Intellectual Property Rights and the Ascent of Proprietary Innovation in Agriculture

Abstract

Biological innovations in agriculture did not enjoy protection by formal intellectual property rights (IPRs) for a long time, but the recent trend has been one of considerable broadening and strengthening of these rights. We document the nature of these IPRs and their evolution, and provide an assessment of their impacts on innovation. We integrate elements of the institutional history of plant IPRs with a discussion of the relevant economic theory and a review of applicable empirical evidence. Throughout, we highlight how the experience of biological innovation mirrors, or differs from, the broader literature on IPRs and innovation. We conclude with some considerations on the relation between IPRs and market structure and the pricing of proprietary inputs in agriculture.

The role of intellectual property rights in seed technology transfer through trade: evidence from U.S. field crop seed exports

“…This result can be rationalized as follows: first, there was a one‐time effect of 23 high‐income countries, who were already members of UPOV, signing on to TRIPs as they became members of the WTO in the mid 1990s; second, 25 low‐income countries in joining TRIPs had implemented UPOV‐like IPRs by the end of the sample period; and third, 33 countries that were not members of UPOV did sign TRIPs by the end of the sample period, thereby committing themselves to implementing UPOV‐like IPRs. In other words, the positive impact of TRIPs on U.S. seed exports most likely represents the perceived benefits of harmonization of IPRs for seed innovations based on UPOV/PBRs and also the expectation that they will be enforced through the WTO dispute‐settlement mechanism (Clancy and Moschini, ), along with the fact that TRIPs membership has been found to be correlated with stronger IP protection of plant varieties in importing countries (Campi and Nuvolari, ).…”

“…Moreover, the development cycle for a new variety usually takes 10–15 years. As a result, seed IPRs are concentrated in the hands of a few large U.S. and European firms such as DuPont, Monsanto, and Syngenta (Clancy and Moschini, ), the top four firms accounting for 54% of the global seed market in 2009 (Heisey and Fuglie, ).…”

“…UPOV was originally agreed in 1961 by a group of European countries, and established PBRs similar to those contained subsequently in U.S. legislation. The rights defined by UPOV focus on the maintenance of commercial exclusivity for a defined period, although the eligibility standard for protection is lower than that for patents (Clancy and Moschini, ). The most recent UPOV Act of 1991 extended its species coverage and length of protection (20 years), although farmers’ privilege is now an option for member states.…”

“…Consequently, a country might provide UPOV‐like protection as a result of it signing the TRIPs agreement—44 countries have in fact become members of UPOV since 1995. As well as harmonization of IPR regimes, perhaps the most important function of TRIPs is provision of international enforcement through the WTO dispute‐settlement mechanism (Clancy and Moschini, ). Campi and Nuvolari () also present empirical evidence indicating that membership of TRIPs resulted in significant strengthening of IP protection for plant varieties by both high‐ and low‐income countries.…”

Corporate Concentration and Technological Change in the Global Seed Industry

“…Because of their chemical origin, these companies have often brought certain economic behaviors into the seed sector, such as the implementation, broadening, and strengthening of intellectual property rights, which are common in the chemical industry, but were previously rather rare in the seed sector. This development, however, is also the result of several contributing factors in the last few decades, such as public policies and regulatory regimes [24,25].…”