The TRIPS Council met last week. One of the highlights was a proposal by 8 developing countries that applications for patents relating to genetic resources and traditional knowledge should be accompanied by evidence of benefit sharing with the countries of origin, otherwise, processing of the applications should stop or they should be withdrawn.

If failure to provide evidence is discovered after the patent is granted, the patent could be revoked, or the rights could be transferred, and criminal or civil sanctions can be applied, according to the proposal.

The proposal, in a paper titled "Elements of the obligation to disclose evidence of benefit sharing under the relevant national regime" (IP/C/W/442), was submitted by Bolivia, Brazil, Colombia, Dominican Republic, Ecuador, India, Peru and Thailand.

Below is a report of the proposal.

Martin Khor
TWN

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Developing countries propose that TRIPS should require patent applicants to prove benefit sharing

By Martin Khor, Geneva, 10 March 2005

Applications for patents relating to genetic resources and traditional knowledge should be accompanied by evidence of benefit sharing with the countries of origin, otherwise, processing of the applications should stop or they should be withdrawn, according to a proposal presented this week by eight developing countries to the WTO's TRIPS Council.

If failure to provide evidence is discovered after the patent is granted, the patent could be revoked, or the rights could be transferred, and criminal or civil sanctions can be applied, according to the proposal.

The proposal, in a paper titled "Elements of the obligation to disclose evidence of benefit sharing under the relevant national regime" (IP/C/W/442), was submitted by Bolivia, Brazil, Colombia, Dominican Republic, Ecuador, India, Peru and Thailand.

It was presented by Brazil and discussed under the agenda item on the relationship between the TRIPS Agreement and the Convention on Biological Diversity (CBD) at the TRIPS Council meeting being held on 8-10 March.

The co-sponsors of the paper said that the patent system should be supportive of, and not run counter to, the objectives of an international framework for disclosure. The TRIPS Agreement has a role to play in supporting its operation. Requiring patent applicants to provide evidence of fair and equitable benefit sharing will enhance the patent system's credibility, in line with the objectives and principles of TRIPS itself.

This is the third paper by the group of countries under a "checklist" of issues on the TRIPS/CBD relationship. Two papers on elements of disclosure of source and country of origin and elements on obligation to disclose evidence of prior informed consent had been submitted at earlier TRIPS Council meetings.

The group's paper advocates that the relevant patent applications be obliged to contain the disclosure of evidence of benefit sharing arising out of the utilisation of genetic resources and/or traditional knowledge in inventions.

This is aimed at not only ensuring that there is benefit sharing per se but that sharing of benefits is fair and equitable among the parties. Evidence would have to be provided that there was sharing of the benefits arising out of the utilisation of the genetic resources and/or traditional knowledge in the invention and that the shares of benefits that accrued to the source and country of origin and/or local/indigenous community, where applicable, was equitable and fair in the circumstances.

The group suggests the following factors to determine whether there is equitable and fair benefit sharing.

First, the sharing of benefits is premised upon mutually agreed terms in the context of Article 15(7) of the CBD, covering elements relating to the conditions, obligations, procedures, types, timing, distribution and mechanisms of the benefits shared.

Secondly, there is a reporting obligation on issues relating to patenting or
commercialisation especially where future benefit sharing is contemplated.

In this regard, given that the CBD recognizes the rights of States to prescribe the conditions of access to the genetic resources that are under their sovereign jurisdiction, it is expected that the prevalent laws and practices of the countries of origin should provide the framework within which to determine the terms of fair and equitable benefit sharing.

To fulfil the requirement of furnishing evidence of benefit sharing, the applicant will have to discharge a positive obligation, said the group. The requirement for furnishing evidence of benefit sharing would be provided for by obligating Members to require, as a condition for acquiring patent rights, that applicants furnish evidence of fair and equitable benefit sharing with respect to genetic resources and/or traditional knowledge used in the invention.

The paper also proposes legal effects of not providing evidence of benefit sharing at the pre- or post-grant stage.

Where genetic resources and/or traditional knowledge was used in an invention but no evidence of benefit-sharing or an arrangement for future benefit sharing has been furnished as required before the examination or grant of a patent, the legal effect could be that the application would not be processed any further until the submission of the necessary declaration and evidence.

This could be accompanied with penalties, including criminal penalties, and
time-limits within which the proper declaration and evidence must be provided. Otherwise, the application could be deemed withdrawn. The failure to provide evidence of benefit sharing should justify the non-processing of the application.

Where the failure to provide evidence of benefit sharing is discovered after the grant of a patent, the legal effects could include:

• Revocation of the patent where it is determined that there is fraudulent intention behind the failure to provide evidence of benefit sharing. Additionally or alternatively, criminal and/or administrative sanctions may also be imposed, particularly to ensure adequate compensation where it is eventually determined that no benefits were shared or are intended to be shared;
• Full or partial transfer of the rights to the invention, also as an alternative to revocation;
• Criminal and/or civil sanctions, outside the patent system, including the possibility of punitive damages, where it is determined that the patent holder in fact provided benefits but did not provide the evidence in the application.

Replying to arguments that such a disclosure system should be set up only at the national level, the eight countries said that the requirement for disclosing evidence of benefit sharing and prior informed consent would not replace national regimes but be a vital supplementary measure and a necessary incentive for patent applicants to comply with the prevalent laws and practices of the countries of origin of the genetic resources, in accordance with the objectives and norms of the CBD.

In this regard, bio-prospectors, researchers and other prospective patent applicants who are committed to accessing biological resources and associated traditional knowledge in a fully lawful manner would have nothing to fear from the disclosure requirements.

The disclosure requirement should not be found cumbersome in the least, given that such a requirement would do little other than ask of patent applicants that they supply information to the effect that the laws of the countries of origin of the genetic resources have been fully complied with.

On the other hand, said the paper, bio-piracy is a global problem mostly involving the acquisition of material in one country and the seeking of a patent over that material or inventions deriving from that material, in another country.

Hence, while national-level access and benefit sharing regimes and/or sui generis systems are being developed in several countries, such national regimes or systems by themselves could not be sufficient to protect and fully preserve biological materials and/or associated traditional knowledge.

For example, the ability of patent offices and other authorities in a national jurisdiction to prevent bio-piracy, as well as to enforce prior informed consent and benefit sharing mechanisms, does not ipso facto lead to similar actions in respect of patent applications in other countries.

Said the group: "What is needed is the establishment of an international framework of protection. Such a system would provide, inter alia, a procedure whereby the use of biological material and/or associated traditional knowledge from one country is allowed, particularly for commercialization and/or the taking out of intellectual property rights, only after the competent authority in the country of origin certifies that the source of origin has been disclosed, and that prior informed consent and
benefit sharing conditions have been accepted.

"The patent system should be supportive of, and not run counter to, the objectives of such a framework. The TRIPS Agreement, in effect, has a role to play in supporting its operation. As in the case of disclosure of evidence of prior informed consent, requiring patent applicants to provide evidence of fair and equitable benefit sharing will enhance the credibility of the patent system by contributing to the realization of the stated objectives and principles of TRIPS itself, as enshrined in Articles 7 and 8
of this WTO Agreement."

The paper proposes that the furnishing of evidence of benefit sharing should be done at the time of applying for the patent. It gives two reasons for this. Firstly, the very fact of gaining access may trigger a certain level of benefit sharing. It is common practice that companies or individuals who require access to background intellectual property to undertake further research and development may pay for the benefit of having access to such background information.

Secondly, and more importantly, where the real benefits can only arise from the patenting and commercialisation of the invention which utilised genetic resources and/or traditional knowledge, the applicant will still have to provide evidence at the time of the application, of the existence of an arrangement for the fair and equitable sharing of any benefit that may arise out of the utilisation of the resources.

It could also be contemplated that the applicant would, in providing evidence of the existence of an arrangement to ensure future sharing of benefits, have to indicate how the national authority (and community, where applicable) would enforce such an arrangement without having to resort to expensive litigation.

Where there is no national regime, the applicant will be deemed to have complied with the obligation by indicating in the declaration that there was no national access and benefit sharing regime in the country of origin, but that there was, in any case, benefit sharing or an arrangement for future benefit sharing with the authority or community in charge of the location where the genetic resources and/or traditional knowledge were accessed, in a manner that fully respects the prevalent laws, regulations and practices of the country of origin.

The paper by the eight countries was one of three papers presented at the TRIPS Council meeting on the CBD/TRIPS relationship, the others being a paper by Peru on its national experience and a Brazil-India paper responding to an earlier paper by the US.

The paper received support from several other developing countries, which generally viewed the checklist as well as the paper as a good basis for further discussion. The EC said that it could agree with the checklist of issues as a basis for discussion; however, it did not agree with the developing countries' proposals requiring disclosure of evidence of prior informed consent and benefit sharing.

The US maintained its position that there is no conflict between the CBD and TRIPS, and that CBD obligations can be satisfied by taking action at the national level, without the need for action to be taken on the patent system or at the WTO.

A large number of countries supported the continued discussion on disclosure, and were favourable to a suggestion that the next meeting discuss the form and content of the disclosure provisions being proposed for introduction in the TRIPS agreement.