Robert Sherwood Interview: Unprotected innovation
Author: Fábio de Castro
Source: Agência Fapesp, 25/06/2008
Agência FAPESP - International consultant and researcher in the area of technology transfer and commercialization, Robert Sherwood has dedicated the last two decades to investigating the role of intellectual property in developing countries.
Last Tuesday (24/6), the North American, one of the international experts consulted for the drafting of the Brazilian Innovation Law, presented, at FAPESP's headquarters, the lecture Successful commercialization of university and government-sourced technology: pitfalls and opportunities (“Successful commercialization of technology supported by government and university: pitfalls and opportunities”).
In an interview with Agência FAPESP, the consultant stated that the science produced in Brazil is of high quality, but does not often result in commercial products as it does not attract global private investors. And what drives these investments away is the fragility of the Brazilian intellectual property system.
Sherwood, who studied at Harvard College, Harvard University School of Law and Columbia University, worked in the field of international law and conducted a diagnosis of intellectual property systems in Latin America for the Inter-American Development Bank (IDB).
The experience led to the creation of a numerical analysis model that allows the evaluation of national intellectual property systems from the perspective of private investors. The approach was applied to 18 developing countries. Sherwood says he has made more than 150 visits to Brazil since 1972. Currently, he visits the country three times a year.
Agência FAPESP - Why does Brazil have so much difficulty in transforming scientific production into innovations inserted in the market?
Robert Sherwood - The Brazilian government invests immense resources in research, which guarantees world-class science. But the global private investment, necessary to transform this scientific and technological production into products, does not reach the country. Global investors are reluctant to put money in Brazil
Agência FAPESP - What is the cause of this reluctance?
Sherwood - They are aware of the high risks of investing in innovation and, therefore, do not want to put resources in countries with a weak intellectual property system, as is the case in Brazil. These investments end up going to the United States.
Agência FAPESP - Could you mention some of the weaknesses of the Brazilian intellectual property system?
Sherwood - No doubt it would be necessary to make at least some technical adjustments to the Innovation Law. I am not sure what would be the ideal time for these adjustments, but the law still has an experimental character, giving more importance to innovation with state investments than to fostering through private investment. The requirement for a public notice for the exclusive licensing of technologies developed with government funding is also a point to be reviewed. One of the most important needs is a comprehensive restructuring of the National Institute of Industrial Property (INPI). The Industrial Property Law also has confusing articles.
Agência FAPESP - How do these problems affect the commercialization of technologies? Could you exemplify?
Sherwood - Some of the start up companies, particularly in the biological and healthcare fields, are dealing with intellectual property issues. Let's say that a Brazilian company tries to advance an original technology, derived from the knowledge produced at the university. It is likely - unless it is a very simple technology - that its ability to commercialize, which involves product or process development, will require access to another foreign technology. There will be situations in which the supplier of this intermediate technology will refuse to make it available in Brazil, because it will not be adequately protected here. The development of technologies by Brazilian companies will then be delayed. This is part of the invisible effects of the weakness of the intellectual protection system in Brazil.
Agência FAPESP - In addition to the problems of legislation, can it be said that there are cultural obstacles? Does the scientist think little about innovation?
Sherwood - I think it is very important that more universities get closer to the commercialization of technologies. It would be essential that they think about their processes in a new way, understanding the importance of intellectual property to support commercialization. That way they would be in a position to act when politicians finally turn to intellectual property problems. In other words, those making inventions in Brazil need to experience a little more the process of moving to successful commercialization on a global scale.
Agência FAPESP - Should research be more market-oriented?
Sherwood - This is not a science focused exclusively on the market, but it would be necessary for the scientist to have the issue of intellectual property in mind since the beginning of a research. He could, first of all, check with international patent banks that his technology has not been patented - which would destroy the possible interest of investors. Scientists should also have closer contact with those who understand intellectual property, to keep in mind what products can be protected. Another fundamental point would be to file the patent application before publishing the scientific article.
Agência FAPESP - Isn't there a tension between the need to publish, to have credibility and to obtain resources, and the need to protect discoveries?
Sherwood - Both are important. The Brazilian scientist publishes a lot and this is important to advance knowledge. This needs to continue. But it is necessary to seek patents and look at where the potential commercials are, instead of wasting those possibilities. It is a matter of making sure that patent applications are completed before the article is published. I see no incompatibility between publishing and patenting. Just as I see no contradiction between basic science and applied science. Even with the potential of the market in view, the researcher can make scientific discoveries of high importance.
Agência FAPESP - How much could Brazil improve its technological production performance with an improvement in the intellectual protection system?
Sherwood - Experts around the world have long been perplexed by the contrast between the very high quality of science made in Brazil and the little energy that such good production places on the country's industrial base. The potential is really impressive. And it doesn't take much to fix that weakness. The cost is not great. On the contrary, if the intellectual property system were strong enough to bring in private investment, replacing the investments the government is forced to make, there would be much more public resources for other parts of the economy. Instead of trying to drive innovation, that money could be reallocated to the health and education system.
Agência FAPESP - You said that patent ownership is an illusory issue, that the most important thing is to know who has the power to negotiate licensing. Could you explain this point of view?
Sherwood - Patent ownership is not really the critical issue. Most important is the ability to negotiate rights to use the patent with private investment. No matter who owns the patent, it is necessary to elect someone who has wisdom, intelligence and who is a business person to formulate an arrangement in which the money will be distributed among the original source of government funds, the university, the department and the professor or the team that did the work that generated research joint ventures.
Agência FAPESP - Could you give an example?
Sherwood - Let's say that there is a team from Israel in partnership with a team from USP and they do an important commercialization of a new technology. We have to be sure about how we are going to distribute the gains from this commercialization, between the Israelis and USP. They are usually very complex determinations, but don't wait to define this after the product enters the market, or there will be a fight. From the beginning of the process, you need to know who will keep the money. And, no matter who the patent belongs to, it will be possible to appoint someone to do the negotiation wisely.
Agência FAPESP - What is your opinion about the incubators of Brazilian companies? Are they managing to transfer technology?
Sherwood - The movement of incubators in Brazil has an impressive growth. Most universities today have incubators, but most of them were created without any concern for intellectual property. Few of those I met understood the importance of the issue. Curitiba, for example, requires small entry-level companies to show their capacity for intellectual protection. I think they have a higher success rate with their graduate companies. Others do a great job, but do not have an adequate appreciation for intellectual property. I learned, for example, of visits by Chinese delegations to Brazilian incubators without imposing secrecy. The Chinese took pictures and asked for copies of diagrams. It's a mild type of espionage. Brazilian technologies would be benefiting the Chinese-based industry. I have no proof of that, but it is a justifiable fear.