Working Paper | HBS Working Paper Series | 2014

Bio-Piracy or Prospering Together? Fuzzy Set and Qualitative Analysis of Herbal Patenting by Firms

by Prithwiraj Choudhury and Tarun Khanna

Abstract

Since the 1990s, several Western firms have filed patents based on medicinal herbs from emerging markets, evoking protests from local stakeholders against 'bio-piracy'. We explore conditions under which firms and local stakeholders share rents from such patents. Our theoretical model builds on two distinct strategy literatures: firms appropriating rents from new technologies and firms managing stakeholders. We predict that a win-win outcome emerges when the patent strength is moderate and when local stakeholders form a coalition with larger national stakeholders to initiate litigation against the focal firm. We test our predictions using a two-pronged empirical strategy. Our empirical context relates to herbal patents from emerging markets and given that we have a small sample (N=17), we employ a fuzzy set QCA methodology. In addition, we develop four in-depth qualitative case studies to support our predictions.

Keywords: Rents from New Technology; Local Stakeholders; Herbal Patents; QCA; Fuzzy Set Analysis; Qualitative Case Studies; Plant-Based Agribusiness; Patents; Emerging Markets; Health Care and Treatment; Business and Stakeholder Relations; Cross-Cultural and Cross-Border Issues; Agriculture and Agribusiness Industry; Pharmaceutical Industry;

Citation:

Choudhury, Prithwiraj, and Tarun Khanna. "Bio-Piracy or Prospering Together? Fuzzy Set and Qualitative Analysis of Herbal Patenting by Firms." Harvard Business School Working Paper, No. 14-081, February 2014.