The Federal Antimonopoly Service of the Russian Federation (FAS) commented on the situation around the transfer of genetic materials from the foreign company Bayer to Russian companies.

Earlier the "Made in Russia" project reported that Bayer has not yet been able to transfer germoplasm of agricultural plants to Russian agrarians in terms of technology transfer, as currently there is no appropriate regulatory framework for it.

The project was told by the FAS press service that there were no such precedents in Russian practice before and therefore there was no need to develop such rules and regulations.

"As soon as relevant regulations are developed and become effective, the process will be launched," the press service explained.

As the Made in Russia project found out, for example, the Russian breeding and seed company SOKO refused to sign a license agreement with Bayer because it contained a clause that the domestic company would have to pay Bayer 3% of sales for 15 years.

Albert Shchegolkov, a researcher in SOKO's breeding department, called the very idea of transferring technology to Russian companies promising.

"The idea of transfer itself was a good one, but as a result we were offered two areas of interaction. This is a week-long training in France and the transfer of germplasm of a number of crops. Due to the pandemic, the seminar in France was cancelled, and when transferring the germoplasm it was necessary to conclude a licensing agreement," he told Made in Russia.

The company's representative added that the document contained a clause about the payment of royalties amounting to 3% of the total net sales of the released varieties over 15 years, regardless of the percentage of licensed germplasm in the released varieties. SOCO therefore declined to participate in the exchange.

According to Shchegolkov, a total of 5 out of 7 Russian companies did not agree to participate in the exchange because of such conditions.

"Transferring seeds of major crops to enrich the domestic genetic fund is not a bad idea, but we already exchange seeds with other companies, including foreign ones. However, we do not have to pay royalties for that. We have the right to use any variety for scientific purposes and we don't have to pay anything unless it is provided otherwise," he said, explaining that by "otherwise" we mean entering into a license agreement.

Shchegolkov said that Bayer's technology transfer involves obtaining ten American soybean lines which have not been grown in Russian conditions before. However, over 23 thousand of Bayer's own soybean lines are planted annually in several places in Russia. The best of them later become varieties.

The representative of a domestic enterprise pointed out another element of the transferred technology - molecular markers. He explained that initially it was planned to transfer databases with climatic conditions similar to those in Russia, so that the company could subsequently work with them independently.

"However, Bayer flatly refused. Then it was decided to transfer markers for specific traits, such as diseases. However, diseases in the United States and diseases in Russia on soybeans are significantly different, so we will not be able to use their markers, because they are simply not applicable to our conditions," Shchegolkov added.

The press office of the Federal Antitrust Service told the Made in Russia project that so far, license agreements have been signed with two Russian companies. The other companies selected as recipients of the germplasm, according to the FAS, are in negotiations with Bayer.

"The payment of royalties when transferring intellectual property rights is a globally recognized practice and does not infringe on the interests of Russian companies in any way. In addition, the instruction of FAS of Russia, issued as a result of consideration of the transaction, provides 25% for 10 years in royalty payments, "- explained in the office.

The antimonopoly service also noted that royalty will be paid only after the start of commercialization of a variety or hybrid, which will be developed using transferred germplasm.

"Obtaining such preferential terms in the provision of germoplasm was only possible due to the order of the FAS of Russia," the press service concluded.

Made in Russia // Made in Russia

Author: Ksenia Gustova