Though the Cultivating Innovation project has now ended, we promised/threatened that we would be back with follow-up posts and further discussion of all things plants and IP. This week Mercedes Campi and Alessandro Nuvolari have taken the time to introduce some of their research to a wider audience, more specifically their recently published index of intellectual property rights tailored for agriculture.
Intellectual property (IP) protection systems for plant varieties are the outcome of a complex historical process that has taken place at a differential rate across the world. Broadly speaking, there are two main forms of IP protection for plant varieties: patents and plant breeders’ rights (PBRs). Both of them grant a temporally limited exclusive control over the propagating material and the harvested material of a new plant variety. However, a PBR is a form of IP protection especially designed to protect plant varieties and, as such, it takes into consideration some of their specific attributes. Some countries have neglected for years the consideration of plant varieties as subject of IP protection. Others early provided different instruments for their IP protection, including patents. Others have adopted sui generis systems that consider the specificities of plant varieties. The heterogeneity in the evolution of the patterns of legislation suggests that the construction of an indicator of intellectual property rights (IPRs) for plant varieties may contribute to enhancing our understanding of the effect of IPRs on agriculture.
The ratification of the agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) in 1994 has resulted in the adoption of tighter IPR systems, also affecting sectors that were not subject of intellectual property protection until recently. Moreover, developing countries with labile regimes or without IPR systems have recently adopted strong IP protection to comply with the demands of TRIPS. The resulting process of strengthening and harmonization of IPR systems has raised several concerns. In agriculture, IPR systems and their social and economic effects are a particularly controversial issue and the assessment of the merits and limitations of different IPRs regimes in this domain is particularly complex.
A proper appraisal of this problem requires consideration of an intricate array of thorny policy issues, ranging from the suitability of patents versus sui generis forms of intellectual property protection as the most appropriate incentive system for stimulating innovations, to the moral and ethical aspects revolving around the consideration of living organisms as inventions. Furthermore, recent developments in molecular biology applied to agriculture have contributed to increasing the complexity of this landscape. Genetically modified varieties may now be regarded as composed by different elements (the plant variety itself and its related gene), which can be protected by different types of IPRs and can even be owned by different actors. In this way, plant breeding has become an economic activity that is at the very core of the interests of major multinational companies involved in the production of genetically modified seeds. These developments have inevitably triggered conflicts, disputes and lobbying actions around intellectual property (IP) protection for seeds.
Several episodes illustrate the significance that intellectual property rights for plant varieties and agricultural products in general have attained in the world economy. In 2005 and 2006, Monsanto began a systematic campaign of infringement suits against importers of Argentinian soybean products and by-products to Europe. In brief, the root of the controversy was that Monsanto’s patent on the “Roundup Ready” (RR) soybean gene had been denied in Argentina but it had been granted by the European Patent Office (EPO). Thus, Monsanto argued that imports from Argentina of soybean related products containing the RR gene were liable for infringement. Monsanto was successful in obtaining the impoundment of several shipments of soybean-related products in Spain, the UK and the Netherlands. Soybean and its by-products were and still are the major export staple of Argentina (representing more than 50% of agricultural exports). To date, both a UK court and the European Court of Justice have ruled against Monsanto. To cite another example, in 2012, the United States and Colombia signed a trade agreement establishing that Colombian farmers could only use “certified seeds”, effectively prohibiting the widespread practice of self-reproduction of seeds. This decision triggered a wave of major protests, strikes and demonstrations all over the country, which finally forced the government to suspend the infamous “seed law”.
In a recent article: M. Campi and A. Nuvolari, (2015), “Intellectual property protection in plant varieties. A worldwide index (1961-2011)”, Research Policy, Vol. 44 (4), 951-964, we have proposed a new index that provides a synthetic quantitative characterization of the relative strength of IP protection on agriculture at the country level for 69 developed and developing countries for the period 1961-2011.
The index has been constructed by means of a detailed study of the historical evolution of the legislation in each country. Our approach has been thoroughly comparative from the outset: we have tried to identify the key-features characterizing the differences of IPR systems for plant varieties at the country level and we have developed a simple approach for transforming these features into quantitative indicators. The countries included in our sample were members of the UPOV convention by 2011. These countries have IP protection systems that are characterized by a rather similar basic legal framework, which follows certain guidelines provided by UPOV and TRIPS. Thus, they have systems that are likely to be compared. The index considers the elements that, within this common framework, tend to vary more from country to country and over time. The five components of the index are: i) ratification of UPOV conventions, ii) farmers' exception, iii) breeders' exception, iv) protection length, and v) patent scope. Subsequently, we have aggregated these indicators in a composite index. For any country in a given year, the index can take a score from 0 to 5 with higher scores indicating stronger intensity of IPR protection (it is possible to access the full data of the index for the panel of countries here).
Although IPRs are believed to be incentives for innovation activities, their effect is not clear neither from a theoretical perspective nor from an empirical point of view. This is because the effect of IPRs is technology and sector specific and also depends on the development level of countries. Being a quantitative indicator of the relative strength of IPR systems, we hope that the index will be a useful tool for unravelling broad patterns of correlation between IPR systems and indicators of innovation and economic performance such as R&D investment, productivity, technology transfer, trade and GDP. We have already used this index to study the effect of IPRs on trade and mergers and acquisitions in the agricultural sector and we have ongoing research projects using the index to address the effect of IPRs on agricultural productivity. In the article, we also provided an exploratory appraisal of the connection between our index and other variables and indicators by means of two econometric exercises. In the first one, we investigated the possible determinants of the strength of IP protection for plant varieties at the country level. In the second one, we examined the correlation between the index and agricultural production. The evidence we found is consistent with the notion that IPRs do not affect developed and developing countries in the same way.
In sum, we hope that the construction of a new indicator explicitly focused on IP protection in agriculture will be a useful tool for researchers interested in assessing the effects of IPRs on innovation, growth, technology transfer, trade and productivity in this sector.
ALESSANDRO NUVOLARI
Associate Professor of Economic and Social History at Sant’Anna School of Advanced Studies, Pisa. His research interests are mostly focused on the role played by science and technology in the emergence and consolidation of “modern economic growth” with a particular focus on the Industrial Revolution in England. At the moment, he is also studying the relationship between intellectual property systems and economic performance both in historical and contemporary contexts.
MERCEDES CAMPI
PhD in Economics from Sant'Anna School of Advanced Studies; Pisa, Italy. Master of Historical Research of the University of San Andrés. Degree in Economics from the University of Buenos Aires. Researcher at the Interdisciplinary Institute of Political Economy at the University of Buenos Aires IIEP-Baires (UBA-CONICET). Previously, research fellow at Laboratory of Management & Economics (LEM) & Institute of Economics, Sant'Anna School of Advanced Studies. Research interests: Technological Change; Innovation and Economic Development; Intellectual Property Rights; Agriculture; Biotechnology.
The ratification of the agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) in 1994 has resulted in the adoption of tighter IPR systems, also affecting sectors that were not subject of intellectual property protection until recently. Moreover, developing countries with labile regimes or without IPR systems have recently adopted strong IP protection to comply with the demands of TRIPS. The resulting process of strengthening and harmonization of IPR systems has raised several concerns. In agriculture, IPR systems and their social and economic effects are a particularly controversial issue and the assessment of the merits and limitations of different IPRs regimes in this domain is particularly complex.
A proper appraisal of this problem requires consideration of an intricate array of thorny policy issues, ranging from the suitability of patents versus sui generis forms of intellectual property protection as the most appropriate incentive system for stimulating innovations, to the moral and ethical aspects revolving around the consideration of living organisms as inventions. Furthermore, recent developments in molecular biology applied to agriculture have contributed to increasing the complexity of this landscape. Genetically modified varieties may now be regarded as composed by different elements (the plant variety itself and its related gene), which can be protected by different types of IPRs and can even be owned by different actors. In this way, plant breeding has become an economic activity that is at the very core of the interests of major multinational companies involved in the production of genetically modified seeds. These developments have inevitably triggered conflicts, disputes and lobbying actions around intellectual property (IP) protection for seeds.
Several episodes illustrate the significance that intellectual property rights for plant varieties and agricultural products in general have attained in the world economy. In 2005 and 2006, Monsanto began a systematic campaign of infringement suits against importers of Argentinian soybean products and by-products to Europe. In brief, the root of the controversy was that Monsanto’s patent on the “Roundup Ready” (RR) soybean gene had been denied in Argentina but it had been granted by the European Patent Office (EPO). Thus, Monsanto argued that imports from Argentina of soybean related products containing the RR gene were liable for infringement. Monsanto was successful in obtaining the impoundment of several shipments of soybean-related products in Spain, the UK and the Netherlands. Soybean and its by-products were and still are the major export staple of Argentina (representing more than 50% of agricultural exports). To date, both a UK court and the European Court of Justice have ruled against Monsanto. To cite another example, in 2012, the United States and Colombia signed a trade agreement establishing that Colombian farmers could only use “certified seeds”, effectively prohibiting the widespread practice of self-reproduction of seeds. This decision triggered a wave of major protests, strikes and demonstrations all over the country, which finally forced the government to suspend the infamous “seed law”.
In a recent article: M. Campi and A. Nuvolari, (2015), “Intellectual property protection in plant varieties. A worldwide index (1961-2011)”, Research Policy, Vol. 44 (4), 951-964, we have proposed a new index that provides a synthetic quantitative characterization of the relative strength of IP protection on agriculture at the country level for 69 developed and developing countries for the period 1961-2011.
The index has been constructed by means of a detailed study of the historical evolution of the legislation in each country. Our approach has been thoroughly comparative from the outset: we have tried to identify the key-features characterizing the differences of IPR systems for plant varieties at the country level and we have developed a simple approach for transforming these features into quantitative indicators. The countries included in our sample were members of the UPOV convention by 2011. These countries have IP protection systems that are characterized by a rather similar basic legal framework, which follows certain guidelines provided by UPOV and TRIPS. Thus, they have systems that are likely to be compared. The index considers the elements that, within this common framework, tend to vary more from country to country and over time. The five components of the index are: i) ratification of UPOV conventions, ii) farmers' exception, iii) breeders' exception, iv) protection length, and v) patent scope. Subsequently, we have aggregated these indicators in a composite index. For any country in a given year, the index can take a score from 0 to 5 with higher scores indicating stronger intensity of IPR protection (it is possible to access the full data of the index for the panel of countries here).
Although IPRs are believed to be incentives for innovation activities, their effect is not clear neither from a theoretical perspective nor from an empirical point of view. This is because the effect of IPRs is technology and sector specific and also depends on the development level of countries. Being a quantitative indicator of the relative strength of IPR systems, we hope that the index will be a useful tool for unravelling broad patterns of correlation between IPR systems and indicators of innovation and economic performance such as R&D investment, productivity, technology transfer, trade and GDP. We have already used this index to study the effect of IPRs on trade and mergers and acquisitions in the agricultural sector and we have ongoing research projects using the index to address the effect of IPRs on agricultural productivity. In the article, we also provided an exploratory appraisal of the connection between our index and other variables and indicators by means of two econometric exercises. In the first one, we investigated the possible determinants of the strength of IP protection for plant varieties at the country level. In the second one, we examined the correlation between the index and agricultural production. The evidence we found is consistent with the notion that IPRs do not affect developed and developing countries in the same way.
In sum, we hope that the construction of a new indicator explicitly focused on IP protection in agriculture will be a useful tool for researchers interested in assessing the effects of IPRs on innovation, growth, technology transfer, trade and productivity in this sector.
ALESSANDRO NUVOLARI
Associate Professor of Economic and Social History at Sant’Anna School of Advanced Studies, Pisa. His research interests are mostly focused on the role played by science and technology in the emergence and consolidation of “modern economic growth” with a particular focus on the Industrial Revolution in England. At the moment, he is also studying the relationship between intellectual property systems and economic performance both in historical and contemporary contexts.
MERCEDES CAMPI
PhD in Economics from Sant'Anna School of Advanced Studies; Pisa, Italy. Master of Historical Research of the University of San Andrés. Degree in Economics from the University of Buenos Aires. Researcher at the Interdisciplinary Institute of Political Economy at the University of Buenos Aires IIEP-Baires (UBA-CONICET). Previously, research fellow at Laboratory of Management & Economics (LEM) & Institute of Economics, Sant'Anna School of Advanced Studies. Research interests: Technological Change; Innovation and Economic Development; Intellectual Property Rights; Agriculture; Biotechnology.
RSS Feed
