndayiragije of Burundi and Professeur Desiré Avom, professor at the University of Yaoundé (Cameroon), both said there is too little innovation in Africa, the release said. This is due to several factors, such as the inflation of raw material, limited exposure to traditional channels of innovations, and a weak ability to absorb and take advantage of foreign innovations.