Category Archives: market development

Branding stories; WIPO new online brand-search tool and Coca Cola

WIPO have launched another new tool this month.  See “WIPO Launches New On-Line Tool to Facilitate Brand Searches“. From their press release:

“A new on-line tool launched by WIPO … will make it easier to search over 640,000 records relating to internationally protected trademarks, appellations of origin and armorial bearings, flags and other state emblems as well as the names, abbreviations and emblems of intergovernmental organizations. The Global Brand Database allows free of charge, simultaneous brand-related searches across multiple collections.”

Thanks to WIPO for another free resource.  It is part of WIPO Gold, a “free public resource which provides a one-stop gateway to WIPO’s global collections of searchable IP data”

And the Coca Cola reference?  Well, whilst on the subject of brands, I was reading the Intellectual Asset Management blog.  They posted an item: “The Coca-Cola brand suffers a sharp fall in value as Google hits number one

Love it or loathe it, no matter where in the world you are, the chances of finding Coca Cola are pretty high.  It was interesting to read therefore that

“for the first time [Coca Cola] finds itself outside the list of the world’s top 10 most valuable brands, according to the annual Brand Finance 500 study”

The article concludes:

“…although there is a lot more to brands than trademarks, it does means that if you are working in-house as a trademark operator, the job that you are doing is absolutely vital to the maintenance (as well as the creation, of course) of profoundly important assets. I am sure that this is not huge news to the trademark practitioners reading this blog, but I wonder how many other people appreciate it. My suspicion is that it is not as many as should be the case.”

Not to be confused with corporate social responsibility; “For Pepsi, a business decision with social benefit”

A New York Times article entitled, “For Pepsi, a business decision with social benefit” told the story of a new venture involving Mexican farmers selling their crops to PepsiCo. 

 “PepsiCo’s work with the corn farmers reflects a relatively new approach by corporations trying to maintain a business edge while helping out small communities and farmers… The social benefits of the corn program are obvious in higher incomes that have improved nutritional and educational standards among the participating farmers, … but PepsiCo insists those benefits are ancillary to the business rationale for the program”

The article then goes on to list some other examples of creative business models that are able to satisfy the “triple bottom line” – interestingly even with products that are “profit-neutral” but that provide valuable intelligence about new and emerging markets.

The article made me smile quoting a spokesman from Dalberg Global Development Advisors who talked about corporate social responsibility (CSR) being “largely nonsense”.  Agreed — business models need to be a lot cleverer than relying on corporate consciousness to satisfy the complex goals of development.  This article highlighted another example of out-to-box thinking in ag development.

I sent the post to Peter Bloch to see what he thought and he said:

“Renowned economist Michael Porter participated in one of the main panel discussions at the World Economic Forum along with the CEOs of PepsiCo and Nestle.  Porter spoke out against Fair Trade.  His rationale was that Fair Trade is/was driven by a perceived need to pay small holder farmers a living wage irrespective of their efficiency.  This approach appealed to corporate CSR managers.  Porter described Nestle’s approach: Why is the small farmer poor?  Because he cannot grow enough (poor inputs, no mechanization) and the quality is poor.  So we will help him to grow more, higher quality food which we will buy at market prices.

This takes developing country poverty alleviation out of the Corporate Social Responsibility department into the business mainstream, and the approach – developing market-driven value chains – is consistent with the latest thinking at USAID and other donors.

(Thanks to Victoria Henson-Apollonio for sending me the original NYT link)

Plumpy’nut in the New York Times & Huffington Post

The New York Times just published an in-depth story on RUTFs.  Andrew Rice’s story provides a historical perspective and looks at the dramatic impact these products have had on humanitarian assistance.  He also examines the history of the invention, its eventual ownership by Nutriset and the patent dispute.  To read the story visit: “The Peanut Solution

 Here are a few excerpts that relate to our previous posts on the subject, “Plumpynut legal battle and the idea of global responsibility licencing” and “IPRs needn’t be a barrier to development; the plumpy’nut case

 

“American food aid must comply with stringent regulations meant to encourage domestic procurement…  

The patent has since been registered in 38 countries, including much of Africa….

Nutriset’s critics say that…the Plumpy’nut patent is so broad as to encompass just about any kind of nut-based nutritional paste. “There are other people that would like to enter into the business,” Ben Tabatchnick, who runs a New Jersey-based kosher soup company, said. “But everybody is afraid of being sued.””

Then, in response to this posting, an article appeared on the Huffington Post written by Jeffrey Sachs, Jessica Fanzo (a nutritionist at Bioversity International) and Sonia Sachs, entitled “Saying “Nuts” to Hunger”.  This provided some very interesting additions to the debate regarding the type of hunger that Plumpy’nut addresses.  There were also some interesting comments relating to the IP aspects of the case.  Firstly:

 “…it is absurd to think that a patent should legitimately give a monopoly right to use a fortified peanut-paste to fight acute hunger. The ingredients are simple: peanut paste, vegetable oil, powdered milk, powdered sugar, vitamins, and minerals. The nutritional values of peanuts and the other ingredients have been known for ages, and only the worst misuse of patent law would grant a broad monopoly claim to such knowledge”

 Well said! And secondly:

 “…it is a standard solution of global intellectual property law that urgent public health needs supersede patent rights. Poor countries should exercise their full right of “compulsory licensing” and other legal protections to produce or to import urgently needed low-cost nutritional supplementation in the face of famines, just as they do to obtain low-cost AIDS medicines.”

I wanted to look a little deeper into this second point.  Of course, not everyone wants to know the ins and outs of the IP component, but that is what we at CAS-IP enjoy most!!  The global intellectual property law referred to in the article is, presumably, the TRIPS agreement.  I am not a lawyer and therefore I am not familiar with the nuances of TRIPS; however, my understanding is that the “compulsory licensing” of TRIPS (an international agreement) requires definition of an emergency as determined by judiciary (at the national level), adding a level of complexity.  The agreement in fact doesn’t mention “compulsory licensing” outright, rather “other use without authorization of the right holder” (see article 31)

The WTO site goes on to explain:

 “Compulsory licensing is only part of this since “other use” includes use by governments for their own purposes.  Compulsory licensing and government use of a patent without the authorization of its owner can only be done under a number of conditions aimed at protecting the legitimate interests of the patent holder.”

This includes remuneration, incidentally!  So, it is an option, but certainly not an immediate one, and not one without cost!  I haven’t had the time to research the HIV/pharmaceutical examples as cases, but it would be very interesting to know more about these to draw on any lessons learned for agriculture.

 (Thanks to Peter Bloch for his contributions to this post)

Cultural Capitalism

This talk is slightly unnerving for those of us who might like to think of themselves as “doing their bit”.  It’s a short animation entitled, “RSA Animate – First as Tragedy, Then as Farce” which appeared on the Andrew Sullivan blog (thanks for sending me the link Victoria)

 Basically the speaker (Philosopher Slavoj Zizek) investigates a new form of capitalism that he says has emerged.  “Cultural capitalism, today’s form of capitalism”.  It really is a thought provoking 10minutes touching on issues surrounding Fair-trade, ethical shopping (he used the example of Starbucks coffee and the complex notions the consumer is “buying into”)

photo by Karine Malgrand for CAS-IP

Rita Agboh-Noameshie from AfricaRice and Jonathan Rosenthal from Just Works Consulting at the NPI meeting 2010. Photo by Karine Malgrand for CAS-IP

 The discussion was not dissimilar to the roundtable we held at the last National Partner’s Initiative meeting in Washington entitled “Branding and Market Development” (visit link for handout from this session).  Jonathan Rosenthal from Just Works Consulting who was part of the panel said the following of Fair-trade today:

 “Fair-trade started up as how to do trade better and power was not talked about.  Now that huge companies are on board some think this is success but others view it as failure…  Now the producers do have some amount of power but it’s still largely concentrated in the north.  Some feel the objective is to work out new models of trade where others are simply looking at improving business. There is lot of turbulence…

 …meanwhile, at the producer end, certification, that used to be free, costs more and more money and has more and more complexity and, thus costs. In addition, they have surprise inspections now–at producers’ cost. And, fair trade prices haven’t kept up with inflation so fair trade is harder to comply with and delivers less benefits over time. The challenge for producers, also, is what’s next? Where do we go from here?”

 Indeed, where do we go from here?  I asked Peter Bloch what he thought given his interest in market development:

  “Zizek is compelling, but let’s remember that he IS a philosopher.  He is simply challenging us to develop better solutions.  How might this apply to agricultural development?  One of the threads of this blog – since it started – has been innovation.  We’ve provided dozen of examples of innovations in a variety of sectors.  The innovation itself is rarely the issue – what we are interested in looking at is how some people can “connect the dots”, and what the final picture looks like.  If we can do this as we design and implement interventions we will, inevitably, be more effective.”

IPRs needn’t be a barrier to development; the Plumpy’nut case

Some time back we posted an item on the Plumpy’nut case.  This is a fascinating case for our community; it’s at the intersection of a debate involving patent rights, development economics and the public interest.  It is a real roller-coaster of a case and, if nothing else, serves as a stark warning to those who aren’t paying close attention to their IP strategy.   

As yet, we still don’t have all the pieces of the puzzle, –but we discussed the case during  our recent NPI meeting in Washington and were also given a presentation by the law firm who are representing the NGOs in the Mama Cares v. Nutriset case, (Fulbright & Jaworski).    

Based on the information we have seen and heard some of the issues involved are: 

Patent rights
The plaintiff, Mama Cares[1], says that the claims awarded in the Nutriset patent (US patent 6346284) are overly broad and effectively prevent the manufacture and distribution of any peanut-based RUTF,(ready-to-use therapeutic food). 

A key element in the case, however, rests on a single element in the claim relating to the osmolarity[2]  index.  Mama Cares claims that Plumpy’nut product , as produced by Nutriset licensees, itself does not meet this requirement (and neither does their own self-produced products) and therefore this constitutes a case of “false marking” of the Plumpy’nut product. The Fulbright presentation indicates that Mama Cares is seeking: 

 “Court determination of non-infringement (osmolarity), alternative determination of patent invalidity (inadequate patent disclosure, prior art) and false marking”. 

What is of particular interest is that Mama Cares – before investing in production – is effectively seeking court confirmation that if it does produce its own version of the RUTF it would not be infringing the claims of the Nutriset patent (i.e. there would be no basis for litigation against them for infringement) .  The case schedule is estimated to run into 2013 (including possible appeals scenarios).  

Supply and demand
There are reports that Nutriset’s licensees are not able to meet demand. (There is debate on this, depending on what constitutes demand[3][4])  Back in 2007 Médecins Sans Frontières (MSF) said:   

“If today’s UN recommendation of treating severe acute malnutrition with therapeutic RUF is to be realised, there is a need for 258,000 tons of product. Production capacity in 2007 is estimated to be less than 19,000 tons, with orders placed projected to be for only 8,500 tons. Therefore only 3% of severely malnourished children are likely to have access to treatment this year. This enormous production gap does not even take into consideration the requirements for a potential extension of RUF use for moderately malnourished children or as a supplement to populations of vulnerable children” 

Can local capacity in Africa meet any increases in demand?  This is important because it has been suggested spare processing capacity (and raw materials) in the USA might be available at a reduced rate or “pro bono” to produce enough material to meet demand in developing countries…  For example, the Peanut Association website, communicates their commitment to the development of peanut based RUTF and they have their own “Peanut Butter for the Hungry” initiative.  

One blog (Celsias) quoted Nutriset on this subject: 

 “The problem with U.S. production, says Nutriset, is that funding for humanitarian food and nutritional supplement suppliers requires that almost all the aid money be spent on American-grown surplus crops. This means that third world peanut farmers would get short shrift in a global marketplace, further increasing poverty in those countries at highest risk of childhood malnutrition” 

 The African peanut import/export figures we looked at don’t enable any hard and fast verification of supply of peanuts that could be used in the manufacture.  According FAOSTAT the top African exporters of shelled groundnuts for 2007 are Malawi (10th largest exporter in the world), Gambia (11th), South Africa (14th), Tanzania (17th), Egypt (18th), Mozambique (19th) and Mali (20th) whilst the top 3 African importers of shelled groundnuts for 2007 are South Africa, Gambia and Nigeria. The source of the information was again FAOSTAT

Of course there are other factors to consider when assessing potential supply of product, e.g. disease that can make it difficult to understand what the availability of good raw materials might be.  

 At first glance it would seem that local capacity to provide the key raw material is sizeable.  In fact, interestingly, looking at stats from “World Geography of the Peanut”  in terms of peanut production area (1000ha) the top 5 in 2001 were: India, China, Nigeria, Sudan and Senegal. 

 Capacity building v. trade policy
The Nutriset strategy to license manufacturing to African owned businesses is a desirable goal, as it builds local capacity, encourages the growth of African-owned businesses and supports the idea of “Africans feeding Africa”.  But we do not know enough about the specifics of these licensing agreements to comment further.  An unverified release from Hilina Foods, Nutriset’s Ethiopian licensee, states that: 

“After rigorous audit of the new out lay and set up a…memorandum was signed by both parties in September 2007 to make Hilina Food Processing Center a franchisee of Nutriset Company with a holding of 51% and 49% by Hilina Food Processing Center and Nutriset respectively.” 

We hear repeatedly that US policy can dictate that US companies provide supplies (e.g., RUTF) to fill development grants and humanitarian aid.  A bit of digging around failed to come up with anything concrete to support this position.  Comments in a US Federal Government Accounting Office (GAO) study “recommends” food aid be sourced locally/regionally.  And, a Greenpeace report  published in 2002 during the Bush administration says: 

“While the Bush Administration claims that its offer of food aid to Africa is motivated by altruism, the USAID website is a little more candid. It states: “The principal beneficiary of America’s foreign assistance programs has always been the United States. Close to 80% of the USAID contracts and grants go directly to American firms. Foreign assistance programs have helped create major markets for agricultural goods, created new markets for American industrial exports and meant hundreds of thousands of jobs for Americans.” 

Good v. evil
Ok, so it’s not quite as dramatic as “good v. evil” but there is certainly an element of emotional play here.  From what we can see, a gap certainly exists between the philosophies held by the two sides of the debate -different ways of “doing development”, if you like.  Should development take the form of capacity building along the entire supply chain, so eventually the regions that require the product become the ones that can supply it, –whilst increasing the capacity of the region overall?  Restrictive IPRs are a “normal” part of business models to bring new products to market; however, in cases where a product can provide humanitarian relief, is it permissible to enforce such IPRs if the supply doesn’t meet demand?  Add to this the whispers of protectionism for US peanut farmers and industry and you have a complex mix… 

Overview and opinion
During the NPI week in Washington we spoke to many IP-in-development professionals about this case.  The main questions people had were regarding the licensing strategy of Nutriset.  We have few details on this but it seems this area is where the most room for maneuver exists.  The Plumpy Nut product is one of those rare cases where one could probably use the term “wonder product”, and both the US NGOs and Nutriset claim to share a common mission.  Strategic licensing terms could accommodate the goals of both sides IF everyone could go back to the negotiating table. 

The suggestion that many of the blogs and news items make — that this case is about humanitarian need v. the dictates of the IPR – is, in our opinion, simplistic.  It is too loaded, and in any case who would make such a decision and how would it actually be implemented?  The current patent litigation could take three years to resolve, and circumstances suggest that the matter needs to be settled immediately.  So, while the litigation could continue, surely this is a case where some lateral thinking is in order.  A high visibility public figure (e.g. Bill Clinton) might take on the role of unofficial mediator and approach the French government, (a co-owner of the patent via IRD), to seek an immediate resolution.  Based on its inability to meet demand, Nutriset might agree that, pending resolution of the patent dispute, it would not take any action against infringers, or issue humanitarian use licenses outside of their target areas?  However, Nutriset has already indicated that cheap product from the USA would destroy its African licensee business model.  What should be done next? 

We have said this many times before – IP is just a tool, and a tool can be used or misused.    We don’t believe the answer in this, or similar cases is to criticise the fact that IP protection exists for a product that has humanitarian use applications.  We have to be more creative than that.  IPRs can fulfill humanitarian goals if awarded according to the law (e.g., in the US novel and non-obvious and patentable subject matter) and if licensed thoughtfully. 

A final comment – We think this is a great example of an IP success.  A humanitarian use product has been developed that satisfies a critical need, is supporting the development of African-owned businesses, –but is only reaching a small percentage of those who could benefit.  We hope the baby isn’t thrown out with the bath water whilst trying to increase this success and to produce enough for the need! 

(Post written by Kay Chapman, Peter Bloch                    , Francesca Re                     Manning with input from Karine Malgrand                    , Guat Hong Teh, Victoria Henson-Apollonio, Fayola Phillip and the NPI) 


[1] Visit http://www.rfcexpress.com/lawsuit.asp?id=52936 for lawsuit details Mama Cares Foundation et al v. Nutriset Societe Anonym France et al 

[2] In this context; see presentation from André Briend, one of the inventors, about these qualities of the product  http://www.fantaproject.org/ctc/plumpynut2PPT2.pdf 

[3] “Demand” can be defined in many ways.  See “Copyfight” for some discussion on this http://copyfight.corante.com/archives/2010/04/16/nutriset_responds.php 

[4] Some links to arguments for and against this claim: http://www.celsias.com/article/can-you-patent-life-saving-nutrition/,  http://globalhealthreport.blogspot.com/2008/05/demand-for-plumpynut-outstrips-supply.html, http://aidwatchers.com/2010/04/the-plumpy%E2%80%99nut-dustup/

Challenges for Tanzanian seed sector

As part of our ongoing market development support for ICRISAT’s seed sector mission in Africa, over the last week I met with public and private sector actors in the Tanzanian seed sector.  Building a viable private sector presents a number of challenges and the situation is quite complex. This is intended only as an overview. After 30 years in power, Julius Nyere’s socialist regime collapsed in 1997, and the market-driven economy is still in the process of evolution.  Under the socialists there was no private seed sector.  A parastatal seed company – Tanseed – had a monopoly on seed production and distribution in Tanzania.

The remains of the old structures can be seen in ASA – the Agricultural Seed Agency – a government agency which promotes itself as “The Source of High Quality Agricultural Seeds”.  ASA’s mission is:

To produce, process and market sufficient high quality agricultural seeds for the local and international farming communities by using modern management and appropriate technologies to enhance food security.

ASA is the sole source of public variety foundation seed.   There are failures, and our interviews revealed that:

  • ASA’s foundation seed production is unable to meet demand;
  • ASA’s certified seed production and marketing (which, according to ASA, is intended only to address orphan crops which are of no interest to the private sector) competes with the private sector;
  • As a result of financial constraints, there is only limited public sector breeding in Tanzania, and no maintenance breeding; this has resulted in the loss of a number of valuable public lines.
  • Foundation seed produced by ASA for both the public and private sector is of poor quality, which does not bode well for the future food security and economic development of Tanzania.
ASA farm in Arusha

From left to right: Paul Nandila (Workshop Manager), Bob Shuma (Executive Director, TASTA) and Zawadieli Mrinji (ASA farm manager) examining maize foundation seed at the ASA farm in Arusha

Bob Shuma
Bob Shuma with ASA maize foundation seed; true to type on left, defective on right.

Bob Shuma, Executive Director of TASTA (Tanzanian Seed Trade Assn.) estimates that only 15% of seed planted in Tanzania is certified.

With a land area of 947,000 sq. km. and four quite different farming ecologies few roads are suitable for trucking. Of the 79,000 km of roadways, less than 7,000 km are paved.[1] This exacerbates an already fragile distribution chain for certified seed by increasing retail prices to the point at which many farmers cannot afford to buy.  Conventional financing is not an option; with a banking sector that is risk averse, does not understand farming, and with interest rates in the 20%-25% range, even a medium sized and profitable regional company such as East Africa Seed finances expansion from retained earnings.

Drought is yet another factor and explains why the private sector has been unable to meet demand from farmers for certified seed, and is one factor in ASA’s inability to meet private sector demand for foundation seed.  The government is now investing in the installation of irrigation systems for the ASA seed farms, and this should enable an increase in output. All of the seed companies interviewed seemed highly aware of the need to establish and maintain a strong brand identity to distinguish themselves from competitors who, for the most part, are selling identical product (foundation seed provided by ASA and AVRDC is available to all buyers). The options for developing unique branding strategies are, however, limited and the common focus is on quality and reliability.  The disparity between supply and demand – no seed company has been able to satisfy demand – explains why marketing is not a critical issue for the private seed sector. Bob Shuma observes that:

When Tanzania’s seed laboratory is finally accredited to ISTA and OECD it will stimulate the availability of new varieties, new crops and new lines and export opportunities will open up; unfortunately budgetary restraints have slowed this process.  With all of these constraints, what will attract local investors and entrepreneurs to invest in private sector seed activity?  And how can farmers access improved technologies?  These are challenges to be addressed by Tanzania, its partners and by the development community.

Many thanks to Bob Shuma for his invaluable assistance on this trip, and to TASTA and Wageningen International for their support.

Post written by Peter Bloch, consultant to CAS-IP


[1] CIA Factbook; this data is at least five years old and paved roadway has probably increased by 20%.