Extracted from: The Convention on Biological Diversity and the Agreement On Trade-Related Aspects of Intellectual Property Rights (TRIPS): relationships and synergies. 1996 paper to COP 3.
-----------------------------------------
The relationships between the TRIPs Agreement and the Convention on Biological Diversity are multifaceted and complex, as are the links between intellectual property rights (IPR) and the Convention which are described in more detail in UNEP/CBD/COP/3/22, Intellectual Property Rights. The COP may wish to identify specific topics within this issue area for further work. The CTE of the WTO is discussing the relationship between the TRIPs Agreement and the sustainable development and protection of the environment, which creates a specific opportunity for exploring the relationship between the TRIPs Agreement and the Convention's objectives. The COP may wish to consider providing input into the CTE's deliberations from the perspective of the Convention and its objectives. Given the complexity of the issues, the COP might wish to begin by suggesting procedures for consultation.
-----------------------------------------
3. In preparing this study, the Secretariat sent an earlier draft to the WTO Secretariat for its comments. The WTO Secretariat suggested a number of changes of a factual or technical nature regarding WTO activities and agreements. In addition, in support of the Secretariat's preparation on this agenda item, the WTO released two of the restricted background documents prepared for the WTO's Committee on Trade and Environment. The first, Environment and TRIPs, is available for the COP as UNEP/CBD/COP/3/Inf. 9. The second, Factors Affecting Transfer of Environmentally-Sound Technology: Note by the Secretariat, is available as UNEP/CBD/COP/3/Inf. 10. The WTO also released the report of one of the CTE's meetings at which IPR were discussed (WTO 1995a). The contents of this paper are, however, remains the responsibility of the Executive Secretary of the Convention on Biological Diversity.
-----------------------------------------
INTELLECTUAL PROPERTY RIGHTS-RELATED MEASURES IN THE CONVENTION ON BIOLOGICAL DIVERSITY AND THE TRIPs AGREEMENT
10. Intellectual property rights are the subject of the TRIPs Agreement, and they also figure prominently in the Convention on Biological Diversity. This section provides basic information on the IPR-related provisions of the Convention on Biological Diversity and the TRIPs Agreement. It does not purport to define authoritative interpretations of these agreements, which must be developed by the respective governing body of each agreement. Only the COP of the Convention on Biological Diversity can interpret the terms of the Convention, as a number of governments pointed out during discussions in the WTO CTE (WTO 1995a). Article 23 of the Convention provides that the COP shall keep under review the implementation of the Convention, considering and taking whatever actions are needed for achieving the Convention's purposes in light of the experience gained in its operation.
11. The TRIPs Agreement may only be authoritatively interpreted by the Ministerial Conference or the General Council, acting on the basis of a recommendation by the Council for TRIPs (Marrakesh Agreement Establishing the WTO, 1994, Article IX). These three bodies are composed of representatives of all WTO members. In addition, interpretations of the TRIPs Agreement may be addressed in the course of dispute settlement under the Understanding on Rules and Procedures Governing the Settlement of Disputes (Annex 2 to the Marrakesh Agreement, 1994).
3.1 Intellectual Property Rights and the Convention on Biological Diversity
12. The objectives of the Convention on Biological Diversity are: the conservation of biological diversity; the sustainable use of its components; and the fair and equitable sharing of the benefits arising out of the use of genetic resources (Article 1). The sharing of the benefits from the use of genetic resources is defined to include, inter alia, the "appropriate transfer of relevant technologies, taking into account all rights ... to technologies" (Article 1). The reference to rights can be understood to include IPR. Thus, technology transfer is highlighted as a method for achieving one of the Convention's three principal objectives, and IPR are identified as a significant aspect of technology transfer.
13. The treatment of IPR was a contentious issue in the negotiations on the Convention. Many developing countries argued that the application of existing IPR systems hinders the transfer of technology to the developing world, and unfairly disregards the contributions of generations of farmers to the world's plant genetic resources, which underpin global food security. These countries objected to the expansion of IPR over new crop varieties and other products based on genetic resources, and proposed that the Convention provide for, or authorise, restrictions on IPR. For their part, some developed countries argued that strong universal protection of IPR would stimulate technology transfer and investment in research and development in developing countries, indirectly increasing the incentives to conserve biological diversity. The language on which negotiators eventually agreed does not entirely resolve these differing perspectives on the role of IPR in achieving the Convention's objectives (see UNEP/CBD/COP/3/22 for further discussion.)
14. Article 16(1) requires each Party to provide and/or facilitate access and transfer to other Parties of technologies, including biotechnologies, that are relevant for conservation and sustainable use or that make use of genetic resources and are not significantly damaging to the environment. Each Party shall take measures "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" (Article 16(3)). The provisions of paragraphs 2 and 5 concerning IPR appear in this context.
15. Article 16(2), on the one hand, provides that technology transfer must be carried out "on terms which recognize and are consistent with the adequate and effective protection of intellectual property rights". The phrase "adequate and effective" is not defined. Article 16(5), on the other hand, provides that 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".
16. Several of the Convention's provisions relating to access to and the sharing of benefits from genetic resources are also relevant to IPR. Article 15 recognises that Parties have sovereign rights over their genetic resources and confirms that they have the authority to determine access through national legislation. Parties shall "endeavour to create conditions to facilitate access to genetic resources for environmentally sound uses by other Contracting Parties and not to impose restrictions that run counter to the objectives of this Convention". Access "shall be on mutually agreed terms," and shall be "subject to prior informed consent of the Contracting Party providing such resources, unless otherwise determined by that Party".
17. Where a Party provides genetic resources to another Party, the receiving Party "shall endeavour to develop and carry out scientific research based on [those] genetic resources ... with the full participation of, and where possible in, [the providing Party]" (Article 15(6)). Similarly, Article 19(1) provides that Parties shall take appropriate measures to provide for the effective participation in biotechnological research by Parties, especially developing countries, that provide the genetic resources for such research, in such Parties where feasible. In general, each Party shall take 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 with the [Party] providing such resources" (Article 15 (7)). Such sharing shall be upon mutually agreed terms (ibid.) Article 19(2) requires parties to "take all practicable measures to promote and advance priority access on a fair and equitable basis" for Parties providing genetic resources, especially developing countries "the results and benefits arising from biotechnologies based upon [those] genetic resources ... on mutually agreed terms". The implementation of these provisions could involve the development of information that could be subject to patents or trade secrets. A number of other provisions involving technology, research and sharing of information could relate to IPR, such as Articles 12(c), 17, and 18 (see UNEP/CBD/COP/3/22).
18. The emphasis of Article 8(j) on knowledge and innovations makes it potentially relevant to IPR. It requires each Party as far as possible, as appropriate, and subject to its national legislation to: "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". Indeed, much discussion among the Parties has concerned the relationship between IPR and the knowledge and innovations of local and indigenous communities within the terms of Article 8(j).
19. Intellectual property rights are also relevant to the implementation of Article 10, which, inter alia, requires Parties, as far as possible and as appropriate, to integrate considerations of the conservation and sustainable use of biological resources into national decision-making, and to adopt measures relating to the use of biological resources to avoid or minimise effects on biological diversity. These provisions may be implicated to the extent that IPR has an impact on the use of biological resources; for example, through the application of patents to living modified organisms.
20. Article 14(b) requires the Parties, as far as possible and as appropriate, to introduce appropriate arrangements to ensure that they duly take into account the environmental consequences of their programmes and policies that are likely to have significant adverse effects on biological diversity. Effective implementation would likely involve a preliminary review of IPR policies to determine whether they are likely to have significant adverse impacts, and a further assessment if the answer to the preliminary inquiry is positive.
21. While IPR figure prominently in the Convention on Biological Diversity, the Convention's provisions relating to IPR are framed in general terms. For example, Article 16(5) states that the Parties generally must cooperate to ensure that IPR promote and do not run counter to the Convention's objectives, suggesting that the Parties have a general obligation to begin a process of consultation on the issue. At the national level, the Convention's language would encompass a variety of approaches to the treatment of IPR within frameworks for controlling both the access to and the benefit-sharing of genetic resources under the Convention, as long as these approaches are consistent with the counterpoised provisions of paragraphs 2 and 5 of Article 16. One approach, for instance, could be to provide for mutually agreed-upon terms for access to genetic resources that allocated IPR under TRIPs-compatible systems among the Parties. A Party could make access to its genetic resources conditional to the access-seeker's agreeing to relinquish some or all IPR over products derived from the genetic resources. Similarly, a Party might require access-seekers to agree to carry out joint research with source-country nationals, or to carry out research in the source country as a condition of access. This would likely be consistent with both the Convention and the IPR standards of the TRIPs Agreement (UNEP/CBD/COP/3/Inf.9, paragraph 78).
3.2 Intellectual Property Rights in the TRIPs Agreement
22. The Ministerial Declaration of Punta del Este launching the Uruguay Round of negotiations under the General Agreement on Tariffs and Trade included provisions on trade-related aspects of IPR. Negotiations continued until the development of the Draft Final Act in December 1991, which was the basis, with relatively minor changes, for the final text of the Agreements Establishing the WTO including the TRIPs Agreement adopted at Marrakesh in April 1994. Some of the most important issues in negotiations concerned patents. The basic definition of patents novelty, inventive step and industrial applicability was never in question. There was, however, considerable disagreement over whether countries should be permitted to make generic exclusions from patentability. One controversial issue was concerned with whether there should be an obligation to make living organisms, particularly plants and animals, patentable. Another was concerned with whether countries should be able to exclude certain products and processes from patenting, in particular pharmaceuticals, agricultural chemicals and foodstuffs, on the grounds of public interest, national security, public health or nutrition.
23. The TRIPs Agreement that resulted from these negotiations is based in part on a recognition of the dual need to "promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade" (Preamble, paragraph 1). The Agreement requires all parties to meet certain minimum standards for protecting IPR, defined as including copyrights, patents, plant variety protection (PVP), industrial designs, geographic designations, the layout-design of integrated circuits, and trade secrets. The Agreement also requires parties to provide fair, effective judicial procedures and remedies for rights-holders claiming infringement (Articles 42-49). It provides developing countries with a five-year grace period to phase in most of the Agreement's requirements (Article 65). The least developed countries have an eleven-year grace period for implementing most obligations (Article 66).
24. The TRIPs Agreement requires WTO members to observe the principles of national treatment and most-favoured nation with respect to IPR (Articles 3-4). For example, a country could not recognise patents on inventions by its nationals (its citizens and corporations) without doing the same for similar inventions by foreign nationals, neither could it discriminate among inventions by nationals of different foreign countries.
25. Of the types of IPR covered by the TRIPs Agreement, patents and PVP are those most likely to have an impact on the objectives of the Convention, although trade secrets and geographic indications may also have some effect. (Further discussion of categories of IPR may be found in UNEP/CBD/COP/3/22.) The TRIPs Agreement includes a definition of the basic characteristics of patents novelty, involving an inventive step or non-obviousness, and capable of industrial application or being "useful" (Article 27). Article 29 provides that WTO members must require patent applicants to disclose the invention such that a person skilled in the art could reproduce it. Article 31 sets out a number of conditions limiting the circumstances in which a government may authorise use of a patent against the will of the patent owner, subject to appropriate compensation (compulsory licensing).
26. The TRIPs Agreement requires countries to recognise patents on most products and processes, including pharmaceuticals, modified microorganisms, and "microbiological processes" (Article 27.3(b)). Furthermore, countries must protect plant varieties either through patents or an "effective sui generis system" or both (ibid.) The TRIPs Agreement leaves to each country's discretion whether to recognise patents on plants or animals, or "essentially biological [but not microbiological] processes for the production of plants or animals" (ibid.). The provisions of Article 27.3(b) will be reviewed in 1999, four years after the entry into force of the Agreements Establishing the WTO (ibid.)
27. WTO members may exclude products or processes from patenting where "the prevention within [national] territory of [their] commercial exploitation ... is necessary to protect ordre public [public order] or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment" (Article 27.2). However, such an exclusion shall not be made "merely because the exploitation is prohibited by domestic law" (ibid.) This language is intended to make clear that products cannot be excluded from patentability merely because they have not yet been approved under normal health and safety regulatory procedures (UNEP/CBD/COP/3/Inf.9, paragraph 88).
28. In addition countries "may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties" (Article 30). This provision was intended to allow for exceptions to exclusive rights, such as the use of the invention for experimental purposes (UNEP/CBD/COP/3/Inf.9, p. 19).
29. The provisions of Article 27.3(b) on plant varieties appear to give WTO members considerable flexibility in designing sui generis systems for PVP. Provisions of the TRIPs Agreement on several other types of IPR in effect incorporate other existing international agreements by reference. Article 9 on copyrights, for instance, provides that WTO members shall comply with provisions of the Berne Convention. Article 27.3(b), in contrast, does not refer to either of the two versions of the principal international agreement concerning PVP, the International Union for the Protection of New Varieties of Plants (UPOV Convention). "Countries have thus been left greater flexibility in meeting their obligations in this area than would have been entailed by a specific reference to UPOV" (Otten 1994).
30. The Council for Trade-Related Aspects of Intellectual Property Rights (the TRIPs Council) is established under Article 68 to monitor the operation of the Agreement, monitor WTO Members' compliance with its terms, and provide a forum for consultations on trade-related aspects of IPR. In 1999, the TRIPs Council will review Article 27.3(b) of the TRIPs Agreement, which, as mentioned above, allows countries to exclude from patenting modified plants and animals and biological processes, and allows sui generis plant variety protection systems, either as an alternative or as an addition to plant patent protection.
31. The TRIPs Agreement provides that each Member shall notify the TRIPs Council of laws and regulations, and final judicial decisions and administrative rulings of general application pertaining to the subject matter of the Agreement (Article 63). If consultations with WIPO succeed in establishing a common register containing countries' laws and regulations, then the Council may waive the notification requirement in favour of using the register as a depository for such national measures (ibid.)
32. In sum, the TRIPs Agreement, while it establishes relatively detailed legal standards to be implemented at the national level, nevertheless permits flexibility in several relevant respects by allowing:
(a) variation in the details of patent procedure;
(b) exceptions from patenting where preventing commercial exploitation is necessary to avoid serious prejudice to the environment;
(c) sui generis systems of plant variety protection;
(d) choice as to whether to issue patents for modified plants or animals other than microorganisms; and
(e) variation in levels of IPR protection by setting minimum, but not maximum, standards.
33. Nothing in the TRIPs Agreement appears either to prevent or to promote the development of additional measures that provide for the sharing of benefits with countries and communities providing genetic resources or traditional knowledge, as long as those measures do not violate TRIPs minimum standards (UNEP/CBD/COP/3/Inf.9, paragraphs 77 and 78). The TRIPs negotiations did not address the question of whether new forms of protection are needed for indigenous and local communities that go beyond conventional IPR concepts (ibid.). Thus, intellectual property rights-like measures that provided control over knowledge that is non-novel or that does not involve an inventive step within the terms of patent law would likely be considered outside the scope of the requirements of the TRIPs Agreement. As a result, while any WTO member would be free to elaborate such measures that would apply within its jurisdiction, other WTO members would have no obligation to provide similar protection within their territories.
4. RELATIONSHIPS BETWEEN THE CONVENTION ON BIOLOGICAL DIVERSITY AND THE TRIPs AGREEMENT
34. Intellectual property rights are important under both the Convention on Biological Diversity and the TRIPs Agreement, but the two agreements approach them from very different perspectives. A large and growing number of countries are both Parties to the Convention and members of the WTO (156 Parties to the Convention on Biological Diversity as of 4 November 1996; 125 members of the WTO as of 23 October 1996). This creates a powerful motivation to develop a mutually supportive relationship and to avoid conflicts. Both the COP and the WTO are beginning to explore the complex interrelationships between IPR and biological diversity. At this stage, the most critical issue for the relationship between the Convention on Biological Diversity and the TRIPs Agreement appears to be whether and how to establish procedures for consultation and cooperation between the bodies associated with the two agreements.
35. Both the Convention on Biological Diversity and the TRIPs Agreement allow a significant degree of flexibility in national implementation. This suggests that there is potential for complementary and perhaps synergistic implementation. Because both agreements entered into force recently and discussions of the relationships between IPR and biological diversity are preliminary, specific legal or policy mechanisms that would create synergies between the two agreements or their implementing measures have yet to be identified. Nevertheless, some general areas for complementarity have been noted.
36. For example, mutually agreed-upon terms for access to genetic resources could allocate IPR as part of the benefits to be shared among parties to an agreement on genetic resources, as noted previously (see paragraph 21 above). Such IPR could be defined under TRIPs-compatible IPR systems.
37. Another possibility is for the Convention and the TRIPs Agreement to develop procedures for exchanging relevant information. Article 16 of the Convention on Biological Diversity, and possibly others as well, prescribes IPR obligations for the Parties. The implementation of these obligations would likely fall within the scope of the notification requirement found in Article 63 of the TRIPs Agreement (see paragraph 31 above). Countries implementing measures that implicate both agreements such as rules requiring patent applications to disclose the country of origin of biological material might report them to the TRIPs Council while at the same time disclosing the same information to the clearing-house mechanism for scientific and technical cooperation established under Article 18(3) of the Convention, or including information regarding the measures in the national reports required under Article 26 of the Convention. It may be useful to note that the WTO and the World Intellectual Property Organization (WIPO) recently concluded an agreement formalising arrangements for the exchange information, in particular copies of IPR laws and regulations received by the two organisations (WIPO/WTO 1995).
38. Other policy and legal proposals involving interrelated implementation of both the Convention on Biological Diversity and the TRIPs Agreement may warrant further examination. One proposal, for example, is to require or encourage disclosure in patent applications of the country and community of origin for genetic resources and informal knowledge used to develop the invention. This has been proposed by a number of commentators (e.g., Gadgil and Devasia 1995; Hendrickx et al. 1994; Gollin 1993). Some evidence suggests that such disclosures are already common practice in filing patent applications. Possible elements of such a requirement, which could help to encourage the implementation of both Article 15 and Article 8(j), are outlined in the Executive Secretary's background paper on Article 8(j) (UNEP/CBD/COP/3/19). More information concerning this proposal, including examples of patent applications, is included as Annex I to this paper.
39. In spite of the flexibility of the Convention and the TRIPs Agreement, and the potential for synergies, there is still a possibility that conflicts could arise (Downes 1995). For example, national measures to promote technology transfer under Article 16 might raise most-favoured nation issues if Convention Parties and non-Parties were treated differently, might raise national-treatment issues if foreign nationals received less favourable treatment, and might raise TRIPs issues if owners of proprietary technology were compelled to license technologies on grounds other than those prescribed in the TRIPs Agreement.
40. Looking to the provisions of the agreements regarding conflicts, Article 22(1) of the Convention provides that its provisions "shall not affect [a Party's] rights and obligations ... deriving from any existing international agreement, except where the exercise of those rights and obligations would cause a serious damage or threat to biological diversity". It is not clear how this Article would apply in the case of conflicts with the TRIPs Agreement. The TRIPs Agreement contains no explicit reference to its relationship to the Convention on Biological Diversity or any other environmental agreement.
41. If WTO members cannot resolve disagreements regarding the implementation of the TRIPs Agreement through consultations, one member may bring a complaint against another for failure to meet its obligations, using the dispute resolution procedures generally applicable for WTO members (Article 64). In certain circumstances, a member prevailing in a dispute may be authorised to take measures for compensation and suspension of concessions. While decisions in such dispute-resolution proceedings do not establish legal precedents, as a practical matter members may look to them when interpreting terms of the Agreement in the future. To date, there have been five cases in which the dispute-settlement mechanism has been initiated regarding TRIPs matters; none of these cases has reached the panel stage as yet.
42. If Parties to the Convention have a dispute about its interpretation or application, they may seek solution by negotiation, by the mediation of a third party, by conciliation, or (if they agree to be bound by such a means of dispute settlement) by arbitration or submission of the dispute to the International Court of Justice (Article 27). These procedures have not yet been invoked by a Convention Party. Like the WTO procedures, dispute-resolution procedures for the Convention emphasise avoidance of direct conflict by requiring other steps, such as negotiation.
43. There are several possible scenarios for conflict. A dispute might arise between countries that are both Convention Parties and WTO members; or between a country that is a Convention Party and a WTO member, and a country that is either a WTO member or a Convention Party. A conflict concerning the two agreements would presumably involve a claim, in a forum associated with one of the instruments, that a country had violated its obligations, countered by a defence that the alleged violation constituted implementation of the other instrument, and was obligated or authorised by it. In such disputes, it is likely that a forum associated with one instrument would need an interpretation of the other agreement. In such a case, it is unclear how a dispute-resolution proceeding would reach such a determination; neither instrument provides for such an eventuality. The absence of a clear mechansim for reconciling perceived differences further emphasises the value of cooperation to avoid such differences.