Genetic Resources Recognition fund 2/2

Pamela C. Ronald pcronald at
Tue Sep 30 11:00:32 EST 1997

the question of how to develop further this technology for use in crop
improvement programs as well as how to recognize source nations who had
contributed to the initial breeding efforts.

        Because there was not a university precedent for germplasm
compensation to source countries, and because there was no prior agreement
governing intellectual property rights (the material was collected in
Africa before the entry into force of the United Nations Convention on
Biological Diversity), UC Davis wished to define an appropriate method of
recognition to the germplasm source countries. The absence of some form of
recognition was deemed inappropriate and would  likely make it more
difficult in the future for the university to obtain research access to
developing nation genetic materials. Our goals were five fold: 1. To
establish a mechanism to recognize and compensate for germplasm
contributions from developing nations. 2. To provide a means for scientists
to patent their inventions while maintaining productive collaborations and
good relations with scientists from developing countries. 3. To encourage
University/Developing nation/Industry links for commercialization of
genetically engineered products. 4. To create a constructive solution that
would be easy to implement and be widely accepted. 5. To create economic
incentive for continued sharing of germplasm and conservation efforts.
        At the suggestion of Professor John Barton of Stanford University,
an expert in international genetic resources law and technology transfer,
it was decided that a fund dedicated to advanced study would be an
appropriate form of compensation because it was likely to be more
beneficial to the source nations than a direct financial transfer to an
individual insomuch as it is usually not possible to determine who in
particular should receive compensation as the owner of a specific genetic
resource.  In June 1996, the University of California at Davis established
the Genetics Resource Recognition Fund (GRRF) to recognize contributions of
developing nations to the success of the Xa21 cloning (see below). The GRRF
will be funded from royalty income generated from commercialization of
genetic materials derived from germplasm obtained from developing nations
(eg. the rice gene Xa21 was derived from material gathered in Mali). The
GRRF will be used entirely for fellowship assistance to researchers from
developing nations who will return to their country and work to ensure that
the information they have learned will benefit others in their home
country. Students from germplasm source countries (in this case, Mali)
would have first priority.
        The GRRF provides fellowships to scientists from the germplasm
source country after the first year of commercialization. By providing a
method to share potential benefits, the GRRF accommodates researchers and
academics who wish to explore, develop, and collaborate with potential
donors of germplasm.  Although the GRRF makes no effort to assess the
future potential income generated from the invention, it provides an
efficient method and  viable solution until further guidelines are
implemented.  The fund will benefit the individuals and farming communities
from where genetic resources were obtained independent of the channeling of
funds through international agricultural research centers or individuals.
Finally, the fund provides a framework whereby commercial interests will be
able to obtain samples and information at an equitable cost.
        Because it is virtually impossible to predict the commercial
success of a particular product, the GRRF will arise from a flat fee.
Currently the UC Davis fund has raised nearly $150,000 of future royalties
from industry, UC Davis and inventors' contributions.  As additional
discoveries are made and licensed to industry, this amount should grow.
Another option is that contributions could take the form as a percentage of
the royalty income. Other forms of compensation like conservation or health
care could also be incorporated into future agreements. It is inevitable
that the total amount provided to developing countries by the GRRF will be
judged to generous or too miserly depending on the perspective. My goal is
to have all future agreements between UC and companies that license UC
inventions specify a contribution to this fund if the material being
licensed was derived directly or indirectly from a developing country. By
depositing all the royalties in one fund, the risk that one license may not
be profitable would not diminish the overall effectiveness of the fund.
Thus the country that contributes genetic resources will benefit from this
fund independent of the commercial success of their particular contribution.
        Our goal was to create a practical compensation method to genetic
resource contributors while allowing for the development, dissemination and
commercialization of their contributions. The GRRF is a special fund set up
for income derived from Xa21.  However, it is hoped that the GRRF concept
will be widely adapted by all the  University of California campuses and in
other major agricultural and medical research institutions. The setting up
of similar funds at other major research institutions would provide a large
and ongoing source of funds for fellowships or other types of
contributions.  The presence of compensation programs would encourage
source countries to conserve valuable land and genetic resources and can
provide an economic incentive to do so.
        Non-commercial researchers, such as those in government funded
programs, would continue to enjoy free access to the genes, so long as they
do not develop commercial products based on that genetic material. For
example UC Davis and IRRI have agreed that IRRI will have full rights to
develop new rice cultivars using the cloned Xa21 and freely distribute this
material as well as the cloned gene to developing countries. If the lines
perform as well as locally adapted varieties, seed will be released to
farmers no added cost in the developing world through national breeding
programs. Because the gene is passed onto the progeny, farmers can grow
their own seed for the next season. The new variety will be genetically
identical to the locally adapted variety except for the addition of a
single gene conferring resistance to bacterial blight.  Other traits
important for local adaptation (such as drought resistance, cold tolerance,
or short stature) are expected to remain unchanged. If issued, the Xa21
patent does not preclude the use of Xa21 by conventional breeding.
        There is an ongoing need to protect the worlds genetic diversity
and to ensure collaborations to use genetic resources to develop improved
crop varieties both through traditional approaches and biotechnology. The
alternative is "a deterioration in the world's ability to cope with the
problems of hunger and disease" (Jacoby and Weiss, 1997).

A sample text is provided below that can be adapted to a particular
institution for the purpose of setting up a GRRF.
        In addition to other royalty obligations, company x shall annually
pay n% of sales of products and derivatives of gene x as defined in Article
X, into a genetic resources recognition fund for 3 years following the end
of the first year of commercialization, until it has transferred a total of
X$ into that fund under this agreement. The genetic resources recognition
fund shall be maintained by the university as a separate restricted fund,
to be used entirely for fellowships and fellowship assistance to students
and postdoctoral researchers from developing nations studying agriculture
with a preference to be given to students and researchers from (name of
source countries). The GRRF shall be managed by the A Dean of the College
of Agriculture and Environmental Science of the University of California at

Acknowledgments:  Many thanks to R. Adamchak, K. Bastian, S. Brush, C.
Jacoby, C. Qualset, R. Stanley, and G. Toenniessen for critical reading of
the manuscript.


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