The author can be reached at: arianeleroy@yahoo.com

This paper is the result of a research for the purpose of a Masters’ thesis in agricultural economics at the Wageningen University, Netherlands.

Five months in the first half of 2000 were spent as a research intern at the Institute for Agriculture and Trade Policy (IATP), a non-profit organization based in Minneapolis, Minnesota (USA), under supervision of Kristin Dawkins, director of the Trade and Agriculture Program.

In Wageningen, dr. Guido Ruivenkamp, associate professor at the Technology and Agrarian Development Group supervised the whole project.

Dr. Niek Koning, senior lecturer at the Department of Social sciences, Agricultural Economics and Rural Policy Group has monitored the economic part of this thesis.

The thesis is part of a curriculum on International Management and Administration, supervised by Ab van Eldijk, in which I chose to focus on biodiversity issues.

The idea of a thesis on biodiversity came a few years ago, while working on Dutch aid to the FAO. The concept of Farmers’ Rights caught my attention as it seemed like a fairness contract to the agricultural profession, which deserves to be respected.

During my search for an internship, I appreciated the fact that IATP’s virtual library provided a large amount of information on all kinds of subjects related to farming, biodiversity and international politics; the information was diverse in topics but also in source. Aside from examining potential improvements for the bargaining positions of developing countries, integrating an economic part in this paper allowed to look more closely at organizations such as the WTO or Worldbank and their role in conservation issues. My stay provided among many other things insight on how ngo’s operate, their strategies and their willingness to achieve their goals, but also on the need to look critically at the information that is used and produced. I was astonished by the work ngo’s are achieving. In my paper, I sometimes criticize ngo’s views on specific topics because I think that those comments can be useful to eventually support and improve the reach of their work.

The biodiversity issue is of tremendous importance. Not only as a basic need for life on earth, but also because it is one element in a complex network of issues that require awareness and willingness to respect the environment we live in. It involves a way of thinking that has not reached enough people yet. Also and unfortunately, commercial interests often prevail over basic needs and rights for humans. I hope that with this work, I can contribute in some way to the debate on the need of public awareness on conservation issues.

Foreword *

List of Boxes *

List of Tables *

Executive Summary *

Résumé en Français *

Acknowledgements *

Abbreviations *

Scope of the Research *

I. Introduction to Biodiversity and Intellectual Property Rights *

II. Conflicts between the agreements *

III. The economics of Information and IPR *

IV. Arguments for TRIPs: What do economic indicators say *

V. Oppositions to TRIPs *

VI. Sui generis Options in TRIPs *

Conclusion – Recommendations *

Post-Script *

Literature *

Box 1. The importance of both formal and informal sector in agriculture *

Box 2. Farmers’ Rights *

Box 3. Benefit- sharing mechanisms *

Box 4. Farmers, breeders and researchers *

Box 5. " Special 301 is one of the most effective instruments in our trade policy arsenal" *

Box 6. Who owes money to whom? *

Box 7. Article 27.3 (b) of TRIPs *

Box 8. United Nations Resolution on TRIPs and Human Rights *

Box 9. Press release- Comments on Patents on Pharmaceuticals by UN *

Table 1. UPOV 1978 and 1991 *

Table 2. Distribution of world R&D *

Table 3. Sources of technology *

Table 4. Impact of PVP laws on information flows, seed prices and germplasm exchange *

Within the World Trade Organization (WTO), the Agreement on Trade-Related Intellectual Property Rights (TRIPs) regulates the access to and use of human-created inventions. Laws that intended to cover such inventions were traditionally meant for industrial products and designs. As biotechnological applications have made natural resources a new area of discovery and patent filing, some biological processes and plant varieties now also have to be protected by Intellectual Property Rights (IPR).

TRIPs became effective in 1994; developing countries, depending on their situation, have 5 to 10 more years to implement the Agreement. Contents and interpretation of the legislative texts are still being negotiated and are subject to intense discussions. Non compliance with TRIPs regulations can lead to trade sanctions under WTO rules. It is the first time that regulations in the area of Intellectual Property happen on such high political level.

The inclusion of biological materials occurred under high pressure of industrialized countries, claiming that the lack of IPR on biological resources formed a barrier to free trade, which is in turn prohibited by the WTO. Access to genetic resources in the Southern Hemisphere enables the developed nations to use those resources for commercial purposes, under which medicines, agricultural inputs etc. Patents in turn assure them of a return on investments, in a sector where expenses are enormous. The arguments that were used to adopt TRIPs were based on the assumption that stronger IPR, by creating an incentive for innovation, would stimulate development of new technologies in the industrialized nations. Through foreign investments and technology transfer, these innovations would in turn benefit developing countries and hence stimulate their participation in the world market and facilitate their development.

This thesis exposes those assumptions and shows that they are highly disputable. Costs of protection and enforcement are high, and benefits arising from potential technological improvements and market access may not reach the developing countries as supposed. The transfer of western technologies as a way to access those markets is also questioned.

Western-made IP regulations also seem unsuitable for the ethos and cultures of developing countries: the existence of collective rights and informal innovators is overlooked by TRIPs and the tradition of keeping knowledge built over the years by farmers and communities in the public domain is endangered. Also, considering "lifeforms" as a commodity disregards widespread moral values. Deep concerns have also been expressed on the consequences of uniformization of crops and species for the purpose of commercial interests in industrialized nations. Biodiversity, mainly present in the developing countries and vital for food security and humankind, has decreased tremendously over the past decades, and is even more endangered with the perspective of unregulated access. Millions of people in southern countries are moreover dependent on cultivation of local varieties for their daily lives. The Convention on Biological Diversity (CBD) signed in 1992 established provisions aiming at conserving biological resources and recognizing the contribution of Indigenous knowledge therein; moreover, it recognized the sovereign rights of states over their genetic resources. TRIPs, by protecting the interests of formal breeders and the high tech-sector facilitates the unrestricted access to those resources, which is detrimental to biodiversity.

This thesis also explores the space left between various legal frameworks, for developing countries to defend their cause. In particular, article 27.3(b) of TRIPs, in which WTO members have the option of elaborating sui generis laws as an alternative to patent protection for plant varieties, is considered in detail. Some countries already have drafted laws that seek to protect their peoples and resources. Even if some of those do clearly assess the countries’ needs, it seems hard to resist foreign and commercial pressure.

L’Organisation Mondiale du Commerce (OMC) comprend une série d’accords dont celui sur les aspects de droits de propriété intellectuelle qui touchent au commerce (ADPIC), signé en 1994 à Marrakech. Le texte international oblige les états-membres de doter les droits de propriété intellectuelle d’un niveau minimum de protection. Ces droits étaient habituellement appliqués aux inventions industrielles. Depuis peu, les états-membres doivent protéger à peu de choses près toutes leurs inventions, qu’elles soient un produit ou un procédé, moyennant un brevet. Les médicaments et les inventions faites dans le domaine du vivant, comme par exemple certains procédés biologiques ou celles faites à partir de ressources génétiques tombent donc sous la même obligation. Les principaux partisans du brevet, issus de pays industriels tels que les Etats-Unis, le Japon ou l’Europe et très actifs dans l’industrie des « sciences de la vie » ont largement insisté pour l’obtention de brevets dans ces domaines spécifiques, prétendant entre autres que l’absence de protection était une barrière au libre-échange, à son tour interdite par l’OMC.

Les ressources génétiques dans le Sud sont une véritable mine pour les entreprises du Nord, qui les utilisent à des fins commerciales: les matières premières pour de nombreux médicaments et insecticides, mais aussi le gène du goût de chocolat sont en effet originaires de ces pays. Les brevets pour ces (bio)technologies à base de ressources biologiques sont ensuite déposés dans ces même pays industrialisés et la vente des produits permet d’amortir des investissements coûteux. Les communautés locales, qui ont préservé ces ressources depuis des siècles et en connaissaient les propriétés bienfaitrices, ne bénéficieront pas de leur exploitation.

L’argument principal pour l'intégration des droits de propriétés intellectuelles dans l’OMC part du principe que le "brevetage" des inventions stimule la recherche scientifique et qu’il est donc indispensable au développement de nouveaux produits et de nouvelles technologies dans les pays industrialisés. A leur tour, les pays en voie de développement bénéficieraient à plus long terme de ces inventions par le transfert de technologies et les investissements étrangers, ce qui faciliterait leur accès et leur participation au marché mondial. Selon cet argument, le brevetage des inventions est donc rentable pour les producteurs mais aussi pour les consommateurs de technologies. L’absence de droits sur les propriétés intellectuelles serait de plus néfaste pour tous deux. Dans le secteur agroalimentaire par exemple, certains prétendent que le brevetage stimulera la recherche scientifique au profit de la sécurité alimentaire, et qu’une absence de protection pourrait faire relâcher les efforts indispensables dans ce domaine.

Le présent mémoire explique que ces arguments sont très contestables. Les coûts d'adaptation au nouveau système de protection sont très élevés. Les produits brevetés sont également vendus bien plus chers que s’ils n’étaient pas protégés par des droits. Les positions de quasi-monopole qui se sont créées récemment dans certains secteurs de l’économie font aussi redouter que le brevetage soit utilisé à des fins stratégiques pour les entreprises afin d’obtenir des parts de marché plus importantes et de monter les prix. La somme de ces aspects risque de nuire considérablement aux pays en voie de développement qui n’ont pas les moyens de se payer des produits essentiels mais onéreux, ni de s’organiser pour résister à de telles situations. Il est de plus loin d’être certain que les bénéfices émanant des technologies nouvelles les atteindront effectivement. En outre, l’intérêt des transferts de ces technologies vers les pays pauvres comme moyen de développement reste discutable.

Un concept occidental de droits de propriété intellectuelle ne semble pas non plus adéquat à la situation et aux mœurs de nombreux pays chauds. Ni les droits collectifs ni les innovations du secteur traditionnel ne sont reconnus dans l’ADPIC. De plus, l’appropriation individuelle des connaissances met en danger la tradition de conserver dans le domaine public les savoirs locaux des communautés. Breveter « le vivant » ne respecte en aucun cas les valeurs morales locales. Aussi, les critères de brevetabilité issus de l’agriculture industrielle et de ce fait pas inadaptés aux pratiques de l’agriculture traditionnelle ont suscité des inquiétudes à cause de leur tendance à inciter une agriculture uniforme, laquelle représente un danger pour la conservation du patrimoine génétique sur Terre, à son tour vitale pour la sécurité alimentaire. La très grande majorité des agriculteurs dans ces pays, pratiquant une agriculture de subsistance, dépendent en effet de la diversité génétique pour leurs cultures. Et que dire du fait que les propriétés des ressources biologiques sont parfois considérées comme une nouveauté par leurs prospecteurs alors que bien des populations les ont déjà découvertes et utilisées avant eux?

Le patrimoine génétique a fortement diminué au cours des dernières décennies. La Convention sur la diversité biologique (CDB) adoptée en 1992 au Sommet de la Terre à Rio cherche à limiter sa destruction et à reconnaître le rôle des agricultures traditionnelles dans la préservation de la biodiversité. En effet, la CDB reconnaît aux Etats un droit de souveraineté sur leurs ressources biologiques et exige des signataires entre autres la protection des communautés (autochtones) locales, leurs systèmes de savoirs et leurs droits sur les ressources biologiques. L’ADPIC, défendant les intérêts de la chaîne agroalimentaire industrielle et les sélectionneurs des pays occidentaux vise à faciliter l’accès aux ressources et contribue ainsi à l’érosion génétique.

Il s’agit donc de trouver un autre moyen que le brevetage pour protéger les ressources biologiques et les droits des communautés rurales, tout en stimulant la recherche dans ce domaine et en tenant compte des droits de propriété intellectuelle déjà mis en place. Le but de ce mémoire est donc, entre autres, d'étudier différentes possibilités pour défendre les intérêts des pays en voie de développement compte tenu des cadres juridiques précédemment cités. Ceux-ci permettent en effet, grâce à leur caractère de compromis international incomplet, de trouver en toute légalité vers des solutions plus adéquates et préservant la biodiversité.

En particulier, l’article 27.3(b) de l’ADPIC offre quelques options dans ce sens. Il accorde aux états-membres d’exclure de la brevetabilité certains organismes vivants, mais exige qu’ils prévoient la protection de variétés végétales par des brevets, par un système sui generis (c’est à dire adapté à leur propre situation) ou par une combinaison des deux moyens. Certains pays ont donc profité de cette occasion pour développer des lois visant à protéger leurs ressources et les communautés locales. Malheureusement, il s’avère plus difficile que prévu de résister aux pressions commerciales. De nombreux efforts sont à réaliser pour affronter un problème de grande envergure.

The time in Minneapolis was absolutely fantastic. So many enthusiastic and friendly colleagues in-and outside the office made the stay unforgettable. Therefore, I would like to thank the people that have made this research possible.

Lots of thanks to Kristin, for your accurate advise and support. I really appreciated the commitment to your work and the passion to fight against unfair politics. Sophia Murphy and the Trade and Ag team: Gabriela Flora, Steve Suppan; Kathy Hiltsley for the flows of information; Renske, the Coffee Guys, Char and all the others.

Mark Ritchie for having me at IATP and the fruitful ideas for San Francisco. Hope we’ll meet again!

Outside the office, Amy Smith, Mark Muller, Cathy Heying and Wendy Wiegmann, thank you for the wonderful time in the house.

In Wageningen, I would like to thank Niek Koning and Guido Ruivenkamp for the success that IATP’s address has brought, and for their accurate supervision once back in the Netherlands.

I owe a lot to Ab van Eldijk who trusted me and supported me many times in the last few years. I really hope his international program will be successful.

Overall support from my friend and my parents at home also made it possible to go abroad and enjoy my stay. Thank you!

During my stay in the Twin Cities, interviews and meetings with prof. Ruttan, prof. Regal and Dan Leskien provided material for interesting discussions.

The sui generis options would never have been possible without the help of many of IATP’s "friends"; among them were Renée Vellvé (GRAIN), David Hathaway, Sue Edwards and Tewolde Egziabher (Institute for Sustainable Development, Addis Ababa), Devinder Sharma, Isaac Gavitza, Liz Hosken (Gaia Foundation) and Wend Wendland (WIPO).

Also, data use from Biothai and GRAIN (1997) is gratefully acknowledged.

ARIPO African Regional Industrial Property Organization

CBD Convention on Biological Diversity / Biodiversity Convention

CGIAR Consultative Group on International Agricultural Research

CIR Community Intellectual Rights

COP Conference Of the Parties (to the Biodiversity Convention)

DNA Deoxyribonucleic Acid

DSB Dispute Settlement Body

DUS Distinctiveness, Uniformity, Stability

FAO Food and Agriculture Organization (of the United Nations)

FDI Foreign Direct Investment

GM Genetically Modified

GMO Genetically Modified Organism

GRAIN Genetic Resources Action International

IATP Institute for Agriculture and Trade Policy

ILO International Labor Organization (of the United Nations)

IP Intellectual Property

IPR Intellectual Property Rights

IUPGR International Undertaking on Plant Genetic Resources (FAO)

LDC’s Least Developed Countries

MFN Most-Favoured-Nation

MTA Multilateral Transfer Agreement

NARs National Agricultural Centers

Ngo Non-Governmental-Organization

NIC Newly Industrialized Countries

OAPI Organisation Africaine de la Propriété Intellectuelle

OAU Organization of African Unity

OECD Organisation for Economic Cooperation and Development

PBR Plant Breeders' Rights

PGR Plant Genetic Resources

PIC Prior Informed Consent

PVP Plant Variety Protection

RAFI Rural Advancement Foundation International

R&D Research and Development

TRIPs Trade-Related Aspects of Intellectual Property Rights

UN United Nations

UNCED United Nations Conference on Environment and Development

UNCTAD United Nations Conference on Trade and Development

UNEP United Nations Environment Programme

UNESCO United Nations Educational, Scientific and Cultural Organisation

USPTO United States Patent and Trademark Office

The conservation of biological resources is essential for basic human needs, such as food security, health, shelter and clothing. A major part of these resources are located in the developing countries, whose inhabitants have been innovating, selecting, conserving and protecting local species for ages. Thanks to efforts of among othes local communities, it is now possible to still be using and improving these resources for the benefit of humanity. The amount of resources still available, though, diminishes with amazing rapidity. Erosion of resources mainly occurs because of the replacement of local varieties by improved varieties and species. The production of commercially more viable crops and the subsequent uniformity are named to be at the source of the actual decline.

Because of huge financial benefits that modification and commercialization of these resources can confer, biodiversity has now become subject of intense trade negotiations. A certain number of international treaties, such as the Convention on Biological Diversity, the International Undertaking of the FAO or the TRIPs Agreement of the WTO, now tend to regulate and legalize the use and access to biological resources. Different parties still are debating on the interpretation of such agreements. Considering "living material" as patentable allows western economies to take advantage of these resources, an advantage they have sought during trade negotiations. The argument of many developed countries is that the implementation of higher (and restrictive) standards of Intellectual Property protection does benefit innovation, competition, technology transfer and at the end the standard of living of many people, including the developing countries. On the other hand, some developing countries advocate that the concentration of patentholders, technological knowledge and financial advantages in the North becomes a threat to the safeguard of biodiversity and disadvantages them economically. According to them, the use of traditional knowledge and its commercialization through patents without the consent or the compensation of the innovators can be considered as theft, and violates human rights.

The Institute for Agriculture and Trade policy, based in Minneapolis, Minnesota (USA), is a non-profit, non-governmental organization that aims, among other things, at "reorganizing agricultural production systems toward food security and the survival of rural communities". Through intensive advocacy work, they support rural people and southern countries in order to give them more opportunities and future in a globalizing world.

The close cooperation with this organization constitutes the basis for the present research.

This paper shows that developing countries’ interests are not met in laws regulating Intellectual Property such as defined in TRIPs, and that other concepts are necessary to protect their natural resources within the legal framework of international treaties. Authors of broad origins, ngo’s as well as academic writers will be considered. The paper aims at giving answer to the following questions:

• What are the potential conflicts between laws regulating on the one hand conservation of biodiversity and traditional knowledge and on the other hand Intellectual Property Rights?
• Which arguments are used by WTO members to claim and enforce highly restrictive Intellectual Property systems?
• How can these arguments be used and refuted in order to strengthen the position of the southern countries in their attempt to defend biological resources and Indigenous knowledge?

To answer those questions, I will first present background information on biodiversity and the protection of Intellectual Property, and the legal frameworks in which they are regulated. In a second chapter, I will show the conflicts between those agreements and how they can be used to gear interests towards the biodiversity-rich nations. The third and fourth chapter focus on the arguments used by developing countries to enforce TRIPs. It focuses, through a qualitative approach on the economic aspects of knowledge and IPR, together with a survey of the relationship between higher standards of protection and economic indicators In chapter 5, I show that those arguments are refutable and that TRIPs does not serve the interests of developing countries, and in particular forms a threat to the conservation of biodiversity. Finally, in chapter 6, I consider the possibilities for developing countries for the purpose of defending their interests. I will also present a number of initiatives of sui generis laws that developing countries have been designing to regulate the access to their national resources. The paper ends with conclusions and some recommendations.

This first chapter provides an introduction to a set of legal frameworks in the area of the conservation of biological resources and Intellectual Property Rights (IPR). After a brief explanation on the importance of biological resources for humankind, different legal contexts will be presented that deal on the one hand with the conservation of biodiversity and on the other hand with the protection of knowledge and inventions. The following aspects are being considered:

• The conservation of biological resources and the role of Indigenous knowledge,
• The conservation of biodiversity through international treaties,
• Intellectual Property Rights in western economies.

1. The conservation of biological resources and the role of Indigenous knowledge

In this first section, I will expose the importance of biological diversity for the human being, and the role of traditional/ Indigenous knowledge in the conservation of these resources. Also, the debate around those issues will be described.

1. Biological diversity

The definitions of biological diversity and natural/genetic resources used in this paper will be the same as the ones used in the Convention on Biodiversity (CBD), stating that "the term "biological diversity" is used to describe the number and variety of living organisms on the planet. It is defined in terms of genes, species, and ecosystems, which are the outcome of over 3,000 million years of evolution. The human species depends on biological diversity for its own survival. Thus, the term can be considered a synonym for "life on Earth".

Although estimations of numbers are very different, some biologists believe that there are around five to thirty million varieties of lifeforms on earth, in water and air, of which only a fraction have been identified (Wilson, 1988, in Swaney and Olson, 1992). Most of the resources (two thirds of plant species) are located in developing countries; the tropical forests in particular are known to be biodiversity rich.

Why preserve these resources? A number of arguments can be listed, which in turn are subject to criticism.

In the first place, agriculture is pre-eminently dependent on biological resources. Varieties of seeds, fertilizers and pesticides all contribute to the production of livestock and crops. These resources are subject to natural evolution. As species tend to compete with each other within nature, non-viable species do not resist this competition and disappear. This auto-selection is a process that makes genetic resources subject to evolution in time; on the long run, it makes environmental factors to change also. Soil, climate and species do not stay in the same shape over the years. Not only do species change but also the diseases and pests that live simultaneously, thereby evolving in the same time. Opinions are divided when it comes to the need of diversity for agricultural purpose and the adaptation of farming systems to the environment.

One opinion is that the evolution of pests obliges farmers to continuously adapt their way of farming to their environment and to supply new forms of resistance to control diseases. Without this effort, farmers would be overwhelmed by the adaptation of pests and diseases to the new varieties in use. It is for those reasons also that the conservation of a large basis of multiple resources is needed, to prevent species to be exterminated by evolving pests (Evenson, Gollin and Santaniello, 1998).

However, another view argues that through modern technologies, humans have been able to adapt the environment to new agricultural inputs and seeds (built-in pesticides for example). In this case, it is not necessary to keep a wide range of resources, as conditions under which resources are grown can be altered. Also, they argue that the synthetic production of inputs will compensate the need for diversity.

Most of the resources are originating from other countries. Through export and foreign market opportunities over the past centuries, resources have been spread over the world, relocating their actual site of origin and more or less reorganizing the genetic-resources-map of the world. Bearing in mind that self-sufficiency of countries in their own crops is close to zero, interdependency in biological resources has strongly increased over the past few decades, emphasizing the need of international cooperation and the preservation of the resources.

The second argument, relying on the first one, states that biological diversity is needed to guarantee food security; FAO statistics (1996) mention that from the 250.000 identified species of plants, 30.000 are considered edible, and 7.000 have been cultivated or collected by humans throughout the years. Besides, thirty crops provide 95% of dietary energy of the world’s population; no more than three crops (wheat, rice, and maize) provide more than half of the human energy intake derived from plants. Food security thus relies on a very small amount of species. Due to the lack of diversity in production systems, these crops are highly vulnerable to pests and disease, which raises the need to handle them with care. Their dependency on external inputs makes them also more expensive to produce. Most farmers, lacking financial resources to afford pesticides and/or fertilizers thus rely on the diversity within species, to be able to produce more diverse crops, which require low external input. These crops are in turn cheaper to cultivate and better adapted to the environment. Diversity within species also makes the basis for food security broader. Population growth enhances the need for food security.

On this argument too, opinions are divided. The antagonism is that whereas diversity of species has diminished, the food production has grown tremendously. So, according to others, it is questionable whether biodiversity is really a sine qua non for food security.

Thirdly, diversity is crucial for healthcare; it is stated that 80% of the world’s population relies on medicinal plants to cure illnesses (Shelton, 1993, in The Crucible Group, 1994). Traditional medicine in particular is strongly dependent on nature and most of the "western" drugs are derived from plants located in the South, too.

Not only are resources vital for food and health purposes, they also provide humanity of other primary needs, such as livestock breeds, clothes, shelter, and fuels. Besides their formal utilization, most of the plants have widespread additional cultural functions in traditional and Indigenous communities, such as religious purposes.

To sum up, we have considered a number of arguments that plead for the conservation of a wide genetic basis within nature: agriculture, which in turn is the basis for food supply; healthcare, traditional uses were also cited to be dependent on biodiversity. We need to bear in mind that objections to such arguments also form the basis of further disagreements on the role of plant breeding in developing countries.

Within agricultural systems, farming methods also make a difference, based on the use of resources. Considering the types of varieties, the mode of conservation of resources and the culture linked to these, two groups of plant genetic resources, or systems can be discerned (FAO, 1996):

1. The formal system, with professional plant breeders of private companies or publicly funded research institutes, producing high yielding varieties, with the aid of external inputs and chemicals;
2. The informal system, which includes traditional farming systems, producing "landraces" or "farm" varieties, which have been bred by farmers themselves, using their own knowledge and traditions.

The role of the two systems’ contribution to the conservation of genetic resources is still a discussion today. The impact of the formal system has among other things been the massive increase in yields and efficiency in farming; the Green Revolution in particular helped raise the quantities of food produced. This approach is nowadays criticized because of its high dependency on expensive agricultural infrastructure, external inputs and irrigation systems. The formal sector however, has the (financial) support of developed countries, and of the countries with an important commercial breeding sector. Life-science companies are, among others, nowadays making huge benefits in this sector, urging their governments to support it. On the other side, the contribution of the informal system is more related to the perpetuation throughout generations of specific knowledge inherent to traditional communities. It focuses on the culture and local information available that have enabled farmers to adapt their farming systems to changing environmental conditions, and preserve traditional varieties over years. Although both systems are now recognized, the informal system still lacks powerful support and active recognition from officials: Both the informal sector and the minorities working for it are rarely mentioned in treaties, weakening their position. Advocacy work in this field tries to draw the attention on such shortcomings. In this paper too, the emphasis will lie on the opportunities for the informal sector get more recognition.

Along with the informal system goes the information that is enclosed in it. It is this specific knowledge, commonly called Indigenous/traditional knowledge, its crucial role in conservation of genetic resources and its subsequent contribution to global food security that are of importance here. A number of characteristics will be explained below.

1. Indigenous knowledge

There are multiple definitions of Indigenous knowledge and folklore. Generally, they relate to Intellectual and artistic creations, which are part of people's cultural heritage. Stephen Brush defines Indigenous knowledge as "systematic information that remains in the informal sector". The main characteristic arising out of this definition is the continuous embedding of knowledge inside a specific traditional culture. Most of the Indigenous expressions are non-written, and do not belong to individuals. They are made by distinct persons, though become collectively owned. Collective management is a crucial component of traditional communities, in particular regarding the conservation of biodiversity. They moreover originate from areas that cross political borders. There is no real inventory of the whole collection of works Indigenous people have produced (Biothai and GRAIN, 1997).

An important argument refers to the vital role of nature, which the majority of the people living in developing countries are dependent on in their daily life. Besides food, an important number of species are being used for clothing and medicinal care; religious and traditional purposes are not to be underestimated. Natural resources in fact have multiple functions in communities, be it of cultural or spiritual relevance. Moreover, some of the resources also have properties that benefit farming; biopesticides, such as the neem tree, play an important role for Indian farmers.

The traditional varieties, also called folk varieties, are of significance too. As products of traditional communities, they adapt to changing environmental conditions, while requiring low external input, and offer stability to the communities (Cleveland et al., 1994, in Cleveland and Murray, 1997). As mentioned before, farmers in these communities are strongly dependent on the diversity of the available seeds for their production. Folk varieties are also the basis of all modern varieties that have been developed throughout the ages, and are at the source of many new varieties that are developed for the industrial agriculture (Plucknett et al. 1987, in Cleveland and Murray, 1997). Folk varieties are therefore of major importance for other parts of the world too.

The numerous descriptions of local communities and Indigenous/traditional knowledge vary in tone and spirit. It is an often-encountered temptation, in particular among well-known activists to romanticize the role and integrity of such lifestyles. Social differentiation and hierarchal relations within communities are for example hardly ever mentioned, while they must for sure exist. Also, some critical notes ought to be expressed when describing the varieties in use by such communities. Surely, traditional ways of farming have value. But if they were that beneficial, how comes then that modern varieties were introduced and grown successfully? Somewhere the modern varieities must have been attractive, and not only because of commercial pressure.

Without aiming at diminishing the importance of traditional communities and knowledge, excessive embellishment of their situation is in my opinion not appropriate. It moreover gives a wrong idea of the situation, which in turn does certainly not benefit the communities themselves.

The meaning of traditional communities seems substantial; their culture, their varieties, their knowledge and their contribution to the preservation of biological resources are of tremendous importance. Western economies are still highly dependent on them for the development of their own food and drugs. It is for all these reasons that traditional communities and their knowledge should be safeguarded.

In this paper, their situation and the interests they represent are significant; understanding their contribution to food security is one step in giving them more space to have their interests at least recognized in international treaties and their situation taken into account.

2. Genetic erosion

Even if biodiversity has been preserved for many years, the alarming news, however, is that genetic diversity is known to be declining at a very big speed. Species disappear forever, after having lived for millennia. The causes of erosion are multiple and the importance of each factor is still contested. A number of reasons are described here.

The replacement of local (genetically diverse) varieties by improved (genetically uniform) varieties is said to be the major reason of erosion (FAO, 1996). The production of better quality, and thus commercially more viable crops leads to uniformity, which in turn, enhances genetic erosion. For example, Chinese wheat varieties in 1949 were supposed to be at the number of 10.000, while only 1.000 are left over now; in Thailand, the Philippines and Malaysia, original fruit and rice varieties are being replaced with better quality varieties. In the United States, 86% of apple varieties used in the past century are now lost (FAO, 1996). Government regulations also tend to promote the production of one specific variety, replacing the old ones. The intensification and change of agricultural systems such as irrigation systems and chemical inputs are known to be an important cause of habitat destruction, causing biodiversity to decline. Lack of sustainable resource management, deforestation and other environmental effects are the other causes of genetic erosion.

Developments in genetically modified (GM) crops have added to the concerns of biodiversity loss. For example Monsanto’s Golden Rice, a rice variety enriched with Beta Carotene, and supposed to partly compensate deficiencies in vitamin A in developing countries, has raised concerns: the fast replacement of local varieties with Golden Rice will contribute to even more erosion. Of course, the whole concept of GM food as a way of feeding the world is a substantial part of the discussion.

According to Swanson (1995), the decline of biodiversity is due to the change in the one controlling its allocation. Whereas evolutionary processes used to be nature’s task, it has now become an activity of humans, led by economic motives. Human's intervention has according to Swanson and many others contributed to the extinction of many species that, otherwise, would still have been living.

As genetic resources are vital for the environment and for humans, their inherent value makes them popular and subject to benefit driven bargaining. Meanwhile, the biological resources have to be preserved from their extinction. Let us see how access to and use of biodiversity is regulated in international treaties.

1. Legal frameworks for the conservation of biodiversity and Indigenous knowledge

As a result of common concern about the erosion of genetic resources, a number of international treaties deal with the issue of conservation of biodiversity, Indigenous knowledge, and/or the combination of the two. Even though opinions are divided on the need for diversity, the importance of biological resources for human being and the decline of their availability made a common commitment urgent. According to Cooper (1993), the worldwide dependence on other countries’ resources is the main reason why international cooperation in the field of plant genetic resources is vital. Two treaties will be exposed. They are the International Undertaking on Plant Genetic Resources (IUPGR) of the Food and Agriculture Organization (FAO) and the Convention on Biological Diversity (CBD). Also, laws protecting traditional communities and their knowledge will be considered. The emphasis of each of these treaties is different. In each case, I will look more closely at the articles and issues relevant for the present research. The debates and conflicts around specific parts of those treaties and Agreements will be dealt with more thoroughly in chapter II.

1. The International Undertaking on Plant Genetic Resources

The International Undertaking on Plant Genetic Resources, hereafter referred to as the Undertaking, was adopted by the Conference of the FAO in 1983, as a non-legally binding instrument. It was the first international instrument that sought to regulate the conservation and the sustainable use of genetic resources.

The objective of the Undertaking is to "ensure that plant genetic resources of economic and/or social interest, particularly for agriculture, will be explored, preserved, evaluated, and made available for plant breeding and scientific purposes (Article 1). In this same article, it is stated that PGR are a "heritage of mankind" and consequently "should be available without restriction". The idea of "heritage of mankind" has undergone some criticism, being that if humanity inherited resources, then they should be accessible to everyone, thereby passing over the sovereign rights of states over their resources. Another issue is that the IUPGR makes resources available for plant breeding purposes. This in fact the start of a trend that would grow under UPOV later (see § 3c), and which now is being attacked by advocates, because it overlooks the use of PGR for non-commercial purposes. In that sense, the IUPGR was not that good start for the recognition of the informal sector.

The Undertaking meant to provide for a number of issues, such as the exploration and collection of genetic resources (article 3), the in situ and ex situ conservation (article 4), the availability of plant genetic resources, (article 5), international cooperation in conservation, exchange and plant breeding (article 6), international coordination of genebank collections and information systems (article 7) and funding (article 8).

The Undertaking also includes three annexes or interpretative resolutions, in which three different issues are being dealt with. They are also the ones with more political weight.

The first resolution (C4/89) recognizes that the Plant Breeders’ Rights (PBR), as determined by the UPOV (see § 3c) were not necessarily in conflict with the Undertaking. The UPOV inter alia provided plant breeders the right protect their seeds through private rights. PBR mainly benefit countries that are active in commercial seed production.

A second annex (C5/89) concerned the concept of Farmers’ Rights, stating that farmers have a priori rights to the materials their ancestors have developed since time immemorial and must be rewarded for their activities and conservation of genetic resources. The international community through the FAO Conference endorsed this annex in 1989; it meant a major step forward in the recognition of the contribution of farmers, thereby challenging the view that genetic resources are only developed within the formal sector (Cooper, 1993). It was also a compensation for the right accorded to breeders in the first annex: If breeders have rights over their varieties, then farmers should also be taken into account as key participants to that process.

The third annex (C3/91) reaffirmed the sovereignty of nations over their natural resources, and the agreement to create a fund in order to implement Farmers' Rights (see Box 2). It focuses on the need to preserve the resources, to regulate their access, use and exchange, and to respect the ones who elaborated them over the past years. It also urges for international cooperation in these fields. Both concepts (sovereignty and Farmers’ Rights) are subject to debate, as we will see in chapter II.

The IUPGR is still referred to as a more or less successful first attempt to regulate the access and use of genetic resources. It especially emphasized on the efforts to rebalance North (resource- poor, but financially rich) and the South (resource rich but financially weak). Today, efforts are made to push the concept of Farmers’ Rights and to include such a provision in national laws.

Box 2. Farmers’ Rights

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2. The Convention on Biological Diversity

The Convention on Biological Diversity, or Biodiversity Convention, signed in 1992, was another result of increasing concerns growing around the preservation and the sustainable use of biodiversity. The Convention was opened for signature on 5 June 1992 at the United Nations Conference on Environment and Development, (UNCED), also called the Rio "Earth Summit", and entered into force on 29 December 1993. By early 2000, 177 countries had ratified the convention. A few countries, of which the USA, haven’t done so.

The CBD’s objective are: "the conservation of biological diversity, the sustainable utilization of its components and the fair and equitable sharing of the benefits arising out of the utilization of genetic resources" (Article 1). In addition, it urges contracting parties 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 practice and encourage the equitable sharing of the benefits arising from the use of such knowledge, innovations and practices" Article 8(j).

Those two articles thus emphasize the need for protection of biodiversity and the recognition of traditional knowledge. If they are effectively applied and implemented, they can have major consequences for the access to genetic resources. Environmentalists, Human Rights advocates and many developing countries have welcomed the concept of benefit- sharing, which is of substantial signification for local communities and the preservation of traditional knowledge (see box 3). It is now subject to heavy criticism, as we will see in chapter II. Also, article 8(j) clearly acknowledges the participation of local communities in the preservation of biodiversity, a major step in the recognition of their contribution. Moreover, it supports in situ conservation over ex situ conservation, another way of recognizing the role of communities, bearing in mind increasing commercial tendencies.

 

Box 3. Benefit- sharing mechanisms

 

 

 

 

 

 

 

 

 

The Convention also recognizes "the sovereign rights of States over their natural resources", and that "the authority to determine access to genetic resources rests with the national governments and is subject to national legislation" (Article 15). The sovereignty of states over their genetic resources is a major victory for the ones concerned about the environment. It also means that governments are responsible for their resources and hence of their sustainable conservation, and that they can decide whether or not they will allow collection of resources on their territories. However, the effectiveness of sovereign rights is questionable, as will be explained in chapter II.

The parties also "shall endeavor to create conditions to facilitate access to genetic resources" (article 15.2). "The access, where granted, shall be on mutually agreed terms" (Article 15.4). "Access to genetic resources shall be subject to Prior Informed Consent (PIC) of the Contracting Party providing such resources, unless otherwise determined by that Party "(15.5). The latter provision indicates that parties have to be aware and agree with the terms under which resources are accessed and /or taken away. More of this will be discussed in chapter II.

The Convention finally asserts, in article 16 that Intellectual Property Rights must not conflict with the conservation and sustainable use of biodiversity: "The Contracting 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."

Articles 15 and 16 are now subject of negotiations, as they involve rights and duties that should be enforced. However, laws regulating Intellectual Property do have other priorities that may be hindered by such articles, as we will see later in this chapter.

The CBD is nowadays seen as the main text in the field of biodiversity. Contracting parties meet within the Convention of the Parties (COP), to discuss further implementation of the articles. The protection of Indigenous/ traditional knowledge is an important part of it.

In short, we can say that the CBD is a step further in the recognition of biodiversity as a vital resource for humanity, together with the recognition of Indigenous knowledge, whereas the International Undertaking only provided protection for plant genetic resources. As the CBD’s articles are legally binding, they provide official support to the signatory party, which is important, especially for the southern countries. Of essential significance are the affirmation that biodiversity is not a gift of nature, but the result of community activities, and the fact that it gives formal international recognition to the central role of Indigenous communities in conservation of biodiversity, through their sustainable practices and cultural knowledge systems. The rights for local communities, as well as for states, are according to the CBD needed in order to protect biological resources and encourage conservation. It is the question if the sovereign rights of states will indeed protect the resources. Chapter II explains more in detail the underlying discussion.

3. Protection of Indigenous knowledge

Indigenous/traditional knowledge, as defined earlier, is commonly held by (traditional) communities in developing countries. It does not mean that it is held exclusively by Indigenous Peoples. The place where the informal sector’s, minorities’ and Indigenous knowledge is regulated is nevertheless in legal texts that also recognize the rights of Indigenous Peoples and Folklore against improper exploitation. For example, some national laws in Africa, as in Benin, Rwanda and Ghana explicitly mention the Indigenous Peoples knowledge in their definitions (Biothai and GRAIN, 1997). International texts also provide some protection.

First of all there is the Universal Declaration of Human Rights stating that all people on earth are born "free and equal in dignity and rights" (Article 1). All people also have the rights to "the protection of the moral and material interests resulting from scientific, literary or artistic production of which he or she is the author" (Article 27). The United Nations Draft Declaration on the Rights of Indigenous Peoples that is being elaborated presently should extend those rights.

The UNESCO/WIPO guidelines for Protection of Folklore and the ILO C169 Indigenous and Tribal Peoples Convention (1989) also provide for some protection. The latter states that: "The rights of ownership and possession of the peoples concerned over the lands which they traditionally occupy shall be recognized. In addition, measures shall be taken in appropriate cases to safeguard the right of the peoples concerned to use lands not exclusively occupied by them, but to which they have traditionally had access for their subsistence and traditional activities. Particular attention shall be paid to the situation of nomadic peoples and shifting cultivators in this respect" (Article 14.1).

Article 15.1 also states that "The rights of the peoples concerned to the natural resources pertaining to their lands shall be specially safeguarded. These rights include the right of these peoples to participate in the use, management and conservation of these resources."

Another few texts also call for the non-discriminatory protection of Property and knowledge, though without explicitly recognizing the Indigenous Peoples. The International Covenant on Economic Social and Cultural Rights (Article 2.1) states that "all peoples may, for their own ends, freely dispose of their natural wealth and resources without prejudice to any obligations arising out of international economic co-operation, based upon the principle of mutual benefit, and international law. In no case may a people be deprived of its own means of subsistence."

Whether and to what exent those texts are lived up to remains the question. In the concerned countries, lack of experience in dealing with issues such as the identification of works, or with implementation mechanisms makes the texts hard to apply. It also seems that legislation is fragmented among the different fields of the biodiversity conservation: fisheries, plants etc. Besides, the absence of regulation and coordination on federal level contributes to incoherence in the implementation (Nijar, 1996b).

Besides, other agreements that do defend other interests feel hindered (!) by such treaties and hence sometimes neglect the primacy of Human Rights over private interests. Political pressure on countries that do not respect Human Rights has grown over the years, but it is questionable on whether such initiatives are part of a politically correct image of governments or whether they are meant truly to protect people. Public awareness and dissatisfaction about certain situations has also increased the last years, having a possible influence on politicians.

The hope is nevertheless expressed by many developing countries that these texts will once provide some protection to the rural communities and their knowledge, and subsequently to the natural resources they have been conserving during years.

The conservation of biological diversity and the protection of (traditional) knowledge are both regulated through more or less recent international treaties. Their enforcement is a slow process though; the ability and the willingness of other countries to compel the provisions are also questionable. Countries signatories of such treaties nevertheless have the duty to meet requirements.

Protection of knowledge has also become a hot issue through other channels: Commodization and the emerging role of information have made protection of genetic resources a new hot issue. The legal enforcement of protection is now a substantial part of supra governmental agendas.

In the next section, I will explain the concept of Intellectual Property Rights, the legal frameworks that regulate the exploitation of knowledge and the particular case of biological resources. Together with the previous section, this will form a basis for further analysis on the possibilities for developing countries to protect their resources, within the legal space that is left over by international treaties.

1. Intellectual Property Rights

Intellectual Property Rights (IPR) are currently defined as "rights given to persons over the creation of their minds" (TRIPs-WTO, text of the Agreement). They confer the creator exclusive rights over the use of his creation for extended periods of time, usually 17-20 years. One can thus claim Property over its individual invention; whether the inventor has used public knowledge or not for the purpose of his invention does not matter. Inventions and knowledge that have collectively been shaped through the years by communities can under this definition been appropriated by a single person, eventually changing an originally public good into a private one.

The protection of knowledge and information has a history. At the time of industrial revolution in particular, inventors of new machines, utensils and other useful materials wanted to be sure their invention would not be used by a third party without their consent. Intellectual Property Rights were therefore initially created to promote technological development, especially in industrial activities. The idea was that if new knowledge were freely disseminated, little incentive would remain to produce new knowledge.

A first attempt to legalize protection was made in 1868; the Paris Patent Union decided that innovators should be rewarded for their investment in generating knowledge and therefore an international mechanism of repatriating compensation was started (Swanson, 1997); the Union for the Protection of Industrial Property was created in 1883. It was till now the most important move towards protection of Intellectual Property (IP). Protection could then not be obtained on inventions in the medical and agricultural sectors. In other fields, unions were created, such as the Berne Union (1886) for the protection of literary and artistic work, the Geneva Convention (1971) for the protection of producers of phonograms against unauthorized duplication and UPOV (1961), for the protection of new plant varieties and many others.

During the twentieth century, as knowledge and artistic creations became an increasing source of benefits, many parties required protection. Particularly with the recent upcoming popularity of biotechnology, the extension of protection in the agricultural and medical sector became an issue, as whole processes and new products were being created through human’s intervention. Acceptance of this extension is still controversial, and lies at the basis of many discussions on the subject.

Let us see which international organizations deal with the protection of Intellectual Properties, and in particular the ones that do include biological material in their texts.

1. WIPO

The World Intellectual Property Organisation (WIPO) started in 1970, and turned into a specialized agency of the United Nations (UN) in 1974, with the mandate to administer Intellectual Property matters recognized by the Member States of the UN. It focuses on the promotion of Intellectual Property Rights throughout the world and international regulation and cooperation in that field. WIPO administers Unions and Treaties in the field of Intellectual Property, such as the previously mentioned Paris Union, the Berne Union and UPOV. Part of WIPO's work concentrates on helping developing countries with international standards of IP protection.

Earlier in time, Property Rights, which were related to trade of goods, became subject to the legislation of the General Agreement on Tariffs and Trade (GATT). This organization created the World Trade Organization with the signature of the Marrakech Convention in 1994. The WTO became the central negotiation platform for any issue related with trade, and so were the Intellectual Property Rights. One of the annex (1C) of the WTO Agreement is actually called the Trade-Related Aspects on Intellectual Property Rights (TRIPs) and is nowadays the major legal instrument in the area of IPR. TRIPs is explained more in detail below.

The lack of a legal compelling mechanism did not satisfy everybody, and countries with a strong Intellectual Property history found WIPO not sufficient. Since the agreement between the World Trade Organization (WTO) and the WIPO in 1995, its mandate is now to focus on the implementation of the Trade-Related Intellectual Property Rights Agreement within developing countries and other United Nations Members.

2. TRIPs

The WTO-TRIPs Agreement (hereafter referred to as TRIPs or the TRIPs Agreement) came into force by 1995, only a few years after the US request of defining Intellectual Property as a trade-related issue. The US claimed that low standards of IP protection formed a non-tariff barrier and thus hindered free trade, which is in turn prohibited by the WTO. The US also claimed that they were losing a huge amount of royalties due to the exclusion of biological resources from Intellectual Property laws.

TRIPs defines minimum standards of protection for Intellectual Property Rights. Members are thus free to define higher standards than TRIPs does. Interesting is also that whereas other agreements of the WTO focus on what members may not do, TRIPs says what should be done.

The main purpose of TRIPs is an economic one: Article 7 formulates the objectives of the Agreement, stating that "the protection and enforcement of Intellectual Property Rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge". There is no indication on how such welfare can be measured and on what can be understood with the mutual advantage of producers and users. Later in this paper, we will see how industrialized countries have interpreted and used this sentence for their argumentation.

All 135 WTO members must implement the Agreement. Developed countries were required to comply with all the provisions by 1 January 1996. Developing countries and countries in transition need to have it implemented by the year 2000, least developed countries (LDC's) by the year 2005. These transition periods may nevertheless not be used to reduce the level of protection (the so-called non-backsliding argument).

The whole Agreement is due for review in 2000. Article 27.3(b), which was found controversial by many parties, was due to be reviewed in 1999, four years after its entry into force. Negotiations on the contents and the interpretation of the Agreement are still going on.

The enforcement measures of the Agreement are highly restrictive. By putting IPR under the auspices of the WTO, member countries are enabled to compel trade sanctions against non-compliant countries. They can also apply a significant number of provisions, which are use in other areas of the WTO. For example, the Most-Favoured-Nation (MFN) Clause and the National Treatment Clause both forbid discrimination between countries' commercial partners and other member countries: "any advantage, favour, privilege or immunity granted by a Member to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other Members." "Trade-related" disputes between WTO members over TRIPs Agreement are to be submitted to the WTO Dispute Settlement Body (DSB) and procedures. The DSB has the function of a juridical court for WTO Members. Challenging a country in front of the DSB can have far-reaching consequences. In the past, "trade wars" between countries over issues such as the import of bananas have led to high political tensions.

Two types of IPR can be discerned within the TRIPs Agreement:

1. Copyrights and rights related to copyrights, which relate to creations that result in (artistic) works such as books, music and artistic creations,
2. Industrial Property Rights, which refer to trademarks, geographical indications, industrial designs, patents, and industrial secrets.

In this paper, patents as defined in the TRIPs Agreement, are the types of IPR we are interested in. Patents protect ideas and their expression within new products and processes. TRIPs requires patents "in all fields of technology". They confer the inventor of new process and/or product exclusive monopoly rights with regard to its economic exploitation for periods up to 20 years. After 20 years, the invention moves to the public domain. Patent legislation requires that the claimed process and/or product meet three requirements. According to TRIPs, a product or process should therefore:

• Be new, that means not previously known;
• Involve an inventive step, i.e. it should not be an extension of something already existing ("non-obvious")
• be "capable of industrial application", that is "useful".

In some countries such as the US, IP protection meets higher standards than the ones in TRIPs. Longer terms of protection (minimum of 20 years) and the criteria of "discovery" (instead of the "narrower" invention) make it for the country more attractive to file a patent, which in then also protected for a longer period of time.

The TRIPs Agreement hereby requires that no invention should escape patent protection. A number of exceptions for patentability are stated in the Agreement:

1. Inventions contrary to ordre public or morality are prohibited; this includes inventions dangerous to humans, animals, plant life, health or the environment (Article 27.2).
2. Members also may exclude diagnostics, therapeutic and surgical methods for the treatment of humans or animals (Article 27.3(a)).
3. The third exception allows Members to "exclude plants and animals other than micro-organisms and essentially biological processes for the production of plants or animals, other than non-biological and microbiological processes. However, any country excluding plant varieties from patent protection must provide an effective sui generis system of protection" (Article 27.3(b)).

"Members may exclude from patentability" implies that countries are entitled to exclude material, but that making it eligible for patentability is legal.

Sui generis means "system of its own kind", that is in this case plant variety-specific. Although a clear definition is lacking in the TRIPs text, the sui generis system is meant to serve as an alternative to the TRIPs patent system, and thus confers the opportunity to build a specific legal system, eventually based on other concepts than the patent system; it can roughly be defined as another kind of IPR for plant varieties. A detailed explanation on the possible interpretations of article 27.3(b) and the sui generis system is given more thouroughly in chapter V.

So, given the constraints of articles 27.2 and 27.3(a) and (b), any invention should be patented, except what may be excluded from patentability being:

• Plants and animals other than microorganisms;
• Plant varieties as far as protected by another kind of IPR;

• Essentially biological processes other than non-biological and microbiological processes for the production of plants and animals.

Above-mentioned articles are of major importance here, as they directly affect biodiversity, local communities and developing countries, but also many of the products and the processes elaborated by the biotechnology sector, such as medicine.

It is to be noted that protection of Intellectual Property has traditionally fallen under the domain of national legislation, whereas it now is a matter of international agreements. Developments in that field are unprecedented. The existing national laws have now to be adapted in such a way that the TRIPs’ minimum standards are met. As TRIPs provisions are in fact the copy of already-existing legislation in industrialized countries, legislation in those countries is conform the Agreement. In most developing countries though, where IP protection was basic or not existing at all, legislation has to be "upgraded" to meet the minimum standards of TRIPs.

Concerning the "sui generis" systems of protection, we should bear in mind that some countries already have alternative systems for their plant varieties since years, though not meeting the TRIPs requirements. Plant Variety Protection (PVP) and Plant Breeders’ Rights (PBR) (see below) are examples of already existing protection in that specific area.

For the moment speaking, only 21 of the developing countries member of the WTO have a Plant Variety Protection in place, thereby leaving 76 without IPR protection for plant varieties (GRAIN, 2000). Serious questions can be raised around this inequality. It also remains to be seen if such existing systems of protection are in line with TRIPs requirements.

A convention that originally provides Intellectual Property Rights in the area of plant resources is the International Union for the Protection of New Plant Varieties (UPOV).

The first UPOV Convention, signed in Paris in 1961, came into force in 1968. It has been modified since then, in 1972, 1978 and 1991. UPOV counts 44 members (by 20 Dec 99) and has a secretariat inside WIPO in Geneva, which provides administrative and financial facilities. UPOV confers plant breeders the possibility to hold exclusive rights over new plant varieties.

To be protected, varieties need to meet the "DUS" criteria:

• Distinctiveness (be distinct from existing, commonly known varieties),
• Uniformity (all the plants in question should display the same characteristics) and
• Stability (the variety should display the same characteristics in each successive generation);

Varieties should also be new, i.e., they must not have been commercialized prior to certain dates (Gaia and Grain, 1998b).

Members are either party of the 1978 or 1991 Act. Any country wishing to access now has to join the 1991 Act. Countries had till 1999 to join that Convention. Since the first Convention, rules have become a lot stricter than they used to be.

The 1991 Convention especially is stricter in the way that it prevents genetic engineers from adding single genes to existing varieties and exploiting the modified variety, without recognizing the contribution of the original breeder (Tansey, 1999). Table 1 shows the changes that have been built in the UPOV 1991 version. The length of the protection has also been upgraded to 20 years since 1978. Also, the convention does not explicitly require recognizing the farmers’ privilege, disabling thereby farmers to freely save seeds for further planting. Many countries do so, though. Moreover, a breeder has rights on the variety and the harvested material. Gaia and Grain (1998b) comment: "If the farmer sowed his or her field to a PVP variety without paying the royalty fee, the breeder can claim ownership of the output (e.g. wheat) and the products of the output (e.g. wheat flour)".

Double protection through simultaneous PVP (Plant Variety Protection) and patenting of the new obtained varieties is also possible under 1991, but not under 1978.

The principle of "essential derivation" is included in 1991 version, whereas it was excluded form the 1978 version. It refers to the "genetic distance" between a "source" variety and the newly obtained variety; the principle seems unclear in terms of what is legally acceptable. If the relationship with the previous variety is found too close, then rights over the newly obtained variety are "dependent on" the rights over the source variety- that means that rights conferred to the breeder over a newly obtained variety are similar to his rights over the source variety. An essentially derived variety thus still falls under the first breeders’ rights.

Currently, UPOV urges developing countries to become a member, as a way to comply with TRIPs requirements. It is also trying to make itself the logical sui generis options for the TRIPs Agreement (Gaia and Grain, 1998b). UPOV has recently reopened the option of acceding the 1978 Act to India, Nicaragua and Zimbabwe, even though it was officially closed for accession in 1998 (GRAIN, 2000). This could mean that the 1991 version has not gained enough support from developing countries: many of those countries have a substantial informal sector, of which the rights have been cut down in the 1991 Convention. Providing more rights to breeders is not in the benefit of such countries. The attempt of WIPO to help and harmonize developing countries’ IPR systems with UPOV 1991 might not be welcomed as much as thought.

Critiques of the UPOV argue that the DUS criteria enhance genetic erosion, by stimulating the replacement of local varieties by modern varieties. They also say that recent restrictions in the Act make the protection more or less equal to patent rights, broadening rights of breeders at the expense of farmers. For these reasons, among others, they argue that it does not fit as a sui generis system.

1. Conclusion

In this chapter, we have seen different international legal contexts in which the conservation of biodiversity, the recognition of Indigenous knowledge and higher standards of Intellectual Property protection are regulated. It appears that the different texts do not represent nor intend to protect the same interests. Although it has been determined that diversity of species is essential to human being, it seems that regulations promoting uniformity of crops, led by commercial interests, have more potential to be formally recognized and supported.

In the next chapter, I will focus on a number of concepts that are present in CBD but that are left out of TRIPs and/or UPOV. Moreover, I will present the criticism that is being expressed about certain provisions. The idea is that disagreement on definitions and concepts leaves a narrow path open to negotiations and adaptations of texts to the own benefit.

II

Conflicts between the agreements

1. Introduction

In the previous chapter, I have exposed a number of texts that regulate the access to genetic resources and Intellectual Property Rights, on different levels and for different purposes. The texts have various intentions and protect different peoples and interests. Simultaneous implementation is therefore sometimes difficult. The co-existence of such agreements is not without tensions. In the particular case of the CBD, UPOV and TRIPs, a certain number of problems arise. In this chapter, it is the purpose to explain how these agreements conflict with each other and also to show that elements of laws regulating IPR do not meet the developing nations’ interests. Also, some provisions that at first sight seemed fair will be looked at more closely, as they might not be as beneficial as formerly thought.

The Convention on Biodiversity, aiming at protecting natural resources, and the TRIPs Agreement, aiming at promoting free trade have obviously different backgrounds, whose interest tend to have opposite directions. Free trade parties contradict this argument, though. Still, the CBD recognizes a number of principles that are overlooked in the TRIPs Agreement and/or the latest UPOV. They mostly concern issues that primarily protect people, their resources and lifestyles. The essential oppositions are presented here.

 

2. Conflicts between the agreements

1. Benefit-sharing

The benefit-sharing mechanism, a central thought in the CBD, is not recognized in TRIPs. It includes the idea as the material is found in the South and that the profits go to the North, then developing countries should be rewarded or compensated for making the resources available. Roughly spoken, as the biodiversity-rich countries are located in the South, and the financially-rich countries in the North, the flows of genetic resources is going South- North, while there does not seem to be much of financial benefits going to the South, a few examples left aside. The issue here is that developing countries would like to see some form of compensation for the use of the resources originating from their territories, especially if those resources can lead to enormous benefits for life-science companies. The Convention on Biodiversity clearly asserts that mechanisms of benefit-sharing should be implemented (but not how), meaning that countries must ensure that benefits arising from the use of biological resources are shared with the communities and peoples from whom they have been taken. Some suggestions have been made in this area, such as the system of Material Transfer Agreements (MTAs). They are intended to work as a contract between researcher and safeguarders (buyer and seller) of the resources. Agreements can be made on how material will be used and how a community can share the benefits.

Criticism on this concept is that such contracts consider material as a commodity rather than knowledge, and overlook the intrinsic value for local communities. Besides, contracts between the private sector and communities or institutions are seldom equitable: the percentage of royalties the communities should get does not reflect in any means the benefits for the company. A percentage accorded to a community can also be interpreted as a percentage of the share an institution holds from the contracting company, which means a lot less than a percentage of the company’s profits due to that resource (Gaia and GRAIN, 2000a). Also, rewards and benefits are based on a potential monetary value of the material. The question is raised how such value is calculated and how fair benefit sharing can occur. Another problem is that expectations in terms of expanded production and export benefits of communities that sign a contract with companies are often not met. There are numerous examples showing that companies, once they have found the resource, synthesize it and produce their own in laboratories (ActionAid, 1999b). The local communities and research institutions that were eager for more income, end up with expensive infrastructure they don’t need any more.

Another criticism is that the rush for Indigenous-held knowledge and resources has turned into a race for patents, and not for the substance the patent is protecting.

So, what seemed to be a fairness contract in CBD is now being criticized by the defenders of community rights and public interest: accepting the mechanism of benefit sharing in fact means that the idea of a resource as a commodity is accepted. In doing so, it justifies bioprospecting, which in turn those same defenders reject.

The TRIPs Agreement does not mention any provision recognizing the principle of benefit-sharing or any regulation between the patent holder and the donor of the material (GAIA foundation and GRAIN, 1998a). The UPOV Convention doesn’t either mention anything like benefit-sharing. The absence of such mechanism from international conventions has long time raised concerns amongst defenders of developing countries’ and public’s interests. The absence of sharing mechanism in IP regulating laws and the simultaneous explicit mentioning of the same principle in CBD shows on the one hand a conflict between two agreements. But on the other hand, given the criticism on benefit sharing, it shows that the principles of the CBD may not conflict that much in starting point with the ones of TRIPs as is commonly advocated.

Concluding on this topic, we can say that whereas the benefit-sharing mechanism seemed like a fairer deal than open access, the practical outcome does not seem to be satisfactory in many cases. It is nevertheless one way in between the agreements to achieve a better deal than unlimited access. It requires though that resources are considered a marketable commodity, which is in turn rejected by many.

2. Sovereignty over genetic resources

There is also some antagonism with TRIPs about the principle mentioned in the CBD, stating that countries have sovereignty over their genetic resources. According to article 3 of the Convention, states have "the sovereign right to exploit their resources pursuant to their own environmental policies".

The TRIPs Agreement, by making biological resources subject to private Intellectual Property Rights with the intention of promoting free trade, wishes to facilitate the access to these resources, and overlooks the sovereignty principle.

The concept of sovereign rights over resources, replacing the concept of common heritage, allows countries to regulate the access to them, making their national laws prevailing, including provisions concerning the restriction to exploit their resources. It is questionable though, if sovereignty of states over their resources is beneficial to the resources and the communities. No need to say that when it comes to financial benefits that can be made out of the exploitation of resources, states too are interested in commerce. In this context, one should think that resources in the hands of dishonest officials are not that protected, especially when it becomes a sought after, commercially interesting item. If the state authorities decide to allow access in exchange for financial support, then the purpose of the CBD can be endangered.

Some improvement could be achieved though: measures could be suggested in order to emphasize and compel the sovereignty of countries over their resources, in such a way that local communities still can decide over their destination. The question though is what kind of provision will achieve that. The suggestion an sich will not change anything to the situation. As TRIPs does not prohibit the protection of "additional subject matter", one could think of including community representatives in authorities deciding on the use and destination of resources. Such regulations should then be included in access laws.

3. Prior Informed Consent/Mutually agreed terms

The CBD also states that access to genetic resources should be subject to "Prior Informed Consent" (PIC), meaning that authorization of the right holder should be sought after and obtained in order to access the resource and/ or the knowledge.

TRIPs on the contrary pursues free access and does not mention this concept. Implementation of such a mechanism would give traditional communities the right to approve or deny the access to researchers and bioprospectors. Access should also be on "mutually agreed terms" (CBD). States thus can deny access if they feel exploitation is contrary to their national interests.

In this case, it is clear that a conflict opposes CBD and TRIPs.

4. Private and collective rights

TRIPs also negates collective rights, by stating in the preamble that "Intellectual Property Rights are private rights". This is according of critics of TRIPs a major shortcoming and shows disrespect for the situation of developing countries. Indeed, many communities share their resources, knowledge and cultures among themselves. The individual appropriation of items like in western cultures is a lot less common in developing countries. The negation of collective rights in TRIPs shows how inappropriate the Agreement is for countries other than the western industrialized ones. The negation of collective rights is seen as a big issue for developing countries. Whereas they are obliged to protect their plant varieties through patents or the sui generis system, they are unable to protect them in a way that fulfills cultural traditions, such as community rights. The issue of collective rights and sui generis will be explained more in detail at the end of the paper.

5. Industrial applicability

TRIPs also formulates that Property Rights are recognized if they serve knowledge and innovation, as a requirement for resources to be patentable (the industrial applicability). This means that a product or process only has legal recognition if it has a commercial value and thus neglects the fact that many varieties grown by farmers practicing subsistence agriculture are not meant for commercial purposes. TRIPs also states in a footnote that "capable of industrial application" and "useful" can be considered as synonyms. But, a distinction can be made on whether a resource is commercially useful or socially useful. While creating some confusion, it seems that there is an opportunity here to play with the criteria for patentability.

In the same context, the IUPGR protects plant genetic resources for "plant breeding and scientific purposes". So, a majority of the agreements discussed in the context of the protection innovations and/or biological resources overlook the non-commercial value of those resources. This while the CBD emphasizes that the rights and customs of Indigenous peoples should be respected, which includes the respect of their traditional systems and varieties.

1. Conclusion

Within the various legal frameworks, it seems that there are many conflicts and oppositions. They clearly show differences in the way different parties approach biological resources. For one agreement, those resources have a golden (commercial) value, and any restriction in their access infringes free trade. For the other, resources are the continually preserved means of subsistence for many countries and part of a culture. The conflicts raise concerns, as we have seen.

The list of conflicts and concerns about privatization of genetic resources, collective versus individual rights, sovereignty principles and others clearly show contrasts between the laws regulating access to biodiversity and Indigenous knowledge on the one hand and Intellectual Property on the other hand. However, it is not adequate to consider TRIPs and UPOV as the bad guys and CBD and IUPGR as the good guys. As we have seen, in some cases oppositions are not that obvious; even more, some concepts such as considering resources as a commodity do not seem very different among the different agreements. This does not mean however that we should agree with such views.

We need to bear in mind also that intentions in both CBD and TRIPs have different directions, but many not opposite. It is logical in some way, as they do represent other peoples’ interest. However, this does not mean they can infringe on already established rights, nor overlook principles and cultures established long ago. In working towards a better position for the purpose of the conservation of biodiversity and the protection of traditional knowledge, developing countries should be aware of the contents of the different agreements and at the same time be critical of what the underlying thought is of such agreements.

Nevertheless, little hope is expressed that conflicts between the agreements can be curbed somewhat towards the interests of developing countries. Provisions in CBD may offer some space and flexibility to the defenders of environment and cultural rights. Also, a lack of consensus between the WTO members led to improperly defined terms and concepts. Some room is thus left over within and between the agreements, which leaves a narrow path open to still protect biodiversity, Indigenous knowledge, the interests of developing countries, without harming the innovation efforts of the industrialized nations. That is, speaking optimistically. Lots of political pressure and advocacy work is needed to achieve small changes and recognition of the developing countries’ interests. Protests against such far-reaching treaties are growing, also. The issue here is that because of TRIPs restrictions, there is very few opportunity to carry out the provisions of the CBD. Countries do not face sanctions if they do not live up to CBD commitments, while they face huge trade sanctions if they are found to violate TRIPs. There is thus inequity in the weight of TRIPs and CBD, making it more difficult to use CBD provisions such as benefit-sharing and sovereignty over resources to be implemented and carried out.

Industrialized countries have managed to pressure other WTO members to implement TRIPs, with all its controversial articles. In the next chapters, I will explain what arguments they have used to achieve this. I will also show that those arguments are refutable. Then, I will recall the conflicts mentioned in this chapter to find a way in which developing countries nevertheless can use provisions in such a manner that their interests are somewhat met and their cultures preserved.

III

The economics of Information and IPR

 

 

In the previous chapters, I exposed the legal frameworks around protection of biological resources, Intellectual Property Rights and the potential conflicts between them. TRIPs is part of the WTO and thus considered a trade-related agreement; it is therefore important to understand the economic arguments behind its implementation. This chapter aims at giving some background information on the protection of knowledge. It is part of a wider section on economic arguments used to support and counter the implementation of TRIPs. Chapter III describes the upcoming popularity of information, knowledge and their simultaneous protection. In Chapter IV, I will discuss more in detail the argued relationship between higher standards of IP protection and a number of specific economic indicators, such as Foreign Direct Investment, trade flows, and levels of R&D. The arguments brought up will also be criticized. In chapter V, I will pay attention to the reasons why TRIPs is considered inadequate for the developing countries’ situation.

Let us first pay attention to general developments in the field of information, knowledge and IPR.

 

1. The information age

Many authors share the common view that information has gained substantial economic value. Humans have now entered the "information age", as the term commonly designating the years shaped by massive communication improvements, from cellular phone to spy systems for all kinds of communications including trade secrets (Echelon), the web and other instruments. Laws for the protection of consumers’ privacy against avid seekers emphasize the race for information and knowledge. The popularity explosion of the Internet and its key role in modern education also show the growing importance of information. Knowledge is not only an asset. It is also becoming a growing part of human capital, and therefore considered as marketable commodity.

That we have entered the information age is especially true for the agricultural sector. Whereas a few decades ago, the sector’s output was defined by labor and mechanical work, it has now become knowledge intensive. According to Vernon Ruttan of the University of Minnesota, differences in agricultural yields in the 21^st century will be knowledge-based, defined by sciences, technologies and human capital (Ruttan, 1997). The knowledge intensity required in this sector has probably emphasized the technological gap -and thereby the effectiveness- in agricultural sectors between developed and developing countries even more. Moreover, biotechnology has become a substantial part of knowledge-intensive agriculture. "It is not an exaggeration to suggest that biotechnology is poised to become the most important new general purpose technology of the first half of 21^st century" (Ruttan, 1999). Discussions around the medical potentials of the Human Genome Project emphasize the importance of those discoveries and of biotechnology as a way to access that information. Thus, within the trend of more information, biotechnology has become a cornerstone.

What we see is that on the one hand, knowledge is becoming more specific, more intensive and fits into a knowledge- driven economy. Such knowledge is expensive, and therefore becomes scarce because not everybody can afford it. Besides, it is often protected by patents and thus is not available for the financially weaker. On the other hand, it seems like another kind of knowledge, that could be "informal" or traditional knowledge, does not fit into this scheme and is being marginalized: It has in terms of current thinking no economic value because it is not marketable/profitable. The gap between those two kinds of knowledges is growing and is driven by profitability motives. Because many cannot access the expensive knowledge, we could state that such knowledge simultaneously produces ignorance about other kinds of knowledge. Social differentiation thus becomes and intrinsic part of "the information-age".

The potential benefits one could possibly make out of the control of information are numerous. The recent emergence and (contested) popularity of the so-called new economy, the Information and Communication Technology (ICT) companies and the lawsuit against the Microsoft Corporation illustrate this, among other cases.

The protection of knowledge created by individuals and companies has as we have seen in the previous chapter been regulated through different agreements governing laws for Intellectual Property. There are also economic reasons that have contributed to the increased attention to the protection of information, and specifically Intellectual Property Rights. The upcoming paragraphs describe those arguments.

 

2. Why protect knowledge?

Arguments about the costs and benefits of protected knowledge are numerous, so it is useful here to present a short theoretical background about the nature of knowledge and information, together with the significance of IPR for its dissemination.

As we have seen above, information and knowledge have become scarce and expensive, intangible assets. At the basis of the discussions about the protection of knowledge and knowledge-intensive goods lays the question about the free dissemination and availability of public goods. In many societies, information is considered a public good, that everybody should be able to access in one way or the other.

A public good has two characteristics.

1. It is non-rival, meaning that its use by one person does not compete with somebody else’s use of it, and
2. It is non-exclusive, meaning that one person cannot exclude somebody else from its use.

Let us see the application of such theory to knowledge and "creations of the mind".

The fulfillment of both conditions is not evident in all cases. For someone to know something does not inhibit another to possess the same knowledge. But non-exclusiveness is not as obvious. Generators of knowledge can choose to prevent others from accessing it, unless they are willing to pay, through patents for example. This is becoming more difficult though since the dissemination of knowledge on Internet (Pinstrup-Andersen, 2000). So the public status of knowledge is theoretically in some cases subject to discussion.

1. Knowledge as a public good

If we suppose that knowledge is a public good (which has been for a long time a worldwide accepted concept) it implies inter alia that it is freely available in nature. Following a theoretical argumentation, it means that its marginal cost is close to zero and that its production is not rewarded. The incentive for creating new knowledge will thus be smaller and the market will subsequently under-invest in that segment (Maskus, 1998a); no new knowledge is being "created". The pro-protection side for instance uses this rationale. Whether it is practically true is questionable; inventions have also seen the light without a market incentive.

Purely theoretically and following this line, in certain cases under investment can have negative effects. For the agricultural sector in particular, innovations are essential as they play a substantial role in the fight for global food security. It is feared that the slow production of new knowledge in that sector will not be sufficient to meet the growing demand for food in the world. So, it has been regarded as necessary to appropriate knowledge, in order to create an incentive to produce more of it. Earlier, I mentioned the marginalization of informal knowledge. In fact, theories on the need to protect knowledge as an incentive to create anew concentrate on the formal knowledge. They overlook the need for other kinds of knowledge and stimulate the marginalization of the informal knowledge. In the agricultural sector, we see that laboratory-made inventions start replacing the informal innovations.

The supposed role of IPR in the former perspective is thus to give knowledge economic value, which will benefit its creators and consumers.

Van Wijk (1996) argues that IPR stimulate innovation because they increase the costs of imitation. Wide-scope patents, protecting both product and process, form a barrier to competitors to imitate the innovation. They will thus be stimulated to produce their own.

Furthermore, unlimited access to and use of information (or any other kind of good) leads to free-rider behavior. Using someone else’s inventions without compensating the creator means that the latter people can copy information without having to do any investment and research. Many see this as unfair.

Free-riding behavior has multiple sides. One of them is that it has enabled developing countries to develop and use technologies that are more affordable, helping them in their overall economical development process. It is still seen as an essential way to access modern development, without which they would not have been at the same level of development as today. "Yet copying to catch up is the only way to catch up. Every country that has caught up has done it by copying" says Thurow (1997). On the other side, innovators feel that free riders violate the owners’ creativity and illegitimately use somebody else’s knowledge. Many developed countries feared that other countries would copy their efforts and investments.

2. Knowledge as a private good

The protection of knowledge and inventions is thus advocated by those sectors in economy that are increasingly dependent on the returns on investment that arise out of the payment for knowledge. Here are some examples.

Protection of knowledge and innovations through IPR ensures that companies and other innovators that invest huge amounts of money for R&D are both rewarded in financial benefits from their investments. Innovators, without IP protection, would not be able to recoup their costs. This is the case for the life-science industry for example, where the average expenses are enormous. Pre-tax costs for making and market a new drug are estimated around US$500 million by PhRMA, the US group of pharmaceutical industries. A significant part of the costs needed to develop a single new drug are spent on clinical trials; this procedure is supposed to be taking 50% of the time of the total development. Besides, the time needed to develop a new drug has expanded, from an average of 8.1 years in 1960s to 14.9 in the 1990s (PhRMA, 1999, in Juma, 1999). Industries even say to be financially relying on "successful drugs" (being the investments that leads to the actual commercialization of medicine) for the funding of further research. By protecting their invention, companies thus ensure themselves of the rights of their research findings, and that the profits go to them. Royalties that are paid to the patent holder are also used to do further research. According to recent studies led by PhRMA, investments in the pharmaceutical industry are made possible because of IPR system, and the royalties arising out of the use of patented materials (Pharmacy industry profile, 1999). Of course, the interests of the sector influence numbers.

Not everyone accepts the protection of knowledge, the way it is presented through western-made IPR systems. Besides, there are numerous costs and disadvantages to the protection of information. Let us list the arguments here.

The privatization of knowledge means that the information is not freely available anymore; this has a negative role in the diffusion of information. As patents offer exclusive rights to the titleholder, owners of knowledge are in the position to monopolize the information, leading to a non-optimal dissemination of knowledge, including inter alia a smaller output and higher prices (Primo Braga et al., 1998). This tendency can particularly be observed in the pharmaceutical industry. Protests have been going on against the high price at which essential drugs are being sold, especially in developing countries.

Privatization leads towards rent seeking; as information is perpetually invented anew and is not owned till it is successful, creators could be racing for patents and other ownership rights, wasting capital on costly duplication and R&D investments (Maskus 1998a).

Exclusive rights inhibit imitation of technology. This has negative effects on developing countries, as they will not be able to access the technology as before. Indeed, by reverse engineering and other imitation processes, many developing countries with less financial resources to develop their own technology, have been copying foreign creations. Imitation of already existing technologies has enabled them to use and apply them, and to eventually make products cheaper. According to Sideri (1994), imitation of technology by competitors is beneficial, as it would be possible to build on top of and improve existing innovations, and make those available again. Scholars of all opinions also agree that many of the developing countries have been able to rise up to a certain level of development thanks to imitation. The ironic part of this argument is that developed countries themselves have always extensively been imitating others in order to be able to reach their own current level of industrialization and technology. They thus inhibit other countries to follow the same path as theirs.

In this context, some scholars do make a difference among countries with high and low imitative capabilities, like Smith (1999). According to her, developed countries have a high potential to copy already existing innovations, due to their technological resources and skills. Developing countries on the other hand would have fewer capabilities. Also, not all technologies are as easy to copy as others are. Some technologies do really need the investment, others don’t.

Also, and following the previous argument, costs of enforcing IPR are high. To be able to prevent free-riders form exploiting existing information means that the information has to be kept away from the public until law protects it. In some cases, like software, the product contains a mechanism that disables free riders to copy the technology. Such mechanisms are costly too.

Ethical aspects of the privatization of knowledge also play a substantial role, in particular when it comes to the patenting of living organisms. It is important to bear in mind that those arguments lay underneath much of the opposition to IPR, especially within the agricultural and nature sciences. The whole concept of privatization of knowledge is a substantial argument in the opposition to TRIPs.

We see that the use and need of information has been growing the last previous years, altogether with its increasing protection. Financial benefits are a substantial driving force behind this evolution, and IPR have become more and more a daily discussion within international trade and development agenda’s.

Let us now see how this evolution has taken place and what are the indicators that show this increasing protection.

1. Increasing protection

As a first observation we could state that there has been a tremendous race for patents and other IPR protection over the last couple of years. The number of registrations worldwide of grants for trademarks (an industrial property protection) has increased by a factor of 2.6, from 420.000 to 1.1 million between 1981-82 and 1994-95. For patents, also in the industrial field, the numbers vary from 320.000 to 670.000 in the same period, an increase by of factor of 2. Specifically, the number of patents granted for plant varieties increased from 2500 to 6600 (WIPO in Primo Braga et al, 1998).

In the United States, the number of grants was higher than anywhere else. Over 6 million patents have been issued since the first patent in 1790. Last year, the United States Patent and Trademark Office (USPTO) issued 161,000 patents and registered 104,000 trademarks (USPTO, 2000). It is feared that the US will monopolize creations worldwide.

The increase in the number of patents might be a reaction on the changing legal environment for Intellectual Property protection, according to Kortum and Lerner (1997) (in Primo Braga et al., 1998). The amounts of fields in which patents are applied have also increased such as in biotechnology or the software industry, widening the set of technological opportunities. In the US, the share of value added by knowledge intensive industries has increased from 21% of GNP to 27% between 1982 and 1995 (Primo Braga et al., 1998). An important second factor is the relatively new and extreme scientific discoveries in the biotechnological sector. Besides the media attention for sheep Dolly, other areas such as the Human Genome Project, GMO's, AIDS/HIV drugs and the Basmati rice case have made clear that biotech is the key to huge investments and benefits. The discussions about the correct use of biotechnology have raised international public concern, strengthened by media. The subsequent race for patents has not gone by unperceived, and has made protection of knowledge a hot issue. Demand for IPR has increased in line with the growth of knowledge activities.

Thirdly, and as a consequence of the second argument, there has been a growing importance of IPR in international trade. The overall international trade in goods and services itself has increased in the past few years. More specifically, the trade in high-tech, knowledge-intensive goods has increased; for example, the share of knowledge-intensive or high-tech products in total world trade has grown from 12 to 24% between 1980 and 1994 (Fink and Primo Braga, 1999). New technologies, software, the electronic highway, the web and biotechnologies have in a rapid time become everyday tradable items. The expenses in R&D, which are considered an index for the fraction of resources used in the area of the creation of knowledge, show us the importance of this phenomenon. As access to information is seen more and more as the key to wealth, its protection has become evermore crucial. Innovators and proprietors of knowledge therefore want to protect their discoveries, increasing the reliance on laws defending their cause (Primo Braga et al., 1998).

Globalization of economies and the international trade of knowledge-intensive goods in particular has subsequently led to the spread of IPR in the world, broadening also its geographical coverage (Primo Braga et al., 1998). Since TRIPs, dozens of countries have enacted or are in the process of enacting the Agreement. In the area of agriculture, UPOV members have been growing too.

Given the benefits that arise out of the grants of patents, IPR have become a strategic weapon for corporations (Primo Braga et al., 1998). Corporations would, according to that opinion, file patents to increase their market share in the specific area, and not because of the knowledge that is protected by a particular patent. In the US particularly, the broad coverage of patents (US law allows wider coverage than TRIPs does) ensures that companies can detain whole processes, thereby limiting similar inventions made by competing companies, and thus limiting overall innovation (which is at the contrary of the purpose of patents). The more exclusive rights one company detains, the larger its market share and in turn its potential market value. AstraZeneca’s patent policy is "to seek any available patent and trademark protection for all products developments on a wide territorial basis and in all its major markets" (Zeneca, 1995).

A sixth reason for the increasing importance of protection is the shift of funding for research. Whereas research was originally a public occupation, it has more and more fallen in the hands of privately held companies. According to Primo Braga et al. (1998), the combination of a decrease of publicly funded research and the increase of biotechnology's role in agriculture has enhanced an emerging role for the private sector in the field of high tech research and information.

According to Carlos Correa (2000), the growing economic relevance of scientific research has enhanced a pressure on the free dissemination of knowledge, even within universities, which traditionally provided open access to their information. Contracts between universities and corporations nowadays are common, locking the academy into deals and privately appropriating knowledge and discoveries before they are even made. It results is the patenting of information that is generated by a public institution benefiting from private funding, thereby constraining the free dissemination of knowledge.

In the area of agriculture, The Crucible Group, an international working group on biodiversity and IPR composed of governmentals and ngo’s, finds that one of the reasons of the popularity of IP is due to the fact that the Uruguay Round has recently expanded its trade-related issues, now including goods, services and intellectual properties. Even if the IP issue was new, the texts required fast implementation of the requirements. The inclusion of IP systems for living materials and the possibility to include animals provoked worldwide a number of reactions. Furthermore, the Convention on Biodiversity has created significant debate about the access of genetic resources and the use of biotechnology (The Crucible Group, 1995).

 

2. Conclusion

This chapter has showed us how and why information became an important asset; its parallel ongoing protection even reinforced its market value. Globalization processes and substantial financial benefits have contributed to even more popularity. Also, the character of information itself has changed. A differentiation has occurred, dividing formal and hence specific and expensive knowledge from the informal and traditionally publicly available knowledge. Knowledge in the agricultural sector in particular is an example of the latter. This differentiation an also be found back in the argumentation that supports its individual appropriation as an incentive for new creations. Simultaneously, a clear change in the landscape of management of information has occurred; from an initially public good, humans have made knowledge and inventions marketable, privately owned items.

The exact consequences of the privatization of knowledge are hard to determine. As we have seen above, there are numerous arguments both in favor and against IPR. A balance of costs and benefits are therefore not easy to make. In this context, some argue that it is merely impossible to determine the exact effects of the dissemination of knowledge as they vary over time and countries.

The arguments in favor of Intellectual Property protection described in this chapter have been massively used by the industrialized countries in order to expand the provisions of TRIPs with even higher standards of protection then were ever made in this field before. Arguments for the inclusion of Intellectual Property and in particular article 27.3(b) in TRIPs were based on the fact that IPR would benefit WTO members, including the developing countries. For that purpose, relationships were established between the economic welfare of a country and the level of IP protection, in order to have arguments to support the TRIPs Agreement. In the next chapter, I will make a survey of those arguments, and focus thus more on TRIPs than IPR in general. They will at the same time be refuted and criticized.

IV

Arguments for TRIPs: What do economic indicators say

 

 

1. Introduction

Chapter IV is the second in a row of a part devoted to explain the economic arguments used for the implementation of the TRIPs Agreement.

In the previous chapter, I introduced the economics of IPR and the arguments behind the individual appropriation of information; those explanations were meant as a theoretical background.

In this chapter I will look more closely at the presumed relationship between higher standards of IP protection and a number of economic indicators. The latter are often used in the argumentation around the question if IPR -and in particular TRIPs- are beneficial to countries’ economies and development. The central issues of this chapter are on the one hand an explanation on the role and meaning of technology and investments in developing countries, and on the other hand an attempt to show how all the indicators and IPR are interrelated, by making a survey of different opinions on the subject. This will allow us to understand how arguments are used, but also what information they confer.

I will first briefly present some preliminary information on analyses of IPR systems and then move towards the economic indicators. It is worthwhile mentioning that there has not been extensive work done on this subject. Its rising importance and public interest have nevertheless contributed to an increase in research during the last years.

 

2. Intellectual Property Rights in current analyses

As IPRs are designed to protect knowledge and to regulate the flow of information, it is certain that any change in levels of protection will have economic impacts. Discussions on the need for stronger IPR regimes, advocated by developed countries generally, focus on IPR systems as a whole and the entire spectrum of patents. Literature on the subject merely concentrates on industrial products and manufactures, for which IPR were originally designed. As the inclusion of genetic resources and information as a form of protectable Intellectual Property is relatively new, and that time to show and experiment with economic consequences of the provision was limited, that specific field is rarely mentioned. On the other hand, research that does address consequences of article 27.3(b) of TRIPs is very subject specific. For those reasons, the economic factors that will be analyzed here cover broad ranges of patents.

The economic study of Intellectual Property Rights is complex. Why?

First, IPR are applicable in many fields. This means that they cover a wide range of products, processes and sectors in the economy. They are not a homogenous set of provisions. The only common base is the knowledge they embody.

Secondly, IPR are just one of numerous policies that are implemented in countries. They are often considered as package deals, as protection is usually a component of wider policy issues. Interrelatedness makes investigating IPR alone trivial. It is difficult to isolate IPR from the factors that are deriving from other economical or institutional indicators. Therefore, they are rarely subject of research as stand-alone policies. As a matter of fact, most scholars are very prudent in their recommendations, admitting that research in the past years is hardly enough to draw conclusions.

Thirdly, the significance of Intellectual Property changes with the sector to which it is applied. There is a large distinction between those IPR applied to industrial designs, such as the recipe for a soda and the protection of newly bred plant varieties. According to Smith (1999), Intellectual Property Rights are especially significant in those sectors of the economy where a lot of investment is made to produce the knowledge. High-tech goods therefore are sensitive to IPR and any changes in levels of protection.

Fourth, the measurement of the strength of levels of protection is complex and scarce. Commonly, quantitative studies rely on indices by among others Rapp and Rozek and by Ginarte and Park to measure the strength of IP regimes in different countries. Those indexes were elaborated few years ago, and are still being used today.

Causal relationships between the implementation of TRIPs and other economical indicators are delicate. Whereas protection may influence the behavior of firms and other actors in their search for innovations, it is not said yet that protection is the main reason for that behavior. Besides, and as we will see below, measurement of countries’ welfare are also debated. Apart from discerning IPR from other policy measures, it is also difficult to isolate factors such as investment from research and development, or from the effect on innovation. Actually, all these factors are closely related. They will therefore be discussed altogether.

Thus it seems that establishing a causal relationship between IP levels and any other factor is debatable. Scholars also agree on this topic that more research is needed in order to obtain a more diversified picture of the situation.

Despite of the difficulties to measure and study the economic consequences of higher standards of IPR, countries have used argumentation based on such studies to pressure the inclusion of IPR within the WTO. The aim in this chapter is to show what those arguments are. They will also be criticized.

 

3. Technology and economic indicators

For the purpose of the survey of the arguments for the implementation of TRIPs, I will first give some information on the role of access to technologies and the (debated) need for investments for developing countries as a way to participate in the international exchange of knowledge. In a second part I will look more closely at the role of IPR within the study of economic indicators.

1. Technology in a developing world

Many consider the access to modern technologies a basic need towards development in today’s world. The ease some products and processes confer to consumers, the higher standards of hygiene in factories, the safety of products and not to speak of the recent mobile access to the World Wide Web are all the result of advanced technologies. Industrialized countries have developed a sort of dependency on these technologies for their daily lives. In developing countries though, this access is not automatic but still necessary, as the ability to use technology properly is determinant in comparative advantage. It also creates competitiveness, thereby promoting economic growth and development. The way in which industrialized countries nowadays attract technology and use it is also considered an indicator for the level of development in those societies: Many rich and industrialized countries have a high rate of technology-use and production.

Within the community of advocates for technology, opinions are divided on how necessary and adequate the transfer of western-made technology to developing countries is.

Some argue that technology is a sine qua non for economic and social development. Only through modern technologies will developing countries be able to compete with the industrialized world. For example, Fisch and Spyer (1995) (in Fink and Primo Braga, 1999) find that the production of new technologies is beneficial to both follower and leader countries. Technologies evolve and new generations are developed by follower countries; so according to them, innovation-producing countries have an incentive for constant renewal and progress in the technological sector, which in the end benefits all producers of technology and stimulates economic growth.

Others are more reserved on the positive effects of technology, arguing that if indeed technology had such effects, than it is strange that still so many countries are "underdeveloped" in inter alia that field. Besides, it seems that the access to technology creates and perpetuates social gaps within countries and communities, which is at the opposite of the original purpose of technology access. The lack of technological infrastructure in some developing countries may emphasize the growing dependency on foreign technologies for local development, but maybe also questions the effectiveness and appropriateness of years of efforts to transfer western-made technologies to those countries. In this topic and in others as we will see later, the North/ South debate plays an important role and lies at the basis of disagreements on the subject. Rent transfer to developed, innovation producing countries

As developing countries are mostly net innovation consumers, they will have to pay huge amounts for the use of developed countries’ technologies. Many small innovation-consuming countries fear therefore that stronger IP regimes may only increase the transfer of rents to innovation producing countries (Fink and Primo Braga, 1999).

There are different kinds of technology. Roughly speaking, a distinction is made between embodied and disembodied technology. When it is embodied, it means that the technology is transferred as a part of the product: it arrives together with the technology, be it in the design of the product itself or in the know-how of the migrating expert. A common example is medicine.

Disembodied means that product and technology are first separated and then assembled. Firms license their technology abroad, through protected rights, product designs etc. Disembodied technology creates flows of fees and royalties to the technology providing countries.

2. Innovative activities and measurement of technology transfers

Attraction, access to and use of technologies in developing countries occur through different channels. This transfer of technology mainly takes place through Foreign Direct Investment (FDI). The latter can be considered as a selective and complex component of development aid. Most FDI flows go to countries with higher per-capita incomes, which is at the opposite of traditional development aid tendencies (Gillis et al., 1992). FDI includes besides capital transfer also other resources such as organizational skills, the transfer of experts and technology, human capital and so on. FDI is also said to confer some countries access to world markets; countries producing at competitive costs are enabled through FDI to operate on more international markets. FDI brings thus both capital and know-how. The non-financial benefits of FDI are in fact the most desired part by developing countries.

For developing countries to attract among others technology flows, they thus try to attract FDI; this makes the two factors closely linked. However, this does not mean their evolution follow the same trends. According to Kumar (1997), even if FDI inflows for developing countries have been increasing over the last years, it seems that the share of technology has not grown in the same proportion.

Overall spending on FDI has increased substantially in the last decades. For developing countries, the inflow of FDI has risen from $13 billion in the 1980’s to $30 billion in the second half of the 80’s to $80 billion in 1994 (Kumar, 1996). According to other sources, FDI inflows to developing countries have increased to approximately $110 billion, which represents 1/3 of total FDI inflows. Some countries did not receive any while 4 countries received more than half of these $110 billion, 55%: China, Mexico, Malaysia and Brazil (Primo Braga et al., 1998). The relatively large share of China in FDI inflow for developing countries can be explained through the extensive role of China in the development of businesses in Southeast Asia. It is suggested that China would eventually attract the capital flows (and the subsequent interests) for FDI directed towards Hong Kong and aimed at the East Asian market, without benefiting from any technology inflow (Kumar, 1997).

So, as FDI and technology transfer are related, it seems that even if levels of investments have increased over the past years, it is questionable in what way it has been turned into more technology. So, it is questionable if FDI as an instrument for the measurement of technology transfer confers a realistic image of the amount of technology that really reaches destination countries. Moreover, only a few countries seem to have benefited from the bulk of FDI inflows in developing countries. If FDI were such a reliable indicator, then it means that the countries that have not received any inflow of FDI have not benefited from any technology transfer. This is highly questionable.

Levels of R&D also measure the technological level of a country, as they are considered a good indicator for how much a country spends on the production of new information and innovation, that is "technology output".

Worldwide, the budgets spent on R&D in the last decades have grown tremendously. In 1992, it is estimated that the total amount of R&D spent was around $429 billion. Most of that was spent in highly industrialized countries, especially the United States and OECD countries. Developed countries spent $372 billion (2% of GDP), of which the United States’ share was $167 billion (2.8% of GDP). Developing countries’ share of total R&D was mainly spent in China, Brazil, India and in a few Asian New Industrializing Countries (NIC) (Primo Braga et al., 1998). According to Maskus, the share of developing countries in the global R&D expenses dropped from 6% in 1980s to 4% in 1990s. This could indicate a reverse trend in improvements of access to technologies for those countries. Table 2 shows us specific numbers.

The ownership of US patents is also considered as an indicator for innovating activities. The US has the biggest market for patents; they confer the most exclusive rights in the world, with the longest duration (20 years), have a wide scope and thus guarantee the most stringent form of protection, which is interesting for innovation-intensive firms. US patents also protect innovations abroad according to US patent law.

Receipts from royalty payments are considered as an instrument to measure the amount of exported, disembodied technology, and thus show to what extent countries are suppliers of technology (Kumar, 1997). One comment could be that such measurement only takes into account patented technology, and thus no generic production of medicine for example. But it clearly gives an indication of where financial benefits are made out of the creation of technologies. Table 3 integrates both indicators. Numbers relate to all kinds of technology.

Firms generally applying for US patents are based in industrialized countries: administrative costs to apply for US patents are very high. This also leads to an increasing gap between the countries that have enough financial resources to be able to afford such filing and the ones that don’t.

Remarkable in this table is both the huge concentration of US patents and technology fees in only 10 industrialized countries (respectively 95% and 91%).

The concentration of US patents has changed over the years. Whereas the US held 62,1% of the patents granted in between 1977 and 1982, number declined to 55,5% between 1990 and 1996. Numbers of biotechnology patents follow the same trend. Simultaneously, Japan emerged in the same time from 11.2% to 20.7% (Kumar, 1997).

Participation of some NIC has also increased during those years. South Korea’s share in US patent ownership grew from 0.02% to 0.77% share, and Taiwan’s from 0.10% to 1.43% during that same period. Royalties perceived raised from 9 million US$ in 1987 to 45 million US$ in 1993 for South Korea (Kumar, 1997). In biotechnology, a raising number of patents is being granted in NIC.

Among the developing countries, South Africa, Mexico, Argentina East and Central Europe saw a decrease in their share of US patent ownership. According to the same author, it is unlikely that developing countries other than South Korea or Taiwan will become serious generators of technology in the near future.

Finally, the amount of trade flows is the last indicator that will be dealt with for the survey of arguments. They are also a way to measure participation in international trade, and hence in the potential benefits that they bring along.

Trade flows have increased enormously. This is certainly true for high-tech goods, accounting in the US to 52% of all merchandise trade and growing 17% faster than trade in all goods between 1985 and 1993 (Callan 1996, in Correa, 2000).

The numbers in the above section show some tendencies within the economic indicators that are used to measure welfare and eventually to argue the inclusion of IPR in the WTO agenda.

Generally speaking they show a simultaneously growing amount and concentration of R&D, technologies and innovation in the industrialized countries; also, unequal spread of flows of FDI and technology among developing countries themselves are noticeable. It seems that benefits for the South in terms of technological advances are relative, at least for the last couple of years.

With those numbers in mind, it is now time to analyze in what way Intellectual Property Rights are said to influence those tendencies. That is, we will see in this section in how far it is possible to find a relationship between higher levels of IP protection and the tendencies in technology transfer, R&D, trade flows and FDI described above. In order to do this, I will look at the arguments that are used to illustrate those tendencies, and to see in what way they indeed have something to do with the level of IP protection. The next section will thus again be a survey of opinions from different scholars. I will start by exposing the opinions that say that IPR and economic indicators are linked and that a causal relationship is to be found between the two factors. Then I will present the arguments that counter the previous ones, stating that relationships are not obvious and misleading. The presentation of arguments shows that different sides of one argument can be used in favor and against. It also provides more insight in how arguments are used and how factors characterizing the situation of country are related.

Before starting, it is important to know that generally speaking, arguments in favor of higher levels of IP assume and emphasize the need of technology transfer to developing countries. Without arguing whether this approach is adequate, I will expose the arguments here.

1. The role of IP protection for developing countries

1. Copying technology

As stated in the previous chapter, imitation of technology is the main thing that developed countries try to inhibit when their technology is transported abroad. Costs of among others lost markets seem to be a strong motivation to argue that IPR are needed in order to protect the industrialized countries. The same arguments are used to show that IPR could even be beneficial to developing countries. So it seems, according to those arguments that two parties could win by increasing protection of Intellectual Property. In the paragraph below, I will describe some evidence given by a number of scholars.

As patents regulate access to protected technology, the use of that technology by consumers or other technology-users will be subject to payment and any other conditions imposed by the patent holder. Besides, local initiatives to develop new technologies, building on already existing ones will be more difficult and expensive (Maskus, 1999). This may in turn slow down the process of new initiatives in the development of technologies. Especially small local initiatives will be turned down because of the costly access.

The absence of strong IPR and the subsequent possible threat of copied technology is a reason for not investing in a certain country, according to some. Owners of technology choose then not to enter the unprotected market, and also not to export their goods to countries with weak protection. Hence, the profitability of firms diminishes, and in turn disables the attraction of new technologies by developing countries. The argument is that if the latter had stronger protection, then exports would rise, thereby increasing trade flows, and also enabling inflows of technologies.

As copying technology also means that countries can produce their own and resell products more cheaply in another country, thereby expanding their own market, it disables the original developer of technology to sell it at a higher price. Evidence is thus that this process discourages further flows to developing countries.

According to Smith (1999), the imitative capabilities of importing countries influence substantially the decisions of US exporters. In this view, countries with high imitative capabilities are the ones that have the resources and infrastructure to copy the technology. A simultaneous market expansion (increasing trade flows) and enhanced market power (decreasing trade flows) would have opposite effects, giving no conclusion about on whether strong IPR increase or decrease bilateral trade.

A lack of strong IP regimes in the importing country would discourage US traders from exporting their technologies and products, if that country had imitative capabilities. Strong IPR would "enhance the market power of US exports in countries with weak imitative abilities, by ensuring US monopoly over the exported technology and products". But, at the same time, IP regimes stimulate market expansion: the costs involved in preventing the imitation being copied by importers are significant. Implementation of strong IPR, discouraging importing countries from copying through exclusive rights, could reduce these costs, enabling more exports, and expanding the market.

The inability of copying technology is a substantial argument in the discussion around IPR. The rights the latter confer contribute to even more concern for developing countries. Let us see why.

Technology itself and the products in which it processed will become more expensive: patented technology means that with every use of the technology or the product, royalties should be paid, making it more expensive for technology-consuming countries. Higher royalty payments are a deep concern for developing countries often lacking sufficient resources, and might even exacerbate already negative terms of trade and balance of payments positions. According to Correa (2000), the financial resources spent on royalty payments could have benefited local investments in R&D.

Besides, owners of technology are in the position that they can refuse to transfer their technology, thereby discouraging and blocking further industrial initiatives. According to studies of the United Nations, industrialized countries tend to sell more and more embodied knowledge, instead of transferring directly the technology to countries through foreign investment or licensing agreements. In turn, this could lead to more exports from developed to developing countries, meaning also less opportunities for developing countries to access technology, while worsening financial problems (Correa 2000).

The strengthening of IPR may also result in the restriction of imitative practices, which may slow down significantly the process of catching up with technology. The argument thus stating that developed countries are better off with stronger IPR is therefore trivial, as technology becomes more expensive, harder to copy and increasingly embodied. According to Carlos Correa, the strengthening of IPR may even have a reverse effect on the access to technology for developing countries. This barrier may in turn even block or slow the process of industrial development.

2. Technology, investments and trade flows

According to industrialized countries' arguments, stronger IP systems are supposed to enhance investment flows and technology transfer; in turn, these investments would allow more equal participation in the international flow of knowledge, enabling all countries to have better access to global economic development. For example, Primo Braga et al. find the level of IP protection influences decisions on FDI. The findings are based on surveys of multinational corporations in various industrialized countries. However, the impact is different according to the sector in which the corporations are active: It seems that the pharmaceutical and chemical industries are more sensitive to the IP conditions in a host country than other sectors are (Mansfield, 1994 and 1995, in Primo Braga et al., 1998).

Also, Maskus (1999) finds that Mexico benefited from an increase of import of manufacturing goods in the 1990s, which is possibly due to its participation in NAFTA that required it to upgrade is level of protection of Intellectual Property. Maskus and Penubarti (1995) also find that higher levels of IPR protection have "a positive impact on bilateral manufacturing imports in both small and medium developing economies".

It seems that IP might have an impact on investments flows, according to the above-mentioned opinions. But, some argue that it is unlikely that stronger IPR will enhance technology transfer. Panagariya (1999) mentions that if that were a serious argument, than developing countries would have implemented IPR long ago, as the access to technology is crucial to their development

Besides, causal relationships between FDI and IP protection are not obvious: If there were a relationship then it would suggest that amounts of FDI would be proportional to the level of IP protection in a country. This is not what researchers have been noticing. China has received a fair amount of FDI, in Thailand and Indonesia FDI inflows have even increased, while in all three countries, levels of IP protection are low (Panagariya, 1999).

Previous investigations present the same conclusions. Relying on earlier research done by Kumar (1996), it seems that Frischtak (1989) and Bosworth (1980) found inter alia that IPRs do not significantly influence the pattern of FDI inflows and technology transfer. Still relying on Kumar’s information, Ferrantino (1993) found more recently that "there is no discernable impact of a country’s adherence to IPR agreements on arms’ length exports of subsidiary sales such as FDI of US firms".

UNCTAD too concluded that IPR are relatively unimportant in determining the level of FDI in a given country (ActionAid, 1999a). As discussed earlier, the enforcement of IPR may lead to the production of products and services that embody the technology in the home country and promote the export of these, instead of production in or near markets with strong IPR systems. This may actually lead to a decrease in FDI settling the flows, and the promotion of exports to developing countries. TRIPS may thus actually reduce the flow of FDI, if other incentives are lacking (South Center, 1997).

Concluding on FDI, we saw that there are a number of arguments that plead in favor of stronger IPR, as they could enhance the inflow of technology in developing countries. The use of technology would in turn confer them a substantive place in the overall trade of technology and economic development. On the other hand, the increased embodiment of technology, the higher prices, and the disability to copy technologies are big disadvantages for developing countries.

Disagreement on real effects may not only be due to the different interpretation of numbers. It also seems that in some cases, research is driven by ideological motives; the opponents of IPR find no relationship or find that there is not enough reliable evidence, while proponents of higher levels of IPR find an eventually positive relationship.

The question of the relationship between IPR and investments in R&D has been more extensively argued. Considering the amount of R&D spent worldwide, some argue that low levels of IP protection can be detrimental to developing countries. Simran Trana for example suggests that the simultaneous weakening of IPR in India and 40% drop in R&D in the 1970s shows the evidence of the need for strong IPR systems in developing countries to enable them to invest sufficiently in R&D (Simran Trana, undated). A recent commercial by Pfizer states that it will not distribute the medicine Viagra in India because of lack of IPR and that if India had stronger IPR, then it would benefit from R&D. It is seen as India’s fault that the country has no access to modern medicinal care (which is socially unacceptable and thus very smart to put in a commercial). Therefore, Pfizer argues that public policy should focus on higher standards of IP protection. According to this same commercial and based on interviews with the Worldbank, the most influential factors regarding decisions for investment in foreign countries are the tax levels and the protection of Intellectual Property (Clemente, 2000).

Also, some argue that "IPR protection has a small positive impact on economic growth across countries, a result attributed to the role of IPRs in fostering R&D investments" (Gould and Gruben, 1996, in Primo Braga et al., 1998).

Some sectors are indeed more dependent on returns on their R&D investments than others. Pharmaceutical companies in particular are very interested in higher standards of IP protection, because they make copying unlawful.

Others stress that the resources collected from royalty payments can be used for new research. It can be doubted though, if research made from royalty payments returns to the developing countries.

Whereas direct relationship between higher standards of IP and higher levels of R&D are still subject to discussions, the US, has meanwhile found a way to resolve the problem. It has, for the purpose of compelling high standards of IP protection worldwide, established a law (Special 301) stating that countries of which the legislation can be proven as substantially hindering the industry's profitability and long-term R&D efforts can face trade sanctions (see Box 5). Such aggressive foreign policy, aimed at protecting the national market has raised protests worldwide. Several countries have since Special 301 introduced patentability of pharmaceuticals.

Correa (2000) says that even if patents do increase R&D in developing countries, the royalties that have to be paid make investment too costly and the technology therefore inaccessible. Besides, if payments are high, they are likely to discourage local incentives to create new technology, especially in the countries where there is already a lack of technology and the infrastructure to produce it.

UNCTAD has argued that it is very unlikely that stronger IPR in the area of pharmaceuticals will increase investments in R&D because most developing countries lack the financial, human, and infrastructure resources to be able to invest fruitfully in life sciences (ActionAid, 1999b). The exclusion of patentability of pharmaceutical products was an intensively used way of accessing the basic skills in complex technologies, before investing in R&D. The TRIPs agreement ends that process, prohibiting developing countries to access technology. However, this argument does not match with the fact that much research is dome in NIC and that a growing number of patents is issued in those countries.

The claim that IPR will enhance more innovation might be applied to industrialized countries, but it remains unproven that the benefits will also reach the developing countries. Even if IPR were to stimulate innovation, it is unlikely that developing countries will benefit from the technologies because of their higher prices and misplacement in developing economies. This argument is especially of meaning in the medical field. According to Panagariya (1999), IPR will not stimulate research in tropical diseases. She finds that the innovation increase-argument is based on the assumption that without TRIPs there will be less research. "Needless to say that the search for the cure has not been any slower in the absence of IPR in developing countries". Besides, as long as the investment is recouped, research will not be inhibited by weak IPR.

Although demand for research and development in protecting countries is higher than in non-protecting countries, it does not mean that higher level of protection do indeed attract R&D investments. Primo Braga et al. (1998), it seems that there is no real consensus whether stronger IP protection does benefit investments in R&D. Some opinions, originating from the royalty-payments-dependent sectors argue that patents are a sine qua non for further research. If no protection is guaranteed, than threat of imitation and absence of fees could discourage investment in such countries. Others find that R&D investments, even if they are facilitated by more IP protection, are beneficial to the developed countries that are conducting the bulk of the research. Sideri (1994) emphasizes this view by stating that "even if an effect is shown, it is not certain that the resulting innovations will be relevant to developing countries."

During the Uruguay Round negotiations, the US and other industrialized countries argued that differences in levels of IPR formed a barrier to free trade. This lead to the inclusion of Intellectual Property in the WTO and the subsequent requirement of minimum standards. One should think that the international regulation of standards of IPR and the implementation of higher levels of protection should therefore have a positive effect on trade flows.

As with other indicators, scholars are divided on this question. Juma (1999) says that economic theory is inconclusive about the final effect of stronger IPR on international trade. Some differences can be discerned though in the argumentation.

Stronger IP regimes may also have negative effect on the amount of goods traded.

The greater market power that comes along with strict regimes of IP and a subsequent imitation-safe environment may lead firms to reduce their sales in a foreign market.

Another way of increasing exports of technological assets is to link those assets to FDI or to license them, instead of exporting products to a foreign market. This would reduce trade flows. So, assets can either be linked with FDI and thus increase the amount of FDI inflows while simultaneously decreasing trade flows; the other way round implies that embodied technology is being exported, increasing trade flows but decreasing FDI inflows. It all depends how technology flows are calculated.

Like stated before, the influence of IPR is also dependent on the kind of goods traded. Even if some research points out that there is no real effect on trade flows generally, this does not seem to be applicable for all sectors and products. Fink and Primo Braga (1999) find that "IPR are not found to be significant for high-tech trade flows." This may apply for the biotech sector, and thus contradicts earlier finding by others.

Also, some say that as IPR do stimulate innovation in the source country, it is likely that it will positively influence trade flows. However, researchers also find that "the destination countries lose from tighter protection whereas the source country is better off" (Fink and Primo Braga, 1999).

The Crucible Group, 1997 finds in this context that "the south is not yet a market for the biological inventions made in the north. In a sense, developing countries have been caught up in a market debate that is not yet relevant for them. With this in mind, they should not be pressured to adopt laws or practices that may subvert their national self-interests".

Many doubt the arguments in favor of protection. At the basis of such doubts lie many questions of the appropriateness of a western look on developing countries’ needs. Some of those were already mentioned, dealing with the increasing dependency of developing countries on industrialized countries technologies, funding and know-how. In the arguments below, that counter the ones above, many of those doubts can be found back. They also emphasize the difficulty to measure relationships between levels of IP protection and the economic indicators.

1. IPR: a barrier to free trade or resisting competition

All the question raised above bring to a wider problem, being the appropriateness of considering IPR a trade-related issue, if potential benefits are measured with the above-mentioned economic indicators. In the paragraphs below, I expose a number of arguments.

According to Panagariya (1999), a subject should meet three requirements before being included in the WTO: its link with trade, its contribution to overall welfare and in particular the welfare of all WTO Members individually. (Questions can be raised on the way welfare should be measured and judged). Most of these conditions are mentioned in the preamble of the WTO text, as goals to be achieved by the organization through its agreements. The author questions the arguments that have lead Intellectual Property to be included in the WTO. The WTO as a vehicle to individual welfare is particularly doubtful.

The second remark refers to the wideness of the impact of TRIPs. With overall globalization and the "package-deal" effect of any transaction around the world, it is increasingly more difficult to isolate the separate effects of different policy measures. This argument has already been brought up in the beginning of this chapter, but remains of important concern. TRIPs is one factor out of many that influences trade flows, investments, technology transfer and innovation. So the isolation of that factor is contentious, if not impossible. The study of TRIPs can therefore be only an approximation and guess of how things can evolve if stronger IPR are implemented.

In this context, some scholars question if TRIPs can be treated as simple enforcement measures. According to Juma (1999), this is not appropriate, as "debates on TRIPS are part of broader questions regarding the role of technology in development." Other critics argue that even if the level of IPR were to determine now economic indicators such as technology transfer, investments etc., at the moment at which IPR will be almost equal when LDC’s have upgraded their protection, "other factors will determine the nature of technology information, and trade flows" (Correa 2000). For this reason, it seems that the impact of TRIPs on economies cannot be determined exactly, nor can the increase of protection serve as a valid guarantee for economic development.

Another question of concern is the coverage of the TRIPs Agreement. "All fields of technology" does not allow anything to be excluded. Bearing in mind the increasing importance of technology today, and the number of products that contain technology in some way, it also means that an increasing number of products will be included in that provision. A same kind of protection is required for such different items as a sewing machine or a piece of altered DNA in a plant. Lester Thurow (1997) referred to it as a "one size fits all" system.

Besides, the geographical coverage of TRIPs is substantial too. The disparities among the world’s countries, be it culturally, financially, economically or technologically raise the question on whether one agreement for all these different people is appropriate or even acceptable; TRIPs is obviously not shaped to meet the needs and wishes of all countries. Different levels of development and infrastructure add to the questionable inclusion of minimum standards of protection for all Member countries. Thurow argues that "The Third World’s need to get low cost pharmaceuticals is not equivalent to its need for low cost CDs."

Panagariya adds to that that the argument to include TRIPs was that it was supposed to outlaw free riding behavior. Lower standards were in that perspective considered free riding. But with different levels of economic development and infrastructure, costs of innovation and levels of IPR, is free riding the appropriate naming?

A fourth question concerns the end purpose of patenting material. It is a debated question on what the final intention of patents is. According to Maskus (1998a), patents are meant to protect technology embodiment in a new product or process, rather than protecting the knowledge itself. The intention of IPR is thus to create a protected market position, in which IPR are used as rules to regulate the terms of competition, rather than a mechanism for creating monopolies.

According to Prof. Regal of the University of Minnesota, the start of the patenting process in the area of agriculture goes back to several years. Whereas officials in Washington DC were seeking to control the market over biotechnology, they did not expect developing countries to be able to imitate or produce technologies equal to US’s. They then realized that through patenting, they could still control the export of technology rich products. According to Phil Regal, patenting is thus a way for US government among other countries, to ensure power and market share in foreign countries. Regal and other authors refer to this practice as neo-colonial, as it is a renewed way of developed countries to exploit countries to have access to resources they don’t have though "need" for their economies.

Finally, some questions can be raised about the fairness of TRIPs: Economic analyses advocating strong IPR in fact advocate a monopolistic market system, that is known for its shortcomings towards consumers and therefore sensitive to protect Juma (1999).

 

2. Conclusion

The survey of the impact of stronger IP protection on economic indicators enables us to draw a number of conclusions.

First, scholars are inconclusive about the effects of higher standards of IPR. Even if there is a relationship between on the one hand levels of R&D, FDI, trade flows and higher standards of IP protection on the other hand, then it is still not certain that the link is causal; all scholars agree that more empirical evidence and extensive research in that field are needed in order to judge, if possible, real impacts. Some nuances in opinions could be highlighted, which enabled a broader perspective on the subject.

Second, the different economic indicators can hardly be distinguished from each other, in their potential influence on IP levels. As technology transfer occurs mainly through Foreign Direct Investment, which has in turn influence on the amounts of R&D spent, it is barely possible to find an adequate segregation and quantification of what the impact is of IPR on economies, if those are measured with those same indicators.

Thirdly, as some sectors of economy are more sensitive to the level of IP protection than others, it is trivial to draw conclusions too broadly, where some effects might only occur in specific sectors. The point of view of the authors is determinant for their opinion. In this context, the high-tech sector seems more eager to implement higher standards.

Fourth, it is clear that there is a real discussion on how imitation could benefit developing countries to facilitate access to technology, but thereby "violating" the rights of innovators. Again, many argue that imitation has been the path to development for all countries, including the actual industrialized ones.

The overall economic indicators do not give a satisfactory conclusion on the potential benefits of higher levels of IP protection. Too much is uncertain about real impacts of higher standards of IP protection. Also, too many factors that can contribute to an evaluation of the effects of IPR are left out during most studies. Therefore, I think that it is inappropriate to draw conclusions on the effect of standards of IPR on economic growth and participation to international trading market. Besides, the economic indicators I have studied are only one part of the analysis of the impact of IPR on economies. Welfare and growth are dependent on more factors than the ones listed above.

It is why in the next section I will look at other issues that are influenced by IPR, and that are often left out of studies. These issues raise questions about the social costs that TRIPs brings along and about the specific situation of developing countries: both are not taken into account in the Agreement.

V

Oppositions to TRIPs

1. Introduction

In the previous chapters, I have looked at the arguments that have been used for the inclusion of IPR in the WTO. Those arguments were merely focusing on the presumed relationship between economic indicators and the level of Intellectual Property protection conferred through TRIPs. The arguments stated in that chapter helped us to see how different parties build their opinions, and also how relative those opinions are. Whereas some argue that more protection is beneficial to both developed and developing countries, others find that relationships between IPR and economic indicators are far from obvious and even if they are, then it is doubtful that they benefit developing countries. Because of this triviality, those arguments do not fit when pleading in favor of TRIPs. Moreover, other factors that often are left unmentioned contribute to the opinion that higher standards of IP could be detrimental to developing countries. In particular, arguments against article 27.3(b) are numerous. In this chapter, it is the aim to expose those arguments and to present the potential negative consequences of the implementation of TRIPs. This chapter thus also emphasizes the need for other IP protection than those suggested in TRIPs.

 

2. The "industrialized-countries-agreement"

The major criticism on the TRIPs Agreement is that it was largely shaped by and to the benefit of developed countries. Many rejected the argument that weak IPR regimes constituted a barrier to free trade. Half of the truth is being hidden, changing the map of benefits. For example, US companies claimed that developing countries owed them huge amounts due to inadequate protection. Costs would range from US$ 200 million a year for the agrochemical industry US$ 2.4 billion in 1996 in the pharmaceutical industry. What was left out of the arguments is that if developed countries were to compensate the developing countries for only 2% in royalties of the $15 billion global seed industry sales and 20% for pharmaceutical products derived from Indigenous plants and knowledge (that is thus where Traditional/Indigenous knowledge and/or resources from developing countries are the basis for the development of "new" material), then they’d owe the developing countries no less than $5.3 billion (RAFI in ActionAid 1999a).

 

Box 6. Who owes money to whom?

 

 

 

 

 

 

Source: Erdos, J.E., 1999

Opponents to TRIPs say it is only meant to protect plant breeders, biotechnologists and industrialized countries. As most of the genes and plants used for research originate from developing countries, companies are highly interested in the access to genetic resources. This balance distortion during the negotiations has been criticized. As developed countries have mostly shaped the TRIPs agreement, it is more and more seen as an instrument that these countries can use to protect their own interests. According to Tansey (1999), a few powerful countries that were themselves heavily influenced by the corporate sector dominated the WTO. The industrialized seed sector in particular, including biotechnologists, breeders and seed industries has been lobbying strongly in order to achieve protection through TRIPs.

Moreover, the agricultural practices of the countries shaping TRIPs differ significantly from the agriculture in developing countries. In most of the industrialized countries, farmers are only a small percentage of population, seed supply and breeding is a commercial activity; in developing countries however, farmers are a much more important part of working population; they also practice subsistence farming, relying on domestic tools and seed supply, exchanged and conserved within a small community. Developing countries argue that western frameworks do not work properly in developing countries. In fact, it is said that TRIPs has been designed as a copy of the already existing protection of PVP in developed countries. The idea that "one size fits all" (Thurow, 997) is rejected by many parties. Disparities in culture, levels of economic development, geographical and demographic conditions and ways of living do not bare the implementation of a uniform, far reaching "agreement".

The free-trade argument is questionable too. The rhetoric of the developed countries suggesting that the purpose of trade negotiations is to liberalize policies in order to promote trade is negated in the case of TRIPS; in the TRIPs case, the developed countries' objective has been to create restrictive barriers to trade in genetic resources – that is, by monopolizing resources through the use of patents. Those who say that access to technology remains fully possible, in exchange for royalty payments, of course counter this argument. As we have seen earlier on p.45, the bulk of patents is attributed to foreigners from industrial countries. TRIPs might be the way to secure this comfortable position.

 

3. Article 27.3(b)

More than a conflict of interests, article 27.3(b) of TRIPs has raised serious concerns worldwide. The article requires inter alia patents on plant varieties. Opponents to this practice refer to it as the "patents on life". A serious number of problems arise out of this controversial requirement. The impact of the article on societies and ecosystems is widely contested or ignored by many parties, also.

Let us see what the discussions are about.

1. Jurisdictional interpretation

In chapter I, I gave a short clarification on what should be patented and what may be excluded from patentability. Lack of precise definitions of the terms used in the article, and the provision have raised many discussions. Apart from the ones that think that any living material should escape any requirements for patentability, opinions are also divided when it comes to the patenting of biotechnological processes and products. Some find that the whole concept of patenting a product in which a gene has been added/changed/relocated should not be patentable because both the gene and the product existed beforehand separately, thus that the product is not new and therefore not eligible for patentability. Egziabher (1999) states that if somebody puts the carburetor of car A into a different kind of car B, he can not patent car B. Similarly, adding/removing DNA to/from an organism only reorganizes something already existing, and does not create anything de novo. This is disputed, as introducing a gene into another living material adds genetic information to that material and thus creates something new, that did not exist beforehand in that state and has new properties. The whole concept of biotechnology is to introduce a gene from an organism into another one. In the case of Bt cotton for example, the pesticide Bt is taken from another living material and introduced into a variety of cotton. The Bt cotton is patentable because it is a new variety that needed an inventive step to exist. Also, some add that the process of finding the function of a specified gene requires an inventive step.

Absence of definitions has also led to confusion. For example, as article 27.3(b) mentions "essentially biological processes", it implies that there are non-essentially biological processes (which in turn would then be patentable). No definition is given of essentially biological. What is very likely to happen is that processes will be filed for patenting, then will be attacked in court and the outcome of the trial will decide what is an essentially biological process for the production of plants and animals. For now, one could think of the reproduction process and photosynthesis.

Protests have risen among the opponents that the distinction is hard to make between what are essentially biological products that are non-microbiological and non-biological on the one side and the rest on the other side. Opponents feel this distinction has been introduced not because it already exists in common biology terms, but because it allows one day to patent micro- and non- biological processes for the production of plants and animals.

It is to be noted that protest and advocacy groups are not the only ones that have opposed such issues; it is also the opinion of many countries of which Kenya.

Whereas exclusion from patentability is sometimes allowed by TRIPs, it is the other way round in other countries, such as the US. As said before, many firms do patent their innovations there; the consequence is that material is being patented under US conditions instead of the lower conditions defined by TRIPs. Opposition thus also focuses on what is commonly being patented in the US. As said before, "members may exclude" implies that they are still allowed to patent without being subject to trade sanctions.

In the field of agriculture, opposition has been expressed about the concept of ownership over a next generation of a living organism. Krimbell (1998) indicates that "opponents note a fundamental difference from the transfer of ownership of seeds or specific animal breeds without any claim on their progeny. This involves owning biomass only and is a practice as old as commerce itself. The retention over the regenerative capacity of organisms, while selling their biomass, is entirely new and extends ownership beyond society’s accepted limits".

2. Ethical concerns

Many people fundamentally believe that biodiversity is a cultural and ecological heritage meaning it should stay in the public domain and therefore not be privatized. In most societies, and especially in the traditional communities of non-western economies, nature is seen as a gift of nature that should be taken care of. The wide range of variety of plants and agricultural seeds is the result of a process that started 10.000 years ago, at the time of the organization of farming systems. The tradition of cultivating and sharing seeds, keeping them publicly available, has been the basis ever since for today's biodiversity and food supply. Free exchange of seeds is not only an economic activity; it also means the exchange of information and knowledge, of culture and traditions. As seeds are the very source of food and for human life, the privatization of these seeds is considered as the privatization of life, which is contrary to any past efforts made in this field.

Another argument is that the claim on human invention violates widespread religious and cultural traditions, in which life is considered a gift. Plants and animals in this context are made by a divine creator, and therefore need to be respected; the human’s duty is to preserve them, in such way that future generations can benefit from them. The loss of biodiversity due to the replacement of genes overlooks this principle. Besides, the whole principle of stewardship tells us that humans should preserve creation, even adapted or modified. Using our technological capability is therefore only ethical when we respect the relationship with other human beings and creation itself (CIDSE, 2000). Thurow (1997) states that "The idea that people should be paid to be creative is a point of view that stems from the Judeo-Christian and Muslim belief in God who created humankind in His image. It has no analogue in Hindu, Buddhist, or Confucian societies. There are real differences in beliefs in what should be freely available in the public domain and what should be for sale in the private market place".

In this same spiritual context, it is worthwhile noting that plants and other living material are considered to possess intrinsic values, which have been and still are recognized by many people, and celebrated in numerous traditional communities. Privatization of living material, as it only focuses on the commercialization of the enclosed information, neglects these values that are at the basis of cultures and religious festivals around the world. For example, in India, some rice varieties are used in combination with other crops as a symbol for blessings during religious ceremonies. Rice, but also coconut, chickpea, bananas and ginger are used for these purposes (Shiva, 1999).

3. Conservation of genetic resources

A major concern about IPR in the hands of private owners and companies is that the latter encourage commercial agriculture, and the production of varieties meeting the DUS criteria. It is a fear that IPR could in a way contribute to uniformity, enhancing erosion of resources, thereby threatening global food security. The industrial, more "efficient" way of farming that companies wish to practice is pushing farmers increasingly to grow uniform crops. As mentioned explicitly in chapter one, the replacement of diverse crops by uniform ones is the first reason for genetic erosion, threatening biodiversity, which in turn threatens food security.

4. Human Rights

Ethical and jurisdictional issues are not the only frameworks for critiques about article 27.3(b). By granting a patent on a plant variety (a product), the holder has the right to "prevent third parties not having the owner's consent from the acts of: making, using, offering for sale, selling, importing for these purposes that product" (TRIPs, article 28). The application of patents, by privatizing genetic resources, legally disables the rights of farmers to control their own seeds. This is found to be in contradiction with Human Rights, as would constitute a direct violation of Article 1 of the Covenant on Economic, Social and Cultural Rights, which stipulates that "In no case may a people be deprived of its own means of subsistence." Earlier in time, the Human Development Report had raised questions on the social effects of TRIPs. Recently, the Commission on Human Rights of the United Nations adopted a resolution "calling into question the impact of WTO’s TRIPs Agreement on the Human Rights of people and communities, including farmers and indigenous people worldwide" (Kothari et al., 2000) (see box 8). It is a major victory for the opponents to TRIPs that such a high body raises questions about the issue.

Aside from Article 27.3(b), other factors have raised concern about implementation of TRIPs. The arguments are discussed below.

1. Higher Costs and other developments

Higher costs for developing countries are a major concern of the implementation of TRIPs. These costs apply for technology inputs, but also for primary commodities and administrative purposes.

The threat of higher prices is substantial; different developments and factors contribute to the idea that higher prices are very likely to happen.

1. Costs of patents

Costs for the protection through a patent are very expensive. Aside form the pure administrative costs to file a patent, many developing countries do not have the infrastructure and the expertise for a Patent Office.

Challenging a patent through court or the Dispute Settlement Body (DSB) of the WTO is a costly process too. The probability to win such a challenge is reduced for southern countries. Besides, it costs much less to defend an application if challenged, placing industrialized countries in a favorable position. No need to say that most developing countries are for this reason reluctant to implement higher standards. These two elements (especially the second) contribute to the tendency that developing countries do not have the same chances than developed countries to protect their material.

The implementation of the TRIPs Agreement itself and all the administrative work that comes with it will put high pressure on the developing countries. Many countries have not developed administrative systems to manage a patent office. Moreover, the enforcement of Intellectual Property laws, in a way that developed countries accept is as "effective", will even be more expensive, as their standards are very high compared to the possibilities of developing countries. Thus, transactional costs are quite high for them.

The threat of higher costs for agricultural inputs and of establishing an effective Intellectual Property system in poorer countries eventually means that the implementation of patents in those nations will be slower or will not happen at all. Also, such tendencies together with access restrictions to technology and royalty payments are likely to emphasize the already existing deep inequalities between the North and the South.

Maskus (1999) finds in this context that the higher costs for developing countries to protect their technologies, the limited diffusion of protected knowledge, the inhibition of imitation and the more difficult access to technologies are likely to increase the gap between the technology have and have-nots. Besides, the privileged bargaining position of foreign firms will increase even more as their investments will bypass local investments. This might in turn lead to the exclusion of local firms, in those areas where growth possibilities are the highest, reinforcing even more the inequality in resources and opportunities between North and South (ActionAid, 1999a).

Also, access to protected technology will only be possible for the wealthy. Others will have to wait till the patent expires, which is +/- 20 years. This means in fact that patents perpetuate social differentiation.

2. Mergers and acquisitions

A development that has caught attention in the patents- field is the recent mergers and concentration of power in capital-intensive sectors, in which industries produce high-tech goods, medicines, industrially bred plant varieties, seeds and other embodied technologies. Quasi-monopolistic markets are very likely to turn up the prices. Because of the vital character of such products, it is important to allocate them more cheaply. Under patent protection though and in the hands of only a few companies, they will remain expensive. In some cases, the patented product is withheld from certain markets altogether.

Mergers and acquisitions also have effects on choice of products and dependency of farmers on providers of agricultural inputs. During the last decade, the seed industry has experienced tremendous changes. Mergers of big industries have reshaped the distribution and control in the sector. The total private seed supply is now in hand of only a few companies. According to RAFI, 33% of the seed trade worldwide, valued at $23 billion, is controlled by 10 companies. The three biggest companies account for 20% of global seed trade. These same corporations (the top 5 of "gene giants") control the tools to pesticides and agrochemicals, that is 91% of the 31$ billion agrochemical market (RAFI, 1999). The simultaneous sale of Monsanto's herbicide Roundup and the herbicide resistant, genetically modified Roundup Ready soybeans is a well-known example of how corporations impose themselves on the seed market. The mergers allow a single company to control the whole production process of a plant, from breeding to sale, via cultivation and pest control. Interdependency of products, such as the Roundup example, is even said to enable companies to sell more of both (Shiva, 1999). Moreover, the sale of "terminator technology" sterile seeds, oblige farmers to buy new seed each year, from the same company. Other farmers, signing contracts with companies, are pushed to keep the same supplier during many years, otherwise facing lawsuits.

The concentrations of power in the seed sector have raised concern about among others the dependency of farmers for their food supply on big companies. Also, the strong tendencies of these companies to promote uniform crops are considered a threat to biodiversity and food security. All these factors do harm developing countries, as they are increase dependency on developed countries, instead of promoting their self-reliance. Corporations themselves advocate inter alia that the specialization in a defined sector benefits research in that field, which will, in the long-term benefit also developing countries.

The verticalization of the food sector also enables the US to enclose farmers in the chain, making them a dependent part of an industrial process. Farmers are in this way disabled to decide what and how they want to practice farming, as the industry decides on behalf of them. This also implies that the food chain is falling into the hands of a quasi-monopolistic sector, which has a lot of power in all fields that are linked to food supply. It is the question if this evolution is desirable

3. Patents on pharmaceuticals

Patents on pharmaceuticals also have caused heavy reactions. The relatively high prices that are charged in developing countries for essential drugs are of serious concern. As medicine fall under the term "all fields of technology", countries are now required to patent their drugs. The National treatment clause of TRIPs also precises that no difference should be made "whether products are imported or locally produced". Countries that had a tradition of not patenting their homemade drugs -and hence distribute them cheaply- now need to provide protection. This will increase prices.

Empirical studies already show the difference in prices between patented and generic drugs. For example, in South Africa, anti- HIV drugs made by pharmaceutical corporations are sold for 7 times the price of the generic drugs (IP-health, 2000). High drug prices make it impossible for many people to afford them.

It is feared that prices of patented drugs and the amount of patented royalties will even increase with the strengthening and the prolongation of the patents’ holder monopoly. In the US, corporations are lobbying on high political levels to obtain prolongation of patents. Also, clinical trials are a common practice, in which companies invest a lot.

In the same context of patents on pharmaceuticals, a major concern is that the race for patents leads to research that is geared towards yielding high profits and recouping the investment, skewing research towards areas where the benefits will be high, e.g. highly specialized drugs, and not in the area where it is socially the most needed, like tropical diseases. Pharmaceutical companies, knowing that selling drugs in the developing countries is less lucrative than in developed countries, will focus on development of drugs that benefit the most. In this context, the "WHO claims that of the $56 billion spent globally on medical R&D in 1994, only 0.2% for pneumonia, diarrheal maladies and tuberculosis, which account for 18% of global illnesses and are found overwhelmingly in poor countries" (Maskus, 1999). Ruttan adds: "My sense is that the biotechnology based pharmaceuticals that are on (or coming on) the market are primarily responsive to the health concerns of the rich, the old and the fat" Ruttan (Ruttan, 1997b).

 

Box 9. Press release- Comments on Patents on Pharmaceuticals by UN

 

 

 

 

 

 

 

 

 

 

As we can see, differences in interests also shape the health sector: Benefits and financial ease to conduct research on the one hand, versus a human right of access to medicine and good health. Therefore, a solution needs to be found to balance the short- term interest in profit maximization and the long-term interest in innovations that are needed of global healthcare.

4. Knowledge in the private domain

Concerns about privatization of knowledge have been raised earlier. In addition, it is feared that key technologies and information will not be available anymore in the public domain. Concerns have been expressed on the independence of public-led research that is funded by the private sector. Indeed, contracts between universities and private companies seem to be a trend; universities, eager for funding, agree not to disclose information in exchange for financial support. Many scholars have noticed that the access to free information is becoming more problematic.

Some argue that increasing protection is making public research more and more difficult, as much of the information is in hands of the private sector. In their view, the royalties that have to be paid to obtain information hinder public research. This argument is disputable, as normally the researchers’ exemption allows researchers to use other people’s creations for their own, without having to pay any royalty. Nonetheless, opinions agree on the fact that information flows from the private to the public sector have decreased since the start of the race for patents.

In the agricultural sector, things have evolved at a rapid pace too. As mentioned earlier, knowledge and technology have become driving forces behind increases in agricultural yields in the past decade. The research done in that field has been subject to many changes that do affect a contemporary perspective on IPR.

Historically, agricultural research has mainly been funded and conducted by institutions of the public sector. National Agricultural Research centers (NARs) and the Consultative Group on International Agricultural Research (CGIAR) have been leading institutions in this area. The Green Revolution also has mutually enhanced their participation in the development of new techniques and varieties. During the mid 1980s though, things have taken another course. Public funding decreased substantively, and activities were fostered towards private research centers. According to Primo Braga et al. (1998), more than ½ of the R&D investments in agriculture in developed countries are made by the private sector. The more or less simultaneous shift of agricultural research from public to private has changed the perspective on protection too and enhanced the increased reliance on IPR systems. The current discussion within CGIAR to patent genetic material that was previously not patented reinforces the trend towards protection, and the struggle for the control of knowledge. Some people argue that, even if they are in principle against patenting material, they consider it necessary in order to keep resources out of the hands of the private sector (New York Times, 2000). Patenting has thus also become a matter of public institutions.

5. Social consequences

It is important to mention that agriculture is a vital income resource for a majority of the population. Asia produces over 90% of the world’s total supply of rice, on a harvested area of nearly 150 million hectares. In aggregate terms, rice accounts for up to half of Asia’s farm incomes (NGO publication, 1998). Besides it is also synonym for food security, as rice makes nearly 80% of peoples daily calories. In many Asian societies, rice is the basis for any meal they will consume. The replacement of landraces by modern ones and/or the control of crops by foreign companies could have a number of social consequences. Some farmers, which do not wish to rely on uncertain markets for their inputs, as considered too risky for their food security, could suffer marginalization and be forced to stop farming. Besides, industrial-farming systems designed for medium and large farming systems will not meet the needs of small-scale farmers. These two processes have in fact squeezed a lot of farmers out, leaving them and their families with no income; another effect could possibly be urbanization, as a reaction to subsequent unemployment in rural areas.

6. Bioprospecting and Genetically Modified crops: substitution of exports of primary commodities

Bioprospecting is defined as the exploitation of resources for commercial purposes. Opponents to this practice refer to it as biopiracy, as it "steals" the resources from the developing countries and does not recognize at any moment the economic and cultural value of these resources for local people, or their contribution to their conservation. Opponents to bioprospecting say that Intellectual Property is used to legitimize the exclusive ownership and control over biological resources and knowledge, without recognition, reward or protection to informal innovators. Industrialized countries, collecting genetic resources from the south, file them for patents in their home country.

Recently, RiceTec, an US-based firm, was granted a patent on Basmati rice, a rice variety that has been elaborated for thousands of years by farmers in India, representing a significant source of income (through export) and living. RiceTec claimed it had found "novel rice grains". Another claim contains the breeding techniques that would allow to grow Basmati elsewhere. The patenting of the characteristics of Basmati would allow RiceTec to grow rice with the same taste, but which has been elaborated synthetically, endangering the income source of millions of people, and overlooking the fact that farmers that did not claim any proprietary rights over their income source have grown this rice for millennia. India challenged partly successful the claim. Rice Tec has now cancelled the claims on the "novel rice grains" of Basmati (feeling it would loose the battle on this against India), but still claims the breeding techniques to grow it elsewhere (which is more difficult to challenge by India).

One of the negative consequences of bioprospecting is that certain traits of plants are used in order to produce the same effect in the patent holders’ country. Biotechnology allows manufacturers to identify and isolate a specific gene from an original cocoa plant, place it in a microorganism and then extract the flavor after fermentation. No need for the cocoa plant anymore to obtain the flavor. Another possibility is to extract the flavor gene and transfer them to other cheaper varieties of cocoa, enabling production in other parts of the world. The company Mars UK has a patent on the genes from a West African cocoa plant that is held responsible for the specific flavor of cocoa from that region. Both practices place pressure on the export. The importance of primary commodities for these economies emphasizes the urge of the situation. In Ghana and Nigeria, the production of cocoa reached respectively 370000 and 175000 tons in 1998. The commodity represents 38-40% of foreign exchange earnings, 18% of GDP, and employs 45% of the agricultural sector (ActionAid Brazil, 1999). No need to say that these countries face huge crises.

A similar story happens to rubber: Two US universities and a couple of companies, under which Chemie Linz, Deutsche GmbH and Goodyear Tire and Rubber Company own patents on the genes that provide rubber for its rubbery characteristics. The artificial production of rubber proteins could seriously damage its original production in amongst others Southeast Asia, where Thailand, Malaysia and Indonesia produce ¾ of world natural rubber (ActionAid Brazil, 1999).

7. Plant Variety Protection

More specifically in the agricultural sector, we have seen already that Article 27.3 (b) requires patents on plant varieties, or a sui generis system. Plant Variety Protection (PVP) and Plant Breeders’ Rights are examples of possible protection. They have traditionally been established on a national level. Many countries have their own PVP laws. UPOV membership also provides such rights.

The intention of Plant Breeders’ Rights is to generate incentives for the development varieties of plants, for horticultural or agricultural purposes. It is questionable though, if such rights will advantage developing countries that have small innovative capabilities. In fact, some say that PBR might even be restrictive in such countries.

For example, it is feared that PVP is likely to have negative effects on seed prices. Plant breeders’ rights protection might enhance the increased use of industrial seeds, and the private control of that market. The latter will have more abilities to prevent unauthorized trade of protected plant varieties, which might in turn lead to higher seed prices.

Various studies, conducted at different times, on the potential impact of Plant Variety Protection are listed in Table 3.

The higher seed prices are especially of concern in the case of the use of GM crops that are by far more expensive; farmers that are practicing self-supporting agriculture in developing countries will not be able to afford them. Besides, the limited choice of seeds that farmers can use in that particular situation will increase their dependency on monopolies Also, Plant Breeders’ rights as established by UPOV 1991, by disabling seed-saving by farmers, will have serious impacts on the costs for farmers that cannot afford buying new seeds every year.

1. Conclusion

We have seen in this chapter that there are serious amounts of criticism against TRIPs: Transactional costs and prices are very likely to be higher due to implementation of TRIPs. In turn, higher costs threaten the cheap availability of primary needs such as medicine, inputs for subsistence farming and key technologies. The deep inequality that is built within the Agreement and the wide impact that TRIPs has on other issues such as the privatization and monopolization of knowledge have also raised concerns. The perpetuation of social differentiation through patents is also feared, as the latter increase and repeat the differences between technology have and have–nots. Besides, much protest based on among others ethical grounds have been expressed against the controversial article 27.3(b). Patents as vehicles for a countries’ economic development are inadequate, especially if applied to the agricultural sector. Concerns in this area are especially of importance as they refer to values that are specific to developing countries’ societies. Article 27.3(b) article is due to be reviewed in 2000. Whereas re-opening of negotiations could be the occasion to gather more support for sui generis, it could also mean the opposite. In fact, some developed countries are reluctant to open up the text for review, fearing that they may lose what’s already in the Agreement (that is the however clause). This is a major victory for the advocates of sui generis, which initially feared that the exception option (27.3 (b) entirely) would be taken out of the Agreement, and thereby requiring patents on plants.

It is highly disputable if the potential benefits of stronger IP protection will indeed outweigh the costs. All the above mentioned factors contribute to the thought that TRIPs is detrimental to developing countries and emphasize the need for an alternative way for developing countries to protect their resources. Therefore, in the specific area of agriculture, developing countries should use the sui generis option on plant varieties, in order to escape the patent obligation under TRIPs.

In the next chapter, I will explain this provision more in detail.

VI

Sui generis Options in TRIPs

1. Introduction

In the previous chapters, I have analyzed the arguments used by developed countries to implement TRIPs. Also, I showed that those arguments are refutable. I concluded inter alia that there is not enough proof to say that IPR standards such as defined in TRIPs do enhance economic development that will reach the non-industrialized nations. Potential economic benefits due to higher IPR are in this context far from obvious. The lack of research, the difficulties to perform this research and numerous disadvantages for those countries contribute to serious doubts on the positive effects of IPR. In particular, the patenting of plant varieties is a threat to the income source of many farmers in developing countries. Aside from those economic uncertainties, I showed that the Agreement does not serve developing countries’ interests due to cultural and ethical reasons. I also argued that social and economical inequalities due to implementation of TRIPs emphasize the need for another system in order to protect the South’s genetic resources.

As we saw, article 27.3(b) of TRIPs offers an alternative to the protection of plant varieties, stating that any country excluding those from patent protection must provide "an effective sui generis system" of protection, meaning "system of its own kind", that is plant variety-specific. The precise conditions the sui generis system should fulfill are lacking in the TRIPs text. In particular, indications on how systems can be elaborated in such way that they do meet TRIPs requirements are absent, creating some confusion.

This chapter aims at exposing how these sui generis options can be used in such a manner that provisions included in any sui generis legislation do address the issues of the conservation of biodiversity and the recognition of Traditional knowledge and that they especially reflect the interests of the people involved in that process.

This chapter thus aims at contributing to the answer on how developing countries can be strengthened in their bargaining position. To develop a useful strategy, we need to bear in mind the following questions:

• What do we want to achieve?
• What is legally allowed by TRIPs?
• How can the gaps between the agreements be filled?
• What are current examples of legislation that make efforts to include specific provisions?

The sui generis option can be understood as a potential instrument to develop a system that respects and acknowledges the conservation efforts of communities in developing countries concerning genetic material. It was a concession to developing countries during trade negotiations and hence gives some space for ideas and concepts that are new or that had been elaborated in other contexts. It is within this article that numerous provisions can be elaborated, at the national level or in multilateral contexts; in particular, issues that are neglected or ignored by TRIPs. Moreover it can be filled with elements that are present in other agreements and that need to be stimulated. Indeed, different groups and advocates are now working on the provisions, in a way they would like to see it included in the WTO.

The debate about TRIPs and sui generis somewhat divides the communities fighting against biopiracy and the inclusion of genetic resources within the WTO. On the one hand, there are those who think that Intellectual Property should neither be included in the WTO, nor anything related to living organisms (the "no patents on life" advocates). They reject TRIPs as a whole. In this context, some groups have criticized a number of sui generis approaches. In particular the options in which property rights (that did not exist beforehand) are conferred to communities are contested because they concede to the pressure of industrialized countries that wish to establish property rights.

On the other side, there are those who think that the process of patenting and the expansion of the WTO are irreversible and that the space left in the Agreement should be used to fill it with provisions that meet the developing countries’ interests. This does not mean they don’t feel that TRIPs is wrong, but they are taking a more pragmatic approach. They also think that it is more useful to fight with available instruments to elaborate appropriate sui generis systems, as more and more countries do join the UPOV 1991 Convention, which is more restrictive and exclusive than the potential scope of many sui generis approaches.

Numerous strategies can be used when it comes to the improvement of developing countries’ interests. NGO’s and other groups follow one strategy, scientists and academics may follow another path. In any situation, I think it is important to focus on the content of the ideas, and not have the strategies to achieve certain goals overwhelm. By giving too much attention on how to resist "patents on life" or how to fill in sui generis, it is too easy and unfruitful to forget what we want to fill it with, in such a way that is successful.

So what we would like to achieve is to find ways in which legislation can be developed in such a way that it does meet the developing countries’ interests regarding Traditional knowledge and biodiversity conservation, bearing in mind TRIPs’ legal constraints.

Earlier in chapter two, I exposed a number of concepts that appear in the CBD but are left out of TRIPs, and that confer rights to various groups of people. In this chapter they will be discussed again in so far that they can be used as potential provisions inside sui generis legislation.

1. Defining formal contents of sui generis- What can we do?

What are possible spaces under the sui generis provision? A number of studies already have highlighted some formal loopholes in the Agreement. Those loopholes are an indication of what is legally tolerated; they do not mean to give answer on what sui generis laws should include, but what they are allowed to include. They eventually enable the elaboration of national legislation, in such a way that local knowledge and resources can be protected, while being compliant with the TRIPs Agreement and article 27.3(b). Let us see what those loopholes are.

According to Leskien and Flitner (1997), in their FAO study, sui generis systems have to meet a certain number of legal requirements. They are not meant to provide for the way in which they can be used.

Sui generis systems should according to them:

1. Provide an Intellectual Property right; this means that it should be a protection such as defined in article 1.2 of TRIPs stating that IPR are "all categories of Intellectual Property that are subject of section 1 through 7 of part II", in which standards concerning the availability, scope and use of Intellectual Property Rights are defined standards (meaning that it should be patent, trademark, trade secret, etc.). Article 68 recognizes sui generis as a potential IPR;
2. Offer national treatment, meaning that they have to offer to nationals of other members, a no less favorable treatment than to their own nationals (art 3.1). Practically this means that for example WTO Members that have joined UPOV cannot discriminate against WTO Members that have not joined UPOV;
3. Allow Most Favoured Nation (MFN) treatment, meaning that a privilege accorded to a member should also be accorded to all other members;
4. Cover all species of plant varieties, as TRIPS does not define which species or varieties should be included (meaning that likely protection should be conferred to all varieties);
5. Provide effective enforcement; article 41 states that "Members shall ensure that enforcement procedures as specified in this Part are available under their law so as to permit effective action against any act of infringement of Intellectual Property Rights covered by this Agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements. These procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse".

A number of these requirements are not well defined within the TRIPs Agreement, meaning that there is some space to include or exclude certain provisions. Also, the possibilities of the sui generis options are legally broad. For example, as TRIPs does allow "protection of additional subject matter" (art 8), it is legally possible to include laws that protect for example local knowledge systems and informal innovations, or other provisions defined in the CBD. Also, access laws, as their intention is to protect biodiversity, are legally justifiable.

TRIPs does not prohibit the exclusion from patenting if such measure "is necessary to protect ordre public and morality" (art 27.2). This includes possible negative impacts on agriculture, biodiversity, health, humans or animals, due to patenting material. The problem here is that there is no international legal framework in which ordre public or morality are defined. Challenging a for example US patent in Thailand on those grounds is difficult: US law allows a lot which is considered as an infringement of ordre public and/or morality.

So TRIPs does not prohibit the creation of new IPR nor the extension of current TRIPs provisions with additional measures of protection: TRIPs requires minimum standards, meaning that additional standards are welcome, as long as they do not diminish or nullify existing rights as defined in TRIPs.

Nevertheless, some rights granted through additional provisions are not meant to provide IP protection, but some other kind of protection or no protection at all, that is for example the recognition of specific rights such as Farmers’ Rights; those provisions are trivial in the perspective of TRIPs. It is the question how WTO members and in particular the DSB will react on such provisions. Laws that do restrict the access to traditional knowledge for example, in turn "needed" for trade of goods can be considered as violating TRIPs. Review processes often show how members feel about them. It thus remains to be seen how different parties will react on efforts to elaborate sui generis legislation.

WTO members have with the above-mentioned factors in mind, a couple of possibilities to fill in the sui generis option. Whether these possibilities are beneficial is a second question. In short, they can either:

1. Join UPOV, that is the 1991 Convention
2. Include the provisions of UPOV 1978 or 1991 or a combination of both, without having to join the Convention, or
3. Redefine their own protection system

Ad 1.

Mainstream thinking, especially in developed countries with an industrial breeding sector, is that the current UPOV regulation can be considered as the standard PVP legislation and the definition of an effective sui generis system. Indeed, the Convention provides an Intellectual Property Right on plant varieties, that is accordance with TRIPs requirements. In addition, it confers commercial breeders more rights than ever, and prohibits inter alia seed saving by farmers.

Critics argue that the UPOV Convention is similar to the patent option of the TRIPs Agreement, and that it excludes many significant rights and concepts elaborated in other contexts. As of now, the TRIPs Agreement does not mention anywhere the option of UPOV in its text. For that reason also, opposed groups to UPOV emphasize that countries adopting sui generis should not feel urged by any means at all to adopt the UPOV system

Ad 2.

It is also possible to include a number of provisions that are part of the UPOV Conventions, without joining them. It allows saving time by adopting already shaped provisions, gaining time and efforts to develop and implement new legislation. Also, it can be interpreted as a sign as if UPOV is not joined (which is then a victory for advocacy groups), while at the same time the same provisions as the UPOV contains are adopted. It can in that way be a strategy to mislead public opinion.

Following this path allows countries to go "either way", that is, on the one hand giving more rights to breeders to the formal sector with standards equal or higher than UPOV 1991 confers, or less rights for breeders and more rights for farmers (closer to UPOV 1978). Combinations of the two are also possible.

In the first case, it enables countries do adopt even tighter protection, it includes certain UPOV provisions, meant in particular for the protection of commercial breeders, but excluding any provision that could benefit farmers, such as farmers’ privilege. South Korea’s Seed Law is an example thereof. This "TRIPs- plus" regime, which goes beyond the current IPR requirement under TRIPs, has among others been urged by the US (for example with Special 301). The earlier attempts to pressure adoption of such systems is trivial, as if those attempts succeed, then it will be more difficult for WTO members that are not pleased with the resolution to resist a more stringent form of IPR.

The other way round, which is more protection of farmers, clearly shifts potential benefits to the informal sector. In particular, it enables countries to include the provisions related to farmers’ rights and farmers’ privilege, that are now left out of the UPOV 1991 Version.

Advocates generally reject either joining UPOV or doing as if, as those options are found to be too restrictive and not leave enough possibilities to contain specific provisions. Also, the basis of those provisions is the patent system, which is criticized by many. They will not be discussed here nor considered as strong options for developing countries. So, in this paper we want to concentrate on the third option, that is another way of protecting resources and people, by defining new types of protection, that is no patents.

1. Redefining protection/ special provisions/ Own PVP

Redefining protection laws that meet the requirements of TRIPs, without having to rely on any of the earlier presented options can be achieved by elaborating a system "of its own kind". Nationals can elaborate laws that they feel are more adapted to their situation. Using this possibility allows on the one hand including provisions that do address issues like regulation of access and protection of Indigenous knowledge. On the other hand it allows recreating and redefining Intellectual Property and/or patent systems. Redefining in this context can be understood as to shape IP protection and its function in such a way that it is more geared towards the interests of the suppliers of the genetic material.

For that purpose, I will, in the paragraphs below, expose a number of possible concepts, ideas and provisions that can be included within legislative texts, meant to serve as sui generis options and Plant Variety Protection laws.

The main provisions that we would like to see implemented refer to the defense of rights and livelihoods of developing nations. So, laws will want to protect the genetic resources, the local varieties, but also disable their systematic replacement with uniform crops. Some of those provisions were already mentioned in chapter II, as they were identified as potential conflicts of interests between laws regulating IP protection and biodiversity and traditional knowledge. In the context of this chapter they are meant as potential provisions within sui generis.

1. Sovereignty over resources

It should be defined within any sui generis law who can decide on who have rights over the resources. This can be the state, on federal or national level, but also more local, that is specifically designated communities. Whereas it may sound more equitable to grant rights to concerned people and original developers of biological resources, we need to bear in mind that abuses around potential financial benefits arising out of the exploitation of resources can occur everywhere. For this reason, where legal and administrative bodies are created to decide on the resources, it is important to include people that are directly concerned with the conservation. That is farmers or community members, maybe ngo’s etc. Sovereignty by states only is not enough and misleading regarding its effectiveness on conservation.

2. Recognition of collective rights

One of the major accomplishments of the CBD was to recognize and acknowledge the role of communities in conservation of biological resources. Some suggestions on how rights to deny or approve access can be granted to communities have been made in the past. Underneath of all those suggestions lies the discussion on whether communities should follow the path of appropriation of knowledge or whether they should deny anything that commodifies their knowledge. In this context, provisions can be elaborated that give the community the right to deny access to knowledge and/or the resources. It is also possible to make additional consent from a national authority mandatory in terms of the knowledge that is given away. The issue however is how the right should be defined when they are granted to a community. The hope is expressed through many opinions that concepts of community rights can be established in developing countries, as a show of respect to those communities but also because any other individual right is not adequate. A few suggestions have been made.

Community Intellectual Rights

The recognition of collective management of and ownership over resources is pursued in Community Intellectual Rights (CIR). Actually, the term "Community Rights" is not precisely defined. The definition also varies with the countries. The essence is that the resources are clearly being managed by a group of people designated through socially recognized rules. All members of the community have an interest in the resources. The main difference with open access is that with open access, parties have mutual privilege and no rights, while with CIR, parties have mutual duties and rights (Santasombat, 1997).

In the context of biodiversity, Community Intellectual Rights refer to sovereign rights over and the collective, local, self-governance and management of natural resources. It could include (intellectual) property (such as knowledge), rights over use and conservation, but also refers to the traditional use of resources for medical or cultural purposes. CIR are mainly geared against the usurpation of resources by foreign interests. Including this term in provisions concerning PGR is a step further in the recognition of all communities, formal and informal. It also relates to the basic human rights and acceptance of Indigenous communities. However, Community Intellectual Rights do not provide for IP protection, but recognize a community as an entitled holder of defined rights.

A couple of countries, of which India, and the Philippines rely on a system of community rights.

Intellectual Property Rights for communities

Another alternative concept very close to the previous one is the Intellectual Property Rights for Communities. Those IPR are geared towards the communities as a whole to protect their informal innovation that cannot be protected through standard, individual IPR (Seiler, 1998). Those rights thus define a community as a whole as proprietary of resources. This form of community rights do provide for IPR.

Even if it is fair and an obligation to take into account the different ways in which societies are organized, that is on an individual or community basis, we should not forget that each of those systems are in turn internally culturally shaped. It is in a sense surely better that rights are granted according to the culture of such community. The restriction with both of these options is that they eventually overlook the fact that communities often have an internal social differentiation. The community rights as described above do not seem to cope with that issue. I think that, if such rights are implemented, social differentiation should be taken into account and mentioned.

3. Approval and denial of access

Provisions should include the conditions under which access is permitted or denied. Article 8 of TRIPs states that: "Members may, in formulating or amending their national laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interests in sectors of vital importance to their socio economic and technological development, provided that such measures are consistent with provisions of this Agreement". So, it should be possible to deny access on the ground that the latter does endanger among others socio- economic development. Besides, the CBD states that access is permitted for the purpose of "environmentally sound uses". It is thus possible to determine what one considers environmentally unsound use in the sui generis provision, which in turn allows denying access if such is the case. The terms under which access can be permitted or denied should be defined in such provisions.

In this context, one could think of mentioning the end purpose of the use of the resources.

4. Prior Informed Consent

The simultaneous occurrence of sovereignty over genetic resources and the allowance to access them can be combined in Prior Informed Consent, that means that communities should know and agree on the removal of resources from their original environment. To make such provision effective, it should be possible to nullify any new invention, whether patented or not, for which the resource was used without PIC. Terms under which consent can be denied/permitted should also clearly be defined.

5. Equitable share of benefits

A highly discussed and disputable issue concerning the conservation of the resources is whether, in the case that access to resources is approved, benefits arising out of the exploitation of the sought resources should be shared with the community they are taken away from. As said before, here too the discussion divides the ones that say "hands off the resources" and refuse any benefit sharing mechanism, and the ones that see as a basic need, now that resources are being appropriated. There is also an opinion that does not oppose too much IP protection on living organisms, which says that benefit sharing is misleading because it is used as an excuse for exploiting the resources.

The CBD requests in its article the equitable share of the benefits. Such a provision can be included in sui generis law, after consensus has been reached on what can be accessed, and what the destination of the resource is. If access is granted and if all the requirements around access, prior informed consent and approval of exploitation of the resource have been met, then the share of benefits can be discussed. The promise of benefit sharing should not be a sufficient ground on which access can be accorded. Many other things have to be conform the law before getting into the benefit-sharing process.

It is also important that clear provisions are made on what benefit is shared: a guaranteed percentage of the sale of the end product for which the resource was needed is of another size than a percentage of the royalty perceived from patenting.

6. Farmers’ Privilege

When considering the rights of breeders over their protected varieties, it should be a basic right of farmers to keep a sufficient amount of seed from the harvest for the next generation planting. This farmers’ privilege is of vital importance for subsistence-farmers.

7. Farmers’ Rights

Pressure has been exercised to mention Farmer’s Rights such as defined in the IUPGR. Such provision would recognize their contribution to conservation processes but also reinforce their often vulnerable position. Implementation of a so-called Gene fund has been suggested as a compensation for their efforts. As aid before, there are numerous barriers to such implementation.

We need to bear in mind that all those possible concepts are only elements of sui generis, and that they need to be built in a wider law, meant to protect plant varieties. As said before, PVP laws should provide for an Intellectual Property Right. Mechanisms such as benefit-sharing, or Farmers’ Rights do not provide for protection in the sense of TRIPs and are therefore inadequate as sui generis provisions by themselves.

The above-mentioned concepts are theoretical possibilities and are sometimes proposed for legislation. The practical outcome of parliamentary sessions is sometimes different. In the paragraphs below, I expose a number of examples and case studies of nationally and collectively defined and drafted legislation for sui generis. Depending on the available documentation, explanations are more or less extensive.

1. The local level: case studies and updates from some developing countries

1. Organization of African Unity

The Scientific, Technical and Research Commission of the Organization of African Unity (OAU) recently drafted a law that serves as a sui generis legislation, the "OAU African Model Law- rights of local Communities, Farmers and Breeders and for the Access to Biological Resources".

Contents of the bill

The bill first recognizes the sovereign rights over resources are granted to "the state and its people". The rights of local communities over their resources are collective in nature and "thus take precedence over rights based on private interests".

The objectives of the bill are inter alia to "recognize, protect and support the inalienable rights of communities including farming communities over their biological resources and crop varieties, knowledge and technologies". Also, it aims at protecting the breeders and their varieties.

The law also serves as to provide "an appropriate system of access to biological resources", subject to Prior Informed Consent and to promote "appropriate mechanisms for a fair and equitable sharing of benefits arising from the use of biological resources, knowledge and technologies". The law therefore provides for establishing "contracts" between users and suppliers of biological material, including inter alia information on the source and destination of the material, "the purpose for which the access to the resource is requested", the way in which the community from which the material is taken from participated in research and development of that material, etc. Also, information on any potential benefit, be it economic, social, scientific etc. shall be provided, and the means by which they will be shared with the community. Environmental and socio economic impact assessment will also be provided for a duration of three generations if it concerns a large quantity of resources. It also aims at ensuring sufficient, sustainable and good quality food for the nation. Recognition of the role of communities in sustainable conservation, and in particular the role of women is explicitly mentioned.

The law mentions it will not recognize any patent on "life forms" (art 9).

Analysis of the bill

Bearing in mind this is a draft legislation, that is meant to serve as a framework within which African countries "can harmonize their positions" (Seuret et al., 2000), the bill is a major step against the unrestricted and ongoing exploitation of genetic material in developing countries.

It has been elaborated in line with CBD, and contains more or less most of its provisions. In particular, the contribution of farmers and local communities in the conservation process of biodiversity is recognized and protection acknowledges such contribution. Together with the access provisions, the OAU model law also contains provisions meant to meet TRIPs requirements. The law defines rules on both access and farmers’ rights, but still protects the breeders and their newly developed varieties. Protection of varieties is guaranteed, though not through patent system, but in a less exclusive way. Farmers are in this law still entitled to save seeds of their harvest for use the next year, without having to pay royalties to the breeders (the farmers’ privilege), which is not the case with patents. The farmers’ privilege is seen as an essential right for farmers, as it constitutes the basis of their means of subsistence.

The OAU model law is deliberately different from UPOV legislation. In doing so, it recognizes the situation of African countries, in which seed exchange among farmers is an old and common tradition (and which is prohibited by UPOV 1991); moreover it recognizes that in many situation, farmers and breeders are one person, thereby differing from the commercial breeding sector of the industrialized countries.

Research initiatives are also stimulated by the research exemption included in the law that allows using a protected variety for the purpose of the development of a new variety. The claim that only patents or Plant Breeders’ rights do stimulate innovation is undone by including an appropriate provision in the law.

Remarkable also is that the law rejects patents on life forms. In that sense, it anticipates on the review of article 27.3(b), during which the OAU, together with other countries and advocates will want to see life forms considered as non-patentable. The OAU law nevertheless provides for other kind of protection, which means no patents but some other kind of IPR allowed by TRIPs. The standpoint is courageous, and a strategic move; the OAU does not wait till the review is over and decided, but already takes a position, reflecting a cultural belief. Such a common position allows the frequently internally divided African countries and communities to present a common paper, which will give them eventually more weight during trade negotiations.

Stage in the legislative process

The OAU Model law is a draft, and needs to be individually implemented in OAU Member countries. We need to bear in mind that the law has been elaborated with the help Third World Network (TWN) and The Institute for Sustainable Development, known advocates for biodiversity conservation and community rights. It is therefore needed to be prudent in any conclusion on the final version of the law. It remains to be seen how OAU countries will implement the law; it is still possible that they will adopt UPOV or UPOV- alike provisions. For some countries, it is unlikely that they will join UPOV, such as Zambia. Also, according to the Director General of African Regional Industrial Property Organization (ARIPO), it is unlikely that countries of the OAU will (Masood, 1999).

However, the OAU only represents the English-speaking countries. The French-speaking nations, united in the Organisation Africaine de la Propriété Intellectuelle (OAPI) have on the contrary already adopted a law very similar to UPOV. Ratification though has not taken place yet.

Conclusion

The law drafted by OAU looks like a very courageous piece of legislation as it includes both the CBD provisions and meets at first sight TRIPs requirements. It is clearly an innovative way of protecting breeder, communities and resources. In that way, it is a real sui generis as it does not build on any already existing patent like law.

2. India

Having recently joined the WTO, India has established a Protection of Plant Varieties and Farmers’ Rights Bill (Bill nr. 123 of 1999), in short PVP law, to meet the requirements of TRIPs. Also, a Patent (Amendment) Act 1999 has been drafted. Moreover, as a signatory of the CBD, India has created a bill on access to genetic resources. Both the PVP law and the access law will be discussed here. Other bills such as the Trademarks Bill 1999, the Copyrights Bill 1999 and the Geographical Indications of Goods Bill 1999 are part of the program to implement TRIPs in India.

India is one of the countries where serious hope had raised that it would establish access laws and rights for farmers. India has long resisted pressure against western industrialized countries. It also has a long history of traditional communities and informal innovation. It has recently adopted a number of laws relating to IPR.

Contents of the Bill

The PVP law contains a number of provisions that are of interest in our context.

Its aim is inter alia to "give effect to article 27.3(b)" of TRIPs, to give an effective system for the protection of the rights of farmers (clause 31), those of plant breeders (clause 2) and of the villages of the farming community (clause 48). It also aims at promoting the development of new plant varieties. Some details in the law are described below (Kothari, 2000a).

For the purpose of registration, plant varieties have to be novel and meet the DUS criteria; the protection confers exclusive rights to the breeders to produce, sell, market, distribute, import, and export the variety or its propagating material and to license other persons to do the same. Protection is granted, depending on the variety, from 15 to 18 years.

It excludes plant varieties from being registered if the exclusion is necessary for public purposes (without mentioning which purposes), or if the commercial utilization of such varieties could threaten human, animal, or plant life or the environment in general.

It gives rights to researchers to use the registered variety for experimental purposes (research’s exemption);

It also confers rights to farmers to save, use, exchange share or sell the produce of any registered variety, except selling for the purpose of reproduction under commercial marketing agreements (Farmers’ Right?).

Compulsory licensing is also provided for. A "compulsory license" is the authorization given by a national authority to a person, without or against the consent of the titleholder, for the exploitation of a subject matter protected by a patent or other IPR. India PVP provides for compulsory licenses in the case where the breeder is not making the seed publicly available in reasonable price or quantity or regularity. This obliges breeders to meet the demand in seeds, thereby emphasizing the need for food security.

Also, the law provides for a benefit-sharing mechanism between the user of the variety and those who claim having contributed genetic material to the variety. A National Gene Fund, built up with royalties, fees and contributions from plant variety plant holders, national and international contributions, is supposed to finance this mechanism, as well as promoting the sustainable conservation of genetic resources and support the communities involved in it. It is left out though how much contribution is expected.

A patent can be revoked if it appears that the breeder has not supplied the correct information at the time of application, and if the application is not in the public’s interest; how is the public’s interest defined remains unclear).

Analysis of the Bill

The PVP law has been presented as a major step towards the protection of plant varieties, breeders and farmers. Some provisions that are included in the Bill (such as the so-called farmers’ rights) are in a way a victory in so far that they are increasingly being left out or erased from current provisions in many other countries. Nevertheless, although it claims to protect them, many farmers, ngo’s, activists and other representatives opposed to TRIPs have rejected it for a couple of reasons.

One of them is that it is too close to the UPOV 1978 text and hence protecting commercial breeders and large farmers; the bulk of India’s farming is made out of an informal-sector farmers community which are not protected as such in the Bill. By expanding breeders’ rights, farmers’ rights are consequently reduced. The similarity between the two texts is seen as unnecessary as India officially has much more room to protect the small scale and subsistence farmers. As a critic presents it in the India magazine Frontline: "India has taken the consistent stand that the UPOV Convention is unsuitable for the country’s needs, yet it has adopted the UPOV model in large measure in formulating the Protection of Plant Variety and Farmers’ Rights Bill that is before Parliament" (Cullet, 2000).

As a signatory of CBD, India has some other commitments in this context, such as the Prior Informed Consent (PIC) and the recognition of local communities in their contribution to biodiversity conservation. None of these can be found back in the PVP Bill 1999.

The sovereignty principle is present in the bill, but the Authority mandated to look after correct implementation of the bill does not include any representative, or any ngo representative. This is a great loss for advocates and farmers.

Some other criticism has been made on the PVP law. In short, it refers to the following issues (Shiva, undated):

The law reduces the activities of farmers to cultivation and the conservation of folk varieties. Their role of breeders is disregarded. Also, varieties bred by farmers do not have the same recognition as that of commercially bred varieties. Prior Informed Consent (PIC) as required by the CBD, is not mentioned in the law. Besides, the "farmers’ rights" clause does not give farmers more rights than to have rights over the crops they have grown, without mentioning the seed. Moreover, the benefit-sharing provision only recognizes material contribution to a variety, thereby disregarding knowledge (Cullet, 2000).

State in the legislative process

The PPV bill has been introduced in Parliament on December 14^th, 1999, and is being examined by a Joint Committee of Members of Parliament that is finalizing its report. The committee has gone around the country spoken to farmers and scientists and others and is busy incorporating the views to be part of the law (Devinder Sharma).

Conclusion

As all hopes were focused on the possibilities for India to develop and an adequate sui generis system, the PPV bill clearly is below any expectation in that field. For example, India has sovereign rights over its resources, a big achievement of CBD according to some. But the original suppliers are not involved in the process of deciding what can be or cannot be given away. So in fact, people that have very few to do with the conservation issue decide on the destination of genetic resources. In fact, we see here that the concept of sovereignty is very vulnerable in that sense that if not applied correctly, resources could eventually fall into the wrong hands.

Implementing the Gene Fund will not be easy either. Who fills the Fund is unclear, but also how contents of the fund will be allocated.

The Bill is very disappointing in these terms. One reason could be that India is a country with a substantial technology sector, competing with the US industry, meaning it is a target country within the "special 301" bill. So it is very likely that other participants play an important role, and that industries want to have their interests met as well, therefore pressuring India to not adopt a too "progressive" law.

3. Andean Community

To meet TRIPs requirements, the Andean Community, composed of Bolivia, Colombia, Ecuador, Peru and Venezuela recently adopted a law denominated "Decision 486", which sets the rules for the implementation and enforcement of IPR regulation. It will come into force on 1 December 2000, replacing the regime defined in the Community's 'Decision 344' of 1993.

The Andean law sets the rule for the protection of Intellectual Property in the line of TRIPs in the five Member countries of the Andean Community. It also considers the provisions such as mentioned in the Convention on Biological Diversity. The Andean law also contains provisions in which the Indigenous communities are recognized and contracts between user and supplier of the genetic material should be established.

In the perspective of this chapter, the following articles are of importance (text and non-official translation from GRAIN, 2000b).

• Art 3 recognizes "the rights and faculties of local, Indigenous and Afro-American communities to decide over their collective knowledge",
• Life forms, in whole or in part, as they are found in nature, natural biological processes, and biological material which exists in nature or which can be isolated from any life form, including genomes or germplasm, shall not be considered inventions (Art 15)
• Inventions whose commercial use should be prohibited to protect the health or life of people or animals, or to conserve plants or the environment, shall not be patentable. To this effect, the commercial use of an invention will not be considered contrary to the health of life of people or animals, or to the conservation of plants or the environment, merely because of a legal or administrative ruling, which prohibits or regulates such use. (Art 20)
• Plants, animals and essentially biological processes, which are not non biological or microbiological processes, for the production of plants or animals shall not be patentable (Art 20)
• Any application for a patent on an invention, be it a product or process, obtained or developed from genetic resources, or their derived products, of which any of the Member States is country of origin shall include a copy of the access contract (Art 26)
• Any application for a patent on an invention, be it a product or process, obtained or developed from traditional knowledge of indigenous, Afro-American or local communities of any of the Member States, and for which the Member State is country of origin, shall include the copy of the document which accredits a license or authorization of use from the community, in conformity with what is established in Decision 391 and its modifications and valid regulations (Art 26)
• When the patent is on a self-replicating biological material, except for plants, the patent holder shall not have the right to prevent others from using it as the initial base to obtain a new viable material unless the repeated use of the patented material is required (Art 53)
• When the patent protects self-replicating biological material, the patent shall not extend to the biological material obtained by reproduction, multiplication or propagation [after the product placed on the market] as long as the reproduction, multiplication or propagation is necessary to use the material in conformity with the purpose for which the product was placed on the market and where the derived material is not used for the purpose of multiplication or propagation (Art 54)
• Patents granted on inventions obtained or developed from genetic resources or traditional knowledge, of which any Member State is country of origin, without presentation of a copy of the proper access contract or license from the community shall be nullified (Art 75)
• Any mark referring to elements of the cultures of indigenous, Afro-American or local communities shall not be registered without the community’s express consent (Art 136)
• Microorganisms shall be patentable pending the adoption of different measures as a result of the review of TRIPS Article 27.3(b). To this effect, the obligations assumed by the Member States under the Convention on Biological Diversity shall be taken into account. (Second Transitional Provision)"

Decision 348 is a text drafted to meet the TRIPS requirements, and in the line of CBD provisions. It is the first time that such law is drafted with both elements in it. So, next to what Andean Community considers patentable, other provisions are included, such as how access to resources is regulated, the concept of Prior Informed Consent and recognition of Traditional communities. In that perspective it is a major step forward for the advocates of CBD. Also, the rights of Traditional communities and sovereign control over their resources are a victory. Such progressive provisions are a prime in the developments around he implementation of TRIPs.

But, in another way, the Andean law already adopts 27.3(b) by stating that microorganisms are patentable. This while the hope is expressed that the oncoming review of the article will result in the exclusion of any life form (including microorganisms) from patentability. The Andean law in fact thus anticipates on the oncoming review in the view of the ngo’s but for others it lives up to the TRIPs requirement. The strategy for advocacy work in this context is to gain time, and to have countries implement laws in which patents on life forms will not be granted, which will in turn give more power to the "no patents on life" lobby during negotiations. It is certain that the Andean initiative makes advocacy work that fights for a maximum of awareness and action during the 27.3b review more difficult. Advocacy groups have expressed criticism. GRAIN (2000b) says in this context: "Incorporating the CBD language does not necessarily move anything forward for local communities themselves". However, it seems like the Andean community includes very concrete suggestions that enables authorities to implement the law and to live up to it.

1. Conclusion

This chapter has contributed to clarifying what kind of legislation countries are allowed to elaborate regarding the protection of plant varieties, according to TRIPs standards.

We saw that in principle, the lack of definitions in the TRIPs confers the possibility to decide what precisely is the patentable subject matter. Criteria for patentability were named as possible gaps in the legislation. Also, there are a number of grounds on which countries can decide they will not accept patentability, such on the basis of morality. As I explained, enforcement of such grounds for exclusion is difficult.

Whereas some gaps in the agreement are trivial to fill, we saw that the possibility nevertheless exists to protect additional subject matter. Indigenous knowledge, local varieties and biological resources can thus be protected through adequate provisions. It is then the question what should be protected (that is the people’s rights, their knowledge, the resources), who the rights are conferred to (the state, the head of a community, all people at the same extent) and how to translate this into effective legislation. In particular, community rights sounded like a fairness deal, but seem not easy to implement without violating TRIPs requirements.

The countries I considered that are in the process of elaborating sui generis legislation are a good illustration on the different outcomes that can be achieved. The OAU elaborated a law that clearly uses the opportunity to protect living organism with other IPR than patents, and recognizes at the same time the contribution of local communities and the significance of Indigenous knowledge. The Indian law on the contrary has adopted legislation that is based on the protection conferred by UPOV 1978. It is felt as a disappointment for the advocates of India’s farming community, that a country where serious hope was expressed it would not follow the western model, in the end drafts legislation very similar to the western model. The Andean community had more concrete suggestions how to carry out the objectives.

The surprising thing in this discussion is that there are no concrete results on how the laws effectively solve the problem of for example the recognition of community rights. In what way are the bills a solution to the conflicts between CBD and TRIPs? If the Bills are a follow up of the CBD without taking into account the TRIPs agreement, then they will not form a long-term solution to the problem.

The sui generis legislations elaborated by the different (groups of) countries show us that it is possible to elaborate legislation in such a way that it does meet at first sight TRIPs requirements. It should nevertheless be proven if the DSB does not challenge the countries because of lack of protection. Such legislation requires a whole lot of work, information and awareness. Ngo’s play a substantial role in the achievement of such legislation and that is a very positive, vital role. In the next chapter, I would like to make some recommendations on how I think such work can be even more successful.

One of the aims of this paper was to refute arguments in order to strengthen the position of developing countries. This last part of the thesis therefore focuses on what can be done by the countries themselves or others defending their interests to achieve that. Before that, I would like to summarize the conclusions I gave in between the chapters, to remind us what we found.

We saw that laws protecting Intellectual Property strongly differ from the ones that defend traditional innovations and the interests of biodiversity-rich countries. The starting points of both are at the opposite of each other, explaining the contradictions. Whereas distinct steps had been undertaken regarding the sustainable conservation of genetic resources and the recognition of informal innovation through the Biodiversity Convention, the WTO-TRIPs Agreement seeks to establish international minimum standards of IPR, to prevent national IP regulations to form a barrier to free trade. Those standards have detrimental effect for the conservation of genetic resources.

At the end of chapter 1 and 2, we can conclude that:

1. Laws regulating IPR are likely to facilitate the erosion of genetic diversity whereas the Biodiversity Convention tries to stop that process;
2. Whereas oppositions between CBD and TRIPs are observable, some provisions do not seem to serve different intentions:

• The principle of sovereign rights over genetic resources, defended by many advocates should not a priori be seen as protecting the resources nor the interests of local communities: it may on the contrary even facilitate the unlimited access, if officials are attracted by commercial foreign interests.
• The concept of benefit-sharing transforms resources into a commodity, by making them subject to trade, contracts and future benefits. This is also the intention of TRIPs.

For the purpose of including IPR in the WTO, industrialized nations rely on a number of economic arguments. In their view, developing countries benefit from higher standards of IP protection, as the latter stimulate economic development by facilitating international investment and technology transfer. Simultaneously, innovators are challenged to produce new knowledge and domestic innovation (that is in developed countries) is rewarded.

This paper showed that those arguments are far from obvious. Economic theories are inconclusive on the economic effects of higher standards of IPR on economies. Developing countries may even loose from tighter protection due to high transactional costs, more expensive and limited access to technologies. Moreover, developments in the area of agriculture and biotechnology such as mergers and acquisitions, patents on pharmaceuticals, replacement of local varieties with more uniform varieties are likely to put high pressure on the benefits. It also seems that the western-made regulations do not match with the traditions and cultures of developing countries, where resources and informal knowledge always used to be a public good, freely exchanged among farmers; also the collective management of resources is not recognized in TRIPs.

For that reason we could conclude that:

1. Implementation of TRIPs relies on arguments that are highly disputable;
2. Implementation costs of TRIPs in developing countries are very high compared to the benefits;
3. TRIPs disregards the moral values in developing countries by overlooking the informal sector; including traditional/Indigenous knowledge and innovations, and by requiring private rights over collectively-held resources;
4. TRIPs is therefore unfair to and inadequate for developing nations;
5. It is urgent to reconsider the criteria under which intellectual property is being protected, especially in the case of living material in developing countries.

The legal frameworks that regulate IPR and biodiversity conservation leave through the sui generis option of article 27.3(b) space to add provisions that protect the interests of developing countries, without having to rely on already existing legislation such as the UPOV texts. In particular on the national level, numerous efforts are currently being made to protect the rights of local communities, biodiversity and traditional knowledge. Additional laws need however to meet TRIPs requirement of protection. After having considered a number of laws, we can conclude that:

6. It is possible to draft laws that do protect biodiversity and the interests of traditional communities together with Indigenous Knowledge.
7. Legislation alone is not enough nor do "concepts of" ever seem to be implemented correctly: The efforts will only be effective if implementation of such laws is carried out. Provisions therefore need to be adequately drafted for this to happen.
8. It remains to be seen however if countries will indeed adopt legislation in such a way that the informal sector and subsistence farmers can be secured of basic sources of income. Even the countries that had high potential to do so have been enacting disappointing laws in that perspective.

Now that we have seen the brief conclusions, it is time for me to come up with a number of recommendations.

The basis for this research has been work at the Institute for Agriculture and Trade Policy. My recommendations therefore focus on the work the Institute is doing, through advocacy work, network building and pressure on representatives during bi- and multilateral negotiations; they also have a wider scope. As I said before, not everybody shares equally the opinion on the way in which TRIPs is approached. Also, it is from my point of view easier to make comments on the work done by ngo’s and other advocacy groups. It is thus the idea to find ways in which I think their work can reach, benefit but also be supported by more people.

As the research was geared towards the conservation and development of biological resources, the recognition of traditional communities and the interface thereof with IPR, the recommendations are primarily focusing on that topic. Wider issues concerning IPR and WTO will not be addressed here.

What we need to bear in mind according to me is that constantly repeating that TRIPs is bad will not lead to any improvement of the situation. What to do in-between TRIPs and CBD can eventually benefit developing countries.

The CBD established that states have sovereign rights over their resources. Such a provision as I explained is fine when the authority is aware of the need to conserve not only the resource, but also the local communities. Granting rights is only effective if there is a way to enforce them. Sovereign rights are not likely to protect the local communities, if the authorities that have legal power over the resources decide that commercial interests are more profitable than the protection of Indigenous communities. Such thinking is not far ahead for many people. The authorities that are created in order to have the PVP and sui generis laws enforced are generally speaking mentioned in the legislation, only they do not include representatives from the concerned people. Besides, it is questionable in what way the laws will indeed solve problems such as the private rights of TRIPs versus the community traditions that the CBD intends to protect. What I would suggest is that:

• Representation of local communities, farmers and ngo’s in the authorities that decide what happens with the resources and the local communities, is being included in the access laws;
• Access to resources should only be accorded if cumulative requirements are met, such as:
• A registration system that would identify and document the source of genetic material and Indigenous knowledge;
• Assessment on whether the exploitation of the resource will not have a negative impact on the surrounding biodiversity, be it animals, plants and humans, but also on the economic consequences of such exploitation;
• Grounds on which access can be denied should be defined;
• Mechanisms and bodies that make the laws enforceable and compelling are included;
• A provision is included making mandatory that the source of the knowledge and the role of the knowledge in the realization of the "invention" is cited;
• Studies are carried out that examine how other groups of farmers deal with the recognition of participatory and community farming within a context of individual rights.

We saw that IPR are needed to protect the rights of the different interests groups. We also saw that IP standards as defined in TRIPs and UPOV are not adequate for the protection of living material in developing countries. So we found that alternative IPR are needed to protect biodiversity, the rights of local communities and traditional Knowledge. Those alternative IPR can be elaborated by drafting laws in which the traditional communities play an active role as safeguarders of the biological resources.

For that purpose, alternative IPR should explicitly:

• Refrain from using UPOV as a model on which new legislation will be drafted;
• Define additional and alternative criteria of protection, that is
• Define what "essentially biological processes for the production of plants and animals other than non-biological and microbiological processes" are;
• Define what the protectable subject matter (Leskien and Flitner, 1997) is: Make clear categories of living material;
• Define the terms of duration of the IPR;
• Define categories of species to be protected, and adapt years of protection on the specie involved. This would allow making a distinction depending on how and for what purpose species are used;
• Dismantle the novelty criteria by disclosing information prior to any bioprospecting activity and publish it. In this way, knowledge held by communities cannot be claimed as novel anymore;
• Change the "Uniform and Stable" criteria; they could be replaced by an identifiability criteria (Seiler, 1998);
• Define the "useful" as socially useful, which would take into account the use that local communities are making of the resources and go beyond the commercial use.

Alternative IPR could also:

• Exclude certain species like basic food crops (The Crucible Group, 1997);
• Allow to register plant varieties under a certificate of origin/Geographical Indication; prohibits from unlawful use of the name (such as Basmati); it does not protect the knowledge that is embodied in such resources though;
• Transform traditional knowledge into trade secrets (IAD supported project, Ecuador);
• Changes to article 27.3(b) itself could include to keep the "however-clause" but extend it with a provision that excludes even more material from patentability; for example adding "essentially derived products" to the public domain, as material from the public domain is not patentable (Biothai and GRAIN, 1997).

Serious hope is expressed that the long ago defined concept of Farmers’ Rights will be implemented. Till now, efforts do not seem to have been very fruitful in that field. Still, countries should on the national level:

• Include a provision that defines Farmers’ Rights in the same way as IUPGR defines them;
• Include a provision that mandates local or national authorities to create a genefund that will be financed by a part of the benefit-sharing mechanism. This provision should not exist without the simultaneous and explicit definition who will fill the fund and how it is filled.

The work at IATP taught me numerous things. It was my first experience to work as closely with a non- profit organization. I learned a lot about how advocacy work operates; it also gave showed me decision-making on high political level from another side. Sometimes I felt that the world was very bad. Luckily, there was enough good news from "the friends". And as Mark Ritchie once said: "We’re winning the battle, they’re backing". It is optimistic, but is also maybe the only way to motivate this courageous work.

Whereas I am very glad and proud I investigated a cause I believe in, I did not always agree with the views of some of the people I worked with; mainly because I thought the words used were too extreme and could have an adverse effect on public opinion. However, I noticed such opinions are needed, because even if some people are extreme in this way, then others are equally extreme in disregarding the peoples’ interests in an unacceptable way. Being extreme is unfortunately maybe the only way in which opponents to current world order can be heard. The balance we’re looking for is fragile.

While focusing on WTO, "corporate agribusiness" and biodiversity, my personal opinion is that if people leading this world are as much persuaded of the need and indispensableness of supranational institutions to regulate world welfare and peace, then I think we should at the same extent recognize that we need ngo’s and defenders of basic human rights. I think it is a sine qua non for the world to keep on turning. Excluding them is detrimental on the long term.

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