Developing Countries & Sustainable Development

Srividhya RagavanProfessor of Law

University of Oklahoma Law Center

Move towards Sustainable Development Development using the trade and

intellectual property regime

Sustainable Development regime in the CBD

The presentation posits that CBD can be an effective tool for poorer countries to maximize the benefits from the trade and intellectual property agenda of the WTO.

The Trade and IP Agenda…

Article 27(3) (b) “…members shall provide for the

protection of plant varieties either by patents or an effective sui generis system or by any combination thereof”

Measuring “Effectiveness”

Article 7+8+ Doha: lends a definition that is flexible and dependent on member’s national requirements

For developing countries: Stimulate R & D without compromising

welfare goals Food security. Biodiversity protection Sustainable development of indigenous

communities, etc.

The International regime for plant variety protection is ineffective because:

1. Over protects hybrid varieties (Eligibility standards are lower than for utility patents)

Low threshold for eligibility requirements Excessive scope for breeder’s rights Inadequate limitations on breeder’s rights

In essence, the rights regime is similar to the utility patent system - creates an exaggerated private domain

2. Creates IP rights in a closed market – IP rights cannot yield benefit when the market is blocked by subsidies

3. Can potentially result in loss of genetic resources.

Achievement of the Trade and IP Agenda…

Posited the need for biodiversity assets to generate intellectual property assets E.g., Biotechnology

Convention on Biological Diversity, 1992

Provides access to genetic resources.

Trilogy of CBD’s Objectives:1. Conservation of biological diversity2. Sustainable development; and3. Equitable sharing of benefits (transfer of

technology) – links with intellectual property

Biodiversity’s Unique Position

Not an idea based property Prioritized by both developing &

developed countries Creates access for the developed

world Links the developing world with:

Trade and TK Trade and IP

What do countries want from biodiversity

Developed Nations

Access – for biotechnology assets that are protected as IP

Developing Countries

Return for local resources

Problem area

Issues for Developing Countries

1. Protection of biodiversity

2. Generating value from biodiversity assets CBD and hence, bio-prospecting are

dependent on mutual agreement to generating value

Bargaining positions are central to determining equities.

Note: Qualifying by-products of bio-prospecting immediately generates a market value.

Protection of Biodiversity Twin Goals: Biodiversity preservation and community

development.

Mandated under art. 8 (g) Countries should “[e]stablish or maintain the means to

regulate, manage or control risks from biotechnology likely to adversely impact the environment.”

Related with value generation & bio-prospecting

Requires government commitment Merck—InBio Kani India agreement as lacking commitment – TBGRI &

Aurveda pharmacy.

Valuation of Biodiversity Assets Objective: generating a value that

distributes the risks and benefits of biodiversity assets proportional to several factors: Holding status; Potential market value;

Need for access, etc Crux for solving issues from bio-

prospecting

Market Value

Bio

Valu

e

Benefits disproportionately enjoyed byaccessor

Risk of disproportionately borne byholder

Risk of capital (biodiversity) should be differentiated from risk of investment

Models for valuing biodiversity

Prospect Model Built on the need of biodiversity to

prospector Base Compensation+ future value

depending on disclosures Disclosure mechanisms need to be built

into the agreement Information Model

Prospector negotiates an initial rate based on prediction of success

Each further test would be like purchasing an option based on rate of success

Contract Based Model Assumes any value determined before

a product comes to market is bound to be low

Hence, the model creates a pre-determined risk v. need paradigm for every stage of research based on which further use of resource is negotiated.

The original contract precludes use of material and its by-products under some reasonable circumstances.

Generating a bio-value

Bio-value need not be connected with biodiversity’s status as an IP.

Value should be identified in need terms Risk of bio-asset should be dissociated

with risk of investment Work towards generating continuous

value One requirement: ownership issues

For sharing IP rights; generating royalties; informed consent, etc.

Generating continuous bio-value

Mandatory terms in bio-diversity agreement:

1. Fund allocation towards biodiversity conservation

2. Fund allocation towards community development of the locals (TK and biodiversity paradigm)

3. Local manufacturing requirement.4. IP sharing/ownership

Local Working Requirement

Bio-prospecting agreements can include: training component provision to set up local manufacturing or

research facilities. Can be used to attract foreign direct

investments. Counters the effects of TRIPS – which

forbids the local working requirement.

The IP Clause

Use of the name as TM; as part of GI, etc. Information provided by communities:

Akin to trade secret Royalties relative to extent of involvement.

Worldwide royalties on sales: X% for first million dollars of sale; Y% for the next 50 million dollars of sale

Joint patent holders (for a percentage of royalty).

Infrastructural changes

Maximizing CBD’s benefits

CBD embodies flexible language in the narrative (unlike TRIPS)

Involvement:1. National Government involvement2. CBD and FAOs Governing Bodies

CBD & FAO Governing Bodies

1. Constitute an advisory body to assist countries to negotiate favorable bioprospecting agreements.

2. Formulate advisory opinions regarding the bio-prospecting negotiations.

3. Act or create a library of information, drawing lessons to facilitate fair exchange of genetic and technological resources

4. Market positioning of the product – Kani and AVP.