By Lyn Resurreccion, Science Editor, Philippines TODAY via SEARCA BIC

Gone are the days when Filipino scientists and researchers engage only in research and development (R&D); when they are not conscious of the business aspects of their projects. With the advent of modern agricultural biotechnology, where organisms are altered or improved to make them suit the modern man's needs, and with the borderless trade, government researchers and scientists are now becoming conscious of protecting their intellectual creation so that they and their respective agencies could take full advantage of their intellectual property (IP) -- especially commercially. 

At the same time, they are now also asserting their rights when using foreign IPs -- also to be able to gain from their market potential. 

"We are becoming very conscious [about IP] because we can also register microorganisms, so that the process of violating them [researchers' IP rights, or IPRs] could be prevented," said lawyer Ronilo Beronio, deputy executive director of the Philippine Rice Research Institute (PhilRice) in Muñoz Science City in Nueva Ecija and concurrent head of its Intellectual Property Management Office (IPMO). 

He explained that he is convinced that biotech is almost synonymous with IPR. "When you make an invention or a creation, that organism shall become intellectual property because it becomes intellectual creation. It is almost a one-to-one correspondence." 

He told Today in an interview that researchers and scientists at PhilRice are now becoming aware of the measures in applying foreign biotechnology into the Philippine setting, especially with the prospect of possibly using it commercially. 

"Before you can use a [biotech] technique, you have to seek permission from the owners, particularly if you would wish to make money out of it or commercialize it. . . If you want to make money from biotech [products], their owners will run after you, so you should be conscious about [the measures needed]," he said. 

He said that PhilRice, an agency under the Department of Agriculture, is not yet encountering problems on the matter because it is still in R&D stage of some technologies. But this early, the agency is not only becoming conscious about IPR "because we don't want to encounter problems [in the future]." It is also "doing something" about it. 

"There are many instances in the world, when scientists do something, but in the end they could not commercialize their products because they did not take care of the IP issues beforehand." 

Negotiations 

The liberalization of trade with the advent of GATT-WTO with its Trade Related Intellectual Property Rights, or TRIPS, has altered international trade and IP landscape. 

"Ang target lang nila noon IPs on computer software, movies and the like. Then came agricultural biotech, which is becoming pervasive," Beronio said. 

He cited the case of Vitamin A Rice, which is being tested in PhilRice. The agency was not yet conscious of IP implications when it first signed the testing agreement. Realizing this, PhilRice is renegotiating the license with the consortium, led by Europe-based agribusiness company Syngenta, that owns the biotechnology. 

The problem? The agreement had "no clear provision" that would allow PhilRice to commercialize. "There was a very limited authority to commercialize" the genetically modified crop, also popularly known as Golden Rice. Under the original agreement, Syngenta allows an individual farmer or seed grower to commercialize the Vitamin A Rice seeds up to $10,000 (or approximately P550,000) as the company's so-called humanitarian target. 

Beronio gave a hypothetical situation: If PhilRice will organize 100 seed growers to produce seeds, which production may exceed $10,000, will the agency be exempted from paying royalty? 

This prompted PhilRice to renegotiate to insert a provision that will allow it to commercialize, or what is known in the IP lingo as "option to license agreement." 

"If the Vitamin A Rice becomes a hit and becomes very critical to our food and nutrition, we don't want to be placed in a situation, when that's the only time we deal with it, which is already too late because the owners may also be conscious about the commercial prospects of the product. So, this early, we should both take the risk of [the test's] failure, as well as success," Beronio said. 

He noted, however, that Syngenta has earlier said that it has "no commercial interest" for the crop in the country. 

He said that the result of the renegotiation on the license agreement on Vitamin A Rice will be concluded soon. 

Similarly, in the recent plan to adopt Bt cotton in the Philippines, Beronio said his office has helped in injecting the provision on the option for commercialization in the licensing agreement with the Chinese owners of the genetically modified organism. 

"Whatever happens [to the adoption of the transgenic crop in the country] you know what you will do. Kung mag-fail, sorry; kung mag-succeed alam mo na at ng Chinese ang relationship ninyo." 

IPR is not very complicated, he said. "Isang phrase lang 'yon sa contract tapos na ang usapan." 

He also cited important Philippine products, whose IPs were not pursued, leaving the country failing to profit from them financially, or even losing the right to a product. 

One is the virgin coconut oil, which, he said, is "exploding in the market, and nobody seems to be controlling it." 

Another is the nata de coco, once a very popular traditional Filipino delicacy. Thailand is benefiting from it and is reaping a windfall by exporting the product to Japan because the Philippines did not protect its technology. 

He stressed that the IP owners "appreciate" it when the licensees insist on their rights "because that would also prevent problems and embarrassments for them in the future. . . These countries will respect you if you negotiate with them. You should assert [your rights]." 

Beronio warned that the Philippines will be left behind in biotechnology if it will not be serious in its IPRs. "In many biotechnology ventures, we were already left behind." 

Citing cotton, he said the Philippine cotton is just as big as golf balls, while the Bt cotton of China is as big as the baseball. 

There is also an even more advanced development in IP -- the Canadian Supreme Court's recent decision on plant biotech, which says that the right of the person who inserted the gene to the plant extends to the new plant itself. 

"There is no dividing line now between the patent and the plant protection. Dahil may na-introduce na siya [researcher] sa plant, kahit iba ang mag-breed [sa plant] sa kanya [researcher] 'na yun [right to the plant]," Beronio said.

Training 

To be able to develop the skills and capabilities among DA researchers and scientists on IP matters, the IPMO is providing them training. PhilRice is the only R&D institution in the DA that has an IP policy in place. 

"I tell the [nonlegal] staff, 'I'm making patent lawyers out of you,'" Beronio said in jest. 

Actually, Beronio has been training his IPMO staff in filling up patent registration forms, training them in licensing agreements and in assisting the scientists in filing up the forms and entering into licensing agreements. 

"We need this kind of [human capability] investment. If you let law firms handle your [patent] registrations, they will bill you by the minute." He clarified that if members of the staff are well trained on IP concerns, lawyers are needed only when there are legal contests. 

The P1.2-million project, funded by DA's Biotech Program and PhilRice, will have five batches of training this year. 

It includes lectures and exercises on the fundamentals of IP, patent searching drafting of claims, IP valuation, and IP commercialization and technology transfer. 

Fundamentals of IP: It involves orientation on the definition, history, existing national and international IP laws and regulations, basic information on patents, utility models, copyright, plant variety protection, layout designs, geographical indications, and term of protection. 

Patent searching: A technique in IP audit, patent search could be easily made through the Internet. Through the technique, Beronio said, a researcher can access 80 percent of the inventions worldwide through the Internet by using codes. From this the researcher could check if the concept he wants to develop is already available abroad. If it does, he should turn to new ideas for research, or just modify the foreign research for Philippine setting. 

"If we are able to institutionalize patent search [among researchers] we can save our meager funds in the government because researchers won't do a research all over again. They can concentrate on breakthrough or cutting-edge researches," Beronio said. 

Drafting of claims: The training on the drafting of claims, he said, is also very critical. He said there is a peculiar language used, which only patent lawyers know, in filing patent claims, in reacting against another patent and in arguing for one's claims. 

Training participants will be taught on the process in drafting claims and the specification for patent applications on engineering and biotechnology. Real life experiences will be shared to them and they will be given practical exercises. 

IP valuation: Through IP valuation, its owner can decide on the most effective way in which it may be used, protected, insured, sold, leveraged or exchanged in the market. The training will focus on reviewing situations why IP valuation is necessary, the different methods of valuing IP and the uses and limitations of each. 

IP commercialization and technology transfer: The training proposal said that one of the main advantages of clear IPRs is that it facilitates technology transfer through licensing, strategic alliances and other types of contractual arrangements. It added that it is important for research institutions to have an effective knowledge on IP commercialization and technology transfer so that "it can fully reap the benefits of its IP." 

The training will include handling technology-transfer agreements, such as licensing, material-transfer, confidential-disclosure and other related agreements. 

IPRs made 

Beronio said that the less than one-year-old IPMO has registered seven patents and has paid the Filipino researchers royalties for their inventions, mostly machinery. 

The royalty arrangement is 60-40 in favor of the scientist, if the invention was an initiative of the scientist, even if the facilities and funds used were that of PhilRice, and 40-60 in favor of PhilRice, if it was the agency's initiative. 

Among those up for patent registration is the PhilRice and University of the Philippines Diliman project on canned rice with adobo or menudo. An exclusive licensing agreement was already entered into with a private company to market the product. 

PhilRice is also negotiating for an agreement on the use of a transgenic bacterial leaf blight-resistant rice owned by the University of California and for another gene against tungro with Danforth Laboratory in the US. 

Raging debate 

A raging debate is ongoing which could revolutionize the IP landscape in the country. The issue: whether IPs made by Philippine government institutions and scientists using public funds and facilities should be protected and be made available for licensing agreements for commercialization, or whether these should be given free to farmers or consumers because they are publicly generated anyway. 

Obviously, the science community is in favor of the former. 

Beronio asked, "How will you encourage innovation and invention in the public sector? You should provide some incentives. You cannot provide incentives without commercialization because how will you generate royalties?" 

He explained that commercialization does not simply mean giving the technology to the farmers for free, and letting them decide whether to adopt it or not. 

"When I talk about commercialization, I mean licensing agreements; [giving] exclusivity to commercial companies, who will have a certain degree of monopoly. No businessman in his right mind will buy a technology from the government if he knows that he has many competitors." 

A patent is protected for 20 years, which gives the businessman a limited monopoly with his exclusive licensing agreement. While the businessman is ensured of making money, the patent owner collects royalties from him. 

"Where will you get royalties? [The government] cannot appropriate it. We only get it from commercialization. But if we won't allow such arrangement, paano kikita ang researcher? Kasi [it is for] public good [and should be given for free]? This is the reason why the government is not earning." 

To stress his point, Beronio explained that the US has been profiting from this system since the 1980s through the Bayh-Dole Act. The law allows universities and public institutions to commercialize their IPs, even if they were generated from federal grants. It even allows the inventors to spin-off in private business, making the scientists earn, if not become rich, from their intellectual creation. 

"Ang nangyari na-revolutionize ang landscape sa universities [in the US], na-encourage ang mga scientists, na-unleash ang kanilang creativity," he said, citing that Columbia University in the US has been earning a whopping $1 billion a year from the drugs its scientists help develop. 

He added that if the publicly owned IPs are bid out, their owners will be free from perceived corruption and conflict of interest issue when they help businessmen trade their product. 

Beronio suggested that one way to cut the budget deficit in the Philippines is by allowing government research agencies and universities earn and let their income revolve within the institution. Actually, the funds generated by almost all government research agencies or educational institutions from royalties or sales go to the National Treasury and not for the use of the agencies and their scientists and researchers.Fortunately, PhilRice is allowed to revolve the fund it gets from sales and royalties. 

Another scientist told Today that many government researchers and scientists have left their public posts for greener pastures in private research agencies or go abroad, owing to lack of incentive from the government. 

On the argument on government researchers' IP are for public good and therefore should be given free to the consumers, Beronio said that the science community is not only dealing with public good now. "Public good has international dimensions. Vitamin A Rice is 50 percent public good and 50-percent international good. So that definition of public good is getting blurred now. It is no longer fully public. There is private component in it." 

He said they are conscious that IP protection should not hinder the promotion of the technology. 

He explained: "The focus of protection is to prevent misappropriation by others. Protection simply gives us confidence that we are really the owners. That we shall be able to selectively engage the market, hindi lang free for all. When people think about public good, I think they generally mean free. Kahit ang magsasaka ayaw na ng libre. Kung ako ang magsasaka bibilhin ko, bibigyan ko kayo ng royalty, basta maganda ang quality ng product mo." 

He said the DA and Department of Science and Technology are into a one-year study on the available legal and institutional frameworks on the issue in the country. 

He said the matter should have a definite legal ground. "We are in a tightrope. We are doing a balancing act. Anybody can challenge it. So I say, 'Go ahead challenge it [in court], so that the Supreme Court can resolve the issue.'" Or a law might be needed to settle its legality. 

He said that while the issue has become very controversial, it also "generates a lot of rights and protection for the farmers. Because this time we are selling a product and we are liable under the Consumer Act for any failure on our part. So [the farmers can say], 'While you [IP owner] are protected, I'm also protected because now I can sue you for selling me a bad product.'"