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THE BIODIVERSITY CONVENTION AND INTELLECTUAL PROPERTY RIGHTS: CONFLICT OR HARMONY?
by Gerald J Mossinghoff
As a former United States Commissioner of Patents and Trademarks, and as a former Chairman of the General Assembly of the World Intellectual Property Organisation (WIPO), I am keenly aware of the indispensable contribution intellectual property protection has made throughout modern history to social progress. In a recent article that Ralph Oman, a former Register of Copyrights, and I published in the journal World Affairs(1) we documented that WIPO - by fostering effective intellectual property protection worldwide both in developed as well as developing countries - has done more for human progress than perhaps any other specialised agency of the United Nations.
In 1776 - the year of our Declaration of Independence - the philosopher/economist Adam Smith taught us that the wealth of nations rested on three pillars: labour, capital and natural resources.(2) Our generation has added a fourth pillar: intellectual property in all of its forms. Patents protect new technology. Copyrights protect literary and artistic works as well as computer software. Trademarks assure orderly commercial development and consumer protection. Each is indispensable in our information-based society.
As Commissioner of Patents, I participated personally in the decision of the Reagan Administration to include intellectual property rights in the Uruguay Round of the General Agreement on Tariffs and Trade (GATT). That decision led to the landmark agreement adopted at Marrakesh in April 1994, the agreement on Trade-Related Aspects of Intellectual Property Rights - the so-called TRIPs accord. TRIPs recognised the dual need to 'promote effective and adequate protection of intellectual property rights' and to 'ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade'.(3)
By requiring all parties to the agreement to eventually meet high standards for protecting intellectual property, TRIPs has as an overriding goal to stimulate and foster human creativity for social progress. At the end of 1996 I retired as President of the United States Pharmaceutical Manufacturer's Association, now known as the Pharmaceutical Research and Manufacturers of America or PhRMA, a scientific and educational trade association that represents the United States research-based pharmaceutical industry worldwide. In that role, I came to appreciate the overriding importance of the three principal objectives of the Convention on Biological Diversity (the Biodiversity Convention) opened for signature at the Earth Summit in Rio de Janeiro, in June 1992. Those objectives are quite straightforward and, in my view, universally accepted:
- to conserve the earth's biological diversity for future generations; - to exploit this biodiversity in a sustainable way; and - to share its benefits in a fair and equitable manner.(4)
Those goals recognise that human beings have an undeniable ethical responsibility to protect other species and a clear duty to manage and preserve the earth's precious resources not only for the present generation but for future generations as well. Conserving biodiversity is of particular interest to the research-based pharmaceutical industry. Despite the advent of what is called rational drug discovery - typified by the work that earned Sir James Black a Nobel Prize in Medicine - and despite modern-day genetic engineering, pharmaceutical industry scientists continue to rely on what's referred to as Natural Products Drug Discovery or NPDD.(5) NPDD involves the search for bioactive compounds contained in natural sources such as plants, fungi, insects, microbes, and marine organisms - most of which are found in the tropical areas of the world. It is estimated, for example, that about one quarter of all modern medicines sold in the United States are derived from NPDD.
During the negotiations leading to the Biodiversity Convention, intellectual property rights did become a contentious issue. The debate centered on the transfer of technology, with several developing countries contending that existing intellectual property systems of law hinder the transfer of technology to the developing world. Developed countries argued exactly the opposite: that transfer of technology requires effective intellectual property protection.
At that same time, there was a concerted effort in Europe - which ultimately proved to be successful, at least initially - to defeat the European Community's Biotechnology Patent Directive that would have clarified the rights of inventors to acquire patents on their biotechnology inventions throughout Europe. The debate on intellectual property during the drafting of the Biodiversity Convention was stimulated, in part, by a desire by some to use the Convention as a way to curtail patent protection on living organisms, whether in Europe, Japan, the United States, or elsewhere. But those efforts did not succeed. A thriving biotechnology industry in the United States is based literally on tens of thousands of U.S. biotechnology patents. That experience is being repeated in Japan and Europe - although on a somewhat smaller scale. The approval on May 12, 1998 by the European Parliament of an amended version of the European Biotechnology Patent Direction is just one more indication of the recognition that biotechnology patents are here to stay.
Although the actual wording of the Biodiversity Convention is diplomatically vague - 'impressively opaque' in the words of the Economist(6)- it did contain potentially troublesome provisions regarding biotechnology regulation and intellectual property rights that prompted the Bush Administration's decision not to sign it at the Earth Summit.
In December 1992, then President-elect Clinton undertook consultations with industry and environmental groups to find ways to reconcile what some viewed as competing interests to allow the United States to become a party to the Convention. The result was a consensus - fully supported by the pharmaceutical and biotechnology industry - on how the United States would interpret the Convention's key but somewhat vague provisions.
President Clinton signed the Convention on June 5, 1993 and sent it and the Administration's interpretive statement to the Senate on November 16, 1993.(7).
The Clinton interpretative statement paid particular attention to intellectual property rights. With respect to Article 15 of the Convention regarding the sharing of genetic resources 'on a fair and equitable basis', the Clinton Administration asserted that such sharing of the results of research and benefits 'must take fully into account exclusive rights to technology that a party may possess, and that transfers of proprietary technology will occur only at the discretion of the owner of the technology'.(8) In order to allay fears of retroactive application of the Convention, the interpretative statement declared that 'resources obtained by public or private entities before the Convention enters into force (for the United States) or obtained outside (of its scope) are not governed by the Convention'.(9)
Because the Convention is not self-implementing in an international judicial sense, these interpretative statements are key to a reasonable - and I would submit, effective - implementation of the technology transfer provisions of the Convention. Importantly, they are also consistent with the later-negotiated and agreed-upon TRIPs accord that I have mentioned. It is significant that more than 125 of the 167 nations that have signed the Biodiversity Convention are now members of the World Trade Organisation and thus have fully agreed to enforce the specific intellectual property standards of TRIPs.
Given the Clinton Administration's interpretation of the Convention as it regards intellectual property - and the fact that the Convention must be read in the light of the TRIPs agreement - the United States pharmaceutical and biotechnology industry is urging the Senate to ratify the Convention. Among other things, this will give the United States an important voice in the follow-up meetings or 'Conferences of the Parties' (COP).(10)
With this background, let me turn to the question suggested by the title of this article: Are the Biodiversity Convention and intellectual property protection - as best exemplified by TRIPs - in conflict or in harmony? In my mind, the answer is clear: appropriately implemented they are clearly in harmony.
Years of study and debate in the United States that resulted in the Stevenson-Wydler and Bayh-Dole acts lead to an inescapable conclusion: technology transfer requires effective intellectual property protection. Without it, there really is nothing to transfer. Let's hypothesise that Drug Company A discovers a complex chemical compound having pharmacologically interesting characteristics in a rainforest. Such a discovery would be potentially beneficial to all concerned, but unless the essential follow-up work of purifying the compound, reproducing it either synthetically or otherwise, and clinically proving its safety and efficacy for human medicinal use - is protected by intellectual property there would be no incentive to undertake the efforts. The compound would remain what it was when it was discovered: an interesting scientific curiosity of no value to anyone.
Perhaps the most widely publicised arrangement between a leading research-based pharmaceutical company and a developing country providing access to its biological resources is the agreement between Merck and a non-profit research and conservation organisation in Costa Rica - the Instituto Nacional de Biodiversidad or more simply INBio. As summarised by one author:
Merck made an advance payment to INBio of $1 million for the right to develop drugs from Costa Rican plants, insects, or microbes supplied by INBio. Such an advance payment, which will provide resources at the outset of the lengthy period of drug development, is a novel feature of the Merck-INBio deal. INBio and the Costa Rican Ministry of Natural Resources will also divide a share of the royalties on any drugs developed, a share reportedly between one and three percent of the total. Ten percent of the initial payment and fifty percent of any royalties, will directly fund conservation.
In addition to the monetary arrangement, the agreement provides for technology transfer that will contribute to the development of Costa Rican science. Merck donated chemical extraction equipment worth $135,000, sent two natural product chemists to train Costa Rican scientists, and arranged for Costa Rican scientists to spend time at Merck's labs. When asked why Merck has undertaken a venture which is admittedly a gamble, P Roy Vagelos, then Merck's chairman and chief executive officer, replied "We're doing this because it's good business and it's good for the rain forests".(11)
This pattern is repeated elsewhere:
In December 1993, the United States National Institutes of Health (NIH), Conservation International, Bristol-Myers Squibb, Virginia Polytechnic Institute and State University, and the Missouri Botanical Garden contracted with the country of Surinam to study medicinal plants. Under the contract, Bristol-Myers pays royalties to the indigenous people of Surinam for drugs derived from local plants. Other initiatives sponsored by the NIH include: an agreement between Monsanto and the Cayetano Peruvian University to study medicinal plants from Andean rain forests; one among Walter Reed Army Institute of Research, the University of Yaounde in Cameroon, and several US-based conservation groups and pharmaceutical companies to search for parasitic drugs in the African rainforest; and another involving American Cyanamid and various universities of Argentina, Chile, Mexico, and the United States to study medicinal properties of plans from arid regions. One US-based company, Shaman Pharmaceuticals, uses ethnobotanical science as a drug discovery technique. It has several patent claims already pending and has pledged to return a portion of its sales from drugs derived from community-based knowledge to the communities involved through its non-profit arm, the Healing Forest Conservancy.(12)
In my view, these joint projects are exactly the kinds of beneficial efforts envisioned by the Biodiversity Convention. And they have one quintessential unifying characteristic: each relies on effective patent protection of any resulting drug discoveries. Without such protection, the agreements would not be worth much to anyone.
Thus, not only is effective intellectual property protection in harmony with the goals of the Biodiversity Conventions; in a very real sense it is indispensable to achieving those goals.
Brazil provides a clear example of how the goals of the Biodivesity Convention can be achieved through effective intellectual property protection. After hosting the Earth Summit in 1992 that lead to the Biodiversity Convention, Brazil has become a world leader in its implementation. That could have been predicted, since Brazil contains the largest remaining area of tropical forest in the world. It has also become a leader among developing countries in recognising the benefits of effective intellectual property protection. In a major development, Brazil amended its patent law effective in May 1997 - well ahead of the schedule required by TRIPs - to protect pharmaceutical products. That decision - and the other actions taken by Brazil to attract outside investment - prompted the worldwide research-based pharmaceutical industry to commit to $1.7 to $2.3 billion in direct investments in Brazil. That investment, in turn, will permit Brazil to assume its place as one of the leading contributors to pharmaceutical and biotechnology research and development. That's good news for the citizens of Brazil - and for people everywhere who are looking for new medicines to prevent, treat and cure diseases.
© 1998 Gerald J Mossinghoff. The author is senior counsel for Oblon, Spivak, McClelland Maier & Neustadt PC, Arlington, Virginia, USA. He was a former Assistant Secretary of Commerce and Commissioner of Patents and Trademarks. Mr Mossinghoff teaches Intellectual Property Law at George Washington University Law School and at George Mason University School of Law.
Notes (1) Mossinghoff and Oman, 'The World Intellectual Property Organisation: A United Nations Success Story', 160 World Affairs 104 (1977), republished in 79 JPTOS 691 (1997). (2) Adam Smith, 'The Wealth of Nations: An Inquiry into the Nature and Causes' (1776). (3) TRIPs Preamble, paragraph 1. (4) Convention in Biological Diversity, Article 1. (5) Bosselmann, 'Plants and Politics: The International Legal Regime concerning Biotechnology and Biodiversity', 7 Colorado Journal of International Environmental Law and Policy 111 (Winter 1996). (6) 'The Earth Conference: Biodivisive', Economist, June 13, 1992, at 93. (7) 'Convention on Biological Diversity: Message from the President of the United States', 103 Cong. Treaty Doc. 103-20, November 1993.
(8) Id. at xi. (9) Id. at xii. (10)See, eg 'Report of the Conference of the Parties (COP) to the Convention on Biological Diversity: the Biodiversity Convention and TRIPs: Relationships and Synergies', UNEP/CBD/COP/3/23, October 5, 1996. (11) Goldman, 'Biological Diversity: Compatibility of Conservation Measures and Competitiveness of the Biotechnology Industry', 25 Law and Policy in International Business 695, 720 (Winter 1994). (12) Namoi Roht-Arriaza, 'Of Seeds and Shamans: The Appropriation of the Scientific and Technical Knowledge of Indigenous and Local Communities', 17 Michigan Journal of International Law 919, 959 (Summer 1996). The author makes an appealing case for expanding intellectual property-like protection to indigenous genetic resources - an intriguing idea well beyond the scope of this article. See also, 'Report of the Workshops on Traditional Knowledge and Biological Diversity', Madrid, November 24-28, 1997, UNEP/CBD/TKBD/1/3 (15 December 1997); Jacoby and Weiss, 'Recognising Property Rights in Traditional Biocultural Contribution', 16 Stanford Environmental Law Journal 74 (January 1977); and Kadidal, 'Plants, Poverty, and Pharmaceutical Patents', 103 Yale Law Journal 223 (October 1993).
This article originally appeared in Patent World Issue #106, October 1998