Draft/Only for comments 					Sept 27, 2005 

Competitive Strategy for Agricultural technology development and Exports through Value addition: the Intellectual Property Rights Perspective

Anil K Gupta, and Vikas Chandak 

The competitiveness of exports from agricultural sector would depend upon quality, reliability of supplies, ability to meet various standards and the extent to which value can be added to these commodities before export part from making production system more sustainable.  Traditionally, most of the commodities have been exported as raw material. The Research and Development community has still not realized how the protection of IPRs on various technologies may eventually help in generating more resources for agricultural and other research agencies themselves. At present, various market committees, say Unjha market ( which is the biggest market for several commodities reviewed in this paper) do not allocate almost any share out of their funds towards research and/or IPRs protection. The net result is the India exports raw material and the value is added by companies or institutions in other importing developed  countries. How can then we pay better prices to the farmers or sustain research and development infrastructure.  

 In this paper we have taken seven crops viz., psyllium, fennel, coriander, cumin, sunflower, peanut and castor. The patents on castor and groundnut have been looked into more comprehensively to illustrate the need for this kind of analysis. The basic argument in the paper is that unless we add value, and  seek intellectual property rights on the inventive methods or materials involved in value addition globally, we will not be able to secure larger gains from the value chain.  The result will be that farmers ability to modernize and diversify their agriculture would suffer in view of limited gains that are possible through raw material export.  The diversification is an important goal of sustainability and requires ability of farmers to modulate their cropping patterns according to changing conditions in domestic and global market. In the Part I of the paper we review the nature of patents granted in USPTO as well as in European Patent Office (EPO) for various commodities. In Part II we look at the detailed case study of castor and groundnut and in Part III we summarize the policy implications for making agriculture competitive through intellectual property rights protection. 

Part I

Review of patents on export crops:

We have looked at patents granted to inventors in various countries on value added products based on different agricultural commodities during last six  years that is 1999-2004.  The idea is that the state government must have a target of reducing raw material exports to the minimum level so that major earnings accrue through value added products.  It is inevitable that such value addition would improve the price realization by the farmers not only in export markets but also domestic markets. 

PSYLLIUM HUSK

During 1996-2004 total 418 patents have been granted on various uses of Psyllium husk. 321 (about 80%) of these have been granted to inventors in United States (321) while twenty eight patents have been granted to inventors in Japan. Based on the use, 172 patents have been granted for use of psyllium husk in pharmaceutical/drug composition viz., composition to reduce cholesterol, improve bowel movements, laxatives, improve palatability etc. Besides these, patents have been also granted on use of psyllium husk for treating constipation, stool softening syrup, cure of scours in calves, dietary supplement, fat absorption composition and improved functionality. Eighty one patents have been granted on the use of psyllium husk in food stuffs like preparation of low cholesterol food items viz. backed snacks, pasta and dough, ready to eat cereals, drink composition containing psyllium etc. In addition, patents have also been granted for preparation of noodles, bread, laxative foods, and foods with low viscosity and animal feed. Biotechnological uses were dealt in 53 patents and cosmetic in 26 patents. 

Out of the total patents granted, 74 patents have been assigned to individuals and rest to company/corporations. Proctor and gamble has received 18, 12 each to Bayer Aktiengesellschaft and General Mills. Kellogg Company has received seven patents for use of psyllium husk in preparation of backed snacks, pasta, dough with low cholesterol, ready to eat cereals and pharmaceutical composition to reduce cholesterol and for improved functionality. Procter & Gamble Company has been granted patent for use in preparation of drink composition, laxatives, compositions with improved palatability and composition for treating hypercholesterolemia etc.

One of the patents by Procter and Gamble is on developing the right mesh size for the husk to optimize the adsorption in the body.  Large number of these products can easily be developed in India and in some cases, the patents already granted must be opposed on account of existing prior art i.e., knowledge and practices already in public domain. The research strategy should also be developed so that a specific portion of funds generated through export of psyllium is invested in creating and protecting intellectual property. 

How many patents were obtained by Indians, just the four out of more than four hundred. What does it indicate: India which has the global monopoly on production of worlds total psyllium production has no monopoly in producing value added products? Is this the way to accomplish the vision of making India a knowledge society? 

FENNEL

403 patents have been granted on various uses of fennel during 1996-2004. The maximum patents have been assigned to inventors in USA (225) followed by Belgium (70) and Japan (38). 32 patents have been granted to individuals and 9 patents to universities. The remaining patents have been granted to corporations. The Colgate Palmolive company has the maximum number of patents (92) followed by The Proctor and Gamble Company (36). 73 patents have been granted on the use of fennel in the composition of detergents, soap and disinfectants. This includes its use as shoe shine, dish cleaning, phase cleaning and chelating agents. 68 patents have been granted on the use of fennel for cosmetic, skin, hair and body care compositions, including gels, creams, shampoos, antiperspirant, deodorant, absorbent, tissue paper etc. 65 patents have been granted for pharmaceutical and drug formulation purposes. This includes treatment for diabetes, intestinal problems, antiseptic, treatment for colic, gynecological problems, breast enhancement and bioactivity enhancement. Other uses include antimicrobial cleaning composition and wipes (36), food and nutritional material (31), biochemical, biotechnological uses (29), agricultural composition (21), flavoring compounds (14), dental care (10) surface cleaning compositions (9), encapsulation compositions (9), liquid nonionic crystal composition (7), reducing solvent levels in extracted biomass (5), animal health (5) and pest control in fabrics (3). Besides these patent has been granted for use of fennel in polymer packaging, pigments, etc.

CORIANDER

410 patents have been granted for the different uses of coriander in the period 1996-2004. Inventors from USA have been granted 170 patents, followed by Belgium (75) and Germany (56). Individuals have been granted 24 patents, universities 7 patents and the remaining patents have been granted to corporations. Colgate Palmolive Company has been assigned the maximum patents (94) followed by The Proctor and Gamble Company (59). Based on the uses, 84 patents have been granted for liquid cleaning compositions (Antibacterial property, all purpose oil and grease remover, blooming agent, fragrance, micro-emulsion light duty liquid cleaning compositions). 71 patents have been granted for detergent, soaps and surface disinfectants. 56 patents have been granted for cosmetics, skin care, body care and hair care products and 45 patents have been granted for Pharmaceutical and drug formulations (dental care, mycobacterium tuberculosis, cytokine potentiator, narcolepsy, sleep disorder). 39 patents each have been assigned for uses in biochemistry and biotechnology and as food and nutrition supplements. Other uses include surfactants (15), insect repellants and plant growth and control (11), fuel and lubricating oil (10), carpet and fabric cleaning (9), anti-foaming and post foaming composition (8), bleach composition (5) and adsorbent.

CUMIN

101 patents have been granted on the different uses of cumin. 42 patents have been granted to inventors from USA, Germany has been granted 17 patents followed by Japan (13). Individuals have been granted 10 patents, University of Iowa Research Foundation 2 patents and the remaining patents have been granted to corporations. Mars Incorporated and McCormick & Company have been assigned 5 patents each. 22 patents have been granted for the use of cumin as food, nutritional supplements, beverages and drinks. 16 patents have been granted for pharmaceutical and medicinal compositions and 14 patents have been granted for air fresheners and perfumes.  Other uses include cosmetics and body care (8), detergents, soap and sanitizing compositions (7), artificial firelog with crackling additives (6), coating and insulation packing composition (5) encapsulation composition (4), animal health and food composition (4) biochemical and biotechnology uses (3) and polymer composition (2).

PEANUT

Fifty five patents have been granted for various uses of peanut from 1996-2001. Out the these, inventors in United States have received forty five patents i. e. more than 2/3rd of patents granted followed by Germany (4), Japan (3), Israel (2) and Canada (1). Twenty eight patents have been granted for use of peanut in food stuffs and consumables like oil quality, butter, protein cake, nut spread with less stickiness and increased flavor, blended nut spreads and creamy chocolate flavored nut spread. Seven patents have been granted for the use of peanut in agriculture (plant improvement and in plant protection compositions). Five patents have been granted for the use of peanuts in pharmaceutical drugs. Besides these patents have been granted also for preparing lubricant/grease, coating material, for removing colour from sugar, separating agent for dusting solder oxides, cosmetic composition, antibody against peanut agglutinin, etc. Six patents, have been assigned to The Procter & Gamble Company for use of peanut in food stuffs and consumables like nut spread with less stickiness and increased flavor, blended nut spreads and creamy chocolate flavored nut spread. Three patents have been assigned to Bayer Aktiengesellschaft for pesticide compositions and environmentally safe well fluid for drilling and three patents have been assigned to University of Florida Research Foundation, Inc. for use of peanut in enhanced peanut plant line (plant improvement).

CASTOR

For various uses of Castor, 190 patents have been granted during the last five years. Inventors in United States have received eighty patents followed by Japan (36) and Germany (28) while inventors in India have received only four patents. Based on use, fifty seven patents have been granted for use of castor in various pharmaceutical compositions as a surfactant, solvating agent, as oil in water emulsion for soft gelatin capsules, sustained release pharmaceutical tablets with tramadol base, long acting injectable formulations containing hydrogenated castor oil, aqueous preparations containing hardly soluble drug, for treatment of various skin/eye/ear disorders, promoting hair growth, and cure of diabetes, cancer, HIV, arthritis, trest infestation, blood pressure, etc. Forty patents have been granted for use of castor in preparation of polyurethane resins, polyurea elastomer systems with improved adhesion to substrates, foamable polyurethane compositions with a good flow behavior, rigid polyurethane foams, polyurea elastomer with increased adhesion, low viscosity polymer polyols, waterproof plastic foam, other coating materials and foams. Twenty seven patents have been granted for use of castor in cosmetic compositions, low residue solid antiperspirant,  gelling agent, hydroalcoholic cosmetic micro emulsions, softening agents, solvating surfactant, etc.,  personal care products, soaps, skin tanning, nail, anti-perspirant composition. Six patents have been granted for use of castor in agricultural compositions in pesticides/insecticides and for coating of fertilizers. Besides these, castor has been used for wide range of products like ink/dyes/paints (14), lubricant/grease (8), rubber composition (4), detergent composition (4), cleaved products (3), etc. Most of the patents have been assigned to Henkel Corporation(8) for use of castor  in preparation of polyurethane   resins,  in   textile  dyes  and  in   agro-product(pesticide composition) and Bayer AG (8) for use in injectable formulations of agricultural use, polyurethane compositions with low viscosity followed by Colgate-Palmolive company(6) for use in antiperspirant composition and desensitizing dentifrice with reduced astringency, and to McNeil-PPC, Inc(5) for use in pharmaceutical medicants for coating of capsules.

Part II  : The case of castor and Peanut

Recognizing the limitations of the data as well as search strategies used to generate the data from various patent databases, we still get some very useful insights from the analysis of the patents ( see Table 5.1 – 6.4).

Castor: About twenty patents (or little more in USPTO) have been granted every year in USPTO and EOP during 1996-2000 in castor( Table 5.1). The regrettable part is that Indian have obtained only two patents in USPTO and four patents in EPO ( Table 5.5 and 5.6). It is obviously an alarming situation in a crop in which we have a dominant share in the world. The fact that pharmaceuticals ( 42  patents in USPTO and 28 in EPO. Table 5.2) and Polyurethane compositions ( 13 each in USPTO and EPO) occupy the maximum number makes the situation even more disappointing because drugs and chemicals are two areas in which Gujarat has preeminent position in the country. Obviously, we have not built adequate linkages among Research and Development processes and policies in industrial and agricultural sector. The private sector has in general been averse to investing much resource in R and D at firm level. But even the farmers' and industrial associations have not apparently taken adequate steps in this direction. Various companies that have been assigned the patents in different R and D categories are listed in Table 5.3 and 5.4. Among the countries in which inventors have taken lead are USA and Germany (Table 5.5 and 5.6). This will have implications for our export targeting and also future growth of value added exports. It is extremely important that we challenge those patents which seem   to be based on the products already existing and being used in India. While in other cases, we will have to invent around the patents already granted and develop new products, processes and uses.
 
Peanut:  There are 55 patents granted at USPTO on various products as well as processes on this crop (Table 6.1). Maximum number is for food stuff related products (table 6.2). As is apparent from Table 7.3 and 7.4, Indian companies or inventors are not visible in any value added product category.

Part III: Policy Implications

The general situation with regard to seeking of intellectual property protection is not very satisfactory in the country. The share of Gujarat is very low in the number of patents obtained by Indians in various states at USPTO since 1976 (Gupta, 2001). In this paper we have looked at some of the major spices and edible and non-edible oilseeds crops, which are exported from Gujarat. The situation with regard to creation and protection of intellectual property rights is very dismal. Under such a situation, we cannot become very competitive without changing our policy and institutional structure. 

Some of the suggestions are:

a)	There is a need for time bound targets to reduce export of raw commodities and instead export only value added products based on proprietary technology protected by intellectual property rights, as far a s possible.
b)	There is a need to monitor regularly the kind of patents being issued worldwide every week so that patents that can be challenged on the ground of available prior art in India or elsewhere can be opposed. This can be done by setting up special cells for the purpose. 
c)	We need to also identify those patents which are expiring so that technologies described in those patents can be shared with small scale manufacturers of  value added products.
d)	In some cases where we can not oppose the patents, licensing terms be negotiated through firm to firm level exchanges or association to firm level exchanges so that industry wide improvement in quality and competitiveness can be achieved.
e)	There is a need to popularize existing incentives for encouraging inventors to file patents and generate new incentives for the purpose. 
f)	A small cess be charged on every export consignment as well marketing volumes in big mandis (such as Unjha for instance) so as to generate resources for funding creation of intellectual property rights
g)	A network be created among R and D institutions in private, public and NGO sector and the relevant commodity association so that patentable value added products are developed in a time bound manner. The existing policies for supporting R and D activities in the state be broadened to include such activities.
h)	A MOU be signed with Director General, CSIR so to develop a joint program for value added technology development. CSIR has filed about 450 patents this year and is in a unique position to strengthen the efforts of the state government.
i)	Various industry associations like CII, and Gujarat Chamber of Commerce need to be supported for setting up Patent Facilitation Cells
j)	It is very obvious that competitiveness of agricultural exports cannot be strengthened only by emphasizing segmented approach of policy making. Large number of patents have been obtained for non agricultural uses including drugs, cosmetics, chemicals, and other industrial applications. This requires change in the present policy perspective in a fundamental manner. Inter-sectoral  empowered working groups need to be created so that through close partnership between private, NGO and public sector,  value added products are developed and patents obtained on the same. Technology Mission on Oil Seeds and NDDB should be involved closely to facilitate transition to new policy regime. 
k)	Special awards need to be instituted for development of technologies that improve export competitiveness of Agricultural commodities. 
l)	In many cases, value added products can be developed by building upon grassroots innovations documented by Honey Bee network and National Innovation Foundation, for instance for developing herbal pesticides, herbal drugs or cosmetics. Such initiatives also need to be supported so that viable bridges can be built among farmers innovators, industrialists, and exporters.
m)	All the commodity associations need to create wider social awareness about existing intellectual property rights by getting abstracts of patents (granted as well as applied for) translated in local languages. A centralized database can also be created in NGO sector for making worldwide information on existing patents on various commodities, available to farmers, small-scale industrialists in food processing, drug, chemicals and other elated sectors, scientists, and other stakeholders. This local language database on relevant patents will be one of the first such attempts in the country and may pay rich dividends in due course. It could also be hosted on web.
n)	Databases like M-CAM Doors which make the task of tracking and valuing intellectual property rights much easier may be subscribed by the patent facilitation cells so that scarce research resources are allocated most judiciously.

It is hoped that with in next five years, the composition, and pattern of exports will change drastically enabling much higher value realization to all the actors involved in value chain most importantly farmers and workers.

Note: Analysis of Pysllium, cumin, fennel and coriander provided as presentation

Search terms : “Castor, Ricinus spp.

TABLE 5.1 PATENTS GRANTED ON CASTOR(Ricinus spp.) AT UNITED STATES AND EUROPEAN PATENT OFFICES BETWEEN 1996 TO 2000

PATENT
OFFICES	PATENTS FILED DURING DIFFERENT YEARS (1996-00)	TOTAL	
	1996	1997	1998	1999	2000		
European patent office	19	24	24	25	28	120	
U. S. Patent & Trademark office	15	14	22	24	22	97	

TABLE 5.2 NUMBER OF PATENTS GRANTED UNDER DIFFERENT CATEGORIES BASED ON USES OF CASTOR (Ricinus spp.) FROM 1996-2000.

Sr. No.	Category
(Based on use)	EPO	USPTO	
1.	Agro products (Plant protection, fertilizer composition, etc) and Animal purposes 		25	04	
2.	Pharmaceutical drugs and composition
(surfactant, solvating agent, sustained release tablets, injectable formulations, treatment medicines for cancer, HIV, diabetes, arthritis,etc.)	28	42	
3.	Cosmetic compositions and tooth paste
(gelling agent, surfactant, absorption agent, softening agent, micro emulsions, etc.)	20	14	
4.	Lubricants and grease and coating material	08	11	
5.	Polyurethane compositions, polymers and foams	13	13	
6.	Dyes, paints and pigments	06	06	
7.	Treating nonwoven fabrics and liquid detergent composition	03	01	
8.	Ink cleaner and immobilizer	02	01	
9.	Non pollutant compositions and reduce pollution composition 	02	01	
10.	Other 		13	04	
	Total	120	97	
TABLE 5.3 TOP ASSIGNEE CORPORATION/COMPANIES AT UNITED STATES PATENT and TRADEMARK OFFICE (USPTO) FROM 1996-2000.
Sr. No.	Corporation/ Company	No. of patents	Category	
1.	Alcon Laboratories, Inc	05	•	Pharmaceutical drugs   
     Storage-stable prostaglandin composition.
        Ocular hypertension.
      Anti-inflamatory	
2.	Colgate-Palmolive Company	05	•	Antiperspirant composition
•	Desensitizing dentifrice with reduced astringency	
3.	Henkel Corporation	05	•	Agro products (Pesticide compositions)
•	Polyurethane Resin
•	Textile Dying	
4.	McNeil – PPC, Inc.	04	•	Pharmaceutical medicament	
5.	NaPro Biotherapeutics, Inc	04	•	Pharmaceutical composition (carrier solution in injectable/pharmaceutical composition with taxol)	

TABLE 5.4 TOP ASSIGNEE CORPORATION/COMPANIES AT EUROPEAN PATENT OFFICE FROM 1996-2000.
Sr. No.	Corporation/ Company	No. of patents	Category	
1.	Henkel Corporation	07	•	Agro products (Pesticide compositions)
•	Polyurethane Resin
•	Textile Dying	
2.	Bayer AG	07	•	Agro products (injectable formulations)
•	 Polyurethane compositions  with low       viscosity	
3.	Colgate-Palmolive company	06	•	Antiperspirant composition
•	Desensitizing dentifrice with reduced astringency	
4.	Caschem, Inc.	04	•	Production of Cleaved Products
•	Polypropylene compatible grease compositions for optical fiber cable	
5.	Novartis AG	03	•	Agro products (pesticide composition)	
6.	Unilever N.V. ! Unilever PLC	03	•	Cosmetic composition (Antiperspirant)	
7.	Akzo Nobel N.V.	03	•	Pharmaceutical composition (capsule)	

TABLE 5.5 PATENTS FILED BY VARIOUS COUNTRIES AT UNITED STATES PATENT OFFICE ON CASTOR ( Ricinus spp..) FROM 1996-2000

Sr. No.	Assignee Country	United State Patent and Trademark Office	
1.	United States	64	
2.	Germany	10	
3.	Japan	06	
4.	India	02	
5.	Others	17	
	Total	97	

TABLE 5.6 PATENTS FILED BY VARIOUS COUNTRIES AT UNITED STATES PATENT OFFICE ON CASTOR ( Ricinus spp..) FROM 1996-2000

Sr. No.	Assignee Country	United State Patent and Trademark Office	
1.	United States	57	
2.	Germany	21	
3.	Japan	10	
4.	Netherlands	05	
5.	India	04	
6.	France	04	
7.	Others	19	
	Total	120	

Search Key : “castor , Ricinus spp.”

Source site : www.USPTO.gov
		    www.espacenet.com

Search terms : “Peanut, Groundnut, Arachis hypogea”

TABLE 6.1 PATENTS GRANTED ON PEANUT/GROUNDNUT(Arachis hypogea) AT UNITED STATES PATENT & TRADEMARK OFFICES  BETWEEN 1996 TO 2001

PATENT
OFFICE	PATENTS FILED DURING DIFFERENT YEARS (1996-01)	TOTAL	
	1996	1997	1998	1999	2000	2001		
U. S. Patent & Trademark office	7	9	6	12	16	5	55	

TABLE 6.2  NUMBER OF PATENTS GRANTED UNDER DIFFERENT CATEGORIES BASED ON USES OF PEANUT(Arachis hypogea) FROM 1996-2001.
Sr. No.	Category
(Based on use)	United States patent office	
1.	Food stuffs and Comsumables (Oil quality,butter, protein cake,etc.)	28	
2.	Agro products (Plant protection, Plant improvement, etc) and Animal purposes	07	
3.	Pharmaceutical drugs and composition	05	
4.	Lubricants and grease and coating material	02	
5.	Antibody against peanut agglutinin (binds to surface)	02	
6.	Separating agent for dusting solder oxides (for use in printed wiring board)	02	
7.	Oil as part of storage device for shaving razors	01	
8.	Cosmetic compositions		01	
9	Shortening composition (filler) material in breast prosthesis envelope	01	
10	Removal of color from sugar solutions	01	
11	Others	05	
	Total	55	

TABLE 6.3 PATENTS GRANTED TO VARIOUS COUNTRIES AT UNITED STATES PATENT OFFICE PEANUT(Arachis hypogea) ON FROM 1996-2001
Sr. No.	Assignee Country	United State Patent and Trademark Office	
1.	United States	45	
2.	Germany	04	
3.	Japan	03	
4.	Israel	02	
5.	Canada	01	
	Total	55	

TABLE 6.4 TOP ASSIGNEE CORPORATION/COMPANIES AT UNITED STATES PATENT and TRADEMARK OFFICE(USPTO) FROM 1996-2001.
Sr. No.	Corporation/ Company	No. of patents	Category	
1.	The Procter and Gamble Company	06	•	Food Stuff and Consumables 
     Nut spread with less stickiness and
     increased flavor
     Blended nut spreads
     Creamy chocolate flavored nut spread	
2.	Bayer Aktiengesellschaft
	03	•	Agro products (Pesticide compositions)
•	Environmentally safe lubricated well fluid for drilling	
3.	University  of Florida Research Foundation, Inc
	03	•	Agro products (enhanced peanut plant line)

Search terms : “Peanut, Groundnut, Arachis hypogea”