W. R. Grace & Company


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W. R. Grace & Company

 A multinational corporation considers applying for a patent for Del-Tein, a promising new medicine that draws upon but improves traditional Indian knowledge of the lentil plant. This research paper will examine the lessons learnt from W. R. Grace and the Neemix patent case study. The information will help the multinational corporation to gain relevant knowledge prior to applying for a patent. The first section will give an overview of the W. R. Grace Company case and then give a stand for or against pursuing a patent for Del-Tein.


W. R. Grace & Company was established in 1865 by William Russell Grace which was mainly involved in trading agricultural products, fertilizers and U.S. manufactured goods. William died in 1904 and his brother Michael took control of the company till 1909 when he was succeeded by Williamâs son Joseph. Josephs leadership saw the companys rapid growth and development. Joseph bought sugar refineries, plantations, and nitrate production facilities in Chile. Graces first ship through the Panama Canal was sent in 1914 and then later the company entered the banking industry through the establishment of Grace National Bank. Moreover, the company moved into the aviation industry by establishing panagra airlines together with Pan American Airways (National Research Council report on Neem, 1992).J. Peter Grace was elected as the president of W. R.

Grace & Company after his father, Josephs retirement in 1945. Peters objective was to look for ways through which he could make the company more secure. What impressed him was how most of the chemical companies in the United States were successful. Hence, he decided to focus into the chemical industry. He started a plan that aimed at reducing South American investments from 100 to 5 percent through expansion into the chemical industry. Purchasing Dewey and Davidson and Almy Chemical companies provided the foundation through which W. R. Grace & Company grew to be the world largest chemical company.

The following 11 years saw Grace acquiring 23 more chemical companies that provided four million stock shares (National Research Council report on Neem, 1992).Grace interest later became to look for a viable pesticide that was harmless to the environment. Robert Larson of Vikwood, a timber producing firm approached Grace 7 Company that later agreed to purchase the rights to the formulation and process for producing Margason-O. The company also began working on the invention of a pesticide that would be more storage stable. Eventually, there was the development of Neemix. Grace applied for a patent on the grounds that the invention would lead to provision of a non-toxic, natural pesticide formulation based on the extract obtained from neem seeds with improved storage stability.

The patent was granted on 23rd June 1993.There are however, several issues arising due to provision of a patent to W. R. Grace & Company. The patent was challenged on the grounds that the issuing did not conform to the guidelines set by the U.S. law. It was challenged that the criteria of obviousness and novelty with respect to prior art lacked in the Neemix patent application. Due to this fact, the patent should never have been granted to Grace Company. The knowledge about Neem was not new since the Indigenous Indian researchers had published descriptions of neem seed use and effectiveness back in the 1920s (National Research Council report on Neem, 1992).

Protesters argued that knowledge about neem use as a pesticide was the result of individual efforts and research carried out several years ago. It is worth noting that these protesters lacked evidence in form of formal publications or print. With the aim of justifying why they lacked published evidence, they claimed that Indian farmers who had traditionally used neem could never have been expected to apply or file for a patent because of legal and pragmatic constraints against the act. Cultural and legal factors prevented Indian researchers from applying for patent. According to majority of Indian citizens, it is unethical to apply for patent and own nature especially the case of neem tree which played a key role in defining the Indian culture and religion (National Research Council report on Neem, 1992).Protesters claimed that patents such as the one held by W.R. Grace & Company were unacceptable since they were a symbol of appropriation of indigenous knowledge without compensating the people who generated the knowledge.

They further argued that neem tree symbolized a great debate surrounding the issue of developing countries and indigenous people not being compensated when chemical products based on traditional knowledge are developed. It was further argued that Grace’s patent was a threat to indigenous Indian farmers who used neem. Patents with regard to neem tree meant that the tree would be financially inaccessible to Indian farmers. This is unfair and inappropriate since the same Indian farmers have been using neem for several purposes for a very long time (National Research Council report on Neem, 1992).With an attempt of defending itself, W.R. Grace & Company claimed that the protester’s accusations were untrue. Grace denied the fact that the patent was on neem tree, a naturally occurring substance.

Grace also noted that the U. S. patent law did not restrict Indian farmers from accessing neem seeds in any way. This is with regard to the claim by protestors that the patent would prevent Indian farmers who depended on neem as a pesticide from accessing it. Grace maintained that the aim of Neemix was to provide consumers with a product that will protect both their crops and the environment. This product however turned out to be a source of accusations that it was responsible for causing more harm than good (National Research Council report on Neem, 1992).The Del-Tein Company should pursue its patent but should follow some ethical and practical guidelines. First of all, the corporation has to consider the customary and traditional laws applying to application of patent. There should be consultation with the indigenous people associated with the area of study.

In this case, the indigenous Indian people who discovered knowledge about the traditional use of the lentil plant have to be consulted. This will help in preventing the issues of prior knowledge arising after obtaining a patent (McManis, 2007).The other guideline is to ascertain both the cultural and legal tenure of the area affected by the manufacture of Del-Tein. Moreover the impact of the new medicine on the environment should be assessed. If it is discovered that Del-Tein has a negative impact on the environment, a plan to address the negative environmental impact has to be devised. This plan should help to reduce the impact of the new medicine on the environment to acceptable levels. The other guideline is to assess the impact that Del-Tein has on the cultural tradition and practices of the indigenous Indian people (Bulger, Hetman and Reiser, 2002).

Assessment ahs to be done with the active participation of the community people who have the authority of speaking on cultural matters.The other point that is worth noting is that the Del-Tein Company has to show commitment and demonstrate an equitable financial return to the indigenous Indian people, who are the traditional owners of the lentil plant. This means that these individuals have to be compensated for discovering relevant knowledge on the use of the lentil plant. One of the issues raised regarding the patent for W.R. Grace & Company was due to the fact that the indigenous Indian people, who were the actual owners of the neem tree, were not compensated. These farmers are the ones who discovered the uses and benefits of neem seeds. Therefore Del-Tein Company has to be committed to compensating the indigenous Indians (McManis, 2007).

The corporation should also learn from Grace’s case that the filed patent should not deny indigenous farmers access to the naturally occurring substance intended to be used by the Company. Hence, prior to applying for a patent, Del-Tein Company should make sure that Indian farmers benefit fully and have access to the lentil plant. They should elaborate and make it clear to the farmers that they can access the plant without any form of financial stress. The patent should allow the company to modify the lentil plant in order to come up with a product that is more beneficial to the entire population and harmless to the environment (Mgbeoji, 2006).It is essential for Del-Tein Company to make the peasant the first priority before exploiting the new opportunity.

The peasant in this case represents the indigenous Indian farmers who discovered the lentil plant. If it were not for this discovery, it would have been hard for the Del-Tein Company to find out that the plant could be used in making a medicinal product. It is unethical to rush into manufacturing a medicinal product that will benefit only a few people who can afford it (Bulger, et.al, 2002). It can be presumed that Del-Tein is a medicinal product that will be costly and unaffordable to the indigenous Indian farmers. Hence, by considering them and compensating them, no one will be on the losing end. Both the company and the native people who are the owners of the lentil plant will eventually benefit (Mgbeoji, 2006).

Del-Tein Company has to ensure that the product to be manufactured will cause more good than harm. The product has to be of great benefit to the consumers, the native people and the manufacturers. By considering all the mentioned ethical considerations and practical guidelines, Del-Tein Company can comfortable pursue for a patent. It is evident that the product will have a positive effect to the environment. The indigenous Indian farmers would also be compensated and hence benefit as well. Del-Tein is a new medicine that would greatly improve the health and well-being of the society and the entire population (McManis, 2007).In conclusion, it is essential to consider several ethical and practical guidelines prior to applying for a patent. A company ahs to make sure that the patent will not put any given group of people on the losing end. Hence, different aspects have to be considered to make sure that the product to be manufactured does more good than harm.



Bulger, R. E., Hetman, E., & Reiser, S. L. (2002) The ethical dimensions of the

biological and health sciences. Cambridge University Press.

McManis, C. R. (2007) Biodiversity and the law: intellectual property, biotechnology and

Traditional knowledge. Earthscan.

Mgbeoji, I. (2006) Global biopiracy: patents, plants and indigenous knowledge. UBC


National Research Council report on Neem (1992) W. R. GRACE & CO. AND THE

NEMIX PATENT (A). Darden Business Publishing. University of Virginia.

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