Ag Biotech Patents on the Move

Innovation in agricultural biotechnology has recently flourished. Since the late 1980s and continuing into the 1990s, a variety of firms have secured key patents, from relatively small seed supply companies and research-oriented agbiotech firms to large multinational corporations. But beginning in the late 1990s, the larger companies began acquiring the smaller ones. Mergers among several of the large firms placed a majority of agbiotech patents in the hands of a dwindling number of large, international corporations.

This concentration of patent ownership means that an increasing share of future research will probably be done by companies with the large scale necessary to handle technology development, product marketing, and regulation compliance efficiently. But these companies might restrict research to complement their existing products. Small startup companies might still pursue innovative avenues of research, but probably with an eye toward becoming acquisition targets or benefiting from licensing revenue. Patents will play a key role in either of these strategies.

A recent study analyzed changes in patent ownership of more than 3,000 agbiotech patents owned by a sample of U.S. and European companies. Agricultural biotechnology patents issued between 1976 and 2000 were classified by their original patent holders and their 2002 owners. The study reveals that by 2002, fully 95 percent of patents originally held by seed or small agbiotech firms had been acquired by large chemical or multinational corporations.

Furthermore, none of the smaller firms acquired patents from the larger ones, and none of the patents changed hands among the different types of large firms. For instance, chemical companies retained all 651 patents for which they were the original owners, but also acquired 219 patents from agbiotech firms and 451 patents from seed companies. With key patents being held by fewer companies, intellectual property ownership will probably continue to affect agbiotech industry structure and the pace and direction of future research.