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Intellectual Property Rights and U.S.-Japan Competition in Biotechnology: Report of a Workshop January 18, 1991 National Academy of Sciences, Washington, D.C. Committee on Japan Office of Japan Affairs National Research Council Washington, D.C. 1991

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NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This report has been reviewed by a group other than the authors according to procedures approved by a Report Review Committee consisting of members of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The National Academy of Sciences is a private, nonprofit self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Frank Press is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievement of engineers. Dr. Robert M. White is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Stuart Bondurant is acting president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy's purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Frank Press and Dr. Robert M. White are chairman and vice-chairman, respectively, of the National Research Council. Available from: Office of Japan Affairs National Research Council 2101 Constitution Avenue, N.W. Washington, D.C. 20418 Printed in the United States of America

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COMMITTEE ON JAPAN Harold Brown, Chairman Johns Hopkins Foreign Policy Institute Erich Bloch, Vice-Chairman Council on Competitiveness C. Fred Bergsten Institute for International Economics Lewis M. Branscomb Harvard University Lawrence W. Clarkson Boeing Commercial Airplane Group I. M. Destler University of Maryland Mildred S. Dresselhaus Massachusetts Institute of Technology Daniel J. Fink D. J. Fink Associates, Inc. Ellen L. Frost United Technologies Corp. Lester C. Krogh 3M Co. E. Floyd Kvamme Kleiner Perkins Caufield & Byers Ex Officio Members: Yoshio Nishi Hewlett-Packard Co. Daniel I. Okimoto Stanford University John D. Rockefeller IV United States Senate Richard J. Samuels MIT Japan Program Robert A. Scalapino University of California, Berkeley Hubert J. P. Schoemaker Centocor, Inc. Ora E. Smith Illinois Superconductor Corp. Albert D. Wheelon Hughes Aircraft Co. (retired) Gerald P. Dinneen, Foreign Secretary, National Academy of Engineering James B. Wyngaarden, Foreign Secretary, National Academy of Sciences and Institute of Medicine . . .

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INTELLECTUAL PROPERTY RIGHTS AND U.S.-JAPAN COMPETITION IN BIOTECHNOLOGY Workshop organized by the National Research Council's Committee on Japan January 18, 1991 - Lecture Room National Academy of Sciences - Washington, D.C. 8:30 Registration and Coffee 9:00 Chairman's Opening Remarks: Hubert J.P. Schoemaker, Centocor, Inc. 9:15 Context of International Competition and Cooperation in Biotechnology and Challenges for U.S. Industry George B. Rathmann, ICOS Corp. 9:30 Panel on the IPR Regime in Japan and the Experiences of U.S. Firms Leonard J. Guarraia, Monsanto Company Raymond C. Stewart, Birch, Stewart, Kolasch & Birch Harold C. Wegner, Wegner, Cantor, Mueller & Player Open Discussion 10:45 Panel on Japan's Growing Presence in the United States Marvin C. Guthrie, Massachusetts General Hospital Norman L. Norris, Woodcock, Washburn, Kurtz, Mackiewicz & Norris Stelios Papadopoulos, PaineWebber Open Discussion 12:00 Remarks by Clyde V. Prestowitz, Economic Strategy Institute 12: 15 Lunch 1:30 Roundtable on Future Prospects Led by David L. Brook, Hamilton, Brook, Smith & Reynolds Participants: Marvin Guthrie, Wayne Herrington (U.S. International Trade Commission), Norman Norris, Stelios Papadopoulos, George Rathmann, Hubert Schoemaker, Raymond Stewart, Charles Van Horn (U.S. Patent and Trademark Office) 2:45 Chairman's Closing Remarks 3:00 Adjourn IV

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OFFICE OF JAPAN AFFAIRS Since 1985 the National Academy of Sciences and the National Academy of Engineering have engaged in a series of high-level discussions on ad- vanced technology and the international environment with a counterpart group of Japanese scientists, engineers, and industrialists. One outcome of these discussions was a deepened understanding of the importance of pro- moting a more balanced two-way flow of people and information between the research and development systems in the two countries. Another result was a broader recognition of the need to address the science and technology policy issues increasingly central to a changing U.S.-Japan relationship. In 1987 the National Research Council, the operating arm of both the National Academy of Sciences and the National Academy of Engineering, authorized first-year funding for a new Office of Japan Affairs (OJA). This newest program element of the Office of International Affairs was formally estab- lished in the spring of 1988. The primary objectives of OJA are to provide a resource to the Academy complex and the broader U.S. science and engineering communities for information on Japanese science and technology, to promote better working relationships between the technical communities in the two countries by developing a process of deepened dialogue on issues of mutual concern, and to address policy issues surrounding a changing U.S.-Japan science and technology relationship. Staff Martha Caldwell Harris, Director Thomas Arrison, Research Associate Maki Fife, Program Assistant

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Preface This report covers major insights from a one-day workshop on "Intellectual Property Rights and U.S.-Japan Competition in Biotechnology" organized by the Committee on Japan of the National Research Council and held on January 18, 1991. Part of a series focusing on key issues in U.S.-Japan scientific and technological relations, the workshop was supported by a grant from the Rockefeller Brothers Fund. The purpose of the workshop was to explore issues and identify alternative approaches to competing and cooperating with Japan as a technologi cal superpower. Hubert J.P. Schoemaker, a member of the Committee on Japan and Chairman of Centocor, chaired the workshop. He was joined by experts familiar with the intellectual property treatment of biotechnology inventions in the United States and Japan and by individuals with special expertise in the biotechnology industry. The National Research Council's Office of Japan Affairs worked with the committee to focus the discussions at the workshop and to prepare this report, which captures major themes from the presentations and discussions. Those who made presentations at the workshop as well as the members of the Committee on Japan reviewed the report and provided many useful suggestions, but the report is not a consensus document or conference proceedings. . . V11

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