Convention publication

Whereas Article 27.3 (b) addresses intellectual property rights and patenting
requirements, this proposal addresses concerns involving the countries of origin. This
proposal includes adopting articles from the Convention on Biological Diversity into
the WTO Trade Related Intellectual Property Rights Agreement.

This study seeks to address the background of the agreement, problem identification
thereof and a proposal with benefits and concerns for stakeholders involved. Finally,
a succinct action plan is proposed to address concerns with the current WTO Trade
Related Intellectual Property Rights Agreement.

Research includes an analysis of Article 27.3 (b) of the Trade Related Intellectual
Property Rights Agreement as well as Articles 15.4 and 15.7 from the Convention on
Biological Diversity. Research articles addressing this topic and/or proposal are also
cited and discussed. Finally, articles or information related to the background of the
current 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 of
the current agreement.

The WTO’s regulation of the global marketplace recognizes participation is not only
inevitable but necessary for success. This proposal assesses the current patenting
standards and Trade Related Intellectual Property Rights Agreement in order to offer
a policy proposal to encourage reform in order to allow for more equitable
participation in the global economy.

Keywords:

World Trade Organization, Trade Related Intellectual Property Rights Agreement,
Convention on Biological Diversity

Reforming Article 27. (b) of the
WTO Trade Related Intellectual Property Rights Agreement

Ashley Daniel 1

1
The Evergreen State College, United States, danash13@evergreen.edu

1

Table of Contents

Executive Summary…………………………………………………………………………..3

Background…………………………………………………………………………………..3

Problem Statement……………………………………………………………….…………..4

Problem Identification……………………………………………………………………….4

Proposal and Benefits……………………….…………………………...…………………..6

Proposal Concerns…………………………………………………………………………...7

Stakeholder Impact……. …………………………………………………...……………….8

Action Plan………………………………………...………………………..……………….9

SWOT Analysis of Proposal………………………………………………………………...10

SWOT Analysis of Current Agreement……………………………………………………..11

Resources…………………………………………………………………………………….12

2

Executive Summary

The WTO enforces regulatory trade agreements including the Trade Related
Intellectual Property Rights Agreement, or TRIPs. Article 27.3b of the TRIPs
Agreement specifically addresses the patenting of organisms modified for
commercial use. The current patenting requirements for genetically modified
organisms (or GMOs) result in unfavorable trading standards for those in the global
South. A fair and equitable compromise exists and is currently modeled in Article
15.4 and 15.7 of the Convention on Biological Diversity’s text. Supplementing Article
27.3b with these provisions will allow developed and lesser developed countries a
place in the global marketplace without forsaking their self-interest.

Background

In 1944, the Bretton Woods Conference resulted in the creation of the General
Agreement on Tariffs and Trade (GATT), now called the World Trade Organization
(WT0). The mission of the WTO originated from a need to regulate international
monetary and financial order after World War II in an effort to liberalize the global
economy and break down trade barriers (Stiglitz, 2002, p.11). Subsequent to its
formation, the international Agreement on Trade Related Aspects of Intellectual
Property Rights (TRIPS) took effect after the 1994 Uruguay Round in order to
regulate patenting, or intellectual property (IIPA, 2013) The current Doha Round in
the WTO negotiations outwardly seeks to “place developing countries’ needs and
interests at the heart of the Work Programme adopted in this [Doha] Declaration”
(WTO, 2013). The issue of intellectual property rights and patenting requirements
should lie at the heart of reform efforts in the interests of the developing countries
affected by Article 27.3b of the TRIPS Agreement.

Article 27.3b addresses the patenting of living organisms, allowing countries to
exclude biological processes from patenting, but protecting patenting of genetically
modified organisms (WTO, 2013). The WTO explains, “Inventions eligible for
patenting must be new, involve an inventive step and be capable of industrial
application” (WTO, 2013). Genetically modified organisms (GMOs) are defined as
“new varieties of living organisms created when scientists splice the genes of two
different species in an attempt to produce a new species with certain desirable
characteristics,” and, once modified, “no matter how slightly, such genetic material
can be patented by corporations or individuals who thus appropriate all financial
benefits” (Wallach & Woodall, 1999, 44; Bello, 2000, p.77). These intellectual
property rights are critiqued for allowing commercial plant breeders to take “traditional
indigenous varieties of seed, ‘improve’ them (often by very minor alterations of
genetic structure), and then patent and commercialize them, eventually selling back
the 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 all
stakeholders, not simply those requesting the patents.

3

Problem Statement

TRIPS Article 27.3b protects patenting of genetically modified organisms, yet does
not indicate the origin from which the gene is derived nor require a patent application
be submitted to the country of origin.

Definition Article 27.3 (b) of TRIPS Agreement from WTO Website

Problem Identification

As TRIPS Article 27.3b does not allow WTO
members to exclude biotechnological inventions
from their patent systems, it results in
disproportionally negatively affecting the global
South, or developing countries (Dutfield, 2001, pg.
1). This article of the TRIPS Agreement relates to
the appropriation of patents on GMOs, invoking
concerns that protection of such “intellectual
property rights” through patenting poses
disadvantages for farmers trying to compete in a
global marketplace. Intellectual property rights do
not extend to patent plants innovatively bred over
generations or through millennia, yet covers
biotechnological inventions, so long as they involve
an inventive step and are capable of industrial
application (WTO, 2013). These patents are thus
commonly granted to agribusiness firms for the Inventions eligible for patenting
creation of GMOs, yet do not generally benefit the
from WTO website
communities of the plants’ origin (Engdahl, 2005,
pg.5).

Extending intellectual property rights, or patenting, of GMOs results in issues such
as:

• “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).

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• 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 current
Article 27.3 (b) of the WTO TRIPS Agreement.
SWOT template obtained from City of Olympia website.

5

One scholar explains, a concentration in the global agricultural biotechnology
industry is “inevitable” with top firms able to devote impressive sums to biotechnology
research (Wright & Pardey, 2006, pg. 22). Vandana Shiva elaborates a “coalition of
12 major U.S. corporations: Bristol Myers, DuPont, GE, General Motors, Hewlett
Packard, IBM, Johnson & Johnson, Merck, Monsanto, Pfizer, Rockwell, and Warner”
essentially control the world’s GM seed supply and worked closely to introduce
intellectual property protection into the WTO (1997, p. 81). These interests often
conflict with those of the farmers who are unable to produce an invention worthy of
intellectual property rights.

Other stakeholders include international governments affected by the TRIPS
agreement. The WTO’s TRIPS Agreement has been used to defend opening foreign
border to untested GMOs (Engdahl, 2005, pg.5). When the European Union blocked
the import of U.S. products through its ban on genetically modified food, the U.S. filed
a formal complaint with WTO citing the EU was in violation of international trade
agreements (Bloom, 2011). India has also pushed heavily for “no patenting on life” in
WTO ministerial conferences to no avail (de Carvalho, 2000, pg. 392). With GMOs
being a protected class for patenting, it is important to consider a way to reconcile the
interests of seed companies with those of the farmers, as well as local governments.

One critic concludes, “Intellectual property rights would only be recognized when they
generated profit” but not when “a Mende farmer saves some seeds and rejects
others” and when the “innovation is capable of industrial application,” but not for “the
Indian farmer who collects and saves seeds for the next year’s planting.” (Lehman
and Krebs, 1996, p.129). Intellectual property rights are thus a“legally enforceable
but limited monopoly, granted by the state to an innovator,” thus allowing the
innovator to “commercialize it, and recoup any investment on research and
development” (Cosbey, 1996, p.2). The context of this proposal arises from
developed countries using genetic resources extracted from biodiversity-rich, but
otherwise lesser developed, countries in order to create new inventions. Yet, there is
no condition requiring listing of the origin of the genetic resources, nor a requirement
to seek patenting permission from the country of origin to use the resource for
biotechnology purposes (de Carvalho, 2000, pg. 375; pg.390). This TRIPS
Agreement proposal seeks to ameliorate present conditions to address the concerns
of all those affected.

Proposal and Benefits

A model proposal to address Article 27.3 (b) exists and can be found in Articles 15.4
and 15.7 from the Convention on Biological Diversity (CBD). Article 15.4 of the CBD
addresses the patenting of GMOs in stating access to a patent should require prior
informed consent from the country of origin (de Carvalho, 2000, pg. 374). This
includes the allocation of genetic material, such as germplasm, for the use of
producing a genetically modified organism. Article 15.7 of the CBD text further
delineates contracting parties “shall take legislative, administrative or policy
measures…with the aim of sharing in a fair and equitable way the results of research
and development and the benefits arising from the commercial and other utilization of
genetic resources” (CBD, 2013). An accompanying proposal to address the sharing
of benefits asserts the patent should disclose the source of the genetic material used
in the inventive activity and provide documentation of prior consent from the country

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of origin (de Carvalho, 2000, pg. 374). The country of origin, in this way, could
receive remuneration from patenting application fees.

Adopting Articles 15.4 and 15.7 of the CBD text
entails a compromise between those who resist
all patents on biological processes or genes and
those who support patenting intellectual property
rights or inventions. The patenting system is
upheld, yet can be utilized to afford benefits to
the countries from which a plant’s genes are
derived. The proposal would have positive
impacts on all stakeholders, farmers in the South
and company executives in the North, in the
quest for a success in the global economy.
Coupling patenting with disclosure ensures: a).
the patent applicants must state the country of
origin of genetic resources and traditional
knowledge used in the inventions, b). evidence
they received “prior informed consent,” c).a more
“fair and equitable” system of benefit sharing and
potential patenting fees (Institute of International Articles 15.4 and .7 from the CBD website
Trade, 2009). The “global village” benefits from
access to genes with positive properties, and the local village is recognized for
multigenerational recognition of the plant’s beneficial properties.

At first glance, the CBD and WTO may not seem compatible. After all, the CBD is
concerned with conservation of biological diversity and equitable sharing of benefits
derived from the world’s resources, while the WTO TRIPS Agreement serves to
discourage policies that obstruct trade liberalization in any area- including
biotechnology (Rosendal, 2001, pg. 2). Yet, while the Convention on Biological
Diversity arose from a United Nations Summit to address environmental concerns, its
Articles provide a compromise addressing the economic, environmental and social
concerns with the TRIPS Agreement (CBD, 2013). Moving forward with reforming
Article 27.3b of the TRIPS Agreement should entail considering these Articles.

Proposal Concerns

This proposal will likely be disputed by certain stakeholders who resist any patents
on life, such as the countries of Norway and India (Rosendal, 2001, pg 10). Their
proposal may address revising Article 27.3b to explicitly prohibit the patenting of
plants and animals, including their parts, and processes which make use of their
parts (Third World Network, 1999). The “No patents on life” movement may call for
the elimination of patents on biological processes or genes to protect indigenous
knowledge as “collective and cumulative innovation” (Shiva, 2000, pg. 123). Yet
another concern could be with the corruption that may take place from governments
issuing the patenting. If a lesser developed country, for example, receives many
patenting requests and grants them despite the wishes of the citizenry, the
government may benefit from patenting fees at the sake of the interests of the
people. One amendment to the proposal could address protecting community
sources through the issue of “collective intellectual property rights” to indigenous

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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). This
proposal could serve to protect community sources from patenting when deemed
necessary.

This proposal may also be critiqued by companies involved in genetic modification.
Requiring companies to fill out patent applications could arguably slow the patenting
process, result in less patent requests, and could have a fiscal impact should the
country of origin impose a patenting fee. Furthermore, it could lead to consumers of
GMOs to request labeling that indicates this information, further impacting the
company fiscally. While clearly mentioning the biological source of the material and
country of its origin is an extra step, it could also be useful should any unintended
consequences 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 modified
proliferation. While this proposal does not perfectly suit the interests of affected
farmers or agribusiness, it entails a compromise between both worlds and interests.

Stakeholder Impact

Many stakeholders are involved in this issue, including farmers affected, seed
companies involved in patenting,
international governments, Pros:
consumers, the WTO and the CBD. • Recognizes country of origin
Reforming Article 27.3b to adopt the • Requires prior consent from
provisions outlined in the Convention country of origin
on Biological Diversity ensures the • Allows for more openness of GMO
sharing of the benefits from the sources
commercial utilization of genetic Cons:
resources (CBD, 2013). Whereas • Regulatory patenting procedures
there is a current lack of provisions in • Patents on genes still allowed
the TRIPS Agreement concerning
obtaining informed consent from the country of origin, this proposal requires a patent
application to be approved before seeking genetic material for biotechnological
inventions (de Carvalho, 2000, pg. 391). Further, the disclosure of the country of
origin assures the representation of interests of the citizenry and the country of the
plant’s origin. The utilization of such “transfer agreements” and “transfer of
information” provides a degree of transparency and equitability currently lacking in
Article 27.3b of the TRIPS Agreement, and in WTO negotiations (de Carvalho, 2000,
pg. 392). Indicating the source of genetic resources and acquiring patenting approval
is a “reasonable care standard” and addresses the concerns of all stakeholders
involved (de Carvalho, 2000, pg. 400). Adopting CBD text into Article 27.3b also
upholds the merit of a UN Convention text in a global trade organization’s
international agreement.

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Action Plan

Reforming Article 27.3b of the TRIPS agreement is crucial in moving forward with
addressing the concerns of developing countries. By adopting the text of the CBD
Articles 15.5 and 15.7, the WTO can move towards more a more transparent, fair and
equitable global institution for all its member countries. Whereas the WTO is currently
in the Doha Round of negotiations, it is crucial to consider this proposal for reforming
an Article that affects farmers globally, particularly in the global South. Adopting
these provisions into the Agreement ensures a successful role for all players in the
global economy, while upholding intellectual property rights for biotechnological
inventions. This is an important step for the WTO and for our global future.

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Convention on Biological Diversity. Article 15: Access to Genetic Resources.
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Corner House. 1998. “Ten Reasons Why GE Crops Won’t Feed the World.”
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