Bridges Trade BioRes Review • Volume 3 • Number 2 • October 2009

Landmark Biodiversity, TK Provisions Accompany EFTA-Colombia FTA

by David Vivas-Eugui

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Since the implementation of the WTO’s Agreement on Trade related Aspects of Intellectual Property (TRIPS) in 1996, several international fora have been working to agree upon the appropriate nature of the relationship between intellectual property provisions and the Convention on Biological Diversity (CBD). The debate expanded to other fora in the early 2000’s when other international organisations - such as the World Intellectual Property Organization (WIPO)[1] and the Convention on Biological Diversity’s Conference of the Parties (CBD COP)[2] - engaged in the discussion from different perspectives.

At the core of the debate is the fact the intellectual property (IP) provisions in TRIPS may generate incentives for the incorporation or use of genetic recourses, its derivatives, or associated traditional knowledge (TK) in new patentable inventions or breeders’ rights. Also, there has been a lot of criticism linked to the fact that the TRIPS Agreement has not incorporated the necessary mechanisms to avoid illegal access and use of genetic resources and TK - so-called ‘biopiracy’ - and address low patent quality examination in biotechnological patents.

Recently, however, a few small steps addressing trade and biodiversity-related concerns have been seen in bilateral Free Trade Agreements (FTAs). For example, non-binding - yet valuable in terms of coverage - language can be found in the now ratified US-CAFTA, US-Peru FTA, the US-Colombia FTA - which is still in process, the Canada-Peru FTA, and the EU’s Economic Partnership Agreement (EPA) with the Caribbean Forum for African, Caribbean, and Pacific States (CARIFORUM). In each of these trade agreements, certain objectives, limited implementing mechanisms, and some level of cooperation to improve patent quality were recognised. Nevertheless, there was reluctance and lack of will on the part of industrialised countries to effectively address biodiversity until the issue was addressed seriously for the first time in the recent FTA between the European Free Trade Association (EFTA)[3] and Colombia.

Colombia, Peru sail into uncharted waters

One of the main reasons why so few FTAs between developed and developing countries contain provisions on the relationship between intellectual property and biodiversity is that developing countries never broached the subject. This silence on the part of developing countries is likely due to a lack of clarity on how to address the issue in a bilateral context. This suddenly changed during US FTA negotiations with Colombia and Peru, when the two Latin American countries made text proposals aimed at incorporating provisions on biodiversity-related issues into the chapter on IP. These proposals included the following measures:

The recognition that IP rights should be granted in respect of CBD and national biodiversity and TK legislation;
The incorporation a disclosure mechanism of origin/source mechanism and evidence of prior informed consent (PIC) and benefit sharing arrangements;
The inclusion of a mandate to develop at the national level an effective sui generis (of its own kind) system to protect TK, and;
The incorporation of enforcement measures and cooperation arrangements in patent examination and exchange of information.

These four measures were rejected by the US and only two carefully worded ‘side letters’ (understandings attached to the agreement) were produced. These side letters have been heavily criticised by civil society actors and even former Colombian and Peruvian negotiators because of what they call “exhortatory” language and the lack of specific obligations. Nevertheless, the fact that the issue was put on the table and an outcome - however small - was realised provided an impetus for these and other biodiversity rich countries to make more precise text proposals in subsequent negotiations.

Biodiversity section appears for first time in FTA

Switzerland[4] has a prominent international reputation in this unexplored field. The country’s progressive legislation regarding a requirement to disclose the source of genetic resources and traditional knowledge in patent applications, demonstrates its ability to be open and responsive to these concerns in absence of an international agreement or possible commercial benefit to their own constituencies. As such, the Swiss have submitted several proposals[5] regarding the introduction of declaration of source requirements in WTO and WIPO.

Due to their expertise in the field, Switzerland - along with Norway[6] - were directly involved in Colombia and Peru’s FTA negotiations with EFTA. They reviewed the Latin American countries’ proposals and proposed specific adjustment to the chapter on IP and have been closely involved throughout the process.

The EFTA-Colombia FTA was ultimately signed in November 2008 and is currently in the ratification process. In a recent interview with the BioRes, the Swiss Federal Institute of Intellectual Property (IPI) and Swiss Secretariat from Economic Affairs (SECO) revealed that the ratification process may be wrapped up by mid-2010. While Colombia and Peru had initially been engaged in joint negotiations with EFTA, they later split the process, thereby allowing the Colombian Agreement to be finalised first.

The EFTA-Colombia agreement contains a section in the IP chapter called “Measures Related to Biodiversity” - it is the first time such a section has been included in an FTA. The inclusion of the heading implies an active stand on the matter, pointing directly at specific “Measures.” According to the IPI and SECO, the inclusion of this text was the result of a specific request from Colombia and Peru.

What’s included?

The “Measures Related to Biodiversity” section includes provisions recognising the importance of the objectives and main obligations under the CBD, recognition of basic principles such a sovereign rights over genetic resources, and the respect for access and benefit sharing in light of principles and provisions in national and international law. It also recognises the contributions of indigenous peoples, local communities and their knowledge to economic and social development[7]. The IPI and SECO insist that the chapter emerged as a response to demand for such a clause from Peru and Colombia, rather than it being suggested by Switzerland. The Swiss have also indicated the IPR Chapter of the EFTA-Colombian FTA is very similar to the text in the Peruvian FTA, but will not necessarily be replicable in other negotiations.

One important issue emerging from the incorporation of the new section in the EFTA-Colombia FTA, are the implications of the application of Most Favoured Nation and National Treatment principles. Some observers say that some aspects of the new section on biodiversity related measures should be subject to article 4 of the TRIPS Agreement, which automatically extends any privilege granted to one party to all other WTO members. This would also be the case in regard to national treatment when the same privilege is already incorporated in national legislation. The ultimate answer depends on whether these new measures are considered as part of any of the intellectual property categories stipulated in the TRIPS Agreements[8] or certain WIPO treaties such as the Paris Convention. It would also depend on whether the provisions in question are creating or increasing the protection of intellectual property rights for the citizens of a given WTO member country.

One could argue that some of the measures in this chapter fall into the patent/sui generis rights-related provisions section. The “Measures Related to Biodiversity” section can affect the patentability criteria examination (e.g., novelty and inventive step), the description of the invention, and the evaluation of the claims made in a particular patent. Others might consider these types of requirements as foreign to the patent system and that countries can even exclude some types of life forms from patentability. This line of argumentation can be supported by diverse documentation and statement in the long debate of article 27.3 b) reviewed in the TRIPS Council. Also, TK rights recognition can be considered a “sui generis” (of its own kind) form of intellectual property protection that covers plant genetic resources. Some supporters also argue that the TK protection in the new section implies the new positive “IP rights” to local and indigenous communities. Regardless of the ultimate long-term answer, there are some interesting aspects of this debate due to its systemic implications for future FTAs.

Conclusions

The new section on “Measures Related to Biodiversity” in the IP chapter of the EFTA-Colombia FTA, shows that it is possible to generate synergies between IP provisions and CBD objectives and principles without affecting the rights of patent holders. It provides certain recognition of the demands made to date by biodiversity-rich countries and the language proposed incorporates many of the proposals made in the TRIPS Council, WIPO, and in previous FTA negotiations. In that sense, it includes - for the first time - precise biodiversity measures backed with some enforcement provisions. This precedent sheds a positive light over future FTAs with EFTA and could be used as reference for future EFTA FTAs as well as EU commercial and cooperation agreements being currently negotiated with Central America and Andean countries. While the honest broker role of Switzerland - and the individual support of Norway - to find balanced outcomes in this particular FTA have brought some limited effect in terms of countries involved, it nonetheless stands as an important example to other negotiations when addressing biodiversity issues in IP negotiations.

David Vivas-Eugui is Deputy Programmes Director at the International Centre for Trade and Sustainable Development (ICTSD).

Biodiversity-Related Measures in the EFTA-Columbia FTA

Measures
Commentary

To collaborate in specific cases of non compliance[9]
While this rule is of a ‘best endeavour’ nature, if implemented in an effective manner it could generate joint efforts toward actual cases of illegal access and use of genetic resources and TK. This would facilitate clarifications and bilateral agreeable solutions.

To require, according to national law, that patent applications contain a declaration of the origin or source of genetic resources to which the inventor has had accessed[10]
This is may be the most ‘novel’ IP provision in this FTA, being also the main measure proposed by biodiversity rich countries to tackle the lack of TRIPS/CBD synergies. This requirement implies that patent applicants must indicate, when appropriate, the country of origin of any genetic resources (in order to assess geographical provenance, linked ecosystems, and more importantly to some countries jurisdiction) or the source - meaning who has provided the resources[11].

To require, as far as provided for in each Party’s national legislation, the fulfillment of the PIC and to apply these provisions to TK as applicable”[12]
This provision is relevant to the fulfilment of CBD objectives and their implementation. The PIC concept is already a solid principle of international environmental law and common to many multilateral environmental agreements. Prior informed consent implies more than simple agreement, it implies the full release of relevant information and consultations between all stakeholders in order to generate an informed formation of the will. This principle is especially relevant in the case of weak parties as is the case of indigenous peoples. This point has also been part of proposals already made in the TRIPS Council by several developing countries that also demand the submission of relevant evidence of PIC and of benefit sharing in patent applications. The objective of the measure in this particular case goes beyond the purpose of improving the patent quality and the avoidance of ‘biopiracy’. The objective here is directly related to the fulfilment of basic requirements for legal access according the CBD and national biodiversity laws.

To take legislative and administrative measures, as appropriate, with the aim of ensuring fair and equitable sharing of benefits provided they are based on mutually agreed terms[13].
This provision, which looks more like an access provision than an IP one, somehow responds to demand by stakeholders on the need to ensure benefit sharing actually happens.

To provide civil, administrative, or criminal sanctions in case the inventor or the patent applicant wilfully or wrongfully misleads the declaration of origin or source[14].
This is the first time rules for providing an erroneous or false declaration of origin source are incorporated into an FTA. This text is an essential part of an effective set of provisions designed to address biodiversity concerns as it provides teeth for their implementation. Additional, strength will be provided by the dispute settlement rules in chapter 12 of the Agreement. The text is consistent with Norwegian and Swiss positions on these issues as the misleading or lack of disclosure will not affect the validity of the patent.

To take policy, legal and administrative measures, with the aim of facilitating the fulfilment of terms and conditions of access established by the Parties for such genetic resources[15].
This provision implies important obligations on the country providing genetic resources by requesting them to facilitate the fulfilment of terms and conditions of access. Many cases have shown that such a situation is not unreal and problems related to burdensome regulations and administrative inefficiency has occurred. This provision could generate some pressure in a providing country to better manage and implement their own internal legislation and to not only seek control but to facilitate the legal flow of genetic resources.

To undertake reasonable efforts to make patent protection available to plant inventions [16]
This is a best endeavour clause that seeks to generate some coherence between the need to insert a disclosure of origin/source requirement and patent law. The argument is that if there are no patents available for plant inventions, what are you going to disclose? A possible answer could be: parts of plants or chemicals derived form. Nevertheless, it is logic that to achieve benefit sharing from the use of biodiversity both incentives should be put in place.

[1] Intergovernmental Working Group on Genetic Resources, Traditional knowledge and folklore (IGC).

[2] Negotiation of an international regime on access and benefit sharing.

[3] EFTA Members include Liechtenstein, Iceland, Norway, and Switzerland. The first EFTA FTA with a developing country was the Agreement with Morocco in 1997 and the latest the one with Colombia in 2008. Advanced negotiations are currently underway with Peru.

[4] See Article 49a) of the Swiss Federal Act on Patents for Inventions, rev. 2007.

[5] See WTO document IP/C/W/433 of November 2004 and IP/C/W/447 of May 2005.

[6] Norway is another of the few industrialised countries that have already introduced a disclosure requirement at the national level.

[7] Ibid, article 6.5.1 to 3.

[8] See TRIPS Agreement, article 1.2.

[9] See EFTA Colombia FTA, article 6.5.4.

[10] See EFTA Colombia FTA, article 6.5.5.

[11] In the case of Switzerland this would imply who is entity competent to grant the access or to participate in the sharing of benefits. See WTO document IP/C/W/433 of November 2004.

[12] See EFTA Colombia FTA, article 6.5.5.

[13] Ibid, article 6.5.8

[14] Ibid, article 6.5.6 and 7.

[15] Ibid article 6.5.9.

[16] Ibid article 6.9.3(b)