UK and EU Implementation of theNagoya ProtocolNagoya Protocol

Prepared forRSC IP Case Law Symposium

Dr Darren Smythy

20th November 2014

eip.com

Background - I

• 1992 Convention on Biological Diversity signed at the Rio Earth Summit• 1992 - Convention on Biological Diversity signed at the Rio Earth Summit

• Only non-Parties of CBD are Andorra, Holy See, South Sudan … and … United States of America

• 2010 - The Nagoya Protocol on “Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization” is signed

• 50 ratifications required for Protocol to enter into Force

Background - II

• October 2012 A draft Regulation related to Nagoya is proposed by The• October 2012 - A draft Regulation related to Nagoya is proposed by The European Commission (in addition to a ratifying Regulation)

• Parliament reviewed in four committees, all of whose rapporteurs were , ppGreens

• Parliament voted in favour of radically amended draft, including retrospective effect

• 6 December 2013 - Following Trilogue between Commission, Parliament and Council compromise draft issuedand Council, compromise draft issued

• 22 January 2014 Trilogue text approved by Environment Committee

Background - III

• 16 April 2014 Regulation (EU) 511/2014 for compliance measures is• 16 April 2014 Regulation (EU) 511/2014 for compliance measures is adopted, and enters into force 9 June 2014

• 14 July 2014 – Uruguay becomes the 50th state to Ratify Nagoya protocoly g y y g y p

• 12 October 2014 – Protocol comes into Force, 90 days after 50th

ratification

• 12 October 2015 – Articles 4, 7 and 9 of EU 511/2014 will come into force

User compliance and due diligence

Monitoring of user compliance

User compliance checks

Nagoya Provisions

• Nagoya Protocol itself founded on principles of:• Nagoya Protocol itself founded on principles of:

―Prior informed consent of Party (=country) before access to genetic

resource is permitted (Article 6)resource is permitted (Article 6)

―Fair and equitable sharing with Party of benefits arising from utilisation

of genetic resources on mutually agreed terms (Article 5; examples of g y g ( p

benefits in Annex)

―Applies also to associated traditional knowledge (Article 7)

• These are not further elaborated in the Regulation; instead a “due diligence” obligation is created

Due diligence – Regulation Article 4

Users (=researchers) required to exercise “due diligence” to ascertain thatUsers (=researchers) required to exercise due diligence to ascertain that genetic resources have been accessed in accordance with ABS/regulatory requirements; and keep for 20 years after end of utilisation “Internationally

i d tifi t f li ” [ f P t l A t 6(3)( )]recognised certificate of compliance” [cf Protocol Art 6(3)(e)] or information/documents concerning:

• Date and place of access• Date and place of access

• Description of genetic resource utilised

• Direct source of genetic resource and subsequent users• Direct source of genetic resource and subsequent users

• Access and Benefit Sharing (ABS) agreements, access permits, mutually agreed terms including benefit-sharing, and any rights or obligationsagreed terms including benefit sharing, and any rights or obligations related to ABS

Declaration – Regulation Article 7

• Users (=researchers) required to declare “due diligence” exercised on• Users (=researchers) required to declare due diligence exercised on receipt of research funding

• At final stage of development of product compliance must also be• At final stage of development of product, compliance must also be declared AND the corresponding documents submitted to competent authority

• Proposal by Parliament to require similar declaration in patent applications was removed at Trilogue

Due diligence process

As imagined by DefraAs imagined by Defra

Due diligence – Penalties

• Rules on penalties left to Member States of EU• Rules on penalties left to Member States of EU

• Penalties are required (Article 11) in relation to compliance with Articles 4 to 7 of Regulation and required to be “effective, proportionate and g q , p pdissuasive”

• UK proposals include a mix of civil and criminal sanctions, ranging from Compliance Notices, to imprisonment for up to 2 years or Variable Monetary Penalties (up to £250,000)

Due diligence - Problems I

• Nagoya drafted envisioning access to genetic resources that have• Nagoya drafted envisioning access to genetic resources that have associated traditional knowledge, and especially higher organisms; relates to “Bioprospecting” and to combat “Biopiracy”

• But the actual provisions of Nagoya, and the Regulation, cover ALL non-human genetic resources

• For ALL genetic resources, European researchers will have to keep documentary evidence EITHER of Art. 4 due diligence OR that not required (eg resource was accessed before Regulation came into force; or resource is of human origin)

• Additional burden that is NOT carried by eg US researchers

Due diligence - Problems II

• Special provisions for pathogens relating to public health emergency; due• Special provisions for pathogens relating to public health emergency; due diligence obligations to be complied with by either 1 month of the health threat being terminated, or within 3 months of commencement of

h (“ tili ti ”) th i h t b t i t dresearch (“utilisation”) – otherwise research must be terminated.

• This seems strict for an emergency situation – perhaps a drafting error?

Nagoya in the UK

• The National Measurement Office appointed as ‘Competent Authority’• The National Measurement Office appointed as Competent Authority

• An executive agency for ensuring “fair and accurate measurements

are available and used for transactions”are available and used for transactions

• Will be responsible for carrying out enforcement of Nagoya in the UK –inspections of compliance and due diligence, as well as raising awarenessinspections of compliance and due diligence, as well as raising awareness and improving understanding of Nagoya obligations

• Also carry out functions assigned to member states, such as verifying so ca y out u ct o s ass g ed to e be states, suc as e y gapplications for ‘register collection status’ (part of EU regulation)

• Defra (specifically, Julian Jackson) will be the National Focal Point –( p y, )resource for answering questions, dissemination of information on procedures etc.

Supporting Due Diligence

• Guidance will (eventually) be published by the National Measurements• Guidance will (eventually) be published by the National Measurements Office – will set out procedures for civil sanctions, and what would merit criminal action

• EU regulations include two provisions to assist users:

• ‘Best Practice Recognition’ (EU Reg, Art. 8) – assessment of user due g ( g, )diligence compliance procedures by EU. If EU decide that following the user’s procedure would comply with due diligence obligations, the user may qualify for a lower frequency of compliance checksthe user may qualify for a lower frequency of compliance checks

• Registered Collections (EU Reg, Art. 5) – a collection which can demonstrate it has all the necessary documentation: anyone who accesses that collection will be deemed to have already carried out due diligence – significant reduction of burden on user

Access and Benefit-Sharing Clearing-House (ABS-CH)

• The ABS CH is “is a platform for exchanging information on ABS and a key• The ABS-CH is is a platform for exchanging information on ABS and a key tool for facilitating the implementation of the Nagoya Protocol”

• Informs user on countries’ legislative measures competent national• Informs user on countries legislative measures, competent national authorities etc.

• Should eventually have provisions for enhancing legal certainty andShould eventually have provisions for enhancing legal certainty and transparency for procedures of access

• Will also include internationally recognised certificates of compliance (egWill also include internationally recognised certificates of compliance (eg. recognised Best Practice procedures in EU)

• https://absch.cbd.int/https://absch.cbd.int/

• Not quite ready yet though…

ABS Agreements - Problems

Inherent problems with system envisaged by Nagoya:Inherent problems with system envisaged by Nagoya:

• If consent and ABS agreement is required before access, no guarantee that anything useful will be discovered, so time and resource will have y g ,been wasted on negotiating ABS agreement

• Particularly relevant in pharmaceutical research where the useful drug molecule hit rate is relatively low; but applies in research generally

• From perspective of Party holding genetic resources, entering into ABS creates expectation of value; if the accessing company then says use hascreates expectation of value; if the accessing company then says use has led to nothing of value, this assertion (while often true) likely to lead to suspicion

It could have been worse - I

Many demands of European Parliament were refused eg:Many demands of European Parliament were refused, eg:

• Mandatory disclosure of origin in patents (although perhaps only delayed – treaty currently in negotiation at WIPO)– treaty currently in negotiation at WIPO)

• Expansion of “use” (=research according to Nagoya) to “utilisation as well as subsequent applications and commercialisation” (much broader)as subsequent applications and commercialisation (much broader)

• Expansion of scope from “genetic resources” to “derivatives” - “a naturally occurring biochemical compound resulting from the genetic expression oroccurring biochemical compound resulting from the genetic expression or metabolism of biological or genetic resources, even if it does not contain functional units of heredity” – i.e. anything derived from any organism

It could have been worse - II

Also demand for retrospective effect was refused Parliament proposal wasAlso demand for retrospective effect was refused – Parliament proposal was that for genetic resources or derivatives already accessed, any future use or commercialisation would require:

• ABS agreement already in place; OR

• If no existing applicable agreement negotiation of new agreement withIf no existing applicable agreement, negotiation of new agreement with country of origin; OR

• If country of origin cannot be ascertained, provide benefit sharing with aIf country of origin cannot be ascertained, provide benefit sharing with a “Union benefit-sharing fund” (to be set up)

This devastating proposal was rejected in the Trilogueg p p j g

Recent Developments

Meeting in Pyeongchang:Meeting in Pyeongchang:

• CBD COP 12 – biennial Conference of the Parties to the CBD

NG COP/MOP 1 fi t C f f th P ti d M ti f th• NG COP/MOP 1 – first Conference of the Parties and Meeting of the Parties to the Nagoya Protocol

NG COP/MOP 1 Ch i Y S k N ti l I tit t f E l• NG COP/MOP 1 Chair: Yoon Seong-kyu, National Institute of Ecology, South Korea

Recent Developments

Meeting in Pyeongchang:Meeting in Pyeongchang:

• CBD COP 12 – biennial Conference of the Parties to the CBD

NG COP/MOP 1 fi t C f f th P ti d M ti f th• NG COP/MOP 1 – first Conference of the Parties and Meeting of the Parties to the Nagoya Protocol

NG COP/MOP 1 Ch i Y S k N ti l I tit t f E l• NG COP/MOP 1 Chair: Yoon Seong-kyu, National Institute of Ecology, South Korea

• NG COP/MOP 1 Chair: Ham Pande (representing Prakash Javadekar)• NG COP/MOP 1 Chair: Ham Pande (representing Prakash Javadekar), Ministry of Environment, India

(South Korea isn’t actually a party to Nagoya Protocol )(South Korea isn t actually a party to Nagoya Protocol…)

Recent Developments

Meeting in Pyeongchang:Meeting in Pyeongchang:

• CBD COP 12 – biennial Conference of the Parties to the CBD

NG COP/MOP 1 fi t C f f th P ti d M ti f th• NG COP/MOP 1 – first Conference of the Parties and Meeting of the Parties to the Nagoya Protocol

A l t f t lk b t ‘P h d ”• A lot of talk about ‘Pyeongchang roadmap”

Recent Developments

Meeting in Pyeongchang:Meeting in Pyeongchang:

• CBD COP 12 – biennial Conference of the Parties to the CBD

NG COP/MOP 1 fi t C f f th P ti d M ti f th• NG COP/MOP 1 – first Conference of the Parties and Meeting of the Parties to the Nagoya Protocol

A l t f t lk b t ‘P h d ”• A lot of talk about ‘Pyeongchang roadmap”

• The CBD proposal appears more confusing

Recent Developments

Meeting in Pyeongchang:Meeting in Pyeongchang:

• CBD COP 12 – biennial Conference of the Parties to the CBD

NG COP/MOP 1 fi t C f f th P ti d M ti f th• NG COP/MOP 1 – first Conference of the Parties and Meeting of the Parties to the Nagoya Protocol

A l t f t lk b t ‘P h d ”• A lot of talk about ‘Pyeongchang roadmap”

• Actual content is not finalised, but won’t affect Nagoya implementation directly focussed on wider CBD “Aichi Biodiversity Targets”directly – focussed on wider CBD Aichi Biodiversity Targets

Aichi Biodiversity Targets

20 defined targets which fall within 5 ‘strategic goals’:20 defined targets, which fall within 5 strategic goals :

• Address the underlying causes of biodiversity loss by mainstreaming biodiversity across government and societybiodiversity across government and society

• Reduce the direct pressures on biodiversity and promote sustainable use

• To improve the status of biodiversity by safeguarding ecosystems, species and genetic diversity

• Enhance the benefits to all from biodiversity and ecosystem services

• Enhance implementation through participatory planning, knowledge management and capacity building

WIPO Intergovernmental Committee

• In parallel with Nagoya ‘WIPO IGC on Intellectual Property and Genetic• In parallel with Nagoya – WIPO IGC on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore’ (both WIPO and CBD are UN entities)

• Draft articles have not been finalised, but should be published soon (WIPO mandate refers to finalising the texts within the 2014/15 bi i )biennium)

• Proposed policies (from WIPO/GRTKF/IC/28/4) would require an applicant to disclose the origin of genetic resources or traditionalapplicant to disclose the origin of genetic resources or traditional knowledge where the invention directly derives from these components

What do we need to do now?

• Ensure researchers are prepared due diligence paperwork• Ensure researchers are prepared – due diligence paperwork

• Be able to provide evidence that resources were accessed pre-Nagoya

• Have an understanding of access and benefit sharing agreements

• Be aware of (eventual) UK implementation, and its associated penalties( ) p , p

• Keep up to date with Nagoya ‘Access and Benefit-Sharing Clearing-House’ (ABS-CH) – “a key tool for facilitating the implementation of the Nagoya Protocol, by enhancing legal certainty and transparency”

• Follow ‘WIPO IGC on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore’ decisions

Conclusion

• “Bioprospecting” “biopiracy” and “misappropriation of genetic• Bioprospecting , biopiracy and misappropriation of genetic resources” difficult to define, and probably all less prevalent than alleged by proponents of Nagoya

• Many examples of alleged misbehaviour do not withstand close scrutiny

• EU Regulation will create burden of maintaining documentationEU Regulation will create burden of maintaining documentation

• Places US researchers at an advantage

• But it could have been worse…

• …and perhaps still could get worse