Searching for Balance between Innovation and Tradition
Manisha A. Desai, Ph.D., Chair of IPO’s Genetic Resources & Traditional Knowledge (GR/TK) Committee and Assistant General Patent Counsel at Eli Lilly and Company, spends a fair amount of her professional time tackling IP policy matters. Her primary role with Lilly is to manage patent litigation in emerging markets such as Latin America, Russia/CIS, the Middle East, South Africa and South Asia, as well as in the U.S. Thus, Dr. Desai is well-versed in the complexities of issues like patentability, enforcement—and increasingly in the pharmaceutical field—compulsory licensing policies in these regions.
She and her committee also have been actively monitoring developments around the topic of emerging nations pushing to require patent applicants to disclose information about “genetic resources” (GR) and/or “traditional knowledge” (TK) used in an invention. Genetic resources are defined by the World Intellectual Property Organization (WIPO) as “any material of plant, animal, microbial or other origin containing functional units of heredity” that is “of actual or potential value,” while traditional knowledge refers to the “knowledge, know-how, skills and practices that are developed, sustained and passed on from generation to generation within a community.” Examples of GR include medicinal plants, agricultural crops and animal breeds, and examples of TK are cultural expressions, ecological and medicinal knowledge.
According to Dr. Desai, while the patent disclosure requirements many developing nations are pushing for in relation to GR and TK “currently exist only in certain national patent laws, there has been and continues to be an effort to introduce such requirements in international treaties, including under the UN Convention on Biological Diversity (CBD), the World Trade Organization (WTO), and WIPO.” Although negotiations with the WIPO General Assembly on the topic broke down in 2014, the impending implementation of the CBD’s “Nagoya Protocol” could result in rules that put patents at risk and create uncertainty. “One concern is that no one can agree on the scope of the requirement,” Dr. Desai explains. “Sugar is derived from genetic resources, for instance; if we buy sugar from a commercial supplier and use it in the lab, do we have to disclose where the sugar originated from?”
Here, Dr. Desai delves deeper into the challenges facing her company and the GR/TK Committee with respect to these issues, and how she is helping to tackle them.
When and how did the controversy over using genetic resources and traditional knowledge in inventions first arise, and where are we now?
While the Nagoya Protocol does not specifically include a requirement to disclose genetic resources in patent applications, it does include a requirement for Parties to implement checkpoints to monitor such use.
The CBD arose out of a UN Conference on Environment and Development in 1992. Genetic resources were previously treated as the common heritage of mankind, but the CBD specifically recognized such resources as belonging to the countries in which they are found. The stated goals of the CBD are conservation of biological diversity, sustainable use of its components, and fair and equitable sharing of benefits arising from its use. This third goal is the basis under which countries have been calling for an international patent disclosure requirement. There seems to be a feeling among many developing nations that products are sometimes developed from the use of their genetic resources, for which the developing country receives no benefits. This premise disregards the reality of innovation, which is that the value of the genetic resource itself is minimal, and the real value comes from years of research and development.
As a result of these demands and after many years of negotiation, the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity was adopted in Nagoya, Japan, on October 29, 2010. The Nagoya Protocol, as it is commonly known, entered into force on October 12, 2014—90 days after 50 Parties ratified it. While the Nagoya Protocol does not specifically include a requirement to disclose genetic resources in patent applications, it does include a requirement for Parties to implement checkpoints to monitor such use. We therefore remain concerned that countries will choose their patent offices or regulatory agencies as their national checkpoints. Our committee is monitoring closely the implementation of the Protocol in various countries. The European Union has been moving rapidly to implement, and clearly, the certainty of our IP rights in the various member states of the EU is of key importance to IPO’s members. It is important to note that the United States is not a party to the CBD, and therefore, it cannot and will not ratify the Nagoya Protocol.
How did WIPO become involved?
Unfortunately, given that the Nagoya Protocol does not include a specific disclosure requirement, many of the same developing countries who urged development of the Nagoya Protocol under the CBD have now shifted their focus to demands for a new international instrument, including patent disclosure, in WIPO. In 2013, the WIPO General Assembly agreed to a mandate for “text-based negotiations with the objective of reaching an agreement on a text(s) of an international legal instrument(s) which will ensure the effective protection of GRs, TK and [Traditional Cultural Expressions] TCEs.” During the 2014 WIPO General Assembly, a small group of developing countries demanded that negotiations be concluded within one year and that the resulting agreement would include patent invalidation as a consequence of improper or incomplete disclosure. As this was not acceptable to a coalition of developed countries, the mandate for continued negotiations was not renewed for 2015. Our committee will closely follow negotiations in the 2015 General Assembly, as there will be renewed attempts to revive the mandate.
Why would a patent disclosure requirement be bad for IP owners? Are there alternative solutions the committee or others have proposed?
We all benefit as a global community if we create incentives for innovation, rather than holding the patent system hostage.
The main reason I became so interested in this topic is that the very principle of these proposals is troubling on several levels. First, I take issue with the idea that we should use one law (IP law) to monitor or enforce another law (national laws on access or use of genetic resources and/or associated traditional knowledge), particularly as many developing countries have failed to even implement such national laws. Second, it demonstrates a fundamental lack of understanding about intellectual property. Agricultural goods have been transferred around the world, but the proponents of disclosure seem to be interested only when intellectual property is involved. These proposals completely disregard the profits arising from simple uses of genetic resources that do not involve creation of IP. For example, evidence suggests that soybeans originated from Southeast Asia and were first domesticated in China; and yet, there seems to be no dispute over the profits that Brazil generates from the export of soybeans to China. However, if a researcher developed and patented a novel pest-resistant soybean, the researcher would face the risk of patent revocation and/or demands for benefit-sharing. So, these proposals create almost a perverse disincentive to innovate, and they fail to take into account the value added by scientific innovation. We all benefit as a global community if we create incentives for innovation, rather than holding the patent system hostage.
Our committee, and indeed industry as a whole, has long recognized that the best way for countries to realize the goals of the CBD is by creating national laws that provide clear guidance to researchers or other users of genetic resources and/or associated non-public traditional knowledge. Countries and local providers of genetic resources can and should negotiate terms for such access, which could also include the sharing of benefits. In fact, contracts between users and providers are much more likely to ensure meaningful benefits to both parties, even if no patents are filed and no product is commercialized. Contracts are the best means to encourage technology transfer between companies and institutions, and such knowledge-sharing is always a benefit.
Contracts between users and providers are much more likely to ensure meaningful benefits to both parties.
Ultimately, despite the years of demands and negotiations for a patent disclosure requirement, the Nagoya Protocol is itself a validation of the importance of bilateral agreements between users and providers.
What is the timeline and process for implementation of the Nagoya Protocol?
The Nagoya Protocol was adopted on October 29, 2010, when the Parties to the CBD agreed to a final text. Under Article 33 of the Nagoya Protocol, it would enter into force 90 days after the 50th Party to ratify, accede to, adopt, or accept the Protocol. This occurred on October 12, 2014. Thus far, there are 60 countries or regional groups that have ratified the Protocol. Of major interest to our committee is the ratification of the Protocol by the European Union.
What concerns do you have about the EU implementation process so far?
On April 16, 2014, the European Union adopted Regulation no. 511/2014 as a binding instrument of compliance with the Nagoya Protocol. The Regulations came into effect for all member states of the EU on the date of entry into force of the Nagoya Protocol. In order to satisfy the requirements of the Nagoya Protocol that each state has an obligation to monitor any use of genetic resources and/or associated traditional knowledge within its borders, the EU regulation imposes a due diligence requirement on users of GR/TK, which will go into effect on October 12 of this year (one year after entry into force of the Nagoya Protocol).
The Regulation sets out three mechanisms for compliance with the due diligence requirements. Users must: (i) access GR from a registered collection; (ii) show evidence of a certificate of compliance, which would demonstrate access was permitted under the national law of the country from which the GR was accessed; or (iii) show evidence of the date and location of access, a description of the GR, proof that access was permitted, and proof of mutually-agreed terms (eg, a contract between user and provider). The first and second options are not realistic, as they simply do not exist in practice. Therefore, users of GR will need to demonstrate due diligence by the third option.
Given the movement of GRs—whether through commercial suppliers, historical movement of goods or the existence of multiple sources—this simple-sounding obligation could prove to be very difficult in practice. This is compounded by the fact that, although these Regulations apply to any GRs accessed after October 2014, the EU has yet to release guidance documents on the intended scope of the Regulations or the definition of “utilization” under the Regulations. Furthermore, users face the reality that most countries have not implemented the Nagoya Protocol, even if they have indeed ratified it. Thus, if users cannot satisfy the due diligence obligations, they can either stop using the GRs in question or face the risk of sanctions (which are themselves not yet defined in many EU member states).
What are the next steps? How does the committee plan to comment on/influence the EU process?
IPO’s recent focus on expanding its influence internationally has allowed our committee to expand our sights as well.
The GR/TK Committee has always taken an active role in engaging with the U.S. government on these issues—whether through letters, meetings or direct input during international negotiations. IPO’s recent focus on expanding its influence internationally has allowed our committee to expand our sights as well. While most of our committee members are not in a position to directly influence the European Commission or EU member states, we can and are collaborating with our colleagues in the European Practice Committee. Our committee is partnering with this committee and the Pharmaceutical and Biotechnology Issues Committee to organize the session, “The Nagoya Protocol: Conserving Biodiversity or Withering the Fruits of Innovation?” at the upcoming Annual Meeting in Chicago, and we believe this is a great opportunity to make IPO members aware of the new European Regulations.
For more on this topic, attend “The Nagoya Protocol: Conserving Biodiversity or Withering the Fruits of Innovation?” on Monday, September 28 from 1:45pm to 3:15pm during the 43rd IPO Annual Meeting in Chicago. IPO members can sign up to join the GR/TK Committee by submitting an application on IPO.org.