Agriculture Reference
In-Depth Information
new traits increased too. Costs increased due to the much greater perceived needs
for translation, testing, and regulatory oversight to control for potential bio-safety
risks. At the same time, the primary factor that has made the large investments by
the private sector economically feasible has been the adaptation of patent law so that
patents can be used to protect inventions in crop genetics. With patents, the value of
a much wider range of genetic improvements can begin to be appropriated in a way
that resembles the hybrid varieties, and thus the private sector is much more likely
to invest. Moreover, tools of molecular biology made it technically much easier
to detect and enforce breaches of trade secrets, patents, and other means keeping
breeding lines and other genetic materials proprietary, as was vividly illustrated in a
1994 US federal case between Pioneer hi-bred and Holden foundation seed (Pioneer
Hi-Bred International v. Holden Foundation Seeds Inc
1994
).
Despite the extent to which private involvement in crop genetic development has
increased, it is most accurate to describe today's relationship between the public
sector and the private sector as one of interdependence. The public sector continues
to make significant contributions, especially in the more basic areas of biological
research, but it is typically not able to justify the dedication of resources necessary
for advanced testing, commercial scaling, and market deployment, including, in the
case of transgenic varieties, the costs of obtaining regulatory approvals. The private
sector has a comparative advantage in managing the riskier financial arrangements
needed for these processes.
The resulting interdependence between the public and private sectors and the
role of patents in inducing follow-on private investment in development and com-
mercialization is reflected in the newer process of technology transfer between pub-
lic sector agricultural research and the private sector. Today, patents or PBRs are
often taken out by universities and government agencies when they make poten-
tially useful inventions in crop genetics. The purpose of such intellectual property
protection taken by public sector organizations is not to provide incentives to public
sector research in the first place nor to generate financial support for them by way
of royalties earned but, rather, its purpose is primarily to induce follow-on private
investment of the magnitude necessary to further test the viability of inventions
that have resulted from publicly funded research, and for those that prove feasible,
to bring them the rest of the way through the R&D pipeline to commercialization.
Thus, while the private sector depends upon the public sector as a source of new
ideas, the public sector depends upon the private sector as a source of capital and
expertise for development and commercialization.
2 The Stages of the R&D Process
The research and development process always starts from new knowledge—wheth-
er a newly identified trait, the characterization of a promising new collection acces-
sion, or an insight about a better way of achieving an outcome. The R&D process,
if completed successfully, results in the introduction of a new innovation, whether a
