Report on Disclosure of Origin in Patent Applications

Transcription

1 Report on Disclosure of Origin in Patent Applications Prepared by: Queen Mary Intellectual Property Research Institute For the European Commission, DG-Trade October

2 Table of Contents Executive Summary 1. What is Meant by Disclosure of Origin? 1.1 Origin, source and legal provenance 1.2 Genetic and biological resources and materials 2. Bioprospecting, Biopiracy and the Role of the Patent System 2.1 International legal and institutional framework Convention on Biological Diversity (CBD) WTO Agreement on the Trade Related Aspects of Intellectual Property Rights (TRIPS) World Intellectual Property Organization 2.2 Patenting life 2.3 The value of biodiversity 2.4 Intellectual property rights and misappropriation of genetic resources and traditional knowledge 2.5 Case studies 2.6 Unequal exchange and intellectual property rights 3. The Disclosure of Origin Debate 3.1 The forums 3.2 Positions, proposals and arguments on disclosure of origin Group 1 countries Group 2 countries Group 3 countries 4. Disclosure of Origin: National and Regional Experiences 4.1 Countries/regions that have adopted Weak Disclosure measures 4.2 Countries/regions that have adopted Medium Disclosure requirements 4.3 Countries/regions that have adopted Strong Disclosure measures 5. Pros and Cons of Disclosure of Origin 5.1 Is disclosure of origin TRIPS compatible? 5.2 Practical issues Public statements by industry The business survey Interviews with legal practitioners 5.3 Conclusions of the empirical research 6. Practical Issues Identified by the Study, Conclusions and Recommendations 6.1 Summary of practical issues raised 6.2 Conclusions and recommendations 2

3 Executive Summary The disclosure of genetic resources and associated traditional knowledge (TK) in patent applications was originally mooted by civil society organisations, but has now been adopted by a number of countries. The proposal is intended to help realise fair and equitable benefit sharing as required by the Convention on Biological Diversity. It is supposed to do this by ensuring that the resources and, in some cases, TK, were acquired in accordance with biodiversity access and benefit sharing regulations in the provider countries, and other provisions of the Convention on Biological Diversity relating to national sovereignty, technology transfer and the knowledge, innovations and practices of indigenous and local communities embodying traditional lifestyles. This report examines the possible means of introducing, at a multilateral level, a requirement for patent applicants to disclose the geographic origin, source or legal provenance of genetic resources and/or traditional knowledge, as well as the economic and practical implications of doing so. The analysis takes into consideration that the disclosure of origin proposal has been framed in three different ways, that will be termed strong, medium and weak disclosure. The weak form is that such disclosure would be encouraged or even expected but not required and its omission would not disqualify the patent from being granted. The medium form is that disclosure of origin would be mandatory. The strong form goes beyond disclosure in the patent specification to require that patent applicants comply with national or regional access and benefit sharing regulations. Chapter 1 examines the various versions of the disclosure of origin concept as a means to clarify its meaning. The second provides some commercial and political context in order to understand why the disclosure of origin proposal has been formulated and to explain the problems it is intended to solve. The vast majority of countries formally recognize and accept that cross-border exchange of genetic resources and traditional knowledge (TK) be carried out in compliance with the principles of the Convention on Biological Diversity (CBD). For a number of reasons, intellectual property rights, particularly patents but also plant variety protection (PVP), have become central to discussions on this matter. These reasons relate to the following: (i) the fact that patent claims in various countries may incorporate biological and genetic material including life forms within their scope; (ii) the conviction widely held among developing countries and NGOs that biodiversity and associated traditional knowledge have tremendous economic potential; (iii) the belief, also shared by developing countries and NGOs, that this feature of the patent system enables corporations to steal, misappropriate or unfairly free-ride on genetic resources and associated traditional knowledge; (iv) the ability of modern intellectual property law to protection the innovations produced by industries based mainly in the developed world and its inability to protect adequately those in which the developing countries are relatively well-endowed; and (v) the perception that as a consequence of reasons i-iv, the unequal distributions and concentrations of patent ownership and the unequal share of benefits obtained from industrial use of biogenetic resources are closely related. It is suggested in Chapter 2 that the disclosure of origin proposal is founded on a certain degree of uncertainty and confusion, and that this is at least partly deliberate. 3

4 Chapter 3 investigates the disclosure of origin debate at the TRIPS Council, WIPO and the Conference of the Parties to the Convention on Biological Diversity, and shows whether or not disclosure of origin is compatible with the TRIPS Agreement, and if not how the Agreement might be amended to incorporate it. It also considers the merits of the view expressed by some developing countries that disclosure of origin is necessary to make TRIPS compatible with the CBD. Chapter 4 surveys efforts to introduce the various forms of disclosure of origin into national and regional ABS and intellectual property laws and regulations. Unfortunately, it is still not possible to evaluate the successes and failures of these laws and regulations. Chapter 5 considers the practical and commercial benefits and disadvantages of disclosure of origin for European businesses operating in all the relevant sectors, including SMEs, and also for the developing countries. This is the most important part of the whole study. The chapter poses responds to two sets of questions: is mandatory disclosure of origin incompatible with TRIPS? And is it actually a good idea anyway? The second of these questions is then broken down into four sub-questions as follows: (i) would disclosure of origin achieve its proponents objectives? (ii) is it feasible to expect companies to be able to trace the source of biogenetic material and associated traditional knowledge from which an invention or new plant variety is derived? (iii) would disclosure of origin turn out to be burdensome or damaging for industry, especially small and medium enterprises in Europe and elsewhere, to the extent that bioprospecting, research or business development would be discouraged; and (iv) would compliance impose excessively high costs on SMEs? Chapter 5 also offers various pertinent comments on the practicality of disclosure of origin. It finds that there is a certain degree of scepticism about disclosure of origin among the business and legal community, mainly on practical grounds. It needs to be emphasised here that the present study does not purport to present or analyse all perspectives. Only a limited number of stakeholders views are represented. Consequently, the doubts expressed should not be treated as definitive objections; the worth and practicality of disclosure of origin should not be discounted. Chapter 6, the concluding part, highlights the practical issues raised by the study, and offers proposals and recommendations for the Commission with respect to the ongoing international negotiations. 4

5 1. What is Meant by Disclosure of Origin? The disclosure of genetic resources and associated TK in patent applications was originally mooted by civil society organisations, but has now been adopted by a number of countries (see below). The proposal is intended to help realise fair and equitable benefit sharing as required by the Convention on Biological Diversity. It is supposed to do this by ensuring that the resources and, in some cases, TK, were acquired in accordance with biodiversity access and benefit sharing regulations in the provider countries, and other provisions of the Convention on Biological Diversity relating to national sovereignty, technology transfer and the knowledge, innovations and practices of indigenous and local communities embodying traditional lifestyles. The report takes into consideration that disclosure of origin proposals take three basic forms, that will be termed weak, medium and strong disclosure albeit while recognising that some proposals may not fit neatly into just one of these categories. The weak form is that such disclosure would be encouraged or even expected but not required and its omission would not disqualify the patent application from being accepted, being granted, or being subsequently enforced. In other words there would be no legal consequences of failing to comply. The medium form is that disclosure of origin would be mandatory, with non-compliance having any of the following consequences: the patent application would not be accepted; it would be rejected during the prosecution stage; or if granted it would not be enforceable. In the case of the weak or medium form, what is being proposed, one presumes, is that the country providing the resource should be disclosed whether or not it is the country of origin. If countries of origin had to be disclosed this might require access to biogeographical information that may or may not be readily available. The strong form goes beyond disclosure in the patent specification to require that patent applicants comply with the CBD s access and benefit sharing (ABS) provisions. One way to implement this is to require applicants to submit official documentation from provider countries proving that genetic resources and where appropriate associated TK were acquired in accordance with the ABS regulations including conformity with such obligations as prior informed consent and benefit sharing. Applications unaccompanied by such documentation would automatically be returned to the applicants for re-submission with the relevant documentation. Alternatively, there could be an international certification of origin system. The Bonn Guidelines on Access to Genetic Resources and Fair and Equitable Sharing of the Benefits Arising out of their Utilization refer to a legally recognized certification of origin system as evidence of prior informed consent and mutually agreed terms. The idea here is that if provider countries were to agree on some common requirements and procedures, standardised certificates of origin could be used which all national and regional patent offices would recognise. In this case, the ABS regulations are those of providers so the situation is clearer than with weak and medium disclosure. As for traditional knowledge, proponents of disclosure of origin tend to use the term associated to establish a link between a genetic resource and traditional knowledge about its useful application. In fact, the directness of the relationship between TK and a patented invention can vary considerably from cases where TK merely attracted a researcher s interest to a particular plant, to one where the claimed invention seems to 5

6 be no more than a slight advance on the TK. As we will see below, the disclosure of origin proposals are not entirely consistent in the way they address this issue. 1.1 Origin, source and legal provenance It should be noted that according to the CBD, the country providing genetic resources means the country supplying genetic resources collected from in-situ sources, including populations of both wild and domesticated species, or taken from ex-situ sources, which may or may not have originated in that country. If they did not originate in that country they should have been acquired in accordance with the Convention. In other words, the provider country may be different from the country or countries of their origin. With respect to the latter, the CBD states that the country of origin of genetic resources is the country which possesses those genetic resources in in-situ conditions. The distinction between provider or source country on the one hand, and origin country on the other is significant. Given that a great many species are not endemic to a single country, the origin of a given resource according to such a definition may be several or even many countries. Indeed, for the sake of practicality, it may be better to use the word source rather than origin. Alternatively, the term legal provenance, which is gaining currency nowadays, may be the appropriate term to use since the country of source may not have acquired the resources legally. 1.2 Genetic and biological resources and materials It is important to underline that the rights and responsibilities in relation to access and benefit sharing (ABS) arise in connection with genetic resources rather than the broader term biological resources. Genetic resources are defined in the CBD as genetic material of actual or potential value, with the material in question being any material of plant, animal, microbial or other origin containing functional units of heredity. Biological resources are much broader, encompassing genetic resources, organisms or parts thereof, populations, or any other biotic component of ecosystems with actual or potential use or value for humanity. Although not directly stated, the CBD s approach to ABS is based on an inherent assumption that the main users of genetic resources are pharmaceutical and biotechnology firms rather than plant breeders. However, the pharmaceutical corporations are primarily interested in pharmacologically active biochemical substances that do not contain genes and are therefore not genetic resources. Biotechnology firms, it is true are interested in genes, and not just therapeutic proteins. But these latter businesses are generally small, short of cash and have no products to sell or license (except patents). Clearly there is a lack of clarity in the use of terminology. It could be argued, for example, that non-coding DNA sequences, even with actual or potential value, are not genetic resources. However, as scientists begin to shed light on the presently obscure but not necessarily non-existent role of junk DNA in the development, functioning and reproduction of living organisms, the category of genetic resources may well expand enormously. Interestingly, Article 2 of the EU Directive on the Legal Protection of Biotechnological Inventions used the term biological material, which it defines as any material containing genetic information and capable of reproducing itself or 6

7 being reproduced in a biological system. It is submitted here that genetic material would be a more accurate term. 7

8 2. Bioprospecting, Biopiracy and the Role of the Patent System The vast majority of countries formally recognize and accept that cross-border exchange of genetic resources and traditional knowledge (TK) be carried out in compliance with the principles of the Convention on Biological Diversity (CBD). For a number of reasons, intellectual property rights, particularly patents but also plant variety protection (PVP), have become central to discussions on this matter. These reasons relate to the following: 1. The fact that patent claims in various countries may incorporate biological and genetic material including life forms within their scope. 2. The conviction widely held among developing countries and NGOs that biodiversity and associated traditional knowledge have tremendous economic potential. 3. The belief, also shared by developing countries and NGOs, that this feature of the patent system enables corporations to steal, misappropriate or unfairly free-ride on genetic resources and associated traditional knowledge. 4. The ability of modern intellectual property law to protection the innovations produced by industries based mainly in the developed world and its inability to protect adequately those in which the developing countries are relatively wellendowed. 5. The perception that as a consequence of reasons 1 4, the unequal distributions and concentrations of patent ownership and the unequal share of benefits obtained from industrial use of biogenetic resources are closely related. It is worthwhile to examine these five issues in turn. However, before that, the international legal and institutional framework is surveyed: 2.1 International legal and institutional framework There are several international legal instruments and processes in which disclosure issues have arisen: Convention on Biological Diversity (CBD) The Convention on Biological Diversity seeks to create a holistic legal regime for the genetic, species and ecosystem levels of biodiversity, wich includes a regime on access to genetic resources and benefit sharing (ABS). 1 In this regime, a framework for bilateral negotiations between provider and user countries is set forth. The elements include: An affirmation of the sovereign rights of States over their genetic resources; The obligation to endeavour to create conditions to facilitate access to genetic resources for environmentally sound uses by other Parties; Where a Party agrees to allow access to its genetic resources, this access shall be on mutually agreed terms and subject to its prior informed consent (PIC). 1 Article 15. 8

9 The only provision of the Convention that relates directly to intellectual property rights is stated in Article 16, whose title is "Access to and transfer of technology". Article 16 (5) states as follows: The Contracting Parties, recognizing that patents and other intellectual property rights may have an influence on the implementation of this Convention, shall cooperate in this regard subject to national legislation and international law in order to ensure that such rights are supportive of and do not run counter to its objectives. Notwithstanding this title, the provision itself appears to apply more generally than only to technology. While it suggests that intellectual property rights will not be created by the CBD itself, the provision does appear to emphasise the need for positive action in developing positive synergies between IPRs and the objectives of the CBD. Another key CBD provision concerns Article 8(j), which relates to traditional knowledge. This provision calls for Parties to: Subject to national legislation, respect, preserve and maintain knowledge, innovations and practices of indigenous and local communities embodying traditional lifestyles relevant for the conservation and sustainable use of biological diversity and promote their wider application with the approval and involvement of the holders of such knowledge, innovations and practices and encourage the equitable sharing of the benefits arising from the utilization of such knowledge innovations and practices." Finally, Article 22(1) is relevant in defining the CBD s relationship to other treaties, including those that relate to IPRs. It provides that the CBD does not affect the rights and obligations of any Party except where the exercise of those rights and obligations would cause a serious damage or threat to biological diversity. The CBD COP has taken a number of decisions relating to disclosure of origin. Decision III/17 on Intellectual Property Rights called for case studies to be developed on the impacts of IPRs on achieving the CBD objectives, including the relationship between IPRs and traditional knowledge relevant for the conservation and sustainable use of biological diversity. In particular, these case studies are to consider the development of intellectual property rights, including sui generis systems or alternative forms of protection, consistent with international law, that could promote the achievement of the Convention's objectives. Furthermore, the Decision called for further work to develop a common appreciation of the relationship between IPRs, the TRIPS Agreement, and the CBD. This last point was reiterated in COP Decision IV/15. 2 At CBD COP-6, Decision VI/24 on Access and Benefit Sharing as Related to Genetic Resources was adopted. This followed deliberations by an Expert Panel and an Ad Hoc Working Group on the topic. Decision VI/24 includes the Bonn Guidelines on Access to Genetic Resources and Fair and Equitable Sharing of the Benefits Arising out of their Utilization and a section on the Role of intellectual property rights in the implementation of access and benefit-sharing arrangements. Although the Guidelines 2 Decision IV/15, UNEP/CBD/COP/4, para

10 are not legally binding, per se, they can be considered as reflecting an authoritative interpretation of the relevant CBD provisions. The Bonn Guidelines include several references to IPRs. According to Paragraph 16(d), Parties should consider taking measures to encourage the disclosure of the country of origin of the genetic resources and of the origin of traditional knowledge, innovations and practices of indigenous and local communities in applications for intellectual property rights. The section on the role of intellectual property rights calls for Parties and Governments to encourage the disclosure of the country of origin of genetic resources in applications for intellectual property rights in order to help track compliance with requirements relating to prior informed consent and the mutually agreed terms. It further calls for relevant traditional knowledge to be also disclosed during IPR applications. The Decision also lists a number of issues that are to be further examined, including the Consistency and applicability of requirements for disclosure of country of origin and prior informed consent in the context of international legal obligations; Efficacy of country of origin and prior informed consent disclosures in assisting the examination of intellectual property rights applications and the re-examination of intellectual property rights granted; Efficacy of country of origin and prior informed consent disclosures in monitoring compliance with access provisions; Feasibility of an internationally recognised certificate of origin system as evidence of prior informed consent and mutually agreed terms. WIPO is further requested to examine a number of issues relating to disclosure requirements. At the WSSD, countries agreed to have an international regime to promote and safeguard the fair and equitable sharing of benefits arising out of the utilization of genetic resources be negotiated under the CBD. 3 At COP VII, the Parties again considered ABS issues, 4 including by directing its ad hoc working group on the negotiations the international regime on ABS, including disclosure of source of origin in IPR applications. The examination of the Working Group of the disclosure issue is to be transmitted to WIPO, which is also requested to prepare model clauses for disclosure requirements in IPR applications, examine the practical options for IPR procedures, and consider the implications for other WIPO instruments WTO Agreement on the Trade Related Aspects of Intellectual Property Rights (TRIPS) 3 Paragraph 44(o). 4 Decision VII/19. 10

11 The WTO TRIPS Agreement is a global agreement that establishes minimum requirements for IPRs. Article 7 lays out the objectives of the Agreement, which are to: contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations. Although this provision does not create any specific rights or obligations, it can be a useful aid to the interpretation and application of the Agreement. Article 8(1) lays out certain priority public interests, including those determined to be priorities at the national level, but clarifies that the TRIPS Agreement is not to be violated by legislating in these areas. 5 The Agreement establishes several forms of IPRs, including copyright, 6 trademarks, 7 geographic indications, 8 trade secrets, 9 and patents. 10 Of these, patenting is likely to be the most relevant to genetic resources. Patents are exclusive rights granted to inventors that prevent others from making, using, selling or importing the patented invention, for a term of at least 20 years. The criteria for granting patents are novelty, inventiveness and industrial applicability. Article 27 establishes what can be patented and the scope for exceptions: 1. Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced. 2. Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law. 3. Members may also exclude from patentability: (b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by 5 Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement. 6 TRIPS, sec TRIPS, sec TRIPS, sec TRIPS, Article TRIPS, sec

12 any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement. This provision contains several elements. The first is the presumption that patents are to be available for any invention meeting the substantive conditions. Secondly, patent rights are to be enjoyed without discrimination. Thirdly, a general exception to this presumption is provided for inventions whose commercial exploitation would violate ordre public, public morality or would seriously prejudice the environment. A key term in that paragraph is necessary ; GATT/WTO jurisprudence suggests that this may set a high threshold. 11 Fourthly, a set of specific exceptions from patentability is provided: plants, animals and essentially biological processes. Plant varieties may be protected by patents or effective sui generis systems. No definition of effective is provided, and some commentators have suggested that to meet this threshold, the minimum principles of the TRIPS Agreement must be respected. 12 Finally, the provision stipulates that the WTO was to review Article 27.3(b) in Paragraph 19 of the Doha Ministerial Declaration states: We instruct the Council for TRIPS, in pursuing its work programme including under the review of Article 27.3(b), to examine, inter alia, the relationship between the TRIPS Agreement and the Convention on Biological Diversity, the protection of traditional knowledge and folklore, and In undertaking this work, the TRIPS Council shall be guided by the objectives and principles set out in Articles 7 and 8 of the TRIPS Agreement and shall take fully into account the development dimension. This wording confirms the view of those Members who were arguing for a broad Review of Article 27.3(b). It is now clear that the Review should consider a variety of factors including the CBD, the public interest aspects identified in the TRIPS Agreement, and development. Furthermore, the Doha Declaration also calls for addressing the relationship between WTO rules and multilateral environmental agreements, although this is not meant to alter the balance of rights and responsibilities of WTO Members World Intellectual Property Organization Under its programme relating to new intellectual property issues, WIPO has been looking in depth at the intellectual property aspects of access to genetic resources. As a result of controversies arising from proposals by some developing countries during the negotiations of the WIPO Patent Law Treaty to require certificates of origin for patent applications involving genetic resources, it was agreed to establish a process 11 See, e.g. BISD 39S/155 United States Restrictions on Imports of Tuna (circulated on 3 September 1991), which applied the least trade restrictive test. More recently, the decision WT/DS135 European Communities- Measures Affecting Asbestos-Containing Products, applied a modified test, based on balancing several criteria. Although these interpretations are instructive, caution is, however, called for, since this term may be interpreted differently in the TRIPS Agreement than in GATT Article XX. 12 E.g., Leskien, D. and Flitner, M., (1997) Intellectual Property Rights and Plant Genetic Resources, Issues in Genetic Resources No. 6, International Plant Genetic Resources Institute, Rome. 13 WTO, WT/MIN(1)/DEC/1, Para

13 under WIPO for considering these issues in greater depth. This led to the creation of the Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore, whose first session was held in The Intergovernmental Committee has proven to be a venue for debating key issues, enabling information gathering, and commissioning further analytical work. So far, it has been unable to forge consensus on the key issues. Currently, negotiations are also ongoing in WIPO to develop the Substantive Patent Law Treaty (SPLT). Whereas the TRIPS Agreement establishes the minimum required elements of national laws on intellectual property rights, the SPLT will spell out the full substance of these rights in an effort to achieve harmonise them. The outcome of these negotiations may impact on the disclosure debate. In addition, discussions on disclosure of origin have been going on at meetings of the Working Group on Reform of the Patent Cooperation Treaty. 2.2 Patenting life The assumption that inventions are essentially mechanical devices and that patents are therefore intended to protect machines is a deep-seated one. But how true is this? In fact, chemical substances synthesised in laboratories with applications in the dyestuff, pharmaceutical, cosmetic and photography industries have been patented for well over 100 years. 14 Early objections to the patenting of chemicals had more to do with infant industry protectionism than the conviction that the basic tenets of patent law were being subverted, although it is also true that for those chemicals to be used as pharmaceuticals, public policy considerations were also influential. As for patenting in the life sciences, the United States was the first country where the patentability of natural substances produced by biotechnological means was considered by the courts. Subsequently, the USA has played a major role in driving the evolution of patent law to protect commercially promising outputs of biotechnological research. Why the USA? In the early days of the pharmaceutical industry, the US industry s products were not, as in Germany and Switzerland, synthetic chemicals but were of natural origin. Thus, the question soon arose of whether these could be protected. The product of nature doctrine, which was formulated in the previous century, was understood to set clear limits on how far or even whether natural substances and life forms could be protected. Nevertheless, as the US pharmaceutical industry increased its ability to develop new products, the Patent Office did not find it inconsistent with the doctrine to allow purified or isolated natural products to be protected. In addition, the courts sometimes interpreted the law in ways that favoured owners in cases where the bounds of patentability relating to new kinds of product were unclear and needed to be demarcated. As for the patenting of life forms, this was confirmed in 1980, when the US Supreme Court ruled by a narrow majority in Diamond v Chakrabarty that a man-made oileating bacterium produced by Anand Chakrabarty, an employee of General Electric, could be classed as a composition of matter or a manufacture, and therefore be treated as a patentable invention. Since then the US has gone tumbling down what 14 Dutfield, G. (2003) Intellectual Property Rights and the Life Science Industries: A Twentieth Century History. Aldershot, Ashgate. 13

14 many critics would consider a slippery slope, pulling the rest of the world at least part of the way with it. In a 1985 patent appeals case, the US Patent and Trademark Office affirmed the patentability of plants, seeds and plant tissue cultures. By 1988 over 40 patents on crop plants had already been issued. By the end of September 2001, there were more than 1,800 US patents with claims to plants, seeds, or plant parts or tissues. In 1988, the first ever animal patent was granted for a transgenic nonhuman mammal containing an activated oncogene sequence. As for Europe, most countries did not allow chemical and pharmaceutical substances to be patented as such for most of the twentieth century. Only the processes for manufacturing them could be. One important exception was the UK, except for the period This situation began to change from around In the past two decades, the United States and Europe have been busily seeking to export their patent law standards to the rest of the world. The TRIPS Agreement is their biggest success to date, reflecting as it does a mix of European and United States patent (and other IPR) law. Thus, Article 27.1 of TRIPS, which deals with patentable subject matter, states that patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. It also requires that patents be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced. Article 27.3(b) echoes the EPC by allowing countries to exclude from patentability plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. According to Article 3(2) of the EU Directive on the Legal Protection of Biotechnological Inventions, Biological material which is isolated from its natural environment or produced by means of a technical process may be the subject of an invention even if it previously occurred in nature. Also, by virtue of Article 5(2), An element isolated from the human body or otherwise produced by means of a technical process, including the sequence or partial sequence of a gene, may constitute a patentable invention, even if the structure of that element is identical to that of a natural element. These provisions are very similar to the EPO Guidelines for Examination, which is of course intentional. The Guidelines clarify: If a substance found in nature has first to be isolated from its surrounding and a process for obtaining it is developed, that process is patentable. Moreover, if the substance can be properly characterised either by its structure, by the process by which is it obtained or by other parameters and it is new in the absolute sense of having no previously recognised existence, then the substance per se may be patentable. A sequence or partial sequence of a gene may also be patented as long as an industrial application is disclosed. This is consistent with EPO practice. 14

15 However, many developing countries have yet to fulfil their obligations in this respect, and it would be fair to say that many of them are unclear on how they should best do so. The majority do not allow animals and plants to be patented, while some have criticised the distinction between micro-organisms and other types of organisms, and between microbiological processes and other biological ones, as being artificial and contrary to the basic tenets of patent law. In consequence, they argue, patenting life forms should not be allowed at all. But as long as natural products and life forms are patentable, they argue, the law should be modified to ensure that these countries are not exploited. Disclosure of origin, it is hoped, will make the patent system fairer. 2.3 The value of biodiversity The annual market for products derived from genetic resources is between US$500 billion and US$800 billion. 15 This figure is based on statistics on the following industrial sectors which depend to a greater or lesser degree on biogenetic resources: pharmaceuticals, botanical medicines, agricultural produce (including agricultural seed), ornamental horticultural products, crop protection products, biotechnologies in fields other than healthcare and agriculture, and personal care and cosmetics products. It should be noted that while not all these are normally considered as being high technology industries as such, the largest and most profitable industries, such as pharmaceuticals and industrial biotechnology, tend to require participating firms to have advanced science and technology capacities. Breaking these figures down by sector, ten Kate and Laird (1999) estimate the present size of the global market for pharmaceuticals as between US$75 and US$150 billion per annum (of which percent of the products derive from genetic resources). For agricultural seeds, the figure for annual sales is US$30 billion. For botanical medicines, it is US$20 to $40 billion. Other researchers have come up with figures supporting the case that biogenetic resources for health, food and agriculture and related traditional knowledge are of tremendous importance for the global economy. The estimated market value of plantbased medicines sold in OECD countries in 1990 was $61 billion. 16 Many of the pharmaceutical companies are likely to have used traditional knowledge as leads in their product development, as demonstrated by Farnsworth s estimate referred to earlier, that of the 119 plant-based compounds used in medicine worldwide, 74 percent had the same or related uses as the medicinal plants from which they were derived. 17 More recent estimates for the United States are that from 1989 to 1995, 60 percent of new anticancer and anti-infective drugs were of natural origin, 18 and also that from 1980 to 2002, natural products were the source of two-thirds of the 15 ten Kate, K. and Laird, S.A. (1999) The Commercial Use of Biodiversity: Access to Genetic Resources and Benefit Sharing, London, Earthscan. 16 Principe, P (1998) Economics and medicinal plants. In: Tomlinson, T R and Akerele, O (eds), Medicinal Plants: Their Role in Health and Biodiversity, University of Pennsylvania Press, Philadelphia, pp Farnsworth, N (1988) Screening plants for new medicines. In: Wilson, E O (ed) BioDiversity, National Academy Press, Washington DC, pp 83-97, p Cragg et al (1997) classify drugs of natural origin as being either original natural products, products derived semisynthetically from natural products, or synthetic products based on natural product models. Cragg, G M, Newman, D J and Snader, K M (1997) Natural products in drug discovery and development. Journal of Natural Products, 60(1), pp

16 anticancer agents being investigated as drug candidates. 19 Studies on the value of landraces as inputs in modern plant breeding are few and far between, but one study on the use and value of landraces for rice breeding in India estimated that rice landraces acquired from India and overseas contributed 5.6 percent, or US$75 million, to India s rice yields. 20 Assuming that landraces contribute equally to other countries where rice is cultivated, the global value added to rice yields by use of landraces can be estimated at US$400 million per year. Despite this obvious dependence of industry on biogenetic resources and traditional knowledge over the years, does this mean they still depend on resources and knowledge they have not yet discovered? Perhaps not so much. The failure of Shaman Pharmaceuticals, which sought to develop new drugs from ethnobotanical information provided by indigenous communities, is sometimes cited to demonstrate that traditional knowledge provides no short-cuts for the industry in its costly search for profitable new cures. Moreover, according to ten Kate and Laird, natural products are likely to remain an important, although minor, component of drug discovery However, the techniques of molecular biology and genetic engineering are likely to become the dominating factor in drug, discovery, design and development. 21 On the other hand, the rapidly growing botanical medicine industry, which is particularly well established in countries with their own traditional health systems, like India and China, is very much dependent on plant genetic resources and traditional knowledge. As ten Kate and Laird explain, traditional knowledge is widely used in the botanical medicine industry as the basis for determining safety and efficacy, to develop agronomic practices for cultivation of materials, and to guide the development of new products. Mention of traditional use of a medicine is also frequently used in marketing. However, companies in this sector tend, for sound business reasons, to depend heavily on existing and well known natural products and many of them are not seeking alternatives to these. As far as the development of new crop varieties goes, it is commonly agreed that the value of plant genetic resources for food and agriculture is increasing due to (a) the need for more food as a result of global population growth; (b) the limited amount of new land being opened up for food production; and (c) the increasing adoption of new biotechnologies, 22 which allow gene transfer between more distantly-related organisms, thereby expanding the pool of genes potentially available for the breeding of new crop varieties. Nevertheless, crop breeders still tend not to use landraces and wild varieties in their breeding programmes. Landraces may be a useful source of desirable single genes, but will not be adapted for a wide range of conditions. They may also require considerable effort to breed out extraneous genetic material. Breeders thus tend to use varieties held in their own collections and those bred in 19 Newman, D.J., Cragg, G.M. and Snader, K.M. (2003) Natural products as sources of new drugs over the period Journal of Natural Products 66, ; Dalton, R. (2004) Bioprospects less than golden Nature 429: Evenson, R E (1996) Economic valuation of biodiversity for agriculture. In: Pan American Health Organization (ed) Biodiversity, Biotechnology, and Sustainable Development in Health and Agriculture: Emerging Connections, PAHO, Washington DC, pp Ten Kate and Laird (1999), p Brush, S B (1994) Providing Farmers Rights through in situ conservation of crop genetic resources. Background Study Paper No. 3, First Extraordinary Session of the Commission on Plant Genetic Resources, Rome, 7-11 November

17 public institutions. Increased adoption of genetic engineering and other biotechnological techniques including transgenics is expected to further reduce dependency on exotic plant germplasm (and local knowledge and skills). However, it is important not to overstate the point. Exotic germplasm is likely to be used when particular traits are sought, new breeding programmes are being started, or for longterm genetic enhancement, and also in the breeding of certain crops (e.g. potatoes). Indeed, even though a survey revealed that only 2.4 percent of germplasm used in the development of new varieties comes from wild species or landraces maintained in situ, 23 these resources are still important. Securing effective protection from diseases and pests in the long term is absolutely dependent on inputs of genes and traits that are new to the system in the sense of being undiscovered or known only to indigenous or traditional communities. The disappointing results of the last 1-2 decades of bioprospecting suggest that the commercial potential of the large stocks of biogenetic resources existing in many developing countries may be much lower than many people think. But this is not the same as saying that they have no potential. This is recognised by the many companies that are still keen to access and screen these resources. 2.4 Intellectual property rights and misappropriation of genetic resources and traditional knowledge Biopiracy has emerged as a term to describe the ways that corporations from the developed world steal, free-ride on, or misappropriate the genetic resources and traditional knowledge and technologies of the developing countries. While these and other corporations complain about intellectual piracy perpetrated by people in developing countries, the latter nations counter that their biological, scientific and cultural assets are being pirated or stolen by these same businesses. Like biopiracy, intellectual piracy is a political term, and as such is inaccurate and deliberately so. Intellectual piracy implies that the copying and selling of pharmaceuticals, music CDs and films anywhere in the world is intellectual piracy. But this is irrespective of whether the works in question had patent or copyright protection under the domestic laws. After all, if drugs cannot be patented in a certain country, copying them by local companies for the domestic market and/or overseas markets where the drugs in question are also not patented is hardly piracy in the legal sense of the word. Similarly, biopiracy is an imprecise term. One of the problems with deliberate imprecision, or what we might refer to as strategic vagueness, is that for those working on legal solutions in such forms as national laws, regulations or international conventions, some consensus is necessary as to its meaning. Let us start by elucidating, as far as we can, the actual meaning of the word. To begin with the obvious, biopiracy is a compound word consisting of bio, which is short for biological, and piracy. According to the Concise Oxford Dictionary, piracy means the following: 23 See Swanson, T (1996) The reliance of northern economies on southern biodiversity: biodiversity as information. Ecological Economics, 17, pp

18 1 the practice or an act of robbery of ships at sea. 2 a similar practice or act in other forms, esp. hijacking. 3 the infringement of copyright Apart from the use of piracy for rhetorical effect, the word does not seem to be applicable to the kinds of act referred to as biopiracy. But let us now turn to the verb to pirate. The two definitions given are 1 appropriate or reproduce (the work or ideas etc. of another) without permission for one s own benefit. 2 plunder. These definitions seem to be more appropriate since inherent to the biopiracy rhetoric are theft, unfair free-riding and misappropriation. In essence, biopirates are those individuals and companies accused of one or both of the following acts: (i) the theft, misappropriation of, or unfair free-riding on, genetic resources and/or traditional knowledge through the patent system; and (ii) the unauthorised collection for commercial ends of genetic resources and/or traditional knowledge. But since biopiracy is not just a matter of law but is also one of morality and of fairness, we need to acknowledge that where the line should be drawn between an act of biopiracy and a legitimate practice may not always be easy to draw. The difficulty in drawing the line is compounded by the vagueness in the way the term is applied. To illustrate this point, it may be useful to explain and distinguish the terms theft, unfair freeriding and misappropriation by explaining that they represent a continuum of activities from criminal acts causing serious harm, to legal but unfair activities, and even to legal, fair and socially-welfare enhancing uses of other people s property. For example, neither misappropriation nor free-riding require there to be a victim. Indeed, acts of free-riding may be of benefit to society. Indeed, since most innovation is incremental by nature, the eradication of free-riding may actually be harmful. Consequently, there is likely to be considerable disagreement about where to draw the line between uses of somebody else s property that are legal, fair and social welfare enhancing, and other uses that are unfair or illegal and/or socially perverse in its effects. Behind much of the debate about biopiracy is disagreement on whether and to what extent such terms should apply. 24 In order to show how differently biopiracy is used, it is useful to understand that a wide range of acts have been considered as acts of biopiracy. Traditional knowledge biopiracy Collection and use: The unauthorised and/or uncompensated use of common TK The unauthorised/uncompensated use of TK only found among one indigenous group 24 See MA Lemley, Property, Intellectual Property, and Free Riding. Stanford Law and Economics Olin Working Paper No. 291,