the intellectual and technical property components of pro ... · 57 the intellectual and technical...

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The Intellectual and Technical PropertyComponents of pro-Vitamin A Rice

(GoldenRiceTM):

A Preliminary Freedom-To-Operate Review

R. David Kryder Stanley P. Kowalski Anatole F. KrattigerDirector Management Consultant Executive DirectorIP/TT Initiative ISAAA

No. 20-2000

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Published by: The International Service for the Acquisition of Agri-biotech Applications (ISAAA).Ithaca, New York.

Copyright: (2000) International Service for the Acquisition of Agri-biotech Applications (ISAAA)

Reproduction of this publication for educational or other noncommercial purposesis authorized without prior permission from the copyright holder, provided thesource is properly acknowledged.

Reproduction for resale or other commercial purposes is prohibited without theprior written permission from the copyright holder.

Citation: Kryder, R. David, Stanley P. Kowalski, and Anatole F. Krattiger. 2000. TheIntellectual and Technical Property Components of pro-Vitamin A Rice(GoldenRiceTM): A Preliminary Freedom-To-Operate Review. ISAAA Briefs No. 20.ISAAA: Ithaca, NY. 56 p.

ISBN: 1-892456-24-9

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Contents

Executive Summary..........................................vList of Tables, Figures and Appendices..............xi

1. Background and Introduction.............................................................................11.1 Rice Consumption and Vitamin A Deficiency in Asia...........................................11.2 Biotechnology Research and the Development of �pro-Vitamin A Rice�

(GoldenRiceTM)...............................................................................11.3 The Institutional Context of GoldenRiceTM.........................................................2

2. Objectives, Limitations and Methodology of the Freedom-to-Operate Review................32.1 Objectives and Purpose..............................................................................32.2 Limitations................................................................................................42.3 Methodology.............................................................................................4

3. Biotechnology Product Management: The Role of Freedom-to-Operate Reviews...........53.1 Why Biotechnology Product Management is Important........................................53.2 What is a Freedom-to-Operate Review and How is it Done ?................................6

4. Deconstruction of the GoldenRiceTM Product.............................................................74.1 Overview...............................................................................................74.2 Movement of Tangible Property......................................................................94.3 Intellectual Property Analysis: Deconstruction of the Components..........................9

4.3.1 Plant/Seed Source.............................................................................114.3.2 Gene Constructs (cloning vectors).........................................................11

4.3.2.1 The plant transformation vector, pBin19Hpc.................................124.3.2.2 The plant transformation vector, pZPsc..........................................124.3.2.3 The plant transformation vector, pZLcyH.......................................12

4.3.3 Transformation vectors, techniques, and plant regeneration.........................134.4 Discussion of Special Cases........................................................................30

4.4.1 The nptII gene................................................................................304.4.2 Method of Plant Transformation.............................................................304.4.3 Overlapping Patent Claims in Carotenoid Biosynthetic Option Genes..........304.4.4 Interpreting Patent Claims: From Greater to Lesser Uncertainty....................314.4.5 Pea Rubisco Small Subunit Transit Peptide...............................................31

5. IP Management Implications..................................................................................325.1 Introduction..................................................................................325.2 Potentially Applicable Patents (or IP) to the Current Form of

GoldenRiceTM................................................................................325.3 Product vs. Process vs. Use Claims........................................................35

5.4 The Important Distinction between IP and TP.....................................................365.5 IP Management Options or Strategies..............................................................37

5.5.1 OPTION 1: Invent Around Current Patents...............................................405.5.2 OPTION 2: Re-design Constructs..........................................................405.5.3 OPTION 3: IP/TP Owners to Relinquish Claims.........................................405.5.4 OPTION 4: Ignore all IP and TP............................................................415.5.5 OPTION 5: Seek Licenses for all IP and TP..............................................425.5.6 OPTION 6: Mix of all Options (1 to 5).....................................................42

5.6 Practical Considerations on Where the Final Product is Developed.........................43

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6. Conclusions: Implementing IP/TP Management Systems..........................................446.1 Major Options on the Management of IP associated with GoldenRice�...................45

6.1.1 Complete and Regular Updates to the FTO..............................................456.1.2 Strategic Science Plan........................................................................466.1.3 Strategic Distribution Plan...................................................................466.1.4 Cost/Benefit Analysis..........................................................................47

6.2 Outlook................................................................................................47

References...................................................................................................................49

Acknowledgements..................................................................................................51

Appendices...........................................................................................................51

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Executive Summary

Introduction

Rice is a staple food for millions of people,predominantly in Asia, but lacks essentialnutritional components such as Vitamin A.This is very important for over 180 millionchildren and women of child bearing age whosuffer from Vitamin A deficiency in Asia alone.For this reason, an improvement was madeunder an effort led by Profs. Ingo Potrykus andPeter Beyer by inserting several genes into riceto produce an improved product called�GoldenRice�� (on the trademark, see Noteon Trademark and Domain Names below).Because GoldenRice� has the potential to beeasily integrated into the farming systems ofthe world�s poorer regions, the advent ofGoldenRice� promises to go a long waytowards solving Asia�s Vitamin A deficiencyproblem in an effective, inexpensive, andsustainable way.

Objectives, Limitations and Definitions

As a result of the increasing complexity of theintellectual property (IP) framework underwhich the international agriculturaldevelopment community operates, theRockefeller Foundation funded an ISAAAproject to conduct a selective Freedom-To-Operate (FTO) analysis of GoldenRice� withthe objectives of:a. reviewing the IP and Technical Property

(TP; or tangible property) componentsassociated with GoldenRice�;

b. providing institutions interested indistributing GoldenRice� with theinformation needed to develop strategicoptions for handling the proprietaryscience embedded in the product; and

c. developing possible alternative strategieson how the IP/TP constraints could bemanaged effectively.

Any FTO opinion is a risk managementopinion and its results vary on a country-by-country basis. It is a dynamic opinion; nevera definitive answer. Hence the presentdocument serves as an analytical frameworkthat can serve as the basis of a legal FTOreview. While it contains information onownership and statutory protection issues, itis not intended to be a final legal opinion.

In addition, this report is not aimed atcommenting on any institution�s current IP/TPstrategy, but on providing relevant informationto make sound policy and strategy decisions.Neither is this study intended to promulgateany particular approach about how toovercome the IP and TP challenges whiledealing with the proprietary science ofagriculture and plant breeding.

Proprietary Property, or proprietary science,as used throughout this document, iscomprised of:· IP or Intellectual Property, which has been

taken to mean, without limitation,intellectual property rights, includingpatent rights, plant variety protectioncertificates, unpublished patentapplications, and any inventions,improvements, and/or discoveries thatmay or may not be legally protectable,including all know-how, trade secrets,research plans and priorities, researchresults and related reports, statisticalmodels and computer programs andrelated reports, and market interests andproduct ideas; and

· TP or Technical Property, which has beentaken to mean, without limitation, tangibleproperty such as computer software,germplasm and the biological materialsand derivatives thereof, and relatedinformation.

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Results of the Deconstruction ofGolden RiceTM

Under the product deconstruction process ofGoldenRice�, we reviewed plant/seedsource; gene constructs (TP and IP) of cloningvectors pBin19hpc, pZPsC and pZLcyH;transformation, plant regeneration, and othertechniques; and DNA amplificationtechnologies.

Technical PropertyAt least fifteen TP components went into thethree different genetic constructs; many ofwhich were acquired by ETH-Zürich underMaterial Transfer Agreements or by uselicenses. Some of this complexity stems fromthe product being a multi-transformant, inwhich three genes/enzymes (phytoenesynthase, phytoene desaturase, and lycopenecyclase) were introduced in the carotenoidbiosynthetic pathway (Figure 1 shows the flowchart of the elements that went into one of thethree constructs or plasmids). This requiredthree transformation vectors and theapplication and use of many other processesand components. For reasons related to theconfidentiality embedded in these

agreements, we are not providing details ofthese agreements nor our interpretation ofthem in this published version of the FTO.

Determining what entity has the right to grantlicenses or sub-licenses is a relatively tediousprocess, one which continually evolves ascompanies re-structure, sell or assign patents,or grant licenses with or without the right tosub-license. Hence at this stage we onlyidentified the patents according to the originalassignee and have not determined whichentity would have to be approached forlicensing the various components.

Intellectual PropertyDepending on the country where the currentform of GoldenRice� would be used weidentified between zero and 44 patents whichapplied to the product. In the USA and mostcountries of the European Union, around 40patents apply. In the 10 top rice producingcountries, many fewer patents apply, namely:China (11), India (5), Indonesia (6),Bangladesh (0), Vietnam (9), Thailand (0),Myanmar (0), Japan (21), the Philippines (1)and Brazil (10). Similarly, in the top ten rice

Figure 1. Flow chart of Tangible Property Transfers for pZPsC

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pZPsCpZPsC

pPZP100M

pBaal3

pUC18M

pUCET4

pCpsyHpBSK

cDNA

pGt1psyH

pCRT-1 pSNIF83

(pyPIET4)

LB Gt1p psy nos! 35Sp tp crtI nos! RB

Phytoene syn. Glutelin Phytoene des.

tpcrt1Erwinia

Pea RuBisCo

daffodilGt1

pPZP100LB + RB

synthetic linker

pPSR6pCAR16

(pUC19)

pBluescriptKS

Misawa,93

Hajdukiewicz,94Beyer, p.c.

Fraser,92Schreier,85

cDNA psy(Uni-Zap)

Rice

Bartley,92Schledz,96(Probe-Scolnik)

pUC18syntheticlinker

Okita,89

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importing countries, relatively few patentsapply: Iran (0), Brazil (10), Nigeria (0), thePhilippines (1), Iraq (0), Saudi Arabia (0),Malaysia (0), South Africa (5), Japan (21) andCôte d�Ivoire (10).

Recognizing that patent claims may begranted for different kinds of inventions,claims may be worded to cover products perse, products-by- process, uses, or processes.Whereas the first three types of claimsgenerally extend to the products that embedthe new discoveries, �process� claims orclaims for the claimed technical proceduresdo not extend to the products that areproduced by the claimed processes. What isof great importance for �process� claims is thecountry in which the process is applied. If theproduct is made in a country where those�process� claims have not been issued, thena license for such claimed processes are notrequired.

A total of 26 of the approximately 70 patentsidentified in this study contain primarilyprocess claims thus reducing somewhat thenumber of applicable patents which couldinhibit FTO in a given country. A detailedanalysis on a country-by-country basis mayreduce the complexity of the IP landscape.

Discussion on Alternative IP/TPManagement Strategies

Transfer and use of GoldenRice�, dependingon the country in which it is to be deployed,would, at a minimum, require agreements froma dozen or so entities (public and private) forthe TP transfer and use. In addition, againdepending on the country of use, betweenzero and 40 licenses for IP rights would berequired, from a dozen or so entities. In total,negotiations with 12 to 20 entities might berequired, again depending on the country ofrelease. Noteworthy is that if a regional orinternational organization, such as theInternational Rice Research Institute (IRRI),

wishes to obtain FTO, say for national use inall developing countries in Asia, licenses foraround 30-40 patents would need to beobtained (in addition to the resolution of TP).

All in all, the widespread release of the currentversion of GoldenRice� will requiresignificant licensing activity if it is tolegitimately become available to the world,either commercially or for humanitarianpurposes.

We identify and discuss the advantages anddisadvantages of six alternative strategies onhow to gain FTO for GoldenRice�, namely:

1. Invent around current patents:Research alternative ways to develop pro-Vitamin A rice, generating new inventions.

This option, which is a science andresearch based approach, leads to lessreliance on other institution�s patents butis likely to be very costly and timeconsuming (if at all feasible). It wouldarguably not constitute a wise use ofdevelopment funds.

2. Re-design constructs:Re-design each construct to reducenumber of applicable patents, wheneverpossible synthesize own genes to reducereliance on TP of others.

This strategy, which is a productdevelopment based approach, is a likelyone as it may be necessary for scientificreasons to re-design the product. It is aneffective way to reduce other institution�sIP and particularly efficient if an FTOanalysis is done prior to initiation of theresearch. This approach would almostcertainly be the approach favored by anycompany as the TP issues are potentiallythe most difficult ones to resolve.

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3. IP/TP owners to relinquish claims:All FTO issues for all GoldenRice� relatedactivities, commercial or otherwise, areeliminated through public (or private)statements and related activities by thecertified owners/assignees of each set ofIP/TP rights for making, having made,using, having used, importing, exporting,selling, and having sold all GoldenRice�plants, plant parts, and all related productsand processes. This humanitarian strategyfocuses on public perception.

Some companies (e.g. Zeneca andMonsanto) already publicly declared thatthey will make their technologies availablefor GoldenRice�. This will greatly simplifylicensing negotiations although a royalty-free license may still need to be negotiated,at least for liability/indemnity reasons.

4. Ignore all IP and TP:All FTO issues for all GoldenRice� relatedactivities, commercial or otherwise, areignored, and research and productdevelopment as well as plans for generaldistribution proceed.

This approach is a strategy that certainlyhas the lowest near-term costs but may leadto long terms costs, especially if a lawsuitensues, and may lead to the longest delayin product dissemination.

5. Seek Licenses for all IP and TP:All FTO issues are resolved by the processof any party (individually or throughconsortia) acquiring an appropriate(commercial or other) license from thecertified owners/assignees for each set ofIP/TP rights for the GoldenRice� relatedactivities that are of interest to the licensee.

This license may be commercial in nature(a grant to make, have made, use, haveused, import, export, sell, or have sold allGoldenRice� plants and plant parts andall related products and processes) or amore restrictive one as the licensee andlicensor mutually determine to berequired.

This licensing approach is complex andcostly, but may lead to stronger public-private relationships wherebycorporations are also willing to transferknow-how and future biotechnologyinventions. It is also the safest route andensures good relations with IP owners (bethey from the public or private sectors).

6. Mix of all Options (1 to 5):While research and development plans aremade to optimize the product, re-designof constructs and acquisition on TP isplanned to minimize IP and TP conflicts(OPTION 2); selected FTO issues areremoved through public (or private)rescinding of rights by selected holders ofcertain IP/TP rights (OPTION 3); this�moral high ground� is used to leverageadditional rights holders to either rescindtheir claims (OPTION 3) or to reduce theirdemands within the context of licensenegotiations (OPTION 5). In the end allremaining unrescinded IP/TP rights can beeither licensed (OPTION 5) or ignored(OPTION 4).

This strategy is again complex from theperspective of IP/TP management butseems to be the most pragmatic andrealistic. It capitalizes on the upsides ofmost of the other options while reducingthe risks of future complications.

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Discussion on Risk ManagementStrategies

Developing a sound IP management strategyis, in many ways, primarily a matter of riskmanagement. No one ever definitively knowswho has rights to do what with all IP, becausenew patents are continually being issued,older patents expire and patent-related courtsettlements take place around the world. Allthat any organization can do is try to complywith the FTO opinions that they commission,establish protocols to defend (or proactivelyfight) themselves, and seek whatever licensesthey believe that they need to reach theirgoals.

For international institutions, licensing issuesare further clouded because their donors andclients are from many different nations.Thereby the statutory protection laws requiredfor full FTO are as varied as their client list.This leaves such institutions, particularly thecenters of the Consultative Group onInternational Agricultural Research (CGIAR)with the challenge as to whether or not todistribute improved germplasm with full FTOor to pass this responsibility for obtaining FTOalong with their improved germplasm, on tothe client nation with a caveat regarding thesematters.

For the present FTO, we also had to makestrategic decisions on how wide a net to castin terms of listing certain patents where it isnot entirely clear whether or not they apply toGoldenRice�, and whether or not to includepatent applications or only issued patents. Weopted to cast a wide net so as to provide thoseinstitutions who wish to further develop anddistribute GoldenRice� with a broad base ofinformation to make sound risk managementdecisions. ISAAA, through the Global IP/TTInitiative, can be assisting institutions indeveloping appropriate and pragmatic IPmanagement options or strategies.

Conclusions

Regardless of which option discussed aboveor which scenario is chosen, there are a seriesof tasks that should be completed in order toadequately manage the IP/TP. These are:1. Complete and regularly update the present

FTO analysis, preferably on a country-by-country basis.

2. Develop a scientific strategic plan (whomanages, what is to be done, whichbiotech and germplasm components areto be used, where is the research to bedone, who is to do the research, what arethe timelines for completion) for finalizingthe current scientific initiative.

3. Draft and negotiate a strategic plan fordistribution (who manages, what must belicensed, list of licensors/licensees,acceptable terms, timelines) of the finishedproduct(s).

4. Complete a cost/benefit analysis for thepreferred options.

It will be for the developing countries, whichwish to benefit from GoldenRice� and for theorganizations whose mandate is to assist thesecountries to make choices on the best optionsto follow. The dominating consideration mustbe the impact of GoldenRice� on the healthand well being of rice producing andconsuming populations. These and relatedfactors will condition the speed andconfiguration of the eventual broad release ofGoldenRice�.

National Agricultural Research Services, oncethey obtain access to GoldenRice�, may stillwish to conduct their own FTO review in orderto confirm which IP issues and TP issues arecovered in their country. This is particularlytrue if the recipient country foresees an exportmarket for its GoldenRice�. Additionally, anycountry to which they export theirGoldenRice� will likely present a different IP/TP landscape.

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Because a preliminary FTO analysis such asthis one and a related version done by a patentattorney is dynamic, it is essential that astrategic plan be developed by any entitywishing to develop and disseminate theproduct in light of an extensive cost/benefitanalysis and list of alternative strategies.Resolving the IP and TP issues still provides aformidable challenge to the ultimate releaseof GoldenRice�. We hope that the systematicreview, presentation and discussion of the IPand TP situation will lead to sound planningand eventual resolution of the issues. In thisway, GoldenRice� will deliver its benefits toboth resource-poor farmers and consumers indeveloping countries and to commercialfarmers and related entities. It can become aclear example of how the benefits ofgenetically modified products can beextended to both developing and developedcountries. Sound planning and resolution ofthe IP/TT issues will contribute to a timelyrelease of this and future essential productsfor the benefit of all people.

Note on Trademark and Domain Names

ISAAA has filed for a United States Trademarkfor the words �GoldenRice� and �GoldenRice�, and for the logo as provided on thecover of this report, and registered the domainnames �www.Golden-Rice.com� and�www.GoldenRice.org�.

These protections have been sought to ensurethat the name GoldenRice� remains in thepublic domain for the benefit of resource-poorfarmers. ISAAA will be pleased to transfer thetrademark rights and domain names, at nocost, to a philanthropic, academic, orinternational development organization whoshares a similar mandate in assisting resourcepoor farmers.

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List of Tables

Table 1. Product Clearance Profile: Possible Required Licenses and/orAgreements for GoldenRice�.................................................................8

Table 2. MTAs, Licenses, Documents and Agreements Relevantto GoldenRiceTM...................................................................................9

Table 3. Product Clearance Spreadsheet for GoldenRiceTM..........................................14Table 4. Major Rice Producing, Exporting and Importing Countries

(FAO 1997) and the Number of Applicable Patents toGoldenRiceTM in its Current Form.............................................................34

Table 5. Patents containing essentially Process Claims............................................36Table 6. Alternative and/or Complementary IP/TP Management Options to

Obtaining Freedom-to-Operate for GoldenRice�..........................................38

List of Figures

Figure 1. Flow chart of Tangible Property Transfers for pZPsC........................................10Figure 2. Flow chart of Tangible Property Transfers for pBin19hpc...................................10Figure 3. Flow chart of Tangible Property Transfers for pZLcyH......................................11

List of Appendices

Appendix A. List of Major Producing/Importing/Exporting Countries and DesignatedPatents Potentially Applicable in these Countries to GoldenRice�......................53

Appendix B. List of Abbreviations and Acronyms............................................................56

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1. Background and Introduction

1.1 Rice Consumption and Vitamin ADeficiency in Asia

Rice is one of the world�s oldest cereal crop,and together with wheat and corn, it is one ofthe core staple cereals worldwide today. Nearly94% of all the world�s rice is grown andconsumed on the Asian continent, where it isby far the most important food crop.

While rice is a good source of calories, it lacksessential nutritional components. In particular,rice contains neither Vitamin A nor beta-carotene, which humans can convert intoVitamin A.

Note that the rice endosperm, however, doescontain a beta-carotene precursor compoundbut that the plant is unable to convert theprecursor into beta-carotene itself. As aconsequence, it is theoretically possible thatsome landraces of rice may contain beta-carotene.

For children and women of child bearing age,Vitamin A is absolutely essential. Worldwide,nearly 134 million children are at risk fordiseases related to Vitamin A deficiency. Some3.1 million preschool age children suffer fromeye damage, and nearly 2 million childrenunder 5 years of age die each year fromdiseases linked to persistent Vitamin Adeficiency. In Southeast Asia alone, 5 millionchildren become at least partially blind everyyear. In the past, attempts to solve this problemby fortifying rice with Vitamin A have beenstymied because of the costs involved and ageneral lack of infrastructure for efficientdistribution in many developing countries. Butthanks to the recent efforts of scientists workingon this problem, Vitamin A producing beta-carotene can now be genetically added torice. This invention has the potential toalleviate the suffering of many millions ofpeople, especially those who are too poor todiversify their diets with green vegetables.

The improved product is called�GoldenRice�� because of the slightly yellowendosperm resulting from the added beta-carotene. In its current formulation,GoldenRice� could supply more than 10%of an adult�s daily Vitamin A requirement. Asthe technology is further developed andenhanced, GoldenRice� will be able toprovide 100% of the daily Vitamin Arequirements for adults living in poor regionswith high per capita rice intake (110-180 kgper year). Because GoldenRice� can easilybe integrated into the farming systems of thepoor in these regions, this new variety has thepotential to make the greatest impact where itis most needed. The advent of GoldenRice�promises to solve Asia�s vitamin A deficiencyproblem in an effective, inexpensive, andsustainable way.

1.2 Biotechnology Research and theDevelopment of “pro-Vitamin ARice” ( Golden RiceTM)

Focusing their research and developmentefforts either on model plants, such as tobaccoor Arabidopsis, or on commercially importantcrops such as maize, soybeans, and cotton,biotechnology companies at first had nocommercial interest in rice. Instead, riceresearch was pursued by the public sector. Amajor international rice biotechnology effortin the early 1980�s was initially funded by theRockefeller Foundation, which has sinceinvested well over US $110 million in ricebiotechnology research and capacitybuilding. This has been a most successfulscientific investment that trained a largenumber of scientists from developing countriesand led to enabling the transformation of rice.

One of these projects, led by Professor IngoPotrykus, undertook to determine whetherbeta-carotene could be added to rice throughtransformation. A collaborative effort between

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the Swiss Federal Institute of Technology (ETH-Zurich) and the University of Freiburg,Germany, allowed scientists to begin theirwork in the early 1990�s. The project receivedfunding from ETH-Zurich itself, the no longerexisting European Community BiotechnologyProgram, and the Rockefeller Foundation.

The research team engineered a japonicavariety of rice with the three genes (psy, crt1,and lyC) necessary for the rice grain to produceand store beta-carotene. Two simultaneoustransformations were necessary, and thisinevitably led to complex plasmid constructs.In fact, the Vitamin A package included twogenes from daffodil and a third from abacterium in order to complete the beta-carotene pathway in rice.

The research group worked with japonica rice,which is mainly grown in the temperate zonesof East Asia, because the transformationsystems for it were well established at the timethe original work was done. In the future, thesuccessful transformation events in japonicarice may be crossed into indica rice either byIRRI or by NARS directly. IRRI is also planningto introduce the genes for beta-carotenesynthesis into elite tropical indica rice bytransformation and evaluation before releaseto NARS. Indica is prevalent in the lessfavorable ecosystems where many of Asia�spoorest people reside.

1.3 The Institutional Context ofGolden RiceTM

Since its inception exactly 40 years ago, theInternational Rice Research Institute (IRRI) hasmade incredible strides in meeting the foodneeds of poor people in developing countries,particularly in Asia. Its main strength has beenits ability to freely receive and distributeimproved rice germplasm and relatedinformation. In fact, this free flow of materialand related information has been used bymany of IRRI�s funding sources to measureperformance. Given this success, IRRI

management and scientists understandablyplace a high value on the free exchange ofinformation and material.

By 1990, IRRI launched its ownbiotechnology unit (although it had practicedtissue culture, isozyme screening, antherculture, and embryo rescue for quite sometime). From its inception, IRRI biotechnologyresearchers sought assistance in the form ofmaterials and related information from outsidesources. Nearly all of this assistance includedproprietary material comprising IntellectualProperty (IP) and Technical Property (TP) rights.When such proprietary material wastransferred to IRRI, it was often under restrictiveconditions such as material transferagreements and other sorts of licensingarrangements. Receipt of such protectedmaterials and related information induced IRRIto institute certain restrictions onconfidentiality, review its publicationprocedures, modify its processes for therelease of IRRI-held germplasm, and seek aclearer path forward regarding IRRI�s use ofthe progeny of transferred materials and relatedinformation for later release to its clients.

With the rapid expansion of plantbiotechnology, particularly since the early-1990s, it has become apparent that IRRI�sopen approach is unlikely to be sustained. ForIRRI to ensure that its clients will continue tohave access to the best available germplasm,some form of intellectual property protectionsystem may have to be implemented.Accordingly, its historically open and freesystem of germplasm and informationexchange might have to be modified overtime, particularly for certain projects and forcertain genetic materials produced underthose projects. This is partly because theprivate sector�s large R&D investments led tomany patents in plant biotechnology�including rice�that are no longer freelyavailable to the international developmentcommunity. In addition, many public

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universities and research institutes are, bynecessity, becoming more and more secretiveabout their research projects and areincreasingly seeking intellectual propertyprotection for their own discoveries.

In the mid-1990s, the Consultative Group onInternational Agricultural Research (CGIAR)also began to study the effect of biotechnologyon its plant operations. It set-up two panels.The first focused on how the Centers of theCGIAR could fulfill their international mandate

from the scientific and technical perspective.The second focused on the implications of theincreasingly proprietary nature ofbiotechnology. As a result of thesedeliberations, most of the CGIAR Centerscommissioned an IP audit from 1999-early2000. These audits generally reported on theoverall handling of IP by the Centers. To charta path forward, the Rockefeller Foundationcommissioned ISAAA to conduct apreliminary FTO review of the GoldenRice�project for IRRI.

2. Objectives, Limitations and Methodology of the Freedom-to- Operate Review

2.1 Objectives and Purpose

As a result of the increasing complexity of theIP framework under which IRRI, the researchcollaborators, and the NARS operate, theRockefeller Foundation commissioned ISAAAfor IRRI, to conduct a selective FTO analysisof the transgenic product containing beta-carotene produced by ETH-Zurich. Theimpetus for the FTO analysis also stems fromsignificant changes in the statutory protectionenvironment in the last decade, particularlyin regards to the World Trade Organization�sTrade Related Intellectual Property agreement(WTO/TRIPs). IRRI is now seeking to ensureopen access to the services and improvedproducts that emanate from its researchprograms and those of its collaborators.

The objective of the Freedom-To-Operate(FTO) review is to provide IRRI with theinformation it needs to develop strategicoptions for handling the proprietary scienceembedded in the Vitamin-A rice(GoldenRice�). This also includesinformation to enable IRRI the developmentof strategic options on how best to releasesuch improved products.

IRRI�s efforts to reach its goal will be mosteffective if they are based on all the

information available about the ownership ofthe proprietary and intellectual property thatIRRI uses in each step of the developmentprocess (see Section 3.1 below). The primarypurpose of an FTO review is to identify theowners of such property. Accordingly, thisreview provides IRRI and the RockefellerFoundation with a worldwide inventory ofpatents that apply to specific products andprocesses that were used in the production ofGoldenRice�. It also discusses the possiblesignificance of these findings in regards to theproprietary technologies that have been used.In preparing this review, ISAAA has consultedwith a retained Attorney specializing in thesematters.

The present preliminary FTO is aimed atproviding IRRI and any other organizationinterested in GoldenRice� with a picture ofthe current situation in terms of ownershipissues around the particular rice product. Thiswill allow any organization to decide, basedon rational information, what strategy tofollow. Thus the report is not aimed atcommenting on IRRI�s current strategy, nor onrecommending a particular strategy, but onproviding relevant information to make soundpolicy and strategy decisions.

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2.2 Limitations

Given the ever-changing biotechnology andIP environment in which every plant breedingand biotechnology institution operates today,virtually no transfer of germplasm or researchis without some degree of risk. As transgenicstrategies begin to dominate cropimprovement practices, both the risks andrewards of transferring and releasing productsby national programs can be expected to rise.

An FTO opinion is a risk managementopinion. It is a document written by an attorney(or for a preliminary FTO, written by paralegalstaff and reviewed by an attorney) and isprepared for the purpose of guiding anorganization through or around perceived risk(see Section 3 for further details on FTOreviews/opinions). These include aspectsrelated to technical property (such asconstructs, plasmids, vectors) and intellectualproperty (patents on products and processes)that may influence an organization�s freedomto enter into the product development phase,or distribute and use the materials derivedtherefrom. When an FTO is broadened tocover biosafety and other regulatory aspectsand obligations, it becomes a ProductClearance (PC) profile.

It should be noted that the FTO opinion,including the information presented in thisreport:· varies on a country-by-country basis

because most statutory protection isfounded in national law, and patents areissued by national governments;

· is dynamic because patent status isdynamic (new patents are issued or expiredaily, sold or licensed, disputed orrendered invalid by courts�thereforeownership changes, and the impact ofspecific claims are constantly changing);and

· is always an opinion and never a definitiveanswer.

As a consequence, the present paper�asindeed any review of FTO�must be regularlyreviewed, updated, and specifically adaptedto the country that will receive the material.Similarly, the opinions presented herein arefor the sole purpose of assisting anyorganization that wishes to develop anddistribute GoldenRice� in determining itsstrategy for in-licensing, out-licensing, andmaterial transfer, so that the organization�sbehavior can be justified should a disputearise.

2.3 Methodology

Conducting this IP/TP Audit of GoldenRice�required a methodical series of steps. Thedeconstruction of this product was systematic,utilizing any and all information that couldshed light on the product�s components andassembly. In sum, these were:· Scrutiny of the original review article on

GoldenRice� (Ye et al. 2000) and severalothers.

· Discovery of all related and relevantreferences by searching scientificdatabases (CAB, BIOSIS, AGRICOLA).

· Careful examination of all relatedinformation, including, where availablebut not limited to, additional articles,project proposals and grant fundingagreements.

· Review of employment agreements.· Examination and construction of the origin

and movement of technical property(construction of flow-diagrams ofplasmids).

· Patent searches on ISAAA�s proprietarypatent database and others, such asMicropatent, USPTO, and IBM.

· Patent examination, particularly in regardsto claims.

· Construction of an IP/TP spreadsheet.

5

· Simultaneous examination of allcomponents (i.e., IP/TP scientificcommodity), in order to assess the IP/TPlandscape.

· Report preparation, including discussionon implications and possible options.

3. Biotechnology Product Management: The Role of Freedom-to-OperateReviews

3.1 Why Biotechnology ProductManagement is Important

Reduced to its simplest form, in regards togermplasm development there are only threegoal-directed steps by any plant breedingorganization, be it a NARS or a center of theCGIAR, or a private company. Beginning withthe goal�or the end product�and movingbackward, these steps are:· Final Step: Enable the release of

improved germplasm and relatedinformation (either directly or through thirdparties);

· Middle Step: Develop and produceimproved germplasm (intermediary orfinished) and related information throughscientific and technical �value added�research, processes,and discoveries; and

· Initial Step: Conserve, use, and distributegermplasm and information, and obtaininformation and/or germplasm, and obtainor generate and develop thebiotechnology tools and componentsneeded to produce improved (includingtransgenic) varieties.

More specifically for the Centers of the CGIAR,to reach their goal, the center�s strategy haslong been to work through variouspartnerships to include a wider range ofcollaborators and expertise. One set ofcollaborators is �downstream� to ensure thedelivery of the Center�s improved germplasmto farmers through national programs. Theother set of �upstream� collaboratorsstrengthens the CGIAR Centers� access to newtechnologies, particularly biotechnology,

through various types of collaborative projects.With time, these may increasingly include theprivate sector.

There are several reasons to form various typesof partnerships with the private sector.Principal among them is that the private sectorowns the majority of the pieces required forany of the biotechnological applications thathold so much promise for farmers, particularlyin the poorer areas of the developing world.This is irrespective of Monsanto�sannouncement on April 3, 2000 that it willmake its rice genomics information freelyavailable to scientists. Relationships, however,are built on legal arrangements founded onmutual trust, and are nurtured and sustainedby the ability of each partner to understandand supply the needs of the other partner.Through the vehicle of agreements,organizations define how they will interact,and all such legal arrangements should beunambiguous to avoid creating confusion andill will. Furthermore, for any organization tobe able to collaborate effectively with privatesector organizations, a good understanding ofthe other side�s needs and wants are important.Only then can costs (monetary or non-monetary) be estimated realistically and therelative value of different alliances compared.Thus, proprietary science rights managementissues are both about legal documents andabout building, strengthening, andmaintaining relationships. In sum, mutual trustand understanding is needed to establishsound legal arrangements, and legalarrangements are needed to maintain trust.

6

3.2 What is a Freedom-to-OperateReview and How is it Done ?

Much of the material in this section is drawnfrom ISAAA�s Intellectual PropertyVirtualWorkshop� Module,1 a web-basedtraining course with interactive evaluation andlaboratory exercises, glossaries, and templateagreements prepared by Dr. Stanley Kowalskiof ISAAA.

An FTO opinion refers to the legal opinionregarding IP and TP. It should be conductedas early as possible, even during theconceptualization of a research project. Thisapproach makes it possible to decide inadvance which components, technologies,and processes are best incorporated into theproduct under development and thereby howto reduce or avoid certain IP and TP issues.

To reach FTO opinion, the first step is to createa Product Clearance (PC) profile. The PCprocess systematically dissects both theproduct�s scientific (acquisition of materials,agreements, and laboratory techniques) andbusiness aspects (biosafety, varietalregistration, and distribution status). This�dissection� is referred to as thedeconstruction of the product.

Deconstruction can take place when theproduct is in the planning stage, whendevelopment is underway, or when theproduct is ready for distribution. But it is inany organization�s strategic best interest toconduct a deconstruction at the earliestpossible phase in product development.

To conduct a deconstruction four keyquestions have to be asked:· What are the methods and procedures

that went into product development?

· What are the components of the product?· What are the ingredients that constitute

each component?· What are the IP and TP rights that may be

attached to these components and theiringredients?

As new patents are issued or old ones expire,as companies merge, and as public andprivate sector organizations alike license orassign certain rights to patents, the IPlandscape for any product evolves andchanges. Hence FTOs and PCs are developedin a fluid, dynamic environment. The timelyinitial PC determination and development ofFTO opinions are only steps in an ongoingprocess that must be regularly updated. With50-100 new plant biotechnology patents andapplications issued each month, as well asnumerous patents expiring, regular monitoringand updating of PC files is essential.

The preparation and content of a productprofile can be easily illustrated using a loaf ofbread as an example: �We can list the genericingredients used to make the bread (flour,liquid, yeast, salt, and shortening) and thegeneric technologies (sifting, mixing,kneading, baking, slicing, and packaging)used to assemble the ingredients and tomanufacture the bread. Each ingredient in theprofile can be specified more precisely. Wecan indicate whether the flour is soy, corn, orwheat, whether a wheat flour is whole wheat,or enriched, bleached, and whether the liquidis water, milk, or beer. Similarly, thetechnologies can be defined in greater detail.The completed product profile then representsthe entirety of the bread�s construction�(Duesing, 1997).

1 The entire Intellectual Property VirtualWorkshop� , prepared by a number of experts from around the world, is accessibleupon subscription. One module, entitled �How to draft a Confidentiality Agreement?� can be viewed by visiting www.isaaa.org/ip.html.

7

Of course, the biotechnological products willbe considerably more complex than a loaf ofbread, and will require a much moresophisticated repertoire of knowledge, skills,and resources. Above all, however, clear,organized records detailing all of theprocedures, components, material transfers,and agreements that went into the productundergoing deconstruction must be in place.In this context, a laboratory notebook is acritical management tool for later referenceduring the FTO process.

In addition to uncovering useful scientificterminology (see also Section 3.2.3 below), asearch of the scientific databases will also yieldpublication dates, authors, and affiliatedinstitutions pertaining to key scientific papers.All of these can also be utilized in a patentsearch. Useful scientific databases forsearching agricultural biotechnology andrelated topics are:· BIOSIS - http://www.biosis.org/· CAB International - http://www.cabi.org/· AGRICOLA - http://www.nalusda.gov/

ag98/· Current Contents Connect© - http://

www.isinet.com/

In order to determine relevant patentsassociated with the product underdeconstruction, the next step is to search thepatent databases. These databases couldinclude, among others:

· IBM Intellectual Property Network -http://www.patents.ibm.com/ibm.html

· MicroPatent© - http://www.micropat.com/

· European Patent Office - http://ep.espacenet.com/

· US Patent and Trademark Office - http://www.uspto.gov/patft/index.html

Most major companies have their ownattorneys, and scientists review each andevery biotech patent issued and annotate themin their own proprietary databases2 . Sinceeach database has distinctive, salient features,it is a good strategy to combine and integratedifferent databases in a comprehensive search,since this combination will produce a broadand thorough result. It also serves to cast thewidest net possible for identifying all possiblerelevant patents.

Searching out TP involves a different strategy.To discover who obtained what from where,when, and how is the heart of the TP search.Obviously, databases are not available for this.Extensive networking is the way to proceedwith all scientists who worked on the product.The objective is to discover, uncover, andobtain copies of any and all material transfer,licensing or �notice to purchaser� agreements,as well as grant proposals, fundingagreements, employment agreements, andconfidentiality agreements.

2 ISAAA has obtained such a truncated database from a donor for ISAAA use. That database was used for this presentFTO, among others.

4. Deconstruction of the Golden Rice™ Product

4.1 Overview

The product deconstruction of GoldenRiceTM

was complex. It yielded over fifteen tangibleproperty components and approximatelyseventy patents and related IP that seem tohave been integral to the product�sdevelopment. Some of this complexity stems

from the product being a multi-transformant,in which three genes/enzymes (phytoenesynthase, phytoene desaturase, and lycopenecyclase) were introduced in the carotenoidbiosynthetic pathway. This required threetransformation vectors (pBin19hpc, pZPscand pZLcyH) along with the application and

8

use of many other processes and components(e.g., Agrobacterium-mediated co-transformation).

Table 1 (Product Clearance Profile) presents asummary of the relevant patents that wereidentified and that are potentially applicableto the GoldenRice� product. It lists thesepatents according to the original assignee.Note that although a company may haveacquired another company by purchase orsome other manner (e.g., DuPont�s purchaseof Pioneer Hi-Bred International Inc. in 1999),

the ownership of certain IP and TP may beretained by the acquired company. In this case,from an FTO point of view, licenses may haveto be obtained from Pioneer rather thanDuPont. Determining what entity has the rightto grant licenses is a relatively tedious process,one which continually evolves as companiesre-structure, sell or assign patents, or grantlicenses with or without the right to sub-license.The present study did not determine whichentity would have to be approached forlicensing certain components.

Table 1: Product Clearance Profile: Possible Required Licenses and/or Agreements for GoldenRice�

Name of Institution Possible Applicable Patents1. AMOCO US5545816, EP0471056, US5530189,

WO9113078, US5530188, US56564722. Bio-Rad Inc. US51868003. Biotechnica WO86035164. Calgene WO9907867, WO98068625. Centra National de la R.S.K. WO96367176. Cetus WO8504899, US4965188, EP02580177. Columbia Univ. of New York US4399216, US4634665, WO83032598. DuPont WO9955889, WO995588, WO99558879. Eli Lilly US566829810. Hoffman-La-Roche US4683202, EP0509612, EP0502588, US488981811. ICI, Ltd. WO9109128,12. Japan Tobacco EP0927765, US5591616, EP0604662, EP0672752,

US5731179, EP0687730, WO951603113. Kirin Brewery JP3058786, US5429939, US5589581, EP0393690, US535068814. Life Technologies15. Max Planck Gesell. EP0265556, EP0270822, EP025747216. Monsanto US5352605, US5858742, WO840291317. National Foods RI JP6309108518. N.R.C. Canada WO941993019. Novartis AG20. Nederlandse O.V.T. EP0765397, WO953538921. Phytogen US453647522. Plant Genetic Systems US5717084, US5778925, WO8603776, WO920969623. Promega US476607223. Rhone-Poulenc Agro USRE36449, WO996735724. Rutgers University25. Stanford University US423722426. Stratagene US5128256, US5188957, US5286636, EP0286200, WO88050827. University of Maryland WO996305528. University of California US4407956, WO991689029. Washington State University30. Yissum R.D.C. US5792903, EP0820221, WO962801431. Zeneca Corp. US5750865, EP0699765A1

Note that these are the names of the owners or assignees of the rights under the relevant patents. Because of possible subsequentlicensing or assignment, these are not necessarily the current entities to approach for licenses.

9

Table 2 lists the tangible property received byETH-Zurich, including the apparatuses usedin the transformation. Some components wereobtained under research-only licenses orresearch only material transfer agreements(MTA), whereas others included use licenses.For reasons related to maintaining a certainlevel of confidentiality embedded in theseagreements, we are not providing details ofthese agreements nor our interpretation ofthem in this published version of the FTO.

It should be noted that the absence of an MTAdoes not necessarily mean that no restrictionsapply to the further use or transfer of aparticular piece of tangible property. In fact,the absence of an MTA or license may signalthe need for greater caution when proceedingwith the release of GoldenRice�.

4.2 Movement of Tangible Property

The development of the product also led to anumber of material transfers. Figures 1, 2, and3 present the flow of material for each plasmidthat went into GoldenRice�.

As with most transformated plant products, anumber of events were produced with each

of different constructs (see Table 1, 2 and 3).This present analysis is based on ISAAA�sreview of published research papers andvarious interviews.

4.3 Intellectual Property Analysis:Deconstruction of theComponents

The detailed analysis of the intellectual andtangible property of each component used toproduce GoldenRice� led to the ProductClearance Spreadsheet (Table 3); the summaryof which had been given as the PC profile (seeTable 1). The comprehensive analysis of thedeconstruction process is presented underfour major categories:

1. Plant/seed source2. Gene constructs (cloning vectors):

· The plant transformation vector,pBin19hpc

· The plant transformation vector, pZPsc· The plant transformation vector,

pZLcyH3. Transformation, plant regeneration, and

other techniques4. DNA amplification.

Table 2: MTAs, Licenses, Documents and Agreements Relevant to GoldenRiceTM

Product Component Source of component1. Rice germplasm transformed with gene construct(s) Taipei 309, obtained from IRRI2. PGEM4 Promega3. PbluescriptKS Stratagene4. PCIB900 Ciba-Geigy Limited (now Novartis Seeds AG)5. Camv35S Promoter (component of pCIB900) Monsanto6. Camv35S Terminator (component of pCIB900) Monsanto7. AphIV gene: hygromycin Phosphotransferase Ciba-Geigy Limited (now Novartis Seeds AG) (component of pCIB900)8. PKSP-1 Thomas Okita, Washington State University9. GT1 Promoter: glutelin storage protein Thomas Okita, Washington State University (component of pKSP-1)10. PUCET4 N. Misawa, Kirin Brewery Co., Ltd.11. Pea Rubisco transit peptide (component of pUCET4) N. Misawa, Kirin Brewery Co., Ltd12. CrtI gene: phytoene desaturase (component of pUCET4) N. Misawa, Kirin Brewery Co., Ltd13. PPZP100 Pal Maliga, Rutgers University14. pYPIET4 Clontech, but now marketed by Life Technologies15. Electroporation Apparatus Bio-Rad Corp., Gene Pulser II SystemÒ16. Miroprojectile Bombardment Apparatus Bio-Rad Corp.

10

Figure 1. Flow chart of Tangible Property Transfers for pZPsC

Figure 2. Flow chart of Tangible Property Transfers for pBin19hpc

Source: Compiled by Maria Jose Amstalden Sampaio while on an IP Management training internship withISAAA. For references quoted, see list of references at the end of this document.

Source: Compiled by Maria Jose Amstalden Sampaio while on an IP Management training internship withISAAA. For references quoted, see list of references at the end of this document

pZPsCpZPsC

pPZP100M

pBaal3

pUC18M

pUCET4

pCpsyHpBSK

cDNA

pGt1psyH

pCRT-1 pSNIF83

(pyPIET4)

LB Gt1p psy nos! 35Sp tp crtI nos! RB

Phytoene syn. Glutelin Phytoene des.

tpcrt1Erwinia

Pea RuBisCo

daffodilGt1

pPZP100LB + RB

synthetic linker

pPSR6pCAR16

(pUC19)

pBluescriptKS

Misawa,93

Hajdukiewicz,94Beyer, p.c.

Fraser,92Schreier,85

cDNA psy(Uni-Zap)

Rice

Bartley,92Schledz,96(Probe-Scolnik)

pUC18syntheticlinker

Okita,89

LB 35S! aphIV 35S p Gt1 p psy nos! 35S p tp crtI nos! nptII RB

pBin19hpcpBin19hpc

pBin19

pBin19M

pBaal 3

pC1B900pUC18M

pUCET4

pyPIET4

pBl121 pCRT-1 pSNIF83

pCAR16 pPSR6

pGt1psyH

pCpsyH

daffodilcDNA psy

(pBSK)

RicecDNA

LB + RBsynthetic linker

aph IV Waldron,85psy ctr1

Gt1Okita,89

tp, Pea RuBisCoSchreier,85

ctr1Fraser,92

35Sp Nos!

pIT139

35SP 35S! Wunn,96

Hygrom. Glutelin Phytoene syn. Phytoene des.

pKS1

(UniZap)

pBluescriptKs

Misawa,93

Bevan,84

Schledz,96Bartley,92(probe-Scolnik)

Burkhardt,97

pUC18synthetic linker

11

Source: Compiled by Maria Jose Amstalden Sampaio while on an IP Management training internship withISAAA. For references quoted, see list of references at the end of this document

These four categories are further expandedinto 43 sub-categories yielding over 70 USand ex-US patents that appear to comprise theintellectual property rights of this version ofGoldenRice�. Fifteen instances of tangibleproperty rights connected to the developmentof the product were also identified, (SeeSection 4.2 above), and those rights aresummarized and included in Table 1.

Please refer to Table 3 at the end of this Sectionfor the entire Product Clearance Spreadsheet.

4.3.1 Plant/Seed Source

The transformed rice line, TP 309 (Taipei 309),a japonica rice, was obtained by ETH-Zurichfrom IRRI in the mid-1980s without anyknown information or conditions that IRRImay have attached at that time.

4.3.2 Gene Constructs (cloningvectors)

Both pGEM4 (Promega) and pBluescriptKS(Staratagene) were used in the production ofGoldenRice�. The vector pGEM4 was criticalto the generation of pZLcyH and the vectorpBluescriptKS was critical to the generationof pBin19Hpc.

4.3.2.1 The plant transformation vector,pBin19Hpc

pBin19Hpc is a highly complex construct,with a wide range of components that arepotentially covered by numerous patents andMTAs:· Plant gene promoters identified as

Camv35S as used in this construct iscovered by patents held by MonsantoCompany in the US and certain othercountries.

Figure 3. Flow chart of Tangible Property Transfers for pZLcyH

pZLcyHpZLcyH

LB 35S! aphIV 35S p 35S! lcy Gt1 p RB

pGt1LcyH

pPZP100M

pRice

pPZP100

LB + RB35S P

synthetic linker

Hygrom. Lycopene cyc. Glutelin

pGEM4LCY

pV34GT1

Gt1

pKS1

pC1B900 Wunn,96Waldron,85

Bonk,97Al-Babili,96(probe-Scolnik)

Okita,89

daffodilcDNA lcy

Beyer, p.c.

aphIV

Hajdukiewicz,94Beyer,p.c.

Beyer, p.c.

12

3 Note that here is a four-way patent litigation involving the Agrobacterium transformation system and precise ownership cannotbe established at this stage.

· The Gt1 promoter may be covered bypatents held by The University ofCalifornia and the National FoodsResearch Institute (Japan).

· The nptII (kanamycin resistance) markermay be covered under a patent held byJapan Tobacco.

· The pea Rubisco Small subunit transitpeptide may be covered by patents heldby Plant Genetic Systems and Rhone-Poulenc Agro.

· The aphIV marker (hygromycin resistance)may be covered by patents held by Eli Lilly.

· The psy (phytoene synthase) gene may becovered by patents held by Amoco,DuPont, Zeneca, Kirin Brewery, and ICI.

· The crtI (phytoene desaturase) gene maybe covered by patents held by AmocoCorp. and DuPont Corp.

4.3.2.2 The plant transformation vector,pZPsc

pZPsc is another highly complex construct,with a wide range of components that arepotentially covered by numerous patents andMTAs:· Plant gene promoters identified as

Camv35S as used in this construct iscovered by patents held by MonsantoCompany in the US and othercountries.

· The Gt1 promoter may be covered bypatents held by The University ofCalifornia and theNational Foods Research Institute (Japan).

· The pea Rubisco Small subunit transitpeptide may be covered by patents heldby Plant Genetic Systems and Rhone-Poulenc Agro.

· The psy (phytoene synthase) gene may becovered by patents held by Amoco,DuPont, Zeneca, Kirin Brewery, and ICI.

· The crtI (phytoene desaturase) gene maybe covered by patents held by Amoco andDuPont.

4.3.2.3 The plant transformation vector,pZLcyH

pZLcyH is a highly complex construct, with awide range of components that are potentiallycovered by numerous patents and MTAs:· Plant gene promoters identified as

Camv35S as used in this construct iscovered by patents held by MonsantoCompany in the US and othercountries.

· The Gt1 promoter may be covered bypatents held by The University ofCalifornia and theNational Foods Research Institute (Japan).

· The pea Rubisco Small subunit transitpeptide, may be covered by patents heldby Plant Genetic Systems and Rhone-Poulenc Agro. It was provided by KirinBrewery Co., Ltd.

· The aphIV marker (hygromycin resistance),may be covered by patents held by Eli Lilly.

· The lcy (lycopene cyclase) gene, may becovered by patents held by Kirin Brewery,Amoco Corp., Yissum RDC, University ofMaryland, Centra National de alRechercheScientifique, and DuPont Corp.

4.3.3 Transformation vectors,techniques, and plantregeneration

The intellectual property landscape intransformation vectors, techniques, andregeneration is also quite complex, withnumerous patents having potentiallyoverlapping claims.· Agrobacterium transformation (general) is

connected to a considerable array ofpotentially applicable patents, withassignees such as Max PlanckGesellschaft, Cetus Corp.,Biotechnica Int., Inc., among others.3

13

· Agrobacterium transformation (monocots)is likely to be connected to a series ofpatents, with assignees such as Max PlanckGesellschaft, Japan Tobacco Inc., and theNRC of Canada.

· Co-transformation technique may becovered by several patents, both in generalterms, with the patent assignee beingColumbia University, and in more specificterms (i.e, as in co-transformation ofmonocots), with the patentassignee being Japan Tobacco, Inc.

· Rice regeneration technology is patented,with the NRC of Canada and Kirin BeerCorp. of Japan as assignees. These patentsmay apply to the GoldenRice� product.

4.3.4 DNA amplification

PCR was not used in the construction of theexpression cassettes at ETH-Zurich but thepossibility that PCR was used in theconstruction of one of the components and/or other up-stream vectors remains apossibility. We did not investigate this further.We decided, however, at least forinformational purposes, to include in the listthe fundamental PCR and Taq polymerasepatents, whose original assignees are CetusCorp. and Hoffman-La Roche. Note thatrecent court determinations may change theenforcement of these patents in certain areasand may involve Promega Corp. in the finaldecisions.

14 Table 3. Product Clearance Spreadsheet for GoldenRiceTM

1. Plant source Primary Patent DetailsSource Patent no. Title Inventor(s) Assignee Filing Issue

date date

Common name riceScientific name Oryza sativaVariety TP 309 IRRI

(Taipei 309)japonica

Pedigree IRGC Acc.# 42576

Note that in the USA, the term of a utility patent depends on when the patent application was filed. If the patent issued from an application filedprior to June 8, 1995, the term is the later of (1) 17 years from the date if issuance of the patent, or (2) 20 years from the first U.S. filing date for thepatent. If the patent issued from an application filed on or after June 8, 1995, then the term is 20 years from the first U.S. filing date for the patent.For further information, see http://www.patents.com/patents.

continued...

15

Table 3 continued. Product Clearance Spreadsheet for GoldenRiceTM

2. Gene construct Primary Patent Details(cloning vectors) Source Patent no. Title Inventor(s) Assignee Filing Issue

date date

Promega Corp.: US4766072 Vectors for in vitro Jendrisak Promega Corp. 17-Jul-85 23-Aug-88pGEM4 was used production of RNA et al. in the construction copies of either strandof pGt1lcyH of a cloned DNA (below) sequence.Stratagene Corp.: US5128256 DNA cloning vectors Huse et al. Stratagene 20-Apr-89 7-Jul-92pBluescriptKS was with in vivo excisableused in the plasmids.construction ofpBaal3 (below),and also for theconstruction ofthe cDNA libraryrot the isolationof psy and lcy(below).

US5188957 Lambda packaging Short and Stratagene 26-Feb-91 23-Feb-93extract lacking beta- Kretzgalactosidase activity

US5286636 DNA cloning vectors Huse et al. Stratagene 21-May-92 15-Feb-94with in vivo excisableplasmids.

EP0286200 DNA cloning vectors Sorge et al. Stratagene 12-Jan-88 12-Oct-88with in vivo excisableplasmids.

WO8805085 DNA cloning vectors Huse et al. Stratagene 12-Jan-88 14-Jul-88with in vivo excisableplasmids.

continued...

16


3. pBin19hpc Primary Patent DetailsSource Patent no. Title Inventor(s) Assignee Filing Issue

date date

CAMV 35S US4407956 Cloned cauliflower Howell The Regents of 13-Mar-81 4-Oct-83Promotor mosaic virus DNA as the University

a plant vehicle of CaliforniaUS5352605 Chimeric genes for Fraley et al. Monsanto Co. 28-Oct-93 4-Oct-94

transforming plant cellsusing viral promoters

US5858742 Chimeric genes fortransforming plant cellsusing viral promoters Fraley et al. Monsanto Co. 24-Jun-96 12-Jun-99

WO8402913 Chimeric genes suitable Fraley and Monsanto Co. 16-Jan-84 2-Aug-84for expression in plant Rogerscells

35S Terminator None foundGt1 Promotor JP63091085 Rice glutelin gene and Fukazawa Natl Food 6-Oct-86 21-Apr-88

preparation thereof Res InstWO9916890 Production of proteins

in plant seeds Lemaux Univ. of CA 30-Sep-98 8-Apr-99et al.

nos terminator None foundtransit peptide US5717084 Chimaeric gene coding Herrera- Plant Genetic 6-Jun-95 10-Feb-98

for a transit peptide and Estrella Systems N.V.,a heterologous peptide et al. Bayer A.G.

US5728925 Chimaeric gene coding Herrera- Plant Genetic 28-Apr-95 17-Mar-98for a transit peptide and Estrella Systems N.V.,a heterologous et al. Bayer A.G.polypeptide

USRE36449 Chimaeric gene for Lebrun Rhone- 17-Feb-98 14-Dec-99the transformation of et al. Poulenc Agroplants

continued...

17



date date

npt II EP0927765 Method for selecting Komari Japan Tobacco 23-Jul-98 7-Jul-99transformed cells Inc.

aph IV US5668298 Selectable marker fordevelopment of vectorsand transformationsystems in plants Waldron Eli Lilly and Co. 7-Jun-95 16-Sep-97

psy (phytoene The hetero- US5545816 Phytoene biosynthesis Ausich Amoco Corp. 19-Jul 93 13-Aug 96synthase) logous probe in genetically et al.

tomato psy1 engineered hostswas providedby PabloScolnik,DuPontCorp., withno MTA.P.Beyer, p.c.

US5705624 DNA sequences Fitzmaurice N/A 27 Dec 95 6 Jan98encoding enzymes et al.useful in phytoenebiosynthesis

US5750865 Process for modifying Bird et al. Zeneca 2 Sep 94 12 May98the production of Ltd.carotenoids in plants,and DNA, constructsand cells therefor

EP0471056 Biosynthesis of Ausich Amoco 4 Mar 91 19 Feb 92carotenoids in et al. Corp.genetically engineeredhosts

continued...

18



date date

JP3058786 DNA strand useful Misawa Kirin Brewery 5 Mar 90 13 Mar 91for synthesis of et al. Co. Ltd.carotinoid

WO9109128 DNA, constructs, Bird et al. Imperial 10 Dec 90 27 Jun 91cells and plants Chemicalderived therefrom Industries PLC

WO9806862 Methods for Shewmaker Calgene LLC 8-Aug-97 19-Feb-98producing carotenoidcompounds andspeciality oils inplant seeds

WO9955889 Carotenoid bio- Cahoon E. I. Du Pont 22 Apr 99 4 Nov 99synthesis enzymes et al. Nemours

and Co.crtI (phytoene Misawa/ US5530189 Lycopene biosynthesis Ausich Amoco 22 Jul 93 25 Jun 96desaturase) Kirin Brewery in genetically et al. Corp.

engineered hostsWO9113078 Biosynthesis of Ausich Amoco 4 Mar 91 5 Sep 91

carotenoids in et al. Corp.genetically engineeredhosts

WO9955888 Carotenoid bio- Cahoon E. I. Du Pont 21 Apr 99 4 Nov 99synthesis enzymes et al. Nemours

and Co.

continued...

19



date date

plasmid sources:pBin19,pBin 19m pUC deri- Mike Bevan

vative plasmid:public domain?

pBaal3 pUC deri-vative plasmid:public domain?

pCIB900 PlasmidpCIB900:source of thehygromycinphosphotransferase marker (aph IV).Obtained fromM. Koziel andN. Carozzi,Ciba-Geigy,R.T.P., NC, USA.

pUC18, pUC derivativepUC18m plasmid:

public domain?pBluescriptKS US, World Stratagene

and EU (see abovepatentsmay for relevantbe applicable, IP and TPplease see connections)above.

continued...

20 Table 3 continued. Product Clearance Spreadsheet for GoldenRiceTM


date date

Pgt1PsyH Pgt1PsyH was The rice glutelinderived from 1 promoter (Gt1)the plasmid was obtained frompKS1 (T. Okita). T. W. Okita,pKS1 is a Washington Statederivative of University.Stratagene�sBluescriptplasmid (above).

pUCET4 pUC derivativeplasmid:public domain?

pYPIET4 pYPIET4 Plasmid pYPIET4:(N. Misawa) source of crtlwas derived linked to thefrom the binary transit peptideplant express- sequence of theion vector pea Rubisco smallpBI121,pur- subunit (tp).chased from Obtained fromClontech N. Misawa of theLaboratories, Kirin Brewerynow marketed Co., Ltd., Yokohama ,by Life Japan. MisawaTechnologies. obtained tp from J. Schell,

Max-Planck-Institut.

continued...

21


4. pZPsc Primary Patent DetailsSource Patent no. Title Inventor(s) Assignee Filing Issue

date date

components:35S Promotor See above35S Terminator See aboveGt1 Promotor See abovenos terminator See abovetransit peptide See abovepsy (phytoene See abovesynthase)crtI (phytoene See abovedesaturase)

plasmidsources:pPZP100, Agrobacte- Paul MaligapPZP100m rium binary laboratory

vector, containschloramphenicolresistance gene(cmr).

pBaal3 pBaal3 isderived from:pYPIET4,pUCET4,Pgt1PsyH,pBluescriptKS,pUC18, pUC18m,pCIB900.Refer topBin19hpc(above) forrelevant detailsattached.

continued...


5. pZLcyH Primary Patent DetailsSource Patent no. Title Inventor(s) Assignee Filing Issue

date date

components:35S Promotor See above35S Terminator See aboveGt1 Promotor See aboveaph IV See abovelcy (lycopenecyclase) A hetero- US5429939 DNA sequences Misawa Kirin Beer 23 Oct 91 4 Jul 95

logous probe useful for the et al. Kabushikifrom Arabidopsis synthesis of Kaishathaliana was carotenoidsprovided byPablo Scolnik,DuPont, with noMTA. P.Beyer,p.c.

US5530188 Beta-carotene Ausich Amoco 21 Jul 93 25 Jun 96biosynthesis in et al. Corp.genetically engineeredhosts

US5589581 DNA sequences Misawa Kirin Beer 10 Mar 94 31 Dec 96useful for the et al. Kabushikisynthesis of Kaishacarotenoids

US5656472 Beta-carotene Ausich Amoco 7 Jun 95 12 Aug 97biosynthesis in et al. Corp.genetically engineeredhosts

US5792903 Lycopene cyclase gene Hirschberg Yissum RDC 7 Mar 95 11 Aug 98et al. Jerusalem,

Univ. of MDEP0393690 DNA sequences Misawa Kirin Beer 20 Apr 90 24 Oct 90

useful for the et al. Kabushikisynthesis of carotenoids Kaisha

continued...

23



date date

EP0699765 DNA, constructs,cells and plants derivedtherefrom Bird et al. Zeneca Ltd. 10 Dec 90 6 Mar 96

EP0820221 Lycopene cyclase gene Hirschberg Yissum 5 Mar 96 28 Jan 98et al. RDC Jerusalem

WO9628014 Lycopene cyclase gene Hirschberg Yissum 5 Mar 96 19 Sep 96et al. RDC Jerusalem

WO9636717 DNA sequences Kuntz Centre National 17 May 96 21 Nov 96encoding a lycopene de la Recherchecyclase, antisense Scientifique Kuntzsequences derivedtherefrom and theiruse for the modificationof carotenoids levelsin plants

WO9907867 Methods for Shewmaker Calgene LLC 6 Aug 98 18 Feb 99producing carotenoidcompounds andspeciality oils inplant seeds

WO9955887 Carotenoid Cahoon E. I. Du Pont 16 Apr 99 4 Nov 99biosynthesis et al. Nemoursenzymes and Co.

WO9963055 Genes of carotenoid Cunning- Univ. of MD 2 Jun 99 9 Dec 99biosynthesis and ham andmetabolism and Sunmethods of use thereof

continued...

24



date date

plasmid sources:pPZP100, Agrobacterium Paul MaligapPZP100m binary vector, laboratory

containschloramphenicolresistance gene(cmr).

pGT1LcyH Consturct Original sourcecontains: lcy, of componentsaphIV in pGT1LcyHexpression still need to becassettes. determined.

The lcy gene islikely from Beyer.

pKS1 see under See StratagenePgt1PsyH aboveabove

pCIB900 see abovepGEM4LCY See Promega

above

continued...

25


6. Transformation vectors, Primary Patent Detailstechniques, plant Source Patent no. Title Inventor(s) Assignee Filing Issueregeneration date date

Agrobacterium Obtained fromtumefaciens Barbara Hohn�sLBA4404 labroatory,

originally fromHookaas� laboratory(Netherlands)

Agrobacteriummediatedtransformation/vectors (general) US4536475 Plant Vector Anderson Phytogen 5 Oct 82 20 Aug 85

EP0265556 Stable binaryagrobacteriumvectors andtheir use Leemans Max Planck 31 Oct 86 4 May 88

et al. Gesellschaft(DE)

EP0270822 Stable binary Leemans Max Planck 30 Oct 87 15 Jun 88agrobacterium and Gesellschaftvectors and Deblaere (DE)their use

WO8504899 Methods and Gelfand Cetus Corp. 16 Apr 85 7 Nov 85vectors for and Bartontransformationof plant cells

WO8603516 Plant transformation Buchanan Biotechnica 13 Dec 85 19 Jun 86vector and Int. Inc.

Cannon

continued...



Agrobacterium US5591616 Method for trans- Hiei Japan 3 May 94 7 Jan 97mediated forming mono- and Tobacco Inc.transformation/ cotyledons Komarivectors EP0257472 Transgenic mono- De La Pena Max Planck 13 Aug 87 2 Mar 88(monocotyledons) cotyledonous plants, et al. Gesellschaft

seeds, therof and (DE)process for thepreparation of theplants

EP0604662 Method for trans- Hiei Japan 6 Jul 93 6 Jul 94forming mono- and Tobacco Inc.cotyledon Komari

EP0672752 Method of trans- Saito Japan 1 Sep 94 20 Sep 95forming mono- et al. Tobacco Inc.cotyledon by usingscutellum of immatureembryo

WO8603776 Process for preparing Hernal- Plant Genetic 20 Dec 85 3 Jul 86genetically stably steens Systems N.V.transformed mono- et al.cotyledonous plantcells

WO9209696 Process for trans- D�Halluin Plant Genetic 21 Nov 91 11 Jun 92forming mono- and Gobel Systems N.V.cotyledonous plants

WO9419930 Enhanced regeneration Nehra NRC of Canada 10 Mar 94 15 Sep 94system for cereals et al.

WO9967357 Agrobacterium- Dong et al. Rhone- 22 Jun 99 29 Dec 99mediated transformation Poulenc Agroof monocots

continued...

27



Co-transformation US4399216 Process for inserting Axel et al. The Trustees of 25 Feb 80 16 Aug 83technique: DNA into eucaryotic Columbia Univ.Two non-linked cells and for producing in the Cityplasmids transformed proteinaceous materials. of New Yorksimultaneously. US4634665 Process for inserting Axel et al. The Trustees of 11 Aug 83 6 Jan 87

DNA into eucaryotic Columbia Univ.cells and for producing in the Cityproteinaceous materials. of New York

WO8303259 Method for introducing Axel et al. The Trustees of 8 Mar 83 29 Sep 83cloned, amplifiable Columbia Univ.genes into eucaryotic in the Citycells and for producing of New Yorkproteinaceous products

US5731179 Method for introducing Komari Japan 8 Aug 95 24 Mar 98two T-DNAs into plants et al. Tobacco Inc.and vectors therefor

EP0687730 Method of transforming Komari Japanplant and vector et al. Tobacco Inc. 12 Jun 94 20 Dec 95therefor

WO9516031 Method of transforming Komari Japan 6 Dec 94 15 Jun 95plant and vector et al. Tobacco Inc.therefor

Agrobacterium US5186800 Electroporation of Dower Bio-Rad . 14 Mar 90 16 Feb 93electroporation prokaryotic cells Laboratories,

IncEP0765397 Method for introduction Leer et al. Nederlandse 16 Jun 95 2 Apr 97

of genetic material into Organisatiemicroorganisms and Voor Toegepasttransformants obtainedtherewith

continued...



Agrobacterium WO9535389 Method for introduction Leer et al. Nederlandse 16 Jun 95 28 Dec 95electroporation of genetic material into Organisatie

microorganisms and Voor Toegepasttransformants obtainedtherewith

Transformation US4237224 Process for producing Cohen Stanford 4 Jan 79 2 Dec 80(general) biologically functional and Boyer University

molecular chimeras

Regeneration US5350688 Method for Matsuno Kirin Beer 16 Jun 92 27 Sep 94of rice regeneration of rice and Kaburshiki

plants Ishizaki KaishaWO9419930 Enhanced regeneration Nehra NRC Canada 10-Mar-94 15-Sep-94

system for cereals et al.

continued...

29


7. DNA Amplification Primary Patent Detailstechniques, plant Source Patent no. Title Inventor(s) Assignee Filing Issueregeneration date date

PCR Technique US4683202 Process for amplifying Mullis Cetus 25 Oct 85 28 Jul 87nucleic acid sequences thereafter to

Hoffman-La Roche

US4683195 Process for amplifying, Mullis Cetus 7 Feb 86 28 Jul 87detecting, and /or- et al.cloning nucleic acidsequences

US4965188 Process for amplifying, Mullis Cetus 17 Jun 87 23 Oct 90detecting,and/or et al.cloning acid sequencesusing a thermostableenzyme

EP0509612 Process for amplifying Mullis Hoffman- 27 Mar 86 21 Oct 92and detecting nucleic et al. La Rocheacid sequences

EP0502588 Process for amplifyingnucleic acid sequences Mullis Hoffman- 27-Mar-86 9-Sep-92

La RocheEP0502589 Kit for use in amplifying Mullis Hoffman- 27-Mar-86 9-Sep-92

and detecting nucleic et al. La Rocheacid sequences

Taq polymerase US4889818 Purified thermostable Gelfand Cetusenzyme et al. thereafter 17 Jun 87 26 Dec 89

to Hoffman-La Roche

EP0258017 Purified thermostable Erlich Cetus 21 Aug 87 2 Mar 88enzyme and process et al.for amplifying detecting,and/or cloning nucleicacid sequences usingsaid enzyme

30

4.4 Discussion of Special Cases

Throughout the course of the GoldenRiceTM

product deconstruction, questions arose thatsometimes could not be readily answered. Wediscuss these and address their implicationsin the sub-sections below.

4.4.1 The nptII gene

An examination of the pBin19Hpc expressioncassette reveals that the selectable marker nptIIlies between the LB and RB (left and rightborder regions) of the binary vector. However,during the course of the deconstruction, wecould not rationalize this orientation. Thesource of nptII is pBin19 (see Bevan, 1984),and in this construct it is clearly outside of theLB-RB region. Through communication withPeter Beyer, we ascertained that nptII hadlikely moved to this new location.

Although intriguing as a scientific question,for our purposes its real importance was withinthe context of the IP that might be associatedwith nptII, contingent on its specific locationin the transformation vector. Whereas the nptIIgene should fall outside of the T-DNA region,on the distal side of the plasmid, in pBin19Hpcit is within the T-DNA region. PatentEP0927765, entitled �Method for SelectingTransformed Cells,� states in Claims #8&9 that�A method for producing a rice transformantby a desired gene comprising: a) providing astrain belonging to the genus Agrobacteriumwhich has a plasmid containing aparomomycin (nptII) resistance gene and adesired gene, in the T-DNA region in saidplasmid, in such a way as to allow expressionof each of said genes.� It appears that thelocation of nptII will have significant impacton the likelihood of the product beingcovered under this patent�s claims. Indeed,what first appears as an anomaly or scientificcuriosity can (very rapidly) complicate the IPlandscape of the product.

4.4.2 Method of Plant Transformation

The method by which the precultured,immature rice embryos were transformed usingAgrobacterium is first referenced in Uze et al.,1997. The Uze reference lists two techniquesof transformation: with a woundingpretreatment (biolistic bombardment) orwithout, followed by immersion inAgrobacterium. If the wounding pretreatmenthad been used, patent WO9209696 mayapply, since in the claims it describes �Amethod of transforming, with a DNA, agenome, particularly the nuclear genome ofa monocotyledonous plant.....comprising thesteps of, wounding and/or degrading either anintact tissue of said plant that is capable offorming compact embryogenic sector thereof,obtained from said intact tissue of said plant,so as to render a cell of said intact tissue ofcallus competent with respect to uptake ofsaid DNA, integrative transformation of saidDNA in said plant genome and regeneration.�Additionally, if the biolistic pretreatment hadbeen used, then the array of patents associatedwith microprojectile bombardment of plantsand/or plant tissues would have requiredcareful scrutiny, along with all potentiallyapplicable licenses. However, ProfessorPotrykus informed us that the procedure usedwas osmoticum treatment of 7-10 day old calli(without bombardment).

4.4.3 Overlapping Patent Claims inCarotenoid Biosynthetic OptionGenes

The interpretation of claims in patents dealingwith the genes and enzymes in the carotenoidbiosynthetic option(s) can be extraordinarilycomplex, with certain patents having claimsthat appear to cover multiple enzymes/genesin the option. The homologous carotenoidbiosynthesis gene clusters found in Erwiniauredovora (Kirin) and Erwinia herbicola(Amoco) are examples. There appear to be

31

overlapping patent claims with several of thepatents we have listed in Table 1. For example,· US5589581 has claims apparently

covering the genes encoding zeaxanthinglycosylase, lycopene cyclase, phytoenedehydrogenase, and phytoene synthase.

· WO9113078 has claims apparentlycovering genes encoding geranylgeranylpyrophosphate synthase, phytoenesynthase, lycopene cyclase, and others.

· US5429939 has claims apparentlycovering genes encoding enzymes forphytoene synthase, phytoenedehydrogenase, lycopene cyclase, andothers.

From a practical standpoint, the patents listedon Table 1 dealing with the three carotenoidbiosynthetic genes in GoldenRice� shouldnot necessarily be considered as mutuallyexclusive in terms of their claims. Thepossibility of substantial overlap is quite likely.

4.4.4 Interpreting Patent Claims: FromGreater to Lesser Uncertainty

Reviewing potentially applicable patents, anddetermining whether their claims might applyto the GoldenRice� product is not a simple�yes or no� situation. Rather, it is a process ofdecreasing levels of uncertainty, andappropriate judgment is necessary. As anexample, we can consider four patents dealingwith genes in the carotenoid biosyntheticoption.· US5744341(not listed in Table 1) is highly

unlikely to be attached to theGoldenRice� product. Its claimsspecifically relate to genes for the enzymesepsilon cyclase, isopentenylpyrophosphate isomerase, and beta-carotene hydroxylase; these genes havenot been used in the production ofGoldenRice�.

· US5656472 is somewhat likely to beattached to the GoldenRice� product andrequires more careful evaluation. This

patent describes a gene for lycopenecyclase, which is associated withGoldenRice�. The claims call for 80%identity with said gene, as well ashybridization under high stringencyconditions (Southern blot). To determinewhat the relationship is between the genein question and the patent claim wouldinvolve some laboratory experiments.

· WO9955888 is more likely to be attachedto the GoldenRice� product. This patentdeals with a carotene desaturase. Theclaims are broadly written, (e.g., claim #2,�an isolated nucleic acid fragment that issubstantially similar to an isolated nucleicacid fragment encoding all or a substantialportion of (a zeta carotene desaturase).�

· WO9907867 is highly likely to beconnected to the GoldenRice� productand deserves special attention. The claimsare broadly and skillfully written, such thatany transformation process of a plant seedwith a gene from the carotenoidbiosynthetic option leading to an alterationof xanthophyll levels is likely to becovered. In the case of GoldenRice�,accumulation of zeaxanthin (axanthophyll) was detected in thepBin19hpc transformants.

4.4.5 Pea Rubisco Small SubunitTransit Peptide

The transit peptide was obtained from acompany, with a letter specifying restrictionson use attached. However, this situation isfurther complicated, since that company hadoriginally obtained the transit peptide from JeffSchell, who is a co-inventor on the patentsUS5717084 and US5728925; the assignee isPlant Genetic Systems N.V. These patentsappear to substantially cover the use of thetransit peptide. The question that needs to besorted out, particularly in terms of tangibleproperty under what conditions that companyacquired the gene from Plant Genetic Systems(now AVENTIS).

32

5. IP Management Implications

5.1 Introduction

The development of GoldenRice�, atransgenic japonica rice with elevated levelsof pro-Vitamin A producing beta carotene, hasgained a great deal of worldwide mediaattention. It has been proposed as a way toreduce blindness and its related sufferingwhich results from Vitamin A deficiency.Further, as a transgenic food, GoldenRice�is seen as the agri-biotech industry�s �posterchild� and�by donating the IP and TPcomponents�a tangible way for the industryto show their concern for humankind. Wideavailability of GoldenRice� would, it isargued, focus attention on the societal goodof plant biotechnology. It is a tangible exampleof the benefits which biotechnology hasalready brought to humanity through thepharmaceutical industry in which virtually allnew drug releases are produced usingessentially the same kinds of biotech processesand components that were used to produceGoldenRice�. Biotech food has been plaguedby detractors, particularly in Europe, whosescientifically unsound arguments belie ahidden agenda that is more anti-corporate thanpro-environment, as is so loudly proclaimed.

In spite of these distractions from Europe andelsewhere, there is broad agreement amongthe leadership of most developing andtransitional countries, that appropriate IP rightsprotection is necessary to entice investmentin their economy, provide additionalemployment for their citizens, and producehard currency through the export of high techproducts. These leaders recognize that theenforcement of IP related laws protect not onlythe innovations and discoveries of foreigninvestors, but also protect the increasinglyoccurring discoveries of their own scientists,engineers, and entrepreneurs. In this way thecountries get closer towards obtaining the foodsecurity and technological standard of living

that is common in the industrialized world.Although skeptics reject such developmentefforts as being �neo-colonial�, few will denythat food biotechnology products have atremendous potential to decrease hunger andsuffering, increase food security, and reducemany of the negative environmental impactsof modern agricultural practices.

Given all of these benefits that GoldenRice�can potentially produce, questioning thelegitimacy of the IP and TP rights issues relatedto its discovery and dissemination may beconsidered a questionable activity. Yet suchquestions must be asked. The questionsbehind this study involve what IP and TP rightslimitations, if any, stand in the way of the broaddistribution of GoldenRice� to the world�sresource-poor who can benefit most. Further,once such questions are identified, articulated,and catalogued it must be asked how suchobstacles can be overcome.

5.2 Potentially Applicable Patents (or IP) to the Current Form ofGolden RiceTM

Patents grant only �negative� rights. That is, apatent holder can prevent others, for aspecified period of time (typically 12 � 20years, depending upon a country�s patentlaws), from making, using, exporting or sellingitems infringing the issued claims of his/herpatent. Of course the patent holder, throughlicense or assignment, can grant permissionto others to function under their issued patentclaims.

TP rights are established under a country�s lawsgoverning personal property and contracts.These rights too, are enforced on a country-by-country basis. However, unlike IP rights,personal property (and most aspects ofcontract law) rights are much more uniformlyacknowledged and enforced around the

33

world, even in countries which do not haveenforceable IP laws. Further, such rightsseldom have a time limitations on theirenjoyment or enforcement.

Trademarks are claimed on a country-by-country basis. Like other personal propertyrights trademarks seldom have a timelimitation on their enforcement.

Domain names, a new sort of right that hasdeveloped with the advent of the World WideWeb (�WWW�), require re-registration fromtime-to-time. Such re-registration, with a minorfee, maintains worldwide exclusivity of aparticular domain name. Adjudication ofalleged domain name violations are similar tothat of other personal property rights.

The present study identified between zero and40 plus patents applying to the productdepending on the country where the currentform of GoldenRice� would be used (for atotal of approx. 70 patents applying acrossdifferent countries). It must be clearly statedthat, because patents are countryspecific, not all 70 patents apply to allof the major rice producing, exporting,importing and consuming countries.Further, many of the developing andtransitional countries for whichGoldenRice� will have the greatestpositive impact, have the fewest patents.

Widespread distribution of the product wouldrequire licenses from zero to a dozen or soentities for the IP components, plusagreements from another dozen entities for theTP transfer and use. In addition to the patentedmaterials, processes, and reagents that theinventors used, certain trademark related issuesmay need to be addressed as GoldenRice�is widely distributed. All in all, the widespreadrelease of the current version of GoldenRice�would require significant licensing activity ifit is to legitimately become available to theworld, either commercially or for humanitarianpurposes.

Until recently, individuals and firms from theindustrialized world typically withheldpatenting in developing countries. Thedeveloping countries thereby were deniedaccess to the latest technologicaladvancements, except in some cases asmarkets for such new products. In more recentyears however, to induce the introduction oftechnologically advanced manufacturing intodeveloping countries with their abundantsupply of qualified yet inexpensive labor,many developing countries have signed theWTO/TRIPS agreements. These internationalagreements require the signatories to establishand maintain a prescribed level of IP rightsprotection. Thus, with the rise of a more globaleconomy, technologically advanced productssuch as GoldenRice� may be produced,distributed and consumed on a worldwidebasis. Therefore, the effects of IP and TP rightsmatters must be considered on a more globalscale than was previously necessary.

Table 4 lists the number of patents that mightbe applying on a country per country basisfor the 15 top rice producing, exporting andimporting countries. For example in China,the world�s leading rice producer, there areonly 11 patents that apply to the current formof GoldenRice� analyzed in this report. InThailand and in Iran, the world�s leading riceexporter and rice importer, respectively, nopatents have been identified as currentlyimpinging upon GoldenRice�. India, secondin world rice production, has 5 patentscovering the studied versions of GoldenRice�while rice producers in Vietnam, the world�ssecond biggest exporter of rice, would requirelicenses to nine patents in order to obtainfreedom-to-operate. Grain importers to Brazil,the world�s second biggest importer of rice,would require licenses to 10 patents in orderto obtain full freedom under known IP rightsto import GoldenRice� into this SouthAmerican country.

34

Table 4: Major Rice Producing, Exporting and Importing Countries (FAO 1997) and the Number ofApplicable Patents to GoldenRiceTM in its Current Form

ProductionCountry Million MT % of World No. of PatentsChina 198.47 34.6 11India 123.01 21.5 5Indonesia 50.63 8.8 6Bangladesh 28.18 4.9 0Vietnam 26.40 4.6 9Thailand 21.28 3.7 0Myanmar 18.90 3.3 0Japan 12.53 2.2 21Philippines 11.27 2.0 1Brazil 9.33 1.6 10USA 8.12 1.4 44South Korea 7.10 1.2 10Pakistan 6.55 1.1 0Egypt 5.59 1.0 0Nepal 3.71 0.6 0Total World 573.30 100.0

ExportThailand 3.24 17.9 0Vietnam 3.00 16.6 9USA 2.30 12.7 44India 2.13 11.8 5Pakistan 1.77 9.8 0China 1.01 5.6 11Uruguay 0.65 3.6 0Australia 0.65 3.6 15Italy 0.63 3.5 29Argentina 0.54 3.0 0Guyana 0.29 1.6 0Spain 0.27 1.5 27Egypt 0.20 1.1 0UAE 0.18 1.0 4Benelux 0.14 0.8 34Total World 18.10 100.0

ImportIran 0.97 5.2 0Brazil 0.82 4.4 10Nigeria 0.73 3.9 0Philippines 0.72 3.9 1Iraq 0.68 3.7 0Saudi Arabia 0.67 3.6 0Malaysia 0.64 3.4 0South Africa 0.59 3.2 5Japan 0.57 3.1 21Cote D�Ivoire 0.47 2.5 10Senegal 0.40 2.2 10UK 0.39 2.1 35France 0.37 2.0 37Indonesia 0.35 1.9 6United States 0.36 1.9 44Total World 18.60 100.0

Note: Appendix A provides a list of the designated patent numbers that may apply in each of the countries listed in this table.

35

The above always supposes that the TP issueshave been resolved with the Table 4 onlyaddressing IP rights, which can vary widelyfrom country to country. TP rights that arerelated to this version of GoldenRice� maybe more uniformly applied across allcountries, whether the country is consideredto be developing, transitional or industrialized.

5.3 Product vs. Process vs. UseClaims 4

Depending on the country in which one files,patent claims may be granted for differentkinds and levels of inventions. The categoriesof granted claims most applicable to this studyare:· Products per se (covering any yet-to-be

determined use of an invention andproduct)

· Product-by-process· Uses· Processes

These categories of claims are not specificallyidentified as such, only a thorough readingwill indicate the distinctions between them.

Claims may be worded to cover product perse, products-by- process or uses. However, thefourth category of claims listed above is ofparticular importance here because whereas�product per se�, �product-by-process� and�use� claims generally extend to the productsthat embed the new discoveries, �process�claims or claims for the claimed technicalprocedures do not extend to the products thatare produced by the claimed processes. Whatis of great important for �process� claims is thelocation where (i.e. in which country) theprocess is applied.

For clarity, the three examples below illustrateclaims on Product, Process, and Product/Process patents, in terms of their claimstructures:

· Product: US5589581, �DNA sequencesuseful for the synthesis of carotenoids�,claims stipulate isolated and purified DNAswhich encode enzymes involved in thebiosynthesis of several carotenoids.

· Process: EP0604662, �Method oftransforming monocotyledon�, claimsstipulate methods, and details thereof, foragrobacterium-mediated transformation ofmonocotyledons (including rice).

· Product/Process: WO9419930,�Enhanced regeneration system�, claimsstipulate both the methods for theregeneration of cereal plants, as well as thetransgenic cereal plants (including rice)produced in the process.

In the case of GoldenRice�, much of the workwas done in Switzerland. As a consequence,for any �process� claims a license for suchclaimed processes is required if the claims tothe processes are issued in Switzerland.

However, if the product had been made in acountry where those �process� claims havenot issued, then a license for such claimedprocesses would not be required. This is thecrux of this matter. If a product is produced ina country using process X and process X isnot patented in that country, then the exportof the product so produced using process Xto another country where process X ispatented does not require a license for processX. The reason is that the product wasproduced in a country where process X wasnot patented and because process patents donot extend to the products that are producedby the process. The country where the processis applied is the determining factor.

In contrast, �product per se� claims extend toany form of the claimed product. A scenariothat illustrates this would be this.

Suppose that a researcher in country Mtransforms a plant with gene G, in a country

4 See also Lesser (1991) for an concise discussion on issues and approaches on patent protection in the developing world.

36

where the gene G is not patented. Once thetransformed product is exported to anothercountry, say country N, where a patentclaiming gene G has issued, a license for thetransformed plant and any product using orcontaining the transformed plant that containsgene G in country N would likely be required,irrespective of where the transformation workhad been done.

Some of the patent claims applicable toGoldenRice� cover processes. The primaryones are listed in Table 5. Of the total patentsidentified, 26 seem to contain process claims.Other of the patents (not listed in Table 5) hasclaim structures which are a mix of processclaims and product per se claims. InSwitzerland, where much of the originalGoldenRice� research was done, only the first12 patents listed in Table 5 have issued. As aconsequence, someone developing aGoldenRice� product in Switzerland wouldrequire licenses under these 12 patents butnot under the remainder of the patents listedin Table 5.

Similarly, a researcher who obtainedGoldenRice� that had been transformed inSwitzerland for use in a country where noneof the process claims of the 12 patents wereissued would not require a license under anyof the 12 patents.

Whereas sorting out the types of patents andtypes of licenses that may be required appearsa complex task, �process� patents at leastsimplify the IP landscape in many situationsand countries.5

5.4 The Important Distinction betweenIP and TP

Although we have discussed at several loca-tions in this document the distinction betweenIP and TP rights, it is worth reviewing brieflythe practical implications. Scientists have tra-ditionally exchanged materials among them-selves for research purposes and this systemhas served the scientific community very well.Such exchanges are often formalized throughmaterial transfer agreements (MTA) that stipu-late the conditions by which materials are pro-vided to a third party (including matters onconfidentiality, under what conditions, if any,the material may be transferred to anotherparty, what happens if an invention takesplace based on work with the material, etc.).What is often ignored is that such transferredmaterial (which is the subject of TechnicalProperty or TP) may contain intellectual prop-erty (IP) of others and that MTAs typically donot provide the recipient with rights to usesuch IP. Similarly, even if the right for using IP

Table 5. Patents containing essentiallyProcess Claims

US4683195US4683202US4766072US4889818US4965188US5128256US5186800US5188957US5286636US5350688US5591616US5731179WO8805085

EP0258017EP0286200EP0502588EP0502589EP0509612EP0604662EP0672752EP0687730EP0765397WO9209696WO9516031 WO9535389US4237224

5 It should be noted, however, that a bill which has been in the US Senate for several years calls for a change in this system.Should the bill pass, any product imported into the USA and produced abroad by a process patent granted in the USA wouldrequire a license.

37

embedded in the transferred material has beengranted through licenses, such licenses do nota priori provide authorization to use the ma-terial (or TP) which was originally transferred.

Suppose researcher X constructs a vector withthe following components:a. a synthetic gene constructed in his/her

laboratory (and files a patent application)b. the 35S promoter (owned by Monsanto

and obtained through an MTA fromMonsanto for research purposes only)

c. a plasmid which is in the public domain.

Researcher X now transfers that construct toanother researcher, Y, with an MTA forresearch purposes only. If researcher Y thenwishes to use a product containing theconstruct, the following agreements may benecessary:· A license from researcher X for use of the

synthetic gene (TP) and any related patentsthat may have been granted (IP) as specifiedin �a� above.

· A license from Monsanto for use of the 35Spromoter

· A license from researcher X for use of theplasmid (TP). Note that despite the fact thatthe plasmid is in the public domain,researcher Y obtained it under an MTAand therefore requires a license to use thatTP.

As a consequence, resolving the IP and TPissues becomes often much more complexthan originally envisaged, particularly if MTAsare involved. These MTAs are often preparedwithout consideration for what happens whenresearch leads to a developed product. MTAsare straightforward and provide an easy wayto access TP and advance research. Yet thateasy route often complicates life further downthe road. It should not be concluded that MTAs

are therefore to be avoided, quite on thecontrary, but the practical implications ofMTAs are often misunderstood.

5.5 IP Management Options orStrategies

Many, perhaps most, people agree with thehumanitarian objective of makingGoldenRice� available to resource-poorfarmers and rice consumers within developingcountries. The present preliminary FTOanalysis was conducted to better understandthe current situation so that options andalternative future strategies might be discussedand developed. Yet the alternative optionsmay be obscured by the desire to achieve thevalued end. This end is always very straightforward, whether it is a private entity or apublic/non-profit entity that pursues it, namelyproviding farmers with a superior product. Thetypical difference between a public and aprivate entity is that the private entity needs toshare in the benefits, but both must providesuperior products in order to survive. Evidently,the way products are disseminated by the twoentities will vary also. Hence the IPmanagement options and strategies of mostprivate entities will be different to those ofpublic entities.

Table 6 lists the broad ranges of strategicoptions that are available to any type of entity,public or private. The options tackle the FTOissue from different perspectives and arediscussed in the sub-sections below. Note thatour discussion of possible alternative strategieswill not address all the issues that may arisefrom the commercialization of GoldenRice�;we are focusing our discussion specifically tooptions on how to possibly overcomeobstacles related to making GoldenRice�available to resource-poor farmers.

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Table 6. Alternative and/or Complementary IP/TP Management Options to Obtaining Freedom-to-Operatefor GoldenRice�

Title Emphasis Description Pros Cons1. Invent Science and Research alternative ways · Less reliance on · Time consumingaround research based to develop pro-Vitamin A patents owned · Costly researchcurrent approach rice, generating new by others · May not be feasiblepatents inventions

2. Re-design Product Re-design each · Normally re-design · May require a fewconstructs development construct to reduce number is necessary after additional years for

based approach of applicable patents, successful research product to be deve-whenever possible synthesize demonstration loped (which in anyown genes to reduce reliance · Effective way to case may be unavoid-on TP of others reduce IP issues able from a scientific

point of view)

3. IP/TP Humanitarian All FTO issues for all · Some companies A royalty-free licenseOwners to approach GoldenRice� related (e.g. Zeneca and may still need to beRelinquish focused on activities, commercial or Monsanto) already negotiated, not leastClaims public perception otherwise, are eliminated publicly declared for liability/indemnity

through public (or private) that they will make reasonsstatements and related their technologiesactivities by the certified available forowners/assignees of each set GoldenRice�of IP/TP rights for making, · Greatly simplifieshaving made, using, having licensing negotiationsused, importing, exporting,selling, and having sold allGoldenRice� plants, plant parts,and all related productsand processes.

4. Ignore Short term All FTO issues for all · Lowest cost in the · Once product deployedall IP and TP perspective GoldenRice� related short term lawsuits may ensue

activities, commercial or · Potential future delayotherwise, are ignored, and of product distributionresearch and product · Difficult relations withdevelopment as well as plans IP ownersfor general distribution proceed.

continued...

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Table 6 continued. Alternative and/or Complementary IP/TP Management Options to Obtaining Freedom-to-Operate for GoldenRice�

Title Emphasis Description Pros Cons5. Seek Licensing All FTO issues are resolved · Safest route · ComplexLicenses for approach by the process of any leading to · Time consumingall IP and TP party (individually or through the distribution

consortia) acquiring an of GoldenRice�appropriate (commercial · Ensures goodor other) license from relations with IP the certified owners/ holders for futureassignees for each set development of productsof IP/TP rights for theGoldenRice� relatedactivities that are of interest tothe licensee. This license maybe commercial in nature(a grant to make, have made,use, have used, import, export,sell, or have sold allGoldenRice� plants and plantparts and all related productsand processes) or a morerestrictive one as the licenseeand licensor mutually determineto be required.

6. Mix of all Pragmatic, While research and · Effective route · Relatively complexOptions realistic development plans are leading to · Relatively time(1 to 5) made to optimize the the distribution of consuming

product, re-design of GoldenRice�constructs and acquisition · Taking advantage of allon TP is planned to available optionsminimize IP and TP conflicts · Ensures good relations(OPTION 2); selected FTO with IP holders forissues are removed through future developmentpublic (or private) rescinding of productsof rights by selected holdersof certain IP/TP rights(OPTION 3); this �moralhigh ground� is used toleverage additional rightsholders to either rescind theirclaims (OPTION 3) or toreduce their demands withinthe context of licensenegotiations (OPTION 5).In the end all remainingunrescinded IP/TP rights canbe either licensed (OPTION 5)or ignored (OPTION 4).

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5.5.1 OPTION 1: Invent AroundCurrent Patents

Research on alternative ways to develop pro-Vitamin A rice, generating new inventions.

In certain cases it is possible to invent aroundexisting patents or inventions. Companies, forexample, will typically evaluate at the outsetwhether it is advantageous to invest in researchto circumvent other corporations� patents orto license technologies from such competitors.

In the case of public entities, the equation ofthe benefits and risks is very different. Quiteoften, they do not have the same critical massin research nor do they necessarily have thefreedom to allocate resources to inventaround existing claims. In addition, in the caseof GoldenRice�, it would significantly delaythe benefits to poor farmers even if inventingaround were possible. Hence this is not arealistic option in this case for public entitiesand NARS.

5.5.2 OPTION 2: Re-design Constructs

Re-design each construct to reduce numberof applicable patents, whenever possiblesynthesize own genes to reduce reliance onTP of others

The GoldenRice� as announced by Potrykus/Beyer in recent months is primarily the productof basic research. Quite naturally, suchresearch products are rarely ready forcommercialization or widespread distributionalthough the proof of concept has beendemonstrated in a few selected plants. Inpractical terms, genes may have to beoptimized or new constructs made withdifferent promoters or selectable markers. Itcan reasonably be expected that the samewould be true for the current version ofGoldenRice�. As a consequence, this studyshould provide the scientists and researchmanagers with some of the information neededto design the constructs in such a way as to

reduce the number of applicable patents (orIP).

Re-design of constructs would also go a longway towards reducing or even eliminating theTP complexities since many genes can besynthesized commercially at low costs andpublic plasmids can be used without majorcontractual limitations.

Re-designing the production of GoldenRice�for scientific reasons may be the most feasibleoption available to deliver a high qualityproduct to resource poor farmers. Further, itmay also be the best complementary optionto reduce the IP and particularly the TPcomplexity (see also Section 6.1.2 below forfurther discussion) of such a re-designedproduct.

5.5.3 OPTION 3: IP/TP Owners toRelinquish Claims

All FTO issues for all GoldenRice� relatedactivities, commercial or otherwise, areeliminated through public (or private)statements and related activities by the certifiedowners/assignees of each set of IP/TP rightsfor making, having made, using, having used,importing, exporting, selling, and having soldall GoldenRice� plants, plant parts, and allrelated products and processes.

With this option, the IP/TP rights holdersrescind all of their rights for all components ofGoldenRice�. Then any entity involved withGoldenRice� would essentially be freed fromall IP and TP related obligations. It may notnecessarily mean that entities wishing todistribute and use GoldenRice� would nothave to enter into a royalty-free licensingagreement with the owners of IP and TP sincesuch owners typically would want to ensurethat they do not bear any liabilities with aproduct developed by third parties and forwhich they, the technology donor, do notreceive any royalties.

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This matter is dealt with through indemnityclauses by which the recipient agrees to holdthe donor harmless of any liabilities that mightflow from making, using or selling the productsdeveloped by the recipient. Commerciallicenses, whether royalty-free or not, generallyinclude indemnity clauses. No entityknowingly wishes to allow another entity todevelop a product and then be held liable forthe product for which the entity had no controlover. This is especially true in cases where atechnology is given free of charge.

There may, however, be a significant time andresource expenditure required to determinewhich IP and TP rights are to be rescinded, toauthoritatively determine who the IP/TP rightsowners/assignees are, under what conditions,if any, the IP/TP rights owners/assignees willrescind their respective rights, and to conductthe negotiations that may be necessary for allrescission to take place. Moreover, there wouldbe a need to compile and manage informationrelating to obtaining FTO in this manner.Because IP/TP rights are accrued on acountry-by-country basis, such informationmanagement is no small matter and wouldhave to be addressed on an on-going basis.

This option is appealing, but entities still facethe challenge of significant FTO managementrequirements and solving liability/indemnityissues.

5.5.4 OPTION 4: Ignore all IP and TP

All FTO issues for all GoldenRice� relatedactivities, commercial or otherwise, areignored, and research and productdevelopment as well as plans for generaldistribution proceed.

On this option, the entities involved in thedevelopment and distribution ofGoldenRice� would ignore the claims of allowners/assignees of each set of IP/TP rightsfor all GoldenRice� related activities.

This option may accrue risks from both patent-related (IP) and private property-rights (TP)owners/assignees who would feel slighted.Such risks may vary widely according to thedegree of enforcement that the IP/TP rightsowners/assignees find within each countrywhere they claim IP/TP rights and to thewillingness of such owner/assignees to invokeaction against potential infringers.

This option has a significant appeal to anumber of entities, not least because of itsperceived ability to partially equalize theresources and power differences between thedeveloping and industrialized portions of theworld. However, this option is likely to createa negative attitude among the holders ofvarious IP/TP rights when advocates for theresource-poor seek to obtain additionalbiotechnology components in the future.

This option eliminates all need to ascertainwho are the IP/TP rights owners/assignees butit flies in the face of current internationaltreaties signed by the majority of developingcountries and widely accepted national lawsin virtually every country of the world.

Another potentially more significant downsidewith this approach is its potential impact onfuture negotiations with those ignored IP/TPrights owners/assignees. Future collaborationand donations would most likely becomeimpossible under such a climate. It should benoted here that in addition to obtainingfreedom to use a certain technology ownedby the entity owing a patent, licensingagreements generally also allow for the transferof know-how and trade secrets which may bevery valuable in order to ensure high qualityproducts and faster or more efficient and lesscostly product development.

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5.5.5 OPTION 5: Seek Licenses for allIP and TP

All FTO issues are resolved by the process ofsome party (individually or through consortia)acquiring an appropriate (commercial orother) license from the certified owners/assignees for each set of IP/TP rights for theGoldenRice� related activities that are ofinterest to the licensee. This license may becommercial in nature (a grant to make, havemade, use, have used, import, export, sell, orhave sold all GoldenRice� plants and plantparts and all related products and processes)or a more restrictive one as the licensee andlicensor mutually determine to be required.

This option appears at first glance to be a littledesired option. Indeed, in the short term it maybe so. It requires an overall IP/TP rightsmanagement strategy that parallels thescientific research and product developmenteffort for GoldenRice�. It requires that someentity definitively determine all IP/TP rightsowners/assignees, draft and negotiateappropriate license agreements, report andtrack the appropriate changes in the IP/TPrights landscape over time, and confirm to thevarious licensees all of these variables.

As a practical matter of license negotiation,adopting this strategy may segment the variouslicensees into different categories. Suchsegmentation would likely be according to thelevel of the licensee�s needs, with moregenerous license terms being offered to thepoorest. Such segmentation might also resultfrom the licensors� business plans, thelicensee�s level of capacity in IP/TPmanagement, issues of domestic production/consumption vs. desire to export, regulatoryissues of biosafety/food safety, bans on thetransfer of certain technologies from onecountry to another (ex. Pre-1996 US ban onexporting technologies to Vietnam), andgeneral IP/TP management capacity andresources.

License segmentation raises other questionsabout equity, compliance and enforcement,cultural and historical values, germplasmorigin, and product development resourceinvestment, to name only a few. Furthermore,questions about the rights and values to beexchanged between licensor and licensee areprofound and far-reaching. There is no cleartemplate readily available.

As mentioned above, this option may appearthe least appealing, at least in the short term,because of the resources required to answerall the questions and manage the issues of IP/TP FTO. However, it has the appeal of beingthe most effective in terms of a model forcapacity building among the licensees, a setof skills that such licensees will undoubtedlyneed in future negotiations, particularly if theywish to export higher value foodbiotechnology products.

Finally, this option is appealing in that insteadof creating a negative attitude, it builds bondsof trust between the licensors and the licens-ees. This is an important issue since it also al-lows the transfer of know-how related to cer-tain IP, including trade secrets, which couldbe instrumental in the efficient developmentof products for resource-poor farmers. Inimplementing this strategy, the same bonds oftrust will hold licensor and licensee togetherduring future aspects of the development ofGoldenRice�, which will empower futurenegotiations between the parties and may ex-tend to other technologies.

5.5.6 OPTION 6: Mix of all Options(1 to 5)

While research and development plans aremade to optimize the product, re-design ofconstructs and acquisition on TP is plannedto minimize IP and TP conflicts (OPTION 2);selected FTO issues are removed throughpublic (or private) rescinding of rights byselected holders of certain IP/TP rights

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(OPTION 3); this �moral high ground� is usedto leverage additional rights holders to eitherrescind their claims (OPTION 3) or to reducetheir demands within the context of licensenegotiations (OPTION 5). In the end allremaining unrescinded IP/TP rights can beeither licensed (OPTION 5) or ignored(OPTION 4).

This option contains components of each ofthe above (except the first Option [inventingaround inventions]). It still requires significantresource expenditures to document andmanage each IP/TP component. Furthermore,many questions arise similar to those indicatedin Option 5.

As noted above, separating commerciallylicensed activities from other activitiesinvolving GoldenRice� may establishadditional variants on each of these fouroptions. However, this document is directedprimarily toward obtaining access toGoldenRice� for resource-poor farmers/consumers, not toward commercial licensing.

Considering each of these options, a strongargument can be made to manage FTO in amanner similar to the management of thetechnological research and productdevelopment that is making GoldenRice� areality.

5.6 Practical Considerations onWhere the Final Product isDeveloped

Sections 5.3 and 5.4 discussed the productand process patents and the distinctionbetween IP and TP. This section will discussthe practical implications of these differencesbased on a hypothetical example.

Suppose an entity in Vietnam wishes todevelop GoldenRice� for farmers in Vietnamwith further transfer to Pakistan. Vietnameseand Pakistani farmers would be growing theGoldenRice�. Vietnam would also export theGoldenRice� to the Philippines. A riceresearcher in Vietnam, therefore, hasessentially three options for managing the IPof GoldenRice�, namely:

Option A: Re-making of GoldenRice� inVietnam by producing entirely newconstructsA rice researcher in Vietnam isolates the samekey carotenoid biosynthetic genes as used byPotrykus and Beyer, remakes all of the geneconstructs and components of GoldenRice�,reassembles the same transformation vectorsand systems, and essentially produce her/hisown version of GoldenRice� that is identicalto the Potrykus�Beyer version.· Currently, such a product would have 9

patents (or IP) impinging upon it inVietnam.

· The distribution of such re-madeGoldenRice� to Pakistan would not posea problem since no patents on such aproduct are issued in Pakistan.

· Export of the product to the Philippinesmight require the license under 1 patent6 .

· If no TP from other sources is used thenthe researcher would not have to seeklicensing agreements for TP rights.

Option B: Re-making of GoldenRice� inVietnam by extracting the relevant genesfrom the Potrykus�Beyer GoldenRice�A rice researcher in Vietnam removes the keycarotenoid biosynthetic genes from thePotrykus�Beyer GoldenRice� constructs andre-clones these for the purpose of re-makinghis/her own version of GoldenRice�.

6 The patent issued in the Philippines does, technically speaking, not extend to the Potrykus/Beyer product because strictlyspeaking it covers only a protoplast-based method of rice transformation.

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· Currently, such a re-made product wouldhave 9 patents (or IP) rights attached to itin Vietnam.

· The distribution of such a re-madeGoldenRice� to Pakistan would not posea problem since no applicable patents areissued in Pakistan.

· Export of the product to the Philippinesmight require the license for 1 patent.

· The most important obstacle, however,would be the TP rights associated with thePotrykus�Beyer GoldenRice� whichwould still require an agreement from theTP rights owners.

· In the future event that the Potrykus-BeyerGoldenRice� patents issue in Vietnam,Pakistan, or in the Philippines, dependingon the specific issued claims, licensesunder that patent may also be required.

Option C: Acquire the Potrykus/BeyerGoldenRice�A rice researcher in Vietnam, using traditionalbreeding methods, crosses the Potrykus�Beyertransformed japonica GoldenRice� withselected indica rice varieties in order to transferthe beta-carotene trait into more desirablecultivars.· The transfer of GoldenRice� from ETH

Zurich to the entity in Vietnam would likely

be done under a MTA for the TPembedded in the transferred material.Such a MTA would dictate any limitationson the TP which ETH Zurich would wishto impose on the Vietnamese entity.

· Currently, that re-made product wouldhave 9 patents (or IP) rights impingingupon it in Vietnam.

· The distribution of such re-madeGoldenRice� to Pakistan would likely notpose a problem since no patents on thecurrent Potrykus-Beyer version ofGoldenRice� have issued in Pakistan.

· Export of the product to the Philippinesmight require the license for 1 patent. ThePhilippine entity, depending on the termsof the MTA, may also be required tonegotiate a license with the TP owners.

If, under any of the three situations describedabove, either the Potrykus�BeyerGoldenRice� patent or other patents that areapplicable to GoldenRice� and/or itscomponents or embodiments, are filed andissued in Vietnam, the Philippines or Pakistan,then the IP landscape significantly changes.Monitoring of the IP landscape and newlyissued patents would be done by regular FTOupdates by the IP/TP manager.

6. Conclusions: Implementing IP/TP Management Systems

There are many challenges regarding FTO forGoldenRice� at both the country andinternational levels because:1. The technology is quite complex,

comprising of many sophisticatedcomponents and processes.

2. There are many potential IP/TP owners/assignees.

3. The range of potential producers/consumers of GoldenRice� is widelyvaried.

4. There exists a rapidly evolving global IPlandscape.

5. TP rights in plant biotechnology, while notas widely understood as IP rights, are verybroadly accepted and generally enforcedon a worldwide basis.

6. GoldenRice� may have significant valuein the world commodity market.

The FTO issues for commercial activities andfor humanitarian activities are nearly identical,although the solutions may vary.

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6.1 Major Options on the Managementof IP associated withGolden Rice™

These FTO challenges can be understood byreviewing some background information andby studying several alternative optionsforward. One immediate issue, for example,concerns the appropriate type of license thatshould be sought for resource-poor farmers/consumers. This example also allows theexamination of some of the alternatives thatare available to those entities that wish to seeGoldenRice� broadly distributed.

Note that no clear, legal, internationallyaccepted definition of the term �non-commercial license� exists. That term hascrept into discussions regardingGoldenRice� but it is not universally defined.On the other hand, a �commercial license�for IP rights is broadly accepted to mean a grantof rights under the objects, designs, ortechnologies claimed in the issued patent thatis being licensed. Such commercial licensesoften use the language of patent law, aspromulgated in many countries, by grantinga right ��to make, use, import, or sell�.� allclaimed products or processes. Increasingly,the granting language in many commercialbiotech seed and/or plant licenses has beenexpanded beyond mere patent law languageto include a broader grant under both the IPand TP rights. This expanded language forsuch licenses grants the licensee rights ��tomake, have made, use, have used, import,export, sell or have sold all plants, plant partsand all related products and processes....�under the defined technology. AGoldenRice� commercial license wouldlikely contain such expansive language. Anyother sort of license might or might not containsuch language.

The question then arises, �Is a commerciallicense the most appropriate way to deliver

GoldenRice� to resource-poor farmers/consumers in developing countries?�, even ifgranted royalty-free (which would beequivalent to a donation free-of-charge). It isnot the purpose of this study to answerquestions regarding the particular licensinglanguage that the parties may prefer. However,it is important to raise these questions so thatlicensee and licensor can properly discusssuch issues.

Regardless of which option discussed aboveor which scenario is chosen, there are a seriesof tasks that should be completed in order toadequately manage the IP/TP rights on anyGoldenRice� product:1. Complete and regularly update the present

FTO analysis.2. Develop a scientific strategic plan (who

manages, what is to be done, whichbiotech and germplasm components areto be used, where is the research is to bedone, who is to do the research, what arethe timelines for completion) for finalizingthe current scientific initiative.

3. Draft and negotiate a strategic plan fordistribution (who manages, what must belicensed, list of licensors/licensees,acceptable terms, timelines) of the finishedproduct(s).

4. Complete a cost/benefit analysis for thepreferred options.

6.1.1 Complete and Regular Updatesto the FTO

This preliminary FTO analysis is based on athorough study of the scientific research (aswas documented to ISAAA) that has beencompleted to date. However, because theresearch and product development regardingGoldenRice� is continuing, and the IPlandscape is dynamic, an annual (at least)update to the present FTO analysis may benecessary.

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6.1.2 Strategic Science Plan

The development of a scientific strategic plan(who manages, what is to be done, whichbiotech and germplasm components are to beused, where is the research to be done, whois to do the research, what are the timelinesfor completion) for finalizing the currentscientific initiative may be under way. Such aplan would include an analysis of thetechnological and IP/TT barriers that couldlimit the successful scientific introduction of afinal product, either within developingcountries for the benefit of resource-poorfarmers/consumers or for commercialpurposes in any part of the world. Also, if andwhen new biotech constructs and/ortransformation events are produced, such aplan would allow the scientists, with a keeneye toward the reduction of FTO barriers aswell as for the normal scientific purposes ofelegance and/or convenience, to re-designcomponents of GoldenRice�.

The elimination of FTO barriers noted heremight include:· Establishing authentic title to all

component parts and using thosecomponents that are more freely available,

· Assuring that signatories to all germaneagreements (material transfer agreements,licenses, sub-licenses, etc.) are empoweredto sign such documents,

· Documenting full compliance with allgermane agreements,

· Determining and documenting that allinventors� employment obligations vis-à-vis all inventions are fulfilled,

· Establishing and maintaining an adequatepaper trail on all aspects of relatedtransactions, and

· Identifying and complying withrequirements that financial donors mayhave imposed when research funding wasobtained.

6.1.3 Strategic Distribution Plan

The development of a strategic plan fordistribution (who manages, what must belicensed, list of licensors/licensees, acceptableterms, timelines) of the finished product(s) may,likewise, be firmly underway. Determiningwhether one or several entities should managethe distribution process may be desirable toachieve economies of scale and efficienciesof operation.

Several alternatives for distribution could be:· Release GoldenRice� on a country-by-

country basis with each recipient countryobtaining all of the licenses that it will needto benefit its rice growers, processors,exporters/importers, and consumers. Thisapproach could be facilitated through aconsortium of research/developmentinstitutions (such as those of the CGIAR).

· Distribute GoldenRice� through aconsortium of regional countries.

· Identify and license a single country perregion and grant that country the right tosub-license its GoldenRice�.

Each of these approaches has merits and somedemerits. A distribution plan will helpdetermine which approach will have thegreatest impact and the highest cost/benefitratio. In any case, whatever licensing strategyis pursued, practical issues regarding licensenegotiations need to be reviewed andanswered:· Which party within a country has both the

authority and the capacity to negotiatewith the licensors? Should there be only asingle licensee within each country?Within each region? Why?

· Should licenses be sought on a country-by-country basis, a regional basis, or insome other manner?

· What is the correct value for a license?How is such value determined? By whom?

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· Should any entity be denied a license?Under what conditions? For how long?

· Should licenses be solely for domesticproduction and consumption?

· Should export, if permitted at all, beallowed only from one developingcountry to other developing country?Should exports to a developed country belicensed in the same way that exports to adeveloped country are treated?

· Should all licenses be commercial withmerely the terms varied? If so, variedaccording to what criterion?

· Should all licensors treat every licensee thesame? Why? Why not?

· What are the alternatives to commerciallicenses?

· What defines a �developing country� ascompared to a �developed country�? Whodetermines the distinction? Is such adistinction permanent?

Raising these questions, of course, does notresolve them. And even answering thesequestions does not provide an exhaustive listof answers to all the potential questions thatmight arise if this option is followed.

This list of questions, however, can serve as achecklist for various entities as they completethe pragmatic working out of licensingGoldenRice�. For example, even thoughthere is likely to be more than one source ofGoldenRice� licenses, all of the samequestions impinge upon the licensingdecisions. Likewise, even thoughGoldenRice� may be transferred under aMTA to a developing country, the issuesembedded in the list above must be addressed.

Finally, whether the licensing of GoldenRice�is done one country (or entity) at a time wheneach rice research/producing/consumingcountry or organization is capable or islicensed to a broker who in turn makesadditional sub-licenses to the appropriateentities, the same concerns must be addressed.

The only significant difference may be one ofefficiencies and economies of scale. However,these and related questions will have to beapproached and answered for any optionfollowed.

6.1.4 Cost/Benefit Analysis

Consideration of aspects of the distributionplan ought to be coupled with a cost/benefitanalysis. Such an analysis considers whatconstitutes appropriate license terms, sufficientregulatory apparatus, and a predictable IP/TPmanagement framework. Which countrieshave such institutions in place and what arethe costs of putting them in place are alsoappropriate questions to ask.

Part of such an analysis would consider notonly the costs, but also the costs to whom. Itshould also analyze the current relationshipthat GoldenRice� recipients have withtechnological components and financialdonors as well as the potential relationshipscreated by distributing GoldenRice�.

6.2 Outlook

It should be noted that the present study wasnot intended to promulgate any particularapproach on how to overcome the IP and TPchallenges that impinge upon GoldenRice�nor to advocate a certain approach to IPmanagement. The objectives were two-fold:a. review the IP and TP components

associated with GoldenRice� asdeveloped by Potrykus-Beyer (withsignificant funding from the RockefellerFoundation)

b. develop and discuss possible alternativestrategies on how to overcome the IP andTP constraints.

It will be for the developing countries whichwish to benefit from GoldenRice� and for theorganizations whose mandate is to assist thesecountries to make choices on the best optionsto follow. The dominating consideration must

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be the impact of GoldenRice� on the healthand well being of rice producing andconsuming populations. These and relatedfactors will condition the speed andconfiguration of the eventual broad release ofGoldenRice�.

Because a preliminary FTO analysis such asthis one and a related version done by a patentattorney is dynamic, it is essential that allstrategic plans be developed in the light of anextensive cost/benefit analysis and an

extensive list of likely options. In this way,GoldenRice� will deliver its benefits to bothresource-poor farmers and consumers indeveloping countries and to commercialfarmers and related entities. It can become aclear example of how the benefits ofgenetically modified products can beextended to both developing and developedcountries. Sound planning and resolution ofthe IP/TT issues will contribute to a timelyrelease of this and future essential productsfor the benefit of all people.

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Acknowledgements

We would like to thank a host of people fortheir willingness to openly share criticalinformation and documentation necessary toconduct this study. In particular, we aregrateful to Ingo Potrykus (Swiss FederalInstitute of Technology, Zurich, Switzerland),Peter Beyer (University of Freiburg, Germany),Xu Dong Ye (Agrecetus, USA), Swapan Datta(IRRI, the Philippines), and William Padolina(IRRI, the Philippines).

We would also like to express our gratitude toTantono Subagyo of Indonesia for hisdedicated help and Maria Jose AmstaldenSampaio (Brazil) for her assistance and diligentcompilation of Figures 1 to 3 while on an IPManagement training internship with ISAAA.Our thanks also go to John Dodds (Dodds &Associates, USA) for providing us with critical

advice and for reviewing the document, toDavid Alvarez for proof reading the finalversion, and to Natalie Campbell and KennaMadigan for their diligent work in making somany editorial changes on the computer.

Finally, we would like to thank GaryToenniessen for critical comments and theRockefeller Foundation for providing the grantto ISAAA that made this study possible.

Whereas we benefited greatly from commentsand advice of the aforementioned colleagues,any errors or omissions are our responsibility.Further, the views expressed in this documentare those of the authors and do not necessarilyreflect the views of the RockefellerFoundation, IRRI or ISAAA.

52

Appendices

Appendix A. List of Major Producing/Importing/Exporting Countries and Designated Patents PotentiallyApplicable in these Countries to GoldenRice�

Country Designated PatentAustralia WO8303259

WO8603776WO9109128WO9209696WO9419930WO9516031WO9535389WO9628014WO9636717WO9806862WO9907867WO9916890WO9955888WO9963055WO9967357

Benelux EP0257472EP0258017EP0265556EP0270822EPO286200EP0471056EP0604662EP0672752EP0687730A1EP0699765A1EP0927765EP502588A2EP509612A2WO8303259WO8402913WO8504889A1WO8603516WO8603776WO9109128W09209696WO9419930WO9516031WO9535389WO9907867WO9113078WO9628014WO9636717WO9806862WO9916890WO9955887WO9955888

Country Designated PatentBenelux EP0257472

WO9955889WO9963055WO9967357

Brazil WO9109128WO9419930WO9806862WO9955887WO9955888WO9955889WO9636717WO9916890WO9963055WO9967357

China WO8603776WO9907867WO9916890WO9419930WO9636717WO9806862WO9955887WO9955888WO9955889WO9963055WO9967357

Cote D�Ivoire WO9209696WO9916890WO9419930WO9806862WO9955887WO9955888WO9955889WO9963055WO9636717WO9967357

France EP0257472EP0258017EP0265556EP0270822EP0286200EP0393690EP0471056EP0604662EP0672752EP0687730A1EP0699765A1EP0765397

continued...

53

Country Designated PatentFrance EP0927765

EP502588A2EP502589A2EP509612A2WO8303259WO8402913WO8504889A1WO8603516WO8603776WO9109128WO9113078W09209696WO9419930WO9516031WO9535389WO9628014WO9636717WO9806862WO9907867WO9916890WO9955887WO9955888WO9955889WO9963055WO9967357

India WO9955887WO9955888WO9955889WO9963055WO9967357

Indonesia WO9916890WO9955887WO9955888WO9955889WO9963055WO9967357

Italy EP0257472EP0258017EP0265556EP0270822EP0286200EP0393690EP0471056EP0604662EP0687730A1EP0699765A1EP0927765EP502588A2

Country Designated PatentItaly EP509612A2

WO8504889A1WO8603516WO8603776WO9113078WO9516031WO9535389WO9628014WO9636717WO9806862WO9907867WO9916890WO9955887WO9955888WO9955889WO9963055WO9967357

Japan JP3058786AJP3091085WO8303259WO8402913WO8504889A1WO8603516WO8603776WO8805085WO9113078WO9209696WO9419930WO9516031WO9628014WO9636717WO9806862WO9916890WO9955887WO9955888WO9955889WO9963055WO9967357

Senegal WO9109128W09209696WO9916890WO9419930WO9806862WO9955887WO9955888WO9955889WO9967357WO9963055

Appendix A continued. List of Major Producing/Importing/Exporting Countries and Designated PatentsPotentially Applicable in these Countries to GoldenRice�

continued...

54

Country Designated PatentSouth Africa WO9955887

WO9955888WO9955889WO9963055WO9967357

South Korea WO9109128WO9209696WO9419930WO9806862WO9955887WO9955888WO9955889WO9963055WO9636717WO9967357

Spain EP0257472EP0258017EP0265556EP0270822EP0286200EP0393690EP0604662EP0672752EP0687730A1EP0699765A1EP0927765WO9109128WO9113078W09209696WO9419930WO9516031WO9535389WO9907867WO9916890WO9955887WO9955888WO9955889WO9628014WO9636717WO9806862WO9963055WO9967357

UAE WO9955887WO9955888WO9955889WO9963055

UK EP0257472EP0258017EP0265556EP0270822

Country Designated PatentUK EP0286200

EP0471056EP0604662EP0672752EP0687730A1EP0699765A1EP0927765EP502588A2EP502589A2EP509612A2WO8303259WO8402913WO8504889A1WO8603516WO8603776WO9109128WO9113078WO9209696WO9419930WO9516031WO9535389WO9628014WO9636717WO9806862WO9907867WO9916890WO9955887WO9955888WO9955889WO9963055WO9967357

USA USRE36449US350688US4237224US4399216US4407956US4536475US4634665US4683195US4683202US4776072US4889818US4965188US5128256US5186800US5188957US52886636US5352605US5429939US5530188


continued...

55

Country Designated PatentUSA US5530189

US5545816US5591616US5668298US5702903US5705624US5717084US5728925US5731179US5750865US5858742WO8303259WO8603776WO9109128WO9209696WO9419930WO9516031


Country Designated PatentUSA WO9535389

WO9628014WO9806862WO9955887WO9955888WO9955889WO9963055WO9636717

Vietnam WO9419930WO9806862WO9916890WO9955887WO9955888WO9955889WO9636717WO9963055WO9967357

56

Appendix B. List of Abbreviations and Acronyms

aphIV hygromycin phosophotransferase (gene)BoT Board of TrusteesCaMV Cauliflower mosaic virusCGIAR Consultative Group on International Agricultural ResearchcrtI phytoene synthase (gene)ETH Eidgenossische Technische HochschuleFAO Food and Agriculture OrganizationFTO Freedom-to-OperateGATT General Agreement on Tariffs and TradeGt1 (rice) Endosperm-specific glutelin (gene)HPLC High-performance liquid chromatographyIARC International Agricultural Research CenterIFPRI International Food Policy Research InstituteIIML Integrated Information Management LaboratoryIP Intellectual PropertyIRRI International Rice Research InstituteISAAA International Service for the Acquisition of Agri-biotech ApplicationsLB-RB Left-right border region (of Agrobacterium Ti plasmid)lcy Lycopene cyclase (gene)mpi Mannose phosphoisomeraseMTA Material Transfer AgreementNARS National Agricultural Research SystemsNGO Non-Governmental OrganizationnptII Neomycin phosphotransferase (gene)NRC National Research Council (Canada)PC Product ClearancePCR Polymerase chain reactionPCT Patent Cooperation Treaty (System)pds Phytoene desaturasePP Proprietary Property (comprising IP and TP)psy Phytoene synthase (gene)TP Technical Propertytp Transit peptideTRIPs Trade-Related Intellectual PropertyUPOV International Convention for the Protection of New Varieties of PlantsUSAID United States Agency for International DevelopmentUSPTO United States Patent and Trademark OfficeWTO World Trade Organizationzds (zeta)-carotene desaturase

68

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