Ag
Biotech Patents: Who is Doing What?
John
King
Paul Heisey
Patents—which
give inventors of new technology exclusive rights to
make, use, or sell a discovery for a specific period
of time—have been used in the U.S. since 1790,
and have often served as a stimulus to progress. For
example, the cotton gin (1793) greatly increased the
profitability of southern cotton, and barbed wire (1868)
provided inexpensive fencing material for a rapidly
settling frontier. Today, patents and other intellectual
property demarcate ownership claims on the expanding
frontier of ag biotech research. Patents cover applications
of new scientific techniques to traditional agricultural
pursuits, as well as innovations in plant and animal
breeding, crop inputs (pesticides, fertilizer, etc.),
food-processing techniques, and many other aspects
of agricultural production.
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Upward
trend in ag biotech
The upward trend in ag biotech patents has outpaced the overall upward
trend in patenting throughout the U.S. economy. This trend reflects increased
research and development, changing legal doctrine on what can be patented,
and different strategic uses of intellectual property protection.
New computerized database
To better analyze and understand the economic effects of the trend, ERS
researchers and academic collaborators have assembled comprehensive
data on ag biotech patents and other intellectual property. The data
are currently being formatted into a new computerized database, which
is expected to be online and searchable in the near future. The database
classifies a wide range of technologies used in agriculture, particularly
innovations derived from plant molecular biology. The database also
includes information on commercial ownership and public sector interest
in several forms of intellectual property.
With the range of information included—technology
classification, ownership, intellectual property
rights, and other aspects—this resource will
support research not only on ag biotech patents,
but also on related areas, such as research and development
spending, innovation, and productivity.
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Technology
classification
To differentiate the wide range of innovations in ag biotech, the database
classifies each biotech patent by scientific, agronomic, and economic
attributes. Many patents are classified into several categories. A patent
might be classified under “genomics” because it covers identification
of a beneficial plant genetic trait with genomic sequencing of its DNA;
under “genetic transformation” because it describes the incorporation
of a trait into a plant; and under “protection, nutrition, and
biological control of plants and animals” because the transformed
plant expresses an improved agronomic property such as higher yield,
pest resistance, drought tolerance, etc. Other patents cover research
on “metabolic pathways,” which are series of naturally occurring
chemical reactions that regulate an organism's biological functions.
Also some patents may be classified under “pharmaceuticals” because
the ag biotech products have livestock or human applications. Many human
pharmaceuticals, such as insulin, may include an agricultural aspect
in that they are produced using plant or animal cell cultures.
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Patent
ownership types
The database also groups patents into entity types (firms, non-profits,
Federal government, etc.) to facilitate analysis of patenting behavior
across these different sectors. Most U.S. ag biotech patents are issued
to commercial firms, but universities, state agricultural experiment
stations, and the federal government also file patents on inventions.
Commercial firms file patents to establish market share, earn royalties,
and in some cases block competitors from using new technologies. Universities,
nonprofit institutions, and public-sector research entities often use
patents and licensing as technology transfer mechanisms.
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Ownership
concentration
The database also includes changes in patent ownership resulting from
mergers, acquisitions and divestitures in the ag biotech industry from
1988-2000. While firms merge for various reasons, the database allows
researchers to analyze resulting changes in patterns of intellectual
property ownership and the economic aspects of firm combinations. For
example, mergers typically result in increased concentration of patent
ownership. Taking into account firm acquisitions and splits, the top
ten patent assignees controlled over half of ag biotech patents issued
through 2000. If acquisitions were not taken into account, the top ten
patent assignees as designated on the original patents would have controlled
only about one-third of the ag biotech patents.
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