Encouraging Research, Development, and Commercialization in

Chapter 35 Encouraging Research, Development, and Commercialization in Agricultural Biotechnology Downloaded by NORTH CAROLINA STATE UNIV on October 26, 2012 | http://pubs.acs.org Publication Date: December 20, 1993 | doi: 10.1021/bk-1994-0551.ch035

Alvin L. Young, Daniel D. Jones, and James C. Staton Office of Agricultural Biotechnology, U.S. Department of Agriculture, Room 1001, Rosslyn Plaza East, Washington, DC 20250-2200 The applications of biotechnology to agriculture are growing at a significant rate throughout the world. With the application of any new technology, there often arise concerns about possible economic and societal effects. In the case of agricultural biotechnology, these concerns include: the scientific underpinning of regulations; technology transfer; intellectual property protection; training/career development; consumer information/education; and research funding. The United States Department of Agriculture (USDA) is taking steps to address these issues and to encourage research, development, and commercialization of safe and effective products of agricultural biotechnology. Agriculture is one of the oldest and most important fields of human endeavor. As the world's population continues to grow, so will the demand for food and fiber, and it is agricultural science and production which will be called upon to develop ways of growing more food and more nutritious food using fewer resources. It is the powerful and precise new tools of agricultural biotechnology which offer perhaps the best hope of satisfying this ever growing need. Indeed, the application of the tools of biotechnology to agriculture is growing at a significant rate throughout the world. With the application of any new technology, there often arise concerns about the economic and societal effects. In the case of agricultural biotechnology, these concerns include: the scientific underpinning of regulations, technology transfer, intellectual property protection, training/career development, consumer information/education, and research funding. Science Basis of Regulations In the United States, there are laws and regulations that are intended to assure that products of biotechnology are safe, effective, and compatible with the environment. These laws and regulations provide an effective yet workable

This chapter not subject to U.S. copyright Published 1994 American Chemical Society In Natural and Engineered Pest Management Agents; Hedin, P., et al.; ACS Symposium Series; American Chemical Society: Washington, DC, 1993.

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system of oversight for product research, development, field testing, and commercialization. The Federal government has established several mechanisms which help ensure that the regulatory programs are based on sound science. For example, a United States Department of Agriculture (USDA) advisory committee developed a set of guidelines for research involving the planned introduction into the environment of genetically modified organisms. The guidelines were developed by the Agricultural Biotechnology Research Advisory Committee (ABRAC), a group made up of scientists from academia, industry, and government chosen to insure scientifically sound, non-partisan, discussion and recommendations. The guidelines established principles for assessing the safety of research with specific organisms, outlined confinement conditions to promote safety, and provided examples of the guidelines' application. They have aided researchers and institutions in the design of safe experiments with specific types of organisms conducted outside contained facilities. Indeed, the principles have provided the regulatory community with a criterion for biosafety. USDA also supports biotechnology risk assessment research directed toward strengthening the scientific basis of oversight and regulation. Under this program, USDA awards competitive grants to support biotechnology risk assessment research to help address concerns about the effects of introducing certain biotechnology products into the environment. Another useful approach to strengthening the scientific basis of regulation and oversight is to share and disseminate information on approved field tests and the results of field tests of genetically modified organisms. USDA maintains an electronic bulletin board under its National Biological Impact Assessment Program (NBIAP) which provides access to nearly 20 databases including Environmental Protection Agency (EPA) and Animal and Plant Health Inspection Service (APHIS) approved field tests and a catalog of field tests approved by other governments. This is available free-of-charge to the public. USDA has also sponsored and organized two international meetings which brought together researchers from around the world to present and discuss the results of field tests of genetically engineered plants and microorganisms (1,2). Technology Transfer The United States Department of Agriculture, and the United States Government as a whole, are committed to the process of international harmonization of standards including those for emerging products of agricultural biotechnology. This is approached by encouraging cooperation and sharing information on biosafety and ecological research in pursuing these goals. The sharing of biotechnological developments, among researchers in the United States and in the international arena has become a major issue in the last decade. The USDA, in accordance with the Stephensen-Wydler Technology Transfer Act

In Natural and Engineered Pest Management Agents; Hedin, P., et al.; ACS Symposium Series; American Chemical Society: Washington, DC, 1993.

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of 1980 and the Federal Technology Transfer Act of 1986,(3) has established Offices of Research and Technology Applications (ORTAs) at all of it's Federally owned laboratories. These offices strive to, wherever appropriate, facilitate the transfer of Federally owned or originated technology to both state and local governments and the private sector. The Technology Transfer Act also authorized the creation of Cooperative Research and Development Agreements, CRADAs, between the Federal government and non-federal organizations. The USDA has been the biggest user of CRADAs in the Federal government thus far, with well over two hundred and fifty in existence.(3) These agreements allow the technology of the Federal government to be transferred to private inventors and businesses which may then patent them. This allows the technology to be disseminated to the people of the United States and the world more quickly and efficiently. In 1987, President Reagan issued Executive Order 12591, "Facilitating Access to Federal Technology". This Executive Order directed U.S. agencies to encourage and facilitate cooperative research and technology transfer through their laboratories, with an end to promoting growth and economic competitiveness.(3) In the case of transferring technology oversees, many of the agreements are negotiated by the United States Department of State, which is very supportive of both scientific and technological cooperation between the U.S. and foreign agencies, foreign universities, and firms. The different patenting processes in different nations and the issues of technology transfer, have combined with other factors to bring the topic of intellectual property protection of developments in biotechnology to the forefront of discussion groups and committees throughout the country and the world. Intellectual Property Protection The protection of intellectual property rights is one of the strongest incentives for investment in scientific endeavors such as agricultural biotechnology. In the United States, patents, the primary form of intellectual property protection available for biotechnological inventions, can be issued on plants, non-human animals and micro-organisms. The United States Patent and Trademark Office (PTO) issued it's first patent on an animal in 1988, and the backlog of animal patent applications is well over 150(3). Intellectual property protection for Federally funded biotechnology developments in agriculture involves a collage of five separate issues. Those issues include: at what stage of development to file for a patent, what licensing policy should Federal agencies adopt, how much freedom with patented material should researchers be allowed, should the government extend agency application and licensing decisions to individuals and private parties, and finally, the international dimensions of intellectual property protection.



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The precedents which guide agencies in these areas began largely with the BayhDole Act of 1980 which required Federal agencies to adopt a "title in contractor" policy, whereby small business and non profit organizations and universities could retain title to their inventions rather than that title being held by the agency (3). In 1983, President Reagan issued the "Government Patent Policy" memorandum and extended the "title in contractor" policy to all contractors, not just small business and non-profit organizations (3). The memorandum was codified in 1984 as amendments to the Bayh-Dole Act. One question that arises during the research and development process is when to file a patent application. There are, in fact, a number of possibilities. A patent could be filed at the earliest possible time, even before a clear use or practicality of the DNA sequence or other biotechnological discovery is known. Many scientists worry that this will put an undue amount of emphasis on patenting and destroy the network of shared knowledge and research materials that has been responsible in large part for the overwhelming success of American agriculture up till now. The opposite extreme would be not to seek patent protection on biotechnology discoveries at all. However, this would contradict the government's commitment to commercializing Federally supported technology and protecting the resulting intellectual property rights. If a middle ground is to be reached, it would have to be a policy of either seeking patents only when the structure and function of the discovery is known, or having each application reviewed on a case-by-case basis by the agencies to decide when each is appropriate for the patent application process. If the former option is chosen, it would greatly increase the risk of forfeiting foreign or U.S. patent rights through earlier publication, and this would discourage investors from making the contributions necessary to commercialize much of the technology. However, if the latter option were adopted, a great deal of variability would exist across the government. A centralized advisory body would probably have to be created to evaluate intermediate research results and suggest appropriate action which could be uniformly adopted by all Federal agencies. Which of these four options will be ultimately chosen is not yet clear.

If Federal agencies, such as the USDA, obtain patents to certain biotechnological developments and inventions, there are three different licensing policies that could implemented (4). The first is to issue an exclusive license to one individual or company. The second is to issue non-exclusive licenses to several people or groups. The third is to dedicate the knowledge to the public at large. The decision the agency makes at this point is as important as when to apply for a patent in that it has extensive effect on the actual dissemination of biotechnologies. The use of patented materials for research does not usually demand any license



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currently, the existing Federal policies and common practice of companies provide sufficient protection for the patent holders. The USDA has proposed the institution of a pilot program whereby "experimental use exemption" clauses would be inserted into funding agreements with the Department (4). If this approach is successful other agencies could do the same. However, some fear that each agency developing its own form of research exemption clause would lead to inconsistent Federal policies. They urge instead a single, unified, clearly expressed, Federal policy of allowing free and uninhibited research activities using patented discoveries resulting from publicly supported research. Unfortunately, in many biotechnological fields such as that of genome research, it is often difficult to distinguish between commercially motivated and purely academic research. How far should the policies of the Federal agencies extend? As previously discussed, Federal employees and contractors have a right to retain title to their inventions, though Federally funded. In the case of the Federal employee it is unlikely that person would take actions to commercialize the invention or any other action inconsistent with Federal policies. Government contractors and grant recipients are not so steadfast in following the Government's lead in this area. Under the current laws, it would be difficult to implement laws written for the Federal employee in relation to contractors and grantees. The adherence to Federal policies by private parties is virtually impossible to mandate. However, in that the Federal government is the largest supporter of genome research, researchers in the private sector are very likely to follow the government policies concerning patenting and licensing as a guiding principle. The final issue concerning the protection of intellectual property in thefieldof agricultural biotechnology is the international dimension. The USDA and many biotechnologists in academia and industry see a need to establish an international standardization of patenting practices. Legislation was introduced in the last Congress to switch U.S. Patent Law from "first to invent" to "first to file" system. Although this would be a big step toward patenting harmonization, questions remain regarding the impact of this change in academic research. Training/Career Development A strong education and training system is of paramount importance if we are to continue to build a strong biotechnology program in the United States and abroad. We need to develop and fund programs to draw young people into the study of agricultural science and biotechnology, as well as programs to retrain traditional agricultural scientists in the use of the powerful new biotechnological methods and tools. With the above mentioned goals in mind, the USDA began it's "USDA Food and Agricultural Sciences National Needs Graduate Fellowships Program" in 1984 to support the education of more scientists in the fields of food and agriculture for



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which there is deemed to be a national need. Since the beginning of the program, biotechnology has been designated as a national needs area. To date, a total of 205 fellows in biotechnology have been recruited and supported. 119 of those have been in plant biotechnology, 86 have been in animal biotechnology. The number of fellows supported each year however, has dropped dramatically from the onset of the program. In 1989 the total number of fellows was down to 11 from 89 five years earlier. Fortunately, those numbers are gradually increasing, in 1992 there was a total of 21 fellows being supported through this program (5). The program is administered by the Office of Higher Education Programs in the USDA's Cooperative State Research Service. The USDA Hatch Act also provides funding for predoctoral trainees as graduate research assistants available to the Agricultural Experiment Stations. The Agricultural Research Service (ARS) of the USDA, also in 1984, established a very successful competitive postdoctoral fellowship program to support 21 people for 1 or 2 years. In the following 2 years the number of fellows underwent a significant increase and has remained a valuable tool for attracting young scientists to agricultural research (6). However, in comparison to the biomedical and basic research trainee programs of the National Institutes of Health and the National Science Foundation postgraduate work in biotechnology for agriculture has been funded at very modest levels (6). Consumer Information/Education Another important issue in agricultural biotechnology, as it is with any new technology, is education and public information. The commercial future of biotechnology and its promise for a better tomorrow depends upon public acceptance and trust. Public science education is essential to prevent a dangerous gap between the rapid progress the biotechnologists are making and the public's understanding of the science. It is important that the public's decisions relating to biotechnology are made on a scientific and logical basis and not merely reactions to alarmist rhetoric. The USDA has taken many steps to aid in the education of the general public concerning biotechnology. The NBIAP and other bulletin boards\databases dealing partially and exclusively with biotechnology are accessible to the general public, and a plethora of printed information is available upon request. For example the USDA's Office of Agricultural Biotechnology (OAB) publishes a monthly newsletter entitled, "Biotechnology Notes" which enjoys a large distribution. OAB, the Agricultural Research Service (ARS), The Cooperative State Research Service (CSRS), and the Animal and Plant Health Inspection Service (APHIS), have all sponsored conferences intended to inform the public and various other special groups about the USDA's biotechnology activity. A high school curriculum has even been developed for educating our young people (7).


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Research Funding Currently, there are several Federal agencies beside USDA which fund research in agricultural biotechnology. The Agency for International Development (AID) funds research aimed at increasing the pest and disease resistance of crops and livestock, thus increasing their productivity. The Department of Commerce (DOC) supports research on the production of food and chemicals through the use of aquaculture. The Department of Energy (DOE) focuses its support on the study of plants as converters of solar energy and a renewable energy source. The Food and Drug Association (FDA) supports research relating to food science, processing, and safety. The National Aeronautics and Space Administration (NASA) promotes agricultural research relating to the closed ecosystems which would enable humans to embark on long-duration space flight without the need for major resupply. The National Science Foundation (NSF) supports a great deal of research in which the main goal is to expand our knowledge base of organisms relevant to agriculture (Committee on Life Sciences and Health; Biotechnology for the 21st Century: Realizing the Promise; in press). USDA is the primary source of Federal funding for research in agricultural biotechnology. As shown in Figure 1, the USDA accounts for approximately 60% of all Federal spending in agricultural biotechnology. In 1992, 114.5 million dollars was spent by USDA on research in the areas of food, fiber, feed, and forestry. Funding for various research areas of biotechnology is carried out through four different agencies within the USDA. The Agricultural Research Service is responsible for 52 percent of all USDA research expenditures. The rest comes from the Cooperative State Research Service, the Forest Service, and the Economic Research Service as shown in Figure 2. Approximately one half of all the Federal funds committed to agricultural biotechnology goes to the study of plant systems including work with disease and pest resistant plants. The second largest funding area is animal systems, with approximately 35 percent. The remaining areas, food safety, food sciences, aquaculture, etc. together account for 15 percent of the total budget. The data in Figure 3 exemplify this breakdown pattern within the 1992 Federal agricultural biotechnology budget. Overall, about 5 percent of Federal funding for biotechnology research, shown in Figure 4, is spent on agricultural biotechnology. Conclusion The application of the new tools of biotechnology to agricultural research and production is growing at a significant rate. This will present many choices and challenges to the agricultural community, public policy makers, and consumers. USDA is working to ensure that decisions relating to agricultural production,



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USDA $ 1 1 4 . 5 M / 6 0 %

DOE S 1 . 8 M / 1 * DOC $ 3 M / 2 % NASA AID

DHHS NSF

$4.2M/2%

$9.4M/5%

$28.9/15%

$28.7M/15%

FY 1992 FUNDING - $190.5M Figure 1.

FY 1992 Federal Research Funding by Agencies for Agricultural Biotechnology



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Agricultural Research Service $110.3M/52%

Forest Service $6.2M/3%

Economic Research Service $0.2M/0%

Cooperative State Research Service $96.6M/45%

FY 1992 FUNDING » $213.3M Figure 2.

FY 1992 Federal Funding for Biotechnology Research USDA Science Agencies



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Plant Systems $107.7M/50%

Animal Systems $68.8M/32%

FY 1992 Total Funding = $214.7M Figure 3.

USDA Funding for FY 1992 for Agricultural Biotechnology by Research Area



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General Foundation $1417.5M/37% Environment $68.6M/2% Eners $80.4M/2 Agriculture $190.5M/5% Infrastructure $300.7M/8%

Social Impact $9M/0%

Manufacturing/ Bioprocessing $98.8M/3%

Health $1593.8M/42%

FY 1992 Total Funding - $3759.3M Figure 4.

Federal Investment in Biotechnology Research for FY 1992


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product development, public policy, and consumer purchases are based on the most objective and factual information available.


Literature Cited 1. MacKenzie, D.R.; Henry, S.C., Eds.; Biological Monitoring of Genetically Engineered Plants and Microbes; Agricultural Research Institute: Bethesda, MD; 1991. 2. Casper, R.; Landsmann, J., Eds.; Proceedings of the 2nd International Symposium on the Biosafety Results of Field Tests of Genetically Modified Plants and Microorganisms; Biologische Bundesanstalt fur Land- und Forstwirtschaft: Braunschweig, Germany; 1992. 3. Genome Patent Working Group, Committee on Life Sciences and Health; Federally Funded Genome Research, Science and Technology Issues; U.S. Government Printing Office: Washington, DC; 1992. 4. Genome Patent Working Group; Report of the Genome Patent Working Group to the Committee on Life Sciences and Health, Federal Coordinating Council on Science, Engineering and Technology; National Science Foundation: Washington, DC; September 17, 1992. 5. Cooperative State Research Service; Food and Agriculture Competitively Awarded Research and Education Grants, Fiscal Year 1992; U.S. Department of Agriculture: Washington, DC; December, 1992. 6. Committee on a National Strategy for Biotechnology in Agriculture; Agricultural Biotechnology: Strategies for National Competitiveness; National Academy Press: Washington, DC; 1987; Sec. 4. 7. Vasil, Indra Κ.; Biotechnology: Science, Education, and Commercialization; Elsevier Science Publishing Co.: New York; 1990; Sec. 4 RECEIVED June 28, 1993


Encouraging Research, Development, and Commercialization in

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