Leo Melchers

Masterclass Octrooigilde – Nov 11, 2015

Balancing access & protection in

Agriculture: Shaping a new IP use

Octrooieren van innovaties in planten

2

Helping small and large farms meet the challenges of global food security

Our ambition is to bring greater food security in an

environmentally sustainable way

to an increasingly populous world

by creating a worldwide step-change

in farm productivity

450M smallholder

farms ~2.0 Ha

8M large-scale

farms >100 Ha

Classification: PUBLIC

3

Demand for food is driven by population growth and rising calorie consumption

World population > 80% of growth in emerging markets

1950 2.5 billion

2011 7 billion

2050 9 billion Emerging

Developed

Source: FAO, Syngenta analysis

0

1

2

3

4

1970 1990 2010 2030 2050

World demand for grains* bn tonnes

+50%

* Cereals, rice and corn

Food Feed

Classification: PUBLIC

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Environmental stresses are increasing

World stress map Climate change is already reducing water and arable land

Source: UNEP, Cline, Syngenta

Climate change impact

High

Medium

Low

1950 2030

1 hectare

fed 2 people

1 hectare needs

to feed 5 people

requiring better use of existing farmland

Agriculture

uses 70% of the

world’s fresh water

withdrawals

Classification: PUBLIC

Grow more from less

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1990’s 2000’s 2010’s 2020’s

Marker Discovery Marker Assisted

Breeding Molecular

Breeding Conventional

Breeding

Conventional

Breeding

Pa

ralle

lism

Dis

co

ve

ry

Pre

dic

tion

Predictive

Breeding

Co

nve

rge

nce

Breeding in the 21st century: Technology convergence Accelerated link between germplasm and traits

Environment & Weather data

Trait associations

Phenotype

Information

Crop Models

Pedigree

Information

Gene networks

Increased scientific understanding & increased opportunity of patentable inventions

Classification: PUBLIC

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Breeder’s challenge: Bring new genetic diversity into a plant

● Breeding targets

- Yield improvement

- Crop quality

- Insect resistance

- Fungal resistance

- Drought tolerance

- Stress tolerance

- Plant architecture

- Post harvest storage

- Taste

- Resistance to lodging

- Resource use efficiency

- …… and more !!

Classification: PUBLIC

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Balancing IP protection & access to genetics

● Unprecedented need for innovation

● Increasing technification and investment

● Increasing complexity of regulatory, IP and legal landscapes

Classification: PUBLIC

Incentive for innovation

($ return / exclusivity)

Incentive for

knowledge sharing

Access to

genetic resources

Manageable transaction

/ legal / regulatory costs

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X IR

IR

A

Variety C

B

Plant Breeder’s Right vs. Patents – we need both systems

● Protects: Plant variety

Variety is defined by all phenotypical characteristics.

● Breeders exemption:

- Competitors can use commercialized variety for breeding

- New developed variety can be freely commercialized

Efficient protection for a plant variety

No efficient protection for IR Trait

X

● Protects: IR Trait (Invention)

All plants with the IR Trait are protected.

● Research & breeders exemption (DE, FR, CH, NL, EU):

- Competitor can use variety A for breeding

- Commercial use of variety C requires a license

Efficient protection of IR Trait

No efficient protection for variety A & B genetics

Plant Breeder’s Right system Patent system

Classification: PUBLIC IR = Insect Resistance Trait

Protects the part but not the whole

Plant Breeder‘s Right

Patents

Protects the whole but not the part

IR

IR

A

Variety C

B

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● No industry alignment on the value of patents for

innovation

● Patents reduce access to biodiversity & stimulate

industry consolidation

● Native traits are present in nature, thus are not

inventions

● License negotiations are complex & time consuming

● Multinationals will decide what food you will eat

The IP controversy

Classification: PUBLIC

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Confrontation

Stronger IP vs. Broader access

Cooperation

Incentive for innovation and Broad access

Classification: PUBLIC

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IP as a Tool A matter of use

Classification: PUBLIC

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TraitAbility – Syngenta e-Licensing platform

TraitAbility provides quick & easy access to our patented native traits and

enabling technologies improve plant breeding and increase innovation

in agriculture

Licensing plant innovations in new ways

E-licensing provides easy access to technology and genetic diversity

Breeding technologies are just a click away

TraitAbility is quick and easy to use, focus your efforts on breeding,

not negotiations

Clear access under standard terms

Simple, clear access to the traits and technologies you need,

licensing and financial terms are transparent and standard for all

users (FRAND terms)

Classification: PUBLIC

www.Traitability.com

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International Licensing Platform (ILP)

● Scope

- Global access & use of plant traits for vegetables breeding.

- Limited “non-regulated” traits (excl. sweetcorn) & Free for research and breeding

- FRAND remuneration for commercial use (independent expert committee)

- Pull-in mechanism for licensee’s patents

● Open Clearing House

- Global - Everyone can join - Patent owners and parties without patents

- Pro-competitive effects:

Low transactional costs, Incentives for innovations, Faster innovation cycles.

“Free access” but not “access for free”

Association

11 Members

Classification: PUBLIC

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Benefits – ILP Vegetable

Benefits

Fair competition • Breeders with/without patents can become an ILP member

• ILP members have certainty to access patented traits of other

members

• ILP provides “free access but not access for free”.

ILP members can apply a “breeders exemption” in the USA.

Fair Reward • The breeder / innovator gets a fair reward for their investments &

risks.

ILP facilitates FRAND license terms.

Reduce transactional

costs and time

• Standard license agreements are available & MFN terms are applied

Create transparency • Information on which commercial varieties comprise patented traits

Industry alignment • The solution re-aligns the seed industry, which is critical in view of the

CBD challenges

Classification: PUBLIC

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What is the “breeders rights” debate about ?

● Three EU members (NL, FR, DE) limited BE

● Limited BE allows plant breeders to use biological materials, covered by patents,

for breeding new varieties without the consent of the patent holder.

Upon commercialization a license agreement needs to be in place.

● A number of plant breeders would like to go further, install a Full BE, and

commercialize the resulting new varieties without paying royalties

● The Dutch Ministry of Economic Affairs aims to include a Full BE in Directive

98/44/EC, or eliminate the patent protection of plant-related inventions

- SEO survey: Analysis of effects of the introduction of a Full BE on the other biotech sectors

- Analysis of plant patents

- New legal analysis of TRIPS vs Breeders exemption in 98/44

- ……….. All 3 reports ready by Dec. 2015 ?

BE = Breeders Exemption Classification: PUBLIC

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Risks of opening Directive 98/44/EC

● Directive 98/44/EC;

- defines a stable and predictable framework for all biotechnological inventions,

- is essential to foster innovation and guarantee technology transfer & sharing

of scientific findings in the EU

● Risks of revising Directive 98/44/EC:

- Reduction of investments, competitive disadvantage for EU scientists

- Reduced scope to patent plant-related inventions will incentive to keep

innovations as trade secrets undermines the social contract inherent to the

patent system

- Trade secrets block access to new scientific develops harmful to EU SMEs

- Ending patent protection of plant-related inventions violates EU international

obligations (i.e. TRIPS)

Classification: PUBLIC

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The “Problem”

Classification: Public

EU plant varieties covered by patents

Impact: Limited - primarily legal uncertainty

Transparency

Access to genetic diversity

Access to patented plant innovations

Incentive for innovation

A problem only arise if patented plant

material is on the market.

Less than 1000 EU varieties are covered

by only 24 patents (<5% of all EU varieties)

>70% of the varieties are covered by 3

patents owned by SMEs or universities

>90% of license income goes to SMEs

and universities.

Only one patent litigation (patent found invalid)

EU plant varieties covered by patents

[525]

[160]

[57]

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Existing solutions and proposals

1. The Limited BE: effective for all EU patents (Unitary Patent) - ratified in 2016

2. Patent Quality: EPO initiative - Raising the bar on patent quality

3. Transparency: Seed Industry developed PINTO data base (patent info on plant varieties)

4. Access: Seeds Industry provide “free access but not access for free”;

o Bilateral licensing

o Company E-licensing platforms – quick & easy access to patented Native Traits

o Patent clearing-house: f.e. International Licensing Platform Vegetable (ILP)

These solutions immediately addresses the needs of plant breeders

without the need for changing Directive 98/44/EC and

risk jeopardizing investments and innovations/growth in Europe

Existing tools offer the desired outcomes and balances rights of patent owners

and plant breeders, as well stimulates innovations in plant breeding

Classification: PUBLIC

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Scenario B

Access & benefit sharing

Scenario A

Legal ban of plant patents

Scenarios

Scenario B

Access & benefit sharing

Cooperative solutions supported by legal measures

Increase transparency

PINTO database as role model

Legal duty to disclose patents covering varieties

Limited breeders exemption Unitary Patent / UPC

Facilitate licensing

“International Licensing Platform” as role model

(“free access but not access for free)

Legal ”clarification” of compulsory license

Pro: Fast, global, adaptable

Con: Requires mindset change

Less black & white debate - more dialog

Scenario A

Legal ban of plant patents

Clear & simple?

Simplistic: Difficult to limit to “native traits”

Removes blocker for innovations?

Reduced incentive for trait innovation

Trade secrets as alternative

Damage to other life-science industries

Legal certainty?

Lengthy: >10yrs to change Dir.98/44 & EPC

No global solution

Pro-SME breeder?

SME’s have large patent estate and income

Industries w/o patents are not more diverse (e.g., software)

Classification: PUBLIC

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21 Classification: PUBLIC