"KRW 90 Billion Annual Royalty" Bio Industry Faces Burden of Disclosing Genetic Resource Origins

A survey revealed that the majority of domestic bio companies feel burdened by the disclosure of genetic resource origins. Disclosure of genetic resource origins refers to revealing the origin information of genetic resources when filing a patent for an invention utilizing those genetic resources.

In this process, companies producing high value-added products using genetic resources from developing countries share a portion of the profits (royalties) obtained from those products with the providers of the genetic resources. For example, Swiss Roche, which developed the novel flu treatment Tamiflu using the Chinese genetic resource plant called ‘Pogostemon cablin’ (Pal-gak), must share part of the Tamiflu sales revenue with the Chinese provider of Pal-gak.

The international community is also discussing sanctions such as canceling or invalidating patents if applicants fail to comply with the disclosure of genetic resource origins. In May this year, discussions on the disclosure of genetic resource origins will be held in Geneva, Switzerland, led by the World Intellectual Property Organization (WIPO).

Prior to this, the Korean Intellectual Property Office (KIPO) recently conducted a ‘Corporate Survey on the Disclosure of Genetic Resource Origins’ targeting domestic bio companies. The results showed that 9 out of 10 domestic bio companies feel burdened by the genetic resource origin disclosure system.

Domestic companies cited reasons for feeling burdened by the disclosure of genetic resource origins, such as intermediaries failing to provide origin information when genetic resources are procured indirectly through them, or limitations in identifying origin information when resources are procured from multiple countries.

In particular, companies expressed concerns that depending on the level of sanctions for non-compliance with genetic resource origin disclosure, negative impacts such as reduced research and development, decreased patent filings, and delays in patent registration could occur in addition to royalties.

According to the survey, if disclosure of genetic resource origins becomes mandatory, the royalties domestic companies would have to pay abroad annually due to the use of genetic resources are expected to reach 90 billion KRW.

Moreover, depending on the ‘level of sanctions such as patent invalidation or cancellation for non-compliance with disclosure’ to be decided in Switzerland in May, additional royalties amounting to hundreds of billions of KRW could arise.

KIPO, recognizing these concerns from the bio industry, has been sharing trends related to genetic resource origin disclosure and holding meetings to gather opinions from related industries and institutions to explore response measures for domestic companies.

The survey was conducted on 1,700 domestic bio companies, with a response rate of 20.1% (sampling error 95%, confidence level ±5.2%). The survey results can be found on the Korea Intellectual Property Research Institute website.

Jung In-sik, Director of the Industrial Property Protection Cooperation Bureau at KIPO, said, “If disclosure of genetic resource origins becomes mandatory, we will carefully examine the impact on the domestic bio industry and the survey results to ensure that the interests of domestic companies are maximally reflected in the genetic resource treaty.”

This content was produced with the assistance of AI translation services.