Journal of Intellectual Property RightsVol 7 January 2002 pp 7-23

Intellectual Property Rights under WTO andAnimal Genetic Resources

Carlos M CorreaCentrefor Advanced Studies, University of Buenos Aires, Argentina

(Received 29 September 2001)

This article presents an overview of the international standards on IPRs set forth bythe TRIPS Agreement. It considers the modalities of IPRs that may be applied toanimal genetic resources (AnGRs) and discusses the main trends in relation to thepatentability of genetic resources. The scope for maneuver left by the TRIPS Agree-ment to legislate at the national level with regard to AnGRs is considered, includingthe exclusion from patentability of AnGRs. The relationship between TRIPS Agree-ment on the Convention on Biological Diversity is examined.

Intellectual property rights (IPRs) confer, ingeneral, the right to exclude third partiesfrom the commercial use of any tangibleobject incorporating the protected informa-tion.IPRs may apply to the intangible compo-nents ofgenetic resources, including animalgenetic resources (AnGRs). For instance,genetically altered animals (e.g. the Harvard"oncomouse") have been declared patent-able in several industrialized countries.

Cells, DNA sequences and other sub-cellu-lar elements may also be patented in manycountries' though their appropriation hasgiven rise to considerable controversy.Trade secrets, which protect undisclosed in-formation of technical or commercial valuemay be applied to AnGRs as well, for in-stance, to protect parent and grandparentbreeding stock for poultry production, whenonly cross breeds are commercialized.

lIn accordance to one opinion, DNAsequences could also be compared to compilations, computer programsor literaryworks; hence, the sequence ofamino acids ina protein or the nucleic acids coding for a protein mightbe protectable under copyright 01· design rights (Derzko, 1993;Speck, 1995).The development of a new typeof intellectual (or "informational") right to protect the genetic information as such has also been proposed(Walden, 1993).

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IPRs protection of animals or of partsthereof, may have a significant economicimpact on agriculture, particularly if it in-volves farm animals. Both patents and tradesecrets may limit access to germplasm forthe purpose of conservation and breeding.However, if IPRs protection focuses on "re-search animals" and those modified to pro-duce specific chemicals, as it is theprevailing trend today, the recognition ofsuch rights may not substantially affect agri-cultural development (Strauss Editor, 1994,p.17).

The Uruguay Round introduced, for the firsttime in the GAIT history, multilateral nego-tiations on IPRs. Though initially resisted bydeveloping countries, a specific agreementon this issue was finally attained and becamepart of the Final Act of the Round: the Agree-ment on Trade-Related Aspects of Intellec-tual Property Rights (hereinafter the "TRIPSAgreement"). The TRIPS Agreement con-tains a detailed set of provisions that is al-ready influencing national legislation andpractice in a great number of developing aswell as developed countries.

This article briefly presents, first, an over-view of the international standards on IPRsset forth by the TRIPS Agreement Second,it considers the modalities of IPRs that maybe applied to AnGRs, followed by a discus-sion of the main trends in relation to thepatentability ofgenetic resources. Third, theroom for maneuver left by said Agreementto legislate at the national level with regard

to AnGRs is considered, including the possi-ble exclusion from patentability of AnGRs.Finally, the relationship between the TRIPSAgreement and the Convention on Biologi-cal Diversity is briefly examined.

International Standards

After almost five years of negotiations, adraft agreement on trade-related aspects ofintellectual property rights (TRIPS) wassubmitted by the Director General of GAITin December 1991 as part of a proposed"Final Agreement" of the Uruguay Round.With minor amendments, such a draft wasadopted in April 1994 by GAIT MemberStates as an integral part of the "MarrakeshAgreement" which established the WorldTrade Organization (WfO)2.

The TRIPS Agreement is, by its coverage,the most comprehensive international in-strument on IPRs, dealing with all types ofIPRs, with the sole exception of breeders'rights (only incidentally referred to) and util-ity models (or "petty patents").

The Agreement establishes minimum stand-ards on copyright and related rights, trade-marks, geographical indications, industrialdesigns, patents, integrated circuits and un-disclosed information (trade secrets). TheAgreement is based on and supplements,with additional obligations'', the Paris,Berne, Rome and Washington'' conventionsin their respective fields. In other words, theAgreement is not to be viewed as a com-pletely new and separate convention, but

2 For an analysis of the TRIPS Agreement, see Correa (2000).3 The provisions of the international conventions, which are supplemented, become compulsory even forcountries that have not ratified them, except in the case of the Rome Convention (relating to producers ofphonograms, performing artists and broadcasting organizations), which only continues to be binding on Statesthat have joined it.4The provisions of the Washington Convention on the protection oflayout designs of integrated circuits (1989),which has never entered into force, became however enforceable through the TRIPS Agreement

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rather as an integrative instrument, whichprovides "convention-plus" protection toIPRs5.The standards of protection set forth relateboth to the availability of rights as well totheir entorcement''. This means that Mem-ber countries cannot, in the specific areasand issues covered by the Agreement, con-fer a lower (or ineffective) protection. Inexchange, Members cannot be obliged toprovide a "more extensive" protection (arti-cle 1.1).

With the approval of the TRIPS Agreement,any controversy as to the compliance withthe minimum standards should be subject toa multilateral procedure of dispute settle-ment within the wro, in accordance withthe Dispute Settlement Understanding(DSU). Once determined the existence of aviolation, the affected country can applytrade retaliations to the non-complyingcountry, in any area covered by the wroAgreement (for instance, it may apply quo-tas to exports from the non-complying coun-try).The "method of implementing" the TRIPSAgreement's provisions can be freely deter-mined within the "own legal system andpractice" (article 1.1.) of each country.There are considerable differences betweennational legal systems, particularly betweenthose based on Anglo-American law, andthose that follow the approach ofcontinentalEuropean law. These differences are notice-able, for instance, in the field of copyrightand neighboring rights, trademarks andtrade secrets protection.Other differences in the implementation ofthe Agreement may arise out from various

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levels of economic and technological devel-opment. The "paradigm" of protectionadopted by the Agreement aims at a balancebetween the exclusive rights conferred toinnovators and the interests of society in thediffusion of and further innovation on exist-ing technology. The Agreement, whilestrengthening IPRs, does not embrace, how-ever, an over protectionist conception onIPRs-as sought by some industrializedcountries- where under the title-ownerwould have full powers to exclude third par-ties.The main stated goal of the Agreement is,thus, "to reduce distortions and impedi-ments to international trade, taking into ac-count the need to promote effective andadequate protection of intellectual propertyrights, and to ensure that measures and pro-cedures to enforce intellectual propertyrights do not themselves become a barrierto legitimate trade" (preamble).Though it is recognized that IPRs are "pri-vate rights", the underlying public policyobjectives of national systems for the protec-tion of intellectual property, including "de-velopmental and technological objectives"are also recognized (preamble). More spe-cifically, articles 7 and 8 of the text provide aframework for the interpretation and imple-mentation of intellectual property rights.In accordance with article 7, "the protectionand enforcement of intellectual propertyrights should contribute to the promotion oftechnological innovation and to the transferand dissemination of technology, to the mu-tual advantage of producers and users oftechnological knowledge and in a mannerconductive to social and economic welfare,and to the balance of rights and obligations".

5 There are some cases, however, where "Convention-minus" protection is granted, such in the case of moralrights provided for by the Berne Convention.6 The inclusion of detailed provisions on "enforcement" is one ofthe main innovations ofthe TRIPs Agreementwith respect to pre-existing conventions on IPRs.

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The concepts of "mutual advantage", "socialand economic welfare" and "balance ofrights and obligations" mean that the recog-nition and enforcement of IPRs are subjectto higher social values and, in particular, thata balance need to be found with other usersof technological knowledge.

Article 8 is also an important provision forframing national legislations that respond toparticular public interests and to prevent orremedy abuses of IPRs.

Article 8.1 states that "members may, in for-mulating or amending their national lawsand regulations, adopt measures necessaryto protect public health and nutrition, and topromote the public interest in sectors ofvitalimportance to their socio-economic andtechnological development, provided thatsuch measures are consistent with the pro-visions of this Agreement".

In addition "appropriate measures", pro-vided that they are consistent with the pro-visions of the Agreement, may be applied "toprevent the abuse of intellectual propertyrights by right holders or the resort to prac-tices which unreasonably restrain trade oradversely affect the international transfer oftechnology" (article 8.2).

The experience of industrialized countriesindicates that they have extensively appliedantitrust laws in order to balance the publicand private interests involved in the use ofIPRs. A noticeable asymmetry in recent de-velopments in IPRs in developing countriesis, in contrast, that in many cases IPRs arereinforced or established in those countrieslacking appropriate rules to combat abusesof market power.

The consistency of national laws with theprovisions of the Agreement should, in sum,be assessed in the light of articles 7 and 8,and of the Preamble, that is, taking socialand economic welfare into account. Theseprovisions are of particular relevance for theimplementation of various articles of theTRIPSAgreement that leave room for differ-ent solutions at the national level, such as inrelation to the patentability of biological ma-terials, the exceptions to exclusive patentrights, and to article 31 on compulsory li-cences.

The adoption of the TRIPS Agreement hasraised considerably controversy, particu-larly in the North-South context. Thoughdeveloping countries had little option but toaccept the said Agreement as part of theglobal package adopted as a result of theUruguay Round, they have remained uncon-vinced about the balance of costs and bene-fits that the Agreement was supposed toreach', and, remained concerned about theimplications for development of higherstandards of protection.

Intellectual property is a significant compo-nent in any innovation policy, but its impactvaries according to the sectors at stake'' andthe level of development and market struc-ture prevailing in the country where suchpolicy is implemented. The granting of ex-clusive rights increases appropriability bypreventing unauthorized use. If the powerconferred to the rights-holder is too strong,diffusion may be limited, further innovationjeopardized and many would-be adopters bedeprived of access to needed products.While intellectual property may be justifiedin terms of dynamic efficiency (optimal in-

7 See Correa, 2000.8 In many industries the loss of appropriability does not act as disincentive for innovative activities. In manycases (such as semiconductors) the crucial factor is the lead time in introducing new products onto the market

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troduction of new products and more effi-cient production processes over time), it lim-its competition and diminishes staticefficiency, notably "allocative efficiency",i.e., the allocation of products trou~h theprice system in the optimum manner .

The controversy about the implications ofthe TRIPS Agreement has been particularlystrong in relation to the access to essentialdrugs. As a result of HlV/ AIDS pandemicand the pressures exerted on some develop-ing countries (such as South Africa) not touse the flexibilities allowed by the Agree-ment, developing countries requested therealization of special sessions in the frame-work of the TRIPS Council to discuss therelationship between intellectual propertyand access to medicineslO.

The implications of the TRIPS Agreementon the appropriation of living materials hasalso raised significant controversy, particu-larly as a result of well publicized cases of"bio-piracy" (see below). The African grouphas proposed to amend the Agreement inorder to exclude the patentability of micro-organisms+'.

In sum, the adoption of the TRIPS Agree-ment allowed developed countries to univer-salize the core of their own IPRs systems. Itwill harmonize, to a considerable extent, thesubstantive (and some procedural) rules onIPRs in accordance with standards essen-tially comparable to those prevailing in thosecountries. However, varying degrees of leg-islative freedom remain at the national level

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to adept legislation to national conditionsand objectives, as discussed below.

Patents on Genetic Resources

After the decision by the US Supreme Courtin re Chakrabarty (1980),which accepted forthe first time a patent on a living matter perse", the patentability of such matter has ex-panded in industrialized countries so as toinclude (a) cells and sub-cellular parts;( b)multicellular organisms; and (c) biologicalmaterials pre-existing in nature. The prevail-ing trend in those countries is towards ad-mitting the protection by patents of anybiotechnology-related invention. An ac-cepted principle is that the fact that an inven-tion consists of, is based on or employs livingmatter, is not a sufficient reason to excludepatent protection.

(a) From Microorganisms to Cells andDNA

While, as mentioned, the first patent on aliving matter per se related to a "microorgan-ism", as this concept is scientifically defined,the concept of "microorganism" applied inpatent cases has been broadened so as toinclude cells and any subcellular part, in-cluding DNAmolecules and genes.In the United Sates, for instance, genes thatare engineered by mutagenesis or geneticengineering techniques, or even which hadnot been known to previously exist in nature,have been deemed patentable. Claims inthese cases normally refer to an isolatedDNA sequence, DNA constructs and newtransformed organisms derived therefrom.

9 See UNCfAD, 1997, p. 5.10 The first session took place on June 20, 2001.11 See wro document wr/GC/W /302.*The patent, filed in 1972, related to a genetically modified microorganism. It asserted 36 claims related to theinvention of "a bacterium from the genus Pseudomonas containing therein at least two stable energy-generatingplasmids, each of these plasmids providing a separate hydrocarbon degradative pathway".

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Claims often include natural DNA se-quences without limitations.No major differences seem to exist todayamongst industrialized countries with re-spect to the patentability ofmicroorganisms,cells and subcellular components. TheTRIPS Agreement has obliged, as discussedbelow, all (WTO) Member countries togrant patents for "microorganisms". There-fore, though differences may still exist innational laws with respect to the subject mat-ter and scope of protection, the patentabilityof microorganisms as such, and possibly ofcells and sub-cellular parts of all kinds oforganisms (including animals), shall be-come common features in many nationalpatent laws.

(b) From Microorganisms to Animalsand Plants

Patentability also followed an upward trend.It was extended from microorganisms tomore complex organisms, including plantsand animals of all types. The first case inwhich the patentability of a multicellular or-ganism as such was judged, related to oys-ters.

In ex parte Allen, the US Patent and Trade-mark Office (USPTO) was required to con-sider the patentability of polyploidy oysters(see Box). While the examiner rejected theidea of patenting a living organism as such,since the animal produced by the methodclaimed was "controlled by laws of nature"and was not "a manufacture by man", theOffice finally rejected the claim on a verydifferent ground. It did not deny the patent-ability of the oysters, but held that in thisparticular case the requirement of non-obvi-ousness had not been met.The patentability ofmulticellular organismshas been confirmed by the granting of nu-merous patents on plants and animals inmany developed countries. The granting ofthis kind of patents dramatically acceleratedin 1996-1997, after some hesitancy of theUSPTO (during those two years the numberof patents granted on animals exceededthose issued during 1988-1995).Most of thepatents have been issued on genetically en-gineered animals to be employed in labora-tories, a route opened by the patenting of agenetically modified mouse by the HarvardUniversity for use in cancer research'<While the majority of patents cover rodents

Patent application on polyploidy oysters

The patent claim included:

"a method of inducing polypoidy in oysters, comprising: (a) separating oysters from oneanother such that male oysters are isolated from female oysters; (b) inducing said oystersto spawn; (c) controlling the temperature of eggs from said oysters; (d) fertilizing saideggs with sperm to form zygotes; (e) applying hydrostatic pressure to said zygotes at apredetermined intensity for a predetermined duration after a predetermined timefollow-ing formation of said zygotes to induce polyploidy; and (1) cultivating said polyploidzygotes".

12 In August 2000, a Federal Court of Appeal accepted in Canada the patentability of the Harvard University"oncomouse'', for which a patent had been granted in 1993. The Federal government, however, requested theSupreme Court to overturn this ruling.

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modified to mimic human conditions or dis-eases, animal patents also include, inter alia,a nematode, two avian species, one rabbit,one sheep, one Guinea pig and one fish.In Europe, patents have been granted with'respect to plants and animals, but the lawdoes not allow protecting animal "races" andplant "varieties"*. The scope of this exclu-sion, however, has been limited by the Euro-pean Directive on Biotechnological Patents(98/44/EC), which states that"Inventions which concern plants or animalsmay be patented if the practicability of theinvention is not technically confined to aparticular plant or animal variety".

Many developing countries have followedthe European approach -as applied beforethe referred Directive- and exclude the pro-tection by patents of plant varieties and ani-mal races, in line with the exceptionauthorized by the TRIPS Agreement.

(c) From Genetically Modified toNaturally Occurring Materials

While the first step in the patentability ofliving organisms was given in the Chakra-

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barty case in respect of a genetically modi-fied microorganism, the protection of anybiological material was soon admitted inmost developed countries, to the extent thatsuch material were not claimed as found innature, but isolated or purified.

Thus, in countries that are members to theEuropean Patent Convention, a patent maybe granted when a substance found in na-ture can be characterized by its structure, byits process of obtention or by other criteria,if it is new in the sense that it was not pre-viously available to the public (seeBox).

In the 1998 European Directive on the mat-ter, it is clarified that:

"Biological material which is isolated fromits natural environment or processed bymeans of a technical process may be thesubject of an invention even if it alreadyoccurred in nature".

1.>';

In the United States an isolated or purifiedform of a natural product is also patentable.The concept of "new" under the novelty re-quirement does not mean "preexisting" but"novel" in a prior art sense, so that the un-

Patentability of naturally occurring substances

''To find a substance freely occurring in nature is also mere discovery and thereforeunpatentable. However, if a substance found in nature has first to be isolated from itssurroundings and a process for obtaining it is developed, that process is patentable.Moreover, if the substance can be properly characterized either by its structure, by theprocess by which it is obtained or by other parameters ... and it is 'new' in the absolutesense of having no previously recognized existence, then the substance per se may bepatentable ... An example of such a case is that of a new substance which is discoveredas being produced by a microorganism" (Guidelines of Examination of the EuropeanPatent Office Part C (Iv, 2.1).

* Plant varieties, though excluded from patent protection, are protected in Europe and other countries by"breeders 'rights". There is no equivalent to these rights for animals.

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known but natural existence of a productdoes not preclude the product from the cate-gory of statutory subject matter.

Similarly in Japan, the Enforcement Stand-ards for Substance Patents, stipulated thatpatents can be granted on chemical sub-stances artificially isolated from natural ma-terials, when the presence of the substancecould not be detected without prior isolationwith the aid of physical or chemical meth-ods.

Patents covering genes are not generallyconfined to the sequence of a gene. Thepatent application typically claims first, agene or protein, standing alone, correspond-ing to that sequence; second, a vector orplasmid incorporating the sequence; and,possibly, third, an organism (e.g. a plant oranimal) that has been transformed by meansof such a vector. Thus, the patent holder maygain effective control over use of the speci-fied gene in genetic engineering.

Some developing countries, however, haverefused to go so far with regard to the pat-entability of existing biological materials.Thus, the laws of Costa Rica, Argentina andthe Andean Group Decision on a CommonIndustrial Property Regime (amended in2(00) do not allow the patentability of mate-rials existing in nature. The Brazilian patentlaw (1996), clarifies that no patents shall begranted with respect to living beings or "bio-logical materials found in nature", even ifisolated, including the "genome orgermplasm'' of any living being.

Room for Maneuver under the TRIPSAgreementDespite that the TRIPS Agreement aims at acertain degree of worldwide harmonizationof intellectual property rights, it does notconstitute a uniform law. It does leaves roomof maneuver in different areas, particularlywith respect biological resources.Article 27.1 of the TRIPS Agreement stipu-lates that "patents shall be available for anyinventions, whether products or processes,in all fields of technology". However, wromembers may exclude from patentability in-ventions, the prevention within their terri-tory of the commercial exploitation ofwhichis necessary to protect ordre public or moral-ity, including to protect human, animal orplant life or health or to avoid serious preju-dice to the environment, provided that suchexclusion is not made merely because theexploitation is prohibited by domestic law"(article 27.2).In addition, the Agreement authorizes wroMembers to exclude "plants" and "animals"and "essentially biological processes" fortheir production from patentability (article27.3(b»13. Instead, Members are bound togrant patents for "microorganisms", micro-biological and non-biological processes forthe production of plants or animals. Thoughthis provision is subject to review, whichshould have taken place in 1999, no agreedinterpretation or amendment has been pro-posed yetl4.

The Concept of "Invention"

The TRIPS Agreement does not contain adefinition of what an "invention" is. Under

13 Article 27.3.a) also permits Members to exclude from patentability "diagnostic, therapeutic and surgicalmethods for the treatment of humans or animals",14 The TRIPS Council has dealt with the "review' of said provision since 1999, but the conflicting views ofdeveloped and developing countries on the nature and scope of the review have blocked any concrete progresson this matter.

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patent laws "discoveries", as opposed to "in-ventions", are not patentable. Thus, there isno obligation under the Agreement to adoptan expansive concept of "invention", as cur-rently done by many developed countries. Inparticular, nothing in the Agreement obligesto consider that substances existing in na-ture, biological or not, are patentable, evenif isolated or claimed in a purified form.

Hence, countries may legitimately consideroutside the scope of the concept of "inven-tion" any naturally occurring substance andprocess as well as isolated DNA sequences,even if transferred to different organisms.The obligation imposed by the TRIPS Agree-ment to grant patents on microorganismsmay be interpreted as applicable only to ge-netically modified microorganisms, and notto those existing in nature. As mentioned, insome jurisdictions, the concept of "microor-ganism" has been extensively interpreted soas to embrace any cell and sub-cellular ele-ment. However, national legislation mayadopt the scientific concept of "microorgan-ism" is deemed to only include a member ofany of the following classes: bacteria, fungi,algae, protozoa or viruses.

Non-patentability of Animals

There is so far no evidence indicating thatthe assignment of IPRs over animal-relatedinventions would create incentives for R&Din this field and for the conservation andsustainable use of AnGRs. The economicimpact of IPRs in the field of animals is likelyto significantly vary according to the typesof animals involved and the predominantmodes of production. Thus, appropriationproblems may be addressed by contractualmeans in the case of high value diseasemodel animals (e.g. transgenic animals forlaboratory use) and by trade secrets in thecase of high value animals used for the pro-duction of pharmaceuticals. In the case of

15poultry, the relatively small number of inte-grators and processors may also make con-tractual arrangements practicable, while inthe case of low value, low-reproductive rateanimals, the large number of farmers, ship-pers and processors make it difficult to en-force IPRs (Office of TechnologyAssessment, 1989, p. 119-120). In none ofthese cases, patentability seems to offerclear-cut advantages both in terms of pro-moting innovation and ensuring its diffu-sion.As mentioned above, there is no obligationunder current international standards to pro-tect animals under patents. The exclusionfrom protection of animals may be more orless broadly defined and encompass, if de-sired, the animals as such, including geneti-cally modified animals, as well as animalvarieties and species. Given that animal cellsand sub-cellular components, includinggenes, do not constitute "microorganisms",as defined above, national laws may alsoexclude them from patentability.

Morality and Public OrderConsiderations

Even if animals or parts thereof are deemed,in principle, patentable, a patent applicationmay be rejected on moral or public ordergrounds, in accordance with article 27.2 ofthe TRIPS Agreement. The Agreement's ex-ception, as drafted, raises several issuesrelevant to the implementation of this articleat the national level.The notions of morality and ordre public arevague and evolutive, and their content willbe dependent on national perceptions byPatent Offices and judges (pollaud-Dulian,1997,p.166). Itisamatterofnationalpublicpolicy to determine when a certain conductmay be deemed contrary to fundamental val-ues of a society. A decision based on thistype of considerations could not be chal-

dustrial machineries and increase their suf-fering.

The application of article 27.2 is subject totwo conditions.

First, non-patentability may only be estab-lished if the commercial exploitation of theinvention needs to be prevented to protectthe interests referred to above. Generally,patent offices have no powers to prevent theconuflercialization of a product The refusalof protection, on the other hand, does notnecessarily lead to the exclusion of commer-cialization. Article 27.2, therefore, seems torequire a judgement by the competentauthority about the need to prevent the com-mercialization of an invention.

It.is debatable whether the exception can beapplied while permitting at the same timethe distribution or sale of the invention, orwhether there is a need for an actual ban ofcommercialization. According to one opin-ion, an effective ban should exist in order tomake the exception viable (Correa, 1994;Otten, 1994). It has been held, however, thatTRIPs "does not require an actual ban of thecommercialization as a condition for exclu-sions; only the necessity of such a ban isrequired. In order to justify an exclusionunder Art. 27 (2) TRIPS, a member statewould therefore have to demonstrate that itis necessary to prevent -by whatever means-the commercial exploitation of the inven-tion. Yet, the member state would not haveto prove that under its national laws, thecommercialization of the invention was or isactually prohibited" (Leskien and Flitner,1997,p. 15).Second, the general final proviso C'providedthat such exclusion is not made merely be-cause the exploitation is prohibited by do-mestic law") outlaws exclusions which arenot actually based on the specific groundsset forth in article 27.2 even if they are pre-scribed by a national law, The existence of a

16 J INTEILEC PROP RIGHTS, JANUARY 2002

lenged under the wro dispute settlement,unless it is clearly beyond the reasonablemeaning of such terms.

The text employs the concept of "ordre pub-lic," as one of the grounds for exception.This concept may be interpreted as beingnarrower than "public order" or "public in-terest". Under the Guidelines for Examina-tion of the European Patent Office, forinstance, "ordre public" is linked to securityreasons, such as riot or public disorder, andinventions that may lead to criminal or othergenerally offensive behaviour (part C, chap-ter N, 3.1).

However, there is no generally accepted no-tion of "ordre public": WTO Member coun-tries have, therefore, considerable flexibilityto define which cases are covered, depend-ing upon their own conception of the protec-tion of public values. Article 27.2 itselfindicates that the concept is not limited to"security" reasons; it also relates to the pro-tection of "human, animal or plant life orhealth" and may be applied to inventionsthat may lead to "serious prejudice to theenvironment" .

The concept of "morality" is also relative tothe values prevailing in a society. Such val-ues are not the same in different culturesand countries, and change over time. Someimportant decisions relating to patentabilitymay depend upon the judgement of the pat-ent office about morality: "it is inadmissibleto think that patent offices may grant patentsto any kind of invention, without consideringethical issues whatsoever" (Bercovitz, 1996,p. 53). The patentability of living organismsand, particularly, of animals has beenstrongly questioned on various moral andreligious grounds in many countries, par-ticularly because patenting would stimulateanimal experimentation, reduce them to in-

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legal prohibition will not be sufficient per seto sustain the non-patentability of any inven-tion. This solution is in line with article4quater of the Paris Convention, which notonly refers to the granting of a patent but toits subsequent invalidation, in cases of re-strictions or limitations resulting from do-mestic law.There is little national case law on the appli-cation of moral or public order grounds toreject or cancel a patent. The European Pat-ent Office (EPO) has decided - on the basisof article 53.b) of the European Patent Con-vention (EPC) 15 - some cases involving ge-netic engineered products, which mayillustrate how such a clause may operate.

Under the EPO guidelines for patent exami-nation, the patentability of an invention maybe rejected on the basis of morality or publicorder grounds in rare and exceptional cases.The EPO jurisprudence has distinguishedbetween morality and ordre public (DecisionT.356/93). The former includes the "totalityof the accepted norms which are deeplyrooted in a particular culture". Under themorality clause, the Office has to establishwhether an invention would be so abhorrentfor the public that it's patenting would beinconceivable. The concept of "ordre public"covers the protection of the public interestand of the physical integrity of individuals. Italso encompasses the protection of the envi-ronment (pollaud-Dulian, 1997, p173).

The analysis for the application of article53.b) of the European Patent Convention(EPC) is made case-by-case. The EPO hasemployed two methods therefore: the bal-ancing of interests at stake and the opinionof the vast majority of the public.

17The balancing of interests takes into consid-eration the advantages and disadvantages ofan invention, including the possible environ-mental risks due to the eventual dissemina-tion of genes in nature (Decision T.19/90).In the area of plant technology, the Board ofAppeals of the EPO has argued that plantgenetic engineering is not a technical do-main that, as such, may be deemed contraryto morality or public order. In decision T356/93 (plant Genetic Systems), it reasonedthat it needs to be established in each indi-vidual case whether a particular inventionrelates to an improper use or has destructiveeffects on plant biotechnology. The Boardheld that "inventions the exploitation ofwhich is likely to breach public peace orsocial order (for example, through acts ofterrorism) or to seriously prejudice the envi-ronment are to be excluded from patentabil-ity as being contrary to ordre public".

The opinion of the majority of the public wasconsidered by the Opposition Division of theEPO in a decision of 8.12.94 in the case of"Relaxine".The patent related to a DNAfrag-ment codifying for a human protein. TheOffice examined whether the inventionwould appear immoral for the vast majorityof the public.

In all the above referred cases the EPO af-firmed the patentability of the inventions atstake:

*In the "oncomouse" case, the balancing ofinterest approach led to consider that theadvantages for humanity of a geneticallymodified animal exceeded its eventual in-conveniences (decision T. 19/90). The pat-entability was deemed to depend "mainly ona careful weighing up of the suffering of theanimals and possible risks to the environ-

lSA similar provision is contained in the European Directive on biotechnological inventions (article 9).

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18 J INTELLEC PROP RIGHI'S, JANUARY2002

ment on the one hand, and the invention'susefulness to mankind on the other". Withregard to the ecological risks, the TechnicalBoard ofAppeal held that it was not a task ofthe EPO to regulate the use of dangerousmaterials, but a matter subject to competentnational authorities. The Board argued that

"the present invention does not belongto that extreme category of inventionswhich could be regarded as so abhor-rent to the vast majority of the publicas to render the granting of a patentinconceivable and thus excluded un-der Art 53(a) EPC. Apart from suchclear-cut cases, the European PatentOffice has no mandate to grant or re-fuse patents on the basis of abstractethical or moral arguments"

The conclusion was that the provision of atest animal in cancer research which maylead to an overall reduction of animal testingtogether with a low risk connected with thehandling of the animals, was importantenough for human society in order to justifypatentability.

*In the Plant Genetics System case theBoard of Appeals considered that the ad-verse ecological effects were not proven and,hence, it was not possible to balance theadvantages and disadvantages of the inven-tion, since one of the terms for comparisonwas missing16.

*In the Relaxine case, finally, itwas held thatthere was nothing immoral with the isolationof RNAm from the tissue of pregnantwomen, and that the majority of the public

accepts and desires the research on the useofhuman materials for therapeutical applica-tions. The Office added that the patent inquestion did not give control over the humanbeing and concluded that DNA is not equalto "life".These decisions indicate that the moralitygrounds have been applied by the EPO in arather restrictive way, only when an inven-tion may be regarded as so abhorrent to thevast majority of the public as to render thegranting of a patent inconceivable.Such decisions also show that the effects ofan invention on the environment may consti-tute a valid ground for denying patentability.However, the EPO refused to assume a regu-latory role on the introduction of geneticengineering inventions. In dealing with thisissue, one of the opposition decisions ar-gued that

"Apatent does not give a positive rightto its proprietor to use the inventionbut rather only confers the right toexclude others from using the inven-tion for a limited period of time. "Con-sidering the underlying reasons forthe existence of patent law and thenature of patent law in general it ap-pears that patent law is primary aninstrument for promoting researchand technical advance associatedtherewith. It would be an overestima-tion of the potency of patent law if oneconsidered it an appropriate instru-ment to regulate research with is dan-gerous or unacceptable for other

16 The opponent had argued that risks in connection with release of the plants into the environment wereimpossible to predict accurately and therefore a potential risk to mankind existed. "This argument wasrejected", explained the Director of the European Patent Office, "because it was not considered appropriate tocarry out the balancing exercise of the Harvard Oncomouse decision. The reasons given for this were manifold,but were primarily the lack of consensus in society on "objective morality" and the inability not only of theopponents but of all experts to prove the extent of the risks" (GugereIl, 1996, p.. m.

CORREA: INTELLECfUAL PROPERTY RIGHTS UNDER ..... 19

reasons to certain groups of mankind.Human curiosity could not be ham-pered by the fact that patent protectionwas not available if such researchpromised an interesting result. If thelegislator is of the opinion that certaintechnical knowledge should be usedunder limited conditions only it is upto him to enact appropriate legislationoutside the framework of patent law".

The arguments developed by the EPO onlyillustrate how the moral and public orderconsiderations may affect the granting orvalidity of patents. The EPO philosophy andcriteria may not be followed in other jurisdic-tions, where other values and social percep-tions may prevail.Access to Patented Materials

In order to comply with the disclosure re-quirement of patent law, the description of abiotechnological invention generally needsto he supported by the deposit of samples ofthe material that contains the relevant infor-mation.Legal systems considerably vary on thistopic. Under US law access can only takeplace after the granting of the patent. Anycommercial use of the sample will amount toan infringement of the patent, but experi-mental uses are allowed. Under Europeanlaw, samples may be obtained after publica-tion of the application through an inde-pendent expert and for experimentalpurposes only.National laws may determine how to dealwith the conditions of access to the depos-ited samples and, particularly, when and un-der which circumstances samples may beobtained by third parties. The BudapestTreaty -which establishes an internationalsystem for the deposit of biological materi-

als- is based on the assumption that accessto the sample will be granted after publica-tion of the relevant application (Rule 11.3 (a)of the Regulations of the Treaty). The accessto samples after such publication may accel-erate innovation based on improvements ofthe protected invention or the developmentof new inventions.

Novelty

Absolute (or "universal") novelty is a typicalrequirement of patent laws. Novelty is gen-erally destroyed by any prior disclosure,written or not, of the invention in any part ofthe world. A rule of this type may prevent, inparticular, the patenting of knowledge ormaterials developed by and diffused withinlocal or indigenous communities. Some pat-ents obtained in the area of plants, as thoserelating to "ayahuasca" and to turmeric*,illustrate the possible consequences of a lessstringent rule, as adopted in the UnitedStates. The US law, unlike the law in force inmost countries, does not consider that the"novelty" requirement has been lost whenan invention has been divulged outside USAby means of public use and sale. Only publi-cations made abroad are deemed to destroynovelty under US law.

~<:i-

t1-'

Broad Claims

In addition to the problems posed by thepossible patentability of substances that ex-ist in nature, a number of other importantissues arise in relation to the coverage ofpatents relating to genetic resources andbiological materials.Some Patent Offices accept claims drafted infunctional or informational rather than instructural terms. Hence, the granted patentsmay cover all ways of solving a technical

*On August 14, USPTO declared invalid a patent on turmeric issued to the University of Mississippi MedicalCentre in December 1993, which had been challenged by the India's Council for Scientific and IndustrialResearch (SUNS No. 4050, 8.9.97)

20 J INTELLEC PROP RIGHTS, JANUARY 2002

problem. An example of this -in the plantarea- is a patent granted to Lubrizol coveringsunflower seed with a high oleic acid contentand a low linoeic acid content, inde-pendently from the germplasm employedfor obtaining such features.

Exceptions to Exclusive Rights

wro members enjoy a certain degree offlexibility to determine exceptions with re-gard to the exclusive rights conferred by apatent (article 30 of the TRIPS Agreement).Such exceptions may include acts made forresearch and teaching as well as the experi-mentation (even for commercial purposes)on the invention.

In the case of AnGRs, of particular impor-tance is the extent to which a patent wouldapply to the progeny of animals subject topatent protection. In principle, the patentowner may exclude the commercial exploi-tation of such progeny, or require a royaltypayment therefore. It is debatable whethernational laws may define, within the termsallowed by article 30 of the TRIPS Agree-ment, an exception to the patent rights inorder to authorize the commercial use ofprogeny by the legitimate acquirer of a pat-ented animal. It may be argued, in effect,before a wro panel that the use of a pat-ented animal for reproduction with commer-cial purposes would prejudice the "normalexploitation" of the patentl7.

Compulsory Licences

Finally, article 31 of the TRIPS Agreementon "Other use without the authorization of

the right holder" contains a detailed set ofconditions for the granting of compulsorylicenses. Though the TRIPS Agreement re-fers to five specific grounds for the grantingof such licenses (refusal to deal; emergencyand extreme urgency; anticompetitive prac-tices; non- commercial use; dependent pat-ents), member countries can grantcompulsory licences on other grounds, suchas for environmental reasons or food secu-rity.

Application of the Convention onBiological Diversity (CBD) to AnGRs

The Convention on Biological Diversity(CBD) covers all kinds ofgenetic resources,whether wild or domesticated, includingAnGRs.

Article 3 of the CBD expressly recognizesthe States' sovereign rights on genetic re-sources residing in their territories. Thismeans that such resources are under thejurisdiction and control of States, and thatthey can determine the kind (public/pri-vate) and extent of property rights to beconferred, if any, and the modes in whichsuch rights can be implemented.Sovereign rights are not equivalent to prop-erty. The former do not entail, by itself, anyparticular form of legal appropriation. Whilethe issue of ownership of animals as such,whether wild or domgsticated, does not cre-ate great difficultiesl ,the "intangible" con-tent of AnGRs and other genetic resourcesposes, instead, complex legal issues.Issues relating to property rights emergeboth with respect to insitu and exsitu conser-vation ofAnGRs. With regard to in-situ con-

17 This concept, as well as other elements of article 30 of the TRIPS Agreement, were examined withconsiderable detail in the case brought by the European Union against Canada in relation to the early workingof a patent to secure marketing approval of pharmaceutical products (see wro document Wf/DS114/R).18There has been controversy, however, with regard to the application of the "rule of first possession II to wildanimals (Cooter and Ulen, 1988, p. 126-127).

CORREA: INTELLEcruAL PROPERTY RIGHTS UNDER ....

servation, consideration should be given tothe eventual recognition of rights in relationto "informal innovations" made by local andindigenous communities. In the case of et"-

situ conservation, an important question re-lates to the legal status of materials(embryos, sperm) held in animal genebanks.Unlike the case of plant genetic resources(pGR), in which a paradigm of free ex-change was enshrined by the FAO Interna-tional Undertaking on Plant GeneticResources (1983), prevailing practices relat-ing to the exchange of AnGRs seem to relyto a large extent on mutually agreed terms.Distinct trade channels have been estab-lished for the transfer of sperm and embryosin certain areas, such as beef and dairycatle.Regulating the access to traditional or in-digenous breeds, including wild relatives ofdomestic animals, may require the adoptionof measures different from those appropri-ate for PGR Developing countries often arethe recipients of high-producing animalsoriginating in developed countries.According to the CBD, access, wheregranted, shall be on mutually agreed termsand subject to the prior informed consent ofthe Contracting Party providing the geneticresources, unless otherwise determined bythat Party (article 15.4 and 15.5).In addition, article 15 of the CBD providesthat each Contracting Party shall take legis-lative, administrative or policy measures, asappropriate, and inaccordance with Articles16and 19and, where necessary, through thefinancial mechanisms established by Arti-cles 20 and 21 of the CBD, with the aim ofsharing in a fair and equitable way the re-sults of research and development and thebenefits arising from the commercial andother utilization of genetic resources withthe Contracting Party providing such re-sources. Such sharing shall be upon mutu-ally agreed terms (article 15.7).

21The implementation of the referred provi-sions is one of the outstanding tasks of theConference of the Parties of the CBD. Thepractical application of that principle shouldtake into account the type of materials in-volved and their intended use. It is quitedifferent, for instance, whether PGR areused for agriculture or for the production ofpharmaceuticals; or whether AnGRs areused for food or for other purposes.The relationship between IPRs and the pro-visions of the TRIPS Agreement and theCBD has given rise to various issues: "Manypolicy-makers and members of civil societyare concerned that the TRIPS Agreementpromotes private commercial interests atthe expense of other important public policyobjectives, such as those contained in theCBD. Specifically they are concerned thatthe TRIPS Agreement is creating seriouschallenges to the successful implementationof the CBD, including in relation to ... accessand benefit sharing, protection of traditionalknowledge, technology transfer, and theconservation and sustainable use of biologi-cal diversity" (WWF, CIEL, 2001, p. 11-12).While, according to the CBD countries thatprovide access to genetic resources have theright to obtain benefit-sharing measures, theappropriation of genetic resources underIPRs may undermine or nullify such rights.There are, in fact, many reported cases ofpatents obtained by researchers or compa-nies from developed countries over geneticresources (e.g. relating to ayahuasca, qui-noa, turmeric) without the consent of thesupplying countries and the concerned com-munities, and without any benefits flowingto them.Different positions have been held in rela-tion to the relationship of the TRIPS Agree-ment and the CBD. While developedcountries, notably the USA,find no inconsis-tencies between the two treaties, several de-veloping countries have indicated the needto reconcile them, possibly by means of arevision of the TRIPS Agreement.

22 J INTELLEC PROP RIGHTS, JANUARY 2002

Thus, the African Group has indicated thatarticle 27.3(b) of the TRIPS Agreirentshould be harmonized with the CBD .theobjective ofwhich is "to protect the rights ofindigenous people and local fanning com-munities and ~8protect and promote biologi-cal diversity" . India has noted that whilethe TRIPS Agreement obliges Members toprovide product patents for microorganismsand for non-biological and microbiologicalprocesses, and to provide for the protectionof plant varieties, the CBO

"categorically reaffirms that nationstates have sovereign rights over theirown biological resources, recognizesthe desirability of sharing equitablythe benefits arising from the use ofthese resources as well as traditionalknowledge, innovations and practicesrelevant to the conservation ofbiologi-cal diversity and its sustainable use,and acknowledges that special provi-sions are required to meet the needsof developing countries".

In order to reconcile any contradictions, In-dia suggested that the innovators share withholders of traditional knowledge the bene-fits arising from its exploitation, through"material transfer agreewents/transfer ofinformation agreements" 1. It has also pro-posed to incorporate a provision estab-lis~Jng that patents inconsistent with fficle15 of the CBO must not be granted .The hannoni~~on of the TRIPS Agreementwith the CBD ,including through the re-

view of article 27.3.b) may also provide thebasis, according to some of the before-men-tioned proposals, to develop rules for the suigener!s protection of traditional knowl-edge2.

Conclusions

The TRIPS Agreement has substantiallymodified the international rules on IPRs.While it has promoted the expansion andstrengthening of IPRs, particularly patents,the Agreement leaves certain room for ma-neuver to national governments.This is particularly the case in the area ofAnGRs. National laws may, consistently withsaid Agreement, exclude the patentability ofanimal-related inventions, including geneti-callymodified animals, cells and genes. Gov-ernments can also invoke morality or publicorder grounds to exclude the patentability ofanimal-related invention, and can issue com-pulsory licences in order to address anti-competitive. emergency or other situationsdefined by the national law. It will be, there-fore, a matter of national policy to establishwhether and the extent to which patentsshould be conferred in relation to animals,and especially, AnGRs.Given the legal powers conferred to patentowners, the granting of patents in the area ofanimal production may lead to an importantrestriction on the fanners' capacity to com-mercially exploit the progeny ofanimals cov-ered by patents. The viability of providingexceptions to the exclusive rights would de-

..

l!1bis Group has also noted that an early review of article 27.3.b) of the TRIPS Agreement, if made, wouldpreempt the outcome of deliberations in other fora, such as CBD, UPOV and FAO and has, therefore, proposedto extend the deadline for implementation of that provision.20See wro document Wf/GC/W/202.21See wr /GC/W /147.21bis article requires prior informed consent for access and to share benefits with the country of origin of theobtained material.23See (WT/GC/W/225).24See also the submission by Egypt, Wf/GG/W /136.25See, e.g., the above-mentioned submissions by India and by the African Group.

CORREA: INTELLECTUAL PROPER1Y RIGHTS UNDER. ....

pend on interpretations to be developed inthe framework of the dispute settlement sys-tem of Wl'O, There is so far no evidencesupporting the need for patents in the fieldof animals in order to provide incentives forinnovation and the conservation and sustain-able use of AnGRs.Finally, it is necessary to clarify in the appro-priate fora the relationship between theTRIPS Agreement and the CBD,jn order toensure that the basic principles of the latter(notably the States sovereignty over geneticresources, prior informed consent and bene-fit sharing) are not undermined by the ap-propriation ofgenetic resources under IPRs.

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