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Convention on Biological Diversity

The CBD contains provisions regarding use of traditional knowledge and access to genetic resources, in particular with respect to prior informed consent and the equitable sharing of benefits derived from traditional knowledge and access to genetic resources. WTO Members have raised two general issues regarding the relationship between the TRIPS Agreement and the CBD: (1) whether there is conflict between the TRIPS Agreement and the CBD and (2) whether something needs to be done to ensure that the two instruments are applied in a non-conflicting and mutually supportive way.[1] As Cottier has noted in his seminal article on the protection of genetic resources and traditional knowledge, the reference in TRIPS Article 27.3(b) to effective suigeneris protection is sufficiently broad to encompass systems to protect innovations based on traditional knowledge as well as existing knowledge through a system of “traditional intellectual property rights.”[2]

Some Members argue that there is a conflict between the TRIPS Agreement and the CBD, for two reasons. First, the TRIPS Agreement provides for the appropriation of such genetic resources by private parties in a way that is inconsistent with the sovereign rights of countries over their genetic resources as provided for in the CBD, by requiring that certain genetic material be patentable or protected by sui generis plant variety rights and by not preventing the patenting of other genetic material. Second, the TRIPS Agreement provides for the patenting or other intellectual property protection of genetic material without ensuring that the provisions of the CBD, including those relating to prior informed consent and benefit sharing, are respected. Similar points have been made about the relationship between the TRIPS Agreement and the provisions of the CBD relating to the traditional knowledge of indigenous peoples and local communities.[3] Some Members argue that the TRIPS Agreement needs to be amended to avoid patents being granted on existing traditional knowledge or genetic resources subject matter, without the prior informed consent ofthe source countries, while others argue that no amendment is required to achieve these objectives.[4] These concerns may seem exaggerated, since there is no obligation to implement the CBD in a manner that would conflict with WTO obligations. However, the CBD serves as an alternative model for national legislation relating to plant varieties and it may prove difficult to implement effectively in a manner that is consistent with WTO obligations (regarding export restrictions for example).

CBD Article 8(j) requires contracting parties to encourage the equitable sharing of the benefits arising from knowledge, innovations, and practices of indigenous and local communities embodying traditional lifestyles relevant for the conservation and sustainable use of biological diversity. Since the obligation merely is to “encourage” and is “subject to national legislation,” this provision contains no real obligation to equitably share benefits from traditional knowledge.[5]

CBD Article 15(1) recognizes that the authority to determine access to genetic resources rests with the national governments. WTO Members are limited by their obligations under the Covered Agreements. For example, export restrictions would have to comply with GATT Article XI or be justified under GATT Article XX(b) or (g). Export restrictions that provide preferential access to natural resources to domestic firms would be difficult to justify under Article XI:2(a) and Article XX.[6] Providing preferential access to nationals could be inconsistent with nondiscrimination obligations in GATT Articles I or III,[7] or nondiscrimination obligations in TRIPS Articles 3, 4, or 27. However, the CBD does not oblige national governments to take any particular course of action in their legislation. It should be possible to implement its provisions in a manner that is consistent with WTO obligations. For example, evenhanded measures that restrict exports in order to preserve biodiversity could be justified under GATT Article XX(g).[8] However, it is not clear that a sui generis system that discriminates between nationals and foreigners could meet the effectiveness requirement of TRIPS Article 27.3(b).

CBD Article 15(4) provides that access, where granted, shall be on mutually agreed terms and subject to the provisions of Article 15. CBD Article 15(5) provides that access to genetic resources shall be subject to prior informed consent of the contracting party providing such resources, unless otherwise determined by that party. As Professor Cottier has noted, this contractual approach has its limitations, but a number of countries have designed national legislation to implement the CBD nevertheless.[9]

CBD Article 15(7) requires each contracting party to take legislative, administrative, or policy measures, as appropriate, and, in accordance with Articles 16 and 19, 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 with the contracting party providing such resources, upon mutually agreed terms. The wording of this provision does not set out any meaningful obligation regarding equitable sharing of the benefits from genetic resources, unless the source party uses its authority to determine access to the genetic resource to negotiate access to the benefits that may arise. It is not clear what “as appropriate” means. It is not clear what “aim” means. The obligation to share benefits is subject to reaching an agreement on “mutually agreed terms.” This amounts to a mere obligation to negotiate, rather than an obligation to reach a particular set ofterms. Thus, these CBD provisions regarding the equitable sharing of the benefits do not really have any teeth unless the source party uses its authority to determine access to the genetic resource to enhance its bargaining position. However, developing countries that are not a source of the genetic material would lack such bargaining power.

It is not clear how the CBD provisions regarding informed consent can be made effective. Some WTO Members have expressed concern that the TRIPS Agreement allows the granting of patents for inventions that use genetic material without requiring that the provisions of the CBD in relation to prior informed consent and benefit sharing are respected. Some have proposed national solutions to this issue, including legislation on access and benefit sharing and contracts, outside the intellectual property system, to directly regulate the conduct in question.[10] Others have suggested disclosure requirements for patent applicants as a supplementary measure to national legislation and contracts, including in international forums other than the WTO. A proposal has been made to amend the TRIPS Agreement to oblige WTO Members to require that an applicant for a patent relating to biological materials or to traditional knowledge provide the following information, as a condition of acquiring patent rights: (i) the source and country of origin of the biological resource and of the traditional knowledge used in the invention; (ii) evidence of prior informed consent from the authorities under the relevant national regime; and (iii) evidence of fair and equitable benefit sharing under the relevant national regime.[11]

Paragraphs 1-5 of CBD Article 16 must be read together, since these paragraphs contain cross references that explicitly require that they be interpreted and applied consistently with each other. Article 16(1) recognizes that technology includes biotechnology, and that both access to and transfer of technology among contracting parties are essential elements for the attainment of the objectives of the Convention. It provides that each contracting party undertakes (subject to the provisions of this Article) to provide and/or facilitate access for and transfer to other contracting parties of technologies that make use of genetic resources.

Article 16(2) provides that access to and transfer of technology to developing countries shall be provided and/or facilitated under fair and most favorable terms, including on concessional and preferential terms where mutually agreed, and, where necessary, in accordance with the financial mechanism established by Articles 20

and 21. Article 16(2) also provides that access to and transfer to developing countries of technology subject to patents and other intellectual property rights shall be provided on terms which recognize and are consistent with the adequate and effective protection of intellectual property rights. Thus, while paragraph 1 contains a mere undertaking regarding access to technology, paragraph 2 contains an obligation to provide such access in a manner that protects intellectual property rights. The access of developing countries to biotechnology takes a back seat to intellectual property rights and depends on access to financing. Concessional and preferential terms of financing are subject to reaching a mutual agreement. In effect, developing countries are required to pay for biotechnology that is subject to intellectual property rights and negotiate further for favorable financing of those purchases. Even this uncertain access to favorable financing is subject to a necessity test, which could depend on the financial and economic situation of the developing country that seeks the financing. Finally, the application of paragraph 2 must be consistent with paragraphs 3, 4, and 5 of Article 16. When read in light of Article 15, these provisions of Article 16 mean that the source party must use its authority to determine access to the genetic resource to negotiate favorable terms before intellectual property rights are granted. However, developing countries that are not a source of the genetic material would lack such bargaining power.

Article 16(3) requires each contracting party to take legislative, administrative, or policy measures, as appropriate, with the aim that contracting parties, in particular those that are developing countries, which provide genetic resources, are provided access to and transfer of technology which makes use of those resources, on mutually agreed terms, including technology protected by patents and other intellectual property rights, where necessary, through the provisions of Articles 20 and 21 and in accordance with international law and consistent with paragraphs 4 and 5. Thus, even where developing countries are the source of the genetic resources that are used to create biotechnologies, their access depends on negotiating financing and is subject to a needs test. The requirement that access be in accordance with international law is vague. However, it likely includes IPR treaties to which the developing country in question is a party, such as the TRIPS Agreement or the UPOV Convention. Once again, the source party must use its authority to determine access to the genetic resource to negotiate favorable terms before intellectual property rights are granted. However, developing countries that are not a source of the genetic material would lack such leverage.

Article 16(4) requires each contracting party to take legislative, administrative, or policy measures, as appropriate, with the aim that the private sector facilitate access to, joint development, and transfer of technology referred to in paragraph 1 for the benefit of both governmental institutions and the private sector of developing countries. Since this paragraph requires each contracting party in this regard to abide by the obligations included in paragraphs 1, 2, and 3, it implies an obligation to protect intellectual property rights. It might also be read to encourage the use of the compulsory licensing provisions of TRIPS Article 31, for example in the case of biotechnology that is subject to patents. However, Article 31 requires that compulsory licensing of patents predominantly serves the domestic market of the WTO

Member that issues the license. This means that the measures taken under CBD Article 16(4) would not include obliging the private sector to transfer biotechnology to developing countries. However, it might include other measures, such as tax incentives. The effectiveness of such incentives would be doubtful if the private sector would stand to lose more by facilitating access to, joint development, and transfer of technology to developing countries than it would gain through the tax incentives. Thus, it is doubtful that Article 16(4) will result in the adoption of any meaningful measures, absent political will.

Under Article 16(5), the contracting parties recognize that patents and other intellectual property rights may have an influence on the implementation of the CBD and requires them to 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. An obligation to cooperate is not an obligation to reach a particular outcome. WTO Members have been trying to cooperate in this regard in the context of the WTO negotiations on TRIPS Article 27.3(b) and the Director General’s consultations on the relationship between the TRIPS Agreement and the CBD, but have failed to reach any agreement.

CBD Article 19 governs handling of biotechnology and distribution of its benefits. Article 19(1) requires each contracting party to take legislative, administrative, or policy measures, as appropriate, to provide for the effective participation in biotechnological research activities by those contracting parties, especially developing countries, which provide the genetic resources for such research, and where feasible in such contracting parties. Article 19(2) requires each contracting party to take all practicable measures to promote and advance priority access on a fair and equitable basis by contracting parties, especially developing countries, to the results and benefits arising from biotechnologies based upon genetic resources provided by those contracting parties. Such access shall be on mutually agreed terms. Again, to make these provisions effective, the source country would have to use its bargaining power when it decides whether or not to grant access to genetic resources.

It is difficult to see how legal conflicts could arise between the CBD, on the one hand, and the TRIPS Agreement or UPOV Convention, on the other hand, with respect to biotechnology. The CBD contains no meaningfully binding legal obligations regarding protection of traditional knowledge or sharing of the benefits of biotechnology that is subject to intellectual property rights, with the notable exception of cases in which the biotechnology in question was developed using the genetic resources of a particular source country. Even those obligations are subject to compliance with the TRIPS Agreement or UPOV Convention, as the case may be, and subject to the source country using its bargaining power regarding access to the genetic resources. Unless the source country uses this bargaining power to negotiate later access to any technology that may be developed as a result of access to the genetic resource, its access will be subject to the intellectual property rights. There is no obligation in the CBD to make the granting of intellectual property rights subject to proving prior informed consent of countries that are the source of genetic material. Even if there were such an obligation, it would only benefit the source countries. Thus, while the CBD preamble speaks of awareness “that conservation and sustainable use of biological diversity is of critical importance for meeting the food, health and other needs of the growing world population, for which purpose access to and sharing of both genetic resources and technologies are essential,” it does not provide legally binding obligations to achieve these goals.

The provisions of the CBD could be relevant to determining compliance with TRIPS Article 27.2. TRIPS Article 27.2 provides a right to exclude from patentability, not an obligation to do so. Lack of informed consent or other inconsistencies with the CBD, particularly with respect to use of traditional knowledge, might justify exclusion from patentability on public policy grounds, particularly in developing countries. However, such an approach could be undermined by the use of terminator technologies or the refusal by multinational holders of intellectual property rights to introduce technologies into countries that exclude biotechnology from patentability.

  • [1] Note by the Secretariat, The Relationship between the TRIPS Agreement and the Conventionon Biological Diversity: Summary of Issues Raised and Points Made, IP/C/W/368/Rev.1, February 8,2006, para. 6.
  • [2] Cottier, “Genetic Resources.” Professor Cottier’s article provides an eloquent argument in favorof a better balance of rights and obligations regarding biotechnology, IPRs genetic resources andtraditional knowledge, as well as concrete suggestions on how that might be achieved. Therefore, wewill limit this discussion to some of the legal issues that arise between TRIPS and the CBD.
  • [3] Note by the Secretariat, The Relationship between the TRIPS Agreement and the Conventionon Biological Diversity para. 15.
  • [4] Note by the Secretariat, The Relationship between the TRIPS Agreement and the Conventionon Biological Diversity paras. 8—15; Director-General Pascal Lamy, Report on Issues Related to theExtension of the Protection of Geographical Indications Provided for in Article 23 of the TRIPSAgreement to Products other than Wines and Spirits and those Related to the Relationship betweenthe TRIPS Agreement and the Convention on Biological Diversity, TN/C/W/61 (also circulated asWT/GC/W/633), April 21, 2011, para. 27.
  • [5] For a summary of the WTO debate on this issue, see Note by the Secretariat, The Protection ofTraditional Knowledge and Folklore: Summary of Issues and Points Made, IP/C/W/370/Rev.1,9 March 2006.
  • [6] Panel Report, China—Raw Materials and Appellate Body Report, China—Raw Materials.
  • [7] Mitsuo Matsushita, Thomas J. Schoenbaum, and Petros C. Mavroidis, The World Trade Organization: Law Practice and Policy (2nd edn., Oxford University Press, Oxford 2006) 714—15.
  • [8] Bradly J. Condon, “Climate Change and Unresolved Issues in WTO Law” (2009) 12 JIEL 895,911-13.
  • [9] Cottier, “Genetic Resources.”
  • [10] Note by the Secretariat, The Protection of Traditional Knowledge and Folklore, paras. 28-9.
  • [11] Note by the Secretariat, The Protection of Traditional Knowledge and Folklore, para. 71.
 
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