Knowledge economy here to stay
Research and development form a major part of Dutch economic activity, and many companies, such as pharmaceutical companies, profit from the Netherlands as a knowledge science centre with its favourable innovation climate. The Dutch government thinks that pharma research plays a particularly important role in innovation and therefore in the Dutch economy.
It only became clear what is at stake for this knowledge economy when the US-based pharmaceutical company MSD & Co recently announced it would move its subsidiary Organon to the US. Organon’s R&D department is currently based in the Netherlands and employs about 1,100 highly educated and specialised researchers in a specific pharmaceutical field, which would be lost if a transfer is continued.
Since this announcement, the Dutch government is alerted and now plays an important role in its attempt to keep knowledge and skills up and running in the Netherlands.
As part of this attempt, the vice president of the Netherlands contacted the head of the parent company of MSD, Merck & Co. Inc. and discussed longterm solutions. He also contacted other stakeholders, such as the Dutch Society of the Research Oriented Pharmaceutical Industry and the Dutch Chemical Steering Group.
A Taskforce Life Sciences Park has been set up to study how best to preserve knowledge and skills. Research has also been done on starting an independent scientific research institute. Clearly the Netherlands is trying to maintain a high-profile Dutch innovation climate.
Several suggestions are made to preserve the Dutch knowledge economy, some of which may deter established companies from staying, and others to move their offices to the Netherlands. These suggestions are regarding how to keep the research knowhow protected by patents, since this knowhow needs to be used as the basis of further research.
“Research and development form a major part of Dutch economic activity, and many companies, such as pharmaceutical companies, profit from the Netherlands as a knowledge science centre with its favourable innovation climate.”
The first suggestion is compulsory licensing. Under article 57 of the Dutch Patent Act, the Minister of Economic Affairs can force a company to grant a licence to all its patents on research methods on general interest grounds. Granting a compulsory licence is a major decision that can only be taken under exceptional circumstances. Since its introduction in the Patent Act, not even one compulsory licence has been granted.
The second solution is the patent research exception. Under article 53 (3) of the Dutch Patent Act, it is permitted to do scientific research with and to patented inventions of third parties, such as patents on research methods. It is believed that this exception is even valid for research purposes in a commercial company, though only if the aim is to develop new techniques.
Both suggested solutions run the risk of turning companies off setting up R&D departments in the Netherlands, which would not be beneficial to the Dutch economy. For that reason, the solution to keeping knowledge and skills in the Netherlands must be to improve the knowledge economy. The alerted government’s attempts to keep R&D in the Netherlands therefore might boost the Netherlands’ innovative climate, resulting in the development of corporate, legal and financial incentives.
MSD has postponed its announced transfer plans until December 31, 2010. That gives the Dutch government and all other involved parties time to explore the alternatives to keep the R&D knowledge and skills in the Netherlands. We await further developments.
Michiel Rijsdijk is a partner at Arnold + Siedsma. He can be contacted at: mrijsdijk@arnold-siedsma.com
