Open Source in Biotechnology

An Australian scientist, Richard Jefferson, who heads the non-governmental organization, Cambia (Centre for the Application of Molecular Biology to International Agriculture), has evolved an innovative open source solution to meet intellectual property constraints in   agbiotech[13]. CAMBIA develops and patents technologies for all needs of plant biotechnology. It licenses the use of their technologies, with a royalty free license, provided that any improvements on the technology be made publicly known and be license free. This is akin to open source Linux computer software. Having the technologies as “open source” leads to what they call “collaborative invention” as all biotechnologists working with the open source material further develop it for all and innovations are quickly disseminated, in stead of remaining proprietary knowledge within a company. This can be of distinct advantage to those trying to increase crop diversity, by further domesticating less-grown crops, especially those in the developing countries where resources are thin.[14]The open source agbiotech is not advocating against patents but preaches the use of patents to ensure that research is not hindered yet return on investment is ensured. It advocates patenting of research tools as leaving it in the public domain would enable a patent holder to command control over development of a product. The quid pro quo arrangement is that, in return of the open access there is an obligation to pay royalty in the event of commercialization of the patented technology and there should be no restriction on access to further research and improvement. This is facilitated by distributing the patented research tools along with an open general license incorporating these conditions. Open source agricultural research facilitates innovation by small biotechnology companies by promoting open access to technologies. This will enable development of locally suited technologies and reduce dependence on giant agribusiness conglomerates.

The BiOS (Biological Innovation for Open Society) Initiative is also known as Open Source Biotechnology. The BiOS model has resonance with the Open Source software movement-well known for the successes such as Linux and has spurred faster innovation, greater community and participation, and new robust business that break monopolies and foster fair competition.[15]

By analogy with FLOSS, Open Source Biotechnology (OSB) incorporates a distinctive approach to^[16]:

• Developing new biotechnologies.

The characteristic mode of development of new biotechnologies is bazaar governance also termed as ‘commons based peer production’. Defining features of this mode of production include

(1)    Integration of contributions from a broad range of participants (individuals, commercial firms and state or private non-profit organizations);

(2)   Diverse motivations to contribute, none of which rely on exclusionary property rights.

(3)   Coordination of contributions through self-selection for tasks on the basis of freely accessible information about the object of production itself, as distinct from direction by superiors in a hierarchy or self-selection on the basis of price signals;

(4)   Low barriers to engagement: technology users are free to become developers according to their own incentives and capacities, irrespective of formal qualifications and without the necessity of making any long-term commitment; and

(5)   Sharing of contributions on terms that permit broad (though not necessarily unlimited) freedom of access and freedom to operate.

In real life OSB projects, bazaar governance would predominate but would coexist with firm, market and network structures enforcing a mix of other (private) incentives. These private incentives could be further supplemented by collective action style incentives and public subsidies of the kind that already support biotechnology research and development (R & D).

• Open Source Licensing

OSB is distinct from ‘open access’ or ‘public domain’ regimes in which innovators refrain from obtaining Intellectual Property Rights or other forms of proprietary or quasi-proprietary protection for their innovations. In OSB, as in FLOSS, contributions are legally owned by the innovators or their assignees but are licensed to all comers on terms that, at a minimum, offer a credible commitment to provide ongoing access to the licensed technology and guarantee a level playing field between licensor and licensee with respect to freedom to operate with the licensed technology.

Open Source licenses are intrinsically and radically pro-competitive. Optionally, OSB licenses may also impose an obligation on licensees to on-license improvements to the technology on the same terms as the original license. Such an obligation would normally apply only to a defined subset of improvements and would not apply to any improvements that are reserved by the licensee/developer solely for in-house use. This mechanism inspired by a subset of FLOSS licenses known as ‘copyleft’ or ‘reciprocal’ licenses, is designed to give both licensors and licensees (in their capacity as licensors of any improvement technologies) ongoing access to a dynamic, legally protected technology commons incorporating  updated versions of the original technology as well as any new technologies based on it.

• Commercialization

A key feature of the OSB approach that distinguishes it from pre-existing forms of bazaar governance (typified by the practices underpinning traditional publicly funded scientific research) is the nature of the relationship it fosters between the commercial and noncommercial contributors.

Traditionally bazaar-style production has frequently involved the transfer of commercially valuable technologies from public and nonprofit sectors without fair compensation and/or adequate recognition of the substantial public subsidy thereby indirectly provided to private/corporate players. In OSB, the relationship between commercial and noncommercial participants would be synergistic and symbiotic, not parasitic. In other words, non-commercial contributors would provide opportunities for commercial players to enhance their profits while commercial players would bring private resources to the production of public knowledge.

The objective of open source biotechnology is to break the grip and monopoly of huge multi nationals on the tools of innovation. Thus, the balance is shifted from the rich and powerful to the poor, underserved communities. If the multi nationals are allowed to hold the basic tools and gene sequence that are the operating systems of life, promising new sectors will be left undeveloped.[17] About 20 percent of the human genome is controlled by patents, of which about two-thirds are owned by private firms. Taking a collaborative open-source approach could speed efforts to reduce hunger and disease.[18] The patenting of ‘enabling technologies’ affects the development of crops by research institutions, whether private or public. Further, applied agricultural research involves derivative development on existing varieties and with each incremental improvement new Intellectual Property rights get added resulting in multiple Intellectual Property holders on innovations. The result is a situation where a single institution will not be able to provide freedom to operate with a particular technology or invention.^[19] Research in the field of biotechnology is expensive, partly because researchers need to purchase even the right to research from a dozen related patent-holders, even when there is little chance of creating a marketable product from the research.

The notion of ‘copyleft’ which envisages free study, copy, distribution and modification of software is applicable only in the case of bioinformatics. But, the other research activities in biotechnology are subject to patent rights and hence ‘copyleft’ is not applicable. Although OSB entails fewer transaction costs than a conventional proprietary approach, it does not eliminate IP-related transaction costs altogether. Unlike a fully ‘public-domain’ or ‘open access’ approach, OSB does involve IP ownership and does require technology users to enter into a license contract. In addition, copyleft-style open source licenses place conditions on the distribution of downstream technologies that, despite their nonproprietary purpose, do limit freedom to operate with respect to those technologies.[20]

Patent is an incentive in the form of limited monopoly granted by the State to the inventor for the disclosure of his information. The limited monopoly grants the inventor economic rewards by way of manufacture, use, sell or import of a product or process for 20 years. The patent law recognizes the exclusive right of a patentee to gain commercial advantage out of his invention. This is to encourage the inventors to invest their creative faculties, knowing that their inventions would be protected by law and no one else would be able to copy their inventions for a certain period during which the inventor would have exclusive rights. Thus, patents grant economic rewards for the promotion of invention. The patent grant provides the owners of patents with a period of market exclusivity, during which they can include a royalty component to out-license their technology in exchange for upfront fees and/or royalty sharing. In this way, patents provide the necessary financial incentive to develop new technology commercially. However, patents also have the potential to deter rather than encourage innovation, particularly when they claim rights to inventions at the upstream end of the research-development continuum[21]. Open source in biotechnology makes this monopoly brittle, thereby reducing the economic reward. Thus, an argument could be advanced that it would reduce long term innovation. But open source would be a facilitator of downstream non- economic rewards.

Another important role of Open Source is its ability to infiltrate through the patent thicket in the patent regime. A patent thicket is “a dense web of overlapping intellectual property rights that a company must hack its way through, in order to actually commercialize new technology.”[22] Thus, it can also be a retaliation against the ‘Tragedy of the Anti-commons’. Patents often are cited as examples of tragedy of the anti-commons because a patent owner has exclusive rights over the use of patented technology. If the creation of a certain product involves the use many technologies and components patented by different people or different companies, then it can be very difficult to negotiate effectively with all the patent holders at once, and the result may be that one has to pay so many license fees that it becomes too expensive to create the desired product. Thus, a product that is in great demand may be produced because costs associated with patents are too high.[23] Anti commons tragedy in biotechnology is triggered by high transaction costs associated with assembling a ‘tool kit’ composed of multiple proprietary elements. If the owner of one of these proprietary elements were to adopt an OSB strategy, then the overall transaction costs would, in principle, be proportionally lowered because anyone, anywhere would be sure of obtaining permission to use, modify and distribute the relevant technology element for any purpose without ongoing obligations to the owner.[24]

One can think of open source licensing as a form of grantback clause, because the licensee is required to make its own intellectual property available to others, including the licensor, while open source licenses commonly compel licensees to turn to grant access to their intellectual property to others, thus extending the reach of the license beyond the scope of the intellectual property grant, there are several reasons to doubt that these agreements raise anti trust concerns. First, few open source licensors have market power. Second, the extent of the required grant is limited to intellectual property actually incorporated in products that use the licensed technology, rather than extending to unrelated or potentially competitive technologies. Finally, the openness that is required is always non-exclusive, rather than an assignment or exclusive license back to the licensor. Indeed, the requirement of openness permits anyone to benefit from the licensed technology, not just the original licensor. For these reasons, it seems unlikely that an open source license will constitute patent or copyright misuse.[25]

Due to the ease of patenting biological discoveries, it is likely that anyone working in biomedical research will have to use several patented procedures in order to create a marketable product. However, since those patents are short-lived and only a few patents result in marketable product, those developing new treatments or processes often find that negotiating a licensing agreement with the patent holders is prohibitively expensive and will result in product being unmarketable. In fact, a patent holder can often say that mere research is in infringing use, and demand a license fee even though the chance of developing a marketable product is slim.[26]

Patent owners who are effectively free to dictate the terms of use of an established test may choose to license it broadly, asking only a reasonable royalty from all laboratories that offer the test to patients. On the other hand, they may choose to restrict license to selected laboratories or even to a single test provider. In the latter case, the consequence can be severe. Monopoly control over a particular test tends to limit accessibility and increase costs, with obvious negative implications for the equitable provision of cheap health services. Quality assurance is also compromised: with only a handful of test providers, regulators may find it not cost effective to develop adequate proficiency testing[27].

Any contributor to an OSB project may be motivated by the anticipation of[28]:

·         Process Benefits

In the FLOSS context, process benefits include fun, learning and social interaction with like minded peers. Biotechnology industry participants do sometimes invest in research and development activity solely or primarily for the sake of analogous process benefits. At the corporate level, potential process benefits of participating in OSB development include organizational learning, developing and maintaining a wide range of inter-organizational linkages and establishing a corporate reputation as competent and trustworthy collaborator. All are commercially relevant in biotechnology and related industries, where the ability to engage in productive collaborations across firm boundaries is crucial to retaining a competitive edge.

·         User Benefits

The primary rationale for choosing OSB approach is that it permits prospective users to share the cost and risk of developing a new technology and depending on the chosen license terms, potentially gain free access to valuable downstream technologies. Further, an OSB approach may enhance the usefulness of the technology by expanding the number of people who can help eliminate design flaws and introduce new features.

·         Non-proprietary Business Opportunities

Mainstream or conventional biotechnology business strategies typically rely on property rights as a means of excluding non-paying users from accessing or commercializing the technology. By contrast, non-proprietary business strategies are designed to exploit the enhanced value to a firm’s clients or customers of technologies whose use, modification and redistribution are relatively unrestricted and which are therefore likely to be cheaper, more readily available and of better quality.

·         Restructuring Competition

A crucial feature of open source is that it promotes free and open competition with respect to the technology in question. Although commercial players generally prefer to protect themselves from competition wherever possible, they always want to ensure competition among their suppliers.  Other ways, an OSB approach might be used to restructure the competitive landscape in an industry sector to contributor’s advantage including creating the opportunity for several smaller firms to combine resources against a larger competitor or attracting customers away from established technology provider.

Peer review may play a crucial role in enhancing biotechnology, and safety concerns might reinforce preferences for open approach rather than proprietary secrecy. Companies using biotechnology to deliver other services, such as health care, rather than just selling genetic products might well prefer open source suppliers. It would appear that open source approaches might be relevant for many aspects of biotechnology, although there would likely still be major areas where proprietary approaches would retain advantages.[29]

At a minimum, open source approaches might offer some useful options concerning the regulation of intellectual property rights related to genetic resources. The example of computer code shows how collective open source efforts can thrive, even while knowledge is produced and used within commercial activities. Similar principles might apply concerning genetic codes. Rather than a purely proprietary or purely public approach to intellectual property in genetic resources, a more differentiated approach might be feasible. Such an approach might facilitate collective action to discover and make available genetic knowledge in ways that would be difficult through purely public or private approaches. In at least some cases, proprietary rights may be neither necessary nor even the best way to promote innovation, while dumps into sources of valuable materials.[30]

Despite the fact that OSB promotes access to research tools and encourages user innovation, there are deep concerns over the fact that it would actually curb the private returns that would have ensued by licensing the innovation. However, open source fits very well within a collaboration-strengthening pyramid because one of the attractions of open source methods for opening up information exchange is that they involve minimal upfront investment on the part of technology developers.[31] The open source group, however, is not trying to restrict the amount of core plus improvement technology available, by ensuring that the improvements remain openly available. Such an effect would be better described as ultimately increasing rather than reducing the supply of the downstream product.[32] 

“Discoveries yet to come will be extraordinary but they won’t happen if people lock up intellectual property.”

`                                                                                   - Carol Kovac, IBM