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By Ratnakar Adhikari
Formerly Executive Director, South Asia Watch on Trade, Economics and Environment (SAWTEE),Kathmandu
Of all the issues brought into the multilateral trade regime under the auspices of the World Trade Organisation (WTO), Trade-Related Intellectual Property Rights (TRIPS) has been, and remains, the most controversial one.
Of the seven forms of Intellectual Property Rights (IPR) protection provided for in TRIPS, the one relating to patents is the most contentious. Patent protection of agricultural and pharmaceutical products was not allowed in several developed countries until three decades ago. Even the US, an ardent supporter of a strong global IPR regime, did not allow the patenting of biological products until the 1980s, although process patenting was common.
However, with the onset of TRIPS, things have moved in a radically different direction.
Patent protection on ‘life forms’ is the most controversial provision in TRIPS. Article 27.3 (b) of TRIPS, in its first part, calls on WTO members to provide patent protection to micro-organisms as well as non-biological and micro-biological processes, while they are allowed to exclude plants, animals and essentially biological processes from the scope of patentability.
Semantics apart, what this Article does is to make all biotechnological invention, including Genetically Modified Organisms (GMOs), patentable.
This provision conflicts with the provisions contained in the Convention on Biological Diversity (CBD), an international legal instrument signed by 187 countries for the conservation and sustainable use of genetic resources and traditional knowledge as well as assuring fair and equitable sharing of benefits between the donors and users of these resources.
The same Article, in its second part, makes it mandatory to protect plant varieties through one of the following three methods:
- Patents.
- An effective sui generis system.
- Any combination thereof.
For the moment, though, we will concentrate on how the system of plant variety protection tends to strengthen the rights of economically powerful commercial breeders at the expense of subsistence farmers.
South Asia is home to two of the 12 mega biodiversity centres of the world, and it has more than 15,000 endemic species of plants. The region also forms the primary and secondary centre of diversity for many crop plants, and owns large genetic diversity in these crops and in a few more crops introduced from elsewhere.
Unlike in other biodiversity-rich regions, the extent of extinction of species and genetic diversity is relatively limited in South Asia, despite huge population pressures. Moreover, more than half the region’s population depends on farming for its survival.
Therefore, the conflicts between TRIPS and the CBD have serious developmental implications for the region.
Against this backdrop, this backgrounder traces the linkage between TRIPS and the CBD in the context of South Asia.
Convention on Biological Diversity (CBD)
Signed at the Earth Summit in 1992, the CBD is the first decisive move undertaken by the global community to establish an international legal framework for the conservation and sustainable use of genetic resources, with the rights over such resources vested in the sovereign States.
This instrument also contains a landmark provision to determine the criteria of access to genetic resources and associated traditional knowledge and the sharing of benefits arising out of their commercial use.
Four Articles of the Convention -- Article 8 (j), Article 15, Article 16.5 and Article 22 -- are particularly relevant.
Article 8 (j) contains a provision to encourage the equitable sharing of benefits arising from the utilisation of knowledge, innovations and practices of indigenous and local communities embodying traditional lifestyles relevant for the conservation and sustainable use of biological diversity.
However, this provision is couched in programmatic terms and therefore not operative or self-executing naturally. In order to be applicable, national laws should determine how the rights of communities are to be recognised and enforced.
There are a number of other conventions and treaties that deal with the protection of traditional knowledge, biodiversity, folklore, etc. However, these are not as effective since they are generally non-binding in nature.
Article 15 of the CBD, recognising the sovereign rights of States over their natural resources, has empowered national authorities to determine policy, administrative or legal measures for allowing access to their genetic resources. It sets the basic framework within which access to genetic resources is to operate, and provides a basis on which negotiations of the terms of sharing benefits can take place.
It recognises that the authority to determine access to genetic resources rests with national governments and is subject to national legislation. It calls for access on mutually agreed terms and with the Prior Informed Consent (PIC), unless waived, of the source country.
Three major areas contained in the CBD assert the supremacy of Access and Benefit Sharing (ABS) issues.
Sovereign rights over natural resources
The Preamble, Articles 3 and 15 (1) of the CBD recognise the sovereign rights of States over their natural resources. Article 15 (1), in particular, stipulates: (a) States have sovereign rights over their natural resources; (b) national governments keep the authority to determine access to genetic resources; and (c) access to the genetic resources regime is subject to national legislation.
States need to facilitate access
States are required to facilitate access to resources, subject to national laws, perhaps because the CBD too holds that modern biotechnology has great potential; if developed and used with adequate safety measures for the environment and human health, it can be beneficial to human beings.
Article 15 (2), therefore, asks the contracting parties to create conditions to facilitate access to genetic resources for environmentally sound purposes by other contracting parties, and not to impose restrictions that run counter to CBD objectives.
Fair and equitable sharing of benefits
Article 15 (1) prescribes benefit-sharing of genetic resources in three ways: participation in research, transfer of technology, and sharing of financial benefits. In a nutshell, the Convention creates not only a procedural framework but also a normative premise on which the developing country, as the provider of genetic resources, and the developed country, as the user, can enter into negotiations to ensure access and benefit-sharing.
Article 16.5 states that contracting parties shall cooperate to ensure that IPRs are ‘supportive of and do not run counter to its (the CBD’s) objectives’.
There is an important political economy implication of this provision that was finalised at a time when the future IPR agreement, ie TRIPS, was being negotiated during the Uruguay Round of negotiations of the General Agreement on Tariffs and Trade (GATT).
Therefore, developed countries quietly added another Article (Article 22) as a cushion, to counter the possible negative impact of the above-mentioned provisions on their industries. Due to this Article, the CBD’s provisions do not affect the rights and obligations of countries to other ‘existing international agreements, except where the exercise of those rights and obligations would cause serious damage or threat to biological diversity’.
This provision was aimed at significantly watering down the provision of Article 16.5 and, to some extent, seemed to have achieved its purpose. However, read together and in the spirit of the CBD, there is a basis for countering the runaway march of the IPR regime.
TRIPS
The basic objective of TRIPS, as provided for in Article 7 of the Agreement, is as follows:
‘The protection and enforcement of intellectual property rights should 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.’
The standards set out in the Agreement must be available in every WTO member State, either by enactment of new legislation or by amendment of existing national laws.
The standards thus enacted and enforced must be without discrimination, ie, on the basis of Most Favoured Nation (MFN) and National Treatment (Articles 3 and 4).
The three main features of the Agreement are:
Standards: In each of the main areas of intellectual property covered by TRIPS, it sets out minimum standards of protection that each WTO member must provide. This means that members are allowed to provide more extensive protection of intellectual property if they so wish. By prescribing the bare minimum standard, TRIPS has made an attempt to homogenise the global framework for intellectual property protection through the one-size-fits-all approach. While this approach has been criticised by several institutions even in developed countries, it has been fiercely opposed by developing countries.
Enforcement: The Agreement provides a set of provisions that deals with domestic procedures and remedies for the enforcement of IPR. It lays down certain general principles applicable to all forms of IPR enforcement procedures. In addition, civil and administrative procedures, remedies, provisional measures, special requirements related to border measures, and criminal procedures are also defined.
Dispute settlement: Disputes arising out of the infringement of IPR between WTO members are incorporated into the WTO’s disputes settlement procedures. One major exception contained in Article 64.2 of the Agreement is that cases involving the non-violation complaint shall not apply to the settlement of disputes under this Agreement.
Here lies a major political economy of the inclusion of the TRIPS Agreement in the WTO. Non-compliance with the TRIPS provision could trigger a trade dispute, and the powerful Disputes Settlement Body (DSB) of the WTO could, in an extreme case, allow retaliatory measures (sanctions) against the non-complying country.
Besides, the Agreement provides for a greater period of protection than that which existed at the time of signing this Agreement (April 15, 2004). For example, the minimum period of patent protection under TRIPS is 20 years, which is more even than what was being provided in the US (17 years) and much higher than that provided in developing countries such as India and Nepal (seven years).
According to Article 27.1 of the Agreement, the patent shall be available for any invention, whether of product or process, in all fields of technology. The Article further states: ‘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.’
Conflicts between TRIPS and the CBD
TRIPS, in particular Article 27.3 (b) of the Agreement, is in direct conflict with the CBD.
The major controversies surrounding these debates relate to:
- Private rights vs public rights.
- Rights of indigenous communities vs rights of multinational pharmaceutical corporations.
- Rights of commercial breeders vs rights of farmers.
It is argued that TRIPS attempts to homogenise IPR regimes and thereby militates against a country’s or a community’s freedom to choose the way in which it wants to deal with the use and protection of knowledge.
Equally important, it contains no provision for the protection of indigenous and local community knowledge. Such knowledge, because of its nature, may not be amenable to protection under current IPR regimes.
Finally, it does not recognise the need to equitably share the benefits of knowledge related to biodiversity.
Since most debates on TRIPS and the CBD are centred on the provisions of Article 27.3 (b), the Article itself explicitly mentions: ‘The provisions of this sub-paragraph shall be reviewed four years after the date of entry into force of the WTO Agreement.’
This part of the Article was, apparently, added towards the end of the Uruguay Round negotiations, at the insistence of developing countries. However, the major problem is that the mandated review of the Article has not moved very far. Non-completion of this review means that developing countries will have to wait for some time to resolve the acute problem of bio-piracy and theft of traditional knowledge.
Bio-piracy and theft of traditional knowledge
Since TRIPS was sponsored by corporate interests in the North, one of the tacit objectives of this Agreement was to help them maximise their profits. This would have been impossible had they not been allowed to legally pirate the indigenous knowledge, traditions, practices and native resources of the South.
Since the North has financial resources, legal muscle and technical superiority, and the major portion of the South does not have anything except biodiversity and traditional knowledge, this Agreement is increasingly being used as a means to legally transfer the bio-resources and traditional knowledge of the South to the North.
Companies that have spent large sums of money on genetically engineered crops have begun patenting the plants that they have engineered, arguing that they ‘own’ them and that others must pay for planting their seeds and plants.
While most of the world’s genetic diversity resides in the South, where farmers and their ancestors develop all the important food crops, transnational corporations (TNCs) can now patent those crops -- thanks to the IPR provision set out in TRIPS -- and make huge profits without compensating traditional farming communities for the original research.
Bio-piracy is commonplace in the corporative global village, whereby the TNCs of the North make use of their scientists to search for new genes located in the South, collect them and genetically alter them to ‘invent’ new genes. Finally, the TNCs patent them and gain control over their use.
Should local communities that have inherited, developed and/or conserved them for generations want to use these resources they have to pay hefty royalties.
Patenting life forms, as mandated by Article 27.3 (b), has already resulted in patent claims incorporating genetic resources within their scope. This feature of the patent system enables corporations to steal, misappropriate or unfairly free-ride on genetic resources and associated traditional knowledge.
The concern is that ‘new’ products based on such resources and traditional knowledge are essentially re-formulations of existing resources and knowledge, and differ minimally, if at all, from what already exists.
Allowing the perpetuation of bio-piracy not only means utter disregard and disrespect for the basic spirit of the CBD, but also non-fulfilment of the basic tenets of patenting -- one that is in stark contrast to the provision of TRIPS.
The conflicts that emerge when patents are granted on products of biological resources are not simply social, political or economic; rather, they strike at the very root and basis of the patent system.
For any patent to be granted it has to fulfil three criteria.
First, the claimed invention has to be ‘new’ or ‘novel’ (the so-called ‘novelty’ requirement, in IPR jargon). Mere ‘discovery’ of something that is pre-existing in nature or is part of the knowledge system of society anywhere in the world cannot be patented. If someone can prove the existence of ‘prior art’ and challenge the patent, it stands revoked.
Second, the claimed invention must have followed an inventive step (the so-called ‘inventive step’ requirement, in IPR jargon), which means that there must be a demonstrable, distinct and unique effort that has gone into the product or process for it to be capable of seeking patent protection.
Third, the claimed invention should be capable of industrial and/or commercially meaningful application (the so-called ‘industrial applicability’ requirement, in IPR jargon).
Most of the bio-piracy taking place in the world today does not fulfil the first two criteria of patentability. Despite this, patent offices in developed countries have been extremely liberal in granting patents even on such claimed inventions as are either merely ‘discoveries’ or have not involved any substantial inventive step.
Countries and regions such as South Asia, which are rich in biodiversity and traditional knowledge, are particularly susceptible to bio-piracy. Unless efforts are made to zealously guard these resources, bio-piracy will continue unabated.
A few examples of bio-piracy that South Asian communities have encountered are worth highlighting here. Several medicinal properties of plants, fruits and vegetables that have been used by traditional healers in South Asia since time immemorial have been patented by various companies in developed countries. Sixty-five properties of neem, two properties of bitter gourd, six properties of turmeric, and three properties of jackfruit have been patented by companies and institutions mainly from the US, Europe and Japan.
Among these, a patent on the use of turmeric to heal wounds became quite controversial, not least because it was later struck down by the concerned authority.
One way of preventing bio-piracy is the documentation of genetic resources and traditional knowledge found in each country. This will at least help the country challenge the grant of patent through documentary evidence of pre-existence of the resource or knowledge.
(This backgrounder is an edited excerpt of the author’s paper ‘TRIPS Implementation and Development Implications for South Asia’ published in Centad’s South Asian Yearbook of Trade and Development 2005. To read the full paper with references, click here)
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