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Technology Transfer: a boon to the developing biotechnology economies

By September 1, 2013Uncategorized

Scientific research has played a major role in advancing technology and addressing pressing needs of the society. However, no technology is successful unless and until it reaches the target customers. This demand of scientific developments to reach a wider audience necessitates commercialization of technology and Technology Transfer aids in the same. It helps in transferring scientific skills, principles, knowledge across the globe so that the available resources of information can be best exploited to develop innovative solutions in the form of products and services. Apart from facilitating an exchange of knowledge between individuals and organizations, technology transfer enables commercial benefits by further attracting venture capital investments to promising projects.

Technology transfer frameworks give opportunities to various research and academic institutes to sell and commercialize their technology or research in the form of Intellectual Property (IP). IP in turn helps institutes generate revenues in the form of royalties and other technology accessibility fees. Exploitation of the commercial values further encourages the development of industries in and around these major innovation centres. Many academic institutions also have policies to reinvest the funds generated by technology commercialization in further research thereby building a R&D pipeline. Increasing number of companies and government organizations also have Technology Transfer Offices, which are in pursuit of research technologies which can be of great values to the society if developed and marketed well.

US has been a world leader in promoting technology commercialization.  The landmark Bayh-Dole Act of 1980 allows academic and research centres to not only market but also acquire IP without any scope for patent infringement and the associated legal suits. The Act has further increased the patenting activity of universities in the United States and has encouraged many institutes and start-ups to apply for patent and licenses to get full credits for their innovations. Many countries like Japan and Germany have passed resolutions to set up their own technology transfer policies and the trend is now catching up in the developing countries too.

The greatest contribution of technology transfer to biotechnology fields has been the creation of major biotech clusters around the globe. Increasing patenting activity has served as a catalyst to the growth of industries around prominent research centres making these clusters a hub of biotechnology innovation and IP outputs prominent ones being the Bay area and the areas around Boston in the US and the Medicon Valley in Denmark.

The steady growth in technology transfer of biotechnology has led to a threefold increase in the licensing fee and other license maintenance fee.  This is significant because a large number of universities which are actively involved in development of new drugs and medical technologies partner with big companies which pay royalties to these institutes in return for an access to the IP developed by them and these royalties in keep stimulating the R&D pipeline. Increase in technology innovation, especially in the biopharmaceutical sector, is happening through partnership agreements and alliances between various institutes and organizations which are active players in biotech and pharma sectors. Collaborations have become a part and parcel of this sector.  Over the years, many big companies are becoming a part of this symbiosis. While the smaller institutes or start-ups get royalties and access to a strong distribution system, larger companies often can use innovations from these organizations exclusively which gives them a competitive edge in the market.

The impact of technology transfer is not just limited to the biotechnology markets in the US, Europe and Japan.  In the past few years, there has seen a radical change in the biotechnology patenting and technology transfer in several developing countries such as India, China, and Brazil. Technology transfer in the form of Foreign Direct Investment (FDI) plays a major role in facilitating the exchange of knowledge and capital between the developing and developed countries. FDI has increased almost doubled in countries like China, India and Brazil with patenting activity catching up rapidly. Recent studies have also shown that positive reforms in the IP policies can have a significant impact on FDI and technology transfer with strengthened IP policy reforms showing encouraging exchange of knowledge and also boosting the economy.

Robust IP policies along with technology transfer and collaborations have had a positive impact on the economy of developing markets and have also given them access to a repertoire of biotechnology products ranging from GM foods to drugs and biologics.

India is one such developing nation which has seen a dramatic change in its IPR and technology transfer policies, a lot of which has materialized following the implementation of TRIPS agreement. These reforms have increased the FDI and in turn the nation’s economy. An almost doubled average score on the Patents Right Index since the past few years indicates the same. While India stands the third in terms of university filed patents, it ranks second in terms of PRO filed patents from among the middle and low income nations with 80% of the public sector patents being filed by CSIR alone. India is also on the path to implement the Protection and Utilization of Public Funded Intellectual Property Bill which further expands the IP definition to copyrights and trademarks apart from implementing stringent IP infringement penalties and provisions to manufacture products related to government funded IPs in India first. Apart from this, the bill promises to increase the R&D funding, fosters innovation, and also recognises innovation as a necessity to succeed in today’s global economy. The reformed IP policies, increased FDI and R&D investments and better patent protection has certainly done a lot to improve the overall economic scenario in India.

Another developing economy which has shown promising growth by the use of IPRs in its universities and research institutes is Brazil. While the patent activity in Brazil has almost quadrupled during over the past decade, it also enjoys the reputation of being a major producer of agribiotech crops. Following Brazil’s adoption of the TRIPS agreement, Brazilian Agricultural Research Corporation emphasized on the need for strong IP policies and technology commercialization. These strong IP policies were not just framed to facilitate licensing but also protect and IP infringement and theft of IP. Ever since, the number of national and international patents from Brazilian biotechnology innovators has been on the upswing. Brazil has also been venturing into the biomedical technology with a wave of innovation being unleashed after the introduction of patent and IP policies one such innovation being and anti-inflammatory technology by Ache Laboratorios.

While a once weak IP environment in China had discouraged many from investment, China’s conscious efforts to strengthen its IP environment has catapulted its to a position well above its BRIC counterparts like Brazil and India. The reforms in the IP policies have not only encouraged FDI but especially encourage the exchange of knowledge and skill intensive technology. While China has always encouraged the use of inventions developed by their own researchers since 1980’s, it was only by the 1990’s that IP reforms came into the picture. These positive steps along with a commendable economic performance over the past decade has encouraged commercial ventures to develop and exchange technology which in turn led to an escalation in the numbers of patents and licenses filed encouraging more FDI. China enjoys the position of being a leading patenting nation, and it owes a lot of it to the consistent increase in the numbers of university patents being filed by Chinese academic and research centres every year.

While much of the economic research suggests that IPRs and technology transfer can have positive impact on a nation’s economy, it can also not be ignored that the impact of this would get limited depending upon a large numbers of other factors like a nation’s development stage and technical, financial capabilities. However, increasing patenting activities and technology transfers in both the developed and developing economies have stimulated research and innovation like never before and the additional incentive of generating revenues and successful collaborations can be added to the list of benefits with a significant impact being seen in the biotechnology and biopharmaceutical sectors.

While many see IPR and technology transfer as a catalyst to scientific advancements, many also see it as a barrier to innovation. However, there has been growing evidence that stronger IP policies and IPRs in the form of patents have encouraged patenting and licensing activities which boosts innovation and technology transfer. This further attracts FDI which in turn generates opportunities to create new jobs by creating technology corridors thereby contributing to the economic development of a nation.

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