12.4 The terms ‘upstream’ and ‘downstream’ are commonly used to describe two ends of a continuum from basic research through to research directed toward marketable end products or processes. For example, in human genetic research, basic research may involve the identification of genetic sequences associated with particular biochemical functions. Downstream research may focus on the eventual use of these genetic sequences in the diagnosis of disease or in novel therapies, such as gene therapy or the production of therapeutic proteins.
12.5 Patents may be issued at different stages of the research continuum. Researchers developing downstream products will require access to patented inventions, including research tools. Access to many patented inventions may be required in order to develop a marketable product. While downstream researchers may view such inventions as essential research inputs to which open access is important, upstream patent holders may view research tools as valuable end products in themselves.
12.6 It follows that the implications of patent reform may be quite different for different actors in the research and biotechnology sectors. For example, while small or start-up biotechnology firms may need patents on their upstream discoveries in order to attract investors, for pharmaceutical companies patents are needed not to raise capital but to ensure effective commercial exploitation of their products.
12.7 The changing nature of research organisations is another important background factor in considering the impact of patent law and practice on research. Traditionally, upstream research has been the province of the public sector, and the private sector has focused more on the downstream application of that research. However, as discussed in more detail in Chapter 11, Australian Government policy is to promote the commercialisation of publicly funded research, including that conducted by universities. Universities and other recipients of public research funding are now encouraged to patent and facilitate commercialisation of the results of their research. Academic and non-profit research organisations increasingly have interests not only as potential users of patented inventions, but also as patent holders. Australian research institutions use the patent system in order to obtain protection for their inventions and routinely seek to license these rights to commercial enterprises.
 See, eg, D Nicol and J Nielsen, Patents and Medical Biotechnology: An Empirical Analysis of Issues Facing the Australian Industry (2003) Centre for Law and Genetics Occasional Paper No 6, 15.
 See R Eisenberg, ‘Bargaining over the Transfer of Proprietary Research Tools: Is the Market Failing or Emerging?’ in R Dreyfuss, D Zimmerman and H First (eds), Expanding the Boundaries of Intellectual Property: Innovation Policy for the Knowledge Society (2001), 223, 228–229; D Nicol and J Nielsen, Patents and Medical Biotechnology: An Empirical Analysis of Issues Facing the Australian Industry (2003) Centre for Law and Genetics Occasional Paper No 6, 15.
 R Eisenberg, ‘Patenting Research Tools and the Law’ in National Research Council (ed) Intellectual Property Rights and Research Tools in Molecular Biology, Summary of a Workshop Held at the National Academy of Sciences, February 15-16 (1996), <http://books.nap.edu/html/property>.
 D Nicol and J Nielsen, Patents and Medical Biotechnology: An Empirical Analysis of Issues Facing the Australian Industry (2003) Centre for Law and Genetics Occasional Paper No 6, 15.
 Davies Collison Cave, Submission P48, 24 October 2003.