Paper No.

: 05 Environmental Biotechnology

Module : 37 Implication of IPRS on commercialization of biotechnology

products

Principal Investigator: Dr Vibha Dhawan, Distinguished Fellow and Sr. Director

The Energy and Resouurces Institute (TERI), New Delhi

Co-Principal Investigator: Prof S K Jain, Professor, of Medical Biochemistry

JamiaHamdard University, New Delhi

Paper Coordinator: Dr Sanjukta Subudhi, Sr.Fellow,

The Energy and Resouurces Institute (TERI), New Delhi

Content Writer: Dr A Vijaya Chitra, Assistant Professor,

Sree Narayana Guru College, Coimbatore, Tamil Nadu

Content Reviwer: Dr K Nantha Kumar, Fellow,

The Energy and Resouurces Institute (TERI), New Delhi

Environmental Biotechnology
Biotechnology
Implication of IPRS on commercialization of biotechnology products
 Description of Module
Subject Name Biotechnology

Paper Name Environmental Biotechnology

Module Name/Title Implication of IPRS on commercialization of biotechnology products

Module Id 37

Pre-requisites

Objectives

Keywords

Environmental Biotechnology
Biotechnology
Implication of IPRS on commercialization of biotechnology products
 Table of contents

1. Learning Obectives
2. Introduction
3. Commercialization process
4. The Innovation Cycle
5. IP commericialization structures
6. Summary

1. Learning Objectives

Biotechnology is that field of science which uses living systems and organisms to
develop products that are of benefit to the human society as well to the organisms in the
ecosystem. Biotechnology has resulted in innovative products either by modifying the
organism or the process.A successful product of importance have to enter the market to
satisfy the needful. Commercialization of the product is very essential inorder to meet the
demand as well to generate revenue and also for further research projects. This module will
give a detailed account on commericilaization process.

2. Introduction

The World Intellectual Property Organisation refers Intellectual Property Rights (IPR) to
innovations, inventions, literary and artistic works, symbols, names and images or in general
the creations of the mind for ultimate use in commerce. IPR grant statutory rights to the
creator to commercialize his/her invention and also prevents others from exploiting it
commercially. The role of Intellectual property Right in biotechnology sector is increasing at
a rapid pace. The intellectual property commercialization is an important factor in
transferring the technology from lab to field or to the business sector.

Environmental Biotechnology
Biotechnology
Implication of IPRS on commercialization of biotechnology products
 3. Commercialization Process

Commercialization is the process of bringing Intellectual Property to the market so that the
patented or IPR product to be exploited in return of business profits and growth.
Biotechnology mainly focuses its research on three segment. They include the Industrial
sector, Healthcare sector and Agricultural sector. Biotechnology companies produce many
products starting from life saving drugs for human to different varieties of plants, animals,
medical instruments, softwares, domain names etc. These different resources may take up any
one form of intellectual property. The most commonly used one is the patent. The other
forms of IP such as trademarks, tradesecrets, copyright, domains, plant breeders right, design
registry are also used and applied.

Source: iprhelpdesk.eu

The number of biotechnology products invented or innovated is at intensification but

patenting living forms and hereditary materials is of prime concern with regard to ethical
issues. Commercialization of biotechnology and its products have been acknowledged by
public with mixed concern.

The laws regarding patenting biotechnology products for commercialization bestow

significance to ethical considerations. There are three international intellectual property

Environmental Biotechnology
Biotechnology
Implication of IPRS on commercialization of biotechnology products
 treaties which are of particular importance for the protection of biotechnology: the Paris
Convention for the Protection of Industrial Property (the Paris Convention); the Budapest
Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of
Patent Procedure (the Deposit Treaty) and the Patent Cooperation Treaty (PCT). With these
treaties there are also some restrictions in patenting some biotechnological products.

Life forms such as microorganisms, plants and animals, are not patentable in India
under the provisions Indian patent Act (1970). However, patent can be obtained for various
biotechnological processes and product applications within the scope of International
conventions. Microorganisms isolated from nature or are obtained by simple manipulations
are not patentable. But microorganisms obtained by novel techniques like genetic engineering
are patentable.

The first patent of GMO (Genetically Modified Organisms) was allowed by US

Supreme Court in 1980 as described in utility patent. A maize plant over producing
tryptophan amino acid was patented in USA in 1985. This was beginning of patenting of high
organisms for patenting. For animals, a patent was granted in 1988 for ‘oncomouse’,
genetically modified mouse in USA. But the patenting of the entire human body in all its
developmental phases is not allowed and also processes for modifying the germ line genetic
identity of human beings and the use of human embryos for industrial or commercial
purposes is not acceptable.

Table 1: List of Patentable and not patentable products

Patentable Not Patentable

Genes and nucleic acid molecules Sequences without a known function
Proteins Genetically modified organism suffering but has no
medical benefit
Enzymes Plant varieties as such
Antibodies Animal Varieties
Virus and virus sequences Human embryos
Cells Process that involve destruction of human embryo
Microorganism Human germ cells
Transgenic plants and animals Human animal chimera

Environmental Biotechnology
Biotechnology
Implication of IPRS on commercialization of biotechnology products
 4. The Innovation cycle

It is a cyclic process which undergoes the steps discovery, validation, development,

registration and commercialization.

Creative concepts and

research

Benefits Development

INNOVATION
CYCLE

Commercialisation Regulatory approval

Fig 1: Steps in the development of a commercialization of a product

Research for new innovations arises mainly due to the social needs of the society. For
example increasing number of cancer patients all over the world has made us to realize to
concentrate towards a drug against cancer. Once a social need is there, the researchers
develop interest towards the proposal and develop partnerships with public or private
institutions. Next the innovation cycle enters into the developmental stage. The development
of an innovation requires monetary fund that may be provided by government or public or
private parties through partnership. Once a product is fully developed it is taken for
regulatory approval. Approval from the regulating body provides the innovator with a license

Environmental Biotechnology
Biotechnology
Implication of IPRS on commercialization of biotechnology products
 for commercialization which may be a direct or indirect process. Newly commercialized
products provide benefits to the researchers, entrepreneurs and society.

The companies which enter into commericialization may be a Biotechnology R&D

firm, Small and Medium sized Enterprises (SME) or larger companies. Mostly educational
institutes and Universities, collaborate with industries in developing a product. Universities
use technology transfer mode to acquire investment from R&D companies and technology
can be granted to companies where the company pays royalty to acquire it.

The success of any IP commercialization depends on the choice of the most appropriate
commercial tool that is based on

1. The organization’s business objectives

2. The form of intellectual property

3. The economic resources at its disposal

5. IP Commercialisation structures

 Direct Exploitation by Owner

 Licence
 Assignment
 Spin-off Company
 Joint Venture

Direct Exploitation

Direct exploitation involves the commercialization by the company on its own after
developing the product. The organization choose to commercialise its IP by developing and
supplying goods or services based on the IP on its own, instead of have the provision of
providing its asset to some external party. Development of an biotechnology product and its
commercialization requires research and development, product development, clinical trials
and as well techniques for high level production to suit industry and market needs.

Generally direct exploitation is less exploited because of the limiting resources of most
organization to commercialize the IP.

Environmental Biotechnology
Biotechnology
Implication of IPRS on commercialization of biotechnology products
 Licensing

Licensing an IP and allowing the third party to utilize the IP is the most common way
adopted in many organizations. It is a powerful way of allowing a third party to utilise IP
without them taking ownership. License grants the right to access the product for a period of
time as agreed by the parties or otherwise would infringe the owners right of IP. It allows for
a temporary transfer of ownership and the rights provided to it. License allows both parties to
meet their demands with a mutual agreement and it is the most used form of
commercialization process. The person granting the license is called the licensor and the
person receiving the license is called the licensee.

There are different types of licenses:

Exclusive license: This involves license to a single company which may extend its
commercialization in different fields and territories. This type of license will be mostly
provided with high royalty rate. But this will have less competition as well more incentive to
develop product for commercialization as only one company is involved.

Non-exclusive license: This type of license permits more than one company to use the
technology. All the companies that have procured license will have equal benefit and
applicable rules as declared by the IP owner. For example like a research tool or one having
many fields of use that everyone uses. A non-exclusive license is the most common type of
license used within Academia.

Sole license – It is a single licensee and the IP owner has the right to use the IP.

Assignment

This is a type of commercializing IP. Assignment involves the transfer of the entire rights of
the IP property to another individual or company or entity permanently. This form of practice
is usually allocated for financial consideration which means the IP property is sold by the IP
owner for a lump sum amount. By selling the IP property the owner of IP loses all his
ownership rights and cannot claim anything in the future. For example the particular IP
product, commercialization may generate a revenue for the buyer three or four times more
than the amount he had spent for buying it or the product may an everlasting demand
etc…but the IP owner once sells it he/she cannot claim it in future. If the IP owner continues
to use it after selling it becomes an infringement on the new owners rights.

Environmental Biotechnology
Biotechnology
Implication of IPRS on commercialization of biotechnology products
 Spin-Off

A spin-off company is a separate company established by an organisation for the purposes of

undertaking a particular activity, such as the commercialization of a specific IP asset. Spin-
Off companies are created using IP. This can be any form of IP ranging from know-how to
patents.

Joint ventures

A joint venture is a collaboration of two or more parties to undertake a common

project or to pursue a specific objective, such as commercialising IP. All parties to the joint
venture will contribute their efforts, personnel, financial resources and/or existing IP towards
the joint venture project. It can be a unincorporated joint venture or incorporated joint venture

6. Summary
Commericialization of biotechnology products with IP enhances the chances for
innovating new products, process and also for a revenue generation with these products
which will ultimately uplift the society.

Environmental Biotechnology
Biotechnology
Implication of IPRS on commercialization of biotechnology products