Whereas Article 27.3 (b) addresses intellectual property rights and patentingrequirements, this proposal addresses concern...
Reforming Article 27. (b) of the                  WTO Trade Related Intellectual Property Rights AgreementAshley Daniel 11...
Table of ContentsExecutive Summary…………………………………………………………………………..3Background…………………………………………………………………………………..3Problem State...
Executive SummaryThe WTO enforces regulatory trade agreements including the Trade RelatedIntellectual Property Rights Agre...
Problem StatementTRIPS Article 27.3b protects patenting of genetically modified organisms, yet doesnot indicate the origin...
•   Purchasing seed versus seed saving- genetically modified or hybrid seed    sometimes cannot be saved, resulting in far...
One scholar explains, a concentration in the global agricultural biotechnologyindustry is “inevitable” with top firms able...
of origin (de Carvalho, 2000, pg. 374). The country of origin, in this way, couldreceive remuneration from patenting appli...
people or communities for the cultivation or use of plants with recognized qualities-such as the neem tree for its anesthe...
Action PlanReforming Article 27.3b of the TRIPS agreement is crucial in moving forward withaddressing the concerns of deve...
ResourcesBello, Walden (2000). Building the Iron Cage. In Views from the South: The Effects of       Globalization and the...
Rosendal, Kristin G. 2001. Impacts of Overlapping International Regimes: The Case     of Biodiversity. In Global Governanc...
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Convention publication

  1. 1. Whereas Article 27.3 (b) addresses intellectual property rights and patentingrequirements, this proposal addresses concerns involving the countries of origin. Thisproposal includes adopting articles from the Convention on Biological Diversity intothe WTO Trade Related Intellectual Property Rights Agreement.This study seeks to address the background of the agreement, problem identificationthereof and a proposal with benefits and concerns for stakeholders involved. Finally,a succinct action plan is proposed to address concerns with the current WTO TradeRelated Intellectual Property Rights Agreement.Research includes an analysis of Article 27.3 (b) of the Trade Related IntellectualProperty Rights Agreement as well as Articles 15.4 and 15.7 from the Convention onBiological Diversity. Research articles addressing this topic and/or proposal are alsocited and discussed. Finally, articles or information related to the background of thecurrent agreement are additionally referenced.In evaluating the policy proposal, an analysis of the strengths, weaknesses,opportunities and threats is discussed and can be compared alongside an analysis ofthe current agreement.The WTO’s regulation of the global marketplace recognizes participation is not onlyinevitable but necessary for success. This proposal assesses the current patentingstandards and Trade Related Intellectual Property Rights Agreement in order to offera policy proposal to encourage reform in order to allow for more equitableparticipation in the global economy.Keywords:World Trade Organization, Trade Related Intellectual Property Rights Agreement,Convention on Biological Diversity
  2. 2. Reforming Article 27. (b) of the WTO Trade Related Intellectual Property Rights AgreementAshley Daniel 11 The Evergreen State College, United States, danash13@evergreen.edu 1
  3. 3. Table of ContentsExecutive Summary…………………………………………………………………………..3Background…………………………………………………………………………………..3Problem Statement……………………………………………………………….…………..4Problem Identification……………………………………………………………………….4Proposal and Benefits……………………….…………………………...…………………..6Proposal Concerns…………………………………………………………………………...7Stakeholder Impact……. …………………………………………………...……………….8Action Plan………………………………………...………………………..……………….9SWOT Analysis of Proposal………………………………………………………………...10SWOT Analysis of Current Agreement……………………………………………………..11Resources…………………………………………………………………………………….12 2
  4. 4. Executive SummaryThe WTO enforces regulatory trade agreements including the Trade RelatedIntellectual Property Rights Agreement, or TRIPs. Article 27.3b of the TRIPsAgreement specifically addresses the patenting of organisms modified forcommercial use. The current patenting requirements for genetically modifiedorganisms (or GMOs) result in unfavorable trading standards for those in the globalSouth. A fair and equitable compromise exists and is currently modeled in Article15.4 and 15.7 of the Convention on Biological Diversity’s text. Supplementing Article27.3b with these provisions will allow developed and lesser developed countries aplace in the global marketplace without forsaking their self-interest.BackgroundIn 1944, the Bretton Woods Conference resulted in the creation of the GeneralAgreement on Tariffs and Trade (GATT), now called the World Trade Organization(WT0). The mission of the WTO originated from a need to regulate internationalmonetary and financial order after World War II in an effort to liberalize the globaleconomy and break down trade barriers (Stiglitz, 2002, p.11). Subsequent to itsformation, the international Agreement on Trade Related Aspects of IntellectualProperty Rights (TRIPS) took effect after the 1994 Uruguay Round in order toregulate patenting, or intellectual property (IIPA, 2013) The current Doha Round inthe WTO negotiations outwardly seeks to “place developing countries’ needs andinterests at the heart of the Work Programme adopted in this [Doha] Declaration”(WTO, 2013). The issue of intellectual property rights and patenting requirementsshould lie at the heart of reform efforts in the interests of the developing countriesaffected by Article 27.3b of the TRIPS Agreement.Article 27.3b addresses the patenting of living organisms, allowing countries toexclude biological processes from patenting, but protecting patenting of geneticallymodified organisms (WTO, 2013). The WTO explains, “Inventions eligible forpatenting must be new, involve an inventive step and be capable of industrialapplication” (WTO, 2013). Genetically modified organisms (GMOs) are defined as“new varieties of living organisms created when scientists splice the genes of twodifferent species in an attempt to produce a new species with certain desirablecharacteristics,” and, once modified, “no matter how slightly, such genetic materialcan be patented by corporations or individuals who thus appropriate all financialbenefits” (Wallach & Woodall, 1999, 44; Bello, 2000, p.77). These intellectualproperty rights are critiqued for allowing commercial plant breeders to take “traditionalindigenous varieties of seed, ‘improve’ them (often by very minor alterations ofgenetic structure), and then patent and commercialize them, eventually selling backthe patented seeds to communities that first provided them freely” (Shiva and Holla-Bhar, 1996, p.147). Reforming Article 27.3b requires addressing the concerns of allstakeholders, not simply those requesting the patents. 3
  5. 5. Problem StatementTRIPS Article 27.3b protects patenting of genetically modified organisms, yet doesnot indicate the origin from which the gene is derived nor require a patent applicationbe submitted to the country of origin. Definition Article 27.3 (b) of TRIPS Agreement from WTO WebsiteProblem IdentificationAs TRIPS Article 27.3b does not allow WTOmembers to exclude biotechnological inventionsfrom their patent systems, it results indisproportionally negatively affecting the globalSouth, or developing countries (Dutfield, 2001, pg.1). This article of the TRIPS Agreement relates tothe appropriation of patents on GMOs, invokingconcerns that protection of such “intellectualproperty rights” through patenting posesdisadvantages for farmers trying to compete in aglobal marketplace. Intellectual property rights donot extend to patent plants innovatively bred overgenerations or through millennia, yet coversbiotechnological inventions, so long as they involvean inventive step and are capable of industrialapplication (WTO, 2013). These patents are thuscommonly granted to agribusiness firms for the Inventions eligible for patentingcreation of GMOs, yet do not generally benefit the from WTO websitecommunities of the plants’ origin (Engdahl, 2005,pg.5).Extending intellectual property rights, or patenting, of GMOs results in issues suchas:• “Biopiracy”- the process whereby seed is usurped and altered to be resold as the product of a given company. In one example, a U.S. firm patented a new variety of seed from genetic material from Thailand’s Jasmine rice and India’s basmati rice, thus threatening local farmers exports with “Jasmati” rice (Bello, 2000, pg. 77). 4
  6. 6. • Purchasing seed versus seed saving- genetically modified or hybrid seed sometimes cannot be saved, resulting in farmers having to repurchase the seed each year. This leads to the control of seed shifting from the farmer to the seed industry (Seeds of Freedom, 2013).• The “three M’s: Multiply, Mutate and Migrate,”- could lead to a new GMO seed choking out a wild variety or a cultivated relative (Cosbey, 1996, pg. 7). One example of this is found in the Schmeiser v. Monsanto case involving the migration of patented Round Up Ready canola. In another case, the migration of a GM rice strain contaminated the rice supply in Arkansas, put the entire regional industry at risk, and the U.S. rice export market in jeopardy (Freeman & Herz, 2007).• Less diversified farming-The proliferation of GMO seeds for industrial application leads to fewer crop varieties through promotion of monocropping and agribusiness. This supplants self-sustainable and diversified farms that can support a community’s agricultural needs with export-oriented farming. The loss of biodiversity also has effects on the ecological system.Table depicting strengths, weaknesses, opportunities and threats presented by the currentArticle 27.3 (b) of the WTO TRIPS Agreement.SWOT template obtained from City of Olympia website. 5
  7. 7. One scholar explains, a concentration in the global agricultural biotechnologyindustry is “inevitable” with top firms able to devote impressive sums to biotechnologyresearch (Wright & Pardey, 2006, pg. 22). Vandana Shiva elaborates a “coalition of12 major U.S. corporations: Bristol Myers, DuPont, GE, General Motors, HewlettPackard, IBM, Johnson & Johnson, Merck, Monsanto, Pfizer, Rockwell, and Warner”essentially control the world’s GM seed supply and worked closely to introduceintellectual property protection into the WTO (1997, p. 81). These interests oftenconflict with those of the farmers who are unable to produce an invention worthy ofintellectual property rights.Other stakeholders include international governments affected by the TRIPSagreement. The WTO’s TRIPS Agreement has been used to defend opening foreignborder to untested GMOs (Engdahl, 2005, pg.5). When the European Union blockedthe import of U.S. products through its ban on genetically modified food, the U.S. fileda formal complaint with WTO citing the EU was in violation of international tradeagreements (Bloom, 2011). India has also pushed heavily for “no patenting on life” inWTO ministerial conferences to no avail (de Carvalho, 2000, pg. 392). With GMOsbeing a protected class for patenting, it is important to consider a way to reconcile theinterests of seed companies with those of the farmers, as well as local governments.One critic concludes, “Intellectual property rights would only be recognized when theygenerated profit” but not when “a Mende farmer saves some seeds and rejectsothers” and when the “innovation is capable of industrial application,” but not for “theIndian farmer who collects and saves seeds for the next year’s planting.” (Lehmanand Krebs, 1996, p.129). Intellectual property rights are thus a“legally enforceablebut limited monopoly, granted by the state to an innovator,” thus allowing theinnovator to “commercialize it, and recoup any investment on research anddevelopment” (Cosbey, 1996, p.2). The context of this proposal arises fromdeveloped countries using genetic resources extracted from biodiversity-rich, butotherwise lesser developed, countries in order to create new inventions. Yet, there isno condition requiring listing of the origin of the genetic resources, nor a requirementto seek patenting permission from the country of origin to use the resource forbiotechnology purposes (de Carvalho, 2000, pg. 375; pg.390). This TRIPSAgreement proposal seeks to ameliorate present conditions to address the concernsof all those affected.Proposal and BenefitsA model proposal to address Article 27.3 (b) exists and can be found in Articles 15.4and 15.7 from the Convention on Biological Diversity (CBD). Article 15.4 of the CBDaddresses the patenting of GMOs in stating access to a patent should require priorinformed consent from the country of origin (de Carvalho, 2000, pg. 374). Thisincludes the allocation of genetic material, such as germplasm, for the use ofproducing a genetically modified organism. Article 15.7 of the CBD text furtherdelineates contracting parties “shall take legislative, administrative or policymeasures…with the aim of sharing in a fair and equitable way the results of researchand development and the benefits arising from the commercial and other utilization ofgenetic resources” (CBD, 2013). An accompanying proposal to address the sharingof benefits asserts the patent should disclose the source of the genetic material usedin the inventive activity and provide documentation of prior consent from the country 6
  8. 8. of origin (de Carvalho, 2000, pg. 374). The country of origin, in this way, couldreceive remuneration from patenting application fees.Adopting Articles 15.4 and 15.7 of the CBD textentails a compromise between those who resistall patents on biological processes or genes andthose who support patenting intellectual propertyrights or inventions. The patenting system isupheld, yet can be utilized to afford benefits tothe countries from which a plant’s genes arederived. The proposal would have positiveimpacts on all stakeholders, farmers in the Southand company executives in the North, in thequest for a success in the global economy.Coupling patenting with disclosure ensures: a).the patent applicants must state the country oforigin of genetic resources and traditionalknowledge used in the inventions, b). evidencethey received “prior informed consent,” c).a more“fair and equitable” system of benefit sharing andpotential patenting fees (Institute of International Articles 15.4 and .7 from the CBD websiteTrade, 2009). The “global village” benefits fromaccess to genes with positive properties, and the local village is recognized formultigenerational recognition of the plant’s beneficial properties.At first glance, the CBD and WTO may not seem compatible. After all, the CBD isconcerned with conservation of biological diversity and equitable sharing of benefitsderived from the world’s resources, while the WTO TRIPS Agreement serves todiscourage policies that obstruct trade liberalization in any area- includingbiotechnology (Rosendal, 2001, pg. 2). Yet, while the Convention on BiologicalDiversity arose from a United Nations Summit to address environmental concerns, itsArticles provide a compromise addressing the economic, environmental and socialconcerns with the TRIPS Agreement (CBD, 2013). Moving forward with reformingArticle 27.3b of the TRIPS Agreement should entail considering these Articles.Proposal ConcernsThis proposal will likely be disputed by certain stakeholders who resist any patentson life, such as the countries of Norway and India (Rosendal, 2001, pg 10). Theirproposal may address revising Article 27.3b to explicitly prohibit the patenting ofplants and animals, including their parts, and processes which make use of theirparts (Third World Network, 1999). The “No patents on life” movement may call forthe elimination of patents on biological processes or genes to protect indigenousknowledge as “collective and cumulative innovation” (Shiva, 2000, pg. 123). Yetanother concern could be with the corruption that may take place from governmentsissuing the patenting. If a lesser developed country, for example, receives manypatenting requests and grants them despite the wishes of the citizenry, thegovernment may benefit from patenting fees at the sake of the interests of thepeople. One amendment to the proposal could address protecting communitysources through the issue of “collective intellectual property rights” to indigenous 7
  9. 9. people or communities for the cultivation or use of plants with recognized qualities-such as the neem tree for its anesthetic properties (Shiva, 2000b, p. 508). Thisproposal could serve to protect community sources from patenting when deemednecessary.This proposal may also be critiqued by companies involved in genetic modification.Requiring companies to fill out patent applications could arguably slow the patentingprocess, result in less patent requests, and could have a fiscal impact should thecountry of origin impose a patenting fee. Furthermore, it could lead to consumers ofGMOs to request labeling that indicates this information, further impacting thecompany fiscally. While clearly mentioning the biological source of the material andcountry of its origin is an extra step, it could also be useful should any unintendedconsequences of genetically modified migration occur (de Carvalho, 2000, pg. 392).It could assist companies in mitigating liability if the source of the invention is clear,especially if there is a consequence in the area of health due to genetically modifiedproliferation. While this proposal does not perfectly suit the interests of affectedfarmers or agribusiness, it entails a compromise between both worlds and interests.Stakeholder ImpactMany stakeholders are involved in this issue, including farmers affected, seedcompanies involved in patenting,international governments, Pros:consumers, the WTO and the CBD. • Recognizes country of originReforming Article 27.3b to adopt the • Requires prior consent fromprovisions outlined in the Convention country of originon Biological Diversity ensures the • Allows for more openness of GMOsharing of the benefits from the sourcescommercial utilization of genetic Cons:resources (CBD, 2013). Whereas • Regulatory patenting proceduresthere is a current lack of provisions in • Patents on genes still allowedthe TRIPS Agreement concerningobtaining informed consent from the country of origin, this proposal requires a patentapplication to be approved before seeking genetic material for biotechnologicalinventions (de Carvalho, 2000, pg. 391). Further, the disclosure of the country oforigin assures the representation of interests of the citizenry and the country of theplant’s origin. The utilization of such “transfer agreements” and “transfer ofinformation” provides a degree of transparency and equitability currently lacking inArticle 27.3b of the TRIPS Agreement, and in WTO negotiations (de Carvalho, 2000,pg. 392). Indicating the source of genetic resources and acquiring patenting approvalis a “reasonable care standard” and addresses the concerns of all stakeholdersinvolved (de Carvalho, 2000, pg. 400). Adopting CBD text into Article 27.3b alsoupholds the merit of a UN Convention text in a global trade organization’sinternational agreement. 8
  10. 10. Action PlanReforming Article 27.3b of the TRIPS agreement is crucial in moving forward withaddressing the concerns of developing countries. By adopting the text of the CBDArticles 15.5 and 15.7, the WTO can move towards more a more transparent, fair andequitable global institution for all its member countries. Whereas the WTO is currentlyin the Doha Round of negotiations, it is crucial to consider this proposal for reformingan Article that affects farmers globally, particularly in the global South. Adoptingthese provisions into the Agreement ensures a successful role for all players in theglobal economy, while upholding intellectual property rights for biotechnologicalinventions. This is an important step for the WTO and for our global future. 9
  11. 11. ResourcesBello, Walden (2000). Building the Iron Cage. In Views from the South: The Effects of Globalization and the WTO on Third World Countries. Ed. Sarah Anderson. Chicago: Food First Books and The International Forum on Globalization.Bloom, Jeremy (Editor). 2011. Is Europe’s ban on Monsanto’s GMO crops illegal? Available from: http://redgreenandblue.org/2011/03/23/is-europes-ban-on- monsantos-gmo-crops-illegal/Convention on Biological Diversity. Article 15: Access to Genetic Resources. Available from: http://www.cbd.int/convention/articles/?a=cbd-15Corner House. 1998. “Ten Reasons Why GE Crops Won’t Feed the World.” Available from: www.thecornerhouse.org.uk/item.shtml?x=52221Cosbey, A. (1996). The Sustainable Development Effects of the WTO TRIPS Agreement: A Focus on Developing Countries. Winnipeg, International Institute for Sustainable Development.de Carvalho, Nuno Pires. 2000. Requiring Disclosure of the Origin of Genetic Resources and Prior Informed Consent in Patent Applications Without Infringing the TRIPS Agreement: The Problem and the Solution. Washington University Journal of Law and Policy. Volume 2: Re-Engineering Patent Law: The Challenge of New Technologies. http://digitalcommons.law.wustl.edu/wujlp/vol2/iss1/12Dutfield, Graham. 2001. Biotechnology and Patents: What Can Developing Countries Do About Article 27.3(b)? Bridges: ICTSD Analysis. Available from: http://ictsd.org/downloads/2008/10/dutfieldbridgesyear5n9novdec2001.pdfEngdahl, F. William (2005). The WTO and the Politics of GMO. Available from: publiceyeonscience.ch/images/the_wto_and_the_politics_of_gmo.docFreeman & Herz LLC (2007). In RE Genetically Modified Rice Litigation. Available from: http://bayerricelitigation.com/International Intellectual Property Alliance (IIPA). 2013. WTO TRIPS Implementation. http://www.iipa.com/trips.htmlInstitute of International Trade. 2009.Intellectual Property: Article 27.3b, traditional knowledge, biodiversity. Available from: http://www.iitrade.com/article27.3_tk_bd.aspLehman, Karen and Krebs, Al. 1996. “Control of the World’s Food Supply.” In The Case Against the Global Economy and For a Turn Toward the Local, eds Mander, Jerry and Goldsmith, Edward, 122-130. San Francisco: Sierra Club Books. 12
  12. 12. Rosendal, Kristin G. 2001. Impacts of Overlapping International Regimes: The Case of Biodiversity. In Global Governance, Vol. 7, Issue 1.Seeds of Freedom (2013). Video available at seedsoffreedom.infoShiva, Vandana. 1997. Biopiracy: the Plunder of Nature and Knowledge. Cambridgee, Massachusetts: South End Press.-----. 2000. War Against Nature and the People of the South. In Views from the South: The Effects of Globalization and the WTO on Third World Countries. Ed. Sarah Anderson. Chicago: Food First Books and The International Forum on Globalization.-----.2000b. North-South Conflicts in Intellectual Property Rights. Piece Review 12:4, p. 501-8.Shiva, Vandana and Holla-Bhar, Radha (1996). “Piracy by Patent: The Case of the Neem Tree.” In The Case Against the Global Economy and for a Turn Toward the Local. Eds. Jerry Mander and Edward Goldsmith. Sierra Club.Stiglitz, Joseph E. 2002. Globalization and Its Discontents. NY: W.W. Norton & Co.Third World Network. 1999. Article 27.3(b) of the TRIPS Agreement: Review options for the South. Available from: http://www.twnside.org.sg/title/oh1-cn.htmUnited Nations. 2013. Democracy. Available from: http://www.un.org/en/globalissues/democracy/index.shtmlWallach, Lori and Woodall, Patrick. 2004. “Whose Trade Organization? The Comprehensive Guide to the WTO.” Available from: http://faculty.fortlewis.edu/lashell_b/AG300/WHOSE%20TRADE%20ORGANI ZATION%20-HO.pdfWright, Brian D. and Pardey, Philip G. 2006. The evolving rights to intellectual property protection in the agricultural biosciences. In Int. J. Technology and Globalization, Vol. 2, Nos. 1/2. Available from: http://are.berkeley.edu/courses/EEP143/fall2007/IJTGWP2.pdfWTO (2013). TRIPs Article 27.3b. Available from: http://www.wto.org/english/tratop_e/trips_e/art27_3b_background_e.htmWTO (2013). Doha Round. Available from: http://www.wto.org/english/tratop_e/dda_e/dda_e.htm#development 13

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