Integrating
Intellectual Property Rights
and Development Policy
Report of the Commission on Intellectual Property Rights
London
September 2002
Published by
Commission on Intellectual Property Rights
c/o DFID
1 Palace Street
London SW1E 5HE
Tel: 020 7023 1732
Fax: 020 7023 0797 (for the attention of Charles Clift)
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Website: http://www.iprcommission.org
September 2002
November 2002 (2nd Edition)
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Professor
John Barton (Commission Chair)
George E. Osborne Professor of Law, Stanford University,
California, USA
Barrister specialising in Intellectual Property Law, London,
UK
Director, Masters Programme on Science and Technology Policy
and Management, University of Buenos Aires, Argentina
Director General, Indian Council of Scientific and Industrial
Research and Secretary to the Department of Scientific and Industrial Research,
Delhi, India
Senior Director of Science Policy and Scientific Affairs
(Europe) at Pfizer Inc., Sandwich, UK
Director of Nuffield Council on Bioethics, London, UK
Charles
Clift – Head
Phil
Thorpe – Policy Analyst
Tom
Pengelly – Policy Analyst
Rob
Fitter – Research Officer
Brian
Penny – Office Manager
Carol
Oliver – Personal Assistant
Clare Short, the
Secretary of State for International Development, established the Commission on
Intellectual Property Rights in May 2001.
We are made up of members from a diversity of countries, backgrounds and
perspectives. We have each brought very different viewpoints to the table. We incorporate voices from both developed
and developing countries: from science, law, ethics and economics and from
industry, government and academia.
I believe that it is a
considerable achievement that there is so much that we have been able to agree
on about our approach and our basic message.
As our title implies, we consider that development objectives need to be
integrated into the making of policy on intellectual property rights, both
nationally and internationally, and our report sets out ways in which this
could be put into practice.
Although appointed by
the British Government, we have been given absolute freedom to set our own
agenda, devise our own programme of work, and come to our own conclusions and
recommendations. We have been given the
opportunity and financial support to improve our understanding of the issues
through commissioning studies, organising workshops and conferences, and
visiting officials and affected groups throughout the world. We have been supported by a wonderfully
capable Secretariat supplied by the DFID and the UK Patent Office, and we want
to thank them especially.
We first met on 8-9
May 2001, and have held seven meetings since. All or some of us have
visited Brazil, China, India, Kenya, and South Africa, and we have consulted
with public sector officials, the private sector and NGOs in London, Brussels,
Geneva, and Washington. We visited the Pfizer research facility in
Sandwich. A list of the main institutions we have consulted appears at
the end of the report. We have
commissioned seventeen working papers and held eight workshops in London on
various aspects of intellectual property.
And we held a large conference in London on 21-22 February 2002 to
ensure that we could hear questions and concerns from many perspectives. We regard these sessions as important parts
of our work in their own right. They
brought together a range of individuals with a view to facilitating dialogue
and exploring the scope for moving some of the issues forward.
Our tasks were to
consider:
·
how national IPR regimes could best be
designed to benefit developing countries within the context of international
agreements, including TRIPS;
·
how the international framework of rules
and agreements might be improved and developed – for instance in the area of
traditional knowledge – and the relationship between IPR rules and regimes covering
access to genetic resources;
·
the broader policy framework needed to
complement intellectual property regimes including for instance controlling
anti-competitive practices through competition policy and law.
We decided early on not just to attempt to suggest compromises among different
interest groups, but to be as evidence-based as possible. This has been challenging, for there is
often limited or inconclusive evidence, but our Secretariat, extensive
consultations, and the papers we commissioned, helped us in identifying the
available evidence, which we then carefully evaluated.
We also recognised early on the importance of distinguishing nations (middle or
low income) which have substantial scientific and technological capability from
those which do not. We attempted to learn about the real impacts of
intellectual property, both positive and negative, in each of these groups of
nations. We chose to concentrate on the
concerns of the poorest, both in low and middle income nations.
We all concur in this report. Our aim
is practical and balanced solutions. In
some cases we have adopted suggestions made by others but the responsibility
for the conclusions is ours alone. We
hope that we have fulfilled our task and that the report will be a valuable
resource to all those engaged in the debate on how intellectual property rights
might better serve to promote development and reduce poverty.
On
behalf of the Commission, I want to thank all those people across the world,
far too numerous to mention, who provided input to our discussions, and
especially those who prepared our working papers.
Finally
I want to thank Clare Short, and the UK Department for International
Development, for their foresight in creating the Commission on Intellectual
Property Rights. I have been honoured
to chair it. It has been an
extraordinary experience for me, and for all of us on the Commission. We received a challenging remit. We
greatly enjoyed our task and the opportunity to learn from one another and, in
particular, from the many who have contributed to our work.
Chairman
FOREWORD
There are few concerned with IP who will find that
this report makes entirely comfortable reading. No greater compliment can be paid to
Professor Barton and his team of Commissioners. Nor can there be any greater indication of the foresight and
courage of Clare Short, the UK Secretary of State for International
Development, in creating the Commission and setting its terms of reference in
the first place.
Perhaps
there is something about the era we live in that has encouraged blind adherence
to dogma. This has affected many walks
of life. It certainly has affected the whole area of intellectual property
rights. On the one side, the developed
world side, there exists a powerful lobby of those who believe that all IPRs
are good for business, benefit the public at large and act as catalysts for
technical progress. They believe and argue that, if IPRs are good, more IPRs
must be better. On the other side, the
developing world side, there exists a vociferous lobby of those who believe
that IPRs are likely to cripple the development of local industry and
technology, will harm the local population and benefit none but the developed
world. They believe and argue that, if
IPRs are bad, the fewer the better. The
process of implementing TRIPS has not resulted in a shrinking of the gap that
divides these two sides, rather it has helped to reinforce the views already held. Those in favour of more IPRs and the
creation of a “level playing field” hail TRIPS as a useful tool with which to
achieve their objectives. On the other
hand those who believe that IPRs are bad for developing countries believe that
the economic playing field was uneven before TRIPS and that its introduction
has reinforced the inequality. So
firmly and sincerely held are these views that at times it has appeared that
neither side has been prepared to listen to the other. Persuasion is out, compulsion is in.
Whether
IPRs are a good or bad thing, the developed world has come to an accommodation
with them over a long period. Even if
their disadvantages sometimes outweigh their advantages, by and large the
developed world has the national economic strength and established legal
mechanisms to overcome the problems so caused. Insofar as their benefits
outweigh their disadvantages, the developed world has the wealth and
infrastructure to take advantage of the opportunities provided. It is likely that neither of these holds
true for developing and least developed countries.
It
is against that background that the Secretary of State decided to set up the
Commission and ask it to consider, amongst other things, how national IPR
rights could best be designed to benefit developing countries. Inherent in that remit was the
acknowledgement that IPRs could be a tool which could help or hinder more
fragile economies. The Commissioners
themselves represent as impressive a cross-section of relevant expertise as one
could wish. They have consulted widely.
This report is the result. It is most
impressive.
Although
the terms of reference have required the Commission to pay particular regard to
the interests of developing countries, it has done this without ignoring the
interests and arguments of those from the other side. As it states, higher IP standards should not be pressed on
developing countries without a serious and objective assessment of their
development impact. The Commission has
gone a long way to providing such an assessment. This has produced a report
which contains sensible proposals designed to meet most of the reasonable
requirements of both sides.
However,
the production of a series of workable proposals is not enough by itself. What
is needed is an acceptance and will to implement them. Once again, in this respect the Commission
is playing a major role. This is not
the report of a pressure group. The Commission was set up to offer as impartial
advice as possible. Its provenance and
makeup should encourage all those to whom it is directed to take its
recommendations seriously.
For
too long IPRs have been regarded as food for the rich countries and poison
for poor countries. I
hope that this report demonstrates that it is not as
simple as that. Poor countries may find them useful provided they are accommodated to suit local palates. The Commission suggests that the appropriate
diet for each developing country needs to be decided on the basis of what is
best for its development, and that the international community and governments in
all countries should take decisions with that in mind. I very much hope this report will stimulate
them to do so.
UK High Court Patents Judge
EXECUTIVE SUMMARY
This
Executive Summary is drawn from the Commission’s full report, “Integrating
Intellectual Property Rights and Development Policy”. This document provides the main elements of the analysis and
recommendations from each chapter of the full report. It does not cover all the issues, nor is it intended to
substitute for reading of the main report where the context,
evidence and arguments are considered in detail.
OVERVIEW
The Millennium Development Goals recognise the importance of reducing poverty and hunger, improving health and education, and ensuring environmental sustainability. Accordingly, the international community has committed itself to reducing the proportion of people in poverty by half by 2015. In 1999, an estimated 1.2 billion people survived on less than one dollar a day, and nearly 2.8 billion people lived on less than two dollars a day. About 90 percent of these people were in South or East Asia or sub-Saharan Africa. HIV/AIDS, tuberculosis, and malaria claim millions of lives in these countries every year. For more than 120 million children of primary school age, education is out of reach.
Developing
countries are far from homogeneous, a fact which is self-evident but often
forgotten. Not only do their scientific
and technical capacities vary, but also their social and economic structures,
and their inequalities of income and wealth.
The determinants of poverty, and therefore the appropriate policies to
address it, will vary accordingly between countries. The same applies to policies on IPRs. Policies required in countries with a relatively advanced
technological capability where most poor people happen to live, for instance
India or China, may well differ from those in other countries with a weak
capability, such as many countries in sub-Saharan Africa. The impact of IP policies on poor people
will also vary according to socio-economic circumstances. What works in India, will not necessarily
work in Brazil or Botswana.
Some argue strongly, particularly in business and government in developed countries, that IPRs help stimulate economic growth and reduce poverty. They say there is no reason why what works so well for developed countries could not do the same in developing countries. Others, particularly from developing countries and NGOs, argue the opposite equally vehemently. IP rights can do little to stimulate invention in developing countries, because the prerequisite human and technical capacity may be absent. Moreover, they increase the costs of essential medicines and agricultural inputs, hitting poor people and farmers particularly hard.
During
the last 20 years or so, the level, scope, territorial extent, and role of IP
protection have expanded at an unprecedented pace. Genetic materials have become widely patented. IP rights have been modified or created to
cover new technologies, particularly biotechnology and information
technology. Technologies produced in
the public sector are routinely patented.
The World Trade Organisation (WTO) Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS) has extended minimum standards for IP
protection globally. There are
continuing discussions in WIPO aimed at further harmonisation of the patent
system, which may supersede TRIPS.
Moreover, bilateral or regional trade and investment agreements between
developed and developing countries often include mutual commitments to
implement IP regimes that go beyond TRIPS minimum standards. Thus there is sustained pressure on
developing countries to increase the levels of IP protection in their own
regimes, based on standards in developed countries.
The functioning of IPR systems raises genuine concerns, even in developed countries. The submission of patent applications has increased tremendously in recent years – as has the perception that many patents of “low quality” and broad scope are being issued. Companies may incur considerable costs, in time and money, determining how – or whether - to conduct research without infringing upon other companies’ patent rights, or defending their own patent rights against other companies. This raises questions as to whether the substantial costs involved in patent litigation are a necessary price to pay for the incentives offered by the patent system, or whether ways can be found to reduce them. How does this proliferation of patents affect competition and research?
The concerns about the impact of IP in developed countries are important for developing countries as well. Developing countries can learn from the experience of developed countries in devising their own systems. In addition, the IP system in developed countries has had direct impacts on developing countries. Restrictions on access to materials and data on the Internet can affect everyone. IP rules and regulations may be hampering research on important diseases or new crops that affect developing countries but that is actually carried out in developed countries. Developing countries may not be sharing appropriately in the benefits from commercialisation of their knowledge or genetic resources when they are patented in developed countries.
The Commission’s fundamental task was to consider whether the rules and institutions of IP protection as they have evolved to date can contribute to development and the reduction of poverty in developing countries. We believe that IP protection of some kind is appropriate at some stage for developing countries. The system provides incentives to invent and develop new technologies that may benefit society.
But incentives work differently, depending on the supply response they evoke. They impose costs on consumers and other users of protected technologies. The balance of costs and benefits will vary according to how the rights are applied and according to the economic and social circumstances of the country where they are being applied. Standards of IP protection that may be suitable for developed countries may produce more costs than benefits when applied in developing countries, which rely in large part on knowledge generated elsewhere to satisfy their basic needs and foster development.
Although most developing countries do not have a strong technological base, they do have genetic resources and traditional knowledge that are of value to them and to the world at large. This gives rise to a further key question. Can the “modern” IP system help to protect these resources of knowledge and ensure that the benefits of their use are equitably shared? At the other end of the scale, the Internet offers enormous opportunities for access to scientific and research information needed by developing countries, whose access to traditional media may be limited by lack of resources. But forms of encryption and IP rules may, paradoxically, make this material less accessible than it is now with printed material.
It
also needs to be considered what sort of rights IP protection confers. The conferring of IP rights is an instrument
of public policy, which should be designed so that the benefit to society (for
instance through the invention of a new drug or technology) outweighs the cost
to society (for instance, the higher cost of a drug and the costs of
administering the IP system). But the
IP right is a private one, so the financial benefits and costs fall on different
groups within society. The IP right is
best viewed as one of the means by which nations and societies can help to
promote the fulfilment of human economic and social rights. In particular, there are no circumstances in
which the most fundamental human rights should be subordinated to the
requirements of IP protection. IP
rights are granted by states for limited times (at least in the case of patents
and copyrights) whereas human rights are inalienable and universal. For the most part IP rights are nowadays
generally treated as economic and commercial rights, as is the case in TRIPS,
and are more often held by companies rather than individual inventors. But describing them as “rights” should not
be allowed to conceal the very real dilemmas raised by their application in
developing countries, where the extra costs they impose may be at the expense
of the necessities of life for poor people.
We believe policy makers need to consider the available evidence, imperfect as it may be, before further extending IP rights. Too often, the interests of the “producer” dominate in the evolution of IP policy, and those of the ultimate consumer are either not heard or heeded. In IPR discussions between developed and developing countries, a similar imbalance exists. Developing countries negotiate from a position of relative weakness. The difficulty is that they are “second comers” in a world that has been shaped by the “first comers.” The question is how they can mould their IP systems to suit their own economic, social, and technological conditions, as developed countries did in the past.
Intellectual
property systems may, if we are not careful, introduce distortions that are
detrimental to the interests of developing countries. Developed countries should pay more attention to reconciling
their commercial self-interest with the need to reduce poverty in developing
countries, which is in everyone’s interest.
Higher IP standards should not be pressed on developing countries
without a serious and objective assessment of their impact on development and
poor people. We need to ensure that the
global IP system evolves so that the needs of developing countries are
incorporated and, most importantly, so that it contributes to the reduction of
poverty in developing countries by stimulating innovation and technology
transfer relevant to them, while also making available the products of
technology at the most competitive prices possible.
We hope that our endeavour will contribute to an agenda for making the global IPR system, and the institutions in that system, work better for poor people and developing countries.
Patents and copyright inherently confer both costs and benefits to individuals and companies, and to society at large. They provide an incentive for invention or creation that may benefit society, as well as the rights holder, but they also impose costs on the users of protected works.
Historically, now-developed countries used IP protection as a flexible instrument to help promote their industrialisation. Discrimination against foreigners – by refusing them the right to IP protection or by charging higher fees – was common, as was the exclusion of entire sectors, such as food or pharmaceuticals, from patentability. In some countries, the patent system was fully implemented only well into the 20th century. The East Asian countries, the most successful recent examples of development, have grown and developed their scientific and technical capabilities in the context of weak IP regimes. Now, under TRIPS and growing pressures for harmonisation, most developing nations are restricted in how they can apply the IP system. They may not discriminate among fields of technology, or by nationality, and the use of various tools of IP policy that were used historically are circumscribed under TRIPS.
The contemporary evidence suggests that, because developing countries are large net importers of technology from the developed world, the globalisation of IP protection will result in very substantial additional net transfers from developing to developed countries. The benefits to developing countries from IP protection would have to come from an offsetting dynamic stimulus to trade, the development of technology, investment, and growth.
In developed countries, strong evidence suggests that certain types of companies, particularly the pharmaceutical industry, consider IPRs are essential in promoting innovation. However, there is much less evidence from developing countries indicating that IPR systems are a key stimulus for innovation. Indeed, for most developing countries with weak technological capacity, the evidence on trade, foreign investment, and growth suggests IP protection will have little impact. Nor is it likely that the benefits of IP protection will outweigh the costs in the foreseeable future. For more technologically advanced developing countries, the balance is finer. Dynamic gains may be achieved through IP protection, but at costs to other industries and consumers.
The crucial issue in respect of IP is perhaps not whether it promotes trade or foreign investment, but how it helps or hinders developing countries to gain access to technologies that are required for their development. Countries such as Korea started at a low level of technological expertise forty years ago, comparable to many low-income countries today, but have now become innovators in their own right. Technology transfer and the development of a sustainable indigenous technological capability are determined by many factors, including but by no means limited to IPRs. Moreover, the global economy has changed fundamentally since technology transfer was last high on the international agenda when the International Code of Conduct on Technology Transfer was being discussed in the early 1980s.
In today’s liberalised and competitive environment, companies in developing countries can no longer compete on the basis of importing “mature” technologies from developed countries and producing them behind tariff barriers. And companies are more wary of transferring technology in ways that may increase the competition they face. The problem is less about obtaining mature technologies on fair and balanced terms, but more accessing about the sophisticated technologies that are required to be competitive in today’s global economy. TRIPS has strengthened the global protection offered to suppliers of technology, but without any counterbalancing strengthening of competition policies globally. Therefore, it may be unwise to focus on TRIPS as a principal means of facilitating technology transfer. A wider agenda needs to be pursued, as is currently being done in the WTO. Developed countries need to give serious consideration to their policies for encouraging technology transfer. In addition, they should promote more effective research and cooperation with and among developing countries to strengthen their scientific and technological capabilities.
·
Appropriate
incentive policies should be considered in developed countries to promote
technology transfer, for instance tax breaks for companies that license
technology to developing countries.
·
Effective
competition policies should be established in developing countries.
·
More public
funds should be made available to promote indigenous scientific and
technological capability in developing countries through scientific and
technological cooperation. For
instance, the proposed Global Research Alliance between developing and
developed country research institutions should be supported.
·
Commitments
should be made to ensure that the benefits of publicly funded research are
available to all, including developing countries.
·
Commitments to
ensure open access to scientific databases.
Without the incentive of patents it is doubtful the private sector would have invested so much in the discovery or development of medicines, many of which are currently in use both in developed and developing countries. But the evidence suggests that the IP system hardly plays any role in stimulating research on diseases particularly prevalent in developing countries, except for those diseases where there is also a substantial market in the developed world (e.g. diabetes or heart disease). Nor is it likely that the globalisation of IP protection will lead to greater investment by the private sector for the development of treatments for diseases that primarily affect developing countries. The evidence also suggests that patent protection has an effect on the prices charged for medicines. In developed countries, generic competition causes prices to fall quite sharply, particularly if the market is large enough to support a number of generic competitors. In the absence of patents in developing countries, more people would be able to afford treatments they need. When TRIPS comes fully into force after 2005, particularly when countries such as India have to introduce patent protection, the existing competition from generic suppliers will diminish.
The IP system is one factor among several that affects poor people’s access to healthcare. Other important constraints to access to medicines in developing countries are the lack of resources, and the absence of a suitable health infrastructure (including hospitals, clinics, health workers, equipment and an adequate supply of drugs) to administer medicines safely and efficaciously. Moreover, developing countries may adopt other policies, for example taxes on medicines, which adversely affect access.
As intellectual property rights are strengthened globally, the cost of medicines in developing countries is likely to increase, unless effective steps are taken to facilitate their availability at lower cost in developing countries. There are a number of IP policies that both developed and developing countries can adopt to promote cheaper prices for medicines in developing countries which the Commission does not believe will adversely affect the incentives for research on relevant diseases. One means of obtaining medicines at lower prices, amongst others discussed in the report, is for countries to use a mechanism called “compulsory licensing.” This allows countries to license the manufacture of patented medicines to other manufacturers if there are good reasons to do so (e.g. when the government considers the price of a medicine is unjustifiably high). It can also be useful as a bargaining tool in price negotiations with producers of patented medicines. For instance, the US envisaged this possibility when negotiating the price of Cipro following the anthrax attacks last year. The importance of the IP system being used to improve access to medicines and public health was emphasised in a Declaration on TRIPS and Public Health at the WTO Ministerial meeting in Doha last year.
A major issue at Doha was how countries without the capacity to manufacture medicines could procure them under the existing rules for compulsory licensing. There are a number of ways this can be achieved which are discussed in the report. A crucial issue is how this can be effected in such a way that it provides appropriate incentives for the potential suppliers of medicines and cheaper prices than the patentee is able to offer.
Apart from international measures to facilitate access to medicines, developing countries need to adopt IP rules in their legislation and practices that limit the extent of patenting and facilitate the introduction of generic competition. Doha also allowed Least Developed Countries (LDCs) to exempt pharmaceutical products from patent protection until at least 2016. But most LDCs have already provided such protection and would need to amend their legislation accordingly.
· Because the IP system does little to
stimulate research on diseases that particularly affect poor people, public
funding for research on health problems in developing countries should be
increased. This additional funding
should seek to exploit and develop existing capacities in developing countries
for this kind of research, and promote new capacity, both in the public and
private sectors.
· Countries need to adopt a range of policies
to improve access to medicines.
Additional resources to improve services, delivery mechanisms and infrastructure
are critical. Other economic policies
need to be in harmony with health policy objectives. But so also does the IP regime. Countries need to ensure that
their IP protection regimes do not run counter to their public health policies
and that they are consistent with and supportive of such policies.
· The IP system can help to establish
differential pricing mechanisms, which would allow prices for drugs to be lower
in developing countries, while higher prices are maintained in developed
countries. If differential pricing is
to work, then it is necessary to stop low priced drugs leaking back to
developed countries. Developed
countries should maintain and strengthen their legislative regimes to prevent
imports of low priced pharmaceutical products originating from developing
countries and to help maintain the price differential. However, developing countries should aim to
facilitate in their legislation their ability to import patented medicines if
they can get them cheaper elsewhere in the world. TRIPS allows countries to set their own rules on what are
technically called “parallel imports.”
· Developing countries should establish
workable laws and procedures to allow them to use compulsory licensing. They should also make similar provisions for
what is called “government use.” Many
developed countries have such laws that allow their governments to make use of
patented inventions without infringing a patent under a wide range of
circumstances.
· How the issue of facilitating compulsory
licensing for developing countries with inadequate manufacturing capacity is to
be resolved is currently being debated in the TRIPS Council. It raises a number of quite detailed legal
and practical matters. A way needs to
be found to reconcile the nature of the solution adopted with the objective of
providing medicines of the appropriate quality at the lowest possible
cost. If that cannot be achieved, the
solution will have little practical reality.
Nor will the option of compulsory licensing be effective as a negotiating
tool with companies. Whatever the
solution adopted, it should be capable of quick and easy implementation to
ensure that the real needs of poor people in developing countries are given
priority. And it should establish
conditions that provide potential suppliers with the necessary economic
incentive to export medicines that are needed by these countries.
· TRIPS allows considerable flexibility in
how countries may design their patent systems.
Since most developing countries do not have a significant research
capability, they have little to gain by providing extensive patent protection
as a means of encouraging research, but they stand to lose as a result of the
impact of patents on prices. Therefore
developing countries should aim for strict standards of patentability to
avoid granting patents that may have limited value in relation to their health
objectives. Such systems should aim to promote competition, and provide
safeguards in the event of abuses of the patent system.
· For instance, most developing countries
should exclude diagnostic, therapeutic and surgical methods from patentability,
including new uses of known products, as permitted under TRIPS.
· Developing countries should also make
provisions in their law that will facilitate the entry of generic competitors
as soon as the patent has expired on a particular drug. One of these provisions (the “Bolar
exception”) allows generic companies to develop their versions of patented
drugs during the term of the patent without infringing it. Another one would be to make it easier and
cheaper for generic companies to get regulatory approval for drugs similar to
registered drugs, while providing for the protection of test data (e.g.
clinical trials data companies require to get approval from regulators such as
the FDA in the US) against unfair commercial use.
· Those LDCs which already provide
pharmaceutical protection should consider carefully how to amend their
legislation to take advantage of the Doha Declaration. The TRIPS Council should review the
transitional arrangements for LDCs, including those applying to join the WTO,
in all fields of technology.
Chapter 3: AGRICULTURE AND GENETIC
RESOURCES
The Commission finds that
while the amount of public resources from developed countries going into
funding research relevant to poor farmers in developing countries is stagnant
or declining, the dynamic element is private sector research, supported by IP
protection and the demand from farmers in developed countries, and the
commercial sectors of a few developing countries. This combination of trends poses the danger that research
priorities overall will be increasingly less relevant to the needs of poor
farmers in developing countries.
Moreover the stagnation in public funding threatens, inter alia, the maintenance of national
and international gene banks which are the principal source of the genetic
material for future breeding efforts of relevance to poor farmers. While in recent years the IP rights of
breeders have been increasingly strengthened, as required by TRIPS, little has
been done in practice to recognise the services of farmers in the selection,
development and conservation of their traditional varieties on the basis of
which modern breeding techniques have built.
The recently agreed FAO Treaty on Plant Genetic Resources for Food and
Agriculture seeks to protect the material in gene banks and in farmers’ fields
covered by the treaty from being directly patented, and also encourages
countries to protect Farmers’ Rights.
Under TRIPS countries
must apply some kind of IP protection to plant varieties, either patents or
other kinds of protection (called sui
generis). They must also allow
microorganisms to be patentable. The
Commission finds that the evidence suggests that sui generis systems of plant variety protection (PVP) have not been
particularly effective at stimulating research on crops in general, and
particularly for the kind of crops grown by poor farmers. Systems of PVP designed for the needs of
commercial agriculture in the developed countries (such as provided for in the
UPOV Convention) also pose a threat to the practices of many farmers in
developing countries of reusing, exchanging and informally selling seeds, and
may not be appropriate in developing countries without significant commercial
agriculture. Patents are commonly used
in developed countries both to protect plant varieties, and to protect genetic
material incorporated in plants.
Because they offer a stronger form of protection than most PVP systems
they may offer a stronger incentive to research, particularly in developed
countries, and the multinational agrochemical companies regard them as
important. However, patents also pose a
threat to farmers’ traditional practices of reuse and exchange. Moreover the proliferation of genetic
patents owned by different companies has led to costly disputes, and
difficulties in pursuing research without infringing other companies’
patents. There is evidence that patents
are one factor contributing to the rapid concentration in the agricultural
biotechnology field, with adverse effects on the degree of competition.
· Because of the restrictions patents may
place on use of seed by farmers and researchers, developing countries should
generally not provide patent protection for plants and animals, as is allowed
under TRIPS. Rather they should
consider different forms of sui generis
systems for plant varieties.
· Because they are unlikely to benefit from
the incentives to research offered by the patent system, but will have to bear
the costs, developing countries with limited technological capacity should
restrict the application of patenting in agricultural biotechnology, in ways
that are consistent with TRIPS. For
similar reasons they should adopt a restrictive definition of the term
“microorganism.”
· However countries that have, or wish to develop, biotechnology-related industries may wish to provide certain types of patent protection in this area. If they d