Convention publication

Whereas Article 27.3 (b) addresses intellectual property rights and patenting requirements, this proposal addresses concerns involving the countries of origin. This proposal includes adopting articles from the Convention on Biological Diversity into the WTO Trade Related Intellectual Property Rights Agreement.

This study seeks to address the background of the agreement, problem identification thereof and a proposal with benefits and concerns for stakeholders involved. Finally, a succinct action plan is proposed to address concerns with the current WTO Trade Related Intellectual Property Rights Agreement.

Research includes an analysis of Article 27.3 (b) of the Trade Related Intellectual Property Rights Agreement as well as Articles 15.4 and 15.7 from the Convention on Biological Diversity. Research articles addressing this topic and/or proposal are also cited and discussed. Finally, articles or information related to the background of the current agreement are additionally referenced.

In evaluating the policy proposal, an analysis of the strengths, weaknesses, opportunities and threats is discussed and can be compared alongside an analysis of the current agreement.

The WTO’s regulation of the global marketplace recognizes participation is not only inevitable but necessary for success. This proposal assesses the current patenting standards and Trade Related Intellectual Property Rights Agreement in order to offer a policy proposal to encourage reform in order to allow for more equitable participation in the global economy.

Keywords:

World Trade Organization, Trade Related Intellectual Property Rights Agreement, Convention on Biological Diversity

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Reforming Article 27. (b) of the WTO Trade Related Intellectual Property Rights Agreement

Ashley Daniel1

1 The Evergreen State College, United States, [email protected]

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Table of Contents

Executive Summary…………………………………………………………………………..3

Background…………………………………………………………………………………..3

Problem Statement……………………………………………………………….…………..4

Problem Identification……………………………………………………………………….4

Proposal and Benefits……………………….…………………………...…………………..6

Proposal Concerns…………………………………………………………………………...7

Stakeholder Impact……. …………………………………………………...……………….8

Action Plan………………………………………...………………………..……………….9

SWOT Analysis of Proposal………………………………………………………………...10

SWOT Analysis of Current Agreement……………………………………………………..11

Resources…………………………………………………………………………………….12

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Executive Summary

The WTO enforces regulatory trade agreements including the Trade Related Intellectual Property Rights Agreement, or TRIPs. Article 27.3b of the TRIPs Agreement specifically addresses the patenting of organisms modified for commercial use. The current patenting requirements for genetically modified organisms (or GMOs) result in unfavorable trading standards for those in the global South. A fair and equitable compromise exists and is currently modeled in Article 15.4 and 15.7 of the Convention on Biological Diversity’s text. Supplementing Article 27.3b with these provisions will allow developed and lesser developed countries a place in the global marketplace without forsaking their self-interest. Background

In 1944, the Bretton Woods Conference resulted in the creation of the General Agreement on Tariffs and Trade (GATT), now called the World Trade Organization (WT0). The mission of the WTO originated from a need to regulate international monetary and financial order after World War II in an effort to liberalize the global economy and break down trade barriers (Stiglitz, 2002, p.11). Subsequent to its formation, the international Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) took effect after the 1994 Uruguay Round in order to regulate patenting, or intellectual property (IIPA, 2013) The current Doha Round in the WTO negotiations outwardly seeks to “place developing countries’ needs and interests at the heart of the Work Programme adopted in this [Doha] Declaration” (WTO, 2013). The issue of intellectual property rights and patenting requirements should lie at the heart of reform efforts in the interests of the developing countries affected by Article 27.3b of the TRIPS Agreement. Article 27.3b addresses the patenting of living organisms, allowing countries to exclude biological processes from patenting, but protecting patenting of genetically modified organisms (WTO, 2013). The WTO explains, “Inventions eligible for patenting must be new, involve an inventive step and be capable of industrial application” (WTO, 2013). Genetically modified organisms (GMOs) are defined as “new varieties of living organisms created when scientists splice the genes of two different species in an attempt to produce a new species with certain desirable characteristics,” and, once modified, “no matter how slightly, such genetic material can be patented by corporations or individuals who thus appropriate all financial benefits” (Wallach & Woodall, 1999, 44; Bello, 2000, p.77). These intellectual property rights are critiqued for allowing commercial plant breeders to take “traditional indigenous varieties of seed, ‘improve’ them (often by very minor alterations of genetic structure), and then patent and commercialize them, eventually selling back the patented seeds to communities that first provided them freely” (Shiva and Holla-Bhar, 1996, p.147). Reforming Article 27.3b requires addressing the concerns of all stakeholders, not simply those requesting the patents.

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Inventions eligible for patenting from WTO website

Problem Statement

TRIPS Article 27.3b protects patenting of genetically modified organisms, yet does not indicate the origin from which the gene is derived nor require a patent application be submitted to the country of origin.

Problem Identification

As TRIPS Article 27.3b does not allow WTO members to exclude biotechnological inventions from their patent systems, it results in disproportionally negatively affecting the global South, or developing countries (Dutfield, 2001, pg. 1). This article of the TRIPS Agreement relates to the appropriation of patents on GMOs, invoking concerns that protection of such “intellectual property rights” through patenting poses disadvantages for farmers trying to compete in a global marketplace. Intellectual property rights do not extend to patent plants innovatively bred over generations or through millennia, yet covers biotechnological inventions, so long as they involve an inventive step and are capable of industrial application (WTO, 2013). These patents are thus commonly granted to agribusiness firms for the creation of GMOs, yet do not generally benefit the communities of the plants’ origin (Engdahl, 2005, pg.5).

Extending intellectual property rights, or patenting, of GMOs results in issues such as:

• “Biopiracy”- the process whereby seed is usurped and altered to be resold as the product of a given company. In one example, a U.S. firm patented a new variety of seed from genetic material from Thailand’s Jasmine rice and India’s basmati rice, thus threatening local farmers exports with “Jasmati” rice (Bello, 2000, pg. 77).

Definition Article 27.3 (b) of TRIPS Agreement from WTO Website

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• Purchasing seed versus seed saving- genetically modified or hybrid seed sometimes cannot be saved, resulting in farmers having to repurchase the seed each year. This leads to the control of seed shifting from the farmer to the seed industry (Seeds of Freedom, 2013).

• The “three M’s: Multiply, Mutate and Migrate,”- could lead to a new GMO seed choking out a wild variety or a cultivated relative (Cosbey, 1996, pg. 7). One example of this is found in the Schmeiser v. Monsanto case involving the migration of patented Round Up Ready canola. In another case, the migration of a GM rice strain contaminated the rice supply in Arkansas, put the entire regional industry at risk, and the U.S. rice export market in jeopardy (Freeman & Herz, 2007).

• Less diversified farming-The proliferation of GMO seeds for industrial application leads to fewer crop varieties through promotion of monocropping and agribusiness. This supplants self-sustainable and diversified farms that can support a community’s agricultural needs with export-oriented farming. The loss of biodiversity also has effects on the ecological system.

Table depicting strengths, weaknesses, opportunities and threats presented by the current Article 27.3 (b) of the WTO TRIPS Agreement. SWOT template obtained from City of Olympia website.

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One scholar explains, a concentration in the global agricultural biotechnology industry is “inevitable” with top firms able to devote impressive sums to biotechnology research (Wright & Pardey, 2006, pg. 22). Vandana Shiva elaborates a “coalition of 12 major U.S. corporations: Bristol Myers, DuPont, GE, General Motors, Hewlett Packard, IBM, Johnson & Johnson, Merck, Monsanto, Pfizer, Rockwell, and Warner” essentially control the world’s GM seed supply and worked closely to introduce intellectual property protection into the WTO (1997, p. 81). These interests often conflict with those of the farmers who are unable to produce an invention worthy of intellectual property rights.

Other stakeholders include international governments affected by the TRIPS agreement. The WTO’s TRIPS Agreement has been used to defend opening foreign border to untested GMOs (Engdahl, 2005, pg.5). When the European Union blocked the import of U.S. products through its ban on genetically modified food, the U.S. filed a formal complaint with WTO citing the EU was in violation of international trade agreements (Bloom, 2011). India has also pushed heavily for “no patenting on life” in WTO ministerial conferences to no avail (de Carvalho, 2000, pg. 392). With GMOs being a protected class for patenting, it is important to consider a way to reconcile the interests of seed companies with those of the farmers, as well as local governments.

One critic concludes, “Intellectual property rights would only be recognized when they generated profit” but not when “a Mende farmer saves some seeds and rejects others” and when the “innovation is capable of industrial application,” but not for “the Indian farmer who collects and saves seeds for the next year’s planting.” (Lehman and Krebs, 1996, p.129). Intellectual property rights are thus a“legally enforceable but limited monopoly, granted by the state to an innovator,” thus allowing the innovator to “commercialize it, and recoup any investment on research and development” (Cosbey, 1996, p.2). The context of this proposal arises from developed countries using genetic resources extracted from biodiversity-rich, but otherwise lesser developed, countries in order to create new inventions. Yet, there is no condition requiring listing of the origin of the genetic resources, nor a requirement to seek patenting permission from the country of origin to use the resource for biotechnology purposes (de Carvalho, 2000, pg. 375; pg.390). This TRIPS Agreement proposal seeks to ameliorate present conditions to address the concerns of all those affected.

Proposal and Benefits

A model proposal to address Article 27.3 (b) exists and can be found in Articles 15.4 and 15.7 from the Convention on Biological Diversity (CBD). Article 15.4 of the CBD addresses the patenting of GMOs in stating access to a patent should require prior informed consent from the country of origin (de Carvalho, 2000, pg. 374). This includes the allocation of genetic material, such as germplasm, for the use of producing a genetically modified organism. Article 15.7 of the CBD text further delineates contracting parties “shall take legislative, administrative or policy measures…with the aim of sharing in a fair and equitable way the results of research and development and the benefits arising from the commercial and other utilization of genetic resources” (CBD, 2013). An accompanying proposal to address the sharing of benefits asserts the patent should disclose the source of the genetic material used in the inventive activity and provide documentation of prior consent from the country

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Articles 15.4 and .7 from the CBD website

of origin (de Carvalho, 2000, pg. 374). The country of origin, in this way, could receive remuneration from patenting application fees.

Adopting Articles 15.4 and 15.7 of the CBD text entails a compromise between those who resist all patents on biological processes or genes and those who support patenting intellectual property rights or inventions. The patenting system is upheld, yet can be utilized to afford benefits to the countries from which a plant’s genes are derived. The proposal would have positive impacts on all stakeholders, farmers in the South and company executives in the North, in the quest for a success in the global economy. Coupling patenting with disclosure ensures: a). the patent applicants must state the country of origin of genetic resources and traditional knowledge used in the inventions, b). evidence they received “prior informed consent,” c).a more “fair and equitable” system of benefit sharing and potential patenting fees (Institute of International Trade, 2009). The “global village” benefits from access to genes with positive properties, and the local village is recognized for multigenerational recognition of the plant’s beneficial properties.

At first glance, the CBD and WTO may not seem compatible. After all, the CBD is concerned with conservation of biological diversity and equitable sharing of benefits derived from the world’s resources, while the WTO TRIPS Agreement serves to discourage policies that obstruct trade liberalization in any area- including biotechnology (Rosendal, 2001, pg. 2). Yet, while the Convention on Biological Diversity arose from a United Nations Summit to address environmental concerns, its Articles provide a compromise addressing the economic, environmental and social concerns with the TRIPS Agreement (CBD, 2013). Moving forward with reforming Article 27.3b of the TRIPS Agreement should entail considering these Articles.

Proposal Concerns

This proposal will likely be disputed by certain stakeholders who resist any patents on life, such as the countries of Norway and India (Rosendal, 2001, pg 10). Their proposal may address revising Article 27.3b to explicitly prohibit the patenting of plants and animals, including their parts, and processes which make use of their parts (Third World Network, 1999). The “No patents on life” movement may call for the elimination of patents on biological processes or genes to protect indigenous knowledge as “collective and cumulative innovation” (Shiva, 2000, pg. 123). Yet another concern could be with the corruption that may take place from governments issuing the patenting. If a lesser developed country, for example, receives many patenting requests and grants them despite the wishes of the citizenry, the government may benefit from patenting fees at the sake of the interests of the people. One amendment to the proposal could address protecting community sources through the issue of “collective intellectual property rights” to indigenous

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people or communities for the cultivation or use of plants with recognized qualities- such as the neem tree for its anesthetic properties (Shiva, 2000b, p. 508). This proposal could serve to protect community sources from patenting when deemed necessary.

This proposal may also be critiqued by companies involved in genetic modification. Requiring companies to fill out patent applications could arguably slow the patenting process, result in less patent requests, and could have a fiscal impact should the country of origin impose a patenting fee. Furthermore, it could lead to consumers of GMOs to request labeling that indicates this information, further impacting the company fiscally. While clearly mentioning the biological source of the material and country of its origin is an extra step, it could also be useful should any unintended consequences of genetically modified migration occur (de Carvalho, 2000, pg. 392). It could assist companies in mitigating liability if the source of the invention is clear, especially if there is a consequence in the area of health due to genetically modified proliferation. While this proposal does not perfectly suit the interests of affected farmers or agribusiness, it entails a compromise between both worlds and interests.

Stakeholder Impact

Many stakeholders are involved in this issue, including farmers affected, seed companies involved in patenting, international governments, consumers, the WTO and the CBD. Reforming Article 27.3b to adopt the provisions outlined in the Convention on Biological Diversity ensures the sharing of the benefits from the commercial utilization of genetic resources (CBD, 2013). Whereas there is a current lack of provisions in the TRIPS Agreement concerning obtaining informed consent from the country of origin, this proposal requires a patent application to be approved before seeking genetic material for biotechnological inventions (de Carvalho, 2000, pg. 391). Further, the disclosure of the country of origin assures the representation of interests of the citizenry and the country of the plant’s origin. The utilization of such “transfer agreements” and “transfer of information” provides a degree of transparency and equitability currently lacking in Article 27.3b of the TRIPS Agreement, and in WTO negotiations (de Carvalho, 2000, pg. 392). Indicating the source of genetic resources and acquiring patenting approval is a “reasonable care standard” and addresses the concerns of all stakeholders involved (de Carvalho, 2000, pg. 400). Adopting CBD text into Article 27.3b also upholds the merit of a UN Convention text in a global trade organization’s international agreement.

Pros: • Recognizes country of origin • Requires prior consent from

country of origin • Allows for more openness of GMO

sources Cons:

• Regulatory patenting procedures • Patents on genes still allowed

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Action Plan

Reforming Article 27.3b of the TRIPS agreement is crucial in moving forward with addressing the concerns of developing countries. By adopting the text of the CBD Articles 15.5 and 15.7, the WTO can move towards more a more transparent, fair and equitable global institution for all its member countries. Whereas the WTO is currently in the Doha Round of negotiations, it is crucial to consider this proposal for reforming an Article that affects farmers globally, particularly in the global South. Adopting these provisions into the Agreement ensures a successful role for all players in the global economy, while upholding intellectual property rights for biotechnological inventions. This is an important step for the WTO and for our global future.

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Resources

Bello, Walden (2000). Building the Iron Cage. In Views from the South: The Effects of Globalization and the WTO on Third World Countries. Ed. Sarah Anderson. Chicago: Food First Books and The International Forum on Globalization.

Bloom, Jeremy (Editor). 2011. Is Europe’s ban on Monsanto’s GMO crops illegal? Available from: http://redgreenandblue.org/2011/03/23/is-europes-ban-on-monsantos-gmo-crops-illegal/

Convention on Biological Diversity. Article 15: Access to Genetic Resources. Available from: http://www.cbd.int/convention/articles/?a=cbd-15

Corner House. 1998. “Ten Reasons Why GE Crops Won’t Feed the World.” Available from: www.thecornerhouse.org.uk/item.shtml?x=52221

Cosbey, A. (1996). The Sustainable Development Effects of the WTO TRIPS Agreement: A Focus on Developing Countries. Winnipeg, International Institute for Sustainable Development.

de Carvalho, Nuno Pires. 2000. Requiring Disclosure of the Origin of Genetic Resources and Prior Informed Consent in Patent Applications Without Infringing the TRIPS Agreement: The Problem and the Solution. Washington University Journal of Law and Policy. Volume 2: Re-Engineering Patent Law: The Challenge of New Technologies. http://digitalcommons.law.wustl.edu/wujlp/vol2/iss1/12

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Engdahl, F. William (2005). The WTO and the Politics of GMO. Available from: publiceyeonscience.ch/images/the_wto_and_the_politics_of_gmo.doc

Freeman & Herz LLC (2007). In RE Genetically Modified Rice Litigation. Available from: http://bayerricelitigation.com/

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Lehman, Karen and Krebs, Al. 1996. “Control of the World’s Food Supply.” In The Case Against the Global Economy and For a Turn Toward the Local, eds Mander, Jerry and Goldsmith, Edward, 122-130. San Francisco: Sierra Club Books.

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Rosendal, Kristin G. 2001. Impacts of Overlapping International Regimes: The Case of Biodiversity. In Global Governance, Vol. 7, Issue 1.

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