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FOIA Number: 2012-0769-F
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Clinton Presidential Records
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Council on Environmental Quality
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Clinton Presidential Records
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marker by the William J. Clinton Presidential Library Staff.
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of digitization. To see the full publication please search online or
visit the Clinton Presidential Library's Research Room.
ACTS
African Centre for Technology Studie
BEYOND THE BIODIVERSITY
CONVENTION
A View From India
Ashish Kothari
Project Director
Indian Institute of
Public Administration
New Delhi, India
International Conference on
the Convention on Biological Diversity:
National Interests and Global Imperatives
Held at the United Nations Environment
Programme (UNEP) Headquarters
Nairobi, Kenya
January 26-29, 1993
Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a publication.
Publications have not been scanned in their entirety for the purpose
of digitization. To see the full publication please search online or
visit the Clinton Presidential Library's Research Room.
ACTS
African Centre for Technology Studie
LEGAL QUESTIONS CONCERNING
THE IMPLEMENTATION OF
ARTICLE 15 PARAGRAPH 5
OF THE CONVENTION ON
BIOLOGICAL DIVERSITY
Access to Genetic Resources
Veit Koester
Head of Section
and
Christian Prip
Legal Advisor
The National Forest and Nature Agency
Ministry of the Environment, Denmark
International Conference on
the Convention on Biological Diversity:
National Interests and Global Imperatives
Held at the United Nations Environment
Programme (UNEP) Headquarters
Nairobi, Kenya
January 26-29, 1993
ACTS
African Centre for Technology Stu
TECHNOLOGY TRANSFER IN
THE CONTEXT OF GLOBAL
ENVIRONMENTAL ISSUES
Amrita N Achanta
Research Associate
and
Prodipto Ghosh
Senior Fellow
Tata Energy Research Institute
Jor Bagh, New Delhi
(Draft: Do not quote)
International Conference on
the Convention on Biological Diversity:
National Interests and Global Imperatives
Held at the United Nations Environment
Programme (UNEP) Headquarters
Nairobi, Kenya
January 26-29, 1993
TECHNOLOGY TRANSFER IN
THE CONTEXT OF GLOBAL
ENVIRONMENTAL ISSUES
Amrita N Achanta
Research Associate
and
Prodipto Ghosh
Senior Fellow
Tata Energy Research Institute
Jor Bagh, New Delhi
(Draft: Do not quote)
International Conference on
the Convention on Biological Diversity:
National Interests and Global Imperatives
Held at the United Nations Environment
Programme (UNEP) Headquarters
Nairobi, Kenya
January 26-29, 1993
Contents
Abstract
1
1. Introduction
1
2. Theoretical basis of IPRs
2
2.1 Developing country perspectives
3
3. Principal Types of IPRs
5
3.1 Patents
5
3.2 Trade Secrets
6
3.3 Plant Breeders' Rights (PBRs)
7
4. Modes of Technology Transfer
8
4.1 Foreign Direct Investment (FDI)
10
4.2 Licensing of Intellectual Property Rights (IPRs)
10
5. Role of Government in Technology Transfer
11
6. Appropriate Technology
12
7. Relevance to Global Environmental Agreements
12
7.1 Specifics within the Biodiversity Convention (BDC)
13
7.2 Technology transfer and full incremental costs
19
8. Conclusion
21
9. References
22
Abstract
This paper attempts to analyze the implications for and considerations in-
volved in technology transfer, which is a crucial component of both the
Conventions on Biological Diversity and Climate Change. The protection,
offered to technologies by various forms of Intellectual Property Rights.
dictates the extent and manner in which an external agent may transfer
technology; while developed countries consider IPRs as a significant bar-
ricr to effective technology transfer. This paper stresses the viewpoint
of the developing world; commencing with the major concerns regarding
IPRs, the appropriateness of potential technology to be transferred. scope
of protection offered by IPRs, and what aspects need inclusion in future
agreements /protocols so as to protect the interests of the developing
world.
1.
Introduction
Multilateral regulation of the global environment is sought to be accom-
plished through Conventions and Protocols (for example, the Conventions
on Climate Change and Biodiversity adopted at Rio in June 1992, and the
earlier Montreal Protocol on Ozone Depletion, 1990). It involves two
broad classes of technology transfer issues for developing countries (DCs).
Firstly, technology transfers are essential in order that DCs may meet their
differentiated responsibilities (not necessari'y mandatory) in abating envi-
ronmental damage. For example, a less greenhouse gases (GHGs) intensive
growth path in the case of India and China may involve switches from
Conventional Pulverized Coal Thermal Power technologies to more energy
efficient or "advanced" Coal Power technologies. Research and
Development (R&D) in respect of the latter have, for the most part, been
carried out in industrialized countries (ICs), whose firms, accordingly,
own the relevant IPRs. Technology transfer from the owners to the rele-
vant agents in DCs will be necessary, and the important questions here re-
late to the terms, depth of, who pays for and how much, for such transfers.
Secondly, most clearly, in the case of biodiversity conservation. environ-
mental protection (and perhaps traditional knowledge) will furnish impor-
tant positive externalities to the process of technology generation (e.g.
pharmaceutical products, agricultural crops) and the question is how to en-
able the DCs to realize payments for these external benefits to technology
producers. This issue is distinct from the question of paying the oppor-
tunity costs of biodiversity conservation. Each of these broad issues is
spiked at the core with considerations of equity between nations, and across
generations. However, this paper is not primarily an exploration of such
equity issues.
In the next section we look briefly at the theoretical underpinnings of
IPRs, including a brief restatement of DCs perspectives.
2. Theoretical basis of IPRs¹
The standard justification for the granting of property rights over intellec-
tual property is that such rights furnish incentives for creative work.
Further, they are sought to be fine-tuned so that the incentives maximize
the difference between the value of the resulting intellectual property and
the social cost of its creation, including administration and transactions
costs. In other words, the specifics of IPRs regimes are designed to realize
economic efficiency. Some further questions are involved:
First, IPRs regimes are premised on the belief that prospective financial
returns in fact drive private creators of intellectual property. In other
words, private creators will have sufficient incentives only if they have the
ability to capture at least some of the value that users place on such prop-
erty. If they are unable to do so, the amount of innovative activity may be
inefficient.
Second, there is the issue of whether innovative activity takes place at
least social cost. This may depend upon the extent to which creators may
borrow ideas or concepts from earlier work. For example, rights to
"derivative work" are typically vested in the authors under copyright law,
resulting in increased costs to subsequent authors.
Third, somewhat related to the second issue, is whether the IPRs regime
maintains a proper balance between the creation and dissemination of intel-
lectual property. A particular incentive structure may result in resources
being assigned to the creation of many new works. If however, these inno-
vations are not widely used, the net societal benefits may be less than in the
case where fewer resources are employed in creativity, but the intellectual
property created is more widely disseminated. This issue focuses attention
on two important questions on the appropriate scope of protection. One,
what is the optimal duration of IPRs protection, for example, in case of
patents. Two, what is the optimal trade-off between the duration and
breadth of IPRs protection? Another way of looking at this issue is in
terms of trade-offs between static and dynamic efficiency. The former
would require that innovations resulting from resources invested by pri-
vate agents be made widely available to all who are willing to pay the
(low) marginal cost of dissemination. Accordingly, public policy should
facilitate the widespread use of these assets, implying minimal property
rights in them. Dynamic efficiency considerations, on the other hand
would suggest that with minimal property rights, the creators may not re-
cover their initial investment, let alone attain sufficient returns to moti-
1
The following discussion is adopted from Besen and Raskind (1991).
2
vate them to undertake such chancy activities in the first place.
Accordingly, property rights should be stronger ("exclusive") than would
be implied under static efficiency.
Formally, IPRs are domestic policy instruments granted by national au-
thorities. However, since innovations embodied in products (or by them-
selves) cross borders, the question of IPRs protection in international
transfer is important. On the other hand, countries have differing perspec-
tives on the socially optimal trade-offs between duration and breadth, and
indeed, on what categories of knowledge may be conferred IPRs protec-
tion. The questions of harmonization of IPRs legislation across countries
and transboundary protection are important current issues of international
political economy. A brief account of perspectives of DCs, in this debate.
is furnished below:
2.1 Developing country perspectives I
We take the current Indian IPRs system as a model of an IPRs regime, in-
corporating the typical concerns of the developing countries. This regime
diverges from typical IPR regimes of OECD (Organization for Economic
Cooperation and Development) countries, in three major aspects:
First, several categories of products and processes are excluded from
IPRs protection. They include horticulture, agriculture, and food pro-
cesses, and medicinal and drugs products. The rationale is that a majority
of the population depends on agriculture and horticulture for its liveli-
hood; that the purchasing power of the poor for food is limited; and be-
cause basic health care is scarce.
Second, while the system rewards innovators, it is not intended to confer
monopoly rights in manufacture or imports. Accordingly. the regime
permits compulsory licensing² for working patents in India.
Third, the regime seeks to promote diffusion of existing technologies
and innovation of technologies which create economic opportunities for a
late industrializing economy. Accordingly, in several sectors (e.g., phar-
maceuticals) processes may be protected while product patents are disal-
lowed, facilitating the wider use of the products as well as local R&D in
alternative manufacturing processes.
I This subsection relied on Nayyar (1992)
2 A compulsory licence is one of the means of limiting the exercise of patent rights in the
interest of the public. A compulsory licence is an authorization by an authority
designated for this purpose (in India it is granted by the Controller General of Patents)
to 2 person other than the patentee to do, without authorization by the patentee, acts
which would otherwise be excluded by the patent. In India, it is granted in the
condition of non-working of a patent or if the patent holder does not fulfil the
obligations.
These features of the Indian IPRs regime are at bottom, expressions of
equity and technological development concerns. Equity within the society
is sought to be realized teleologically, focusing on the need to enhance en-
titlements to basic needs by the poor, particularly in respect of livelihood,
food, and medicine. This is attempted to be accomplished through the IPRs
regime itself, rather than a separate overall policy framework for social
welfare. Accordingly, in pursuit of equity, property rights (in respect of
both duration and breadth) for creators are weakened.
The second policy imperative, of facilitating technology development,
derives from the fact that comparative advantage across countries based on
knowledge requires a policy framework which accelerates knowledge (and
skill) acquisition. Accordingly, this policy objective justifies narrower
IPRs protection, besides exclusions from patentability.
These considerations are sought by DCs to justify differentiated IPRs
regimes in ICs and DCs. The scholars from DCs have argued that the draft
agreement on IPRs at GATT (General Agreement on Trade and Tariff) the
"Dunkel Draft" neglects these concerns, focusing instead on the interests of
ICs. Thus the proposal "seeks to expand the scope of the IPRs system, in-
crease the life of privileges granted or rights conferred, extend the geo-
graphical spread where the privileges or rights can be exercised, reduce
the restrictions on the use of rights conferred and, above all, create an en-
forcement mechanism with retaliation across sectors' (Nayyar, 1992).
More specifically, exclusions from patentability under the Dunkel draft
would be restricted to life-forms, implying that exclusions on product
patents would be disallowed. Further, the burden of proof in suits for vio-
lation would be reversed with the onus on the alleged infringer. In addi-
tion, compulsory licensing would be severely restricted, and imports
deemed as working the IPRs. The period of protection would be extended
(from 14 years, the current duration in India) to 20 years. These are im-
portant deviations from, for example, current Indian patent law. Serious
consequences are prognosticated: essential technologies may become unaf-
fordable; the emergence of domestic technological capacity may be
stymied; transfers of technology may be retarded; and restrictive business
practices by Transnational Corporations (TNCs) may increase. These im-
pacts would accentuate inequalities between ICs and DCs.
Some other scholars (e.g., Sengupta, 1991), on the other hand, have ar-
gued that strengthening IPRs protection in DCs (albeit not on the lines of
the Dunkel draft) would ensure continued Foreign Direct Investment
(FDI). This is because of a perception in the international business com-
munity that investing in countries with weak IPRs protection is risky.
Empirically, however, it has been noted that the laws governing foreign
investment and technology transfer, as well as the general industrial envi-
ronment, play a greater role in determining investment and technology
flows than IPRs protection levels. Accordingly, strengthening IPRs pro-
4
tection may neither adversely affect developmental concerns, nor neces-
sarily attract foreign investment and technology flows.
In the next two sections, we present descriptive accounts of some key
IPRs instruments, as well as modes of technology transfer.
3.
Principal Types of IPRs
The two principal types of intellectual property, relevant for technology
transfer in the global environmental policy context are "patents" and "trade
secrets". A discussion of the types of IPRs is important since a significant
proportion of technologies (in both the Conventions) are under such pro-
tection and the alleged lack of adequate protection in certain developing
countries, could be cited as a deterrent to effective transfer. Also in the
Biodiversity Convention, the mention of prior informed consent includes
an element of disclosure whose treatment varies while using different IPR
instruments. Harmonization of domestic legislation to facilitate trans-
boundary technology transfer may have repercussions within the country
as well.
3.1
Patents
A patent may be granted by designated public authorities in a country on
"any new and useful process, machine, manufacture, composition of mat-
ter, improvement and plant as well as to new, original and incremental de-
sign for an article of manufacture" (Chisum, 1989). In India, patents are
granted under the Indian Patent Act, 1970, which was based on the report
of the Tek Chand/lyengar Commission on the subject. There are important
departures in the Indian statute from typical patent laws in OECD coun-
tries, relating largely to duration and patentability, i.e., exactly what kinds
of innovations may be patented. These differences are discussed above.
What exactly are the terms of the property right conferred on a patent
holder? In exchange for disclosure of the subject matter of the innovation
to the public (which would include actual and potential rivals), the patent
holder (patentee) is enabled to exclude all others from making, selling, or
using the subject matter of the patent for a specified period. During this
term, any use of the subject matter of the patent requires permission of the
patentee, usually by means of a license involving royalty payments. The
patentee can even prevent an independent subsequent inventor of the same
subject matter from making, using or selling it. At the end of the period of
protection, the subject matter enters the public domain, i.e., all property
rights cease.
Many questions about patents are still widely debated. There is little
agreement among economists on the impact of patent protection on the
growth of technology (Kitch, 1986), or on the optimal (dynamically effi-
5
cient) duration of patents (McFetridge and Ratiquzzaman, 1986). Further,
the evidence on whether patents have helped cartelization is inconclusive
(Hall, 1986).
Patents are frequently the subject of court proceedings, often by suits by
patentees alleging infringement. Courts may interpret the patent claim lit-
erally, or infringement may be found if there is a "substantial, functional
identify between the patent claims and the contested item" (Besen and
Raskind, 1991) i.e., the "doctrine of equivalents". In fact, one important
legal issue is whether a patent effectively covers more than the literal dis-
closure in the patent application or also includes the prospective technology
that follows.
Four principal lines of defence are open to alleged infringers. The grant
of the patent may itself be challenged: first lacking the requirements of
novelty and non-obviousness, second, fraudulence by the patentee may be
alleged by misrepresenting the prior state of the art in the patent applica-
tion, third, a patent is invalid if it was patented elsewhere or described in a
printed publication; and finally, the "doctrine of misuse" relates to the use
of a patent beyond its statutory scope. For example, if the license involves
a tying arrangement, i.e., the licensee must purchase another product from
the patentee.
Biotechnological patents are classified by the Indian Patent Office in
International Patent Classification (IPC) sub-class C12D (2nd Edition of
IPC). This subclass entitles the "production of chemical substances, other
than ethanol, by fermentation or biosynthesis," and include the microbio-
logical production of vitamins, toxins, antibiotics and other compounds.
3.2 Trade Secrets
Trade secrets are specific commercial information. One definition is
"information including a formula, pattern, compilation, program, device,
method, technique, or process, that: (i) derives independent economic
value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can
obtain value from its disclosure or use, and (ii) is the subject of efforts that
are reasonable under the circumstances to maintain its secrecy" (US
Uniform Trade Secrets Act, 1979).
Trade secrets are thus, by definition and unlike patents, not disclosed.
Trade secret law only protects such information from "improper" disclo-
sure, but not against independent discovery or by reverse engineering
(e.g., determining the chemical formula of a pharmaceutical product
through chemical analysis). The incentive to create intellectual property
protectible as trade secrets derives from their potential value. Trade se-
crets also differ from patents in respect of subject matter and duration of
protection. While innovation or novelty is required of the subject matter
6
or patent protection, commercial value is the sole criterion for protection
is a trade secret. Moreover, the duration of trade secret protection is in-
lefinite, limited only by the accident of independent discovery (or im-
proper disclosure).
"Improper" disclosure requires either a breach of duty by an employee
with access to the trade secret) to maintain secrecy. Alternatively, the im-
proper act includes theft, bribery, misrepresentation and commercial espi-
onage; in fact anything that would count as wrongful conduct even outside
trade secret law. Relief against improper disclosure includes injunctions
and damages.
Clearly, many categories of inventions may be eligible for protection
under either patents or trade secrets law (but obviously not both)¹.
Although trade secrets law offers lesser protection, because filing a patent
application involves heavy transactions costs, while the costs of preventing
disclosure of a trade secret may be less, a trade secret is often the pre-
ferred course. Alternatively, the disclosure required of patent applications
may convey sufficient useful information to potential rivals engaged in a
race for related or for the next generation of innovations, and this may
lead innovators to prefer trade secrets protection.
3.3 Plant Breeders' Rights (PBRs)
The need for plant breeder rights was that earlier classical breeding meth-
ods of crossing and selection were used to create new varieties and they did
not satisfy the conditions of patentability, in particular reproducibility and
non-obviousness. To obtain protection the applicant must show that the
submitted plant variety is (i) stable (that it reproduces true to form over
repeated propagations), (ii) homogenous (that important characteristics are
uniform across a single planting), (iii) distinctive (clearly distinguishable
from existing varieties), and (iv) having a variety denomination.
Protection is normally granted for a minimum of 15 years. PBRs are sub-
ject to a farmer's exemption and a research exemption. The farmer's ex-
emption allows users the right to retain part of the harvest for subsequent
planting as seed. The research exemption permits breeders to use a pro-
tected variety in subsequent breeding and to apply for protection of the
outcome as long as repeated use of the protected variety is not required.
The International Convention for the Protection of New Varieties of Plants
(UPOV), (administered by the International Union for the Protection of
New Varieties of Plants) governs this form of IPRs protection. This
Convention also has a clause prohibiting "double protection" i.e. use of
both patents and plant variety. The protection offered by Plant Breeders'
Rights differs from patent protection in that it only concerns the marketing
1 Under the UPOV Convention (1983) there is a clause preventing the protection of
biotechnological invention by both patents and plant variety rights.
7
of propagating materials (seeds, etc.) but not the growing and marketing of
plants themselves. In the case of asexually reproduced plants, "plant
patents" are available.
4.
Modes of Technology Transfer
Technology transfer is defined as the process by which technology,
knowledge and/or information developed in an organization, in a given
area, or for a particular purpose is applied and utilized in a different set-
ting or context.
Bell (1990)1 distinguishes categories of transferrable technology and
has identified them as three flows:
Flow A: capital goods, services and design specifica-
tions
Technology here refers to hardware or machinery and equipment,
which is acquired and brought into operational use during investment
projects. Other technological and managerial services included in invest-
ment projects cover execution of planning and feasibility studies, types of
design engineering, project management services, etc. The flow of capi-
tal goods and services add to the production capacity of the transferee, or
in the case of equipment designs, provide domestic capital goods produc-
ers with specifications for setting up similar facilities.
Flow B: skills and know-how for production
Included in most technology transfer agreements is the flow of know-
how required to operate and maintain new or improved production facili-
ties. There are two main components in this flow:
a. "Paper embodied technology"- in the form of manuals, schedules, flow
charts, including operating procedures, maintenance and repair proce-
dures, routine quality control, and possibly procedures for marketing
outputs and purchasing inputs.
b. "People embodied technology- refers to knowledge and expertise re-
quired to carry out procedures, which in turn includes training of in-
dividuals in requisite skills, or in dealing with situations not covered in
manuals and routines. This flow (which includes know-how and exper-
tise) also adds to the production capabilities of the transferee.
1 Bell,M., Continuing Industrialization, Climate Change and International Technology
Transfer. A report prepared in collaboration with the Resource Policy Group,Oslo,
Norway. Science Policy Research Unit. University of Sussex (1990).
8
Although Flow A and B add to the production capacity of the transferee,
hey do not contribute substantially to the his "technological capacity" of
he transferee. Neither does the transfer of capital goods or of know-how
(which aid in production of a product) add to the expertise and experience
required to change, adapt, and develop the product or process in the fu-
ture. The prospects of subsequent improvements are neglected in Flows A
and B.
Flow C: knowledge and expertise for generating and
managing technical change ("know-why")
Like Flow B, it also consists mainly of information and people embodied
knowledge and expertise. It differs from Flow B, in that it is concerned
with changing technical systems. There is obviously some overlap between
Flow B and Flow C.
The depth of knowledge and information about the technology in Flow
C would be greater than that required for routine operation and mainte-
nance. The other (and crucial) component is the expertise required to un-
dertake various engineering design studies, or the evaluation of alternative
plans and designs, or the incorporation of technology in improved pro-
duction systems. Through this flow, continuous technical change could be
realized in existing production facilities.
The transfer of technology can occur from a supplier to a recipient by
various mechanisms. The modes of technology transfer may be classified
as commercial or non-commercial. Commercial transfers are contracted
primarily through markets, and non- commercial transfers occur primar-
ily through non-market institutions.
The principal commercial methods of transfer are:
(1) Direct foreign investment in a host country subsidiary or a joint
venture.
(2) Licensing of intellectual property rights, usually on royalty payments.
(3) Technical assistance.
(4) Sale, importation, installation, and servicing of machinery and other
capital goods; and
(5) Franchising of consumer goods and services.
Some of the non-commercial methods of technology transfer are:
(1) Advisory groups.
(2) Personnel exchanges.
(3) Information dissemination.
(4) Education.
9
Though it must be noted that successful transfers are usually a combi-
nation of several (all) of these mechanisms. The effectiveness of transfer
is a function of the stage of technological development, characteristics of
end users, its potential for absorption within the recipient country, besides
other factors. Two principal commercial modes of technology transfer are
discussed below in more detail:
4.1 Foreign Direct Investment (FDI)
Technology transfer is often a component of foreign direct investment,
although each may also stand alone. The flow of technology to developing
countries has frequently constituted a part of foreign direct investment,
typically by large transnational corporations (TNCs).
Technology transfers between affiliates constitute a significant share of
such transactions. Transfers involving the parent firm and their branches,
or wholly (or majority) owned subsidiaries are usually done informally,
and do not include formal agreement(s). In contrast, when the foreign in-
vestment is a joint venture, where the local partner is a majority owner, a
formal agreement/license is typically negotiated between the technology
supplier and the recipient.
The mechanism of transfer through direct foreign investment may ap-
peal to the supplier because control is retained apart from the earning of
dividends rather than royalties. Control of the local enterprise is often
comprehensive: management, operation and marketing, quality control of
products. This facilitates control of the technology itself as a trade secret
rather than submitting to the disclosure required by patents.
From the viewpoint of the recipient, foreign investment brings in capi-
tal in the form of foreign exchange, and the security of the foreign part-
ner's long-term commitment. However, local innovative improvement of
the imported technology may be thwarted by the supplier quite deliber-
ately.
4.2 Licensing of Intellectual Property Rights (IPRs)
Technology transfer can occur independently of direct foreign investment
by means such as intellectual property licenses.
A patent licence transfers to the licensee several of the exclusive rights
of the patent. The licence is usually obtained by the payment of lump-sum
fees or royalty, although other commercial arrangements are also possible.
Such an agreement enables a foreign licenser, unwilling to risk his capi-
tal in a developing country, or uncertain of a project's profitability, or
unable to invest in unfamiliar conditions, to benefit from his intellectual
property holding. In countries where foreign investment is regulated and
local entrepreneurship is strong, technology licensing is increasingly used.
10
Similarly where host country foreign investment laws are restrictive,
either in the form of prohibition of foreign equity participation in certain
sectors of the economy, or legislation requiring a phased 'fade-out' of
foreign ownership in local subsidiaries/joint ventures, it encourages
TNCs interested in penetrating these markets to opt for licensing agree-
ments in place of foreign investment. This has been the typical experience
in India till recently.
Licensing is also convenient in that it is for a finite duration. From the
recipient's point of view, licensing leaves the recipient free of control and
interference. The recipient may also benefit from interaction with his own
government in ensuring that the agreement is equitable. However, gov.
ernment interference may also result in restrictive licensing arrangements,
which may not be perceived by the licensee as in his interest.
This mode of transfer appears more likely in the case of the Biodiversity
Convention (BDC). At the time of negotiating such a licensing agreement,
some of the aspects which could find Inclusion are a) obligations of licen-
sor (person granting license to licensee) in terms of technology transfer
particularly when a genetic resource is supplied b) Applicable lawl as the
BDC refers to the "adequate and effective protection of technologies under
IPR protection"; and also because technologies are protected by domestic
legislation and transboundary transfers are envisaged and c) Allowance of
cross licensing so that further innovations could follow.
5.
Role of Government In Technology Transfer
The role of the government in facilitating transfers of technology should
not be underestimated. It is responsible for the economic framework of the
recipient country, a factor which would influence investment decisions of
TNCs. The signals government gives to industry may discourage or en-
courage R&D as well as influence modes and depth of technology transfer.
Governments are also heavily involved in funding or organizing R&D. In
India 80% of scientific R&D is in the public sector, a situation similar to
that in France. In the US, government funding accounts for 50 per cent of
the total R&D investments. Further, governments are heavily involved in
setting up the IPRs framework, as well as in egotiating the international
IPRs regimes as in GATT.
India had earlier followed a development path of import substitution,
and in an effort to substitute imported technologies, indigenous technologi-
cal capacity was encouraged by a restrictive regime of technology imports.
No significant relationship between protection and degree of innovation
1 A clause of applicable law indicates which country's law is to be used for interpretation
of the agreement. This could be the laws of either negotiating party or could be the
laws of a third country.
11
has however been observed (Sengupta 1991). Recent policy changes have
significantly liberalized technology imports.
IPRs regimes may impact the Balance of Payment (BOP) situations of
countries in several ways. First, a strengthening of IPRs may mean that
transferees would have to pay increased royalties in foreign exchange. On
the other hand a loss of IPRs earnings due to weak IPRs protection in
transferee' countries could worsen a trade deficit. For example, it is
claimed that the US loses $60 billion a year owing to IPRs "violations" in
other countries.
Government policy also affects technology transfer through regulation
of foreign direct investment, in terms of restriction on import of capital
goods, and control of technology licensing. For example, India had earlier
insisted on a majority domestic equity share of at least 51%.
6.
Appropriate Technology
The technologies under consideration for transfer should be "appropriate"
from the standpoint of the recipient country. Some of the considerations
determining whether the appropriateness of a technology are (i) that it is
environmentally friendly, (ii) that it conforms to the development goals of
the recipient country, (iii) it harmonizes with its resource endowments,
and (iv) that the conditions under which the transfer occurs relate to its
circumstances.
Appropriateness, in the case of biotechnology must also take into par-
ticular consideration the safety aspect (design defect and failure to warn)
of some of the products of these technologies. The resulting implications
may require a re-examination of domestic environmental legislation, par-
ticularly those relating to legal liability for damages.
Developmental goals may relate to promotion of self reliance, removal
of inequalities in income, increasing employment opportunities, etc.
Resource endowments relate to availability of natural resources, man-
power, managerial skills, etc. The prevailing conditions include the exist-
ing infrastructure, markets, and other institutional structures. Appropriate
technologies in this context may include those that are labour intensive, use
local materials, are not capital intensive, and may be operated on small
scales.
7.
Relevance to Global Environmental Agreements
In this section, we discuss technology transfer issues with particular refer-
ence to the Conventions on Climate Change and Biodiversity Conservation.
Its relevance within the Biodiversity Convention has been dealt with in
greater detail.
12
The Climate Change Convention commits DCs to three specific actions:
(a) To formulate and implement publicly notified plans for abatement
and adaptation.
(b)
Take action to minimize any adverse effects of abatement or adapta-
tion measures on the economy, public health and the environment.
(c)
Additionally, DCs may submit specific abatement (reduction of
GHGs), projects for funding.
In these, the DCs are entitled to financial resources, outside of normal
developmental assistance, including the transfer of technology. The quan-
tum of assistance is described as the "agreed full incremental costs". If such
assistance is not forthcoming, DCs have no commitments.
Technology transfer is thus visualized in respect of both abatement and
adaptation measures (context of climate change), and to ensure that any
harmful impacts of the measures themselves are minimized. No conces-
sional or non-commercial terms of technology transfer are envisaged;
only that the financial component (in the terminology employed) shall
qualify as grant. Further, no attenuation of IPRs protection of the tech-
nologies are contemplated.
Similarly, the Biodiversity Convention requires all countries, including
developing countries, to formulate national strategies for conservation and
sustainable use of genetic resources, integration of conservation concerns
in policy making, establishment of protected areas etc., to conserve biodi-
versity; domestic legislation for conservation and promotion of public
awareness for biodiversity conservation. The implementation of these
commitments by developing countries is, again, contingent on the devel-
oped countries meeting their own (further) commitments relating to trans-
fer of technology and "new and additional" financial resources for meeting
the "agreed full incremental costs" of such measures. The question of what
exactly would count as full incremental costs in the context of technology
transfer is obviously important and this is considered in the next section.
7.1 Specifics within the Biodiversity Convention (BDC)
The Convention while recognizing that technology (inclusive of biotech-
nology ¹) and its access and transfer are a means for attaining the
Convention objectives; has categorised them as: (i) those technologies rele-
1 The Office of Technology Assessment of the US Congress (1984, 1988b) has defined
biotechnology as any technique that uses living organisms (or parts of organisms) to
make or modify products, to improve plants or animals, or to develop micro-organisms
for specific use. The UNIDO/WHO/UNEP Working Group on Biotechnology Safety
defined it as the application of biological systems and organisms to scientific.
industrial, agricultural and environmental processes and uses. The Convention defines
it as any technological application that uses biological systems, living organisms, or
derivatives thereof, to make or modify products or processes for specific use.
13
vant to conservation and the sustainable use of biodiversity (ii) biotech-
nologies based on the genetic resources themselves.
Technology transfer is constituted by a knowledge component and a
payment component. The former includes elements such as extent of
knowledge transferred, and conditions limiting the use of such knowledge
such as spatial (territorial aspects), and temporal (time period) restrictions,
obligations of both licensor and licensee, retransfer of rights and obliga-
tions to third parties, R&D involving transferred knowledge, allowance of
cross licensing, length of agreement, depth of transfer, applicable law
(clause relating to law to be followed in the event of a dispute), etc. The
latter includes terms of compensation for the transferred knowledge,
which may include both direct and indirect modes of payment. This com-
ponent may also encompass incentives for innovation and conservation, to
parties supplying the genetic material either in a national or an individual
(agent) capacity. Payment related concerns also arise in the event that the
contracting parties provide financial and other support for ex-situ conser-
vation facilities in developing countries; particularly with respect to access
of the donor country to the genetic material.
The major movement of technology is anticipated to be from the ICs
(which are technologically rich and gene poor) to the DCs (gene rich and
technologically poor) and traditional knowledge and practices from the
DCs to the ICs. Table 1 gives an idea of the major donors and beneficiaries
of germplasm (Mooney, P.R. 1985) which demonstrates the reverse in the
case of germplasm.
Table 1: Major Donors and Beneficiaries of Germplasm
Region
Donors
Beneficiaries
(Per cent)
(Per cent)
Asia
34.2
4.2
Africa
34.0
4.6
Latin America
22.9
6.3
West Europe
8.6
15.9
East Europe
..
1.9
North America
:
23.8
IARCs
:
41.3
Others
0.3
1.9
Source: Mooney, Law of the seed Revisited. Development
Dialogue, 1985 (1), pp. 139-152.
Transfer of conservation technologies
The BDC recognizes the need for transfer of technologies relevant for
conservation and sustainable use of biodiversity, on "fair and most
14
favourable terms" to developing countries. It is stated that the contracting
parties are aware that conservation¹ and sustainable use of biodiversity are
of critical importance for meeting the food, health and other needs of the
growing world population, for which purpose access to and sharing of
both genetic resources and technologies are essential. Legislative, adminis-
trative and policy measures would be undertaken to ensure that the private
sector facilitates access to, transfer and joint development of the appropri-
ate technologies.
To fulfil this need the Convention mentions the establishment and main-
tenance of facilities for ex-situ conservation of and research on plants,
animals and microorganisms, preferably in the country of origin of genetic
resources 2. This facility of conservation will be encouraged by the pro-
vision of finance to developing countries.
Transfer of biotechnologies utilizing genetic resources a nd
implications for existing IPR regimes
A primary requisite for the development of technologies based on the ge-
netic resource is access to such material, either under in-situ or ex-situ
conditions. The sovereign rights of states over their natural resources are
recognized in the BDC, and the authority to determine access to their
country's genetic resources rests with the concerned national governments
although it is stated that environmentally sound uses of these genetic re-
sources should be facilitated and no restrictions imposed which run counter
to the objectives of the Convention. How this would be enforced is clearly
a problem given that it is difficult to restrict physical access to this re-
source. Another diluting factor is that most germplasm is exchanged in-
formally and occasionally even through third parties. On the other hand it
is important to clarify that developing countries would like access to ge-
netic resources of economic interest (including newly developed varieties
1 Definition of in-situ conservation
It has been defined as "the continuing maintenance of a population within the
community of which it forms a part, in the environment to which it is adapted".
(Commission on Plant Gen. Res., Item 5, 11-15 March 1985). It is most often used
for wildspecies and wild relatives of сторs and animals, but "can include artificial
regeneration whenever planting or sowing of seed is carried out, without conscious
selection, on the same area where the seed was collected" (Commission on Plant Gen.
Res., Item 5, 11-15 March 1985).
Ex-situ conservation is the conservation of organism outside their natural habitat.
Although in-situ conservation is to be encouraged, the species to be conserved (other
than those having potential for sustainable use) have not been identified.
2 Country of origin of genetic resources means the country which possesses those
genetic resources under in-situ conditions.
15
and special genetic stocks, inclusive of current breeder's lines and mu-
tants).
Depth and nature of technology
The absence of detailed treatment of the depth of transfer within the BDC
should lead to its inclusion, as 2 subject of a future protocol. Secondly,
the convention addresses the identification of innovative, efficient and SOA
technologies and know-how relating to the conservation and sustainable use
of biodiversity {Art. 25(c)} by the subsidiary body on scientific, technical
and technological advice. Those relating to the development of genetic re-
sources have not been addressed. An inventory of such SOA technologies
appropriate for conditions in developing countries could be established
and mainfained.
Specifically, technology transferred may include both exchange of re-
sults of technical, scientific and socio-economic research {Art.17 (2)}, and
promotion of cooperatic. 1 in the training of personnel and exchange of
experts {Article 18(4)}. It would also involve the promotion of establish-
ment of joint research programmes and joint ventures for the development
of technologies {Article 18(5)}.
Technical cooperation
Regarding the potential for joint R&D, particularly in the area of biotech-
nology involving developing country participation, some of the issues of
concern are:
i. What would be the implications for IPR regimes and ownership of
rights ?
ii. What are the incentives offered to developed country contracting parties
(private sector) for participation? Potential reasons could be the high
expenditure involved, spread of risk through the sharing of capital and
access to genetic material held in the developing country.
One model of patent ownership in joint ventures, has been developed by
the US Agency for International Development which has developed a
project whereby scientists of developing countries participate in joint re-
search with private companies, for the development of products for use in
overcoming certain agricultural constraints in the developing world.
Patents on resulting products (e.g. pest/drought resistant sorghum) would
be held jointly by the private company and the scientist's home institution.
Contractive framework of the BDC
Another set of technology transfer issues are also at the heart of the
Biodiversity Convention (BDC). At its core, this Convention attempts to
16
set up a framework by which access to genetic resources are granted
(typically by DCs to ICs) in exchange for transfer of the technology em-
bodying the genetic resource. Because it is physically impossible to deny
access to the genetic pool conserved, the framework stipulates (in the offi-
cial Indian interpretation) that disclosure of the fact of use of particular
genetic resources shall be made. The parties shall conduct the exchange on
"mutually agreed terms", meaning commercial contractual agreements in-
volving royalty payments.
In this case, since what exactly comprises "technology transfer" remains
undefined, ICs may endeavour to place the least restrictive interpretation
on the term. Apart from depth of transfer, since sharing of IPRs rents are
envisaged, questions about duration of transfer and geographical limits
over which the licensed (transferred) rights may be exercised are impor-
tant.
Serious legal issues are raised by the apparent requirement of compul-
sory disclosure of the source of genetic resources employed, and transfer-
ring the "make or license" discretion from the IPR holder to the gene
supplier. For one, trade secrets protection may no longer be available. For
another, patent protection may significantly lose its exclusionary power. It
seems that the stipulation of mandatory technology transfer in the frame-
work for contracts confers little negotiating advantage to DCs. Further, the
effectiveness of the new regime hinges critically on exactly what penalties
follow in the event of non-disclosure¹. If the penalties are non existent or
not severe, the regime would be ineffective. The reasons for this are
briefly discussed below:
There will be a clear asymmetry of information between the gene sup-
plier and the agent developing the biotechnology, notwithstanding the fact
that supply of genetic resources is to be with the "prior informed consent"
of the supplier. The latter would, at the time of negotiations, have already
completed a significant amount of research, know fairly well what it was
looking for, and benefitting from the provisions of the BDC facilitating
mapping and organization of genetic information, a reasonably good idea
of the chances of finding it. The developing country negotiators in such
contracts would have relatively lesser information (unless the country at-
tempts to screen its national genetic wealth to channelize such access to re-
sources), since much of it would be proprietary to the potential user, and
would therefore have little idea of the true value of the resource. As of the
present there are no clearly defined penalties for failure to disclosure.
Second, is the question whether the requirement of (compulsory) trans-
fer of technologies enhances the bargaining strength of developing coun-
1 It is critical that it is understood that it would not usually be feasible to detect non-
disclosure of origin of the genetic resource.
17
tries. As noted above technology transfer may occur in several varying
depths. The Convention is silent on this aspect.
Suppose that disclosure of use of genetic resource is, in fact, effectively
mandated. In that case, biotechnology innovators must negotiate with the
gene supplier regarding sidepayments and depth of technology transfer, in
return for access to the gene pool. The gene supplier may be prepared to
trade-off reduced depth for increased sidepayments, but would start with
the disadvantage of not knowing the gene pool's true worth. It would
therefore, very likely make trade-offs along an indifference contour which
at every point is below that which would be the case if it had full informa-
tion. The latter, on the other hand, having revealed less than the gene
pool's perceived true worth, would also prefer to trade-off reduced depth
for increased sidepayments, within the disclosed valuation of the resource,
since at least part of the negotiated sidepayments may be paid by the multi-
Interal fund. If the administrators of the fund do not intervene, the likely
result is only nominal technology transfer and low level of sidepayments.
However, the administrators of the fund may seek to eliminate such free
rides on its finances by the gene users. Accordingly, they may attempt to
negotiate norms both for sidepayments, as well as depth of transfer (which,
as pointed out above, may also be an issue in defining incremental costs).
In this, developed countries would collectively reveal less than their true
valuations for access to genetic resources, and may also attempt to protect
gene users' rights by proposing restrictive norms for depth of technology
transfer. Since DCs would not know the true valuation of the resource, and
collectively have little taste for increasing depth at the expense of sidepay-
ments on offer, the process of evolving norms may only tend to freeze the
earlier outcomes.
Further, even if such norms do not emerge and all sidepayments are di-
rectly paid by gene users, rents from IPRs can be captured equally by sale
of goods involving the technology, or by licensing agreements.
What kinds of policy responses are possible and appropriate for DCs? A
minimal step is that in negotiating protocols under the Convention, they
should insist upon restricting the availability of IPRs protection to biotech-
nology to categories in which full disclosure of the use of genetic resources
is required, i.e. trade secrets type IPRs must not be available for tech-
nologies employing genetic resources. Additionally, that contracts for ac-
cess must be filed alongwith the application for IPRs protection for the in-
novation (biotechnology). This may be pursued in the GATT forums as
well. Additionally, they should unilaterally incorporate this restriction on
IPRs protection for biotechnology in their domestic legislation. It is only
the unambiguous requirement of disclosure that will compel gene users to
enter into contracts for access.
18
7.2 Technology transfer and full incremental costs
We have noted above that commercial technology transfers may occur in a
dense set of modes and their combinations, from direct foreign investment
protected by trade secrets, to transfer of in-depth R&D capability ("Flow
C") under patent licenses on the other. One issue in defining "full incre-
mental costs" is what is the "depth" (in multiple attributes) whose licensee
fees would be covered by multilateral transfers to DCs through the con-
cerned financial mechanisms (FMs). ICs may be expected to support trans-
fers through "Flow A" regimes and/or by FDI, while simultaneously
pressing for liberalized FDI regimes in GATT, as well as bilaterally. DCs
views may be more varied, with countries like China and India perhaps
perceiving the advantage in "Flow C" types of transfers, and the use of
FDI being a choice variable for national authorities, rather than the IPRs
holders. Rents for IPRs licences will depend on the precise attributes of the
licence, i.e., the depth of technology transfer; and spatial and temporal ex-
tent of jurisdiction of the licence.
Clearly, what types of technologies and what depths of technology trans-
fer would qualify for concessional funding, are important areas of future
negotiations. Some of the strategic bargaining aspects of these negotiations
are as follows:
In negotiating technology transfer norms, ICs may argue (and calculate)
that since "no regret" measures are in themselves of net advantage to DCs,
they should (may) adopt them anyway, without any external concessional
funding for in-depth transfer of such technologies under the provisions of
the Conventions.
One argument that DCs may advance involves the concept of an
"investment hurdle" or "capital-gap". Several no-regrets strategies are
typically not adopted on a wider scale because their up-front capital costs
are higher than competing technologies, even though the no-regrets
strategies are more (economically) efficient. The classic example in this re-
spect is hydro versus thermal power; capital shortage typically leads to
relative under-investment by DCs in the former, even though it is more
economically efficient. DCs may urge that the "capital gap" involved in
such no-regret strategies be met by grant funding, because the major deci-
sion criterion for investments in their case is initial capital costs rather
than (relative) economic efficiencies of alternatives.
Where technology transfer is involved, funding this capital gap may in-
volve royalty payments for in-depth technology transfer, instead of, or in
addition to, purchase of capital equipment. This would, however, require
the adoption of non-restrictive norms for technology transfers.
Accordingly, another possible stratagem for DCs is to delink questions
of depth of technology transfer from whether the options are "no-regret",
or involve positive (economic) costs, i.e., the norms should apply to both
categories identically. What would be the advantage to DCs? Many of the
19
important abatement measures (i.e., in terms of scope for GHGs reductions
or conservation measures for biodiversity) may, in fact, be in the latter
category (e.g., switch to natural gas based power generation from coal
based power generation). If ICs perceive that it is in their interest to per-
suade DCs to adopt these, they would need to concede grant funding at
sufficient levels that the DCs are at least indifferent between these and the
conventional options. If DCs further insist that norms for depth of tech-
nology transfer are not restrictive (including restricted to positive cost op-
tions), enabling them to utilize such funding for technology transfer in
depth, they may still be on strong negotiating ground in respect, in particu-
lar for conservation of genetic resources which are unique and whose loss
is irreversible. The application of such non-restrictive norms to no-regrets
strategies may enable DCs to employ capital gap funding for in-depth tech-
nology transfers in such cases also.
The problem of strategic bargaining to realize these and other advan-
tages is complex. DCs are as a group, more heterogenous, including in
their economic interests, than ICs. Further, they are susceptible in differ-
ent degrees to bilateral inducements and pressures from powerful ICs. This
is evident from the negotiating processes leading to the Rio Summit. On
the other hand, a few key DCs have the potential to collectively alter use of
global environmental resources significantly in a few decades, giving their
possible coalition considerable synergy. Strategic bargaining aspects of
these questions, thus need to be addressed carefully.
One possible response to the question of norms for technology transfer
is for the financial mechanism to purchase the IPRs for a set of abatement
(conservation) technologies outright, and place these in the public domain.
In that case, any country wishing to employ these technologies may do so
at any depth; without it (or the FM) paying any further licensee fees.
Would such alternative arrangements be preferable for DCs? To answer
this point, one may note that the universe of possible benign technologies is
extremely large. Any selection must be of a far smaller set, because of
limited financial resources with the FM. Since the technologies must be
voluntarily placed on offer, and the potential recipients also involved in
making the choice, the question arises as to whether or not one may expect
outcomes in which the most efficient (or "state of the art") technologies
would enter the public domain. The vendors would have complete infor-
mation about their own technologies, while the recipients would be unable
to acquire such information, till the technologies are actually disseminated.
A variant of the "market for lemons" phenomenon, well known in the cco-
nomics literature, may therefore emerge. That is, because of information
asymmetry, only the worst of the benign technologies (which are still im-
provements over current practice) would be actually transferred. By this
means, DCs would be able to choose only from a small set, or be saddled
with existing inferior technologies. Further, since the performance of any
20
given technology is highly context specific, and the situations of DCs are
extremely varied, there would be little assurance that a particular technol-
ogy would perform as advertised in a given DC situation.
The "market for lemons" may, of course, also arise in the alternative
case of individual DCs identifying benign technologies and the associated
depth of transfers. In this case, however, the choice would be from a
larger set, and DCs may be better able to relate technologies to their own
circumstances. The greater freedom of choice may be of advantage to DCs.
8.
Conclusion
It is extremely difficult to successfully conclude a paper such as this given
the present status of protection of biodiversity. The authors have drawn
attention to the concerns of the developing world as expressed in their in-
tellectual property right regimes. Technology transfer across nations,
would necessarily require an critical examination of existing IPRs regimes.
The requirement in the Biodiversity Convention that for those biotech-
nologies utilizing genetic resources measures to ensure adequate and effec-
tive protection of IPRs will be taken, may imply that domestic legislation
of developing countries would require alteration. This is significant in that
there are widely differing goals of the developed and the developing world
and the alleged lack of adequate protection has been a deterrent to success-
ful transfers. The role of the government in maintaining a balance between
public and private interests and as a facilitator of successful transfers has
been briefly discussed.
The various instruments of Intellectual Property Protection have been
examined although it is not simple to choose a single, preferred mode of
protection for biotechnological inventions. It is to be seen which instru-
ment would be best able to incorporate elements of 'compulsory disclo-
sure' of source of genetic material without compromising commercial in-
terests.
The discussion on the nature of flows of technology transfer serve to
highlight the fact that the Biodiversity Convention has not given adequate
treatment to the subject of 'depth' of transfer. This is of consequence while
attempting to define and estimate 'full agreed incremental costs' due to the
element of depth which must be taken into account. Since developing
countries are not in a position to correctly assess the potential value of a
genetic resource in the initial stages of exploitation (particularly due to a
lack of information), it would be important to devise contracts for access
to genetic resources carefully, negotiating the terms for actual commercial
exploitation when greater information about the potential value of the re-
source is available.
21
9.
References
Bell, M. 1990. Continuing Industrialization, Climate change and Internal Technology
Transfer. A report prepared in collaboration with the Resource Policy Group, Oslo,
Norway", Science Policy Research Unit, University of Sussex.
Besen, Stanley M. and Leo J. Raskind. 1991. An introduction to the Law and Economics
of intellectual Property. The Journal of Economic Perspectives, VS, No. 1: 3-28.
Chisum, D: Patents, Matthew Bender, New York, 1989.
Nayyar, Deepsk: - IPRs: Lessons from the Indian Model", Economic Times, New Delhi,
5 February 1992.
Hall, C.D.1986. Patents, Licensing and Anti-trust. Research in Law and Economics, V 7:
Kitch, 59-86. E.W. 1986. Patents: Monopolies or Property Rights? Research in Law and
Economics, V 8: 31-49.
McFetridge, D.G. and M. Rafiquzzaman. 1986. The Scope and Duration of the Patent
Right and the Nature of Research Rivalry. Research in Law and Economics, V 8: 91-
120.
Sengupta, Tamali. 1991. "Protection of Intellectual Property Rights in India and South
Korea". Case Studies of the Computer Coftware and Pharmaceutical Industries. Ph.D.
diss. (unpublished), School of Law: Stanford University.
World Intellectual Property Organisation. Guide on the licensing of biotechnology. Geneva
1992. WIPO Publication No.708 (E).
Mooney, Law of the seed Revisited. Development Dialogue, 1985 (1): pp.139-152.
*This paper has been produced without formal editing.
22
International Conference on the
CONVENTION ON
BIOLOGICAL DIVERSITY
National Interests and
Global Imperatives
Nairobi, January 26-29, 1993
Organized by the:
Biopolicy Institute of the
African Centre for Technology Studies (ACTS)
Stockholm Environment Institute (SEI)
Sponsored by the:
Finnish International Development Agency (FINNIDA)
Government of Norway
Initiacives Limited
International Development Research Centre (IDRC)
Pew Scholars Programme in Conservation and the Environment
Stockholm Environment Institute (SEI)
Swedish Agency for Research Cooperation with Developing Countries (SAREC)
Swedish International Development Authority (SIDA)
Swedish Society for Nature Conservation (SSNC)
United Nations Environment Programme (UNEP)
WRI/IUCN/UNEP Biodiversity Programme
UNITED NATIONS ENVIRONMENT PROGRAMME
UNEP
CONVENTION ON BIOLOGICAL DIVERSITY
5 JUNE 1992
Na. 92-7807
/
- 2 -
CONVENTION ON BIOLOGICAL DIVERSITY
Preamble
The Contracting Parties,
Conscious of the intrinsic value of biological diversity and of the
ecological, genetic, social, economic, scientific, educational, cultural,
recreational and aesthetic values of biological diversity and its
components,
Conscious also of the importance of biological diversity for evolution
and for maintaining life sustaining systems of the biosphere,
Affirming that the conservation of biological diversity is a common
concern of humankind,
Reaffirming that States have sovereign rights over their own
biological resources,
Reaffirming also that States are responsible for conserving their
biological diversity and for using their biological resources in a
sustainable manner,
Concerned that biological diversity is being significantly reduced by
certain human activities,
Aware of the general lack of information and knowledge regarding
biological diversity and of the urgent need to develop scientific,
technical and institutional capacities to provide the basic understanding
upon which to plan and implement appropriate measures,
Noting that it is vital to anticipate, prevent and attack the causes
of significant reduction or loss of biological diversity at source,
Noting also that where there is a threat of significant reduction or
loss of biological diversity, lack of full scientific certainty should not
be used as a reason for postponing measures to avoid or minimize such a
threat,
Noting further that the fundamental requirement for the conservation
of biological diversity is the in-situ conservation of ecosystems and
natural habitats and the maintenance and recovery of viable populations of
species in their natural surroundings,
Noting further that ex-situ measures, preferably in the country of
origin, also have an important role to play,
Recognizing the close and traditional dependence of many indigenous
and local communities embodying traditional lifestyles on biological
resources, and the desirability of sharing equitably benefits arising from
the use of traditional knowledge, innovations and practices relevant to the
conservation of biological diversity and the sustainable use of its
components,
Recognizing also the vital role that women play in the conservation
and sustainable use of biological diversity and affirming the need for the
full participation of women at all levels of policy-making and
implementation for biological diversity conservation,
Stressing the importance of, and the need to promote, international,
regional and global cooperation among States and intergovernmental
organizations and the non-governmental sector for the conservation of
biological diversity and the sustainable use of its components,
/
- 3 -
Acknowledging that the provision of new and additional financial
resources and appropriate access to relevant technologies can be expected
to make a substantial difference in the world's ability to address the loss
of biological diversity,
Acknowledging further that special provision is required to meet the
needs of developing countries, including the provision of new and
additional financial resources and appropriate access to relevant
technologies,
Noting in this regard the special conditions of the least developed
countries and small island States,
Acknowledging that substantial investments are required to conserve
biological diversity and that there is the expectation of a broad range of
environmental, economic and social benefits from those investments,
Recognizing that economic and social development and poverty
eradication are the first and overriding priorities of developing
countries,
Aware that conservation and sustainable use of biological diversity is
of critical importance for meeting the food, health and other needs of the
growing world population, for which purpose access to and sharing of both
genetic resources and technologies are essential,
Noting that, ultimately, the conservation and sustainable use of
biological diversity will strengthen friendly relations among States and
contribute to peace for humankind,
Desiring to enhance and complement existing international arrangements
for the conservation of biological diversity and sustainable use of its
components, and
Determined to conserve and sustainably use biological diversity for
the benefit of present and future generations,
Have agreed as follows:
Article 1. Objectives
The objectives of this Convention, to be pursued in accordance with
its relevant provisions, are the conservation of biological diversity, "the
sustainable use of its components 7and the fair and equitable sharing of the
benefits arising out of the utilization of genetic resources, including by
appropriate access to genetic resources and by appropriate transfer of
each country's
relevant technologies, taking into account all rights over those resources
and to technologies, and by appropriate funding.
Article 2. Use of Terms
protection bure W, maybe
For the purposes of this Convention:
"Biological diversity" means the variability among living organisms from
all sources including, inter alia, terrestrial, marine and other aquatic
ecosystems and the ecological complexes of which they are part; this
includes diversity within species, between species and of ecosystems.
"Biological resources" includes genetic resources, organisms or parts
thereof, populations, or any other biotic component of ecosystems with
Country
actual or potential use or value for humanity.
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"Biotechnology" means any technological application that uses biological
systems, living organisms, or derivatives thereof, to make or modify
products or processes for specific use.
"Country of origin of genetic resources" means the country which possesses
those genetic resources in in-situ conditions.
"Country providing genetic resources" means the country supplying genetic
resources collected from in-situ sources, including populations of both
wild and domesticated species, or taken from ex-situ sources, which may or
may not have originated in that country.
"Domesticated or cultivated species" means species in which the
evolutionary process has been influenced by humans to meet their needs.
"Ecosystem" means a dynamic complex of plant, animal and micro-organism
unit. communities and their non-living environment interacting as a functional
"Ex-situ conservation" means the conservation of components of biological
diversity outside their natural habitats.
"Genetic material" means any material of plant, animal, microbial or other
origin containing functional units of heredity.
"Genetic resources" means genetic material of actual or potential value.
"Habitat" means the place or type of site where an organism or population
naturally occurs.
"In-situ conditions" means conditions where genetic resources exist within
ecosystems and natural habitats, and, in the case of domesticated or
cultivated species, in the surroundings where they have developed their
distinctive properties.
"In-situ conservation" means the conservation of ecosystems and natural
habitats and the maintenance and recovery of viable populations of species
in their natural surroundings and, in the case of domesticated or
cultivated species, in the surroundings where they have developed their
distinctive properties.
"Protected area" means a geographically defined area which is designated or
regulated and managed to achieve specific conservation objectives.
"Regional economic integration organization" means an organization
constituted by sovereign States of a given region, to which its member
States have transferred competence in respect of matters governed by this
Convention and which has been duly authorized, in accordance with its
internal procedures, to sign, ratify, accept, approve or accede to it.
"Sustainable use" means the use of components of biological diversity in a
way and at a rate that does not lead to the long-term decline of biological
diversity, thereby maintaining its potential to meet the needs and
aspirations of present and future generations.
"Technology" includes biotechnology.
Article 3. Principle
States have, in accordance with the Charter of the United Nations and
the principles of international law, the sovereign right to exploit their
own resources pursuant to their own environmental policies, and the
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responsibility to ensure that activities within their jurisdiction or
control do not cause damage to the environment of other States or of areas
beyond the limits of national jurisdiction.
Article 4. Jurisdictional Scope
Subject to the rights of other States, and except as otherwise
expressly provided in this Convention, the provisions of this Convention
apply, in relation to each Contracting Party:
(a) In the case of components of biological diversity, in areas
within the limits of its national jurisdiction; and
(b) In the case of processes and activities, regardless of where
their effects occur, carried out under its jurisdiction or control, within
the area of its national jurisdiction or beyond the limits of national
jurisdiction.
"Article 5. Cooperation
Each Contracting Party shall, as far as possible and as appropriate,
cooperate with other Contracting Parties, directly or, where appropriate,
through competent international organizations, in respect of areas beyond
national jurisdiction and on other matters of mutual interest, for the
conservation and sustainable use of biological diversity.
Article 6. General Measures for Conservation and Sustainable Use
Each Contracting Party shall, in accordance with its particular
conditions and capabilities:
(a) Develop national strategies, plans or programmes for the
conservation and sustainable use of biological diversity or adapt for this
purpose existing strategies, plans or programmes which shall reflect, inter
alia, the measures set out in this Convention relevant to the Contracting
Party concerned; and
(b) Integrate, as far as possible and as appropriate, the
conservation and sustainable use of biological diversity into relevant
sectoral or cross-sectoral plans, programmes and policies.
Article 7. Identification and Monitoring
Each Contracting Party shall, as far as possible and as appropriate,
in particular for the purposes of Articles 8 to 10:
(a) Identify components of biological diversity important for its
conservation and sustainable use having regard to the indicative list of
categories set down in Annex I;
(b) Monitor, through sampling and other techniques, the components of
biological diversity identified pursuant to subparagraph (a) above, paying
particular attention to those requiring urgent conservation measures and
those which offer the greatest potential for sustainable use;
(c) Identify processes and categories of activities which have or are
likely to have significant adverse impacts on the conservation and
sustainable use of biological diversity, and monitor their effects through
sampling and other techniques; and
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(d) Maintain and organize, by any mechanism data, derived from
identification and monitoring activities pursuant to subparagraphs (a), (b)
and (c) above.
Article 8. In-situ Conservation
Each Contracting Party shall, as far as possible and as appropriate:
(a) Establish a system of protected areas or areas where special
measures need to be taken to conserve biological diversity;
(b) Develop, where necessary, guidelines for the selection,
establishment and management of protected areas or areas where special
measures need to be taken to conserve biological diversity;
(c) Regulate or manage biological resources important for the
conservation of biological diversity whether within or outside protected
areas, with a view to ensyring their conservation and sustainable use;
(d) Promote the protection of ecosystems, natural habitats and the
maintenance of viable populations of species in natural surroundings;
(e) Promote environmentally sound and sustainable development in
areas adjacent to protected areas with a view to furthering protection of
these areas;
(f) Rehabilitate and restore degraded ecosystems and promote the
recovery of threatened species, inter alia, through the development and
implementation of plans or other management strategies;
(g) Establish or maintain means to regulate, manage or control the
risks associated with the use and release of living modified organisms
resulting from biotechnology which are likely to have adverse environmental
impacts that could affect the conservation and sustainable use of
biological diversity, taking also into account the risks to human health;
(h) Prevent the introduction of, control or eradicate those alien
species which threaten ecosystems, habitats or species;
(i) Endeavour to provide the conditions needed for compatibility
between present uses and the conservation of biological diversity and the
sustainable use of its components;
(j) Subject to its national legislation, respect, preserve and
maintain knowledge, innovations and practices of indigenous and local
communities embodying traditional lifestyles relevant for the conservation
and sustainable use of biological diversity and promote their wider
application with the approval and involvement of the holders of such
knowledge, innovations and practices and encourage the equitable sharing of
the benefits arising from the utilization of such knowledge, innovations
and practices;
(k) Develop or maintain necessary legislation and/or other regulatory
provisions for the protection of threatened species and populations;
(1) Where a significant adverse effect on biological diversity has
been determined pursuant to Article 7, regulate or manage the relevant
processes and categories of activities; and
(m) Cooperate in providing financial and other support for in-situ
conservation outlined in subparagraphs (a) to (1) above, particularly to
developing countries.
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Article 9. Ex-situ Conservation
Each Contracting Party shall, as far as possible and as appropriate,
and predominantly for the purpose of complementing in-situ measures:
(a) Adopt measures for the ex-situ conservation of components of
biological diversity, preferably in the country of origin of such
components;
(b) Establish and maintain facilities for ex-situ conservation of and
research on plants; animals and micro-organisms, preferably in the country
of origin of genetic resources;
(c) Adopt measures for the recovery and rehabilitation of threatened
species and for their reintroduction into their natural habitats under
appropriate conditions;
(d) Regulate and manage collection of biological resources from
natural habitats for ex-situ' conservation purposes so as not to threaten
ecosystems and in-situ populations of species, except where special
temporary ex-situ measures are required under subparagraph (c) above; and
(e) Cooperate in providing financial and other support for ex-situ
conservation outlined in subparagraphs (a) to (d) above and in the
establishment and maintenance of ex-situ conservation facilities in
developing countries.
Article 10. Sustainable Use of Components of Biological Diversity
Each Contracting Party shall, as far as possible and as appropriate:
(a) Integrate consideration of the conservation and sustainable use
of biological resources into national decision-making;
(b) Adopt measures relating to the use of biological resources to
avoid or minimize adverse impacts on biological diversity;
(c) Protect and encourage customary use of biological resources in
accordance with traditional cultural practices that are compatible with
conservation or sustainable use requirements;
(d) Support local populations to develop and implement remedial
action in degraded areas where biological diversity has been reduced; and
(e) Encourage cooperation between its governmental authorities and
its private sector in developing methods for sustainable use of biological
resources.
Article 11. Incentive Measures
Each Contracting Party shall, as far as possible and as appropriate,
adopt economically and socially sound measures that act as incentives for
the conservation and sustainable use of components of biological diversity.
Article 12. Research and Training
The Contracting Parties, taking into account the special needs of
developing countries, shall:
(a) Establish and maintain programmes for scientific and technical
education and training in measures for the identification, conservation and
sustainable use of biological diversity and its components and provide
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support for such education and training for the specific needs of
developing countries;
(b) Promote and encourage research which contributes to the
conservation and sustainable use of biological diversity, particularly in
developing countries, inter alia, in accordance with decisions of the
Conference of the Parties taken in consequence of recommendations of the
Subsidiary Body on Scientific, Technical and Technological Advice; and
(c) In keeping with the provisions of Articles 16, 18 and 20, promote
and cooperate in the use of scientific advances in biological diversity
research in developing methods for conservation and sustainable use of
biological resources.
Article 13. Public Education and Awareness
The Contracting Parties shall:
(a) Promote and encourage understanding of the importance of, and the
measures required for, the conservation of biological diversity, as well as
its propagation through media, and the inclusion of these topics in
educational programmes; and
(b) Cooperate, as appropriate, with other States and international
organizations in developing educational and public awareness programmes,
with respect to conservation and sustainable use of biological diversity.
Article 14. Impact Assessment and Minimizing Adverse Impacts
1. Each Contracting Party, as far as possible and as appropriate, shall:
(a) Introduce appropriate procedures requiring environmental impact
assessment of its proposed projects that are likely to have significant
adverse effects on biological diversity with a view to avoiding or
minimizing such effects and, where appropriate, allow for public
participation in such procedures;
(b) Introduce appropriate arrangements to ensure that the
environmental consequences of its programmes and policies that are likely
to have significant adverse impacts on biological diversity are duly taken
into account;
(c) Promote, on the basis of reciprocity, notification, exchange of
information and consultation on activities under their jurisdiction or
control which are likely to significantly affect adversely the biological
diversity of other States or areas beyond the limits of national
jurisdiction, by encouraging the conclusion of bilateral, regional or
multilateral arrangements, as appropriate;
(d) In the case of imminent or grave danger or damage, originating
under its jurisdiction or control, to biological diversity within the area
under jurisdiction of other States or in areas beyond the limits of
national jurisdiction, notify immediately the potentially affected States
of such danger or damage, as well as initiate action to prevent or minimize
such danger or damage; and
(e) Promote national arrangements for emergency responses to
activities or events, whether caused naturally or otherwise, which present
a grave and imminent danger to biological diversity and encourage
international cooperation to supplement such national efforts and, where
appropriate and agreed by the States or regional economic integration
organizations concerned, to establish joint contingency plans.
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2. The Conference of the Parties shall examine, on the basis of studies
to be carried out, the issue of liability and redress, including
restoration and compensation, for damage to biological diversity, except
where such liability is a purely internal matter.
Article 15. Access to Genetic Resources
1.
Recognizing the sovereign rights of States over their natural
resources, the authority to determine access to genetic resources rests
with the national governments and is subject to national legislation.
2. Each Contracting Party shall endeavour to create conditions to
facilitate access to genetic resources for environmentally sound uses by
other Contracting Parties and not to impose restrictions that run counter
to the objectives of this Convention.
3. For the purpose of this Convention, the genetic resources being
provided by a Contracting Party, as referred to in this Article and
Articles 16 and 19, are only those that are provided by Contracting Parties
that are countries of origin of such resources or by the Parties that have
acquired the genetic resources in accordance with this Convention.
4. Access, where granted, shall be on mutually agreed terms and subject
to the provisions of this Article.
5. Access to genetic resources shall be subject to prior informed consent
of the Contracting Party providing such resources, unless otherwise
determined by that Party.
6. Each Contracting Party shall endeavour to develop and carry out
scientific research based on genetic resources provided by other
Contracting Parties with the full participation of, and where possible in,
such Contracting Parties.
7. Each Contracting Party shall take legislative, administrative or
policy measures, as appropriate, and in accordance with Articles 16 and 19
and, where necessary, through the financial mechanism established by
Articles 20 and 21 with the aim of sharing in a fair and equitable way the
results of research and development and the benefits arising from the
commercial and other utilization of genetic resources with the Contracting
Party providing such resources. Such sharing shall be upon mutually agreed
terms.
Article 16. Access to and Transfer of Technology
1. Each Contracting Party, recognizing that technology includes
biotechnology, and that both access to and transfer of technology among
Contracting Parties are essential elements for the attainment of the
objectives of this Convention, undertakes subject to the provisions of this
Article to provide and/or facilitate access for and transfer to other
Contracting Parties of technologies that are relevant to the conservation
and sustainable use of biological diversity or make use of genetic
resources and do not cause significant damage to the environment.
2. Access to and transfer of technology referred to in paragraph 1 above
to developing countries shall be provided and/or facilitated under fair and
most favourable terms, including on concessional and preferential terms
where mutually agreed, and, where necessary, in accordance with the
financial mechanism established by Articles 20 and 21. In the case of
technology subject to patents and other intellectual property rights, such
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access and transfer shall be provided on terms which recognize and are
consistent with the adequate and effective protection of intellectual
property rights. The application of this paragraph shall be consistent
with paragraphs 3, 4 and 5 below.
3. Each Contracting Party shall take legislative, administrative or
policy measures, as appropriate, with the aim that Contracting Parties, in
particular those that are developing countries, which provide genetic
resources are provided access to and transfer of technology which makes use
of those resources, on mutually agreed terms, including technology
protected by patents and other intellectual property rights, where
Paris
necessary, through the provisions of Articles 20 and 21 and in accordance
with international law and consistent with paragraphs 4 and 5 below.
Trips
4. Each Contracting Party shall take legislative, administrative or
policy measures, as appropriate, with the aim that the private sector
facilitates access to, joint development and transfer of technology
referred to in paragraph 1 above for the benefit of both governmental
institutions and the private sector of developing countries and in this
regard shall abide by the obligations included in paragraphs 1, 2 and 3
above.
5. The Contracting Parties, recognizing that patents and other
intellectual property rights may have an influence on the implementation of
this Convention, shall cooperate in this regard subject to national
legislation and international law in order to ensure that such rights are
supportive of and do not run counter to its objectives.
Article 17. Exchange of Information
1. The Contracting Parties shall facilitate the exchange of information,
from all publicly available sources, relevant to the conservation and
sustainable use of biological diversity, taking into account the special
needs of developing countries.
2. Such exchange of information shall include exchange of results of
technical, scientific and socio-economic research, as well as information
on training and surveying programmes, specialized knowledge, indigenous and
traditional knowledge as such and in combination with the technologies
referred to in Article 16, paragraph 1. It shall also, where feasible,
include repatriation of information.
Article 18. Technical and Scientific Cooperation
1. The Contracting Parties shall promote international technical and
scientific cooperation in the field of conservation and sustainable use of
biological diversity, where necessary, through the appropriate
international and national institutions.
2. Each Contracting Party shall promote technical and scientific
cooperation with other Contracting Parties, in particular developing
countries, in implementing this Convention, inter alia, through the
development and implementation of national policies. In promoting such
cooperation, special attention should be given to the development and
strengthening of national capabilities, by means of human resources
development and institution building.
3. The Conference of the Parties, at its first meeting, shall determine
how to establish a clearing-house mechanism to promote and facilitate
technical and scientific cooperation.
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4. The Contracting Parties shall, in accordance with national legislation
and policies, encourage and develop methods of cooperation for the
development and use of technologies, including indigenous and traditional
technologies, in pursuance of the objectives of this Convention. For this
purpose, the Contracting Parties shall also promote cooperation in the
training of personnel and exchange of experts.
5. The Contracting Parties shall, subject to mutual agreement, promote
the establishment of joint research programmes and joint ventures for the
development of technologies relevant to the objectives of this Convention.
Article 19. Handling of Biotechnology and Distribution of its Benefits
1.
Suris
Each Contracting Party shall take legislative, administrative or
policy measures, as appropriate, to provide for the effective participation
in biotechnological research activities by those Contracting Parties,
especially developing countries, which provide the genetic resources for
such research, and where feasible in such Contracting Parties.
2. Each Contracting Party shall take all practicable measures to promote
and advance priority access on a fair and equitable basis by Contracting
Parties, especially developing countries, to the results and benefits
arising from biotechnologies based upon genetic resources provided by those
Contracting Parties. Such access shall be on mutually agreed terms.
3.
The Parties shall consider the need for and modalities of a protocol
setting out appropriate procedures, including, in particular, advance
informed agreement, in the field of the safe transfer, handling and use of
any living modified organism resulting from biotechnology that may have
adverse effect on the conservation and sustainable use of biological
diversity.
4. Each Contracting Party shall, directly or by requiring any natural or
legal person under its jurisdiction providing the organisms referred to in
paragraph 3 above, provide any available information about the use and
safety regulations required by that Contracting Party in handling such
organisms, as well as any available information on the potential adverse
impact of the specific organisms concerned to the Contracting Party into
which those organisms are to be introduced.
Article 20. Financial Resources
1. Each Contracting Party undertakes to provide, in accordance with its
capabilities, financial support and incentives in respect of those national
activities which are intended to achieve the objectives of this Convention,
in accordance with its national plans, priorities and programmes.
2. The developed country Parties shall provide new and additional
financial resources to enable developing country Parties to meet the agreed
full incremental costs to them of implementing measures which fulfil the
obligations of this Convention and to benefit from its provisions and which
costs are agreed between a developing country Party and the institutional
structure referred to in Article 21, in accordance with policy, strategy,
programme priorities and eligibility criteria and an indicative list of
incremental costs established by the Conference of the Parties. Other
Parties, including countries undergoing the process of transition to a
market economy, may voluntarily assume the obligations of the developed
country Parties. For the purpose of this Article, the Conference of the
Parties, shall at its first meeting establish a list of developed country
Parties and other Parties which voluntarily assume the obligations of the
developed country Parties. The Conference of the Parties shall periodically
review and if necessary amend the list. Contributions from other countries
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and sources on a voluntary basis would also be encouraged. The
implementation of these commitments shall take into account the need for
adequacy, predictability and timely flow of funds and the importance of
burden-sharing among the contributing Parties included in the list.
3. The developed country Parties may also provide, and developing country
Parties avail themselves of, financial resources related to the
implementation of this Convention through bilateral, regional and other
multilateral channels.
4. The extent to which developing country Parties will effectively
implement their commitments under this Convention will depend on the
effective implementation by developed country Parties of their commitments
under this Convention related to financial resources and transfer of
technology and will take fully into account the fact that economic and
social development and eradication of poverty are the first and overriding
priorities of the developing country Parties.
5. The Parties shall take full account of the specific needs and special
situation of least developed countries in their actions with regard to
funding and transfer of technology.
6. The Contracting Parties shall also take into consideration the special
conditions resulting from the dependence on, distribution and location of,
biological diversity within developing country Parties, in particular small
island States.
7. Consideration shall also be given to the special situation of
developing countries, including those that are most environmentally
vulnerable, such as those with arid and semi-arid zones, coastal and
mountainous areas.
Article 21. Financial Mechanism
1. There shall be a mechanism for the provision of financial resources to
developing country Parties for purposes of this Convention on a grant or
concessional basis the essential elements of which are described in this
Article. The mechanism shall function under the authority and guidance of,
and be accountable to, the Conference of the Parties for purposes of this
Convention. The operations of the mechanism shall be carried out by such
institutional structure as may. be decided upon by the Conference of the
Parties at its first meeting. For purposes of this Convention, the
Conference of the Parties shall determine the policy, strategy, programme
priorities and eligibility criteria relating to the access to and
utilization of such resources. The contributions shall be such as to take
into account the need for predictability, adequacy and timely flow of funds
referred to in Article 20 in accordance with the amount of resources needed
to be decided periodically by the Conference of the Parties and the
importance of burden-sharing among the contributing Parties included in the
list referred to in Article 20, paragraph 2. Voluntary contributions may
also be made by the developed country Parties and by other countries and
sources. The mechanism shall operate within a democratic and transparent
system of governance.
2. Pursuant to the objectives of this Convention, the Conference of the
Parties shall at its first meeting determine the policy, strategy and
programme priorities, as well as detailed criteria and guidelines for
eligibility for access to and utilization of the financial resources
including monitoring and evaluation on a regular basis of such utilization.
The Conference of the Parties shall decide on the arrangements to give
effect to paragraph 1 above after consultation with the institutional
structure entrusted with the operation of the financial mechanism.
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3.
The Conference of the Parties shall review the effectiveness of the
mechanism established under this Article, including the criteria and
guidelines referred to in paragraph 2 above, not less than two years after
the entry into force of this Convention and thereafter on a regular basis.
Based on such review, it shall take appropriate action to improve the
effectiveness of the mechanism if necessary.
4. The Contracting Parties shall consider strengthening existing
financial institutions to provide financial resources for the conservation
and sustainable use of biological diversity.
Article 22. Relationship with Other International Conventions
1. The provisions of this Convention shall not affect the rights and
obligations of any Contracting Party deriving from any existing
19
international agreement, except where the exercise of those rights and
obligations would cause a serious damage or threat to biological diversity.
re predisci
2.
Contracting Parties shall implement this Convention with respect
to the marine environment consistently with the rights and obligations of
States under the law of the sea.
Article 23. Conference of the Parties
1. A Conference of the Parties is hereby established. The first meeting
of the Conference of the Parties shall be convened by the Executive
Director of the United Nations Environment Programme not later than one
year after the entry into force of this Convention. Thereafter, ordinary
meetings of the Conference of the Parties shall be held at regular
intervals to be determined by the Conference at its first meeting.
2. Extraordinary meetings of the Conference of the Parties shall be held
at such other times as may be deemed necessary by the Conference, or at the
written request of any Party, provided that, within six months of the
request being communicated to them by the Secretariat, it is supported by
at least one third of the Parties.
3. The Conference of the Parties shall by consensus agree upon and adopt
rules of procedure for itself and for any subsidiary body it may establish,
as well as financial rules governing the funding of the Secretariat. At
each ordinary meeting, it shall adopt a budget for the financial period
until the next ordinary meeting.
4. The Conference of the Parties shall keep under review the
implementation of this Convention, and, for this purpose, shall:
(a) Establish the form and the intervals for transmitting the
information to be submitted in accordance with Article 26 and consider such
information as well as reports submitted by any subsidiary body;
(b) Review scientific, technical and technological advice on
biological diversity provided in accordance with Article 25;
(c) Consider and adopt, as required, protocols in accordance with
Article 28;
(d) Consider and adopt, as required, in accordance with Articles 29
and 30, amendments to this Convention and its annexes;
(e) Consider amendments to any protocol, as well as to any annexes
thereto, and, if SO decided, recommend their adoption to the parties to the
protocol concerned;
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(f) Consider and adopt, as required, in accordance with Article 30,
additional annexes to this Convention;
(g) Establish such subsidiary bodies, particularly to provide
scientific and technical advice, as are deemed necessary for the
implementation of this Convention;
(h) Contact, through the Secretariat, the executive bodies of
conventions dealing with matters covered by this Convention with a view to
establishing appropriate forms of cooperation with them; and
(i) Consider and undertake any additional action that may be required
for the achievement of the purposes of this Convention in the light of
experience gained in its operation.
5. The United Nations, its specialized agencies and the International
Atomic Energy Agency, as well as any State not Party to this Convention,
may be represented as observers at meetings of the Conference of-the
Parties. Any other body or agency, whether governmental or non-
governmental, qualified in fields relating to conservation and sustainable
use of biological diversity, which has informed the Secretariat of its wish
to be represented as an observer at a meeting of the Conference of the
Parties, may be admitted unless at least one third of the Parties present
object. The admission and participation of observers shall be subject to
the rules of procedure adopted by the Conference of the Parties.
Article 24. Secretariat
1. A secretariat is hereby established. Its functions shall be:
(a) To arrange for and service meetings of the Conference of the
Parties provided for in Article 23;
(b) To perform the functions assigned to it by any protocol;
(c) To prepare reports on the execution of its functions under this
Convention and present them to the Conference of the Parties;
(d) To coordinate with other relevant international bodies and, in
particular to enter into such administrative and contractual arrangements
as may be required for the effective discharge of its functions; and
(e) To perform such other functions as may be determined by the
Conference of the Parties.
2. At its first ordinary meeting, the Conference of the Parties shall
designate the secretariat from amongst those existing competent
international organizations which have signified their willingness to carry
out the secretariat functions under this Convention.
Article 25. Subsidiary Body on Scientific, Technical
and Technological Advice
1. A subsidiary body for the provision of scientific, technical and
technological advice is hereby established to provide the Conference of the
Parties and, as appropriate, its other subsidiary bodies with timely advice
relating to the implementation of this Convention. This body shall be open
to participation by all Parties and shall be multidisciplinary. It shall
comprise government representatives competent in the relevant field of
expertise. It shall report regularly to the Conference of the Parties on
all aspects of its work.
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2. Under the authority of and in accordance with guidelines laid down by
the Conference of the Parties, and upon its request, this body shall:
(a) Provide scientific and technical assessments of the status of
biological diversity;
(b) Prepare scientific and technical assessments of the effects of
types of measures taken in accordance with the provisions of this
Convention;
(c) Identify innovative, efficient and state-of-the-art technologies
and know-how relating to the conservation and sustainable use of biological
diversity and advise on the ways and means of promoting development and/or
transferring such technologies;
(d) Provide advice on scientific programmes and international
cooperation in research and development related to conservation and
sustainable use of biological diversity; and
(e) Respond to scientific, technical, technological and
methodological questions that the Conference of the Parties and its
subsidiary bodies may put to the body.
3. The functions, terms of reference, organization and operation of this
body may be further elaborated by the Conference of the Parties.
Article 26. Reports
Each Contracting Party shall, at intervals to be determined by the
Conference of the Parties, present to the Conference of the Parties,
reports on measures which it has taken for the implementation of the
provisions of this Convention and their effectiveness in meeting the
objectives of this Convention.
Article 27. Settlement of Disputes
1. In the event of a dispute between Contracting Parties concerning the
interpretation or application of this Convention, the parties concerned
shall seek solution by negotiation.
2. If the parties concerned cannot reach agreement by negotiation, they
may jointly seek the good offices of, or request mediation by, a third
party.
3. When ratifying, accepting, approving or acceding to this Convention,
or at any time thereafter, a State or regional economic integration
organization may declare in writing to the Depositary that for a dispute
not resolved in accordance with paragraph 1 or paragraph 2 above, it
accepts one or both of the following means of dispute settlement as
compulsory:
(a) Arbitration in accordance with the procedure laid down in Part 1
of Annex II;
(b) Submission of the dispute to the International Court of Justice.
4. If the parties to the dispute have not, in accordance with paragraph 3
above, accepted the same or any procedure, the dispute shall be submitted
to conciliation in accordance with Part 2 of Annex II unless the parties
otherwise agree.
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5. The provisions of this Article shall apply with respect to any
protocol except as otherwise provided in the protocol concerned.
Article 28. Adoption of Protocols
1. The Contracting Parties shall cooperate in the formulation and
adoption of protocols to this Convention.
2. Protocols shall be adopted at a meeting of the Conference of the
Parties.
3. The text of any proposed protocol shall be communicated to the
Contracting Parties by the Secretariat at least six months before such a
meeting.
Article 29. Amendment of the Convention or Protocols
1. Amendments to this Convention may be proposed by any contracting
protocol. Party. Amendments to" any protocol may be proposed by any Party to that
2. Amendments to this Convention shall be adopted at a meeting of the
Conference of the Parties. Amendments to any protocol shall be adopted at
a meeting of the Parties to the Protocol in question. The text of any
proposed amendment to this Convention or to any protocol, except as may
otherwise be provided in such protocol, shall be communicated to the
Parties to the instrument in question by the secretariat at least six
months before the meeting at which it is proposed for adoption. The
secretariat shall also communicate proposed amendments to the signatories
to this Convention for information.
3. The Parties shall make every effort to reach agreement on any proposed
amendment to this Convention or to any protocol by consensus. If all
efforts at consensus have been exhausted, and no agreement reached, the
amendment shall as a last resort be adopted by a two-third majority vote of
the Parties to the instrument in question present and voting at the
meeting, and shall be submitted by the Depositary to all Parties for
ratification, acceptance or approval.
4. Ratification, acceptance or approval of amendments shall be notified
to the Depositary in writing. Amendments adopted in accordance with
paragraph 3 above shall enter into force among Parties having accepted them
on the ninetieth day after the deposit of instruments of ratification,
acceptance or approval by at least two thirds of the Contracting Parties to
this Convention or of the Parties to the protocol concerned, except as may
otherwise be provided in such protocol. Thereafter the amendments shall
enter into force for any other Party on the ninetieth day after that Party
deposits its instrument of ratification, acceptance or approval of the
amendments.
5. For the purposes of this Article, "Parties present and voting" means
Parties present and casting an affirmative or negative vote.
Article 30. Adoption and Amendment of Annexes
1. The annexes to this Convention or to any protocol shall form an
integral part of the Convention or of such protocol, as the case may be,
and, unless expressly provided otherwise, a reference to this Convention or
its protocols constitutes at the same time a reference to any annexes
thereto. Such annexes shall be restricted to procedural, scientific,
technical and administrative matters.
/
- 17 -
2. Except as may be otherwise provided in any protocol with respect to
its annexes, the following procedure shall apply to the proposal, adoption
and entry into force of additional annexes to this Convention or of annexes
to any protocol:
(a) Annexes to this Convention or to any protocol shall be proposed
and adopted according to the procedure laid down in Article 29;
(b) Any Party that is unable to approve an additional annex to this
Convention or an annex to any protocol to which it is Party shall so notify
the Depositary, in writing, within one year from the date of the
communication of the adoption by the Depositary. The Depositary shall
without delay notify all Parties of any such notification received. A
Party may at any time withdraw a previous declaration of objection and the
annexes shall thereupon enter into force for that Party subject to
subparagraph (c) below;
(c) On the expiry of one year from the date of the communication of
the adoption by the Depositary, the annex shall enter into force for all
Parties to this Convention or to any protocol concerned which have not
submitted a notification in accordance with the provisions of subparagraph
(b) above.
3. The proposal, adoption and entry into force of amendments to annexes
to this Convention or to any protocol shall be subject to the same
procedure as for the proposal, adoption and entry into force of annexes to
the Convention or annexes to any protocol.
4. If an additional annex or an amendment to an annex is related to an
amendment to this Convention or to any protocol, the additional annex or
amendment shall not enter into force until such time as the amendment to
the Convention or to the protocol concerned enters into force.
Article 31. Right to Vote
1. Except as provided for in paragraph 2 below, each Contracting Party to
this Convention or to any protocol shall have one vote.
2. Regional economic integration organizations, in matters within their
competence, shall exercise their right to vote with a number of votes equal
to the number of their member States which are Contracting Parties to this
Convention or the relevant protocol. Such organizations shall not exercise
their right to vote if their member States exercise theirs, and vice versa.
Article 32. Relationship between this Convention and Its Protocols
1. A State or a regional economic integration organization may not become
a Party to a protocol unless it is, or becomes at the same time, a
Contracting Party to this Convention.
2. Decisions under any protocol shall be taken only by the Parties to the
protocol concerned. Any Contracting Party that has not ratified, accepted
or approved a protocol may participate as an observer in any meeting of the
parties to that protocol.
Article 33. Signature
This Convention shall be open for signature at Rio de Janeiro by all
States and any regional economic integration organization from 5 June 1992
until 14 June 1992, and at the United Nations Headquarters in New York from
15 June 1992 to 4 June 1993.
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Article 34. Ratification, Acceptance or Approval
1. This Convention and any protocol shall be subject to ratification,
acceptance or approval by States and by regional economic integration
organizations. Instruments of ratification, acceptance or approval shall
be deposited with the Depositary.
2. Any organization referred to in paragraph 1 above which becomes a
Contracting Party to this Convention or any protocol without any of its
member States being a Contracting Party shall be bound by all the
obligations under the Convention or the protocol, as the case may be. In
the case of such organizations, one or more of whose member States is a
Contracting Party to this Convention or relevant protocol, the organization
and its member States shall decide on their respective responsibilities for
the performance of their obligations under the Convention or protocol, as
the case may be. In such cases, the organization and the member States
shall not be entitled to exercise rights under the Convention or relevant
protocol concurrently.
3. In their instruments of ratification, acceptance or approval, the
organizations referred to in paragraph 1 above shall declare the extent of
their competence with respect to the matters governed by the Convention or
the relevant protocol. These organizations shall also inform the
Depositary of any relevant modification in the extent of their competence.
Article 35. Accession
1. This Convention and any protocol shall be open for accession by States
and by regional economic integration organizations from the date on which
the Convention or the protocol concerned is closed for signature. The
instruments of accession shall be deposited with the Depositary.
2. In their instruments of accession, the organizations referred to in
paragraph 1 above shall declare the extent of their competence with respect
to the matters governed by the Convention or the relevant protocol. These
organizations shall also inform the Depositary of any relevant modification
in the extent of their competence.
3. The provisions of Article 34, paragraph 2, shall apply to regional
economic integration organizations which accede to this Convention or any
protocol.
Article 36. Entry Into Force
1. This Convention shall enter into force on the ninetieth day after the
date of deposit of the thirtieth instrument of ratification, acceptance,
approval or accession.
2. Any protocol shall enter into force on the ninetieth day after the
date of deposit of the number of instruments of ratification, acceptance,
approval or accession, specified in that protocol, has been deposited.
3. For each Contracting Party which ratifies, accepts or approves this
Convention or accedes thereto after the deposit of the thirtieth instrument
of ratification, acceptance, approval or accession, it shall enter into
force on the ninetieth day after the date of deposit by such Contracting
Party of its instrument of ratification, acceptance, approval or accession.
4. Any protocol, except as otherwise provided in such protocol, shall
enter into force for a Contracting Party that ratifies, accepts or approves
that protocol or accedes thereto after its entry into force pursuant to
paragraph 2 above, on the ninetieth day after the date on which that
/
- 19 -
Contracting Party deposits its instrument of ratification, acceptance,
approval or accession, or on the date on which this Convention enters into
force for that Contracting Party, whichever shall be the later.
5. For the purposes of paragraphs 1 and 2 above, any instrument deposited
by a regional economic integration organization shall not be counted as
additional to those deposited by member States of such organization.
Article 37. Reservations
No reservations may be made to this Convention.
Article 38. Withdrawals
1. At any time after two years from the date on which this Convention has
entered into force for a Contracting Party, that Contracting Party may
withdraw from the Convention by giving written notification to the
Depositary.
2. Any such withdrawal shall take place upon expiry of one year after the
date of its receipt by the Depositary, or on such later date as may be
specified in the notification of the withdrawal.
3. Any Contracting Party which withdraws from this Convention shall be
considered as also having withdrawn from any protocol to which it is party.
Article 39. Financial Interim Arrangements
Provided that it has been fully restructured in accordance with the
requirements of Article 21, the Global Environment Facility of the United
Nations Development Programme, the United Nations Environment Programme and
the International Bank for Reconstruction and Development shall be the
institutional structure referred to in Article 21 on an interim basis, for
the period between the entry into force of this Convention and the first
meeting of the Conference of the Parties or until the Conference of the
Parties decides which institutional structure will be designated in
accordance with Article 21.
Article 40. Secretariat Interim Arrangements
The secretariat to be provided by the Executive Director of the
United Nations Environment Programme shall be the secretariat referred to
in Article 24, paragraph 2, on an interim basis for the period between the
entry into force of this Convention and the first meeting of the Conference
of the Parties.
Article 41. Depositary
The Secretary-General of the United Nations shall assume the functions
of Depositary of this Convention and any protocols.
Article 42. Authentic Texts
The original of this Convention, of which the Arabic, Chinese,
English, French, Russian and Spanish texts are equally authentic, shall be
deposited with the Secretary-General of the United Nations.
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- 20 -
IN WITNESS WHEREOF the undersigned, being duly authorized to that effect,
have signed this Convention.
Done at Rio de Janeiro on this fifth day of June, one thousand nine hundred
and ninety-two.
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- 21 -
Annex I
IDENTIFICATION AND MONITORING
1.
Ecosystems and habitats: containing high diversity, large numbers of
endemic or threatened species, or wilderness; required by migratory
species; of social, economic, cultural or scientific importance; or,
which are representative, unique or associated with key evolutionary or
other biological processes;
2. Species and communities which are: threatened; wild relatives of
domesticated or cultivated species; of medicinal, agricultural or other
economic value; or social, scientific or cultural importance; or
importance for research into the conservation and sustainable use of
biological diversity, such as indicator species; and
3. Described genomes and genes of social, scientific or economic
importance.
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Annex II
Part 1
ARBITRATION
Article 1
The claimant party shall notify the secretariat that the parties are
referring a dispute to arbitration pursuant to Article 27. The
notification shall state the subject-matter of arbitration and include, in
particular, the articles of the Convention or the protocol, the
interpretation or application of which are at issue. If the parties do not
agree on the subject matter of the dispute before the President of the
tribunal is designated, the arbitral tribunal shall determine the subject
matter. The secretariat shall forward the information thus received to all
Contracting Parties to this Convention or to the protocol concerned.
Article 2
1. In disputes between two parties, the arbitral tribunal shall consist
of three members. Each of the parties to the dispute shall appoint an
arbitrator and the two arbitrators so appointed shall designate by common
agreement the third arbitrator who shall be the President of the tribunal.
The latter shall not be a national of one of the parties to the dispute,
nor have his or her usual place of residence in the territory of one of
these parties, nor be employed by any of them, nor have dealt with the case
in any other capacity.
2. In disputes between more than two parties, parties in the same
interest shall appoint one arbitrator jointly by agreement.
3. Any vacancy shall be filled in the manner prescribed for the initial
appointment.
Article 3
1. If the President of the arbitral tribunal has not been designated
within two months of the appointment of the second arbitrator, the
Secretary-General of the United Nations shall, at the request of a party,
designate the President within a further two-month period.
2. If one of the parties to the dispute does not appoint an arbitrator
within two months of receipt of the request, the other party may inform the
Secretary-General who shall make the designation within a further two-month
period.
Article 4
The arbitral tribunal shall render its decisions in accordance with
the provisions of this Convention, any protocols concerned, and
international law.
Article 5
Unless the parties to the dispute otherwise agree, the arbitral
tribunal shall determine its own rules of procedure.
Article 6
The arbitral tribunal may, at the request of one of the parties,
recommend essential interim measures of protection.
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- 23 -
Article 7
The parties to the dispute shall facilitate the work of the arbitral
tribunal and, in particular, using all means at their disposal, shall:
(a) Provide it with all relevant documents, information and
facilities; and
(b) Enable it, when necessary, to call witnesses or experts and
receive their evidence.
Article 8
The parties and the arbitrators are under an obligation to protect the
confidentiality of any information they receive in confidence during the
proceedings of the arbitral tribunal.
Article 9
Unless the arbitral tribunal determines otherwise because of the
particular circumstances of the case, the costs of the tribunal shall be
borne by the parties to the dispute in equal shares. The tribunal shall
keep a record of all its costs, and shall furnish a final statement thereof
to the parties.
Article 10
Any Contracting Party that has an interest of a legal nature in the
subject-matter of the dispute which may be affected by the decision in the
case, may intervene in the proceedings with the consent of the tribunal.
Article 11
The tribunal may hear and determine counterclaims arising directly out
of the subject-matter of the dispute.
Article 12
Decisions both on procedure and substance of the arbitral tribunal
shall be taken by a majority vote of its members.
Article 13
If one of the parties to the dispute does not appear before the
arbitral tribunal or fails to defend its case, the other party may request
the tribunal to continue the proceedings and to make its award. Absence of
a party or a failure of a party to defend its case shall not constitute a
bar to the proceedings. Before rendering its final decision, the arbitral
tribunal must satisfy itself that the claim is well founded in fact and
law.
Article 14
The tribunal shall render its final decision within five months of the
date on which it is fully constituted unless it finds it necessary to
extend the time-limit for a period which should not exceed five more
months.
Article 15
The final decision of the arbitral tribunal shall be confined to the
subject-matter of the dispute and shall state the reasons on which it is
- 24 -
based. It shall contain the names of the members who have participated and
the date of the final decision. Any member of the tribunal may attach a
separate or dissenting opinion to the final decision.
Article 16
The award shall be binding on the parties to the dispute. It shall be
without appeal unless the parties to the dispute have agreed in advance to
an appellate procedure.
Article 17
Any controversy which may arise between the parties to the dispute as
regards the interpretation or manner of implementation of the final
decision may be submitted by either party for decision to the arbitral
tribunal which rendered it.
Part 2
CONCILIATION
Article 1
A conciliation commission shall be created upon the request of one of
the parties to the dispute. The commission shall, unless the parties
otherwise agree, be composed of five members, two appointed by each Party
concerned and a President chosen jointly by those members.
Article 2
In disputes between more than two parties, parties in the same
interest shall appoint their members of the commission jointly by
agreement. Where two or more parties have separate interests or there is a
disagreement as to whether they are of the same interest, they shall
appoint their members separately.
Article 3
If any appointments by the parties are not made within two months of
the date of the request to create a conciliation commission, the Secretary-
General of the United Nations shall, if asked to do so by the party that
made the request, make those appointments within a further two-month
period.
Article 4
If a President of the conciliation commission has not been chosen
within two months of the last of the members of the commission being
appointed, the Secretary-General of the United Nations shall, if asked to
do so by a party, designate a President within a further two-month period.
Article 5
The conciliation commission shall take its decisions by majority vote
of its members. It shall, unless the parties to the dispute otherwise
agree, determine its own procedure. It shall render a proposal for
resolution of the dispute, which the parties shall consider in good faith.
Article 6
A disagreement as to whether the conciliation commission has
competence shall be decided by the commission.
UNITED NATIONS ENVIRONMENT PROGRAMME
UNEP
CONVENTION ON BIOLOGICAL DIVERSITY
5 JUNE 1992
Na.92-7807
/...
ACTS
African Centre for Technology Studies
COOPERATION BETWEEN
1
DEVELOPED AND DEVELOPING
COUNTRIES IN BIOLOGICAL
DIVERSITY CONSERVATION
TECHNOLOGIES PROTECTED
THROUGH INTELLECTUAL
PROPERTY RIGHTS
Manuel Illescas
Technical Advisor on Technology Information
Spanish Patent and Trade Marks Office
Madrid, Spain
International Conference on
the Convention on Biological Diversity:
National Interests and Global Imperatives
Held at the United Nations Environment
I
Programme (UNEP) Headquarters
Nairobi, Kenya
January 26-29, 1993
7
The Crescent,
ACTS Biopolicy Institute
a
Off Parklands Road
Witmakersstraat 10
1651/744047
6211 JB Maastricht, The Netherlands
Tel: 31(43) 258499 Fax: 258433
Often, intellec
property rights (IPR's) are considered
a kind of
ious
obstacle for the transfer of technolog related to the cc
vation of bio-
logical diversity. During the last two Convention negotiating sessions held
in Nairobi, the main item which called problems on this point were, sum-
ming up:
Access to genetic resources.
Contents
Access to and transfer of technology.
Exchange of information.
Technical and scientific cooperation.
Biotechnology handling and share of benefits.
A. Access to Genetic Resources Protected by IPR's
3
Developed countries introduced at that time, some amendments to the
1.
original text, to preserve the rights of the IPR's holders for the automatic
B. Access to and Transfer of Technology
8
transfers of technology to private firms or public bodies of developing
C. Exchange of Information
11
countries. This exchange of information, access to genetic resources and ac-
D. Technical and Scientific Cooperation
12
cess and/or transfer of technology, was agreed to be based on mutually
2.
E. Distribution of Benefits
13
agreed terms, That means in practice, that private circles of developed
countries may freely negotiate preferential flows of technology and/or in-
3.
formation to developing countries, on matters related to the conservation of
biological diversity. Financial mechanisms provided by developed countries
4.
would encourage cooperation in this field not only between public, but also,
private sectors.
The role to play at this point by patent offices may become crucial at a
certain level. Most of patented technology only remains secret in its legal
life, during the application period and in most of the countries, only in part
of this period. Once the patent is granted, or the application is published,
there is an automatic disclosure of its content, and a free accessibility to it.
Information, at this stage, may be freely exchanged and/or transferred to de-
veloping countries, with minimal cost. Also search reports on matters con-
cerning conservation of biological diversity may be performed by the patent
offices of developed countries at reduced prices, or Spanish patent as Trade
Marks Office does since years in any technical sector, in the context of co-
operation with South American countries which had signed agreements in
this sense with us in spite of previous assessments, to fully use a patent, a
negotiation with the patent holder has to be previously made on know-how,
marketing, to put a competitive produce into the market.
These are some ideas of the role to be played by the public bodies which
are in charge of the administration of IPR's, mainly the patent offices, in or-
der to assure full cooperation between developed and developing countries,
on conservation of biological matters. They only try to illustrate some new
perspectives always based on the mutual problem of the technical property
legislation and the goals of the biological diversity conservation Convention.
*This paper has been produced without formal editing.
Rio de Janeiro in June 1992 of the Convention on the Conservation of
P
are
ally defined as contracts between inventors
society.
Biological Diversity. This new born has J started walking and in some
Each part must fulfill some commitments. The society must guaranty to the
circles, IPR's has been shown as threatened obstacles for the implementa-
inventor the monopoly in the exploitation of his invention. For this reason
tion of the convention.
we talk of property rights. On the other hand, the inventor must disclose his
This paper is going to serve the opposite, that is, IPR's not only constitute
invention. This part of the contract is clearly related with the continuous
any serious obstacle for the Convention to come fully into force, to the con-
growing up of the common technical knowledge, that in the field of IPR's is
trary it may help in certain sense, with the active role of the patent office, to
called as state of the art.
spread out technologies and information contained in patent documents.
Thus, as consequence of the previous reasoning, IPR's are useful tools to
A non exhaustive analysis of the articles of the Biological Diversity
keep on going the innovation process inherent to many industrial activities.
Conservation Convention detects some areas of IPR's influence in the im-
Within this context, new inventions arising from any human activity, includ-
plementation of the text and where the role of patent offices in cooperation
ing environment, biological legal protection was not provided. In fact, in
may be widely open. These areas are covered mainly by articles 15 to 19 of
some circles a threatened future is foreseen for biotechnology innovations,
the convention and summing up are the following:
for instead, if patent laws do not became rapidly adapted to this arising sec-
tor (EEC Commission Directive Draft Proposal for the Protection of
A. Access to genetic resources.
Biotechnological Inventions COM88-496final-SYN159, October, 1988).
B. Access to and transfer of technology.
Following with the example of the Biotechnology, this new industrial
C. Exchange of information.
sector offers opportunities for global partnerships, especially between
C. Technical and scientific cooperation.
countries rich in biological resources (most of the developing countries) and
D. Distribution of benefits.
others which have developed technologies to transform those resources in
order to serve the needs of sustainable development (United Nations General
A. Access to Genetic Resources Protected by IPR's
Assembly document A/CONF.151/PC/100/Add. 27). Patent and other IPR's
designed to protect technology (Plant Variety Certificates, Utility Models,
I know this specific article has not been thought to talk about IPR's. The ar-
etc.), support subsequently the innovation process and without its role in the
ticle intends to assure access to genetic resources because facilitating this
legal framework, science and technology may slow down considerably.
access, generation of biodiversity is also assured. This is the reason why I
Without a satisfactory IPR's system there would be also important obstacles
entitle this point "Access to genetic resources protected by IPR's". I know I
to the diffusion of the information because most of the inventions would re-
am only talking about a small part of the problem but, probably is the worst
main secret. The alternative most widely used to the IPR's is secrecy and
one. Genetic resources not protected by IPR's are accessible after negotia-
dealing with secrets, the access to and/or the transfer of knowledge is even
tion between contracting parties on mutually agreed terms. But what happen
feasible.
when, for instead, once those genetic resources are obtained by a firm of de-
Biodiversity includes variety and variability of genes, on our planet and
veloped country, from a territory of a developing country, the genetic re-
provides an abundant and essential supply of indispensable goods and ser-
sources are genetically improved and protected through patents? The access
vices, To resolve the most critical problem for the conservation of biodiver-
to the genetic material developed and patented is possible?
sity will require a major spirit in thinking at all levels of decision-making,
As general principle, access to any patented subject is only restricted dur-
supported by a commitment to stepping up levels of human, financial, and
ing a short period of time, until a first publication. Normally the first one to
other resources, especially for capacity building in the developing countries
be published is the application and usually takes places after 18 months from
(United Nations General Assembly Doc. A CONF. 151/PC/100/Add.20). In
the filing date of the first application. However, some countries, like the
this sense the biodiversity conservation is a whole human task and should
United States of America, only make the first publication after granting the
serve to balance the differences between developed countries which depend
patent. In this particular case, the period when the patent remains secret, be-
on it for future projects on research and development (R&D) and develop-
came a bit longer (24-36 months). Once the publication takes place, the in-
ing countries which have the former responsibility of conservation because
vention is disclosed, and any one may consult it or obtain copies of it. There
they have the resources inside their own territories. The urgency in adopting
is only an exception to this general principle, patents which are declared se-
measures, an estimated 25 percent of the world's species present in the mid-
cret during the examination proceeding due, generally, to defense or secu-
1980's may be extinct by the year 2015 or soon after (Biodiversity Country
rity national policies. These patents are of no statistical significance.
Studies, UNEP Inf.1, Nairobi, 23 April 1992), has lead to the signature in
3
2
statement that may also serve for the following chapters, cooperation be-
The article of the Biodiversity Convention rules this subject of the ac
tween countries rich in animal and plant genetic resources and countries
to genetic resources. The aim of this article is to encourage contracting par-
which have developed isolation and sequencing technologies of gene and/or
ties to create conditions to facilitate access on the basis of:
DNA sequences must guarantee access to such genetic materials and recip-
rocal share of benefits resulting from those materials, in the way of scientific
Recognizing the sovereignty of each nation over its natural resources.
cooperation, including training programmes for scientific and technical staff,
The access shall be on mutually agreed terms between parties.
exchange of information, sharing the ownership or licensing of IPR's de-
S ing of results and/or benefits of the R&D made from the genetic re-
rived from the invention or sharing money benefits if the invention is put on
sources.
the market.
A special mention is made about the restrictions that run against the ob-
A-2 Access to living matter protected by IPR's
jectives of the Convention. In this sense IPR's may be considered as such a
sort of restrictions. I must say at this particular point that IPR's were de-
Once again I must divide living matter into three categories: microorgan-
signed to act as useful and effective tools of a free market economy and they
isms, in general, plants and animals. This division is not intended to be
have been operating correctly during many years. Obviously IPR's since
based on any taxonomy and is only made from the point of view of the
they were created have fully-developed in parallel to the new technologies
IPR's problems existing in each category.
and the economy itself. An objective of the contracting parties and of the
Convention itself should be, from my point of view, to make compatible two
A.23a. Access to animals related inventions protected by IPR's
instruments, IPR's by one side, and Biodiversity Convention by the other,
designed for completely different purposes and that must coexist and, in
At the moment there is not any IPR's for races of animals. They are ex-
certain fields, enhance their goals.
cluded from patentability in most of existing patent laws. However, recently
Before coming into details, I must distinguish between access to genes or
some patent applications have been deposited, mainly at USPTMO (United
DNA sequences as such and access to living matter containing those genes
States Patent on Trade Marks Offices) and at the EPO (European Patent
or DNA sequences (microorganisms, plants, animals, etc.).
Office). The applications mentioned above are related to transgenic animals,
although some other patents about breeding methods which include surgical
A-1 Access to genes or DNA sequences as such, protected by IPR's
manipulations (embryo transfers) have been also applied. Until the last
decade, the inventions related to animals were restricted to essentially bio-
Recently the patentability of human genes isolated, has been widely dis-
logical methods of breeding to obtain new races of animals (both, methods
cussed between the patent offices from the United States, Japan and the
Euro
and races are express excluded from patentability). With the arrival of
n patent office. The problem was raised by the patent applications
Biotechnology on Genetic Engineering to the animal breeding techniques,
for human DNA sequences isolated by the American laboratory of Dr.
these inventions claimed for an effective protection which allow the sector
Venters. The actual state of discussions (Commission of the European
to keep on developing.
Communities. Committee 113, Session 274/92) tends to consider as suitable
No definitive decisions have been made in this respect but the tendency is
for patentability only the gene and/or sequences whose function was known.
to consider these inventions as suitable for patents. Future cooperation at
This transactional solution solves, for the time being, the problem raised by
this point between countries with autochthonous races adapted to certain
the automatic sequencing of DNA material due to the technical development
of DNA sequencers achieved recently.
biotopes, and countries with technologies to incorporate the genes where
those features are located into other commercial races of animals, shall be
The problem has also an ethical component. Many people wonder if the
necessary. At this point a good solution could be the creation in developing
g
c heritage of a human being can be owned or not by private circles.
W
countries of experimental forms for breeding of new animal races commer-
we referred to animal or plant isolated genes of DNA sequences
cially more profitable, from local races, but always with conservation pro-
(n
I talk about DNA I am also talking about their problem which is simi-
grammes of the native species. In fact this solution is already subjected in
lar although the ethical component is weaker in these cases.
article 15 itself when in paragraph 6 we talk about the location of research
At this stage I may conclude that meanwhile the patentability of this kind
activities in the contracting parties.
or inventions was not definitively set up, its influence on the implementation
of the Biodiversity convention is to be seen. In any case, and as general
5
4
small farmers and developing economics. This International center also
A.2.b. Access to plants protected by IPR's
warns about the risks of the extension of breeder's rights and plant patents
and their negative influence on traditional selection breeders which maintain
Plants may be protected by patents in certain cases and by Breeder's Rights
an important biological diversity as result of their traditional practices. It
which are widely used, in others. Usually patents cover biotechnology and
recognizes, however, the substantial role of IPR's system to stimulate the
genetic engineering inventions and breeder's rights cover more traditional
innovation process in the plant research. From the point of view of biodi-
methods, as selection, for example. In fact, in most of the patent laws, tradi-
versity, strictly, CUPOV promotes development of new varieties through
ti
breeding methods and the varieties obtained thereof, are expressively
breeders and farmers' exemptions. Breeder's exemption consists in the uti-
considered as non patentable. Concerning access to plants protected through
lization without restrictions of the protected varieties as source of initial
patents, every general principle previously said for other subjects is appli-
variability in the selection processes for obtaining new varieties. Only in the
cable. FAO conference of November 1989 opposed to any restriction to the
case of varieties essentially derived, the holder of the former protected vari-
access to germ plasm, protected by IPR's or not. In fact, unfair situations
ety has some rights over the new one. This exemption is consistent with the
1 occur, like restrictions, due to IPR's, to local populations, origin of
aim of CUPOV, this is to encourage the creation of plant varieties by en-
germ plasm developed by biotechnology and protected later on. In relation
hancing its legal protection but without blocking generation of new varieties.
to access to plant varieties protected by Breeder's Rights, the International
Farmer's exception or farmer's privilege contribute to biodiversity in plant
Union for the Protection of New Varieties of Plants (UPOV), has recently
field by allowing farmers, inside their properties, to reuse seeds obtained in
approved a new draft of its Convention (CUPOV) (Diplomatic Conference
their harvests and to continue selecting varieties in traditional fashion. On
for the Revision of the International Convention for the Protection of New
the other hand the uniformity requirement may restrict the use of native
varieties of Plants, Doc.DC/91/138). No specific provisions have been
varieties adapted to local conditions, genetically more diverse. In effect the
adopted about the access itself but the scope of protection of this right cov-
four main requirements plant varieties have to meet to be granted with a
ers production of reproduction, conditioning, selling, export/importing, etc.
breeder's right are: novelty, distinctiveness, uniformity and stability.
of the plant Variety's propagating material. There is however some excep-
Uniformity criteria is needed to assure what is really being protected but
ti
to the Breeder's right which may be important to implement the
may run against the creation of biodiversity.
Biodiversity Convention. These exceptions are:
Plant patents are seen by some authors as restrictive not only for the ac-
cess to plant genetic resources, but also for their use. New plants coming
from biotechnology research tend to substitute traditional varieties in agri-
Acts without commercial purposes.
culture, which are abandoned, diminishing biodiversity therefore. Plant
Acts done for experimental purposes.
patents do not recognise any breeder or farmer's exceptions for the time be-
Acts done for the purpose of breeding other varieties derived from the
ing. At this point patents do not act in a comparable way to breeder's rights.
protected ones.
From the point of view of the strength of the right, may be considered as
more powerful instruments of protection than breeder's right. The encourag-
In my opinion these exceptions make compatible the existence of these
ing effects in searching new varieties through patents is not achieved
two bodies of law: CUPOV and Biodiversity Convention. There is also an
throughout exceptions to the monopoly conferred. The encouraging action
exemption traditionally accepted, the so called "Farmers privilege". This
of patents is based on their effectiveness to fully legally protect inventions,
privilege allows farmers to use their own harvested material as seeds for the
moving investments to fields in the confidence of the security legal frame
next season, but only inside the limits of their own properties. The impor-
offered. In any case there are also exceptions in patent law which allow the
tance of maintaining this privilege for developing countries is crucial be-
use of patented plants but only for experimental research. In the draft text of
Ca
farmers in these countries have no means to purchase seeds every
the EC directive on "Legal protection of biotechnological inventions", not
y
as has been outlined by, among others, The Keystone Center (Oslo
approved yet, there also were some mechanisms to allow the creation of new
Rapport on "Security and sustainable use of plant genetic resources", 1991).
varieties of plants from patented inventions (genes, plant cells or tissues,
The recent CUPOV revision leaves member countries to keep this exemp-
etc.). In fact a dependency licensing system was laid out to permit the ob-
tion as such or to restrict it, to avoid the extended abuse of reselling reused
tention of new varieties of plants which would not be possible without the
3. Keystone Center recommends developing countries which are mem-
infringement of a previous patent. The directive has recently been discussed
of CUPOV or are thinking of joining that Convention, to keep farmer's
by the European Parliament and sent back to the commission to introduce in
privilege and do not restrict this traditional right, very advantageous for
7
6
the draft text, among other amendments, the farmer's privilege principle
15 and 16 to 19 are, in a certain sense, the two plates of a balance. A ba e
(Europe, Marcredi ler Juillet 1992, no. 5762 pg:14). As we may observe,
that was clearly laid down in the Convention's preamble and objectives (Art.
different right systems, as patent laws, breeder rights and, in certain ways,
1). In the plate of article 15 the Convention assures access to genetic re-
also Biodiversity Convention, tend with time, to harmonise in many differ-
sources as a substantial mechanism to preserve and enhance the Biological
ent experts.
Diversity. In the other arm of the balance, articles 16 to 19 set up the com-
pensation to be paid by the contracting parties using such genetic resources.
A.2.c. Access to microorganisms protected by IPR's
Compensation has several modalities: transfer of technology (article
The term microorganism, from the point of view of IPR's, is considered as
),exchange of information (article 17), technical and scientific cooperation
any living matter that may be deposited in recognized institutions to fulfill
(article 18) and sharing of benefits (article 19). Why are there so many ref-
the requirement of description sufficiency. In the patent granting procedure,
erences to IPR's in article 16 and none in the rest of articles dealing with
applications dealing with microbiology, biotechnology, genetic engineering,
compensations tó satisfy the use of genetic resources? The answer is found
processes and/or products, often have to make a deposit of the material
in the aim of IPR's itself, to protect technology developed to be used by the
mentioned in the patent document in an International Authority. The deposit
industry. This is a crucial point to understand the role IPR's are going to
requirement is complementary of the written description of the embodiment
play in the effective implementation of the biodiversity convention.
of the invention that very often results insufficient when living matter is in-
Although some IPR's are owned by public institutions (public research
volved.
tres, universities, etc.) or by the governments themselves, most of them be-
Therefore any deposit shall be linked to a patent application. The term
long to the private sector. So, the only way to involve the private sector in
microorganism includes: bacteria, fungi, algae, protozoa, plants, seeds, ani-
the Biodiversity Convention shall be respecting IPR's. From the point of
mal embryos, tissue cultures, cells, plasmids, etc. The functioning of the
view of access to and transfer of technology owned by public bodies, does
International Authorities recognized by the World Intellectual Property
not matter if it is protected by IPR's or not, the obstacles for the implemen-
Organization (WIPO), and the proceeding to deposit and to access to sam-
tation of the convention in this particular problem will disappear with the
ples, are ruled in the so called Budapest Treaty (WIPO, Geneva 1982). The
political will of such governments. The conflict will arise when these same
access to the samples deposited is permitted, once the patent application has
governments treat to oblige to their private sectors to take decisions in tech-
been published, to anybody who meet the following requirements:
nology access and/or transfer matters which were not environmentally-
sound. The only way to allow private sectors to the spirit of the Convention
Not communicate to third parties any information about the culture
is to take measures to encourage it to cooperate, but respecting the play-
obtained.
ground rules where this private sector moves, develops and creates wealth,
Use the culture only for experimental purposes.
which include an effective protection of IPR's. In this respect, balancing the
The requirements are valid only if the patent is in force but not if it be-
situation stated in article 15, it is important that also in article 16, any
came rejected, expired, abandoned, etc. Before publication of the patent
agreement or compromise between contracting parties shall be done on mu-
application only are allowed to obtain samples of the deposited material,
tually agreed terms. The encouraging measures probably have to include fi-
those legitimated by some other patent right presumably infringed or, in
nancial mechanisms (through the provisions of articles 20 and 21 of the
some legislations anyone but through a third person called "an expert"
Convention) to avoid blocking of transfer when negotiations were not suc-
(European Patent Convention Rule 28).
cessfully finished. Financial items were broadly discussed in May at the
As you may easily see, the access is only hardly restricted in consonance
Joint Development/Environment Council of the European Communities
with the secrecy of patent applications, until first publication occurs. Once
(Doc. 6273/92 ENVI21 ONU13). It was generally agreed that additional ex-
the publication takes place, access to samples deposited is widely open.
ternal funding for sustainable development and for action to combat global
environmental problems shall be provided by developed countries on equi-
Access to and Transfer of Technology
table burden sharing basis. The most common instrument to transfer tech-
Let me first point our that the convention only mentions the access to and
nology protected by IPR's are licenses. If such license must be preferential,
transfer of technology, environmentally sound and related to the conserva-
exclusive, concessional, most favourable, whatever term we wish to add to
tion of biological diversity.
the list, shall be to the free negotiating process between contracting parties.
This particular subject is treated in article 16 of the Convention. Reading
If commercial mechanisms alone do act adequately, administrative or policy
the article we may find frequently mentioned references to IPR's. Articles
measures should be taken by contracting parties to assure the implementa-
8
9
tion of the convention at this point. Where necessary, financial provisions
according to articles 20 and 21 could also be used to purchase, by govern-
Microbiology, Genetic Engineering, etc.), but other classes may also contain
I of developed countries, patents or non exclusive licenses to be offered
groups and subgroups dealing with this matter.
to developing countries providing genetic resources, as part of aid packages.
About the transfer of patented technology, patent offices may play a sec-
The development of national technologies, endogenous scientific and
ondary but also important role. As I have previously said, mutually agreed
technological capabilities in developing countries, together with the
licenses are the instruments more commonly used to transfer patented tech-
strengthening of Industrial Property policies, would promote technology
nology. In some legislations lack of exploitation of patents may lead to the
transfer. Transfer of environmentally sound technology has to intensify not
expiration of the patent. This exploitation requirement may be replaced by
only between developed and developing countries but among developing
the public offering (published in a newspaper) of licenses when the holder of
countries too.
the patent can not put it in exploitation himself. Patent offices should send
Agenda 21 also deals with this subject. Technology transfer process
monthly lists of licenses offered related to biodiversity conservation, to de-
(including the state-of-the-art technology and related know-how) should
veloping countries, to facilitate contract between partners for transfer of
entail a system involving governments, private sector and research and de-
technology on mutually agreed terms. Spanish patent office also collaborate
velopment facilities.
with some other organisms of the Spanish Industry Ministry to evaluate
What may be the role to be played by patent offices and offices in gen-
partnership industrial projects between Spanish and foreign firms, in which,
eral, in charge of the administration of IPR's in the access to and/or transfer
in some cases, transfer of technology is involved.
of environmentally-sound technology? First of all the patent offices in their
daily work are facilitating the access to technology by means of routine
C. Exchange of Information
tasks
Article 17 of the convention deals with this important aspect. This article is
classifying the documents according to the international patent classifica-
complementary in many ways to the previous one. In effect, in many cases
tion (IPC STD addition WIPO) The classification facilitates the ordering
and especially when developing countries are involved, to guarantee a free
a recovery of patents on each industrial sector.
access to technology is not enough. How to know which technology is rele-
systemizing patent documents in collections by numerical order, by
vant to or developed form the genetic resource provided? The cooperation
classification, by country, etc.
shall go one step further and to assure a fluid flow of information from de-
introducing patents in data bases, Compact Disk-Read Only Memory
veloped to developing countries, in matters related to the conservation of
(CD-ROMs), microfiches, etc., different supports to facilitate consulta-
biological diversity.
ti
in different equipments.
First problem that immediately arises is, what information can be subject
translating the same family of patent documents to different languages.
of being exchanged? Article 17 itself answers that question: publicly avail-
producing monographs, search reports, technological surveillance, etc.
able information. Know-how, trade and industrial secrets, secret patents, get
published patent applications, etc. are not included in the concept of publicly
This way patent documents are systemized, classified, ordered, available
available.
in different languages and supports, and ones first publication occurs, are in
If cooperation in the field of exchanging information has to go one step
the public domain. There are features which distinguish patent information
further only to assure access to tehcnology, the role of patent offices in this
fr other sources of knowledge, especially traditional information, like
field has also to be more active than their mere normal functions. Spanish
native methodology of fermentation, or breeding of plants, etc. This useful
patent office has an entire department of Technological Information with a
information is generally not systemized, even in some cases not written and
Diffusion section dedicated only to distribute patent, utility models, trade
therefore difficult to get and to spread.
marks, etc., information among users of our services. These services in-
Patent offices are routinely facilitating access to technology contained in
clude, among others:
patent documents as part of their obligations: to grant patents but also to dis-
cl them.
selective diffusion by IPC sectors or by applicants.
Classifications related with technology dealing with Biological Diversity
publication of bulletins with bibliographic data and abstracts.
Conservation are, in general, in the chemical section C and in particular in
annual indexes, statistics and monographs.
class 12 (Biochemistry, Biotechnology, Enzymology, Fermentation,
retrospective searches in national and international data bases or CD-
ROM's (assisted or done on-line by the user himself).
10
11
search reports,
technological veillance (Biotechnology and Environmental Tech-
ance the technology system towards the direction of countries providing ge-
nology, for example).
netic resources, generally developing countries. They are clearly designed to
technical assistance.
contribute to lighten the burden of biodiversity conservation, that mainly
falls over developing countries.
As you may see Spanish patent office, in line with most of the existing
It is generally accepted that patents are better technical instruments than
Industrial Property Authorities, has gone not one but several steps ahead in
scientific ones. For scientific purposes, journals and books are more useful
patent information diffusion. Most of these services are charged to the users,
tools than patents. However, scientific literature is also used and joined to
but with a policy of public prices with reduced fares. Our office has been
search files routinely classified by each examiner. Obviously there are more
cooperating with South American countries in the field of exchanging patent
suitable documentation centers than patent offices, to organize, administrate
information without cost since 1982. Seventeen South American countries
and cooperate on scientific information, but we, just in case, may also con-
may order patent copies and search reports on any industrial sector and re-
tribute with our grain of sand in this respect. The article, in any case, talks
ceive patent documentation, free of charge thanks to bilateral cooperation
about technical and scientific cooperation in more general form than the
treat signed between the respective patent offices. Nearly 982.000 mi-
strict cooperation in scientific information. From this point of view, techni-
crofiches of Spanish patents and utility models, more than 14.000 bulletins,
cal and scientific cooperation in general terms would escape the scope of
216 retrospective seaches, 285 Spanish patent documents' copies, have been
patent offices to be converted as a matter of general policy, and what the ar-
sent by our country. In compensation we receive patent documents of those
ticle intends, is the creation of a framework to encourage cooperation in the
countries (nearly 25000 since 1982, plus almost 600 bulletins and more than
technical and scientific fields. To successfully achieve this goal, the private
2600 first pages) which we keep as part of our funds and loaded onto our
sector shall be involved in such cooperation, attracted by policy measures
data
CIBEPAT (more than 132.000 references corresponding to South
(generally economic and fiscal).
American patents, have already been loaded, of a total amount over 600.00
The paper of IPR's in this cooperation process has been previously dis-
references contained), available in CD-ROM support and that we also sup-
cussed. Perhaps only to add something about the paper of know-how in the
ply to those countries. Together with EPO and WIPO we also published in
process of technical cooperation. Know-how could be considered as part of
CD-ROM first pages of South American patents (DOPALEs) and fully doc-
non written IPR's. Effectively, as I have previously said, IPR's are commit-
uments of Spanish patents since 1990
and we have created
ments between the inventors and the society. In exchange of being granted
a network of CD-ROM units to access to the patent information published in
by the society with an exploitation monopoly, inventors disclose their in-
that support. Other cooperation activities with South American countries
ventions adding them to the called "state of the art". What then is the know-
include microfilming of national patent documents (nearly 85.000), patents
how? Well, the disclosure of the invention must allow to any person skilled
seminars (together with WIPO and EPO), training programmes (every year a
in the art, to execute the invention, to put it into practice. But nothing is said
number of grants are offered to South American Countries to attend activi-
about disclosing optimal parameters, more profitable embodiments, highest
ties to the exchange of patent information have crystallized in the constitu-
rentability ways of action, etc. This hidden knowledge, saved secretly volun-
tion of an International center of Documentation in Spanish and Portuguese
tarily and legally by the holder of the patent constitute the know-how. Most
languages that has not started fully functioning yet.
of the technology transfer contracts include both items, IPR's to be trans-
I hope these experiences may serve as samples of the role to be played by
ferred and know-how. When we talk about technical cooperation and we
patent offices of developed countries in the cooperation with developing
think in human resources development, through training programmes, for
countries on exchange of information about the conservation of biodiversity.
instead, we must be aware than know-how usually covers the personnel
formation, to operate the invention in the most effective way.
D
Technical and Scientific Cooperation
E. Distribution of Benefits
1
matters are covered by article 18 of the Convention. Most of them are
linked to previous articles about exchange of information and access to and
Article 19 covers in paragraphs 1 and 2 this mechanism of compensation, in
transfer of technology. In fact they all are, together with article 19 dealing
this particular case, derived from Biotechnology. I must admit that I do not
with sharing of benefits, the bases of the whole cooperation scheme outlined
see yet, after many discussion sessions on this matter, the necessity of doing
in the Convention. These four articles constitute the compensations to bal-
a specific mention of Biotechnology. It is true that technologies involving
living matter and covered by the term Biotechnology, have suffered an
12
13
enoi us development since DNA recombination techniques were discov-
ered by Boyer and Cohen 1974. It is also true that natural genetic resources
patent systems more permissive when patentability of living matter is
are commonly used by biotechnology industry and that huge amounts of
involved. This new directive has four main purposes.
mc
have been invested in this sector during the last 10 years. Only if we
consider biotechnology as a course of biodiversity, has any justification to
do not exclude any invention of patentability for the only reason that is
do some specific mention to this technology in the text of the convention.
composed of living matter, as general principle.
However I really do not agree to drafting a separate article that deals with
to consider biological classifications other than plant or animal varieties
biotechnology and mixing up the concepts of safe handling and sharing of
or races, patentable subject matter.
benefits.
to extend the scope of patent protection over genetic material to following
From the point of view of IPR's there is nothing to say about safety regu-
generations obtained by multiplication and propagation, and to any host
lati for the use of biotechnology. The concept of safety has no meaning
that contains said genetic material.
in patent laws. Another rather different thing is the concept of sharing of
to limit access to deposited living matter when patent applications has
benefits. A patent give to its holder a monopoly of exploitation, how to
been refused, withdrawn or, through an expert, until technical prepara-
make compatible this monopoly with a distribution of benefits? First of all
tions for publication of the application are deemed to have been com-
article 19 only talks about access to the results and benefits arising from
pleted.
biotechnologies based upon genetic resources provided by developing
countries. The access to the benefits must be, obviously, also on mutually
With these legal instruments EC commission expects to create an effec-
agreed terms. In my opinion this last sentence, present in most of the articles
tive protection structure for biotechnological inventions that will offer a
of the Convention, is the key world to work out any cooperation between
larger certainty for the investments of the companies working in this field.
countries providing genetic resources and those providing technology.
All these future measures have direct impacts on the implementation of the
Taking the example again of the DNA recombination technique discovered
Biodiversity Convention. But, from the point of view of article 19, they as-
by Boyer and Cohen, Stanford University, where Stanley Cohen worked at
sure money returns for companies doing investments in biotechnology re-
the time of this discovery, patented the DNA recombination technique and
search. When benefits are generated, to share them with countries providing
free of charge, to any scientific public researcher to use them.
genetic resources used in said research, is more feasible. Chapters 15 and 16
For private researchers the university charged companies with a 0.5-1 %
of Agenda 21 are also aware of the importance of biotechnology in a
royalty of total commercial sales. This more than reasonable, royalty gives
Convention of these characteristics, and the crucial role of sharing of bene-
Stanford University more than 1 million dollars per year as income of more
fits arising with communities whose indigenous or traditional lifestyles, are
t 1 70 licenses granted from the patent. Here is shown an example of
a continuous source of biodiversity, that also means a continuous source of
sharing benefits derived from biotechnology. Countries providing genetic
development capability for industry in developed countries. benefits arising
resources could specify in the mutually agreed contract of access to such a
from biotechnology will assist developing countries providing genetics re-
material, a percentage of sales to be returned. But the distribution of benefits
sources to preserve traditional methods and knowledge of indigenous people
not ly has to imply money sharing. It may be also importat to have as-
which have a relevant role to the conservation of biological diversity.
sured a certain return in the form of staff training, establishment of indus-
It appears quite clear to all of us that the implementation of the
t
in developing countries, priority access to the new material developed,
Biodiversity Convention greatly depends on additional financial funds to be
etc. Biotechnology inventions are considered by the interested circles, as not
provided by developed countries. The decision of who will be the organism
sufficiently covered by the present patent system. EC commission has
in charge of the administration of such funds, exceeds my position as tech-
drafted a text of directive addressed to achieve an effective protection of
nical adviser of a national office. The incremental costs accrued by develop-
tl
inventions, adapting and harmonizing existing patent laws, but
ing countries in the implementation of the provisions of the Convention
respecting international conventions on Industrial Property, as European
need to be covered by these new and additional financial resources (Costs
P
t Convention (EPC) and CUPOV. The directive wants to offer an
and benefits for the developing countries of becoming parties to environ-
effective answer to the demands of the European industries working in this
mental treaties, Mostafa K. Tolba UNEP). Only a few states at the Rio Earth
sector, in order to allow them to compete in more equitable conditions with
Summit made financial commitments to increase their percentage of Gross
American and Japanese companies which have in their own countries legal
National Product (GNP) dedicated to global conservation efforts and
Spanish President Gonzalez was one of them.
14
15
The EC, at this specific point on the financial
banisms to be
le-
mented to work out the cooperation projects related to conservati matters,
I
always aware of the transnational dimension of the problem which
exceed the community borders. In this sense EC has been an active partici-
in various conventions related to conservation aspects such as CITES
International Conference on the
(commerce international or threatened extinction species) or Lome IV
wh aims are the safeguard of ecosystems in danger such as forests, for
example. EC states members have also signed the Biodiversity Convention
CONVENTION ON
a
ious that conservation of biological resources implies financial funds
BIOLOGICAL DIVERSITY
to aid the poorest countries to preserve ecosystems and native species. These
ft B and long term investments are important, not only for those local re-
National Interests and
gions where biological diversity is located, but also for the future of the en-
tire humanity (Report of the EC Commission to the UNEP Conference at
Global Imperatives
Rio de Janeiro, June 1992 DOC.SEC(91) 2448 final).
I hope my paper clarifies some doubts participants may ever have about
Nairobi, January 26-29, 1993
the role IPR's may play in the implementation of the Biodiversity certify
that Convention. I will also satisfy if I have been able to show to all of you,
how patent offices may help to put the Convention into practice, facilitating
ac
to and transfer of technology and enhancing the exchange of infor-
mation. I also expect my explanations about specific protection for each liv-
ing matter related invention, reflects the complexity level we have to face
when we transfer the Convention to national laws in such a specific field.
Organized by the:
IPR's have to be an additional instrument of cooperation between devel-
Biopolicy Institute of the
oped and developing countries and never be an obstacle to achieve the final
African Centre for Technology Studies (ACTS)
aim of the Convention: Conservation of Biological Diversity as common
Stockholm Environment Institute (SEI)
heritage of mankind.
Sponsored by the:
Finnish International Development Agency (FINNIDA)
Government of Norway
Initiatives Lim
International Development Research Centre (IDRC)
Pew Scholars Programme in Conservation and the Environment
Stockholm Environment Institute (SEI)
Swedish Agency for Research Cooperation with Developing Countries (SAREC)
Swedish International Development Authority (SIDA)
Swedish Society for Nature Conservation (SSNC)
United Nations Environment Programme (UNEP)
WRI/TUCN/UNEP Biodiversity Programme
16
CSB
FYI. This is pretty food poper.
I take it Hornery has not
spoken to you about this
January 6, 1993
2210 Her I receive this from
i friend that work yn a PMA
member Emery
Implications of the Intellectual Property-Related Provisions of the U.N. Convention on
Biological Diversity for the U.S. Pharmaceutical Industry
by
Jacques J. Gorlin, Ph.D.
A.
Introduction
While 153 countries and the EC signed the Convention on Biological Diversity at the U.N.
Conference on Environment and Development (UNCED) in Rio de Janeiro in June, 1992, only
five countries -- the most recent being Canada -- have ratified the convention. Ratification by
thirty countries is required before the convention enters into force.
The intellectual property-related provisions of the convention would sanction governmental
interference in contractual relationships by interposing governments into an investment and
technology transfer process that should essentially be among private parties. In analyzing the
provisions, one must look both at the rights that the developing countries (LDCs) will gain from
the biodiversity convention vis-a-vis their foreign private sector partners and also at the
obligations that will fall on the shoulders of the developed country parties to the convention.
These obligations could require developed country parties to undertake certain intellectual
property-restricting actions and could limit their ability to support their private sectors in any
negotiations with the LDC sources of genetic material.
There are numerous provisions of the convention that raise issues of concern for the
pharmaceutical industry. This memorandum, however, will specifically focus on the key
intellectual property-related provisions of concern to the U.S. pharmaceutical industry and will
analyze the implications and consequences of these provisions for the industry. The paper will
also suggest a strategy that the industry could pursue in anticipation of a possible decision by
the Clinton Administration to support U.S. signature and ratification of the convention.
B. Key Intellectual Property-Related Provisions of the Convention
Articles 15, 16, 17, 19 and 22 are the principal intellectual property-related provisions of the
biodiversity convention. The final text that was on the table in Rio represents an improvement
over the pre-Nairobi penultimate text. U.S. negotiators were able to gain these improvements by
using such lawyer's techniques as adding "where feasible" or "mutually acceptable" to many of
the provisions that mandated a governmental interposition in the technology transfer process.
Nevertheless, the convention established certain principles that could be used to permit the
suppression and violation of intellectual property rights. Articles 15, 16, 17 and 19 of the
convention describe a process that defines the terms for:
Access to genetic resources (Article 15);
Access to and transfer of technology (Article 16);
Exchange of Information (Article 17); and
Handling and sharing of benefits (Article 19).
Article 22, which defines the relationship of the biodiversity convention to other international
conventions, could be construed as calling into question the obligations of parties to protect
intellectual property under WIPO treaties or an eventual GATT TRIPS agreement.
Article 15.2 (Access to Genetic Resources) calls on each party "not to impose restrictions
counter to the objectives of this convention." Among the convention's objectives (Article 1) is not
only the "conservation of biological diversity" but also "the fair and equitable sharing of the
benefits arising out of the utilization of genetic resources, including by appropriate transfer of
relevant technologies." Laws and regulations protecting intellectual property could be viewed as
imposing restrictions on the "fair and equitable sharing of the benefits arising out of the utilization
of genetic resources" and thus be in violation of the convention.
Article 16 (Access to and Transfer of Technology): Article 16.2 stipulates that access to and
transfer of technology "shall be provided and/or facilitated under fair and most favorable terms,
including on concessional and preferential terms where mutually agreed upon While the terms
of LDC access must be "mutually agreed upon" by the parties, they must also be "fair and most
favorable" for the developing country.
In an apparent victory for U.S. negotiators, Article 16.2, however, continues: "In the case of
technology subject to patents and other intellectual property rights, such access and transfer
shall be provided on terms which recognize and are consistent with the adequate and effective
protection of intellectual property rights." India turned the U.S. success into a pyrrhic victory by
requiring that the application of paragraph 2 -- and hence, the respect for the adequacy and
effectiveness of intellectual property rights -- be consistent with paragraphs 3,4 and 5 of the
Article.
Article 16.3 would require developed country parties to ensure that the LDCs that provide
the genetic resources are provided access to and transfer of technology which make use of
those resources, "including technology protected by patents and other intellectual property
rights." "Ensuring access to technology" for all intents and purposes is a euphemism for a
"compulsory license."
Article 16.4 would require developed country parties to ensure that their industries facilitate
access to "joint development and transfer of technology for the benefit of both the government
and the private sector of developing countries." Once the technology was developed, the foreign
private sector partner could be forced to grant back licenses to a potential governmental or
private sector competitor in the LDC.
Article 16.5 encapsulates the convention's attitude towards intellectual property protection.
It calls on the parties to the convention to ensure that intellectual property rights "are supportive
of and do not run counter" to the convention's objectives, i.e., that such rights do not restrict the
transfer of technology. The convention's presumption is that, since intellectual property rights
conflict with technology transfer, the parties to the convention must be vigilant to ensure that
intellectual property rights support the convention's objectives.
2
Article 17 (Exchange of Information): Article 17.1 of the convention limits the exchange of
information to information that is publicly available. The limitation, however, is modified by the
requirement that the "special needs of developing countries" have to be taken into account.
Conceivably, the "special LDC needs" could be used to require the disclosure of confidential
information owned by the foreign private sector partner that is normally protected under trade
secrets.
Article 17.2, which enumerates the types of information exchanges envisioned under Article
17.1, includes "repatriation of information." Once again, this would appear to permit the
expropriation by governments of proprietary information through "repatriation" into the public
domain.
Article 19 (Handling of Biotechnology and Distribution of its Benefits): Article 19.1 interposes
governments in the process by requiring "effective" LDC participation in the biotechnological
research activities and that, where feasible, the research take place in the LDC.
Article 19.2 would permit contracting parties to take measures that would "promote and
advance access on a fair and equitable basis" by developing country parties "to the results and
benefits arising from biotechnologies.... This paragraph raises a number of concerns:
(a) It would appear that either the developed country or LDC government could require
that the private sector partner license the technology ("access to the benefits and
results") to the developing country party an a "priority basis."
(b) The "fair and equitable basis" for the priority access, as commonly understood, leaves
the terms of the remuneration to the government's unilaterai determination. In contrast,
Article 31 (h) of the GATT Dunkel TRIPS text states that, in the case of compulsory
licenses, "the right holder shall be paid adequate remuneration in the circumstances
of each case, taking into account the economic value of the authorization." The phrase
"fair and equitable" was considered and rejected during the course of the GATT TRIPS
negotiations.
(c) The additional requirement that the access be on "mutually agreed terms" would not
prevent a LDC partner from demanding "access to the benefits" under a "fair and
equitable 11 but onerous basis after the foreign private sector partner had invested
heavily into the research and development of the genetic resource. The skewed
negotiation that would follow would force the private sector partner to choose between
foregoing his sunk investment and mutually agreeing to a "fair and equitable" offer
made by the LDC party.
Article 22 (Relationship with Other International Conventions): Under Article 22.1, parties to
the biodiversity convention would not be bound by any of the WIPO intellectual property
agreements or by a possible GATT TRIPS accord if the "exercise of those rights and obligations
would cause a serious damage or threat to biological diversity."
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C. Implications and Consequences of the Intellectual Property-Related Provisions for the
Industry
Two sets of implications flow from the intellectual property-related provisions of the
biodiversity convention: the first set flows from the intellectual property-related provisions
themselves while the second set would flow from a U.S. decision to sign and join the convention.
(1) Implications of the Intellectual Property-Related Provisions Themselves
(a) The inclusion of provisions that call into question intellectual property protection
in a multilateral convention ostensibly aimed at conserving biological diversity indicates that
the United States has not yet turned the corner in neutralizing the LDC approach to
economic development. The LDC approach views intellectual property as another tool --
rather then a private property right that must be protected -- that LDC governments can use
to attain their economic development objectives. The technology transfer provisions are a
throwback to the days of the North-South Dialogue and the endless UNCTAD sessions of
the 1970s. The convention, as was the North-South Dialogue of the 1970s, is based on the
false premise that economic development and technology transfer can be promoted by
sweeping governmental declarations taken in a U.N. body that mandate investment terms
rather than on the ground, through the establishment in individual countries of the proper
environment for foreign investment. Such an environment incudes adequate and effective
intellectual property protection.
(b) The inclusion of the intellectual property-related provisions -- especially Article 16.5
-- can be construed to confirm the LDC contention that there is a basic conflict between
strong intellectual property protection and protection of biodiversity.
(c) The intellectual property-related provisions will make it more difficult for the industry
to negotiate agreements with LDCs that follow the pattern of the Merck-INBio accord.
Among the critical elements of the INBio agreement were the proper protection of intellectual
property rights and the establishment of appropriate compensation mechanisms, both of
which are called into question by the convention's provisions.
(d) Given the convention's support for preferential sharing of technology, LDC
governments may wait for the convention's entry into force before entering into further
discussions on INBio-type arrangements or may begin to insist upon terms supported by
the convention prior to the convention's entry into force.
(e) Given the obligations that fall on the developed countries to assist in the
technology transfer process, the industry may not be able to rely on the support of
developed country governments in their negotiations with LDC governments and institutions.
(f) The convention's weak intellectual property provisions will give the opponents of
strong multilateral intellectual property protection -- led by India -- ammunition to counter the
arguments of the U.S. and other developed countries in GATT and WIPO. It is not surprising
that India led the charge to weaken the intellectual property provisions in both the
biodiversity convention and the GATT TRIPS negotiations.
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(g) On the other hand, the intellectual property provisions of the convention could
prove to be counterproductive to the LDC search for increased technology transfer.
Potential foreign private partners will not enter into arrangements for the use of foreign-
source biological material in product development unless these arrangements contain
satisfactory provisions for intellectual property protection and appropriate compensation
mechanisms. The economic development of the LDCs could very well be retarded by the
convention due to the reluctance of potential private sector partners to invest under
unfavorable conditions.
(2) Implications of a U.S. Decision to Sign the Convention
(a) A U.S. decision to sign and join the convention will make more difficult successful
outcomes in the GATT TRIPS negotiations and future bilateral special 301 negotiations. For
example, U.S. support for the convention's special intellectual property provisions in favor
of the LDCs would pull the rug from under the arguments of U.S. negotiators for strong
pipeline protection, which specifically asks LDCs to undertake special provisions in favor of
pharmaceutical inventions of right holders principally from developed countries.
(b) U.S. support of the biodiversity convention will be viewed as a signal of a
diminished U.S. commitment to strong intellectual property protection and may embolden
India and its fellow travellers to try to move intellectual property protection and technology
transfer issues out of the GATT and into more politicized U.N. bodies. Such a U.S. move
could reverse past U.S. successes in neutralizing the North-South dialogue and in using
bilateral investment treaties and intellectual property agreements with individual countries
to develop the favorable conditions and incentives for the technology transfer that LDC
economic development requires.
D. Strategy to Deal with a Possible U.S. Signing of the Convention¹
In anticipation of a possible change in U.S. policy on the convention, it would be prudent
if the industry were to adopt a strategy along the following lines:
1) Domestically, the industry should begin an education campaign for the new
Administration and Congress explaining that, while the industry supports the protection of
biodiversity, it has major concerns about the convention's specific intellectual property-
related provisions. The industry should indicate that its support for the convention is
contingent on improvements in the intellectual property-related provisions. In this regard,
the industry should use Vice President-elect Gore's view that "access to native resources
and protection of intellectual property are complementary concerns" as the intellectual
starting point for the campaign.
1 The strategy suggests steps to deal with the intellectual property-related of the industry.
It does not take into account the effect on the strategy of other aspects of the convention
(financing mechanisms, voting structure, regulation of biotechnology, etc.) that also may be of
concern to the industry.
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2) To facilitate the education program, the industry should draft a suggested protocol
to the convention that would contain the revisions that the industry seeks in the intellectual
property-related provisions.
3) In anticipation of U.S. adherence to the convention, the industry should also begin
drafting an interpretation document that would explain the U.S. position on the intellectual
property-related provisions. (Article 37 of the convention does not permit reservations).
While these interpretative notes are not legally binding, they would put the other parties to
the convention on notice on how the U.S. plans to interpret the convention. The draft
interpretative notes should make clear the supremacy of adequate and effective intellectual
property protection in the technology transfer process and that the U.S. Government
expects other governments to interpret the provisions in a similar manner.
4) In the interim, pharmaceutical companies should consider creating "facts on the
ground" by pushing ahead with negotiations in individual LDCs on additional Merck-INBio
type arrangements that will contain effective intellectual property protection and appropriate
compensation measures.
5) The industry should develop an international consensus with counterpart
pharmaceutical associations in Europe and Japan in opposition to the currently-drafted
intellectual property-related provisions of the convention. Counterpart associations would
be urged to lobby their governments to support the negotiation of a protocol prior to their
ratification of the convention. Should the United States sign the convention with
interpretative notes and not pursue the negotiation of a protocol, the foreign counterpart
associations would also be urged to get their governments to adopt similar interpretations
of the convention.
6) The industry should follow very closely both the deliberations of the UNEP Experts
Group that is looking at the technology transfer issues raised by the convention and also
the preparations for the UNEP Governing Council meeting in May. The Council is expected
to agree to the formation of an intergovernmental committee that will begin preparations for
the implementation of the convention. Both signatories and "interested parties" will
participate. Close scrutiny and involvement by the industry in development of the U.S.
position will help ensure that changes in U.S. intellectual property policy will not
inadvertently be signaled by U.S. officials.
7) If the U.S. decides to go ahead and sign the convention, the industry should seek
to gain the Administration's support for the negotiation of a protocol that would be agreed
before the convention enters into force. The industry should seek Congressional support
for the protocol approach.
E.
Conclusion
While the intellectual property-related provisions of the convention, in and of themselves,
raise serious concerns for the industry, the overriding question is whether the Clinton
Administration will change U.S. policy and sign the convention as currently-drafted. Such a
decision would set off shockwaves in the intellectual property community both here and abroad,
which would view the move as raising doubts about the Clinton Administration's commitment to
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strong worldwide intellectual property protection. It thus is critical that the industry quickly
implement a strategy that will explain the intellectual property-related implications of U.S.
adherence to the currently-drafted convention and suggest possible solutions for correcting the
intellectual property-related provisions.
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