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BIOTECHNOLOGY IN FOOD AND AGRICULTURE
Background document to Conference 6: March 20 - May 13


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    The impact of intellectual property rights (IPRs) on food and agriculture in developing countries

    1. The concept of IPRs

    Firstly, a few words about the concept of IPRs in general. IPRs are intangible rights which grant an exclusive right to impede others to freely exploit an invention or creation. Different forms of IPRs exist such as patents, trademarks, industrial designs or copyrights. Each form of IPRs has different requirements and grants different rights.

    For example, patents are granted on inventions which are novel, inventive, with a useful application and sufficiently described to allow verification. Some things may not be patented, such as discoveries. Patents are granted for a limited time period, usually 20 years, and are only valid in the country where they have been granted. Registered trademarks also have national coverage and the time limit of the rights may be extended. Plant variety protection provides protection to new plant varieties that have not been previously commercialised, that are distinct from existing varieties, that are uniform in their main characteristics and stable over the years for those characteristics. Unlike patented material, protected varieties can be used for the development of new varieties without the authorisation of the rights holder.

    IPRs in general, and the patent system in particular, were established originally as a way to reward creativity and promote innovation. They allow the holder of the rights to recoup the investment in research required to develop the new invention, which can be quite substantial for high technology inventions and, in exchange, society receives the benefit of the disclosure of the new invention.

    2. IPRs in the field of biotechnology for food and agriculture

    Before the whole range of possibilities offered by modern technologies in the agricultural sector were available, inventions based on living organisms were considered natural phenomena, i.e. discoveries, and were thus not patentable. However, developments in modern biotechnology require substantial levels of investment in research and development, and its processes and products can be easily copied. The IPRs system provides a way of ensuring the financial revenues required to make the technology profitable.

    In 1980, the United States Supreme Court made a landmark decision in the Diamond versus Chakrabarty case. The ruling stated that a live, human-made, genetically engineered bacterium (of the genus Pseudomonas, that was modified to break down components of crude oil) could be patented, thus initiating an era of massive private investment in biotechnology and of rapid expansion in the patenting of new biotechnological innovations and products. Many biotechnology companies and universities have since applied for and been granted patents on a wide range of biotechnology processes and products, involving genes, viruses, bacteria and even living higher organisms.

    While the positive impact of the IPRs system on investments in research is not in question, concerns have been raised regarding the following issues:

    a) The limits of patentability

    The difference between invention and discovery becomes a matter of interpretation when it refers to living material. The isolation of a gene from its natural environment and the identification of its function render the gene and its sequence an invention for patenting purposes in some countries. The impact of patenting of genes in the agricultural sector cannot be minimised and should be discussed in this conference.

    b) Patenting of "enabling technologies" (i.e. technologies that are essential for the practical implementation of a wide range of other biotechnological processes and products)

    This issue is of great importance as it has an impact on access to these technologies, not only by developing countries but also by the agricultural research system in general.

    c) The multiplicity of patents required to develop an agricultural product

    This complicates management of the research agenda. Developments in modern agricultural biotechnology require the use of several processes and products, which in most cases will be subject to patent protection. As an example, let us consider development of genetically modified (GM) crops. Firstly, individual genes, affecting characters of interest such as disease resistance or herbicide tolerance, are patentable. Secondly, DNA sequences controlling the expression of these genes, such as promoters, may also be patented. The two methods most widely used for transferring foreign DNA, as well as methods for identifying plant cells that have successfully incorporated the foreign genes, are also patented. Thus, many steps of patented technologies are required for the development of a product in the field of agricultural biotechnology.

    An example illustrating the complexity of IPRs is "golden rice", a rice plant into which three foreign genes (two from the daffodil and one from a bacteria) have been introduced so that it produces provitamin A. The plant variant was produced by researchers collaborating in Switzerland and Germany and there is large interest in making it available to farmers in developing countries. However, the number of concurrent patents has complicated this possibility. Seventy techniques and materials used in developing the variant are patented, and they are owned by 32 different parties.

    d) Patents on specific genes usually extend to the GM organisms into which the genes are inserted, thus bringing the entire organism under patent protection.

    This question has raised considerable debate in the crop sector. Eventual financial revenues are granted to the patent holder, without compensating the developers of the original plant variety. In some cases, however, particularly when the original plant variety is protected through plant variety protection, sharing of benefits is achieved on a contractual basis with the patent holder.

    e) Concentration of the agricultural industry

    Another important element in this discussion is that a small number of multinational companies (MNCs) dominate the field of agricultural biotechnology. Companies from developed countries therefore own many of the important IPRs in this area, and the power that this provides is concentrated in very few hands. For example, it is reported that of the roughly 270 patents related to genes of the soil bacterium Bacillus thuringiensis (Bt) granted from 1986 to 1997 in countries of the Organisation for Economic Co-operation and Development (OECD), about 60% were owned by only six MNCs. As the development of biotechnology products requires the use of many protected technologies, the private sector usually overcomes this problem by cross-licensing their patents, involving the mutual exchange of access to patented products or processes without financial compensation. For small organisations that do not have IPRs to trade, licensing negotiations may be difficult and costly.

    From discussions during Conference 1 of the Forum (entitled "How appropriate are currently available biotechnologies in the crop sector for food production and agriculture in developing countries"), it was apparent that many participants were convinced that the impact of IPRs on agricultural biotechnology in developing countries was quite substantial. Some of the potential consequences mentioned by participants were:

    a) Increased dependency of developing countries on developed countries:

    The point was made that the existence of strong IPRs, and the fact that the rights over the technologies and products are often owned by MNCs, might lead to (increased) dependence by developing country farmers on MNCs and developed countries.

    b) Patenting of genetic resources native to developing countries:

    Patents can and have been issued to companies from developed countries over genetic material from developing countries, particularly for pharmaceutical and cosmetic purposes. In some cases, the lack of appropriate mechanisms for sharing of benefits has generated considerable controversy. A much-cited example is that of the neem tree (Azadirachta indica), which is a member of the mahogany family and which is indigenous to the Indian subcontinent where it has traditionally been used for agriculture, medicine and cosmetics. Around 90 patents exploiting the tree have been granted world-wide. In some cases, patents have been granted for particular uses, which are already known by traditional indigenous communities, not fulfilling the novelty requirement. Following a legal challenge, the European Patent Office in May 2000, revoked one of the patents (number EP0436257), granted to an American MNC and the United States Department of Agriculture, on a neem seed extract with insecticide and fungicide properties on the basis of its lack of novelty. Patent litigation costs are high and are an important factor in deciding whether to challenge such patents.

    A more detailed summary of what the participants said can be found in the Summary Document of Conference 1 sent to Forum members on 2 October 2000 and which is also available on the Forum website at http://www.fao.org/biotech/logs/C1/sum.htm .

    3. Factors that should be discussed in this conference

    The main topic of this e-mail conference is the impact of IPRs (over biotechnological products and processes) on food and agriculture in developing countries.

    The following areas should be considered during the conference:

  • What are the impacts of IPRs (positive or negative) for food and agriculture in developing countries
  • Compare the relative impacts in the animal, crop, fishery or forestry sectors
  • Are the impacts different for different countries or regions of the developing world
  • Are the impacts more substantial for some biotechnologies than for others
  • If some of the impacts or consequences are negative for developing countries, how can they be avoided or alleviated
  • Whether the lack of an appropriate or harmonised IPRs system in a developing country can have an impact on biotechnology transfer

    NB: When submitting messages (which should be no more than 600 words), participants are requested to ensure that their messages address some of the above elements.

  • Join the Forum.
  • Read the messages posted [beginning March 20].

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