Department of Agricultural and Resource Economics

While biotechnology creates new opportunities for agriculture, developments are impeded by confusion in the system for awarding intellectual property rights (IPRs) over agro-biotechnological innovations. An intelligent redesign of the IPR system requires attention to how the definition of rights interacts with the market environment, generating incentives to create value. A distinction is drawn between cost-reducing innovations that increase the efficiency of producing homogeneous outputs and value-adding innovations that create entirely new types of differentiated outputs. A reform is proposed that would require the mandatory sublicensing of genes and certain core enabling technologies for creating genetically altered organisms.