There are as many areas of collaboration in biotechnology as there are biotechnology areas. Since technology has made the world globalized, international research collaboration has gained momentum. With the increasingly complex and fast-changing global issues of today, researchers have found great benefit from international multidisciplinary expertise. International collaboration enables researchers to share their knowledge and combine perspectives to solve complex problems that are increasingly cross-disciplinary in nature. The need for collaboration has increased even more because of the global struggle to address the COVID-19 pandemic.
While globalization has enabled an ever-increasing amount of collaboration across borders, challenges nonetheless exist. The availability and affordability of therapeutics and vaccines in LMICs are among the key challenges. Other challenges for collaborations include overcoming language barriers when working with people from foreign countries or addressing issues specific to the local community and managing the complexity and transparent enforcement of IP rights.
Being mindful of cultural differences when pursuing international agreements is important because culture in large part determines the rules for creating an agreement, and how an agreement is carried out in practice. In some cultures, the goal of a business negotiation may be a signed contract between the parties. Other cultures tend to consider the goal of a negotiation to be not merely a signed contract, but also the creation of a relationship between the two parties. Therefore, the preliminaries of a licensing agreement, in which the parties seek to get to know one another thoroughly, are critical.
Methods of communication also vary among cultures. Some emphasize direct and simple methods of communication while others rely heavily on indirect and complex methods. These cultural differences can be as complex as the legal framework under which agreements are formulated or as simple as the meanings attributed to a particular word. For example, in some contexts an American will take “yes” to mean “I agree”, while someone from Japan in the same context might take it to mean “I understand”. To avoid some of the cultural challenges in licensing agreements, the process should begin with standard templates and model agreements that are acceptable to all parties.
Considerations applying to cross-border collaborations and jointly owned IP
Some examples of challenges that can arise when licensing IP that is jointly owned by entities located in different jurisdictions where the laws of each may conflict in terms of patent, copyright and other IP (such as trade secrets) law and/or privacy laws are given below. Many (but not all, for example, privacy laws) of these issues can be addressed proactively by expressly defining either in a collaboration, IP rights management principles agreement or other IP management agreement, how co-owned IP, if any, will be managed and which laws apply.
Patent laws are not uniform. Patent laws vary among countries, and this can impact the handling of jointly made inventions. Examples include the statutory and case law definitions of who constitutes an “inventor” and whether exploitation of a jointly owned invention requires consent of the other joint owners. In the United States, for example, the default position is that joint owners can independently exploit their respective interests in the joint invention without any obligation to obtain permission from or report to the other party, whereas in most other jurisdictions, such as the European Union, Japan, the United Kingdom, Australia, China, Spain, etc., all joint owners must consent to the grant of a license to the joint invention. Other examples are the enforcement of jointly owned IP in court (US law, for instance, requires that all owners join the lawsuit, while in other countries any one of the joint owners may enforce the jointly owned patent) and filing obligations (for example, some countries, such as India, Italy, Singapore, South Korea, Turkey and the United Kingdom, have laws requiring their residents to file patents on their inventions in their country first). Furthermore, patent laws vary as to the kinds of biotech inventions that can be patented (“patentable subject matter”) in a country. As a result, it is important to identify precisely what technologies are covered by enforceable patent rights in a given country, and how the patent rights term in an agreement should be defined.
Laws and policies for ownership of IP at foreign institutions are not uniform. Many countries have developed laws and policies that enable academic institutions to take title to inventions made at academic institutions. However, these laws and policies are not uniform, making the administration of cross-border, jointly owned IP challenging. A single academic institution’s ability to take the lead and manage the patenting and licensing under the terms and conditions of an IIA or an IP rights management principles agreement is of critical importance to the commercial viability of the technology. Without an IIA in place, it is highly unlikely that one institution would spend money filing patents on an invention which will be difficult or impossible to license. No company wants to have to negotiate with two separate parties or negotiate with an individual researcher who might, as in some foreign institutions, be the co-owner of the patents. The clarity of ownership provided by laws such as the Bayh-Dole Act in the United States, and by extension the patent policies developed by institutions, is of vital importance for the successful commercialization of academic institution research.
Privacy and export control laws and regulations are not uniform. Differences in data protection (for example, GDPR vs. CCPA vs. the California Privacy Rights Act (CPRA)), privacy and export control (for example, EAR; ITAR; EU Regulation 428/2009) laws from one country to another must be considered. This requires collaborators to have or retain adequate expertise to address these issues. As explained above, the GDPR, drafted and passed by the European Union, is one of the strongest privacy and security laws in the world. It applies to individuals and entities located anywhere in the world if they are collecting data on people residing in the European Union. In some cases, it may be necessary to consider the data protection laws of a state or province. For example, the CCPA provides residents of California with more control over their personal information, including what information companies retain, what they use it for and whether they can sell such personal information. This law applies to any entity that meets certain thresholds in terms of gross annual revenue or the extent to which it buys, receives or sells the personal information of California residents, households or devices. The CPRA also places limits on data collection, retention and use. Complying with these data privacy laws becomes more and more important, since the digitalization of the healthcare sector leads to huge amounts of data that can be used to develop, for example, drugs and therapies. Thus, the secondary use of data needs to be regulated and addressed adequately to make use of this “data ecosystem”.
Accepted practices can vary among ecosystems, leading to conflicting expectations. Each territory often has its own unique set of best practices and policies. Differing default assumptions (that is, parties go into the negotiation having misaligned expectations of what “standard” terms and conditions consist of) can lead to protracted negotiations. Additional rounds of draft exchanges are involved in these negotiations, which delays the contemplated collaboration and decreases the likelihood of executing it successfully.
Cross-border collaborations between academic institutions and for-profit entities
Many of the challenges presented by cross-border collaborations between academic institutions and for-profit entities are similar to those outlined above. There are, however, some additional issues to consider.
Patent laws applying to exploitation of joint inventions differ. In some countries, a joint owner does not need prior consent to commercialize the joint invention (that is, to manufacture and sell products) although they must get permission from the other joint owners to license the joint invention. This advantages companies over academic institutions that do not commercialize their discoveries. As a result, incentives to participate and share ideas and nonpatentable information are diminished. In most other jurisdictions, joint owners do need the explicit consent of the other owners, which can be a limiting factor in the commercialization of technologies. To avoid unnecessary obstacles to fast dissemination and access to the market, parties are often adopting IP rights management principles agreements and mandating that one of the parties take the lead with respect to technology transfer-related activities, with the obligation of regular reporting on outcomes of such activities.
“Standard IP rights” granted under ISRAs vary. Customary IP terms that an academic institution is willing to grant to a company sponsor can vary by territory and this can lead to misunderstandings and protracted negotiations. For example, most US academic institutions are reluctant to (and often cannot) assign ownership of IP to a for-profit entity. However, there are some territories wherein academic institutions are willing to do so and, as a result, expectations between an academic institution and a for-profit entity at the commencement of a cross-border collaboration negotiation are often misaligned and require substantial communication as their respective starting positions may be far apart.
IP ownership and tax laws are not uniform. Various corporate laws applying to for-profit entities can also vary significantly by country. Examples include works-made-for-hire (some countries have addressed ownership in their statutes, while entities in other countries must address ownership via an employment or other contract), liability and tax laws.
Export control concerns. Personal data and genetic information can sometimes be subject to export control review.
(1)Export controls are laws and regulations that regulate and restrict the release of critical technologies, information and services to foreign nationals, within and outside of the United States, and foreign countries for reasons of foreign policy and national security. It is important for the academic institution to consult a trade lawyer prior to sending data outside the United States.
Impact of international regulations on cross-border collaboration
Cross-border collaboration in the biotechnology sphere, while attractive, requires careful consideration and compliance with international regulations. One overarching international regulation that has an impact on biotechnology cross-border collaborations is the Nagoya Protocol of the Convention on Biological Diversity (CBD).
The protocol was adopted in October 2010 in Nagoya, Japan, and enacted in October 2014. By October 2020, it had been ratified by 128 parties – 127 United Nations member states and the European Union. The United States has not ratified the Nagoya Protocol. One of the challenges with the Nagoya Protocol is the lack of uniformity in its implementation among member states. For example, some countries (such as China, India, South Africa and Brazil) have instituted patent disclosure requirements for genetic materials that are referenced and/or utilized in the invention, whereas others have opted to go with access and benefit-sharing contractual agreements to comply with national regulations governing genetic materials.
Even though the Nagoya Protocol requires that countries designate a focal point, there are many jurisdictions in which there remains a lack of clarity as to who owns a genetic resource – the country, the locality, an indigenous community or an individual, for instance. And further, in some jurisdictions there is a lack of clarity as to whether a synthetic biological material or a digital genetic sequence falls within the myriad national regulations. Sorting through the morass of regulations and laws that govern genetic resources (some of which are not only costly and burdensome but may result in criminal prosecution depending on the jurisdiction) can disincentivize collaboration and thus commercialization.