INFORMATION ABOUT INTELLECTUAL PROPERTY RIGHTS No. 1

Intellectual Property Rights and Biodiversity
by Kristin Dawkins, Michelle Thom and Carolyn Carr
Institute for Agriculture and Trade Policy

Intellectual property rights (IPRs) are rights to make, use, and sell a new product or technology that are granted, usually for a period of 17- 20 years, solely to the inventor or the corporation which files a claim on the inventor's behalf. They generally take the form of patents, trademarks, or copyrights and have traditionally fallen under the domain of national law.
Different countries have produced different IPR laws, each one a balance between industry's desire to capitalize on its investments in technological development and the rights of society to benefit from the knowledge and resources of its country.

PATENTING PLANTS

Under the new rules of the General Agreement on Tariffs and Trade (GATT) [1] which took effect January 1, 1995, all member countries must bring their national IPR laws into conformity with certain provisions of the new agreement on Trade-Related Intellectual Property Rights (TRIPs). This agreement obliges member governments to provide for "the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof." (Sui generis is a Latin phrase meaning "of their own kind.") Simultaneously, governments are given the option to exclude from patentability "plants and animals other than micro-organisms" and the "essentially biological processes for the production of plants or animals other than non-biological and microbiological processes." These provisions[2] were so controversial during the GATT negotiations that the final agreement states that they "shall be reviewed four years after the date of entry into force" -- in other words, in 1999. Patenting enables the company to monopolize the market for new plant varieties deriving from the original plant for the term of the patent. Agrecetus, for example, a subsidiary of W.R. Grace, has sought exclusive rights to all genetically engineered varieties of cotton and soybeans in what is known as a "sweeping patent."[3] The cotton patent was granted by the U.S Patents and Trademarks Office (PTO) in 1992 and the soybean patent was granted by the European Patent Convention in 1994. Since then, the sweeping cotton patent was tentatively reversed in January by the PTO after a challenge was issued by the U.S. Department of Agriculture and an anonymous party. The European patent has also been challenged on grounds that genetically engineered plants are neither "novel" inventions nor "non-obvious" innovations, according to the criteria of European patent law.[4]

For pharmaceutical, food and seed companies, and the biotechnology firms behind them, the ability to patent the world's biological diversity brings promise of great new sources of revenue. Monsanto, for example, expects to earn an additional $150 million annually if it is able to patent and bring to market one of its new products: a variety of soybean that is designed to withstand intensive applications of the herbicide which Monsanto itself markets most widely: Round-Up.[5]

IMPACTS ON BIODIVERSITY

In developing new products, scientists take plant samples from the field to the laboratory, where the simple act of moving a single gene from one spot to another within a cell -- whether or not it causes an actual variation in the next generation, creates a "plant variety" deemed sufficiently "new" to qualify as a patentable invention. In most cases, such genetic engineering experiments produce nothing worthwhile. In a few cases, the variations have desireable traits that can be reproduced and marketed.

The emphasis on finding and isolating plants with the most marketable traits leads to the decline of other plant species, as only those required to create the new techno-varieties are cultivated. In the U.S. alone, the focus on commercial varieties has already led to the loss of many varieties of plants in seed bank storage. A survey of U.S. seed banks showed that some varieties of non-commercial crops such as chufas, martynia and rampion have been lost entirely.[6]

In addition, the privatization of genetic resources that have been engineered and patented accelerates the trend toward monocultural cropping. Just as a mere handful of varieties of patented hybrid corn now cover millions of acres of the midwestern U.S. corn belt, where prairies once hosted thousands of varieties of grasses supporting birds and butterflies, bees and other life, so too will the biodiversity of other lands shrink as patented crops take over.

In India, for example, peasant producers now cultivate some 50,000 varieties of rice[7], developed through traditional practices over the millennia. This astonishing variety arose from subtle differences in soil and climatic conditions through mutation, evolution, and the deliberate application of cultural preferences. The GATT-TRIPs rules would prohibit these farmers from harvesting and reusing the seed of any rice variety that has been patented. (Unlike hybrid species cultivated by plant breeders, genetically engineered plants do produce viable seed.) Lack of access to seed stocks will cause the abandonment of much of India's biologically diverse agriculture, which in turn sustains healthy diversity in surrounding ecosystems.

Patent-holding companies are likely to use the GATT-TRIPs rules to ensure their monopoly rights are upheld. In the U.S., the Asgrow seed company, a subsidiary of the Upjohn company, sued Iowa farmers Denny and Becky Winterboer for harvesting and selling a variety of seed that had sexually reproduced in their field. The company was ruled against and the decision was upheld by a Federal Circuit Court of Appeals. Asgrow has since appealed and the case is about to be heard by the Supreme Court.[8]

Furthermore, an engineered organism may produce unanticipated harmful impacts on other species in its new environment. A group of scientists at Oregon State University, for example, engineered a variety of Klebsiella planticola, a bacteria known to reside in the soil and contribute to the decomposition of plant material. Their goal was to engineer a product that would efficiently convert agricultural wastes to ethanol fuel. Although the project was successful in meeting this goal, the scientists discovered in late stages of testing that the new product also destroyed much of a beneficial mycorrhizal fungus essential to the recycling of nitrogen through plant roots -- which could lead to desertification throughout the range of the product.[9]

IMPACTS ON SOCIAL POLICY The GATT-TRIPs rules prohibit member countries from discriminating, in granting patents, "as to the place of invention" and the "field of technology." These criteria will constrain countries in their use of IPRs as tools for development. The TRIPs agreement provides a 5-year grace period for countries making the transition from centrally-planned to market economies and a 10-year grace period for the least developed countries, which may not be sufficient to accommodate their development needs.

Many countries have allowed patents on processes but not products, and obligated patent-holders through "compulsory licensing" laws to make socially useful products available in the domestic marketplace. These policies have ensured that domestic firms can develop and market products of social value, including medicines and seeds, through reverse engineering. While they may not copy the formula of a patented product, they may create their own formula that produces an identical result. And they may not withold these products from the public.

India, Argentina, and Brazil are countries where these policies have paid off, and where, as a result, strong national opposition to the TRIPs rules has emerged. Historically, India has denied patents altogether in the fields of pharmaceutical and agricultural products, on grounds that these products are essential to the public's welfare. Recently, the Indian Parliament refused to pass legislation that would bring its national IPR laws into conformity with TRIPs.[10] The Argentines have used their IPR laws to develop a strong pharmaceutical sector that has contributed extensively to its national economy and become a powerful competitor in the global marketplace.[11] The Brazilians are seeking to do the same. In both Argentina and Brazil, their Congresses have also fought against altering their national IPR laws to conform with TRIPs.[12]

In the U.S., consumers will pay an additional $1.2 billion in 1996 and 1997 alone for over-the-counter and prescription drugs, as patents are extended from 17 to 20 years in what the Clinton Administration claims is a response to the new GATT-TRIPs rules.[13]

Besides limiting national economic and social development strategies, the GATT-TRIPs agreement will enable biotechnology companies to compete in the world marketplace with commodity exports that form the backbone of many national economies. Biologically-engineered synthetic substitutes for sugar, cocoa and plant oils are already taking over huge segments of the global markets for these commodities, upon which many impoverished African and Latin American nations depend.[14]

The quest for new plants to create new products has resulted in a new "gold rush" known as bioprospecting. Ethnobotanists go to indigenous communities, sometimes offering compensation in the form of gifts or shares in any royalties that may be earned, once a product is patented and marketed. Like gold diggers everywhere, these explorers inadvertently disrupt the indigenous communities. And once disrupted, it may be difficult or impossible for that human community to restore the traditional balance between itself and the ecosystem which has sustained it while being sustained by it. In 1994, FAO Assistant Director-General Obaidullah Khana referred to such bioprospecting as "biopiracy."[15]

THE CONVENTION ON BIOLOGICAL DIVERSITY

In June 1992, more than 150 countries of the world (except the U.S.) signed the U.N. Convention on Biological Diversity, stating their commitment to "the conservation of biological diversity, the sustainable use of its components and the fair and equitable sharing of the benefits arising out of the utilization of genetic resources."[16] One of the methods to reach these goals is by ensuring "appropriate access to genetic resources and by appropriate transfer of relevant technologies, taking into account all rights over those resources and to technologies, and by appropriate funding." However, this emphasis on rights is placed in perspective: parties to the Convention are "to ensure that such rights [IPRs] are supportive of and do not run counter to its objectives."

The Clinton Administration sought approval from biotechnology industry representatives before signing the Convention in June 1994. At that time, the Administration published an Intrepretive Statement[17] that redefines the IPR provisions of the Convention in the following ways:

* It declares U.S. patent law provisions an adequate and effective protection of IPRs; the U.S. will not recognize patent laws which restrict patenting nor allow compulsory licensing arrangements.
* It defines "fair and equitable sharing of benefits" very narrowly, requiring that any technology transfer system "take fully into account exclusive rights to technology that a party may possess, and ... that Parties [to the Convention] must ensure that access to and transfer of technology recognize and are consistent with adequate and effective protection of intellectual property rights."
* It warns that the U.S. will "strongly resist any actions taken by Parties to the Convention that lead to inadequate levels of protection of intellectual property rights, and will continue to pursue a vigorous policy with respect to the adequate and effective protection of intellectual property rights in negotiations on bilateral and multilateral trade agreements."

In other words, the U.S. will demand that IPR protection under the Convention on Biological Diversity is consistent with the GATT.

CONCLUSION

The Convention on Biological Diversity establishes important principles regarding the protection of biodiversity while recognizing the vast commercial value of the planet's store of germplasm. However, the recent expansion of international trade agreements establishing a global regime of intellectual property rights creates incentives that may destroy biodiversity, while undercutting social and economic development opportunities as well as cultural diversity. Countries are now under pressure to change their IPR laws to conform with the TRIPS agreement of the GATT. These rules will supersede national laws and allow privatization of the world's knowledge and resources. The ability of companies to gain monopolies over what were formerly freely available community resources -- seeds, plants and even micro-organisms -- will have devastating effects on both human communities and the protection of biodiversity.

1 Final Act Embodying the Results of the Uruguay Round of Multilateral
Trade Negotiations. Marrakesh, 15 April 1994.
2 Agreement on Trade-Related Aspects of Intellectual Property Rights, Article 27, 3(b), Annex 1C to the Final Act, cited above.
3 "Plant Patent Dispute Reaches Standoff." AGWEEK. December 12, 1994.
4 Rural Advancement Foundation International. "Biotech Patent Challenge."
Press Release. December 1, 1994.
5 Burstiner, Marcy. "A Seedy Business." Multinational Monitor. March 1988.
6 Fowler, C. and P. Mooney. Shattering: Food, Politics and the Loss of Genetic Diversity. University of Arizona Press. 1990.
7 Navdanya. Cultivating Diversity. Research Foundation for Science, Technology and Natural Resource Policy. Delhi, India. 1993.
8 Asgrow Seed Company v. Denny Winterboer and Becky Winterboer. Brief Amici Curiae of Rural Advancement Foundation International, Friends of the Earth, Seed Savers Exchange, et al. October 1994.
9 Hill, Richard L. "OSU study finds genetic altering of bacterium upsets natural order." The Oregonian. August 8, 1994.
10 Hazarika, Sanjoy. India Presses U.S. to Pass Biotic Treaty. The New York Times. April 23, 1995.
11 Challu, Pablo M. "The consequences of pharmaceutical product patenting." World Competition. December 1991.
12 "Argentine Patent Measure Heads for Veto by Menem." Journal of Commerce. April 12, 1995 and "Vote on Patent Law Further Delayed in Brazil." Journal of Commerce. April 28, 1995.
13 Schondelmeyer, Stephen W. The Prime Insitute.
14 Abugre, Charles. "Understanding the Commodity Problem in the Context of the Changing Order." Third World Network. August 1991. 15 "FAO Official Blasts Western Biopiracy." Reuter. June 6, 1994.
16 Convention on Biological Diversity. United Nations. June 1992.
17 Statement from the President of the United States transmitting the Convention on Biological Diversity. 103rd Congress, 1st Session. Treaty Document 103-20. USGPO, Washington DC. 1993.

One in a series of info sheets on Intellectual Property Rights available from the Institute for Agriculture and Trade Policy. For a complete listing, send email to: ipr-info@igc.apc.org

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