Biotechnological Innovation and Partnerships

By Gold, E. Richard | The Journal of High Technology Law, January 2010 | Go to article overview

Biotechnological Innovation and Partnerships

Gold, E. Richard, The Journal of High Technology Law

Cite as 10 J. HIGH TECH. L. 1 (2009)

I. Introduction

The biopharmaceutical industries are undergoing a significant, perhaps radical, restructuring. Due to a variety of factors ranging from the current economic slowdown, to the increasing recognition that the biotech business model has failed, to pressures on the pharmaceutical industry to find new ways of identifying promising medicines, companies, universities and policy-makers are seeking new ways to carry out research and bring products to market. Pharmaceutical companies are dramatically cutting back staff, engaging in more collaborative efforts, and becoming more flexible in the way they sell their products on the market. (1) For its part, the biotechnology industry has, thirty years into its existence, failed to make a profit. (2) As Harvard Business School Professor Gary Pisano states, "[w]hile there have been a few very successful biotechnology firms (e.g., Amgen, Genentech, Genzyme), the economic performance of the sector overall has been disappointing by any objective standard." (3)

Beyond these economic considerations, pressure from government to provide greater access to their products, particularly, but not exclusively, in low and middle-income countries, has increased the need to restructure. (4) Efforts to increase patent protection through traditional fora-such as the World Intellectual Property Organization and the World Trade Organization-have met steep resistance. (5) The industries have had to reformulate their arguments away from the incentive-access paradigm to one based on health protection in eliminating counterfeit medications. (6)

In this essay, I describe the biopharmaceutical industries' restructuring in terms of intellectual property ("IP"): why and when patents are acquired, how they are licensed and shared, and how they are enforced. The essay draws on the work of the International Expert Group on Biotechnology, Innovation and Intellectual Property (the "IEG"), which released a report and case studies that examine the changing ways in which private and public sector actors create, use, and share knowledge within innovation systems. (7) The essential argument of the IEG is that the biotechnology and pharmaceutical industries are undergoing a change: from the old era of IP ("Old IP"), in which innovation was heavily patented and shared only on a limited basis, to "New IP," in which patents are obtained in order to build relationships and increase sharing of innovation. (8)

I will begin then, by describing the IEG's conclusions and illustrate them through a discussion of two of the case studies conducted by the IEG. The first describes the failure of the classic biotechnology business strategy in high-income countries, while the second illustrates pressures on the model from low and middle-income countries in relation to traditional knowledge.

II. A Change of Intellectual Property Era

After a seven-year study involving seven academic disciplines and engagement with industry, government and civil society representatives, the IEG released its report on the role that IP actually plays in biotechnology innovation in the health, agricultural and industrial fields, in September 2008. (9) The IEG was funded by the Canadian government through a rigorous peer-review process. (10) While the primary researchers in the IEG were located in Canada and the United States, an international expert advisory group and researchers from literally around the world supported their work. The IEG further relied on the knowledge and expertise of its private and public sector partners from high, middle and low-income countries. (11)

The IEG consciously established itself to overcome disciplinary-based barriers to analyzing how the IP system practically functioned to facilitate or hamper innovation in the biotechnology sector. (12) As the IEG found, legal scholarship tends to place priority on legal rules rather than other factors that modulate the effect of those rules in practice:

   An analysis of IP laws alone gives a distorted understanding of how
   IP facilitates innovation and dissemination. … 

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