About the AgAccord
The first of the commercial biotechnology events in the United States will be going "off-patent" and becoming "generic" in 2014. To prepare for the transition, the Biotechnology Industry Organization (BIO) and the American Seed Trade Association (ASTA), together with its members worked with the agricultural value chain to create the AgAccord℠. The AgAccord is intended to provide a predictable and transparent mechanism to address patent expiration for agricultural biotechnology events.
The AgAccord is now complete and will support a seamless transition to a marketplace that includes both proprietary and off-patent events. Creation of the AgAccord is a substantial milestone for the agricultural biotechnology industry and it is well in advance of the need as the number of events coming off-patent in the near future is small and won't increase significantly until after 2020.
The AgAccord establishes a contractual framework to support business opportunities for those seeking to use off-patent events in the United States while ensuring important global regulatory commitments are maintained for off-patent events so that U.S. exports of products containing these events are not disrupted. The AgAccord comprises two separate agreements that cover the full spectrum of issues related to patent expiration — the Generic Event Marketability and Access Agreement (GEMAA℠) and the Data Use and Compensation Agreement (DUCA). The GEMAA entered into force in November 2012 and has 10 signatories. The DUCA opened for signature in December 2013.
The AgAccord agreements promote choice in the seed marketplace by supporting access to off-patent events and also preserves intellectual property rights, so to promote continued innovation in the U.S. seed and biotechnology industry. These agreements complement industry's extensive use of licensing agreements. Pre-patent expiration licensing and cross licensing in the biotechnology and seed industry is responsible for the wide-spread use of patented biotechnology events in the United States and has contributed to the growth in the combined-event (stacks) seed product market. Currently, it is estimated that over 50 percent of the combined-event seed products on the market today are the result of pre-patent licensing agreements.
The AgAccord simply establishes a standard process to make off-patent events and the proprietary regulatory information that support trade in materials containing these events available to interested parties that might not otherwise have access prior to patent expiration.
The AgAccord provides agricultural stakeholders:
- confidence that trade will be maintained, by providing a contractual framework for signatories to commit to maintenance of regulatory authorizations post patent expiration;
- access to off-patent events;
- continued stewardship of off-patent events
- alternative processes for negotiating and arbitrating access to proprietary regulatory information, such as data and studies, thereby enabling the ability to create new proprietary combined event seed products that include off-patent events.
- Access to off-patent events for signatories;
- Commitment to maintain trade and stewardship of events; e.g. a process for discontinuing events and a legal commitment to maintain trade for a period of time post last sale of the event;
- Obligations to engage in good-faith negotiations prior to patent expiration;
- A process for signatories to enter into negotiations for data compensation (optional under the GEMAA; mandatory under the DUCA);
- An inclusive governance that is open to any signatory, including farmer's representatives. These representatives will help steer the future of both the GEMAA and DUCA as the marketplace evolves.
- Provides greater flexibility.
- Provides the PRP Holder a choice while ensuring fair access to the off-patent event. If a PRP Holder chooses not to share proprietary regulatory property, they agree to bear the full cost of maintaining authorizations for their off-patent events which allows the opportunity for a generic market with appropriate regulatory stewardship.
- Data compensation is negotiable and subject to arbitration, but is not mandatory.
- Provides access to events covered under the GEMAA.
- Provides a clear path for a signatory exiting the market for an event to transition the responsibility to maintain authorizations for an off-patent event.
- Greater predictability, as the process for negotiation and arbitration are structured.
- Access to PRP and data compensation is mandatory for users of an off-patent event.
- Access to Events covered under the DUCA.
- Provides a clear path for a signatory exiting the market for an event to transition the responsibility to maintain authorizations for an off-patent event.
- Signatories would have access to events covered by both the GEMAA and the DUCA;
- Signatories would be bound to following the DUCA process. Once a company becomes signatory to the GEMAA and DUCA, they cannot later choose to follow the GEMAA process, unless they withdraw from the DUCA.
- Maximizing technology benefits;
- A commitment to thorough testing for food, feed and environmental safety;
- Full compliance with applicable regulatory requirements; and
- Continual active engagement with the value chain to evaluate and promote appropriate stewardship approaches.
Frequently Asked Questions
A: The AgAccord is a unique private sector led solution to address important marketability, regulatory and stewardship issues resulting from patent expiration on commercial agricultural biotechnology events in the United States. The patent on the first commercial biotechnology events expire in 2014. Between 2014 and 2020 only a handful of event patents will expire, but the number of patents on currently commercial products is expected to increase significantly after 2020.
The AgAccord consists of two agreements, the Generic Event Marketability and Access Agreement (GEMAA) and the Data Use and Compensation Agreement (DUCA).
Most important, the agreements under the AgAccord establish contractual frameworks for the agricultural biotechnology industry to manage the transition to a seed market that includes off-patent biotechnology events. The agreements provide an enforceable framework to make off-patent events available to interested signatories, and to ensure that export authorizations and stewardship are maintained to support the marketing of products containing off-patent events accessed through the AgAccord agreements.
A: Before the AgAccord there was no comprehensive legal mechanism, legislative or private, to facilitate access to an off-patent event or share or transfer regulatory or stewardship responsibilities to new users of the off-patent event. A comprehensive solution to manage this process is necessary because agricultural biotechnology events are highly regulated around the world and require continued regulatory support after patent expiration in order to ensure commodity trade is not disrupted in key international export markets. Trade is a major contributor to the U.S. agricultural economy and it is critical that the rise of a generic marketplace does not threaten hard earned market access. In sum, if there is demand for seed products containing off-patent biotech events in the United States, the AgAccord was created to support that market.
A: It is difficult to forecast demand for off-patent events. The primary cost of marketing biotechnology events are the global regulatory cost. These are costs that go to maintaining and obtaining regulatory authorizations in countries that import U.S. commodities, such as corn and soybeans. Often, importing countries have time-limited authorizations, meaning that the biotechnology company marketing that event must maintain and submit regulatory data to authorities on a regular basis. The AgAccord cannot reduce global regulatory costs, but the AgAccord agreement establishes a process to ensure that regulatory authorizations are being maintained to facilitate global trade.
It is important to note that seed germplasm is often protected by intellectual property, meaning that a seed company specializing in developing elite germplasm may license-in biotechnology events to incorporate into their proprietary germplasm, this practice will likely continue once the event patents expire. In such circumstances the seed product would be proprietary even though the event is off-patent. Therefore it is important for seed companies and farmers to communicate about what are fully "generic" products. Communication along the agricultural value chain, such as this, is a core component to both agreements under the AgAccord.
A: If there is demand for off-patent events, both the GEMAA and DUCA are designed to support access. The agreements under the AgAccord promote communication along the agricultural value chain. It is important for farmers and their local and national representatives to communicate with biotechnology and seed companies about their interest in having access to off-patent events. This communication will help determine if there is demand for off-patent events and will potentially drive interested parties to use the AgAccord Agreements to facilitate access.
A: PRP is another formal property right developed and owned by agricultural biotechnology developers. PRP refers to the information developed by a biotechnology company to gain authorizations in an importing country so that grains and oilseeds derived from agricultural biotechnology seeds can be exported. The authorizations themselves are also PRP. Global regulatory support for events is one of the significant costs of marketing an event. A company's PRP has value and does not fall into the public domain upon patent expiration. At the same time, it can be time consuming and expensive to recreate PRP from scratch. While PRP under the AgAccord may remain the property of the original owner, the AgAccord recognizes the need for access to PRP in a generic market place.
Access to the PRP is most significant in two circumstances 1) when an original developer chooses to discontinue regulatory support; and 2) when a company chooses to create a new proprietary combined event seed product containing an off-patent event and needs to create a regulatory support package for the new product to gain authorizations in export markets. (Many importing countries require separate authorizations for combined event seed products, even when the single events have been previously authorized.)
The AgAccord was built to respect this ownership and property right while simultaneously paving the way for development of a generic marketplace. It accomplishes this by setting market based negotiating parameters that signatories can use to structure their negotiation.
A: No, the AgAccord Agreements are non-exclusive, for example, this means an interested party that is not a signatory to either AgAccord agreement can approach a biotechnology developer and request access to the PRP before or after patent expiration. If pre-patent expiration, the biotechnology developer may provide access to the event and PRP under license to a non-signatory. If after patent expiration, the biotechnology developer that is a signatory to either agreement can provide access to the off-patent event and the PRP to a non-signatory; however the terms of such outside agreement must be consistent with the signatory's obligations under the GEMAA or DUCA.
A: Both the GEMAA and DUCA share principles and contractual commitments to protect the marketability of off-patent events, for example:
GEMAA and DUCA differ by providing choice with respect to mechanisms for sharing and transitioning PRP to new users of an off-patent event. This provides flexibility for all types of stakeholders to utilize a process that best suits their specific needs.
The GEMAA provides flexibility to the holder of PRP to maintain regulatory authorizations independently. On the other hand, the DUCA requires its signatories to enter into negotiations for data compensation, so those using the off-patent events share in the cost of maintaining regulatory authorizations. In turn, those sharing the costs have the ability to create new proprietary combined event seed products.
Each potential signatory will have to make an independent decision to determine which agreement best suits their needs, the GEMAA, DUCA or both.
A: Each potential signatory will need to make an independent decision whether to sign either the GEMAA or DUCA or both. Both agreements commit signatories to maintain trade and provide access to off-patent events. However, the decision to sign either the GEMAA or DUCA or both will depend on a number of factors, such as:
A: Yes, the GEMAA entered into effect in November 2012 and has 10 signatories. The Committee of Signatories that oversees implementation of the GEMAA is now active.
A: No, the DUCA opened for signature in December 2013, and will become operational once 3 parties that are currently PRP holders or have petitioned the U.S. Department of Agriculture for non-regulated status for an event have signed and 3 parties that are not covered by the above have signed, for example seed companies that are not PRP holders or national farm organizations.
A: No, the scope of the AgAccord is exclusively focused on events patented and commercially cultivated in the United States and regulatory authorizations in U.S. export markets.
A: Currently, nearly ninety-percent of cotton, corn and soybean acreage in the United States is planted with seed varieties containing biotechnology events. Grain from these crops is traded globally, accounting for over $40 billion annually, making the United States the largest producer and exporter of crops and grain derived from biotechnology globally. If a regulatory authorization in an importing country lapses for an off-patent event, trade to that country could stop. Therefore both the GEMAA and DUCA establish commitments on Signatories that are marketing off-patent events in the United States to maintain international regulatory authorizations in relevant U.S. export markets.
A: Yes, universities and public institutions are welcome to sign on to the AgAccord agreements. For the AgAccord to reach its full potential it will be important for there to be a diverse body of signatories.
A: It depends on the size and business organization of the signatory. Both agreements are intended to be operated at minimal cost. Certain entities are eligible to be exempt from paying operating costs, for example non-profits, such as 501(c) corporations and small businesses with fewer than 100 employees receive a full exemption from operating costs. Companies with 100 or more but fewer than 250 employees will be obligated to pay discounted operating costs (half of a full share). All other entities are required to pay a full share. Legal fees that may result from the operation of either agreement are considered an operating cost.
By signing the GEMAA or DUCA, a company does not commit itself to paying the costs of global regulatory authorizations. Sharing in the costs of global regulatory authorizations is only relevant if a company chooses to enter into negotiations for access to the PRP and the amount would be determined by negotiation or arbitration and would not apply unless that signatory executes an agreement resulting from negotiation or arbitration.
A: The AgAccord agreements do not create a legal entity, but is a legal contract among signatories. Under the GEMAA, an administrator has been hired to carry out administrative tasks at the direction of the Committee of Signatories. The GEMAA Committee of Signatories oversee the discretionary activities and implementation of the GEMAA.
The same model will be used to operate the DUCA. The DUCA Committee of Signatories will be unique from the GEMAA Committee of Signatories; a signatory of both agreements may not have a representative on both Committees.
A: Yes, ability to amend the GEMAA and DUCA is important so to ensure that the agreements can be adjusted over time to address issues that were not contemplated when the agreements were drafted. Any signatory can propose an amendment. Amendments can only be made by the Committee of Signatories to either agreement. Any amendment that materially affects the rights and duties of all signatories must be agreed to by 60% of all signatories.
A: Yes, signatories can withdraw from either the GEMAA or DUCA, provided that they provide one-year written notice. Withdrawal does not relieve a signatory from its obligations under either agreement that are in effect at the time of withdrawal.
A: We use the term stewardship in a broad sense when speaking of the AgAccord to mean maintaining the proper support for national legal and regulatory requirements and the proper approach to markets and customers.
Excellence Through Stewardship® (ETS) defines stewardship as a life cycle approach to product management. It is the responsible way to manage biotechnology-derived plant products from their discovery and development, to their use and eventual discontinuation. Plant biotechnology stewardship for the product life cycle focuses on:
Any potential signatory of either AgAccord agreement that develops, grows, produces, markets, sells, processes, handles or maintains authorizations for seed products containing events shall be a member of ETS, be under contract with a member of ETS or maintain a seed product stewardship program that complies with the product life cycle stewardship and Quality Management System (QMS) guidelines established by ETS, as verified in an audit of the program by a certified ETS auditor. Once a Signatory decides to share in or take over responsibility for an off-patent event, that Signatory must provide documented proof of stewardship.