doctoral dissertation washington university school of law · elaboration of international treaties...

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LEGAL PROTECTION OF ECUADORIAN BIODIVERSITY AND TRADITIONAL KNOWLEDGE: THE EXISTING INTELLECTUAL PROPERTY RIGHTS SYSTEM

VS. A SUI GENERIS SYSTEM

Doctoral Dissertation

Washington University School of Law

By

Sophia Espinosa Coloma

Juris Scientiae Doctoris (J.S.D.)

MAY, 2010

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ACKNOWLEDGMENTS

I wish to thank all those who helped and supported me during the development of

this research. Without them, I could not have successfully completed this journey.

To God who gave me this opportunity and the skills to follow my dreams.

To Professor Charles McManis: my dissertation advisor, who was my main support for

the development of this study. He taught me how to identify the legal issue and look for

the best solution. His knowledge about the dissertation’s research field constituted the

backbone of this project. He introduced me to a new world of knowledge in which we

have the responsibility to develop and improve the current legal system in benefit of the

society. Thank you for teaching me how to think outside the box.

To Washington University: In special to Dean Kent D. Syverud, the faculty and the

administrative personnel. Thank you for contributing every day with your knowledge,

time and dedication to this amazing academic institution.

To my parents: Santa and Carlos who are the reason of my life. Their love and

continuous support during the J.S.D. program and my entire life have made possible the

achievement of many dreams and goals. Thank you for being always by my side.

To my fiancé: Gilles Cigerza, who has supported me during this long journey. He has

constituted my guide and my light in many phases of this program.

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To my family and friends, who believed in and gave me the strength that I needed to

accomplish this objective. In particular, to Michele Shoresman who has been my angel

during my stay in St. Louis. She gave me the moral support to reach this goal.

To the Fulbright Commission and the Organization of American States: Thank you for

the financial and logistic support. Without any doubt this dream would have not been

possible without your help.

To all the people and institutions in Ecuador who assisted me with the information for the

development of this dissertation. In particular to Maria de Lourdes Torres, Professor of

Biological Sciences at Universidad San Francisco de Quito; Doctor Manuel Bedon,

Universidad San Francisco and Project GIBEX; Econ. Fernando Montenegro, Ministerio

de Ambiente del Ecuador; Rodrigo de la Cruz, specialist in traditional knowledge,

Instituto Ecuatoriano de Propiedad Intelectual (IEPI).

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ABSTRACT OF THE DISSERTATION

LEGAL PROTECTION OF ECUADORIAN BIODIVERSITY AND TRADITIONAL KNOWLEDGE: THE EXISTING INTELLECTUAL PROPERTY RIGHTS SYSTEM

VS. A SUI GENERIS SYSTEM

By


Juris Scientiae Doctoris

Washington University School of Law

Saint Louis, Missouri

2010

Professor Charles McManis, Chairperson

Legal protection of traditional knowledge and access to genetic resources is a complex topic that involves different issues that range from legal aspects to social, spiritual and financial concerns. An adequate treatment of this topic will allow biodiversity rich countries to enhance their economy and living conditions of their people while preserving biodiversity and traditional practices of local and indigenous communities. On the other hand, industrialized countries will be benefitted from the access to genetic resources and traditional knowledge, which constitute valuable assets within the scientific, medicinal, agricultural, environmental and biotechnological fields. The apparent opposite interests of biodiversity rich and developed countries results in a highly ideological and political debate, raising historical fears and disagreements between the North and the South and precluding conciliation and reasonable treatment of this matter. As a result, despite the elaboration of international treaties tending to facilitate the access to genetic resources and traditional knowledge within equitable conditions; the international community has not found an effective mechanism to protect and manage this issue. Therefore, this dissertation explores the economic, legal and social aspects involved in the protection and management of traditional knowledge and genetic resources in order to understand all the dimensions that this topic comprises. It also explores the different legal treaties developed by the international community that have an impact within the treatment of this topic. Furthermore, it analyzes different models and proposals elaborated by specific countries and regional organizations regarding this subject and, finally, it evaluates whether the creation of a sui generis system is necessary. As a result, this dissertation shows that, under the current circumstances, the use of existing intellectual property rights is the key element to provide an effective and equitable legal protection as well as conserve traditional knowledge and genetic resources. Finally, it demonstrates that the application of the principles of access and benefit-sharing is possible and that can work in benefit of users and providers of traditional knowledge and genetic resources.

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Sophia Espinosa Coloma, J.S.D., L.L.M.

Date of Birth: October 19th, 1980

Place of Birth: Quito-Ecuador

e-mail: [email protected]/ [email protected]

Undergraduate Study:

Law, Universidad San Francisco de Quito, Ecuador.

Graduate Study:

Juris Scientiae Doctoris (J.S.D.), Washington University in St. Louis, USA.

LLM in Intellectual Property and Technology Law, Washington University in St. Louis, USA.

Specialist in Banking and Financial Law , Universidad Andina Simón Bolívar, Ecuador.

Professional Societies:

New York Bar- Admitted to practice law in the State of New York since June 2009. American Bar Association 2009-2010

Member of the National Scholars Honor Society since 2007

Member of the Inter -American Bar Association since 2005

Member of the Colegio de Abogados de Pichincha since 2004

Honors/ Awards:

Organization of American States OAS – Graduate Academic Scholarship Selection 2009-2010

American Association of University Women (AAUW– Alternate scholarship 2009-2010 (I did not accept it)

Washington University in St. Louis- JSD Scholarship for academic excellence, 2008.

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Washington University in St. Louis- Scholarship, 2007.

Fulbright Scholarship – 2007.

Representing Ecuador in the Prep- Com 3 of the World Summit on the Information Society (WSIS). Geneva 2005. Consejo Nacional de Educacion Superior de Universidades y Politecnicas (CONESUP) declared me as the Top graduate in law in Ecuador in 2005. Universidad San Francisco de Quito- Top graduate from University San Francisco, Feb. 2005. Universidad San Francisco de Quito- Justiniano Scholarship for Academic Excellence 2000-2004 Universidad San Francisco de Quito- Dean’s list (all semesters)

Teaching and Professional Experience:

Universidad San Francisco de Quito 2011- Present. Full time Professor at the School of Law. Teaching areas: ABS system, New Technologies and Law (TIC’s and Biotechnology), Antitrust Law, Intellectual Property Law, Legal Research, Legal Argumentation and Legal English.

Solines & Asociados, Quito-Ecuador , 2004- 2010. Associate Attorney Legal Counselor in intellectual property, technology, banking, securities, corporate, migration, civil, commercial and family law. Advised and managed clients. Analyzed, researched and litigated cases. Drafted contracts and memoranda. Advised in regulatory issues and legislative and legal drafting.

Gobierno Digital, Quito-Ecuador, 2003-Present. Legal Counselor, Information and Communication Technology Advisor. Developed regulation, projects and policies related to information and communication technology. Advised and managed clients from private and public sector.

Consejo Nacional de Telecomunicaciones CONATEL, Quito-Ecuador 2005-2007. Director of Connectivity Agenda Developed nationwide information and communication technology policies. Led and coordinated meetings and proposals with 300 people from multidisciplinary groups that were integrated by representatives of

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public sector, industry and academia. Coordinated information and communication technology projects and programs to increase the connectivity and improve infrastructure to provide the community with useful services such as e-government, e-health, e- work and e-learning. Member of the Network of E-Government Leaders in Latin America and the Caribbean. Developed regulation projects. Supervised employees.

Universidad de las Americas (UDLA), Quito-Ecuador 2006-2007. Professor of Family Law and Trusts and Estates Law. Designed the education program in these fields. Prepared, researched and elaborated the course material. Developed syllabi, presentations and evaluations. Prepared every class in the different subjects ( 2 hours per day all the week). Taught three courses with 25 students apiece.

Universidad San Francisco de Quito, Quito-Ecuador 2004-2005. Adjunct Professor- Family Law and Technology Law - Prepared, researched and elaborated the course material. Developed presentation, evaluations and guides to help the student with the subject. Prepared for the classes that I was assigned to teach and also for the practical classes.

Fundacion Esquel - World Bank, Quito-Ecuador, Summer 2002. Part-Time Researcher Researched, compiled and organized report on “Legal System in Ecuador – Users.” The research was done in the Court and on-line.

Publications:

CONATEL, National Policy of Information and Communication Society- Ecuador, (Sophia Espinosa Coloma, co-author and Editor, Digital Publication, 2006)

Dissertation for the degree of Lawyer: Sophia Espinosa Coloma, Proteccion de Datos Personales dentro de la Legislacion Ecuatoriana, (Quito, 2004).

Dissertation for the degree of Specialist in Banking and Financial Law: Sophia Espinosa Coloma, Responsabilidad Civil de los Agentes Fiduciarios, (Quito, 2005).

Copyright by


All rights reserved. Permission is granted to make single copies for research use so long as

acknowledgment is made of any material used and proper notice of copyright is affixed to each copy.

April 28th, 2010

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TABLE OF CONTENTS

INTRODUCTION 1 CHAPTER I: THE ECONOMIC AND MORAL NATURE OF INTELLECTUAL PROPERTY 6 1. Why do we protect intellectual property? The economic and moral nature of

intellectual property. 7 a. The Natual Rights Theory 9 b. The Fair Reward for the Inventor 13 c. The Utilitarian Theory 16 d. Posner Proposal 21

2. Economic effect of intellectual property: reduction of transaction costs or monopoly? 25 3. Intellectual Property Rights: How much of them do we need? 35 4.Conclusion 38 CHAPTER II: UNDERSTANDING TRADITIONAL KNOWLEDGE 46 1. Introduction: Sociological concerns related to biodiversity and traditional knowledge

protection. 46 2. What is traditional knowledge? 48

a. Characteristics of Traditional Knowledge 51 b. Types of Traditional Knowledge 53

i. Traditional Medicinal Knowledge 53 1. The role of the Shaman in the Traditional Medicinal Knowledge 59

ii. Traditional Agricultural Knowledge 61 iii. Traditional Environmental Knowledge 66

3. Current Threats to Traditional Knowledge 68 4. Why it is important to protect Traditional Knowledge 72

a. Because of the relevance of Biodiversity and Traditional Knowledge in Ecuador and the Andean and Amazonian Region. 72

b. To improve the life conditions of traditional knowledge holders and preservation of traditional knowledge. 75

c. To improve the national economy 76 d. Other effects: prevent biopiracy and conserve the environment 78

5. Traditional knowledge status in the Ecuadorian Legal System 78 a. Regional Regulation 79

i. Andean Community Decision 391 Common Regime on access to genetic resources 79

ii. Andean Decision 486 Common Intellectual Property Regime 83 b. National Regulation 86

i. Constitution of Ecuador 86

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ii. Intellectual Property Law 90 iii. The Agricultural Development Law 91 iv. Environmental Law 93

6. Conclusion 96 CHAPTER III: BIODIVERSITY: A MULTIFACETED ASSET 104 1. What is Biodiversity? 104 2. Value of Biodiversity 108

a. Direct Value 112 b. Indirect Value 116 c. Optional Value 117

3. Biodiversity Loss 120 4. Bioprospecting and Biopiracy: Removing Ghosts 127 5. Biopiracy: What it is and what it is not? 141

a. The Enola Bean Patent 145 b. The Neem Patents 147 c. The Ayahuasca Plant Patent 148 d. The Quinoa Patent 150 e. The Turmeric Patent 152

6. Biodiversity in Ecuador 154 7. Biodiversity Legal Framework in Ecuador 159

a. Constitution of Ecuador 160 b. Environmental Law 166

8. Conclusion 170 CHAPTER IV: THE INTERNATIONAL LEGAL SYSTEM RELATED TO BIODIVERSITY, TRADITIONAL KNOWLEDGE AND INTELLECTUAL PROPERTY PROTECTION: THE INTEREST BEHIND THE RIGHT 181 1. International Legal Framework 181 2. The Convention on Biological Diversity 181

a. General Overview and History 182 b. Convention on Biological Diversity: Access to biological resources and traditional

knowledge. 188 i. Access to genetic resources according to the CBD 190 ii. Prior Informed Consent 195 iii. Equitable Benefit-Sharing 204 iv. Treatment of Traditional Knowledge 212 v. Technology Transfer- Biotechnology and Intellectual Property Rights 220

3. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and It’s Impact within the Genetic Resources, biodiversity and Traditional Knowledge Fields 228

4. The International Treaty on Plant Genetic Resources for Food and Agriculture 257 5. Conclusion 267

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CHAPTER V: INTELLECTUAL PROPERTY, BIODIVERSITY AND TRADITIONAL KNOWLEDGE PROTECTION: REGIONAL AND NATIONAL SAMPLES OF LEGAL FRAMEWORKS 283 1. The African Model Legislation 284 2. The Andean Community Decisions 293

a. Decision 391: Common Regime on Access to Genetic Resources 295 b. Decision 486: Common Intellectual property Regime 306

3. Peruvian Legislation 313 4. Conclusion 321 CHAPTER VI: POSSIBLE LEGAL MECHANISMS FOR THE PROTECTION OF TRADITIONAL KNOWLEDGE AND ACCESS TO GENETIC RESOURCES 330 1. Legal mechanisms for traditional knowledge protection and access to genetic

resources 331 a. Protection of Traditional Knowledge and Genetic Resources under Existing

Intellectual Property Regimes. 335 i. Patent Law 336

1. The Disclosure Requirement 349 2. Access and Benefit-Sharing 357 3. TRIPS Flexibilities: What to patent and what not to patent? 360

ii. Regime of Undisclosed Information 368 b. Protection of traditional Knowledge and Genetic Resources: Sui Generis

System 371 2. The Ecuadorian Case: Which is the best model for Traditional Knowledge and Genetic

Resources Protection? 377 3. Conclusion 383 CONCLUSION 392 BIBLIOGRAPHY 397

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INTRODUCTION

The purpose of this study is to analyze the legal mechanisms that biodiversity-rich

countries in general and Ecuador in particular can use to protect their biodiversity and

traditional knowledge under the existing schemes of intellectual property rights, in order

to promote economic development while preserving and enhancing the biological

diversity and cultural practices of native communities. This study will explore the factors

surrounding the protection of biodiversity and traditional knowledge and show that using

existing intellectual property regimes is currently the best alternative to maximize the

protection, conservation, and sustainable use of these resources.

The legal protection of biodiversity and traditional knowledge involves diverse

and complex issues that range from the economic value of biodiversity and traditional

knowledge to the social and spiritual impact that these resources have within local and

indigenous communities. Therefore, this dissertation will analyze the economic, legal,

and social aspects surrounding the protection of biodiversity and traditional knowledge in

order to provide effective solutions that can be implemented according the unique

situation of each country. Consequently, the dissertation is divided into six chapters that

explore the different dimensions and realities that should be considered regarding

protection of biodiversity and traditional knowledge.

Chapter I, “The Economic and Moral Nature of Intellectual Property Rights,”

considers the different theories that have been developed to justify the existence of

intellectual property rights. The moral and economic dimensions take a special place in

this chapter because they constitute significant elements in the creation of the intellectual

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property right system. Moreover, this chapter tries to eliminate the fears that have

developed in relation to intellectual property rights. In this sense, this study shows that

intellectual property rights constitute a mechanism to increase community welfare by

providing incentive to inventors/authors, creating differentiating assets that promote

competition, and allocating the costs of new inventions. This chapter scrutinizes the

posture that links intellectual property rights with monopolization, concluding that this

approach is the result of a misconception and erroneous interpretation of the terms.

Finally, the chapter evaluates how much intellectual property we need, analyzing the

conditions that each country should consider before strengthening its intellectual property

rights system. As a result, Chapter I explores the faces of intellectual property rights and

defines how this legal mechanism can be used to increase social welfare and economic

development.

Chapter II, “Understanding Traditional Knowledge,” addresses the most

significant characteristics and elements of traditional knowledge. This chapter tries to

demonstrate that traditional knowledge is a very diverse and complex concept that cannot

be circumscribed in one single definition. As a result, the chapter emphasizes the

elements that characterize traditional knowledge in order to define common elements that

can be used and adapted by different local and indigenous communities. In addition, this

chapter explores the different types of traditional knowledge1 and how they constitute an

aggregate value in today’s world economy and social development. It also explores why

it is important to protect traditional knowledge as a resource that is crucial not only for

native communities but for society in general. Finally, the chapter defines the status of

traditional knowledge within the Ecuadorian legal regime. It is important to note that one

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of the most significant purposes of this chapter is to emphasize that traditional knowledge

constitutes an element of the identity and spiritual values of local and indigenous

communities. Therefore, we cannot manage it as a commodity subject to trade. It is true

that traditional knowledge can have commercial value, but it should be handled without

disrupting the traditional values and social structures of local and indigenous

communities.

Chapter III, “Biodiversity: A Multifaceted Asset,” defines and examines

biodiversity as well as examining the different ways that this resource can be valuable.

Therefore, this section explores the different dimensions of biodiversity and tries to

conceive it as a whole, viewing it as an umbrella concept that covers different elements.

Moreover, this chapter analyzes the different values of biodiversity and its role in the

perpetuation of life. In this respect, it emphasizes the need to use biodiversity within

sustainable and reasonable parameters; as a result, the chapter addresses the problem of

biodiversity loss. In addition, this chapter tries to clarify and remove the myths

surrounding biopiracy and bioprospecting, showing the different sides of these practices

and pointing out their positive and negative effects. Finally, it explores the current status

of biodiversity in Ecuador and the current mechanisms in place to conserve it and

maximize its use. It is important to note that even though this chapter emphasizes the

need to protect and conserve biodiversity that does not mean that the researcher opposes

the use of biological resources. On the contrary, sustainable management of biodiversity

is the only way to efficiently protect, conserve, and commercialize biological resources in

a way that all actors can benefit from these activities.

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Chapter IV, “The International Legal System Related to Biodiversity, Traditional

Knowledge and Intellectual Property Protection: The Interest Behind the Right,”

examines the current international legal framework for the protection of genetic resources

and traditional knowledge. This chapter focuses on the most significant treaties within

the field, such as the Convention on Biological Diversity (CBD), The Agreement on

Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the International

Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA). This chapter

analyzes these legal frameworks in order to identify the interests behind them and to

define how their provisions have impacted the management of genetic resources and

traditional knowledge. Furthermore, this chapter shows the weaknesses of these treaties

with respect to the protection and management of genetic resources and traditional

knowledge. In addition, it demonstrates how the existing regimes are interconnected and

consistent with each other. Even though these legal instruments do not represent a

perfect scheme of regulation for genetic resources and traditional knowledge, they still

provide a reasonable legal framework that can protect these resources.

Chapter V, “Intellectual Property, Biodiversity and Traditional Knowledge

Protection: Regional and National Samples of Legal Frameworks,” evaluates how

developing biodiversity rich countries have adopted the provisions established by the

CBD, the TRIPS, and the ITPGRFA into their domestic legislation. The chapter focuses

on the regulatory initiatives developed by the African Union, the Andean Community,

and Peru, because they reflect the strategies adopted at different levels (continental,

regional, and national). The main purpose of this chapter is to determine whether the

approaches embraced by these models effectively facilitate the access to genetic

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resources and traditional knowledge, as well as the application of the principles of benefit

sharing. In this respect, it examines whether these initiatives conciliate the interests of

their countries with the different counterparts (such as universities, bioprospectors, and

researchers) or on the contrary take a protectionist perspective and only watch over the

misunderstood interests of biodiversity-rich countries.

Chapter VI, “Possible Legal Mechanisms for the Protection of Traditional

Knowledge and Access to Genetic Resources,” explores the existing intellectual property

rights framework as an option to regulate the protection of and access to genetic

resources and traditional knowledge. The chapter identifies the problems with the current

system and focuses on how existing intellectual property rights can be adapted to protect

traditional knowledge and genetic resources. In addition, this chapter examines the need

to develop a sui generis system of protection for traditional knowledge and the associated

genetic resources. The need to develop a sui generis system is analyzed, with

consideration for the holistic nature of traditional knowledge as well as the politics of

intellectual property. Finally, this chapter addresses the Ecuadorian case and tries to

provide a mechanism that incorporates different legal figures in order to efficiently and

adequately protect traditional knowledge and genetic resources. Traditional knowledge

and genetic resource protection is characterized by diversity; as a consequence, this

chapter shows that there is no singular model to regulate this field. On the contrary, the

incorporation of different legal mechanisms and approaches is the only way to adequately

meet the needs of such a diverse subject matter as traditional knowledge and genetic

resources.

1 For the purposes of this study we are not considering traditional cultural expressions or folklore.

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CHAPTER I

THE ECOMIC AND MORAL NATURE OF INTELLECTUAL PROPERTY

The concept of property is one of the most developed notions in our society. The

property system is one of the oldest institutions of the human race because it is

intrinsically linked with the human essence and nature. Therefore, the right of private

property has been renowned throughout history as a fundamental mechanism for human

progress. “The philosophical bases for protection of private property are well entrenched

in our culture. Private property has been viewed as resulting when labor is applied to

nature, as an incentive for discovery, as an essential part of personhood, and as a

foundation for an ordered economic system.”1The private property system has evolved

according to societal needs. Consequently, it started with the protection of tangible

objects. However, recently society required a legal standard that would provide adequate

protection to intangibles, including intellectual work. As a response to the need for such

protection, the intellectual property system was conceived as a mechanism to reward

inventors and authors for their intellectual work and promote the progress of society as a

whole.

Defining “intellectual property” is not an easy task. Developments in society have

brought new standards and new forms of protection that complicate the effort to develop

a fixed definition for this special kind of property. Nevertheless, it is important to discuss

some concepts that help to focus the study of this field.

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Intellectual property is concerned with the product of the mind, with intellectual activity transformed by custom and law into a commodity capable of being appropriated and therefore traded.2

Intellectual property, very broadly, means the legal rights which result from intellectual activity in the industrial, scientific, literary and artistic fields. Countries have laws to protect intellectual property for two main reasons. One is to give statutory expression to the moral and economic rights of creators in their creations and the rights of the public in access to those creations. The second is to promote, as a deliberate act of Government policy, creativity and the dissemination and application of its results and to encourage fair trading which would contribute to economic and social development.3

Intellectual property is a set of principles and rules that discipline the acquisition, the use and the loss of rights and interests in differentiating intangible assets susceptible of being used in competition between businesses.4

As we can see, there are different types of intellectual property rights, and the

nature of the right depends upon the subject matter under protection. Nevertheless, all

fields of intellectual property protection have a common denominator: the subject matter

is an intangible product of the human intellect.5

This chapter has two main purposes. First, it will discuss rationales for the

protection of intellectual property, utilizing a philosophical and economical analysis.

Second, it will seek to clarify a mistaken view of intellectual property, which holds that

intellectual property rights create a monopoly power that generates inefficiency.

1. Why do we protect intellectual property? The economic and moral nature of

intellectual property.

Intellectual property protection involves two intrinsically related elements – the

moral element and the economic element. The moral element is basically the recognition

of the holder of the intellectual property right for the paternity of the intangible subject to

protection. Undoubtedly, it is important to guard the work of a person who has dedicated

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time, knowledge, money, and creativity to develop an intangible asset that is going to

contribute to society’s development.

However, it is also crucial to recognize that we live in a globalized world and that

all of these intangible assets, subject to intellectual property protection, generate a

significant impact in the global economy. Intellectual property rights differentiate

intangible assets6, and this factor enhances the competition in the market, providing

consumers with more options from which to choose. In addition, the establishment of

intellectual property standards effects an immediate wealth transfer from consumers to

the right holders. Consequently, the economic nature of intellectual property can be seen

through both the incentive to the owner of the intellectual property right and also through

the market effect.

Intellectual property protection has faced strong opposition throughout history.

This is because, for some theorists, “IP law privatizes public knowledge, creates scarcity7

where it otherwise would not exist and restricts access to information goods.”8

Intellectual property assets are considered public goods because of the fact that their

intangible nature makes it possible for them to be non-rival and non-excludable. In other

words, intellectual property assets can be used by many people at the same time, and the

use of one person does not limit or extinguish the use of the same intangible by other

people. In addition, the non-excludable element refers to the fact that people cannot be

charged to access or to use the public good. Therefore, justifications for the existence of

intellectual property protection are controversial, because some people do not accept the

privatization of public goods through the intellectual property legal system.

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However, is this statement true? Are all public goods free? Are intellectual

property rights an unfair mechanism to create a false scarcity? What would be the result

if all of the assets protected by intellectual property rights were freely accessible? These

questions will be answered through an exposition of some theories that have been

developed to justify intellectual property.

a. The Natural Rights Theory

John Locke, in the fifth chapter of his Second Treatise on Government, makes an

important point about the property right and its connatural relationship with human

beings.

Though the earth and all inferior creatures be common to all men, yet every man has a “property” in his own “person”. This nobody has any right to but himself. The “labour” of his body and the work of his hands, we may say, are properly his. Whatsoever, then, he removes out of the state that Nature hath provided and left it in, he hath mixed his labour with it, and joined to it something that is his own, and thereby makes it his property. It being by him removed from the common state Nature placed it in, it hath by this labour something annexed to it that excludes the common right for other men. For this “labour” being the unquestionable property of the labourer, no man but he can have a right to what that is once joined to, at least where there is enough, and as good left in common for others. (…) The same law of Nature that does by this means give us property, does also bound that property too. “God has given us all things richly.” Is the voice of reason confirmed by inspiration? But how far has He given it us “to enjoy”? As much as anyone can make use of to any advantage of life before it spoils, so much he may by his labour fix a property in. Whatever is beyond this is more than his share, and belongs to others. (…) God gave the world to men in common, but since He gave it them for their benefit and the greatest conveniences of life they were capable to drawn from it, it cannot be supposed He meant it should always remain common and uncultivated. He gave it to use of the industrious and rational (and labour was to be his title to it); not to the fancy or covetousness of the quarrelsome and contentious. He that had as good left for his improvement as was already taken up needed not complain, ought not to meddle with what was improved by another’s labour; if he did is plain he desired the benefit of another’s pains, which he had no right to, and not the ground which God had given him, in common with others, to labour on, and

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whereof there was a good left as that already possessed, and more than he knew what to do with, or his industry could reach to. (…)9 Locke’s main premise is that the person who works the land in order to obtain a

product should have a property right in that product because his effort has been mixed

with natural resources that were in common. Therefore, labor gives people the right to

create private property interests in resources that have been improved by human work.

Nevertheless, this right to private property is legitimate as long as “there is enough, and

as good left in common for others.” This limit that Locke imposes on private property,

also called the Lockean Proviso, can be translated to say that our right of private property

cannot go beyond the right of others to appropriate the resources that are in common and

privatize them through their labor.

In addition, Locke has stated that the world has been given to human beings to

benefit them, and therefore humans have to apply their skills and labor to obtain products

that can benefit society and improve their communal life conditions. Consequently, if

humans can obtain property rights in things provided by Nature that have been obtained

through people’s labor, what about products of human intellect? Are they also

appropriable?

Intellectual Property can be evaluated under the same theory. Let’s say that a

person, after the dedication of hours of study, research, and application of knowledge,

personal skills, creativity, investment, or even mere curiosity, has developed an

invention, a piece of art, or any intangible asset that has an aggregate value. Who is the

owner of this new asset? As Locke said, “labor being the unquestionable Property of the

Laborer, no Man but he can have a right to what that is once joined to, at least where

there is enough and as good left in common for others.” Consequently, if we consider the

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fact that intellectual work involves labor; its owner would be the one that developed it,

because his essence has been fixed to the new invention or art.

In addition, Locke stated that nobody has the right to appropriate and receive the

benefit of the product of another’s labor or to profit from another’s pains. This standard

can also be applied to the field of Intellectual Property, because nobody has the right to

unfairly take possession of the non-harmful product of another’s intellect. If an

intangible has been developed with the effort of a human being, then that intellectual

labor has created an exclusive right that allows its holder to have control over the

intangible.

Analyzing the Lockean Proviso and the Natural Rights Theory, Wendy Gordon has stated that:

Since all humanity is equal in the state of nature, the duties we owe others are also the duties they owe us, and the rights I have against others they have against me. One can discern in Locke's theory two general classes of rights: liberty rights (areas free of duty) and claim rights (areas where the right holder is owed a duty by others). Using these two classes, one can identify four general sets of natural rights and duties: First and foremost, all persons have a duty not to harm others, except in some cases of extreme need. Second, there are two key liberty rights: 1) all persons have a liberty right to dispose of their efforts as they see fit, and 2) all persons have a liberty right to use the common-“the earth and all its fruits”-which God gave to humankind. These two liberty rights mean that, at least in the absence of extreme need, the law of nature gives no one a claim right over any other person's non-harmful use of her own efforts, or her non-harmful use of the common. Third, all persons have two central duties in regard to their resources. Each person has a duty to let others share in her resources (other than her body) in times of great need, so long as the sharer's own survival is not imperiled by such charity, and each has a duty to share any of her non-bodily resources which would otherwise spoil or go to waste. Fourth, all persons have a duty not to interfere with the resources others have appropriated or produced by laboring on the common. This duty is conditional, and is a keystone in the moral justification for property rights.10

Consequently, the Natural Rights Theory contains a non-harm principle that has

to be applied in two ways. First, a person has a right to appropriate resources that exist in

Nature only if he leaves enough to allow others to create similar property rights from

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these assets. Second, if the first right holder has obtained his property right according to

the first premise, then other people do not have the right to interfere with this property

that has been created by the person that worked on it. As a result, intellectual property

can be governed by this theory and these principles, but it is important to have reasonable

standards of protection that allow the right holders to protect their property without

affecting other people by the creation of an unfair right that excludes everyone from the

new developments. In that way, Gordon states:

With the proviso, Locke argues that one person's joining of her labor with resources that God gave mankind (“appropriation”) should not give that individual a right to exclude others from the resulting product, unless the exclusion will leave these other people with as much opportunity to use the common as they otherwise would have had. A person who wants access is entitled to complain only if he is worse off (in regard to the common) when he is denied access than he would have been if the item had never come into existence. If the proviso is satisfied, others are no worse off if they are excluded from the resource the laborer has marked off as her own.11

Moreover, the appropriation of technical knowledge has been accepted since the

Code of Hammurabi. As Doctor Carvalho states:

The first compilation of written statutes the text of which has been preserved contained a “law” on the private appropriation of technical knowledge. It is Law No.188, which says that “If an artisan has undertaken to rear a child and teaches him his craft, he cannot be demanded back.” This law must be contrasted with the next Law, which reads: “If he has not taught him his craft, this adopted son may return to his father’s house.” This means that, if the artisan had transmitted his knowledge and his technique to an adopted apprentice, the latter would continue under his authority until the artisan decided otherwise. In practice, the artisan had the power to prohibit the apprentice to disclose information received from him during the apprenticeship to other persons.12 This shows how ancient societies recognized the concept that a person who has

developed a specific kind of knowledge has rights to control it. This is nothing less than

a fair and logical compensation for the effort involved in the creation, with the sole

13

limitation that the right must not harm others. Wendy Gordon explained the laws

contained in the Hammurabi code through the lens of Locke’s theory:

As individuals we can take actions that cause us to deserve more or less than these fundamental human entitlements would dictate. Most notably, if we work productively, our labor may entitle us to own more goods than less industrious people are entitled to have. But by our own actions we cannot give ourselves a right to impair others' fundamental human entitlements. We cannot “earn” a right to harm others, or a right to impair their access to the common. (…) No harm principle. Appropriative labor involves altering what was in the common in a way that makes it usable and thus more valuable to humanity. It may also involve a kind of psychological identification, an “infusion of personality.” Most important from the perspective of the laborer's claim, however, is the laborer's purposiveness. A stranger's taking of another's labored-on objects is likely to merit legal intervention only if the taking interferes with a goal or project to which the laborer has purposely directed her effort. If the taking does interfere, the actor needs some special justification for doing it.13

Here, the artisan has worked on the development of a technique. In this process,

the artisan has invested time, knowledge, and effort. As a result, he owns the knowledge

involved in this process, and he is entitled to own more goods than people who have not

developed their own method. The artisan has the right to share his technique and also to

impose limits on his pupils in order to avoid harm. This is a rational right that does not

unfairly deny others the access to the commons. It is simply a limitation to prevent his

apprentice from taking advantage of the artisan’s method. As a result, the Lockean

proviso and the non-harm principle justify the existence of the conduct norms that have

been in place since ancient times.

b. The fair reward for the Inventor

The fair reward for the inventor is a perspective compatible with the one

explained above. Nevertheless, it is not the same, because this theory does not analyze

appropriation through labor. Instead, it develops the notion that every work should be

adequately compensated. A natural consequence of all property rights is a quantifiable

14

value in which the property right can be translated. Therefore, this theory shows that

every person has the right to receive fair remuneration for all the effort and knowledge

they have invested in the development of new intellectual works. This remuneration

should reflect the quantifiable value that the new development represents to society.

John Stuart Mill affirmed “that he, the inventor, ought to be both compensated

and rewarded…will not be denied…it would be a gross immorality of the law to set

everybody free to use a person’s work without his consent, and without giving him an

equivalent.”14 Application of this theory to modern times allows us to talk about the

unfairness of the free ride15 that causes harm. This occurs when one person obtains a

benefit from another person without paying an equitable and fair compensation, thereby

damaging the second party. This type of parasitic and destructive free riding can be

appreciated in case law, specifically when we talk about the tort of misappropriation. For

instance, in International News Service v. Associated Press, 248 U.S. 215 (1918), the

Associated Press filed a lawsuit against International New Service for appropriating news

taken from bulletins issued by the complainant or any of its members, or from

newspapers published by them, for the purpose of selling that news to the defendant’s

clients. In this case, the plaintiff and the defendant competed in the gathering,

distribution, and publication of the news for revenue in newspapers throughout the

United States. The competitive advantage of this service was based on the promptness of

the transmission and the veracity of the news. Despite the fact that news is not copyright

subject matter, in this case the Court held that there was a question of unfair competition

in business.

The peculiar value of news is in the spreading of it while it is fresh; and it is evident that a valuable property interest in the news, as news, cannot be

15

maintained by keeping it secret. The parties are competitors, so when the rights or privileges of the one are liable to conflict with those of the other, each party is under a duty so to conduct its own business as not unnecessarily or unfairly to injure that of the other. Unfair competition in business is determined by the character and circumstances of the business. The right of the purchaser of a single newspaper to spread knowledge of its contents gratuitously, for any legitimate purpose not unreasonably interfering with complainant’s right to make merchandise of it, may be admitted; but to transmit that news for commercial use, in competition with complainant is a very different matter. Defendant admits that it is taking material that has been acquired by complainant as the result of organization and the expenditure of labor, skill, and money. The transaction speaks for itself, and a court of equity ought not to hesitate long in characterizing it as unfair competition in business. It has all the attributes of property necessary for determining that a misappropriation of it by a competitor is unfair competition because contrary to good conscience. The view we adopt does not result in giving to complainant the right to monopolize either gathering or distribution of the news; but only postpones participation by competitor in the process of distribution and reproduction of the news; to prevent that competitor from reaping the fruits of complainant’s efforts and expenditure. In the present case the fraud upon complainant’s rights is more direct and obvious. Regarding news matter as the mere material from which these two competing parties are endeavoring to make money, and treating it, therefore, as quasi property for the purposes of their business because they are both selling it as such, defendant’s conduct differs from the ordinary case of unfair competition in trade principally in this that, instead of selling its own goods as those complainant, it substitutes misappropriation in the place of misrepresentation, and sells complainant’s goods as its own. Besides misappropriation, there are elements of imitation, or false pretense, in defendant’s practices.16

This case is a good example of free riding, in which the defendant took advantage

of the plaintiff’s work and used the final product to obtain a personal benefit. This

injured the plaintiff’s business. Although it is not a case that is focused on intellectual

property, the same analysis can be applied in this matter. Therefore, if we translate this

holding to the intellectual property field, we can state that the fair reward to the inventor

or author is a moral standard that should be maintained and protected for the well being

of the market. Intellectual property rights are a good alternative because they allow the

inventor to obtain and use the fruits of his work while excluding others from the free use

of this new asset. Any attempt to free ride another’s intellectual work that produces a

16

harm to the right holder should not be accepted under the legal system because such

behavior is dishonest. Therefore, the protection of intellectual property rights is crucial

because it promotes moral standards in the market.17

If intellectual property rights did not exist, then anybody could have free access to

another’s creations. It is true that in the short term the society might benefit from the

ability to enjoy these fruits without any charge. Nevertheless, in the long term, society

would be injured by this policy because new developers would not have any incentive to

continue producing new inventions and works under a system that did not protect them.

They would be obliged to either hide their new creations, or, even worse, to stop

inventing them.

Consequently, we can appreciate that the fair reward theory promotes the intrinsic

essence of intellectual property rights as rules of honesty and morality in business. These

rules are necessary for a competitive and healthy market without fraudulent schemes and

practices. “Intellectual property, therefore, is essentially a matter of honest business. It is

no surprise, therefore, that historically intellectual property has been closely associated

with rules concerning compliance with standard weights and measures. Both set of rules

speak against fraud.”18

c. The Utilitarian Theory

The Utilitarian theory holds “that the state should adopt policies that would

maximize the happiness of members of its community.”19 According to Bentham:

By utility is meant that property in any object, whereby it tends to produce benefit, advantage, pleasure, good, or happiness (all this in the present case comes to the same thing), or (what comes again to the same thing) to prevent the

17

happening of mischief, pain, evil or unhappiness to the party whose interest is considered: if the party be the community in general, then the happiness of the community: if the particular individual, then the happiness of that individual.20

This theory is similar to the current version of intellectual property rights because

the utilitarian perspective requires the intervention of the government to enact legislation

that grants rights. As a result, people justify the existence of the right under the law.

This approach is different from Locke’s point of view, which believes that the intellectual

property right is part of human nature because of the process of appropriation of labor.

The first two recognized types of intellectual property rights were patents and copyrights.

They were instituted by the state in order to pursue two main objectives: the promotion

of the progress of science and useful arts and the protection of the integrity of the market

place.21

According to the utilitarian perspective, in order to maximize the utility of society

and the inventor/author, it is necessary to define rights that can increase the happiness of

these two actors. Therefore, intellectual property rights are a good option because they

make it possible for the inventor/author, through the exclusive right of property, to secure

a fair reward for their work. In that way, the inventor/author has a good incentive to

continue with his work and not to hide it or cease working.

At the same time, these rights allow society to obtain knowledge about new

inventions and works and to enjoy them through the acquisition of the resulting products.

Moreover, in the case of patent law, the disclosure of the invention can become a

mechanism by which to teach future generations how to develop a determinate innovation

or how to improve it. Undoubtedly, this promotes the development of science because it

permits people to think beyond the established parameters of society.

18

Some experts have agreed that the absence of intellectual property rights could

hinder the advancement of society:

If competitors could simply copy books, movies, and records, and take one another’s inventions and business techniques, there would be no incentive to spend the vast amounts of time, energy, and money necessary to develop these products and techniques. It would be in each firm’s self-interest to let others develop products, and then mimic the result. No one would engage in original development, and consequently no new writings, inventions, or business techniques would be developed. To avoid this disastrous result, the argument claims, we must continue to grant intellectual property rights.

Notice that this argument focuses on the users of intellectual products, rather than on the producers (as Locke’s natural rights labor-theory). Granting property rights to producers is here seen as necessary to ensure that enough intellectual products (and countless other goods based on these products) are available to users. The grant of property rights to producers is a mere means to this end.22

According to the utilitarian theory, the government must look for better ways to

increase the level of happiness of all actors in society. Therefore, through the

establishment of intellectual property rights, the government guarantees that society is

going to have access to new inventions and creations because this legal system provides

enough incentive to the inventors/authors to continue their work.

Government has created intellectual property rights in an effort to give authors and inventors control over the use and distribution of their ideas, thereby encouraging them to invest in the production of new ideas and works of authorship. Thus the economic justification for intellectual property lies not in rewarding creators for their labor but in ensuring that they (and other creators) have appropriate incentives to engage in creativity activities.23

Consequently, this theory states that inventors/authors need motivation to develop

more innovations; otherwise they would decide to hide the product of their work or to

discontinue their inventive process. As a result, intellectual property rights are not only

designed to benefit the producer, but also to benefit the society that is going to enjoy the

fruits of that producer’s creativity. In addition, the community is encouraged to promote

19

the enlargement of sciences and arts. When people have access to new products, they are

able to learn from them and invent even more intangibles, which can in turn be protected

by intellectual property rights.

The benefits that are enjoyed by creators and by society as a result of intellectual

property protection can be seen in all fields. For example, trademark law does not

promote innovation like patents; nevertheless, trademarks make it possible for one

product to be differentiated from others. Thus, trademarks allow consumers to trace the

product to its source. This allows buyers to reduce costs because they spend less time

looking for the goods that they want. Also, trademarks permit purchasers to acquire

products from producers that they like and trust. Likewise, the owner of a trademark has

the right to exclude others from uses of this asset that would generate confusion or

dilution in the market. In that way, the integrity of the market place is ensured because

nobody else is allowed to take a free ride off the well-known trademark.

It is logical that a system that creators will be stimulated by a system that protects

their rights to the product of their labor. It is reasonable to think that people who have

more and better incentives will work more productively. This is a fact that we can

perceive in all fields of life. For example, when we are building a house, we hire people

to help us with different works such as plumbing, floors, and lighting. We have confined

these workers for hours building our house; therefore, it is indisputable that if we provide

them with a good lunch and beverages, they are going to have more energy and a better

attitude to continue their labor. As a result, we have a well-built house and happy

workers. The same principle applies in the case of creators. If the government provides a

fair and convenient system of incentives, people are going to work better, because they

20

know that their effort, time, investment, and knowledge are going to be compensated. At

the same time, members of the community can enjoy and improve their life styles with

the new innovations.

Nevertheless, what kind of motivation can be considered the motor of labor

activity? Can recognition be enough to stimulate creativity? Do people always need a

monetary or proprietary compensation for their work? What is the limit of this reward?

At what point do intellectual property rights become an obstacle to the society that

inhibits access to new developments?

All of these are questions that economists and jurists have asked in the past

several years. As a response, many fields have developed recognition systems. For

instance, the Nobel Prize is an annual award that is given for achievements in physics,

chemistry, physiology or medicine, literature, and peace. However, are all inventors

going to find fulfillment of their expectations through an award? Is the recognition

enough to reward them for the time, money, effort, and knowledge invested in the new

development? Recognition systems are a good source of incentive that without any doubt

promote the progress of science and art. Nevertheless, in some cases it is not enough.

For example, in the pharmaceutical industry, the cost to bring a single drug to the market

will take around “fifteen years and ranges between $800 million to 1.7 billion.”24

Consequently, it is hard to conceive that pharmaceutical companies will be satisfied by a

recognition award. It is fair that this effort has as a counterpart an intellectual property

right that assures that those costs can be recovered over a period of time.

21

It is true that many people are not motivated by money, and other factors can

sometimes move people to create. For instance, Professor Neil Netanel argues that

copyright protection has a production and a structural function. In that way, “through its

production function, copyright encourages creative expression on a wide array of

political, social, and aesthetic issues.”25 The structural function of copyright is

performed through the promotion of the creation of copyright industries that are

autonomous and that are not bounded by the government or any other political power.

Therefore, copyright per se constitutes a guarantee of free speech, and it is enough

motivation to continue with the creative work.

In addition, we have to consider that intellectual property rights only give the

creator the right to exclude others from their fruits. Therefore, if this inventor/author

considers that recognition is enough for him, he is free to share the product of his

intellect. At the same time, if the originator thinks that he needs an economic

compensation for his effort, he is free to use the intellectual property right and translate

this right to a monetary value. This means that intellectual property rights give

inventors/authors the ability to negotiate with the intangible assets that they have

obtained.

d. Posner Proposal

Richard Posner, who is concerned about the limits, scope, and effects of

intellectual property rights, supports a modified version of the utilitarian theory. This

proposal is based on the maximization of general welfare and not on private utility.26 In

Posner’s words: “The basic function of law in an economic or wealth maximization

22

perspective is to alter incentives.” This means that the role of law is constructivist and

interventionist, an attempt to reorder economic institutions to attain a particular end.”27

Posner argues that the intellectual property system should provide a scheme that

allows creators and society to ensure their maximum welfare. Therefore, the exclusive

right that is owned by the holder of the intangible assets cannot be so broad that it

undermines the community’s welfare. For that reason, creators of the intellectual

property system should look for an adequate way to balance the rights of intellectual

property owners with the needs of society.

As Doctor Carvalho has stated, intellectual property rights are:

A set of legal norms that permit allocate revenues and costs. (…) Using the expression of Robert Heilein, ‘There ain’t no such thing as a free lunch.’ Once applied to intellectual property, that rule means that the legal system, in first place, acknowledges the very merit of the existence of a lunch. Secondly, legal provisions identify who must pay- and to whom- the price of that lunch (with all its components, including the costs and the revenue).28

Applying that expression to the case of intellectual property, the free lunch could

be interpreted as the intangible assets that constitute the subject matter of protection29.

The intellectual works are the fruit of an investment; therefore, the law determines how

this venture will be paid – in other words, who is going to carry the costs. In the actual

system, the costs are covered by society because it has to pay in order to have access to

the new development. Hence, the law should be equitable enough to disallow any kind of

abuse of the intellectual property rights by the owner. That way, the creator will have a

fair compensation for his labor, but at the same time the society will be satisfied about

paying a reasonable price for the use of the intangible asset.

23

Posner affirms that even though the problem of intellectual property rights as a

tradeoff between incentive and access is important, it is not the only issue that the

economist has to consider in an economic analysis of intellectual property law. Posner

also analyzes the benefits and costs of intellectual property through a comparison to the

tangible property system. He states that “property rights confer two types of economic

benefits, static and dynamic.”30 The static benefit emphasizes how privatization of

common property allows a better allocation of the resources and costs through the

reduction of transaction costs. Moreover, the dynamic benefit of a property right is “the

incentive that possession of such right imparts to invest in the creation or improvement of

a resource in a period.”31 In that way, Posner concludes that “in some circumstances

propertizing intellectual property can prevent overuse or congestion in economically

meaningful senses of these terms.”32

In addition, Posner notes the well-known analysis of transaction costs made by

Ronald Coases, who states that “enforceable contract rights are all that society needs,

beyond some underlying set of entitlements so that the parties have something to

contract about, to stain optimal use and investment. Moreover, Posner states that if the

costs of enforcing property rights are disproportionate to the value of the rights, or if the

costs of appropriating someone’s valuable good are prohibitive quite apart from any legal

sanction, the social value of property rights will be slight or even negative.”33

Posner contends that intellectual property faces three costs that can be conflictive.

These are transaction, rent seeking, and protection costs. According to Posner,

transaction costs of property are so high that they may prevent optimal adjustments to

24

changing values. In that way, if a changing of values occurs, the rule should reallocate

this cost without the need to enter a transaction.

The second problem is rent seeking. This problem occurs because “economic rent

is a return over and above the cost of generating the return; it is pure profit, and so worth

incurring costs to obtain, even if the costs exceed the social benefit from the undertaking,

as they will often do.”34 Analyzing this problem in the intellectual property field, Posner

concludes that “the excess over the optimal investment, minus any social benefit

produced by the additional investment, is the waste produced by rent seeking.”35

Therefore, the economic return should be proportional to the social welfare. Otherwise,

charging the waste to society can be considered an abusive management of intellectual

property rights that undermines the right of the people.

Finally, the third problem that Posner discusses is the fact that property is costly

to protect. This phenomenon is worse in intellectual property because the intangible

nature of the assets make them more difficult to secure. These facts generate new costs

that are allocated in the price of an intellectual property asset.

After analyzing of the pros and cons of intellectual property, Posner concludes that:

Unless there is power to exclude, the incentive to create intellectual property in the first place may be impaired. Socially desirable investments may be deterred if the creators of intellectual property cannot recoup their sunk costs. That is the dynamic benefit of property rights, and the result is the access versus incentives tradeoff: charging a price for a public good reduces access to it, making it artificially scarce (Plant’s point), but increases the incentive to create it in the first place, which is a possibly offsetting social benefit.36

25

2. Economic effect of intellectual property: reduction of transaction costs or monopoly?

Intellectual property rights have an exclusive nature that corresponds to the right

that the intellectual property holder has to exclude others from the use and satisfaction of

the intangible asset. This right to exclude others allows the creator to establish the

conditions under which the dissemination of the new work or invention will take place.

“Indeed, it is commonly accepted that it is the nature of intellectual property rights to

convey monopoly power.”37 Nevertheless, this power to exclude has been misunderstood

through time because it has been interpreted to mean that intellectual property rights

create monopolization.

Patent law has been criticized as a legal instrument that creates monopolization.

Therefore, this study will focus mainly on patent law, but it will also provide some

arguments that intellectual property rights are complementary and not in conflict with

antitrust law. In order to analyze whether intellectual property rights in general and

patent rights in particular create monopolization, we have to consider the sense and

connotation of the word “monopoly.” It is important for our study to determine what

kind of monopoly is created by intellectual property rights (especially patent law):

monopoly in the literal sense of the word or monopoly in the economic sense of the term.

Monopoly in the literal sense of the word means “the market condition existing

when only one economic entity produces a particular product or provides a particular

service.”38 Therefore, if we consider that a patent confers on its owner the exclusive right

to make, sell and use an invention within a defined period and under a determined scope,

we can say that the patentee has monopoly over the invention, because he has the right to

26

exclude others and to establish the conditions under which he is going to negotiate the

use of this asset. It means that the inventor is the only person allowed to control the asset

because nobody else could use the invention without infringement of the inventor’s

intellectual property right.

In this respect, Edmund Kitch states that “the description of a patent as a

monopoly depends in part on the ambiguity of the term monopoly. A patent is certainly a

monopoly in the sense that any property right is a monopoly- it is the exclusive right to

control the use of the subject matter of the patent claim.”39 Economists have stated that

patent law creates monopoly situations because it gives the absolute property right over

the innovation to the inventor. Therefore, this public good is privatized, and as a

consequence, fewer people have access to it. This is because after patent law has been

applied to the invention, you have to negotiate with the patentee to acquire the right to

use the invention. Hence, the inventor is free to fix the price of the patent according to

the demand. This phenomenon results in social loss, which is one of the main effects of

monopoly. The social loss is reflected in two ways. First, the consumer surplus is

reduced, because consumers have to pay more to use to the invention that according to

the public goods theory should be free to access. Second, some consumers stop using the

product, so they suffer a loss because they are no longer enjoying the advantages of this

invention.

When market price rises above the competitive level, consumers who continue to purchase the sellers’ product at the new, higher price suffer loss exactly offset by the additional revenue that the sellers obtain at the higher price. Those who stop buying the product suffer a loss not offset by any gain to the sellers. This is the deadweight loss from supracompetitive pricing and in traditional analysis its only social costs.40

27

This position assumes that every patent creates monopolization just because it

gives exclusive rights to the patent owner. In addition, it takes an extreme approach

about the social cost. So it is important to ask the following question: If we did not have

a patent law system, would the social cost disappear? As we have stated above, one of

the most important bases for patent law is the possibility to provide incentives to the

inventors. Consequently, it is highly probable that without patent law the invention

process would be diminished or that the inventors would make the decision to hide their

innovations in order to obtain a reward or profit from their effort. Hence, which social

cost is the largest – the one generated for patent law or the one that just prevents society

from having access to the new developments? Ignorance and lack of knowledge is one of

the biggest problems of society. It is important to create effective mechanisms that can

simplify the transmission of knowledge and creations because every mechanism that

delays the dissemination of knowledge results in social loss. Without patent law, we face

three possible scenarios. First, the inventor gives up his work. Second, the inventor

decides to hide the new innovations. Third, the inventor starts looking for contractual

means through which he can secure the transaction.

The first scenario is the worst because without the generation of new

developments, humanity will not make progress. Thus, society will be stuck until

someone decides to take the risk of creating without legal protection for his work. The

second option translates into secrecy, which does not allow people to take advantage of

new inventions because the inventor must keep all information under control and

undisclosed. According to the trade secret system, there are two ways to willfully obtain

a secret: reverse engineering and one’s own development. Therefore, people will take

28

more time to know how the invention works and to benefit from it. The third scenario is

even more costly because the creator would need to use complex and expensive

contractual forms and legal advice to protect the creation.

Consequently, without patent law there is a high risk that humanity would be

deprived of scientific progress. For this reason, the social loss is bigger without patent

law. This argument is supported by Posner’s affirmation:

The patent laws embody a somewhat similar economizing technique. In their absence inventors would expend substantial resources on preserving the secrecy of their innovations. Their efforts in this direction would generate indirect as well as direct social costs, by retarding the spread of knowledge. By providing a legal remedy against stealing inventions, the patent laws reduce the level of such expenditures in much the same way as the existence of legal penalties for theft reduces the level of resources that people devote to protecting their property from thieves.41

As we have stated above, it is important to determine the economic meaning of

the term “monopoly” in order to establish whether patent law causes monopolization that

affects the market. Nowadays, the term monopolization is understood as a practice that

reduces competition in the market through entry barriers, agreements, practices, and the

establishment of a dominant position that utilizes abusive means of control. Such

practices may be seen in antitrust laws and treaties. Therefore, for the purpose of this

chapter, we are going to use the definition established in two of the most important legal

bodies of Antitrust Law, the Art. 81, 82 of the EC Treaty and the Sherman Act §§1, 2.

According to the European Community, the term "antitrust" refers to competition rules on agreements and business practices which restrict competition and on abuse of dominant positions.

Agreements and concerted practices which may restrict competition are prohibited by the antitrust provisions of Article 81 of the Treaty establishing the European Community (EC Treaty). The prohibition applies to cartels (also referred to as "agreements") and relates to situations in which competing

29

businesses collude to restrict competition, by fixing prices, limiting production or sharing markets. Restrictive agreements may nonetheless be permitted if they generate more positive than negative effects (agreements improving production, product distribution, contributing to technical progress, etc.).

The Community antitrust rules also forbid abuse of a dominant position within a market (Article 82 of the EC Treaty). An undertaking is in a dominant position when it has a substantial proportion of a market and can evade normal competition on it. It is then forbidden to make abusive use of its dominance, e.g. by charging excessive or unduly low prices or practicing discrimination between commercial partners.42

The Sherman Act states that:

§ 1 Trusts, etc., in restraint of trade illegal; penalty

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.

§ 2 Monopolizing trade a felony; penalty

Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.43

As we have seen in the definitions stated above, one of the main objectives of

antitrust law is the promotion of competition in the market. Consequently, in order to

determine whether patent law restricts competition, it is important to define the relevant

market. In this respect, it is impossible to determine a uniform relevant market for all

patents because every patent will have its own market niche. In addition, we have to

30

consider that in order to obtain a patent, it is not necessary to prove that the invention is

able to be commercialized; one must only show that the patent works in the technical

sense. Thus, in many patents we are not even be able to talk about the market; hence no

economic monopoly can exist.

Kitch states that:

A patent is not usually a monopoly in the sense of price theory- an exclusive right to sell into a market with a downward sloping demand curve. The invention which is the subject of a patent claim is not the same as a product market. Many patents in fact turn out to be worthless because the product or process covered by their claims cannot be profitable exploited in competition with other available alternatives.44

In addition, another important issue to consider is whether or not every patent

creates a market power that can result in an abusive practice that affects consumers. As

stated above, not all patents are subjects of commerce. Therefore, we cannot generalize

that all patents have a dominant position. It is important to determine when an enterprise

has a dominant position and when it is abusing that position.

Dominant position starts with the autonomy of the will of the people, a principle

that allow persons to make agreements freely, bounded only by public order. Enterprises

that have a dominant position have more controls that those that do not. This is because

the market power of these entities makes it possible to intentionally affect the market in a

negative way, an action that many believe to be an abuse of the dominant position.

Dominant position allows the one in power to establish conditions in the market

without any consideration for rivals or consumers. This means that the enterprise can

arbitrarily fix the price because they are the only agent in the market. The dominant

position itself is not an evil. The problem appears when companies abuse their dominant

31

position through practices like price fixing, ties, horizontal agreements, and vertical

agreements. From one point of view, the ability to hold a dominant position is just the

consequence of efficiency. Generally, an agent in the market has dominant position

because of its industrial and commercial development, optimization of resources, and

well-trained employees. This efficiency allows the entity to make its own commercial

strategy without considering competitors or consumers.

To determine whether an agent has dominant position in the market, we have to

define the relevant market. To do that, we have to identify the territory market and the

product market. The territory market is the region in which the enterprise engages in

commerce. The product market is related to the product substitutes that are available. In

patent law, it is very common to find many substitutes for the same invention; therefore,

finding a dominant position in the economic sense would be difficult. “A patent holder

has no market power in any relevant sense if there are close substitutes for the patented

product. Similarly, a high market share indicated market power only if the market is

properly defined to include all reasonable substitutes for the product.”45

Therefore, patent law is not necessarily inconsistent with antitrust law by virtue

of the fact that the provision of property rights alone cannot restrict competition.

Nevertheless, it is true that some entities can use their patented products to generate and

abuse a dominant position. However, this is not a consequence of patent law. It is merely

a result of the management of the corporation and the market structure.

32

As a consequence of the aforementioned conditions, many economists have

concluded that patent law and antitrust law are complementary legal bodies. Gallini and

Trebilcock develop this theory as follows:

Intellectual property embodies information that is a public good: an inventor’s consumption of the information does not preclude others from consuming it and so, in the absence of property rights, an innovation will be imitated. In recognition of the public good nature of IP, patent law provides intellectual property rights (IPRs) in innovations; without IPRs, the incentive to invest in innovation would be diminished. The law also recognizes that the dynamic benefits from IPRs come at an allocative cost, in that the use of the innovation will be suboptimal: information is relatively costless to transmit, and its efficient price is therefore zero; exclusionary rights, on the other hand, enable the patentee to set a positive price for the information, thus reducing the output and flow of that information. By giving rights to an innovation that are exclusive but limited in scope and duration, an IPR awarded under patent law attempts to strike the appropriate balance between these competing concerns. Competition law impacts on the exercise of the innovator’s rights-and therefore on its reward-by restricting certain practices involving the IPR. (…) IP grant seeks to protect property rights, and, in so doing, limits competition. In contrast, competition law generally reflects the premise that consumer welfare is best served by removing impediments to competition. (…) There is, therefore, a growing willingness to restrict competition today in order to promote competition in new products and processes tomorrow. Thus IPRs and competition policy are now seen as complementary ways of achieving efficiency in a market economy.46

Nowadays, competition law and patent law are seen as complementary

instruments. As a result, some economists believe that it is impossible to conceive a

market without these two bodies of law. “Patent and competition policy are

complementary instruments for rewarding the innovator most efficiently: patent scope, by

preventing imitation; and antitrust, by affecting price through constrains on contracts for

transferring technology.”47

Doctor Nuno Pires de Carvalho has stated that in order to establish the

complementary nature of intellectual property rights and competition law, the economic

function of intellectual property should promote the creation and preservation of business

33

differentiation, thereby reducing transactional costs. In this respect, Doctor Carvalho

states that

[P]atent law and antitrust law are complementary legal tools that, from a macro-economic point of view, contribute to establish an efficient environment for the promotion of economic growth and wealth distribution. As explained above, intellectual property is about the protection of entrepreneurs differentials. And differentials only can be relevant in a scenario of rivalry (or the prospect thereof). Therefore, the role of enhancing and promoting the creation of differentials that intellectual property performs only can be achieved if rules that promote and preserve a competitive environment are in place and enforced.48

According to Pires de Carvalho, the common denominator of all types of

intellectual property is that they create a differentiation49 that gives a competitive

advantage in the market to its owner. For instance, the owner of a trademark has

developed a distinctive sign that encourages the consumer to choose his product because

of reputation, quality, and personal preference. Thus, the ownership of this trademark

gives the owner a commercial advantage.

In relation to the second objective, the reduction of transaction costs, Pires de

Carvalho notes that transaction costs “are higher or lower depending on the legal security

that involves the transaction….The higher the legal security that surrounds the

transaction, the less will be the precautions that the parties are requested to take, and

therefore fewer resources are to be allocated in the preparation and execution of the

transaction.”50 In his analysis, Dr. Carvalho explains that intellectual property (patent

law) ensures that the legal system protects the inventor/author through all the phases of

the negotiation. In addition, he affirms that “the second element of transaction costs that

private property rights reduce is enforcement. A clear definition of rights reduces the

34

costs of enforcement to the extent it ensures the parties that their rights may be coercively

imposed in the event there is no voluntary compliance.”51

Having stated the economic objectives of intellectual property, Dr. Carvalho concludes that:

Industrial property and antitrust law interoperate on two different levels:

(a) on the first level, industrial property needs antitrust law to operate effectively: on the one hand, without a competitive environment, industrial property is not able to achieve its primary function of differentiating business and their assets; on the other hand, without antitrust law, industrial property (like all other property rights) may be used in a manner that distorts competition and reduces rivalry;

(b) On a second level, antitrust needs industrial property: without a legal tool that fosters the creation and ensures the protection of differentiating assets, competition law is meaningless.52

Consequently, we can see that antitrust law and intellectual property rights (patent

law) need each other in order to operate effectively. As Dr. Carvalho said, industrial

property requires a market based on competition to exist. Otherwise, its presence makes

no sense. This is because monopolies do not need intellectual property rights in order to

gain market power and impose their conditions. Monopolies can obtain the reward from

their investments without the aid of a legal system because of their supremacy in the

market. In the same way, antitrust law cannot work adequately without intellectual

property because “industrial property ensures that firms have the necessary legal tools to

differentiate themselves from their rivals. Without industrial property there is no possible

rivalry between competitors nor may consumers exercise their discretion in making

choices.”53 In other words, in a market without different assets, competition law is

worthless because it cannot survive in a homologized environment.

In the same sense, Gallini and Trebilcock state that competition policy can

produce three effects on social surplus generated by innovation: “1. Provides ex ante

35

incentives to innovate; 2. Affects ex post incentives to transfer new technologies and

products; and 3. Promotes price competition in product markets that use the new products

and processes.”54 Therefore, competition law and industrial property are complementary.

This means that any healthy market should have appropriate schemes of intellectual

property and competition law, in order to avoid the existence of monopolies, abuse of

dominant position, free riding, and the harm caused by imitators who destroy trade.

Hence, the theory that intellectual property rights (patent law) cause

monopolization is a result of a misconception of the term monopoly and a

misunderstanding of the exclusive nature of intellectual property rights. The intellectual

property system (patent law) not only does not originate monopoly, but it is also a legal

instrument that promotes competition and that ensures a reduction of transaction costs,

allowing people to have access to new developments in all areas.

3. Intellectual Property Rights: How much of them do we need?

Intellectual property rights were mainly conceived as a legal tool to protect

inventors’/creators’ rights and to promote development. For this reason, most studies

focus on the legal effects of intellectual property. Nevertheless, people have recently

begun to analyze the economic impact of intellectual property. “Economics took notice

of the issue following the seminal work of Joseph Schumpeter, who argued that

innovation and technology were driving forces behind industrial growth and

development. (Schumpeter 1976)”55

Traditionally, economists and legal experts have suggested that the adoption of

strong intellectual property rights has a direct impact on economic growth. Gutterman

36

supports this theory, arguing that strong intellectual property standards result in benefits

such as “increased domestic research and development, increased flow of new products,

enhanced value of patent rights, increased inward investment and technology transfer,

improvements in the local knowledge base.”56

However, in a globalized world, these benefits overlap within a national and

international reality. In that sense, it is true that for many countries, particularly

developed countries, strong intellectual property systems have a positive effect on

economic growth. This is because stronger intellectual property regimes enhance the

value of intellectual property assets. Therefore, if we consider that most intellectual

property owners come from industrialized countries, these countries and their industries

would benefit from the intellectual property system. This is why the implementation of

the Agreement on Trade Related Aspects of Intellectual property Rights (TRIPS), which

sets forth the minimum standards for intellectual property rights, had a positive effect for

developed countries like the United States of America. For instance, “the biggest

exporter of proprietary rights and thus the largest recipient of royalties and license fees

has traditionally been the United States. Total recipients of royalties and license fees

increased from an average of $ 6.7 billion in 1980-82 to an average of $ 23.3 billion in

1993-1995.”57

However, the effects of a stronger intellectual property system in developing and

undeveloped countries are not so positive in the short term. The first effect of this is a

transfer of wealth from poor countries to the industrialized countries that own the

intellectual property rights.58 This is a logical result of such a system of access to new

products and technology that have intellectual property right protection. Consumers from

37

developing countries have to pay license fees or the real price of the patented or

copyrighted work to the intellectual property right holders.

In addition, benefits like the increase of research and development and technology

transfer are relative. First of all, to talk about research and development, we have to

consider whether developing countries have the capacity to participate in those activities.

We have to consider whether the human resource of the country in question have the

academic background and the expertise to work on new inventions. In addition, we have

to consider whether they have sufficient access to new technology to allow researchers or

inventors to develop new studies. Consequently, only a few developing countries would

have the resources to increase their research and development levels.

In addition, technology transfer59 has been acknowledged as one of the most

important effects of strong intellectual property rights because it helps to spread

knowledge. In this respect, “TRIPS recognizes in Article 7 that the transfer and

dissemination of technology is a fundamental objective of the global IPR system.

However, most provisions of TRIPS offer little direct assurance that there will be a rise in

ITT to poor countries.”60 Therefore, technology transfer as an effect of strong IPR

systems is only a theory because it depends on many factors that are closely related to the

actors within the developing country and to the intellectual property rights holders.

Actors in developing countries should try to learn and assimilate new technology and to

find an application that can be useful in accordance with their needs and interests. On the

other hand, the intellectual property owners should have the will to teach these people

how to use the available technology. Sometimes this is a really difficult task because this

38

technology gives them their competitive advantage, and therefore they are reluctant to

train others in how to use it. In this respect,

Many developing countries have complained for a long time that the flows of ITT through private channels are inadequate for their competitive and social needs. Implicitly the claim is that the volume (and quality) of technology transfers is well below optimal. In principle, this deficiency could be the result of failures in private markets for technology, failures in surrounding factor and product markets, and failures in public policy. All of these are important reasons for limited ITT, perhaps especially the latter two as they may establish an uninviting climate for FDI and licensing61

Furthermore, intellectual property rights (IPR) are linked with increased levels of

foreign direct investment (FDI). It is true that transnational corporations look to invest in

countries that provide the same IP protection that they can get in their countries.

Nevertheless, “existing research suggests that countries that strengthen their IPR regimes

are unlikely to expertise a sudden boost in flows of FDI.”62 This is because the level of

intellectual property right is not the only element that investors consider when they make

this decision. In the end, they will normally consider the general conditions of the

country with respect to issues such as political stability, legal security, and the overall

investment climate.

For this reason, some authors suggest that a “developing country never gains from

stronger intellectual property regimes until it is ready to engage in research and

development at the frontiers of knowledge.”63 Therefore, the welfare and economic

growth repercussions after strengthening of intellectual property rights would depend on

the characteristics and conditions of each country. It is important to note that intellectual

property rights are not a magic solution to transform a developing country into a

developed one. This system is a tool that must be used according to the potentialities,

39

capabilities, and resources of each nation. For this reason, “the significance of

intellectual property rights in economic activity differs across countries and depends (1)

on the amount of resources countries devote to creating intellectual assets as well as (2)

the amount of protected knowledge and information used in production and

consumption.”64

Consequently, before adopting legal IP standards, countries should know the

particular characteristics of their economy, industry, society, and political climate in

order to know whether they are close to the edge that divides developing from

industrialized nations. If they are close to the dividing line, they can obtain immediate

rewards by strengthening their IP system. If they are not close to that line, they should

pursue different intellectual property policies according to their capabilities and resources

in order to promote development, and then they should follow the international IPR

parameters.

4. Conclusion

In a discussion about patent law, Fritz Machlup concluded that “if we did not

have a patent system, it would be irresponsible on the basis of our present knowledge of

its economic consequences, to recommend instituting one. But since we have had a

patent system for a long time, it would be irresponsible, on the basis of our present

knowledge, to recommend abolishing it.”65

This is a strong judgment that can be applied to all fields of intellectual property

rights. The intellectual property system is not perfect, and for this reason it brings many

economic effects, such as the previously discussed social loss. Nevertheless, it is the best

40

and most effective system of promoting innovation and creativity that the world has

known. Therefore, advocating for a change of the intellectual property system, without

strong underlying empirical support for source, is not only irresponsible but is also

incongruent with the development of a globalized civilization.

Nowadays, when we are talking about intellectual property, we cannot look only

at our national system. We also have to see the treatment of this topic abroad. This is

because new technologies are one of the biggest subjects of intellectual property

protection. These kinds of inventions are transmitted faster and without consideration for

regions or boundaries. Therefore, legal system should contemplate international

standards that protect the title holder. In addition, the use and application of new

technologies make it possible that information can be disseminated more rapidly. Thus,

this information must have adequate legal protection in order to avoid imitators that can

take advantage of new conditions.

Intellectual property rights in general and patent law in particular are legal

instruments that facilitate the transfer of information. This results in the spread of

knowledge and information throughout the world. This usually increases the likelihood

of more inventions that utilize and improve upon new innovations. Therefore, this legal

system rewards the inventor/author’s effort, but at the same time, it promotes the

development of science and useful arts.

Through this chapter, we have seen the different justifications for the creation of

an intellectual property system, and it is my opinion that we cannot argue that only one of

these theories should be considered. All of these perceptions relating to intellectual

41

property justification should be analyzed as one, because they complement each other.

We cannot negate the fact that intellectual property rights are morally founded on the

reward of labor. We also cannot deny that intellectual property constitutes an incentive

to inventors/authors, and we cannot reject the fact that intellectual property results in the

creation of differentiating assets that promote competition. Intellectual property allocates

the costs of new inventions, determining who is going to pay and to whom. This system

was created to promote the development of sciences and arts, and it is impossible to close

our eyes and say that the intellectual property system does not work and that it should be

substituted by another mechanism that promotes the free utilization of public goods. We

cannot make such a claim because we have never formally applied a legal system that

used an alternative mechanism to treat intellectual property. Therefore, it would be

reckless to abolish or ignore the system that the world has been using for centuries

without having a proven alternative that shows significant advantages.

Nevertheless, this does not mean that the intellectual property system should be

untouchable. The intellectual property system should be improved in order to reach a

better allocation of costs, to promote the efficient transfer of technology, to create a

policy that allows creators and society to maximize their welfare, and to generate a

system in which the differentiation of products caused by intellectual property results in a

competitive market in which consumers obtain more benefits.

Moreover, it is important to consider that the major part of world uses an

intellectual property system. Therefore, in order to protect our nationals and to

incentivize local inventors/authors to continue with their intellectual labor, every country

42

should promote and improve an intellectual property system to provide clear rights and

efficient enforcement that will reduce transaction costs on these assets.

It is crucial for nations and policy makers to eliminate the ghosts around

intellectual property and to rid themselves of the misconception that intellectual property

creates monopolization. Policy makers should understand intellectual property law and

competition law as mechanisms to increase community welfare. Therefore, before

issuing any rule or modification to the intellectual property system, they have the

responsibility to study the legal, economic, and social impact of these rights according to

their national conditions, but always with an eye toward the international environment.

1 Merges, Menell &Lemley, Intellectual Property in the New Technological Age 1, (Aspen Publishers, New York-USA, 2006). 2 Ruth Towse & Rudi Holzhauer, The Economics of Intellectual Property ix, Vol I, (Edward Elgar Publishing Limited, Cheltenham-UK, 2002). 3 WIPO, WIPO Intellectual Property Handbook: Policy, Law and Use3, http://www.wipo.int/about-ip/en/iprm/ 4 Nuno Pires de Carvalho, The TRIPS Regime of Antitrust and Undisclosed Information 4, (Kluwer Law International, The Netherlands, 2008.) 5 When we state that intellectual property rights protect human intellectual work, we do not want to say that all ideas are protected by these kinds of rights. The only ideas protected by this system are those which accomplish the requirements established by law. As Doctor Carvalho says: “ideas are protected by intellectual property only to the extent they differentiate, they distinguish one’s assets from others’ assets, businesses from other business, creators from other creators, merchants from other merchants, merchant’s goods from the other merchant’s goods”. Id. at 9. 6 Id. at 1-13. 7 Explaining scarcity, Ejan Mackaay notes: “Property rights are a response of scarcity. Scarcity manifests itself where people envisage different uses of a resource that are incompatibles. (…) Scarcity imposes a choice among alternative uses, creating conflicts among those who advocate those alternatives. Conflict can be solved in many ways, some of them violent. One alternative is to award the right to decide to one party or to divide the resource and give each party such exclusive right on a part: exclusive rights or property rights.” Ejan Mackaay, Economic Incentives in Markets for Information and Innovation, 13 Harv JLPP 867, 873-74 (1990) (discussing scarcity). 8 See Ruth Towse, supra note 2, at ix.

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9 John Locke, Two treatises on Government 1680-1690, chapter 5, http://www.lonang.com/exlibris/locke/ 10 Wendy J. Gordon, A Property Right in Self-Expression: Equality and Individualism in the Natural Law of Intellectual Property, 102 Yale L.J. 1533, 1541-42 (1993). 11 Id at 1562-63. 12 See Nuno Pires de Carvalho, supra note 4, at 26. 13 See Wendy J. Gordon, supra note 10, at 1544,1547-48. 14 Fritz Machlup & Edith Penrose, The Patent Controversy in the Nineteenth Century, in The Economics of Intellectual Property 24, Vol II, (Ruth Towse & Rudi Holzhauer eds., Edward Elgar Publishing Limited, Cheltenham-UK, 2002 . 15 “In economics, collective bargaining, psychology, and political science, "free riders" are those who consume more than their fair share of a public resource, or shoulder less than a fair share of the costs of its production. Free riding is usually considered to be an economic "problem" only when it leads to the non-production or under-production of a public good (and thus to Pareto inefficiency), or when it leads to the excessive use of a common property resource.” http://en.wikipedia.org/wiki/Free_rider_problem. 16 International News Service v. Associated Press, 248 U.S. 215 (1918). 17 See Nuno Pires de Carvalho, supra note 4, at 11-12. 18 Id. 19 Scott Kieff, Pauline Newman, Herbert Schwartz &Henry Smith, Principles of Patent Law 49, (Foundation Press, New York, 2004). 20 Jeremy Bentham, An Introduction to the Principles of Morals and Legislation ch.1, §3, p.12, (J.H. Burns and H.L.A. Hart eds., Oxford: Clarendon Press, 1907) (1780). 21 US Constitution shows a utilitarian justification for the creation of Intellectual property rights, that way it clearly In Article I, section 8, that: Congress shall have power . . . To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. 22 See Scott Kieff, Pauline Newman, Herbert Schwartz &Henry Smith , supra note 19, at50. 23 See Merges, Menell &Lemley, supra note 1, at 13. 24 Gregory C. Ellis, Emerging Biotechnologies Demand Defeat of Proposed Legislation That Attempts to Ban Gene Patents, XV RICH. J.L.& TECH. 1, 11 (2008), http://law.richmond.edu/jolt/v15i1/article1.pdf. 25 Neil Weinstock Netanel, Copyright and a Democratic Civil Society, 106 Yale L.J. 283, 347 (1996). 26 In many economic areas welfare and utility are synonyms. Nevertheless, in this case we use welfare to show that the benefits are going to be for all the actors in the market, it means inventor/author and society. The term utility here is conceived to show that the only that is benefited is the owner of the intellectual property right.

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27 Tom G. Palmer, Intellectual Property: A Non-Poserian Law and Economics Approach, in The Economics of Intellectual Property 52, Vol I, (Ruth Towse & Rudi Holzhauer eds., Edward Elgar Publishing Limited, Cheltenham-UK, 2002). 28 See Nuno Pires de Carvalho, supra note 4, at 15-16. 29 Id. at 16. 30 Landes & Posner, The Economic Structure of Intellectual Property 12, (The Belknap Press of Harvard University Press, Cambridge, Massachusetts, USA, 2003). 31 Id at 13. 32 Id at 14. 33 Id. 34 Id at 17. 35 Id at 18. 36 Id at 20. 37 See Nuno Pires de Carvalho, supra note 4, at 1. 38 Black’s Law Dictionary 712 (9th ed.2009). 39 Edmund W. Kitch (1998), Patents, in Peter Newman (ed.), The New Palgrave Dictionary of Economics and the Law14, in The Economics of Intellectual Property 4, Volume II, (Ruth Towse &Rudi Holzhauer eds., Edward Elgar Publishing Limited, Cheltenham-UK, 2002). 40 Richard A. Posner, The Social Cost of Monopoly and Regulation, in The Economics of Intellectual Property 3, Vol IV, (Ruth Towse and Rudi Holzhauer eds., Edward Elgar Publishing Limited, Cheltenham-UK, 2002).

41 Id. at 21. 42 European Union website: http://europa.eu/scadplus/glossary/antitrust_en.htm 43 Sherman Act, § 1, 2. 44 See Edmund W. Kitch, supra note 39, at 4. 45 Jefferson Parish Hospital Dist. No.2 v, Hyde, 466 U.S. 2, 38 n.7 (1984). 46 Nancy T. Gallini &Michael J. Trebilcock (1998), Intellectual Property Rights and Competition Policy: A Framework for the Analysis of Economic and Legal Issues, in Robert D. Anderson and Nancy T. Gallini, Competition Policy and Intellectual property Rights in the Knowledge-Based Economy, , in The Economics of Intellectual Property 24-5, Vol IV, (Ruth Towse & Rudi Holzhauer eds., Edward Elgar Publishing Limited, Cheltenham-UK, 2002). 47 Id at 20-7. 48 See Nuno Pires de Carvalho, supra note 4, at 41.

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49Id. at 4, 21. 50 Id. at 18. 51 Id at 20. 52 Id at 31. 53 Id at 32. 54 See Nancy T. Gallini & Michael J. Trebilcock, supra note 46, at 29. 55 Robert L. & Ostergard Jr., The development dilemma 1,( Scholarly Publishing, New York City, 2003). 56 Alan S. Gutterman, The North-South Debate Regarding the Protection of Intellectual Property Rights, 28 Wake Forest L.Rev. 89, 120 (1993). 57 Carlos Primo Braga, Carsten Fink &Claudia Paz Sepulveda, Intellectual Property Rights and Economic Development 18, (The World Bank, Washington D.C., 2000). 58 Original idea from Frederick M. Abbott, Public Policy and Global Technological Integration: An introduction in Public Policy and Global Technological Integration 7-8, (Frederick M. Abbot ed., Wolters Kluwer Law & Business, 1997). 59“Technology transfer refers to any process by which one party gains access to a second party's information and successfully learns and absorbs it into his production function.” Keith E. Maskus, Encouraging International Technology Transfer 9, (Keith E. Maskus ed., UNCTAD-ICTSD, Switzerland, 2004). 60 Id. at 3. 61 Id. at 15. 62 Carsten Fink & Keith E. Maskus, Intellectual Property and Development 8, (World Bank and Oxford University Press, Washington D.C., 2005). 63 Sumner J. La Croix, The Rise of Global Intellectual Property Rights and their impact on Asia, in Asia Pacific Issues 4, (Analysis from the East-West Center Series, Nov. 23, 1995). 64 See Carlos Primo Braga, Carsten Fink &Claudia Paz Sepulveda, supra note 57, at12. 65 See Edmund W. Kitch, supra note 39, at 4.

46

CHAPTER II

UNDERSTANDING TRADITIONAL KNOWLEDGE

1. Introduction: Sociological concerns related to biodiversity and traditional

knowledge protection

The protection and management of biodiversity, genetic resources, and traditional

knowledge is a crucial issue for Ecuador, the Andes, and Amazonian countries in general.

That is because these countries are the world’s reserve of biodiversity, but at the same

time they have not developed an efficient method to protect and utilize these resources.

Presently, the advance of new technologies has made that traditional knowledge and

biodiversity valuable assets within the economic world. Therefore, its protection is

crucial for these countries.

As a result, biodiversity and traditional knowledge have become controversial

topics in the realm of intellectual property protection. It is important to study the impact

of intellectual property rights applied to biodiversity and traditional knowledge because

this topic goes beyond economic concerns and is closely related to people. Members of

indigenous communities have developed their lives, cultures, and traditions through the

use of biodiversity. These communities have elaborated a sacred knowledge around

nature and its elements. As a consequence, biodiversity and traditional knowledge

protection involves a deep conflict between economical and cultural interests.

...[C]onservation of the biological diversity of tropical forest and the survival of the indigenous people who live there are indivisible. Without the land and its resources that are the central element in their physical and spiritual existence, indigenous communities will suffer a systems failure consequent upon the loss of

47

language, knowledge, institutions and sacred beliefs.1

This statement demonstrates the relationship between the environment and

indigenous communities. Sometimes it is difficult for us to understand how people prefer

to protect biodiversity instead of taking advantage of its economic benefits. This

misunderstanding comes about because we do not belong to this culture. For indigenous

people, biodiversity is not a tool, but rather a sacred element. Indigenous communities

based their culture, institutions, power structure, values, and life on the biodiversity that

surrounds them. All the essence of these native communities is linked to biodiversity.

Through time, indigenous people have taken care of nature and learned how to

make use of biodiversity resources. As a result, many applications of genetic resources

developed by indigenous communities are now used in industries such as medicine,

pharmaceuticals, cosmetics and agriculture. The problem is that these genetic resources

and traditional knowledge carry many economic interests that have led to the violation of

indigenous peoples’ rights through the misappropriation of these resources. The proven economic benefits of biodiversity, both locally and globally, in the areas of medicine and agriculture have been noted, (…) Many of the uses of wild genetic resources employed by indigenous people constitute, in economic terms, a store of knowledge and therefore a public good. Over generations, indigenous people have helped informally to conserve, nurture and improve species by using methods of cultivation and husbandry calculated to halt the erosion of genetic diversity.2

This chapter has four main purposes. The first is to examine what can be

considered traditional knowledge, its characteristics, and categories. The second

objective is to determine what the current threats to traditional knowledge are and how

they are perceived by indigenous communities. The third objective is to explain the

rationale behind the protection of traditional knowledge. The final objective is to define

48

the legal status of traditional knowledge in Ecuador.

2. What is traditional knowledge?

Since the origin of the human race, communities have developed schemes of

communication and practices that are a manifestation of their culture, beliefs, and values.

This integrated pattern of human knowledge has passed from generation to generation,

resulting in a dynamic system of evolving acquaintance. This traditional knowledge is

more evident in indigenous communities. Indigenous knowledge is a subset of the larger

body of traditional knowledge; nevertheless, for the purposes of this study we will

consider them to be the same. “Indeed, the primary distinction between traditional and

indigenous knowledge pertains to the holders rather than the knowledge per se.”3

Indigenous communities have learned to utilize their wisdom about nature within

a holistic process. The holistic approach is essential for traditional knowledge because it

incorporates every element of environment, society, and world as an integrated system

that cannot be explained without the interaction of every element in equal parts. This

whole system is the essence of the community’s rational thinking, religious beliefs, and

social values.

Therefore, definitions of traditional knowledge may be misleading because this

knowledge differs according to the community. Moreover, the idea of definition is a

Western approach that not always is shared by indigenous scholars, who believe that

there is no satisfactory definition of indigenous traditional knowledge.4 Nevertheless, we

can state some definitions of traditional knowledge that will help us to define the scope of

our study.

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Indigenous knowledge5 as a concept concerns information, understanding, and knowledge that reflect symbiotic relationships between individuals, communities, generations, the physical environment, and other living creatures, and the spiritual relationships of a people. Indigenous knowledge involves ecosystems and other factors change but remains grounded in the more enduring aspects of identity, culture, generations and spirituality.6 Traditional knowledge in the broad sense can be defined as: Everything that belongs to the distinct identity of a people and which is theirs to share, if they wish, with other people. It includes all of those things which contemporary international law regards as the creative production of human thought and craftsmanship, such as songs, music, dances, literature, artworks, scientific research and knowledge. It also includes inheritance from the past and from the nature, such as human remains, the nature features of the landscape, and naturally occurring species of plants and animals with which a people has long been connected.7 TK comprises two main (and to some extent, distinct) categories: on the one hand, TK consists of knowledge itself, that is, ideas developed by traditional communities and indigenous peoples, in a traditional and informal way, as a response to the needs imposed by their physical and cultural environments and that serve as means of cultural identification. This is what we may call “TK stricto sensu”, and it contrasts with ‘expressions of TK’, also named ‘expressions of folklore’ or ‘expressions of traditional culture’, such as verbal expressions (tales, poetry, riddles), musical expressions (songs and instrumental music), expressions by action or performances (dances, plays and artistic forms or rituals), whether or not reduced to a material form, and tangible expressions (productions of art, such as drawings, paintings, carvings), musical instruments and architectural forms. The two categories form TK lato sensu8.

The World Intellectual Property Organization (WIPO) established that to protect

traditional knowledge under a legal framework, it is not necessary to have an exhaustive

definition of it. It happens because traditional knowledge covers an enormous variety of

intellectual traditions, knowledge and cultural heritage that identifies the vast number of

indigenous communities around the world. Therefore, it is quite difficult to develop a

single definition that embraces all cultures knowledge without losing its essence.

No single definition would fully do justice to the diverse forms of knowledge that are held by traditional communities; and no form of legal protection system can

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replace the complex social and legal systems that sustain TK within the original communities. One form of protection, but one form only, is the application of laws to prevent unauthorized or inappropriate use of TK by third parties beyond the traditional circle.9

Therefore, the crucial concern is to state the essential elements and characteristics

of the traditional knowledge in question, in order to protect it against misappropriation

and misuse beyond its traditional context10 rather than to define the diverse and holistic

conceptions of traditional knowledge. According to WIPO:

Traditional knowledge refers to the content or substance of knowledge resulting from intellectual activity in a traditional context, and includes the know-how, skills, innovations, practices and learning that form part of traditional knowledge systems, and knowledge embodying traditional lifestyles of indigenous and local communities, or contained in codified knowledge systems passed between generations. It is not limited to any specific technical field, and may include agricultural, environmental and medicinal knowledge, and knowledge associated with genetic resources.11

Under the approach stated above, we can conclude that the general framework of

traditional knowledge can be constituted by those traditional elements that distinguish

one community from another. This traditional knowledge is the base of the indigenous

community because it reflects the community’s own interpretation of the cosmos. In that

way, traditional knowledge can be understood as a system of ideas, information, and

practices that result from the spiritual meaning behind the interaction of people and

nature.

It is important to note that members of indigenous communities have developed

their lives around the environment for centuries. As a consequence, nature becomes their

God and their source of life that provides them with resources for the satisfaction of the

community’s nutrition and health needs. Therefore, indigenous people have developed a

fund of cultural and scientific knowledge related to the use and application of

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biodiversity in the cure of illness and human diseases, as well as knowledge about the

generation of food through the domestication of native plants. Also, we have to consider

that indigenous cultures reflect a deep respect for the environment and that they use these

resources under mythological parameters that involve the power of the nature and its

relation with human beings within a holy structure.12 a. Characteristics of Traditional Knowledge13

Traditional knowledge is not an easy term to define. However, because it is a

product of the human intellect, it has general parameters that are common and universal

among the communities of the world. The purpose of this section is to identify the main

characteristics of traditional knowledge, since these characteristics are crucial to the

determination of the subject matter in question during our investigation.

Traditional Knowledge (TK) is dynamic and evolutive. It occurs because it is the

response of the community to environmental conditions. As a result, TK is

always changing and adapting to the new circumstances of the group.

TK in general terms can be considered as a communitarian creation because it

reflects the beliefs and moral standards of a community. Consequently, all the

developments related to medicine, agriculture, or environment embrace the

philosophy of that specific group. In that way, traditional knowledge constitutes

an element that identifies and distinguishes the community from other groups.

Sometimes, the indigenous community does not share the idea of authorship or

ownership because they as a whole are the holders of that TK. However, it does

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not mean that individuals cannot create and contribute to TK. Thus, individuals

can be considered as traditional knowledge holders too.

TK is denominated as such because it is the knowledge that results from the

identity, rules, values, and parameters of a defined community. Therefore,

“traditional” does not mean “old,” it is just a way to reflect the process of

generation of knowledge.

TK is spontaneous. This means that it does not have any formal or scientific

mechanism to be generated. TK appears as the natural answer for a determined

situation of the community.

TK is holistic. TK embraces as a whole the natural and supernatural world; the

physical and the spiritual elements; the people, plants, animals, and natural

phenomena. In that way, all the elements are interpreted and explained through

the interaction between each other.

TK is collective. TK is passed from generation to generation. Therefore, the

foundations, contributions and modifications made by other people of the

community are still alive in the current TK.

TK is mainly oral, customary, pragmatic, and experimental. It is learned through

observation and practical experimentation in daily life.

TK constitutes a show of identity. TK is the most pure manifestation of what the

indigenous community is. Consequently, it is an element of cultural identification

and self acceptance. TK allows people from the community to realize who they

are and to establish their position in relation to the community and the cosmos.

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b. Types of Traditional Knowledge

Traditional knowledge as a response of the human being to the environment, and

it involves nature in its manifestations and developments. Therefore, the biodiversity that

surrounds the indigenous community is related to the traditional knowledge generated by

that group. For this reason, we can state that genetic resources can be considered a

tangible element of TK14. This component is essential to the determination of the types

of TK that have been developed around it. In that way, we can consider: i. traditional

medicinal knowledge, ii. traditional agricultural knowledge, and iii. traditional

environmental knowledge.

i. Traditional Medicinal Knowledge

This type of traditional knowledge focuses on the use and application that

indigenous communities make of plant genetic resources for curative, therapeutic, or

medicinal purposes. The World Health Organization has defines Traditional Medicinal

Knowledge as:

Traditional medicine (TM) refers to the knowledge, skills and practices based on the theories, beliefs and experiences indigenous to different cultures, used in the maintenance of health and in the prevention, diagnosis, improvement or treatment of physical and mental illness. Traditional medicine covers a wide variety of therapies and practices which vary from country to country and region to region. In some countries, it is referred to as "alternative" or "complementary" medicine (CAM).15

The holistic nature of traditional knowledge is clearly reflected in this field,

because traditional medicinal knowledge combines and balances the mental, spiritual,

social, physical, and natural dimensions in order to develop efficient mechanisms and

compounds to treat illness. For instance, the Ayurvedic system is one of the oldest

medical systems and has been considered a referral for modern medicine. However, it

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shows that traditional medicine is a response of the interaction of the human being,

nature, spiritual, and supernatural world.

Ayurveda is a comprehensive medical system to which modern medical science owes a great deal. There are about seventy books of Ayurvedic pharmacopoeia containing about eight thousand recipes. (...) Today the practice of Ayurvedic medicine includes such specialties identified in modern medicine as internal medicine, surgery, pediatrics, toxicology, eugenics, and geriatrics, among others. (...) Ayurveda emphasizes the use of plants, in addition to other materials, in the treatment of pathological conditions. (...) In Ayurvedic tradition, we see not only the centrality of plants in therapy but also the connection between traditional therapy, religion, and cosmological order.16

This strong interoperability between humans, environment, and spiritual world

shows that traditional medicinal knowledge holders believe diseases to be the result of an

irregular activity that breaks the balance between the human being and the other

dimensions. Therefore, it is crucial to find equilibrium between our human nature and

the cosmos in order to have a healthy life. “Indigenous use of plants for therapeutic

purposes involves complex religion-cultural, social and metaphysical experience. It

brings to the fore different conceptions of health and sickness as well as the role of

associated belief systems.”17

Traditional medicinal knowledge holds that the only way to find this equilibrium

is to show respect for nature through an adequate management of the resources that it

provides for our survival. For this reason, indigenous communities aspire to take care of

the environment and use the fruits of the earth without harming it. These communities

hold biodiversity and animals to be sacred, because they constitute entities and creatures

derived from a supernatural being.

Traditional medicinal knowledge is one of the fields in which we find a close

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relationship between people and the use of genetic resources for health treatments. Since

the beginning of society, human beings have used plants to make compounds to relieve or

cure illness or diseases. For indigenous communities, health starts with good nutrition

because food is considered to be medicine. In that way, some parts of plants were used

for nourishment and others for medicinal purposes. To this respect, Virgil Vogel

explains the close relationship between food and health in the following example “maize,

or corn, the most widely cultivated plant among aborigines of the New World, was not

only a major part of the food supply for Indians from Peru to the upper Missouri; both the

grain and other parts of the plant were also an important element in the pharmacopoeia of

these tribes.”18

Through time, some societies have lost the practice of creating knowledge around

genetic resources because of the introduction of new beliefs and globalization.

Nevertheless, indigenous communities have continued developing this kind of knowledge

to satisfy community health requirements.

Indigenous communities around the world have developed informal mechanisms

to classify plants according to their properties. Shepard observed during a study in Peru

with the Matsigenka and Yora communities that this population observe, examine, slash,

sniff, and taste plants in order to identify medicinal compounds. In that way, these

communities have informally classified plant properties according to specific criteria:

Medicinal plant properties can be classified according to the main sensory modes involved: taste, detection of irritation, odor, and visual/ tactile properties. The Matsigenka place a strong emphasis on taste (22% of collections) and irritation (25%) in assessing the efficacy of medicinal plants, whereas the Yora rarely note these aspects (less than 5% each). Both groups place strong emphasis on odor (31% for the Matsigenka, 38% for the Yora). The Yora pay more attention to visual and tactile properties (32%) than do the Matsigenka (13%). Finally, there

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is another category in which the plant’s medicinal value is an inherent property, learned by rote and not directly assessable through the senses. (...) More than just arbitrary cues for identifying plant species, sensory properties are crucial to understanding how each cultural group perceives the efficacious property of medicines, what Nina Etkin (1988a) calls the “cultural construction of efficacy”19 As we can appreciate in the Matsigenka and Yora communities in Peru, the way

that indigenous people acquire and transmit traditional medicinal knowledge is different

and varies according to community values and perception of plants properties. For this

reason, the Matsigenka community gives more attention to taste and irritation, while the

Yora gives more attention to visual and tactile properties. As a result, traditional

medicinal knowledge does not have a standard that is shared by all indigenous

communities around the world. Therefore, legislation to protect traditional medicinal

knowledge should not consider specific parameters, but rather general rules that can be

share by all indigenous communities.

Another important point about the Matsigenka and Yora communities is that this

selection process is based on sensory modes. For this reason, traditional medicinal

knowledge can be transmitted orally because the old people in the community teach the

young generations through the daily activity. It is easier to preserve the knowledge

because the young people are experimenting with the odor, taste, and texture of each

plant, and that creates an automatic mechanism that saves the information in their

memory. In this respect Seremetakis states that:

The senses are meaning-generating apparatuses that operate beyond consciousness and intention. The interpretation of and through the senses becomes a recovery of truth as collective, material experience. The senses are also implicated in historical interpretation as witnesses or record-keepers of material experience (...) There is a corporate communication between the body and things, the person and the world, which point to the perceptual construction of truth as

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the involuntary disclosure of meaning through the senses.(... ) The memory of the senses speaks to a reception theory of material culture, from both the different perspectives of interacting, perceiving subjects and that of the perceptible talking object (formed from a constellation of human acts). Meaning-endowed objects constitute indigenous, regional nets of sensory receipt. Sediments of sensory memory stratify the artifact as depth, forming a diachronic volume, from which all historical matter, valued and devalued, may see as expressive material culture.20 In addition, that mechanism can also be used with the evolving aspect of

traditional medicinal knowledge, because according to the needs of the community,

people can develop new cures based on genetic resources. Thus, the information

recorded in the memory can help to adapt new genetic resources to the upcoming

requirements of the community.

Around the world, some indigenous communities have discovered plants’

medicinal uses for the treatment of illness and health. For instance, considering the use

of herbs in traditional medicine to treat gynecological conditions, “a compendium of

Chinese material medical has about 228 preparations described with applications related

to fertility control; 97 as emmenagouges, 60 contraindicated in pregnancy, 44 as uterine

stimulants and 27 as abortifacients.”21 In Ecuador, the use of Cinchona has been broadly

extended for the local and foreign use for the treatment of malaria. In the Ecuadorian

case, indigenous communities used to extract the quinine from the Cinchona bark in order

to obtain the compound to treat malaria.

In Ecuador, indigenous communities use not only plants for the treatment of

illness, but also animals. One example is the case of the Epipedobates tricolor frog,

which is an endemic species from Ecuador and the north of Peru. Indigenous people can

extract a strong analgesic from this frog. This compound is so strong that it can replace

the morphine because it does not lead to addiction.22

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In addition, some of the plants that have been used in traditional medicine by

indigenous communities in the tropics, including Ecuador, are represented in the chart

below23:

Plant common name

Plant Family Vegetal Specie Medical Use Compound

Arbol de corcho (Cork Tree)

Solanaceae Duboisia spp. Antispasmodic Buscapine

Cafe (Coffee) Rubiaceae Coffea spp. Analgesic Caffeine

Coca Eryrhroxylaceae Erythroxylum coca Analgesic Cocaine

Opium Papaveraceae Papaver somniferum

Analgesic and Antitussive

Codeine


Analgesic Corfina

Nuez Vomica (Pecan nut)

Loganiaceae Strychnos nux-vomica

Insecticide Strychnine


Antitussive Noscapine

Cascarilla Rubiaceae Chinchona pubescens

Anti-malaria and Antipyretic

Quinine

Indo-jyaboku Apocynaceae Rauwolfia serpentine

Hypotensive and tranquillizer

Reserpina

Tea Theaceae Camellia sinensis Bronchodilator diuretic and stimulant

Teofilina

Ulmaria Rosaceae Filipendula ulmaria

Pain and inflammation reliever

Aspirin

Chamico Solanaceae Datura stramoniumMotor illness Scopolamine

Ipecacuanha Rubiaceae Psychotria ipecacuanha

Induce vomit Ipecacuanha

Jaborandi Rutaceae Pilocarpus jaborandi

Reduce the intra-ocular pressure

Pilocarpine

Ma huang Ephedraceae Ephedra sinica Reduce the nasal congestion

Seudoefredina

Vinca rosa de Madagascar (Madagascar Rose)

Apocynaceae Catharanthus roseus

Treatment of Hodking disease

Vinblastina

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As we can see through time and around the world, plants have been used as medicine

for the treatment of different kind of illness. Traditional medicinal knowledge constitutes

an important source of new compounds, based on biodiversity, to combat diseases.

Indigenous communities have already developed a strong knowledge about the use,

application, and effects of biodiversity in the medical field.

Therefore, it is crucial to build a strong legal framework that protects this

traditional medicinal knowledge and its holders. To reach this goal, it is important to

understand how indigenous communities think and what their position is with respect to

this topic. The inclusion of indigenous communities in the discussion and the

development of a legal protection for traditional medicinal knowledge is the only way to

obtain a fair regulation. Respect for the traditions of indigenous communities is the best

path to access to their knowledge in order to improve health conditions and develop new

drugs to fight illness around the world.

1. The role of the Shaman in Traditional Medicinal Knowledge

Indigenous communities consider traditional medicinal knowledge to be a

backbone of their society because it is one of the areas in which the world that we see is

mixed with the supernatural world. For this reason, traditional medicinal knowledge is

utilized by the members of the community in different levels. It is possible to identify a

kind of traditional medicinal knowledge that is shared for all the community and that is

related to the use of some plants to the cure of small diseases – for instance, the use of

oregano to treat the stomach ache. However, for the treatment of serious diseases or the

development of new compounds, only a few members of the community hold the

necessary skills, because this kind of knowledge is sacred and involves a close

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interrelation between this world and the spiritual world. This member of the community

is known as a Shaman.

Talking about the Native Californian groups, Lowell states that:

(...) there were clearly separate degrees of medical knowledge, practice, and roles available to individuals. There was a common folk medicine available to anyone- the treatment of usual maladies by simple techniques of therapy ranging from the use of herbs, sweating, massage, and bed rest to magical forms privately and/or commonly owned. More specialized forms existed, however; they increased in their degree of specialization as shamanic or doctoring roles were more associated with resources of supernatural power and formal education.24

It is interesting to appreciate that this specialization of knowledge among the

members of the Native Californian groups is a consistent attribute of traditional

knowledge that can be observed in other indigenous communities. In fact, because the

access and use of knowledge constitutes a source of power, it has been hierarchically

stratified in all societies. Consequently, the shaman is an individual who leads the

community in its politics, society, medicine, and religion. Usually, the shaman comes

from a family of shamans, like a dynasty. In a few cases, the shaman does not come from

any specific family, but is a person that has been chosen by a previous shaman to be

taught all the knowledge and become the new patriarch of the community.25

The role of the shaman within the indigenous community is extremely important.

Shaman is the advisor to the population, as well as the one who is wise enough to lead his

people and cure all diseases. One of the principal attributes of the shaman is his ability to

communicate with the supernatural world, with gods, spirits, and the past. For this

reason, the shaman is considered to be the connection with the ancestors of the

community. The shaman not only keeps the knowledge from generation to generation,

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but he also improves and develops new knowledge to benefit his community. In addition,

the shaman takes “magic flights” into the supernatural world and takes the orders from

the spirits to guide the people and cure any kind of illness. The shaman is above all a connecting figure, bridging several worlds for his people, traveling between this world, the underworld, and the heavens. He transforms himself into an animal and talk with ghosts, the dead, the deities, the ancestors. He dies and revives. He brings back knowledge from the shadow realm, thus linking his people to the spirits and places which were once mythically accessible to all.26

For us, the shaman can be understood as a mythical character or someone unreal.

This is because we do not understand that inner cultural world, beliefs, or traditions.

Indigenous people trust the shaman, and he is the healer of the community. Through

centuries, the shaman’s rituals plus the use of compounds made of plants have saved the

lived of thousands of indigenous people. For us it is difficult to understand the role of

magic and the supernatural world; but these are the convictions that made traditional

medicinal knowledge so valuable within the community and, now, in the larger world.

ii. Traditional Agricultural Knowledge

Since ancient times, humans have domesticated wild crops in order to satisfy their

food requirements. Traditional agricultural knowledge refers to this type of knowledge

related to the management of seeds for food and goods production in accordance with

crop environments. Therefore, this traditional agricultural knowledge is possessed by

farmers that use their ancestors’ knowledge in order to handle different types of crops and

maintain each species and its varieties. This agricultural practice starts with crop

selection. This is one of the more important steps because it determines which product is

going to be cultivated.

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Darwin laid out the basic framework of crop evolution that distinguishes two types of human selection: methodical and unconscious. According to Darwin, unconscious selection is inadvertent and arises when people generally favor a superior cultivar without specific selection for individual traits. Methodical, or conscious selection, which is methodical and specific, is the more important contribution of humans to the evolution of crops. For the vast majority of crop evolution, conscious selection has been decentralized and managed by farmers.27

Indigenous communities have developed extensive practices regarding the

management of seeds and agricultural production. It is important to consider that the

holistic attribute of traditional knowledge is evident in this field, where interaction

between the human being and the earth determines the time and the products that are

going to be cultivated.

In India, where Ayurveda is one of the bodies of traditional agricultural

knowledge (TAK), TAK is vested with spiritual and supernatural character. The

community believes that everything exists for a purpose in the universe and that all the

elements have to interact to accomplish their mission. Moreover, the strong spiritual

vision means that all practices are marked and related to the interoperation with the

deities. As a result, farmers choose their crops types based on environmental conditions,

and women perform an important role in the seed conservation process.

Farmers choose crops types or varieties depending on soil depths, water holding capacity, slope and drainage and by observing their interactions with each other. The combinations of different agro climatic conditions such as low rainfall and high temperatures coupled with different soil conditions gave rise to various crop combinations and crop rotations. (...) Traditional agriculture generally ensured food security and preserved genetic diversity. (...) Women play a major role in conserving seed at the farm level. It is women who decide the amount of seeds that has to be preserved, the variety, and the preservations methods necessary. Women are the ones who decide when change is required and that seed has to be borrowed and exchanged. Because woman share the sacred power of Shakti

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(female power of reproduction).28

The indigenous Andean communities from Ecuador, Peru, and Bolivia share a

pantheistic 'cosmovision', which means that mountains, rivers, lakes, and trees are

considered sacred. For these indigenous communities, the balance between our world

and the supernatural world can be appreciated in nature. In that way, if a natural disaster

occurs, it is because the gods are angry over human behavior. The same thing is true

with the agriculture. If there is not enough rain to irrigate the sown field, it means that

the gods are not happy, so a ritual is required to re-establish the balance.

One important notion around which Andean native communities develop their lives

and values is the concept of the Pacha. Pacha embraces the idea of totality like eternal and dynamic space-time concept. (...) Within pacha, three spheres of life flow together and interact: Pachakamak- Spiritual Life; Pachamama- Material Life; Pachankamachana- Social Life. (...) Pachamama refers to all forces, as a whole, that make life here on earth possible expressing themselves in all the aspects related to material life, in particular.29

Within the agricultural practices, the Pachamama has the most important role. The

Pachamama is akin to the concept of Mother Nature, who has the power to enrich or

destroy harvest, and supports all existing creations. Therefore, before indigenous people

start their sowing, they perform a ritual in order to solicit the Pachamama with the

optimal spiritual conditions to continue this process and to ask permission for disturbing

the soil. In addition, indigenous communities take astronomic facts into account when

sowing.

In a study on the North Ecuadorian Sierra, Campbell states that the most relevant

agricultural practices of pre-Inca indigenous communities are: 1) the interplanting

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strategy with beans, maize, and zapallo; 2) the potato-maize rotation; 3) the irrigation

system; and 4) the practice of planting according the moon phases. “According to local

indigenous agriculturists one should never plant near the time of a full moon. One

explains: ‘I see the lunar phases: full moon-one doesn’t plant because it will grow with

fungi, like ash, dust, or mushrooms.’”30

Andean indigenous communities have developed a large variety of crops for the

satisfaction of their food requirements. In the case of the indigenous communities of

Canton Cotacachi, in the North of Ecuador, they cultivated a large list of products to

satisfy their nutrition.

The pre-Inca diet mainly revolved around maize. It was consumed in variety of forms, as it still is today, including, chicha (fermented drink), toasted kernels, flour, popcorn, choclo (green-on the cob) and mote (hominy). The other major seed crops grown in the highlands includes beans, (Phaseolus vulgaris L.), chocho (Lupinus tricolor Sod.), and quinoa (Chenopodium quinoa Wild); the tubers grown in the highlands were the oca (Oxalis tuberosa Sav.), Mashua (Tropeolum tuberosum R. and P.), Melloco (Ulluctus tuberosus H.B.K.), and the potato (Solatum tuberosum L.). Fruit trees were also grown in the highlands; these included avocados (Persea americana mill), lucuma (Lucuma obovata), grenadilla (Passiflora sp), highland papayas (Carica candamarcensis and pentagona), chirimoya (Annona muricata), tree tomato (Cyphomandrea betacea), guaba (Inga spp.), cucumber (Solanum muricatum Ait.), and guayaba (Psidium guajaba). In the lower ecological zones, the pre-Incaic crops most likely included: manioc (Manihot esculenta), peanuts (Arachis hypodea L.), coca (Erythroxilon coca Lam), cotton (Gossypium spp.), sweet potato (Batata edulis Choisi), Jicama (Pachyrhizus sp.), and red capsicum pepper (Capsicum annum).31

It is impressive to see how pre-Incan cultures developed agricultural systems for the

production of a huge variety of crops like the ones stated above. It becomes even more

important when researchers from the first world begin to discover the nutritional

properties of these products. Often these valuable nutritional properties have been known

to indigenous communities for centuries. This is the case of quinoa, which was also

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known as the sacred crop of the Incas. Quinoa has been cultivated in the Andean region

for over 7,000 years; however, its nutritious attributes have recently brought an

increasing interest in cultivating this crop in the traditional way.32

Indigenous communities in the Central Andes also succeeded in the selection and

cultivation of potato crops, improving the original varieties. We have now found seven

recognized potato species and five thousand potato varieties still grown in the Andes.33

As a consequence, this region is considered as the potato’s origin center. Some

researchers consider that Peru is the birthplace of the potato. However, subspecies have

been developed throughout the Andean Region. The huge variety of potato in this region

brought as a result that this product constitutes one of the main sources of food for the

habitants of los Andes.

As we can see, the role of farmers within the development of crop systems

constitutes the backbone of agriculture. Traditional agricultural knowledge developed by

indigenous communities or ancient societies can be considered the most important

accomplishment in the agricultural field. For years, this traditional knowledge has guided

farmers around the world in such “specific activities as designing and managing

irrigation, coping with marginal farming environments, enhancing production with local

inputs, and developing crop diversity.”34

In addition, the permanent relationship between agricultural practices and nature

protected the environment from suffering an impact that could have that could have

affected people's life. Farmers from indigenous communities and non-indigenous groups

are still following the traditional agricultural practices, because those practices allow

them to produce safer products and to conserve genetic diversity.

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Farmers around the world created mechanisms to identify crops and seeds, as well

as ways to select, exchange, and maintain seeds. One of the main characteristics of these

practices is that the diffusion of seeds and crop genetic resources has been managed

under the common heritage system. This mechanism allows farmers and breeders around

the world to have access and free interchange of seeds varieties. Nevertheless, the

introduction of intellectual property rights and plant variety protection is changing this

scheme. This fact brings to light one of the more controversial points about traditional

agricultural knowledge. This topic will be analyzed in following chapters.

iii. Traditional Environmental Knowledge

Indigenous communities understand the relationship between nature, spirit, and

human beings as a whole. This relationship has allowed them to develop behaviors in

which balance and respect are fundamental principles. Consequently, indigenous people

do not take from nature more than they need to live. As a result, their ecological impact

in the environment is almost negligible.

The idea of indigenous harmony also made cursory empirical sense. Most environmental degradation was caused by state societies, whereas tribal peoples tucked away in tropical rainforests or deserts were seen as having little negative impact on the environment (Borgerhoff Mulder & Coppolillo 2005). Evidence for this association is seen in several comparative studies showing an association between biodiversity and the distribution of native peoples: High biodiversity is associated with the presence of native peoples, whereas low biodiversity is associated with non natives (Borgerhoff Mulder & Coppolillo 2005, pp. 81–88; see also Redford & Robinson 1987 on native and nonnative hunting)35

In addition, Carneiro da Cunha and Almeida state that: Many Amazonian indigenous societies uphold a sort of Lavoisierian or zero-sum ideology in which all things, including life and souls, are recycled. Theirs is an ideology of limited exploitation of natural resources in which human beings are

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the sustainers of the equilibrium of the universe, nature and supernature included. Values, taboos on food and hunting, and institutional or supernatural sanctions provide the instruments for them to act according to this ideology. Such societies could easily fit into the category of cultural conservationists.36

Traditional environmental knowledge can be defined as: “an interdisciplinary

approach that explores how nature is viewed by human groups through a screen of beliefs

and knowledge, and how humans use their images to acquire and manage natural

resources.”37 One of the main characteristics of traditional environmental knowledge is

that indigenous communities have based their production habits on diversity of resources

and practices. They strongly believe that the soil can get tired if only one product is

sown. Therefore, they believe that it is important to rotate production to revitalize the

soil.

Indigenous groups have been practicing the recycling of material, energy, and

waste since ancient times. For instance, in Ecuador, in the North Ecuadorian Sierra, pre-

Inca communities use wild plants for different purposes:

One of the most prevalent and widely used plants in Cotacachi is the cabuya blanca (Fourcroya andina Trel.). It is found throughout communities and elevations between 2,300 and 2,800 masl in earthen walls (sancas) used as land boundary markers surrounding agricultural fields and houses. It serves to demarcate property and keep unwanted animals out of fields as well as a form of terracing that prevents erosion. A very strong fiber can be extracted from the cabuya blanca that is used to make ropes, hats, clothing and shoes. A sweet juice, chuarmishki, can be extracted and drunk either fresh or fermented. The root may be used as slow-burning firewood and the dried chaur kiro or agave tooth may be used as a building material. Ethnographic evidence was also found that some people currently use the pulp as a fertilizer, however, it may be toxic and there is no evidence as to whether it was used in this way prehistorically.38

Another example is the case of the Zuni culture, which developed agricultural

methods to conserve water. In that way, they incorporated within their agricultural

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practices things like rainfall farming, dry farming, runoff farming, floodwater farming,

and irrigation farming.39

Nowadays, this knowledge is very valuable because it involves methods related to

the conservation of the environment and resource management. Presently, we can see

that the world has suffered devastation in its flora and fauna. It has brought as a result

the extinction of many species, erosion of soil, pollution of the earth, air, and water, as

well as global warming. Consequently, it is important to learn and use these ancient

practices in order to develop sustainable systems that can coexist with the environment.

3. Current threats to traditional knowledge

As we have seen, over the ages indigenous people have developed a significant

body of knowledge in the areas of medicine, agriculture, technology, and management of

natural resources. They have learned how to live in balance with the nature and how to

take advantage of the fruits of the earth without hurting it. Sadly, this expertise and

wisdom is disappearing through a voluntary crisis originated by new generations’ preference

of exogenous values and standards.

Nowadays, we can find many factors that endanger traditional knowledge. Some of

them come from that same indigenous community. Thus, we can appreciate that one of

the most significant threats is the loss of the oral tradition that allowed the transmission

of traditional knowledge. Presently, the young generations of indigenous people are not

interested in understanding and continuing their ancestral traditions. The introduction of

new values and life styles has created a huge gap between old and new generations. The

worst part of this is the loss of values and culture.

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The most intractable aspect of the crisis is that it is largely voluntary. Entranced by images of the wealth and power of the First World, the young turn away from their elders, breaking an ancient but fragile chain of oral traditions. For the elders, it is difficult to persuade an ambitious young native that he is better off hunting boar with blowpipes than reaching for the fruits of "civilization," even if those fruits might translate into a menial job in a teeming city. For the well-fed, well-educated visiting scientist to make that argument can seem both hypocritical and condescending.40

This loss of interest in traditional practices can be appreciated in the agricultural

field, in which the introduction of new crops and mechanisms of production has caused

native farmers to abandon many of their former skills. In that way, farmers have

abandoned the traditional breeding practices and started using new genetically modified

crops, leading to the loss of the ability to obtain new varieties based on traditional

practices. This loss of skill not only impacts the farmers’ skill set, but also causes a loss

of plant variety. Mr. Flores, a native indigenous man from Ucshapungo, Cotacachi,

comments on this trend:

Before we only planted with organic fertilizer; we never utilized chemicals;...before it wasn’t necessary to put chemical fertilizers down, but some mestizos gave us a demonstration in small parcels and sure enough with the chemicals it produced some huge potatoes; after seeing that almost all the community began to utilize chemicals. Now I’ve utilized chemicals since I was young, because some people came to indicate how to use them, and they came here with seeds and together with the chemicals, but here sometimes we didn’t have the seeds... Now we tend to fumigate up to 3,4,5 times during the development, but when we fumigate various times we have the risk of contaminating the fruit and then it’s not worth eating. Before we had more or less 15 varieties of native potatoes, but now we have lost them. Now we put chemicals on everything: potatoes, mellocos, ocas, trigo, cebada. We didn’t know the tractor before; it was only tilling by hand and with the yunta.41

Another cause for the devolution of traditional knowledge is the loss of the native

languages. Presently, only the elder indigenous people of many communities know the

native language, and that has prevented the transmission of knowledge to younger

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generations. “The extinction of language is an excellent example of devolution, as

related to cultural knowledge. Nettle and Romaine (2000) reported that of the 6600

languages spoken today; fewer than 9 per cent, or 600 have enough speakers to ensure

their continuity into the next century.”42

The loss of language is one of the principal threats to TK because young

generations cannot communicate with their ancestors. As a consequence, young people

cannot appropriate and assimilate old people’s knowledge. If the members of indigenous

communities did not share the same language the communication would be partial and

the knowledge would be lost within the translation process. “An important aspect to any

type of management is that one can manage only what one knows, and as a corollary, one

knows that for which one has a linguistic expression. Language mirrors the evolution of

traditional knowledge and the importance that specific biological resources have for

survival: languages are the repositories of past experience.”43

Moreover, the lack of documentation systems for traditional knowledge is another

problem that indigenous communities have to face. The major part of traditional

knowledge is concentrated in the elder population. However, the lack of interest and the

loss of language mean that new generations do not have access to this information

through the oral process. In a research trip to Isla de la Plata (Silver Island) in Ecuador,

Freddy, an indigenous member of the community Manta-Guancavilca, was telling me

that last summer his people suffered a major loss of traditional knowledge. Around

twelve of their elders died without leaving any kind of documentation related to TK. In

addition, he told me that for them it is very common to have foreign researchers

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inventory their traditional knowledge, but then the researchers use this information solely

for their publications, giving nothing to the community.44

Finally, another threat is the misappropriation of indigenous traditional medicinal

knowledge, traditional agricultural knowledge, genetic resources, art, and cultural

expressions. As noted above, traditional medicinal knowledge is one of the most

important and valuable assets of these communities. Indigenous people have developed

systems and compounds to use medical properties of plants for the treatment of illness.

Indigenous people do not consider this knowledge a commodity to be commercialized,

but rather a sacred heritage of their culture.

However, for pharmaceutical companies, this traditional knowledge has great value

because it can save a lot of time and also introduce new natural compounds for the

development of medicines. “Now when plants are identified as commercially viable,

their active properties are isolated and the pharmaceutical company takes out a patent on

inventions relating to those plants, even though their benefits have been known to

Indigenous people for years”45

Traditional Knowledge related to the use of plants for food is another field that has

been threatened. Much research has been conducted, and many investigations have been

made in relation to the natural properties of some nutritional products. This information

has been documented around the world without giving a legitimate reward to the

community that developed this knowledge. As a result, it became another example of the

exploitation of traditional knowledge.

A similar phenomenon has occurred with the exploitation of arts and cultural

expressions that have been appropriated by non-indigenous people for their sole benefit.

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It is common to see in some movies the representation of traditional dances and rituals;

nevertheless in most cases this occurs without the authorization of the indigenous

community. Also, the community is not recognized as the copyright holder.

In addition, the use of some handcrafts in different contexts has caused their origin

to be been mistaken. For instance, the Panama hat, which is one of the most popular and

fashionable summer hats, has its origin in Ecuador and is woven by hand from a plant

named Paja Toquilla. The origins of the Panama hat can be “traced back as far as be the

16th Century when the Incas were the first to use the Toquilla plant to produce hats.”46

As we can see, modernization and globalization have introduced new values and

interests to indigenous communities. As a result, young generations are being separated

from their culture and traditions and are appropriating new styles of life. Technology has

opened a new world for native people with the access to knowledge, but at the same time

it has changed the focus of people’s endeavors. Therefore, it is important to work on a

national policy that allows indigenous communities to take part in the new civilization

and to take advantage of technological developments without losing their traditions,

values and, knowledge.

4. Why it is important to protect Traditional Knowledge?

a. Because of the relevance of Biodiversity and Traditional Knowledge in Ecuador

and the Andean and Amazonian Region.

Conservation International has reported that the countries of Venezuela,

Colombia, Ecuador, Peru, and Bolivia together contain almost a quarter of the planet’s

terrestrial biodiversity. The tropical regions of these countries alone contain an amazing

9,600 species of vertebrates, as well as roughly fifty-five percent of the world’s

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amphibians, twenty-five percent of the world’s plants, and twenty percent of the world’s

reptiles and birds. In addition, twenty-five percent of these countries’ plants are endemic.

This is the highest concentration and endemism of birds and amphibians in the world.47

According to the National Biodiversity Strategy of Ecuador, Ecuador is one of

one of the world’s richest sources of biological diversity. More than twenty-four tropical

life zones are found in this country (according to the Holdridge Life Zone system)

including: mangrove swamps, dry tropical forests, tropical cloud forests, paramos, and

tropical lowland rainforests48. As a result, Ecuador is considered by the national and

international scientific community to be one of the mega-diverse and the most bio-diverse

countries in the world.

For example one hectare of lowland rainforest can contain as many frog species as in all of North America; one tree can contain more ant species than in all of the British Isles combined; and of the world's known bird species (about 9,000), pint-sized Ecuador is home to over 1,500. Ecuador also has one of the greatest levels of endemism anywhere in the world.49

By way of corroboration, the World Wildlife Fund has stated that Ecuador is one

of the seventeen most “megadiverse” countries in the world. For instance, the country has

an estimated twenty-five thousand species of vascular plants (roughly ten percent of the

world’s total), 422 species of amphibians (fourth in the world), and 1,618 species of birds

(eighteen percent of the world’s total).50

Adequate protection of biodiversity will allow these countries and Ecuador in

particular to look for sustainable mechanisms to preserve and maintain biodiversity.

Presently, the world is suffering a significant loss of biological resources, and for this

reason it is important to take steps to protect regions like the ones noted above. In

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addition, these countries are trying to improve their economies by working on projects to

exploit natural resources and also to industrialize their production. If we do not take

reasonable measures, we will lose the one of the most important reserves of biodiversity.

For this reason, a legal system of protection will allow these countries not only to prevent

the devastation of biodiversity, but also to raise money for national development within

sustainable parameters.

These countries are also multinational, which means that within their territories

exist many pueblos, nationalities, and indigenous communities. In the case of Ecuador,

the country includes the Awa, Chachi, Epera, Tsachila, Cofan, Secoya, Siona, Waorani,

Shiwiar, Zapara Achuar, Andoa, Kichwa Amazonico, Shuar, and Quichua51 groups. It is

important to consider that each of these nationalities has developed their own body of

traditional knowledge. Therefore, if we sum the ancient wisdom of these pueblos plus

the rich biodiversity, these countries can be considered some of the most important

providers of knowledge and innovations in the world’s economy.

Nevertheless, these countries do not have an adequate and efficient intellectual

property or environmental legal regime that gives appropriate protection to genetic

resources and traditional knowledge derived from the use of biodiversity. The lack of

effective regulation in these areas has exposed indigenous communities to biopiracy, as

multinational pharmaceutical companies have been taking advantage of genetic resources

and traditional knowledge without authorization and devoid of compensation to the

indigenous people. For instance,

in May 1986 a chief from the Secoya community of Ecuador exchanged some specimens of the rare and useful plant, Banisteriopsis caapi (otherwise known as

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‘yage’ in the local language), for two packs of Malboro cigarettes. This exchange, as it were, occurred between the chief and a person whom he would later simply describe as a ‘gringo’. The gringo was Loren Miller of the International Plant Medicine Corporation. Miller had heard of the psychoactive properties of yage as a hallucinogenic (the variety of Banisteriopsis he took had been domesticated by the Indians for hundreds of years). Shortly after the exchange, Miller returned to the United States with the ‘discovery’, applied indigenous methods of breeding, and applied for and obtained plant patent no. 5,751 from the US Patent Office on the ‘new’ breed.52

Consequently, it is important to provide an adequate legal system that motivates

traditional knowledge holders and the society in general to preserve and conserve

traditional knowledge and biodiversity.53

b. To improve the life conditions of traditional knowledge holders and preservation

of traditional knowledge.

It is disturbing to see that in Latin America, indigenous people are generally

considered to be among the poorest groups of people. This is a result of the process by

which these lands were conquered, leading to a system where native people were

enslaved and exploited for centuries. Nowadays, despite the fact that the situation has

changed, indigenous people are still suffering the consequences of discrimination.

Consequently, they are still people with less than average access to education and basic

services.

On that issue, World Bank Economist Gillete Hall says that “Although indigenous

people in the region have increased their political power and representation during the

last decade, this has not translated into the positive results -in terms of poverty reduction-

we had hoped to find when we embarked on this research.”54 In the Ecuadorian

case, “poverty among indigenous people (...) is about 87 percent and reaches 96 percent

in the rural highlands”55

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The high rates of poverty among indigenous people have brought as a result the

migration of the younger generation to urban zones in order to improve their livelihood.

These people have abandoned their families, land, traditions, and cultures to become a

part of the modern society. The most significant consequence of this separation is the

loss of traditional knowledge and identity. It has produced a loss of skill among native

people in activities like agriculture, traditional medicine, and the creation of handicrafts.

Traditional knowledge protection should be based on the principles of access,

benefit, and sharing. That way, traditional knowledge holders will have the opportunity

to share the benefits of the exploitation of traditional knowledge and biodiversity. Access

to monetary resources will allow these communities to improve their health and

education systems. In addition, these people will have access to new technology56, so

they can improve their knowledge. Moreover, new generations will be motivated to

continue building traditional knowledge and practices.

c. To improve the national economy

According to the WHO Traditional Medicine Strategy, traditional medicinal

knowledge is a worldwide phenomenon. The strategy reports that:

TM is widely used and of rapidly growing health system and economic importance. In Africa up to 80% of the population uses TM to help meet their health care needs. In Asia and Latin America, populations continue to use TM as a result of historical circumstances and cultural beliefs. In China, TM accounts for around 40% of all health care delivered. Meanwhile, in many developed countries, CAM is becoming more and more popular. The percentage of the population which has used CAM at least once is 48% in Australia, 70% in Canada, 42% in USA, 38% in Belgium and 75% in France. In many parts of the world expenditure on TM/CAM is not only significant, but growing rapidly. In Malaysia, an estimated US$ 500 million is spent annually on this type of health care, compared to about US$ 300 million on allopathic medicine. In the USA, total 1997 out-of-pocket CAM expenditure was estimated at US$ 2700 million. In Australia, Canada and the

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United Kingdom, annual CAM expenditure is estimated at US$ 80 million, US$ 2400 million and US$ 2300 million respectively.57

There are a variety of reasons to choose traditional medicine. In some countries,

the cause is poverty, and in other countries, people use traditional medicine because of

their belief systems. Other countries have found in traditional medicine an alternative

approach to health care, while still others have chosen this option due to concerns about

the adverse effects of chemical drugs. Regardless of the motive, the central point is that

traditional medicinal knowledge and biodiversity have become attractive and valuable

commodities to pharmaceutical companies and biotechnology industries that work on the

development of new drugs for the cure and treatment of diseases.58

This effect is not limited to the field of traditional medicine. Food corporations and

cosmetic enterprises have started to see these resources as a valuable competitive

advantage for the development of new products. Furthermore, the handicrafts market is

becoming an important good in the global context. In this respect,

Markets for indigenous knowledge and genetic resources are growing exponentially. The last comprehensive analysis of the global markets for products derived from genetic resources was estimated their value between $500-800 billion in 1997. The wild or bush foods and cosmetic treatment industries fall within these markets and are very significant economic sectors on their own, involving trade both within domestic and international markets. Overall, there is great capacity for growth in both of these sectors. However, the involvement of indigenous people– both as employees or business owners or investors – has so far been limited.59

As a consequence, a reasonable legal scheme to protect traditional knowledge and

biodiversity will allow countries to have another revenue source. In that way, the

sustainable exploitation and commercialization of traditional knowledge and biodiversity-

related products will improve the economy of these countries. It is important to note that

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this extra income should be used to create mechanisms to maintain and conserve

biodiversity and to promote the development and strength of traditional knowledge.

d. Other effects: prevent biopiracy and conserve the environment

Biopiracy is a latent problem for biodiversity rich countries. This is because

foreign enterprises and researchers have had access and obtained benefits from traditional

knowledge and biological resources without giving any kind of compensation or

acknowledgement to the providers. Therefore, an effective legal system for traditional

knowledge and biodiversity protection will help these countries to eliminate this practice.

We will study the biopiracy problem more deeply in the next chapter.

Finally, the protection of traditional knowledge and biodiversity will constitute a

best practice to be followed, and it will bolster traditional practices to conserve the

environment. As we see above, traditional environmental knowledge has a compendium

of rich practices and systems related to the management of natural resources. Thus,

adequate protection will allow the world to have access to this information and become

more ecologically responsible.

5. Traditional knowledge status in the Ecuadorian Legal System

The first step to protect Traditional Knowledge is to consider its existence within

the legal system. Currently, Ecuador has signed many international agreements related to

the protection of traditional knowledge, including the Agreement on Trade-Related

Aspects of Intellectual Property Rights (TRIPS), the Convention on Biological Diversity

(CBD), and the International Treaty on Plant Genetic Resources for Food and Agriculture

(ITPGRFA). Nevertheless, it is important to determinate what legal instruments exist to

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protect traditional knowledge in the Andean Region, and specifically in Ecuador.

a. Regional Regulation

i. Andean Community Decision 391 Common Regime on access to genetic

resources

The Andean Community of Nations “is a trade bloc comprising the South American

countries of Bolivia, Colombia, Ecuador and Peru. The trade bloc was called the Andean

Pact until 1996 and came into existence with the signing of the Cartagena Agreement in

1969.”60 The decisions made by the Andean Community are legally binding and

automatically applicable.

The Andean Countries, acknowledging the sovereignty over the use and

development of biological resources and considering the value of traditional knowledge,

decided in July 1996 to adopt the Decision 391 on a Common Regimen on Access to

Genetic Resources. Decision 391 has as a main objective the establishment of a regional

legal framework for bioprospecting within the Andean Community, under the principles

of access, benefit, and sharing established in the Convention on Biological Diversity

(CBD).

The objective of Decision 391 is contained in Article 2, which reads:

The purpose of this Decision is to regulate access to the genetic resources of the Member Countries and their by-products, in order to: a) Establish the conditions for just and equitable participation in the benefits of the access; b) Lay the foundations for the recognition and valuation of the genetic resources and their by-products and of their associated intangible components, especially when native, Afro- American or local communities are involved; c) Promote conservation of the biological diversity and the sustainable use of the biological resources that contain genetic resources; d) Promote the consolidation and development of scientific, technological and

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technical capacities at the local, national and subregional levels; and e) Strengthen the negotiating capacity of the Member Countries.61

Decision 391 in its Preamble acknowledges the sovereignty right over genetic

resources established in the CBD and in its Article 5 states that: "The Member Countries

exercise sovereignty over their genetic resources and their by-products and consequently

determine the conditions for access to them, pursuant to the provisions of this Decision

(...)."62 Therefore, in order to access them, it is necessary to have the authorization of the

country of origin. This is accomplished through a contract between the Competent

National Authority and the applicant requesting the access.63 It also establishes that a fair

and equitable share of the benefits derived from the access to genetic resources and

traditional knowledge will be given to the indigenous communities. On that subject,

Article 35 states: “When access is requested to genetic resources or their by-products

with an intangible component, the access contract shall incorporate, as an integral part of

that contract, an annex stipulating the fair and equitable distribution of the profits from

use of that component.”64

This article is crucial because it sets forth the principle of benefit-sharing. Through

this provision, the communities allowing access to genetic resources with an intangible

component must be rewarded through an equitable and fair remuneration. It is important

to note that within Decision 391, the intangible component must be understood as “all

know-how, innovation or individual or collective practice, with a real or potential value,

that is associated with the genetic resource, its by-products or the biological resource that

contains them, whether or not protected by intellectual property regimes.”65

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Ruiz presents a summary of the requirements established in the Decision regarding

access to genetic resources and/or traditional knowledge: Step 1. Review general minimum conditions for access (article 17) to be included in application and / or access contract. Conditions could include: terms of transfer of materials to third parties (see final paragraph of Section 2.3 above), submission of research results, support to conservation and sustainable use of biodiversity research, participation of Member State nationals in research activities, among others. Step 2. Submit an access application to the national competent authority (article 26). Step 3. Conclude an accessory contract (between applicant and ex situ conservation centre; owner or person in possession of land where biological resource is located; owner or person in possession of the biological resource or the national support institution) (article 41), and / or an accessory contract (or Annex) between applicant and provider of the intangible component (knowledge, whether from an indigenous community or not) (article 35). Step 4. Access contract is concluded between the National Competent Authority and the applicant seeking access. All other contracts are subject to the results of the negotiations of the access contract (article 32). The State will take into account the interests of the providers of the biological resources and the intangible component (article 34). All accessory contracts will only enter into effect once the access contract has been signed (article 42). Access by research and ex situ centers Step 5. If bioprospecting is to be carried out by universities or recognized research institutions and researchers and they involve multiple access activities, a framework access agreement must be concluded with the National Competent Authority (article 36). Step 6. If ex situ centers or other institutions seek to carry out access related activities they must conclude an access contract with the National Competent Authority. The National Competent Authority may conclude access contracts with third parties who seek to access resources deposited in these centers of which Member States are countries of origin (article 37). Step 7. The National Competent Authority may conclude deposit, administration and intermediation contracts with universities or recognized research institutions and researchers (Fifth Complementary Disposition).66

In addition, Decision 391 considers traditional knowledge an important and

valuable element of this system. To this respect, Article 7 states: “The Member

Countries, in keeping with this Decision and their complementary national legislation,

recognize and value the rights and the authority of the native, Afro-American and local

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communities to decide about their know-how, innovations and traditional practices

associated with genetic resources and their by-products.”67 Moreover, in the temporary

provision,68 number eight states that Member Countries should present a proposal to

establish a special regime or a harmonization regulation, as applicable, aimed at

reinforcing the protection of know-how, innovations, and traditional practices of natives.

Decision 391 is aligned with the CBD. For instance, it determines in Article 17 that

access contracts can have accessory contracts to include conditions such as “(a) The

participation of Subregional nationals69 in the research on genetic resources and their by-

products and on the associated intangible component; (f) The strengthening and

development of the capacities of the native, Afro-American and local communities with

relation to the associated intangible components, the genetic resources and their by-

products.”70 As we will see in Chapter IV, these provisions are aligned with the CBD in

the sense that they recognize the rights of indigenous people to participate and be

consulted in issues related to the access to genetic resources and traditional knowledge.

In addition, the possibility to work on the strength and development of capacities of

indigenous people constitute a mechanism to conserve, promote and develop traditional

knowledge.

Nevertheless, despite the creation of Decision 391, still some of the Andean

Countries, including Ecuador; have not developed national regulation to make the

decision operable. Therefore, despite the fact that the Decision is immediately

applicable, country members must create laws and regulations that state detailed

procedures to determine how the Decision is going to be applied. In addition, Decision

391 involves significant contractual work that requires a certain level of knowledge

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regarding the legal, economical and cultural issues that surround the access to genetic

resources and traditional knowledge. At this point, neither the authorities nor the

indigenous communities have enough knowledge, training, or expertise in the drafting of

contracts regarding access to genetic resources and traditional knowledge. As a

consequence, Andean Countries need to work on the development of domestic legislation

that allows the entry into force of Decision 391 as well of the CBD.

ii. Andean Decision 486 Common Intellectual Property Regime

In September 2000, the Andean Community adopted Decision 486, the main

objective of which is to state a Common Intellectual Property Regime for the region.

Decision 486, without any doubt, is one of the most innovative mechanisms to ensure the

application and conciliation of the CBD and the TRIPS agreement. Article 3.- The Member Countries shall ensure that the protection granted to intellectual property elements shall be accorded while safeguarding and respecting their biological and genetic heritage, together with the traditional knowledge of their indigenous, African American, or local communities. As a result, the granting of patents on inventions that have been developed on the basis of material obtained from that heritage or that knowledge shall be subordinated to the acquisition of that material in accordance with international, Andean Community, and national law.71

This provision ensures that any intellectual property right that can be granted over

biological resources and traditional knowledge cannot harm Member Countries or their

native communities in issues regarding to their genetic and traditional knowledge

heritages. In addition, it subordinates the grant of any intellectual property right to the

accomplishment of the provisions stated in Decision 391.

In other words, any intellectual property right over biological resources and

traditional knowledge can be granted without the existence of an agreement that contains

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the previous consent and the equitable benefits that the provider of resources is going to

obtain. In that way,

this provision is close to the disclosure of origin requirement72, with the difference that

this provision subordinates the grant of an intellectual property right to the obligation not

only to disclose the origin, but also to subscribe a contract that determines fair and

equitable conditions regarding the access, benefit, and sharing. To this respect, these

provisions are stronger than the disclosure requirement. Decision 486 does not merely

request information about the genetic resource or TK utilized in the inventive process; it

requires that the contractual obligations of benefit sharing have been defined in contracts

that contain the conditions of the access. These contracts must be attached during the

filing process.

As a consequence, at the moment of the filing of a patent application, the applicant

must attach: Article 26.73

h) a copy of the contract for access, if the products or processes for which a patent application is being filed were obtained or developed from genetic resources or byproducts originating in one of the Member Countries; i) if applicable, a copy of the document that certifies the license or authorization to use the traditional knowledge of indigenous, African American, or local communities in the Member Countries where the products or processes whose protection is being requested was obtained or developed on the basis of the knowledge originating in any one of the Member Countries, pursuant to the provisions of Decision 391 and its effective amendments and regulations;

Consequently, the grant of a patent right is subject to the consent of the traditional

knowledge holder, in addition to the existence of the access agreement. As a result, this

provision tries to make effective the benefit and sharing mechanism stated in the CBD. It

is important to note that Decision 486 states mechanisms to make these provisions

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enforceable; as the provision contained in Article 75 contemplates the possibility of

nullifying any patent that has not completed the requirements stated in article 26.

Nevertheless, these provisions can cause some problems, such as incompatibility

with the TRIPS Agreement. Dr. Nuno Pires de Carvalho says that the disclosure

requirement is a formal requisite that does not concern the nature of the invention.74

Therefore, if we add the requirement as a condition to during the process of obtaining a

patent, we are inconsistent with the TRIPS Agreement. If the requirement is

implemented through measures that are inconsistent to the TRIPS Agreement, the

consequence is that it is also in violation of the CBD. The solution that Dr. Carvalho

proposes is a new approach to the requirement: the unclean hands doctrine. This

proposal states that the requirement should not be considered a condition of patentability,

but the unclean hands doctrine can be used to suspend the patent until its owner cleans

his/her hands through benefit sharing.75 As a result, the same interpretation and solution

can be applied to the provisions of Decision 486. Nevertheless, we have not yet faced

any legal claim to this respect, and this issue would be decided by the WTO dispute

settlement process.

In conclusion, Decision 486 is an effort to reconcile the provisions contained in

the CBD and the intellectual property system. Its most valuable contributions are the

recognition of traditional knowledge holders’ rights and the provision of an efficient

mechanism to ensure access, benefit, and sharing. Nevertheless, this mechanism is still

mandatory only to the countries of the Andean Community, so there is no international

recognition of these provisions. Therefore, access to genetic resources and traditional

knowledge is not protected outside the Community boundaries. In addition, to make this

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decision operable, we need the legislation of national regulations, which have not been

created by Ecuador.

b. National Regulation

i. Constitution of Ecuador

The Ecuadorian Constitution76 recognizes the inter-cultural and multinational

character of the country. The new Constitution of 2008 is one of the most advanced and

progressive Constitutions in the world. The Constitution contemplates many provisions

regarding the respect, protection, and conservation of nature, biodiversity, and traditional

knowledge. For instance, Article 10 recognized that nature has rights, and chapter 7 states

the mechanisms that are going to be used to enforce these rights.

Regarding traditional knowledge, the constitution recognizes and grants rights to

the communities, pueblos, and nationalities that are part of Ecuador. In that way, Article

57 acknowledges twenty one rights. The most relevant of those rights77 for the purposes

of our study are the following:

To develop and strengthen their identity, sense of permanence, ancestral traditions,

and forms of social organization.

To conserve the non-transferable ownership of community lands, these shall be

considered inalienable, non-attachable, and indivisible. These lands will be

exempted from payment of taxes.

To maintain the possession of ancestral lands and obtain free adjudication.

To share in the use, usufruct, administration, and conservation of renewable natural

resources in their lands

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To be informed and previously consulted, within a reasonable time, on plans and

projects of prospection, exploitation, and commercialization of non-renewable

resources that are in their lands and that may affect them environmentally or

culturally; to share in profits and receive indemnities for social, cultural, and

environmental damages. The consultation, which has to be performed by a

competent authority, should be mandatory and timely. If the consent of the

community is not obtained, we will proceed according to the Constitution and the

Law.

To maintain and promote their practices regarding biodiversity management and

their cultural heritage. Ecuador will establish and execute programs, with the

community participation, to ensure the conservation and sustainable use of

biodiversity.

To not be displaced from their ancestral lands.

To maintain, protect, and develop collective knowledge, science, technology, and

traditional knowledge; genetic resources that contain biological diversity and

agricultural diversity; their medicine and practices of traditional medicinal

knowledge, with the right to recoup, promote, and protect ritual and sacred places,

and plants, animals, minerals, and the ecosystem within their territories; and the

knowledge of the resources and properties of flora and fauna. Any kind of

appropriation of this knowledge, innovation, and practices is prohibited.

In addition, Article 281 number 6 promotes the preservation and recuperation

of traditional agricultural knowledge, genetic diversity, and the free exchange of

seeds.78 Article 379 number 1 declares as a national patrimony the native languages,

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performances, oral traditions, and any kind of cultural manifestation. Moreover,

Article 313 declares biodiversity to be a strategic resource79, and Article 395

guarantees the permanent and active participation of people, communities, pueblos,

and nationalities that can be affected in the planning, execution, and control of any

activity that created environmental impact.80 Finally, Article 400 affirms the

sovereignty of the country over its biodiversity81, and Article 402 states the

prohibition of the issuance of any right, including intellectual property rights, over

products derived or synthesized from biodiversity and traditional knowledge.82

In conclusion, the Ecuadorian Constitution is concerned about biodiversity

and traditional knowledge protection. Nevertheless, it is clear that some concepts

have been mishandled. Despite the fact that the indigenous communities have many

rights regarding to their ancestral culture and knowledge, they do not have any legal

mechanism to protect those rights. First, Article 57 only gives the communities,

pueblos, and nationalities the right to be consulted, share in profits, and receive

indemnities in cases related to non-renewable resources that are located in their lands.

It obvious that the legislators were thinking about oil and mine exploitation, but what

is going to happen with biodiversity? Biodiversity is considered a renewable

resource, however its management is still a topic that must be settled with the

indigenous people. Therefore, this provision limits the rights of traditional

knowledge holders to participate in decisions and projects regarding biodiversity.

Moreover, Article 57 number 12 contains a prohibition on the appropriation

of traditional knowledge. It states the right of indigenous and local communities and

establishes that: “(…) Any kind of appropriation of this knowledge, innovation, and

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practices is prohibited.” This is a provision that harms indigenous communities that

lose any opportunity to acquire the property of their heritage. The Constitution

blocks any kind of application of intellectual property rights in this field or the

creation of a sui generis system that creates property rights to traditional knowledge

holders. As a result, people that are part of the communities, pueblos, and

nationalities would not be a part of any legal mechanism to fight against the biopiracy

and abuse to their heritage.

The same problem occurs with the provision of Article 40283. The

prohibition of the grant of any kind of right over products derived from biodiversity

and traditional knowledge only has effect in Ecuador. The rest of the world can still

gain rights and patents over these resources. It is clear that the intention here was to

eliminate the possibility that foreigners and multinationals could acquire rights over

these assets. Nevertheless, the drafting is so poor and weak that it limited the use of

the document. As a result, traditional knowledge holders are the most impacted,

losing their right to acquire property rights over their traditional knowledge and

biodiversity, while foreigner enterprises can still get patents and IPR in United States

and the European Union.

Nevertheless, despite of these problems cited above, it is important to note

that the Ecuadorian Constitution makes a good work stating the indigenous peoples’

rights regarding to traditional knowledge management, land ownership and language

preservation. For indigenous communities it is crucial to maintain the rights over the

land, because they have a strong link between their ecosystem and their beliefs. The

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fact that the Constitution states the right to own and maintain the ancestral lands

constitutes an important step within the preservation of traditional knowledge. ii. Intellectual Property Law

On May 28, 1998, Ecuador enacted an Intellectual Property Law (IPL), which covers all aspects of intellectual property, from copyrights to trademarks to patents. The IPL addresses semiconductor chip protection, plant breeder’s rights, industrial designs, utility models and unfair competition. It also provides for a complete set of procedures, including preliminary enforcement measures, border enforcement, statutory damages, and new criminal offenses, including the criminalization of certain acts regarding technical protections against infringement and electronic rights management information. Finally, the IPL declares that the protection and enforcement of IP rights is in the public interest, and it creates the Ecuadorian Intellectual Property Institute (IEPI) to administer all IP registration processes and administrative enforcement measures, including border enforcement.84

The Ecuadorian Intellectual Property Law85 is aligned with TRIPS Agreement. It

is intended to comply with all provisions set by the TRIPS. In addition, the Law tries to

conciliate the TRIPS with the CBD and the Andean Decision 486. To this respect, the

first article states that Ecuador recognizes and guarantees the intellectual property rights

obtained according to the law, international treaties, and Decisions of the Andean

Community.86 Moreover, the law states that the rights established under it neither limit

the rights granted by the Convention on Biological Diversity nor the other Ecuadorian

laws about the subject.87

The Intellectual Property Law in relation to the patentable subject matter follows

TRIPS Agreement and uses the same text established in Article 27.1 TRIPS. Therefore,

Article 121 of the Ecuadorian Intellectual Property Law states that: “patents shall be

available for any inventions, whether products or processes, in all fields of technology,

provided that they are new, involve an inventive step and are capable of industrial

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application.”88 Furthermore, Article 126 adopts the exclusions from patentability

determined in TRIPS and states: “ Are expressly excluded from patentability: a)

inventions, which commercial exploitation prohibition is necessary to protect public

order or morality, including to protect human, animal or plant life or health or to avoid

serious prejudice to the environment; b) diagnostic, therapeutic and surgical methods for

the treatment of humans or animals; c) plants and animal races, and essentially biological

processes for the production of plants or animals.”89

In addition, the Ecuadorian Intellectual Property Law, in Article 376 states that

patents regarding genetic resources have to be legally accessed according to the rights

established in the Constitution, international treaties, and Andean Decisions.90

Furthermore, in relation to traditional knowledge, Article 377 determines a sui generis

system regarding the collective intellectual rights of indigenous communities through a

special law.91

It is clear that despite the intentions of this law, it is not sufficient to protect

traditional knowledge. The sui generis system created in Article 377 has not been

developed until now. In addition, the changes brought by the new Constitution are going

to bring a huge change to the intellectual property system in Ecuador.

iii. The Agricultural Development Law

The Agricultural Development Law92 was enacted in 1994. Its main purpose is to

regulate the mechanisms of production, financing, and real property. Thus, it has not

been developed with much consideration for traditional agricultural knowledge. This law

does not have any provision to encourage the use and conservation of traditional

agricultural practices.

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The only provision that mentions traditional knowledge is the one contained in

Article 5. This provision talks about the training plans and states that the Ministry of

Agriculture and Livestock will start a national program of training and technology

transfer that includes the innovation of traditional knowledge and practices.93 The major

problem with this provision is that it does not state the importance of respect for and

conservation of traditional agricultural knowledge. As a result, the innovation of

traditional knowledge and practices can be understood as the inclusion of new

procedures, products, and equipment. Therefore, if the program is not based on the

respect and promotion of traditional agricultural knowledge, the only result would be a

loss of skill in native farmers.

In addition, the provision promotes technology transfer in only one direction. In

that way, farmers can be subject to an imposition of new techniques that are far away

from traditional practices. Moreover, the section that contains agricultural research does

not include or even mention the participation of native communities and the use of

traditional agricultural knowledge. It is inefficient not to consider the valuable

knowledge of indigenous communities, because they already know the properties and

nutritional value of the products in their respective zones, as well as the environmental

conditions needed for their production. However, if the introduction of new technology

is done within parameters of respect to traditional practices, it can contribute to the

development of traditional knowledge, bringing as a result a re-skilling of the farmers.94

Consequently, this law is weak on topics relating to traditional knowledge. It is

crucial that the government start thinking about the impact of these regulatory bodies on

the communities, pueblos, and nationalities of Ecuador. The insertion of traditional

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practices should be an important part of this law. It is important to consider that the

Agrarian Development Law plays an important role in Ecuadorian society, because it

strengthens the acquisition of land by indigenous communities that started with the

agrarian reform.

iv. Environmental Law

The Ministry of Environment is the entity which is in charge of the management

of biodiversity conservation, access to biological resources, and traditional knowledge

protection. Therefore, many regulations have been developed on these topics. The most

important regulations regarding traditional knowledge protection are the Environmental

Management Law, the Law that Protects Biodiversity in Ecuador, and the National

Biodiversity Strategy and Action Plan.

The Environmental Management Law95 has as a main objective the protection and

conservation of the environment, biodiversity, the integrity of genetic patrimony, and

related issues. The law states that one principle that will bind environmental policy is

respect for traditional knowledge and practices. In addition, the Ministry of Environment

will work with an Advisory Counsel that is going to collaborate in the development of the

national environmental policies and plan. One of the parties to this Counsel will be the

Development Counsel of Nationalities and Pueblos from Ecuador (CODEMPE). So, the

Law should ensure the participation of traditional knowledge holders in activities related

to the use, exploitation, and management of biological resources.96

In addition, the Law that Protects Biodiversity in Ecuador97 guarantees that the

exploitation of natural resources will respect the ancestral rights of indigenous and afro-

Ecuadorian people. In addition, it states that any activity regarding the management of

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the biodiversity will guarantee the rights of traditional knowledge holders over their

knowledge and practices, which are considered and recognized as intangible components

of biodiversity and genetic resources.98

Moreover, one of the most important documents regarding the management of

biodiversity and traditional knowledge protection is the National Biodiversity Strategy

and Policy 2001-201099. This Strategy and Action Plan has been created to accomplish

the provisions and objectives defined in the Convention of Biological Diversity.100

Therefore, the strategy represents the path that Ecuador has defined to conserve and

sustainably use biodiversity.

This document is focused on maintaining the integrity and functionality of

biodiversity, but also to promote its use and sustainable development. In addition, the

strategy states that it is possible to extend and diversify the use of biodiversity in

activities like ecotourism, agriculture, and fishing, thus opening Ecuador to new markets

based on genetic resources and biological resources. Furthermore, the strategy considers

that it is important to count on the participation of the different interested groups. In that

way, the document includes mechanisms to protect and maintain traditional

knowledge.101

The strategy acknowledges and values the traditional knowledge, practices, and

innovations of indigenous communities. In addition, it determines that this knowledge

constitutes a significant cultural and economic resource.102 However, it is important to

note that Ecuador has not formally recognized the intellectual property rights over this

knowledge, which has caused the misappropriation of it by third parties.

Consequently, the strategy states that it is important to immediately develop a

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regulation to guarantee the intellectual property rights of pueblos and nationalities over

their traditional knowledge. It is also important to recognize the collective and

intergenerational character of traditional knowledge and the right of indigenous

communities to control their traditional knowledge and genetic resources.

The document also states the importance of creating a mechanism to register

traditional knowledge and establishing informed consent as a mandatory requirement for

access to genetic resources and related traditional knowledge. Furthermore, the strategy

determines that access to resources must be subject to the principles of benefit and

sharing and that the indigenous communities will have the right to veto the access when it

may have a negative impact in the community. Moreover, the strategy states that it is

necessary to provide the indigenous communities with legal knowledge and mechanisms

to ensure a fair contractual negotiation for access to traditional knowledge.103

In addition, the strategy determines that the legal provisions that will bind the

access, benefit, and sharing are the ones stated in the Andean Decision 391. Therefore,

indigenous communities that become providers of traditional knowledge and genetic

resources must follow the Andean Decision 391.104

The Environmental Law has some provisions regarding the protection of

traditional knowledge. The majority of them try to follow the principles and objectives

defined by the Convention of Biological Diversity and the Andean Decision 391.

However, it is important to translate the provisions contained in the paper to reality.

Ecuador requires effective and operable mechanism to protect and manage traditional

knowledge and biodiversity.

Despite the fact that this strategy is intended to create an effective legal

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framework, that framework has not yet been developed. As a consequence, the

Environmental Ministry does not utilize a legal procedure to determine the steps for

accessing to traditional knowledge and genetic resources. This problem is aggravated by

the lack of advisors with legal knowledge and expertise related to access to genetic

resources. As a result, Ecuador is hindered by the lack of legal framework, and many

research opportunities that involve access to genetic resources and traditional knowledge

have been abandoned.

6. Conclusion

Traditional knowledge, as the compendium of values, knowledge, practices, and

beliefs that have been passed from generation to generation, constitutes an important and

valuable economic and cultural resource. Traditional knowledge is an element of the

identity of indigenous communities; therefore it has to be considered and evaluated under

the principles and values of each community. Through this chapter, we have observed

the significance of traditional knowledge for indigenous communities and for the rest of

society. Therefore, we can affirm that traditional knowledge itself constitutes a treasure

that we must maintain and promote.

Presently, traditional knowledge has many threats from endogenous and

exogenous factors. Consequently, it is important that the international community

continue working on projects, regulations, and public policies that encourage the

conservation of traditional knowledge. We have seen that one of the main causes of the

loss of traditional knowledge is the insertion of new values and life standards that make

young generations change their traditions and priorities. Therefore, it is important to

motivate young generations to return to their traditional practices. To do that, it is crucial

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to show them the strategic value of traditional knowledge and its impact in the worldwide

economy and in their communities.

The legal protection of traditional knowledge is an urgent need of Ecuador, the

Andean and Amazonian nations, and all bio-diverse countries. However, it is important

to consider that before the elaboration of any kind of regulation, we must understand all

the dimensions of traditional knowledge. For this reason, it is crucial to obtain the

participation of all the actors, especially the representatives of indigenous communities,

in order to develop a norm that can satisfy the legal requirements within the parameters

of respect of the native traditions.

We have seen that in Ecuador and the Andean region, there is a tendency to

promote the development of a sui generis system for the protection of traditional

knowledge. However, it is important to consider that the effectiveness of a legal

framework relies on its enforceability. Consequently, it is crucial to develop a

mechanism or to apply an existing legal system that is recognized by the international

community. Some of the major problems that traditional knowledge faces are

misappropriation and biopiracy. As a result, the only way to fight against these threats is

with an effective legal system that has been adopted and recognized by the world

community. That is the only way to protect the rights of traditional knowledge holders.

Nevertheless, we have to acknowledge that the adoption of an international legal

system for the protection of traditional knowledge is not an easy task. The decisions

made by the international community are the result of long and complex negotiations, in

which many interests are discussed. Most importantly, to bring a topic to the table, it is

crucial to have the support of the most powerful countries in order for the discussion to

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proceed.

Consequently, despite the fact that some discussions are taking place about

traditional knowledge protection, it is not yet a significant issue for the majority of the

international community. For this reason, Ecuador and rich bio-diverse countries cannot

wait until the international community has the will to adopt a legal system that embraces

the holistic nature of traditional knowledge. Therefore, we should start protecting

traditional knowledge under the existing intellectual property rights that have been

acknowledged by most of the countries in the world.

1 Woodliffe, J. , Biodiversity and Indigenous People, in International Law and the Conservation of Biological Diversity 259 (R. Bowman ed., London: Kluwer Law International, 1996). 2 Id. at 264. 3 Stephen B. Brush, The Demise of Common Heritage and Protection for Traditional Agricultural Knowledge, in Biodiversity & the Law 302, (Charles Mc Manis ed., Earthscan, London, 2007). 4 Chidi Oguamanam, International Law and Indigenous Knowledge 15 (Chidi Oguamanam ed.,University of Toronto Press, 2006). 5 Notice that for the purposes of this study we are not going to make any distinction between traditional knowledge and indigenous knowledge, because we consider the terms as synonyms that reflect the long standing traditions and practices of a community. 6 Howard Mann, Intellectual Property Rights, Biodiversity and Indigenous Knowledge: A Critical Analysis in the Canadian Context 1, paper prepared for the Canadian Working Group on Article 8 (j) of the Convention on Biological Diversity, November 1997. 7 United Nations, Office of the High Commissioner for Human Rights, Working Group on Indigenous Population, Protection of the heritage of Indigenous People, UN Office of the High Commissioner for Human Rights, 1997, iii. 8 Nuno Pires de Carvalho, From the Shaman’s Hut to the Patent Officer: A Road Under Construction, in Biodiversity & the Law 243, (Charles Mc Manis ed., Earthscan, London, 2007). 9 World Intellectual Property Organization, Intellectual Property and traditional Knowledge 4, http://www.wipo.int/export/sites/www/freepublications/en/tk/920/wipo_pub_920.pdf (last visited Oct.21, 2009). 10 Id. 11 See WIPO, The Protection of Traditional Knowledge: Revised Objectives and Principles, WIPO/GRTKF/IC/12/5(c), at Article 3. 2 (Dec. 6, 2007).

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12 See Oguamanam, supra note 4, at 26, 27. 13 Id at 16-18; see also Matthias Leistner, Traditional Knowledge, in Indigenous Heritage and Intellectual Property 56-61, (Silke von Lewinski ed., Kluwer Law International, The Netherlands, 2004). 14 Krystyna Swiderska, Protecting Traditional Knowledge: A framework based on Customary Laws and Bio-Cultural Heritage 3, Paper for the International Conference on Endogenous Development and Bio-Cultural Diversity, 3-5 October 2006, Geneva, http://www.iied.org/pubs/pdfs/G01069.pdf (last visited Oct. 21, 2009). 15 http://www.who.int/en/ (follow “Health topics” hyperlink; then follow “Traditional Medicine” hyperlink) (last visited April 16, 2009). 16 See Oguamanam, supra note 4, at 120,121. 17 Id. at 52. 18 Virgil J. Vogel, American Indian Foods used as Medicine, in American Folk Medicine 125, (Hand Wayland ed., University of California Press, London, 1976). 19 G.H. Shepard Jr., Nature’s Madison Avenue Sensory Cues as Mnemonic Devices in the Transmission of Medicinal Plant Knowledge among Matisgenka and Yora of Peru, in Ethnobiology and Biocultural Diversity 328 ( Stepp, Wyndham & Zarger eds., International Society of Ethnobiology, 2002). 20 C. Nadia Seremetakis, The Memory of the Senses, Part I: Marks of the Transitory 6,11,12, in The Senses Still (C. Nadia Seremetakis ed., Westview Press, United States of America, 1994). 21 Adebiyi, Adaikan, Prasad & S.C. Ng, Uterine Stimulating Effects of Crude Latex of Carica Papaya L., in Ethnobiology and Biocultural Diversity 299, ( Stepp, Wyndham & Zarger eds., International Society of Ethnobiology, 2002). 22 http://en.wikipedia.org/wiki/Epipedobates_tricolor (last visited April 16, 2009).

23 Monserrat Rios, Plantas Utiles del Ecuador: Uso y Abuso, in Conocimiento Tradicional y Plantas Utiles del Ecuador 11,15, (Rios, Cruz & Mora eds., ABYA-YALA, Quito 2008). 24 Lowell John Bean, California Indian Shamanism and Folk Curing, in American Folk Medicine 111, (Hand Wayland, University of California Press, London, 1976). 25 Id. 26 Barbara G. Myerhoff, Shamanic-equilibrium: Balance and Mediation in Known and Unknown Worlds, in American Folk Medicine 99, (Hand Wayland, University of California Press, London, 1976). 27 Stephen Brush, Protecting Traditional Agricultural Knowledge, 17 Wash. U. J.L. & Pol'y 59, 98-99 (2005), available at http://law.wustl.edu/journal/17/p%2059%20Brush%20book%20pages.pdf 28 K.M. Shyam Sundar & A.V. Balasubramanian, Ayurveda, Cosmovision and Traditional Agriculture, in Food for Thought 73, (Bertus Haverkort &Wim Hiemstra eds., Zed Books, London, 1999). 29 Stephan Rist, Juan San Martin & Nelson Tapia, Andean Cosmovision and Self-Sustained Development, in Food for Thought 178, (Bertus Haverkort &Wim Hiemstra eds., Zed Books, London, 1999).

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30 B. Campbell, Ancestral Futures? Historical Ecology in the North Ecuadorian Sierra, in Ethnobiology and Biocultural Diversity 448 ( Stepp, Wyndham & Zarger eds., International Society of Ethnobiology, 2002). 31 Id at 446. 32Amanda Kimble-Evans, Quinoa, lost crop of the Incas, finds new life, http://newfarm.rodaleinstitute.org/international/features/0803/quinoa/incaorganics.shtml (last visited Oct.21,2009). 33 http://www.potato2008.org/en/potato/origins.html (last visited April 12, 2009). 34 See Stephen Brush, supra note 27, at 101. 35 Raymond Hames, The Ecologically Noble Savage Debate 179, Department of Anthropology and Geography, University of Nebraska, Lincoln, Nebraska, available at http://arjournals.annualreviews.org/doi/pdf/10.1146/annurev.anthro.35.081705.123321?cookieSet=1 36 Manuela Carneiro da Cunha & Mauro W. B. de Almeida, Indigenous People, Traditional People, and Conservation in the Amazon, in Brazil: The Burden of the past; The Promise of the Future, 129 Daedalus No. 2 315, 324 (2000), (The MIT Press on behalf of American Academy of Arts & Sciences) available at http://www.jstor.org/stable/20027639 37 V.M. Toledo, Ethnoecology a conceptual framework for the study of Indigenous Knowledge of Nature, in Ethnobiology and Biocultural Diversity 514 ( Stepp, Wyndham & Zarger eds., International Society of Ethnobiology, 2002). 38 See B. Campbell, supra note 30, at 448,449. 39 Virginia D. Nazarea, Ethnoecology 76-79, (Virginia D. Nazarea ed., The University of Arizona Press, 1999). 40 Eugene Linden, Lost Tribes, Lost Knowledge, http://www.ee.ryerson.ca:8080/%7Eelf/abacus/lost-tribes-lost-knowledge.html (last visited April 11, 2009). 41 See B. Campbell, supra note 30, at. 456. 42 Michael J. Balick, Traditional Knowledge: Lessons from the Past, Lessons for the Future, in Biodiversity & the Law 281 (Charles Mc Manis ed., Earthscan, London, 2007). 43 S.Biber-Klemm & T. Cottier, Right to Plant Genetic Resources And Traditional Knowledge Basic Issues and Perspectives 18,( S.Biber-Klemm & T. Cottier eds., CABI, UK, 2006). 44 Personal Interview with Freddy a touristic guide at “La Isla de la Plata” and member of the indigenous community Manta-Guancavilca, Manabi-Ecuador, (January 4th, 2009). 45 Terry Janke, Our Culture, Our Future 24, http://www.wipo.int/export/sites/www/tk/en/folklore/creative_heritage/docs/terry_janke_culture_future.pdf (last visited April 12, 2009) 46 http://www.thehatsite.com/panama.html, (last visited April 11, 2009). 47 Conservation International. (n.d.). www.conservation.org, (last visited February 15, 2009).

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48 Rob Rachowiecki & Danny Palmerlee, Ecuador & the Galapagos Islands 17, (Lonely Planet Publications, August 2003) (February 1986). 49 World Bank. (n.d.). www.worldbank.org/ec. (last visited January 27, 2009). 50 Id. 51 http://www.codenpe.gov.ec/ (follow “Nacionalidades y Pueblos” hyperlink; then follow “Nacionalidades” hyperlink). 52 Ikechi Mgbeoji, Global Biopiracy 133, (UBC Press, Canada, 2006). 53 For further discussion about what it is biopiracy see Chapter III.

54 http://www.worldbank.org (follow Countries hyperlink; then follow Latin America and Caribbean hyperlink; then follow Ecuador hyperlink; then follow News & Events hyperlink; then follow Feature Stories hyperlink; then follow Indigenous Peoples, Poverty and Human Development in Latin America: 1994-2004 hyperlink) (last visited April 16, 2009). 55 Id. 56 Some experts consider that the introduction of “new technologies undermine traditional knowledge (Harwick, 2000, p53; Simms, 1999)”. However, it is important to note that depending on how the new technologies are used, they can enhance traditional knowledge. For instance, talking about the use of biotechnology in the agricultural field Glenn Davis Stone states that: "its impacts on traditional knowledge are diverse and even paradoxical. I here present two case studies on Indian cotton growers. (...) The first case, set in Andhra Pradesh, is a study in the disruption of traditional knowledge. Contrary to industry claims that the rapid adoption reflects farmer experimentation and evaluation, the farmers here have faced such wild variability in the seed system that they have all but given up on experimentation, and now show striking degree of faddism in seed choices. Contrary to activists' claims this 'deskilling' predated the GM seeds. (...) The second case, set in Gujarat, lacks the ethnographic depth of the first, but it offers and intriguing contrast. here the spread of GM cotton has been dominated by illicit seeds, leading to widespread flouting of seed laws aimed at protecting both the environment and the farmer; but there are signs of success both in cotton production and also the 'reskilling' of farmers.' Therefore, if the introduction of new technology is doing in a sustainable an adequate way, it can bring positive results to traditional knowledge. Glenn Davis Stone, The Birth and Death of Traditional Knowledge: Paradoxical Effects of Biotechnology in India 207,208, in Biodiversity & The Law, (Charles McManis ed., Earthscan, London, 2007). 57 WHO Traditional medicine Strategy, 2002-2005, http://whqlibdoc.who.int/hq/2002/WHO_EDM_TRM_2002.1.pdf. (last visited April 9,2009). 58 Id. 59 http://www.unutki.org (follow “Programmes” hyperlink; then follow “TK and Natural Resources” hyperlink; then follow “TK and Biological Resources” hyperlink). 60 http://en.wikipedia.org/wiki/Andean_Community, (last visited April 12, 2009). 61 Andean Decision 391 Article 2, available at http://www.comunidadandina.org/INGLES/normativa/D391e.htm 62 Id. at Article 5. 63 Id. at Articles 32-37.

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64 Id. at Article 35. 65 Id. 66 Manuel Ruiz, Regulating Bio Prospecting and Protecting Indigenous Knowledge in the Andean Community: Decision 391 and its Overall Impacts in the Region 9, UNCTAD (ed.), Geneva 30 October 2000, available at http://www.unctad.org/biotrade/BTFP/Legal/Legal_docs/Regulating%20bioprospecting%20and%20protecting%20indigenous%20knowledge%20in%20the%20Andean%20Community.pdf (last visited April12, 2009). 67 See Andean Decision 391, supra note 61, Article 7. 68 Temporary provisions are legal regulations that are in force during a certain period of time until the Decision can be fully applied. 69 Subregional nationals are considered the indigenous and local communities. 70 Id at Article 17. 71 Andean Decision 486 Article 3, available at

http://www.comunidadandina.org/INGLES/normativa/D486e.htm

72 The disclosure requirement of origin of any genetic resource or TK utilized in the inventive process and evidence of prior informed consent of the source country and/or community or individuals providing such genetic resources or TK, is a measure that pretends to oblige patent applicants to disclose the country of origin of the biological resources as well that the traditional knowledge involved (if it is the case) has been obtained previous informed consent of their providers. For further discussion of this topic see Chapter VI. 73 See Andean Decision 486, supra note 71, Article 26 74 See Nuno Pires de Carvalho, supra note 8, at 251-257. 75 Id. 76 Ecuadorian Constitution, 2008, available at http://www.asambleanacional.gov.ec/documentos/constitucion_de_bolsillo.pdf. Unofficial translation. 77 See Ecuadorian Constitution, supra note 76, at Article 57. 78 Id at Article 281 6). 79 Id at Article 313. 80 Id at Article 395. 81 Id at Article 400. 82 Id at Article 402. 83 Id. 84

http://www.iipa.com/rbc/2002/2002SPEC301ECUADOR.pdf. (last visited April 9, 2009).

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85 Ecuadorian Intellectual Property Law, available at http://www.iepi.gov.ec/Files/Leyes/LeydePropiedadIntelectual.pdf 86 Id at Article 1. 87 Id. 88 Id at Article 121. 89 Id at Article 126. 90 Id at Article 376. 91 Id at Article 377. 92 Agricultural Development Law, available at http://www.inda.gov.ec/DOCS/agrario.pdf 93 Id at Article 5. 94 See Glenn Davis Stone, supra note 56. 95 Environmental Management Law, available at http://www.ambiente.gov.ec/docs/LGA.pdf 96 Id at Articles 2, 11 (6). 97 Law that Protects Biodiversity in Ecuador, Official Registry Supplement 418, September 10th, 2004. 98 Id at Article 1. 99 National Biodiversity Strategy and Policy 2001-2010, available at http://www.ambiente.gov.ec/docs/Politica_Biod.pdf 100 Id at p. 3. 101 Id at 1-52. 102 Id. 103 Id. 104 Id.

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CHAPTER III

BIODIVERSITY: A MULTIFACETED ASSET

Biodiversity is a complex topic, involving a variety of aspects, from the

conception of biodiversity as a commodity to the importance of its conservation as a

crucial factor of life itself. Therefore, this chapter will examine biodiversity and its status

in the contemporary world, by proffering a definition of biodiversity, estimating its value,

and analyzing the problem of biodiversity loss. Later, we will focus on the analysis of

bioprospecting and biopiracy in order to identify the positive or negative impact of these

practices. Finally, we will study biodiversity in Ecuador, which will help us to determine

the place of biodiversity in that country and the legal framework that has been developed

to manage and conserve biodiversity.

1. What is biodiversity?

Biodiversity is currently considered one of the world’s most valuable assets, not

only for its role within the ecosystem balance, but also for the multiple uses of its

resources in different industries. For instance, "the biodiversity of tropical forest is

emerging as the forests' most valuable economic asset and very important source for the

pharmaceutical industry worldwide. It is a source of product generating incomes in the

region of ten billions of dollars annually."1

Biodiversity is a relatively new concept that was developed in the 1980’s.2 It is

the result of a new interpretation of the status of nature and the importance of its diversity

within the environmental balance. Edward O. Wilson, who is considered the father of

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biodiversity, came up with this new concept. He “understood ‘biodiversity’ as an

‘umbrella concept’ of the biological sciences, thus aiming at a holistic and dynamic

understanding of nature.”3 It is important to state some of the proposed definitions of

biodiversity in order to establish a starting point that will facilitate the understanding of

this term.

One of the most cited definitions of biodiversity is the one developed by

McNeely. For him, “Biological diversity encompasses all species of plants, animals and

microorganisms and the ecosystems and ecological processes of which they are parts. It

is an umbrella term for the degree of nature’s variety...It is usually considered at three

different levels: genetic diversity, species diversity and ecosystem diversity.”4

The U.S. Congress Office of Technology Assessment, "Technologies to Maintain

Biological Diversity," 1987 has defined biodiversity as:

[Biological diversity] is the variety and variability among living organisms and the ecological complexes in which they occur. Diversity can be defined as the number of different items and their relative frequency. For biological diversity, these items are organized at many levels, ranging from complete ecosystems to the chemical structures that are the molecular basis of heredity. Thus, the term encompasses different ecosystems, species, genes, and their relative abundance.5

The Convention of Biological Diversity, in its Article 2, determines that

Biodiversity is:

[Biological diversity means] the variability among living organisms from all sources including, interalia, 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.6

Nonetheless, more important than defining biodiversity is to understand it,

because of all the implications of the term. In this respect, it is important to analyze the

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umbrella concept given by Wilson. Biodiversity cannot be considered an element of

nature, because it is a holistic concept in which converge all the varieties, variability, and

interaction of the different living resources and forms that exist in nature. Thus, it is an

intangible concept that represents the variability among living organisms. “Accordingly,

the term does not mean the sum of all ecosystems, species and genetic material, but rather

represents the variability within and among them. It is, therefore, an attribute of life, in

contrast with ‘biological resources,’ which are the tangible biotic components of

ecosystems.”7

Therefore, it is important to distinguish biodiversity from biological resources.

“Wood posits that biodiversity is the source of bioresources, and therein lays its value to

humanity. He sees biodiversity as a concept on a higher plane of abstraction than

biological resources.”8 Consequently, biodiversity can be understood as the abstract idea

that embraces the variability of all living forms and bioresources, which are the tangible

subjects that compose biodiversity.

The Convention of Biological Diversity, in its Article 2, determines that

“‘Biological resources’ includes genetic resources, organisms or parts thereof,

populations, or any other biotic component of ecosystems with actual or potential use or

value for humanity.” The article also states that “‘Genetic resources’ means genetic

material of actual or potential value. Finally, it states that “‘Genetic material’ means any

material of plant, animal, microbial or other origin containing functional units of

heredity.”9 As a result, the Convention of Biological Biodiversity states a clear

difference between biodiversity and biological resources. Thus, biological resources

have a material connotation; in other words, they can be physically perceived. On the

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other hand, biodiversity is concerned more with the classes of living organisms and their

number or frequency.

This distinction between biodiversity and biological resources has been adopted in

other fields. In this respect, Oguamanam considers that:

Seen from a higher plane of abstraction, biodiversity, as distinct from bioresources, has no recognized owner. Biodiversity, or the natural environment, for that matter, knows no national boundaries or political boundaries. Ownership is not an idea suited to biodiversity. For this reason, international law on biodiversity recognizes the sovereign right of nations over their biological resources. However, dealings with biological resources have an impact on biodiversity. Consequently, international law adopts an overtly collectivist approach to the preservation of global biodiversity. Therefore, instead of the principle of ‘common heritage of mankind’, issues of environmental protection, specifically biodiversity, fall within the amorphous concept of ‘common concern of mankind’. Here, the emphasis is not on ownership but on the duty or responsibility to protect and not to harm, abuse or destroy.10

As we can see, the fact that biodiversity is considered an abstraction that

encompasses the variability of life forms means that biodiversity cannot be understood as

a subject of ownership. However, the tangible components of biodiversity are susceptible

to appropriation. This fact brings to light a controversial issue regarding ownership,

sustainable management, and equitable reward. Before the Convention of Biological

Diversity, biological resources were considered a common heritage of mankind.

Nevertheless, after the issuance of the Convention, countries acquired the sovereignty

and ownership of these biological resources. As a result, countries have the right to

control access to their biological resources. The impact of the Convention of Biological

Biodiversity will be discussed in the next chapter.

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2. Value of Biodiversity

Biodiversity plays an important role within the survival of different species and in

nature in general. Therefore, we can affirm that mankind’s subsistence depends on

biodiversity. This fact has caused the conservation of biodiversity to become one of the

most important issues in our time. As a consequence, it is important to determine why

biodiversity is valuable and what different points of view and approaches have been used

to determine the significance of biodiversity.

In this respect, Perlman and Andelson believe that values can be analyzed under

two levels of conceptualization. Thus, value conceived as “the preferences, motivations,

and [underlying] belief systems that human beings use in assessing the world”11 or “in

undertaking and activity, investigating a matter, or protecting an object.”12 The second

value concept is understood as “the worth of a particular object or activity.”13

Applying these concepts to biodiversity, the first category of value represents the

close relationship that exists between human beings and Nature. Through time, people

develop convictions, beliefs, and points of view about different topics. These

perspectives are the result of the internalization and assimilation of different issues. In

this case, the first kind of value could be translated to how much biodiversity is worth for

humans and what is the position that it occupies within people’s hierarchy of priorities.

For instance, as noted in chapter two, indigenous communities have a holistic approach to

the relationship between people and biodiversity, understanding the system as a whole

that continuously interacts. Thus, for native communities, biodiversity constitutes a

sacred element that has to be fully respected.

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The second kind of value is more oriented to how much biodiversity is financially

worth. This question not only involves the economic aspect, but also the cultural side.

Thus, the value of biodiversity will depend on the point of view and beliefs of a specific

society. As a consequence, the conceptualizations of value are related; because both

involve the intrinsic meaning that biodiversity has to people. However, the second

concept of value fits better within the Western model of society. It occurs because

biodiversity is not understood within the holistic conception that indigenous people have.

As a consequence, for the Western world, it is easier to project the exploitation and use of

biological resources within the market model, without considering the sacred value that

some indigenous groups attribute to biodiversity.

In this respect, some scientists believe that indigenous communities valuate

biodiversity under the first concept because they assume that it is an inherent element of

their nature, values, and social structure. The reasons to support this thesis are:

First values are not interpreted on the basis of economic exchange. Second, an indigenous world view is riddled with strong internalized belief systems, and hence it fits into that value category. On the contrary, a Western perspective is more likely to view biodiversity from the second value paradigm. This is so because it operates within a capitalist and market-oriented world view that emphasizes economic determination of values.14

Consequently, in order to develop an efficient legal framework for biodiversity

management, it is important to generate a mechanism that allows us to consider both

conceptualizations of value. In other words, it is crucial to determine a way to maximize

the benefits of biodiversity within the parameters stated by the holistic approach that is

practiced by indigenous communities. For this reason, we have considered it important to

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establish the Western approach regarding to biodiversity valuation in order to define how

it can be compatible with the indigenous approach.

The most significant approaches that have been developed by the Western world

are the anthropocentric or utilitarian approach and the ecocentric approach. “Under the

anthropocentric approach, the value of biodiversity is explained by its contribution to

human welfare and/or happiness. (...) The ecocentric approach is concerned with the

intrinsic value of biodiversity, meaning its value independent from its contribution to

human welfare.”15

First, it is important to note that both approaches are looking for justifications and

motivations for biodiversity preservation and conservation. The anthropocentric or

utilitarian approach considers the moral and practical sides of biodiversity valuation.

Thus, it emphasizes the moral responsibility to protect and conserve biodiversity, but at

the same time, it opens the door to see the possibilities for exploitation of biodiversity

and enhancement of society’s welfare and happiness. On the other hand, the ecocentric

approach believes that the value of biodiversity is in biodiversity per se. Therefore, it

does not consider the interaction with people and the benefits that result from it, because

it analyzes biodiversity as an independent element.

Under the indigenous approach, biodiversity is appreciated within a holistic

meaning. That means indigenous people believe that the existence of every single entity

in the world depends on an interaction between all the dimensions that surround life.

Thus, human beings, nature, and the spiritual world are constantly communicating in

order to obtain balance. As a consequence, despite the indigenous belief that biodiversity

is worthy in itself, they cannot understand it as an independent element. This is because

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within their holistic cosmovision, nothing can act without affecting the relationship and

status of the other dimensions. As a result, everything has to be respected and valued as a

whole.16

Consequently, the indigenous approach could be considered closer to the

anthropocentric approach because the interrelation between the community and Nature

ultimately benefits people and their existence. However, it does not mean that these

approaches share every principle or statement. Actually, one of the biggest issues

regarding this topic is that this Western approach does not encompass all the beliefs

contained in the holistic approach. For instance, the anthropocentric approach considers

the human being to be the center of everything, but under the indigenous approach,

“humans are neither above nor below others in the circle of life. Everything that exists in

the circle is one unity, of one heart.”17 Therefore, it is important for the purposes of this

study to establish some relevant arguments from the anthropocentric approach in order to

see if they can be reconciled with the indigenous approach.

According to the anthropocentric approach, “Biodiversity is valued by science as

an indicator of the sustainable use of resources. Furthermore, economic theories refer to

the so-called direct, indirect and optional value of biodiversity.”18 Because we are trying

to propose a legal framework that embraces and conciliates the different positions within

the biodiversity management, an analysis of the economic argument is crucial. It will

help us to determine whether this argument focuses only on the revenue perspective or

whether it contemplates elements that go beyond money.

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a. Direct Value

The direct value of biodiversity is more focused in biological resources than

biodiversity itself. This is because this kind of value considers the tangible resources

that are susceptible to appropriation, and therefore, can be commercialized, used,

produced, consumed, and exploited. “Direct use value refers to those elements of

biodiversity that can be consumed directly, traded or used as an input to commercial

activities, such as plants, animals that are collected or hunted for food, clothing, energy or

shelter.”19

Since ancient times, biological resources have been used by people to satisfy their

food and health needs. Biological resources can be considered the main source of food

for humans and other living organisms. The Report of the Consultation on the Cross-

Cutting Initiative on Biodiversity for Food and Nutrition has stated that:

There are multiple links between biodiversity, food and nutrition. Biodiversity at the genetic and species levels provides the basic components of nutrition, including energy, protein, fats, minerals and vitamins, as well as bioactive “non-nutrients” (e.g., antioxidant phytochemicals). The diversity of fruits, leafy vegetables and other plants is particularly important, but also of fish and other animal sources. While in the aggregate, only three crops provide some 50% of human energy intake, about 10,000 species are used, or have been used, for food at some time. Cultivated species are often complemented by wild species that can be of particular significance in nutritional terms. Wild sources of food in general remain particularly important for the poor and landless, and are especially important during times of famine and insecurity or conflict where normal food supply mechanisms are disrupted and local or displaced populations have limited access to other forms of food. Even at normal times wild foods are often important in complementing staple foods to provide a balanced diet.20 Corroborating this argument,

FAO and other organizations and initiatives in the scientific community (e.g. the International Union of Nutritional Sciences (IUNS), the United Nations University (UNU), the International Food Data Conference (IFDC) and the United Nations Standing Committee on Nutrition (SCN)), recognized that biodiversity at the species and variety levels provides the basic components of

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nutrition (...) Diversity is of particular significance for indigenous communities and for poor and vulnerable communities, especially in times of shortages of major crops. In addition to its role in supporting and sustaining food production, biodiversity, by underpinning dietary diversity, has a role to play in addressing both undernutrition associated with poverty, and obesity-related diseases associated with urbanization, in developed and developing countries.21

As noted above, biodiversity plays an important role not only for human

nourishment but also as a mechanism to reduce poverty and famine. However, despite

the fact that these resources have been used for a long time, there are a lot of bioresources

waiting to be discovered and exploited. Wilson has stated that “people have utilized

about 7000 kinds of plants for food, predominant among these being wheat, rye, maize

and about a dozen highly domesticated species. Yet are at least 75,000 edible plants in

existence, and many of these are superior to crop plants in the widest use.”22 Therefore,

it is important to state a plan and strategy to maximize the use of biodiversity in aid of

humanity.

The international community has recognized the value of biodiversity and its

direct relationship with human subsistence. As a consequence, biodiversity has acquired

a strategic position within the world’s policy. For this reason, biodiversity is currently

considered one of the fundamental backbones of food security. Therefore, sustainable

management of biodiversity is crucial to securing the provision of enough resources to

feed people around the world. As a result, “in 2004, the Conference of the Parties to the

Convention on Biological Diversity (CBD-CoP) recognized the linkage between

biodiversity, food and nutrition and the need to enhance sustainable use of biodiversity to

combat hunger and malnutrition, and thereby contribute to Target 2 of Goal 1 of the

MDGs (Decision VII/32).”23

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Another field in which we can appreciate the direct value of biodiversity is human

health. As stated in chapter two, since the origin of the humanity, people have used

plants for the treatment of illness. Indigenous communities around the world have

developed valuable compounds based on the use of biological resources to satisfy their

health requirements. For this reason, biodiversity is considered one of the most important

sources for pharmaceutical development.

Natural products compose a superb resource for drug discovery because they have evolved, in some cases during millions of years, to exploit fundamental biological pathways often shared by humans. In addition, the random aspect of the evolutionary process gives rise to products with unforeseen, and perhaps unforeseeable, biological actions, allowing for the development of pharmaceuticals with novel mechanisms of action. For example, paclitaxel (discovered in the bark of the Pacific yew tree), a mainstay of chemotherapy for a variety of cancers, was the first drug shown to inhibit microtubule breakdown during mitosis.24

The World Health Organization has recognized the intrinsic relationship between

biodiversity and health. This organization has defined human health as “a state of

complete physical, mental and social well-being.”25 Therefore, it has been considered

that an adequate and sustainable management of biodiversity is fundamental to providing

individuals with all the elements necessary for maintaining their physical and mental

health. Thus, biodiversity is not only the source of medicinal compounds, but also the

space in which the miracle of life occurs. Therefore, ecosystems and health are

visualized within a holistic concept that encompasses all the dimensions that can be

presented in the interaction between people and Nature.

In addition, the WHO has recognized the significance of biodiversity as a source of

biological resources for the treatment of illness. In this respect, it has noted that

biodiversity plays an important role in both traditional and non-traditional medicine.

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Millions of people around the world depend partly or fully on products collected from ecosystems for medicinal purposes (R16). Even when synthetic medicines (often originating from natural sources) are available, the need and demand for wild products persists. Some of the better-known pharmaceuticals from natural sources include aspirin, digitalis and quinine.26

In addition, the WHO has reported that “80% of the people in developing countries

rely on traditional medicine for their primary health-care needs, and that about 85% of

traditional medicine involves the use of plant extracts. This leads to the conclusion that

about 3.5 to 4 billion people in the world rely on plants as sources of drugs.”27 According

to Farnsworth “about 119 pure chemical substances extracted from fewer than 90 species

of plant are used in modern medicine throughout the world today.”28 Consequently,

biological resources are critical providers of supplies for human health in traditional and

modern medicine.

As we can appreciate, the direct value of biodiversity to human beings is evident

and undeniable. In addition, this direct value is shared by the anthropocentric and

indigenous approaches. This is because both indigenous communities and non-

indigenous groups depend on biodiversity for their survival. As a consequence, this

intrinsic relationship between human life and nature causes every single actor to

recognize the direct benefits that they are obtaining from the ecosystem.

However, it is important to determine the boundaries of this direct use in order to

follow the holistic perspective of the indigenous approach. This is necessary because

indigenous communities do not consider the profitable side of biodiversity. On the other

hand, according to the utilitarian approach and the market model, “direct use values can

normally be realized by individuals or companies, and are thus privately appropriable.”29

Consequently, in order to reconcile these postures, it is important to state limits and

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conditions for biodiversity exploitation that can satisfy the expectations of both sides.

This point will be analyzed in future chapters.

b. Indirect Value

The indirect value of biodiversity refers to a kind of value that is not susceptible

to translation into economic terms. However, it represents an enormous contribution to

the environment and to society. Therefore, it can be understood as “ecosystem services.”

Thus, the indirect value of biodiversity

consist[s] of the regulatory functions of ecosystems, such as nutrient recycling, sedimentation, processes, waste treatment, water regulation, gas regulation and other functions which obviously support or protect ecological activity. The services depend on the proper functioning of the ecosystem, which, in turn, depends on an ecologically healthy level of biological diversity. In other words, the resilience of the ecosystem.30

The indirect value is reflected in the role that biodiversity plays in keeping the

ecosystem balanced. This indirect value is closely related to the direct value because

without equilibrium in the environment, human beings will not be able to obtain enough

resources for their survival. Consequently, despite the fact that humans can not

physically appropriate the indirect value of biodiversity, they can benefit from it because

it provides a base from which to obtain the goods and services that do have a direct value.

Again, it is important to consider this indirect value in order to exhort the urgent

need to protect and conserve biodiversity. Since the beginning of human race,

ecosystems have been affected by the different activities of mankind. Therefore, the

ecosystems “capacity to recover from external stresses and to maintain the option of

change is defined by the level of its biodiversity.”31 For this reason, adequate protection

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of biodiversity will ensure the existence of a balanced environment and enough resources

for the satisfaction of human needs.

Moreover, we can appreciate that this indirect value is consistent with the

indigenous approach. Within the holistic perspective, biodiversity should be analyzed in

every aspect. Indigenous people consider this indirect value to be intangible. For

indigenous communities, the environmental balance is a fundamental part of their

philosophy. For this reason, as noted in previous chapters, when they are going to engage

in any kind of activity that disturbs the ecosystem, they ask for permission from Mother

Nature.32 Consequently, this indirect value is aligned with the principles of the

indigenous approach.

c. Option Value

The option value of biodiversity makes reference to the importance of conservation

and preservation of nature. The point of this value is that it is our responsibility to

conserve biodiversity now in order to ensure that future generations will still have the

major types of species and genes. Future generation will then have to decide whether

they will exploit that biodiversity. According to Oguamanam, “Maintaining genetic

diversity is a way to guarantee the gene pool from which sought-after genetic character

can be derived in the future.”33

In addition, this option value approach contemplates the importance of all

information that biological resources contain in order to guarantee the subsistence of

biodiversity. Thus, it states that bioresources have been suffering an adaptation process

through time; therefore, all the information regarding to the evolution of species is

contained in its genes. This information is fundamental when we are trying to find a

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useful application of a genetic resource, because it will disclose us how the resource

reacts to a determinate change of environment. Supporting this point, some experts have

said that:

Optional value of biological diversity lies in the amount of information contained in life forms, which has accumulated in the process of evolution. A community of animals and plants, which has co-evolved over million years, contains an encapsulated history of information, and this cannot be exactly reproduced.34 This information secures the continuity of the natural evolutionary process and the adaptation of species to a changing world. In conserving biological diversity, the option remains intact that the future exploration and use of currently unknown resources may generate discoveries of new and useful qualities.35 The loss of any species, and of even one gene, could thus limit our options for future.36

The option value of biodiversity is consistent with the indigenous approach.

Indigenous people consider conservation and respect for biodiversity crucial to the

continuance of life on earth. They also believe that if they protect nature, they will

conserve enough biological resources for future generations. In addition, for indigenous

communities, biodiversity conservation is something that goes beyond the preservation of

biological resources because it also involves the perpetuation of culture, tradition, and

beliefs.37

In this respect, Carlos Correa talking about community rights enhances the strong

relationship between biodiversity and indigenous people and states:

Community rights recognize that the customary practices of local communities derive from a priori duties and responsibilities to past and future generations of both human and other species. This reflects a fundamental relationship with all life, and is imbued with an innate demand for respect. Despite the fact that this worldview is not commonly understood by the dominant western world, the purpose of these rights is to recognize and protect the multi-cultural nature of the human species. Community rights and responsibilities that govern the use, management and development of biodiversity, as well as the traditional knowledge, innovations and practices relating to them, existed long before private rights over biodiversity emerged, and concepts of individual ownership and property arose. (...)

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This system of rights, which enhances the conservation and sustainable use of biological diversity and promotes the use and further development of knowledge and technologies, is absolutely essential for the identity of local communities and for the continuation of their irreplaceable role in the conservation and sustainable use of this biodiversity.38

As we can see, the different types of value proposed by the anthropocentric

approach are not altogether inconsistent with the indigenous approach. On the contrary,

they are aligned in many points. Nevertheless, the approaches are not completely

compatible because they have different starting points. Therefore, it is crucial to

understand the positions of the different actors in order to conciliate postures and models.

For indigenous people, “life and its forces are seen as a gift to be humbly accepted,

not as something to be taken for granted or used to manipulate other life forms. Life is

revered, acknowledged, and reaffirmed through prayer, ceremony, dance and ritual.”39

This cosmovision of life is also translated to the biodiversity field. As a result, man can

enjoy the gifts of nature, but he/she cannot abuse nature. Consequently, a Western

approach in which exploitation of biodiversity is considered important to benefit human

beings within a market model can violate the principles of indigenous people.

Nevertheless, if biodiversity is managed with respect and conservation and protection

mechanisms are strengthened, indigenous communities would accept those measures.

This point can be proven by many indigenous practices that show that indigenous

people are open and actively practicing sustainable management of biodiversity to

improve biodiversity variability. For instance,

Working in Ecuador portion of the Amazon forest, Irvine has also reported that Runa Indian swiddens resemble agroforestry system rather than the slash-and-burn that merely results in temporary clearings in the forest canopy. Compared to unmanaged fallows, Irvine found that management actually increased species diversity in 5-years-old fallows. Between 14 and 35% of

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this enhanced species diversity was attributed to direct planting and protection of secondary species.40

Consequently, it is important to evaluate the economic and non-economic value of

biodiversity in order to provide a legal framework that can satisfy the expectations of the

different players. However, we have established that indigenous and non-indigenous

people share the belief that conservation of biodiversity is a necessary global interest.41

The benefits of biodiversity should be valued not only under the revenue perspective, but

also in accordance to intangible principles and values that facilitate the existence of life.

3. Biodiversity Loss

As we have stated before, conservation of biodiversity is a global concern that is

becoming more important on a daily basis. Since the beginning of the world,

biodiversity has undergone many changes, some positive and some negative. However,

we now are facing one of the most frightening degrees of biodiversity loss. “Biologists

warn that the present biodiversity loss is part of the sixth, man-made extinction period,

the rate of extinction being 100 to 1000 times higher than the estimated rates for the

natural extinction process.”42

According to Jeffrey McNeeley and Peter Raven “we are confronting an episode of

species extinction (more) than anything the world has experimented in the past 65 million

years.”43 This phenomenon is a result of a mixture of factors and processes. First, we are

currently suffering the effects of previous biodiversity extinction. This means that

despite the fact that biodiversity has recovered; we still have less variety in our genetic

resources than before. This undermines our quality of life because the environmental

balance was unquestionably affected. According to experts, “each time the perished

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species have been replaced by an even larger number of descendants of the surviving

species.”44 Therefore, variability among living organisms is diminished, as are our

options for benefitting from biodiversity.

In addition, we have to consider the introduction of new technologies and manmade

practices that have disturbed the ecosystem equilibrium. This sum of factors has caused

the worst biodiversity crisis in history. For this reason, it is important to analyze the most

important causes of biodiversity loss in order to look for possible solutions.

It is important to note that despite the fact that not all human communities agree

with the anthropocentric approach, this study will use as a starting point the implications

that biodiversity loss have for human life. We have decided to use this orientation

because the major concern of biodiversity loss is human survival. Thus, “lack of

biodiversity implies the extinction of all life forms including humankind, characterized as

a creature in a state of obligate dependency upon many critical products and processes of

nature.”45 Therefore, because this research is being conducted by humans for humans, the

anthropocentric view will determine the base of the analysis.

There are two major causes of biodiversity loss, the direct and the indirect causes.

The direct causes of biodiversity loss are mainly related to ecosystem alterations.

“Habitat loss and degradation are the primary proximate causes of biodiversity loss

world-wide.”46 For instance, “The tropical moist forests of the worlds in Latin America,

Africa and South East Asia combined have been reduced from an aggregate area of about

the size of the continental United States, to an area of about one-third that size.”47 This

loss and degradation have produced the extinction of many species, thereby causing the

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loss of genetic information necessary for the adaptation of the species to environmental

changes.

Moreover, over-harvesting and hunting abuses have resulted in the loss of flora and

fauna. “Another direct cause (...) is the loss of animal and plant species caused by their

overexploitation through unsustainable fishing, hunting and collecting practices, in order

to profit from the demands of international markets.”48 In their search for adequate

means of livelihood, human beings have confused the limits of exploitation and abuse.

As a consequence, people trying to pursue better conditions of life have underestimated

the value of biodiversity and have transformed it in another commodity, without regard

for the indirect benefits that biodiversity brings.

This irresponsible use and abuse of biological resources have caused biodiversity to

lose its balance, and, even worse, they have caused biodiversity to lose its regeneration

capacity. “Scientists are in agreement that in an ideal situation, nature, or biodiversity,

has a capacity for self-sustenance and regeneration. (...) Nevertheless, the current global

biodiversity crisis appears to undermine nature’s regenerative capacity.”49 We are facing

one of the most explicit consequences of the non-sustainable management of biological

resources and the introduction of new values and life styles – climate change.

Climate change “reflects abnormal variations to the expected climate within the

Earth's atmosphere and subsequent effects on other parts of the Earth, such as in the ice

caps over durations ranging from decades to millions of years.”50 Nowadays, climate

change is considered one of the proximate causes of biodiversity loss, and the 2005

Millennium Ecosystem Assessment estimated that by the end of this century, climate

change will be the main driver of biodiversity loss.51 The consequences of biodiversity

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loss originated by climate change will affect all crucial areas of human subsistence. For

example, we already stated that biodiversity plays an important role in the food security

field; the impact of climate change in this field according to the FAO will not be positive:

It is therefore very likely that climate change will affect the ecosystem services provided by agricultural biodiversity. This impact will be different for the different components of agricultural biodiversity. There will be mismatches in response times to climate change between interacting species (plant and pest). Certain genotypes will be favored against others and communities within agro-ecosystems will reshuffle. This means potentially that there will be trophic decoupling of food webs and disruption of mutualism and evolutionary processes, leading to loss of functional biodiversity and to localized impacts in the delivery of ecosystem services such as lack of pollination, loss of soil biodiversity and capacity for nutrient cycling, or loss of natural biological control leading to potential new pest outbreaks.52

As most people would expect, the direct causes are in some degree the result of

human activity and reckless use of biodiversity. Therefore, if we took off the veil, we

would find that some underlying causes of biodiversity loss are related to sociological

factors. These underlying causes have sometimes gone unnoticed and un-debated within

biodiversity conservation policies. Nevertheless, it is fundamental to analyze the reality

beyond the obvious causes of biodiversity loss to develop a consistent framework for

biodiversity management. “If strategies and instruments for the conservation and

sustainable use of biodiversity are to be effective, they must address the underlying

causes as well.”53

Some of the underlying causes of biodiversity loss are related to economic

reasoning and arguments. According to economic theory, biodiversity loss occurs

because the “economic failure of the market to adequately recognize the full and true

value of biological resources plays a preeminent role.”54 It occurs because the

exploitation of biological resources is inexpensive in comparison with the benefits that

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can be taken from those resources. As a result, the exploitation of bioresources does not

correspond to a sustainable model because it is easier to take advantage of biodiversity

without taking reasonable measures to conserve it. In addition, some biological resources

can be made into marketable products; however, others have difficulty finding an

application and a market niche. This distinction makes it difficult to define the true value

of biodiversity, and therefore it causes an underestimation of value within the policy

making process. “Therefore, the markets do not secure the economically correct balance

between the utilization and conservation and maintenance of biodiversity.”55

Wood and other skilled professionals considered it important to analyze the

problem of biodiversity loss not only under the proximate causes’ perspective, but also

considering the factors that are behind these direct causes. Therefore, they decided to

explore the root causes of biodiversity loss. “Root causes of biodiversity loss refer to the

set of factors driving biodiversity loss, the distance of which from the actual incidence of

the loss. Either in space or in time, makes them a challenge to identify and remedy.”56

This knowledgeable group of researchers believes that the analysis of the

sociological issues is crucial to understanding all dimensions of the problem of

biodiversity loss. Nevertheless, this analysis cannot be confined to consideration at the

local level, but should also be taken to the international level. The broader degree of

analysis is necessary because biodiversity conservation is a global concern, and we are

living in a globalized world. Globalization means that the decision-making system is

constantly interconnected among all the actors, and as a consequence, economic policies

should be created within these global parameters. This process means that in some way

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biodiversity management will be impacted by the world’s political, sociological and

economical forces.

To understand why extensive alteration and destruction of habitats is occurring, it is essential to understand what lies behind these proximate causes. Socioeconomic forces and circumstances create incentives for activities that put pressure on biodiversity and create disincentives for more sustainable behavior. Socioeconomic institutions, including, inter alia, market, laws, political bodies and social norms, frequently favor expansion of patterns of development that lead to biodiversity loss. Yet, the connections between social and economic structures, on the one hand, and biodiversity loss, on the other, are not well understood. (...) Only by exploring and understanding and exploring the socioeconomic factors at various levels- local, regional, national and international- that drive people to degrade the natural environment will be able to change this behavior.57

The conclusions of the research show that a close relationship exists between

biodiversity loss and sociological factors at all levels. Therefore, the root causes of

biodiversity loss are identified in this matrix:

LEVEL & CONSEQUENCES

ROOT CAUSE

Domestic Demographic pressure due to population growth and migration.

Poverty and inequality

Isolation of a site may cause the degradation of the ecosystem because the

increased use of resources.

International Pressures caused by macroeconomic policies

International trade may shape the use of resources, sometimes it leads to an

unsustainable use of resources.

CONSEQUENCES

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LEVEL & CONSEQUENCES

ROOT CAUSE

Government and market responses predominantly address socio-economic

and political pressures. Thus, they pay little attention to environmental

problems and it promotes the expansion of the use of natural resources

Economic, social and political objectives make that governments do not take

adequate steps to protect environment.

As a result we have a greater use of biological resources without

corresponding measures essential to protect the environment.

Source58

In conclusion, the use of biodiversity is necessary. Nevertheless, it is important to

define the limits of its exploitation in order to avoid biodiversity loss. Consequently, it is

vital to determine the sociological, economic, and political factors that lie behind the

national and international policies in order to establish priorities within a sustainable

model. In addition, it is important to create incentives for the protection of biodiversity.

As we have stated above, the exploitation of biological resources is cheap, and there is no

mechanism to promote sustainable management of bioresources.

Finally, the international community should work on changing the direction of the

global economy. For years we have been living in a model in which the over-exploitation

of biological resources constitutes the basis of revenue and economic growth. It is

important to understand that if we continue misusing biodiversity, we will not have

biological resources to use in the future. This chart59 summarizes what we have stated

above, including the proximate and underlying causes of biodiversity loss and their

impact:

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4. Bioprospecting and Biopiracy: Removing Ghosts

Biodiversity prospecting or “bioprospecting” refers to the process of looking for

potentially valuable genetic resources and biochemical compounds in nature.60 Thus,

bioprospecting is a practice that is not limited to the medical field, but rather occurs in

other areas, including agriculture, cosmetics, food, and biotechnology. Following this

approach, we can affirm that bioprospecting has been practiced since the beginning of the

mankind. In chapter two, we discussed how ancient communities developed compounds

based on biological resources for the treatment of illness, as well as new crops for the

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satisfaction of nutritional needs. Therefore, the use of biodiversity for medical and

agricultural applications shows that bioprospecting has occurred around the world since

antiquity.

Bioprospecting had been shaping global cultures for centuries before a world trade organization came into being. A quick tour of almost any garden, farm field, or medicine cabinet should serve as a reminder that the global economy has in part been built on products of bioprospecting. According to Joshua Rosenthal, deputy director of the Division of International Training and Research at the NIH Fogarty International Center, more than 50% of the most prescribed medicines in the United States contain compounds derived from natural products. And an even larger percentage of the world's people rely on natural products for their primary medicinal needs. 61

In contemporary times, bioprospecting has acquired significant value for many

industries that work on the development of new products. The pharmaceutical,

biotechnology, agriculture-food, and cosmetic industries see biodiversity as a valuable

source of resources, and they consider bioprospecting to be a mechanism useful to

identify those resources. For instance, “In the United States, some 25 percent of

prescriptions are filled with drugs whose active ingredients are extracted or derived from

plants. Sales of these plant based drugs amounted to some $ 4.5 billion in 1980 and an

estimated $ 15.5 billion in 1990.”62 This fact has arisen in a controversial debate between

the use and access to biological resources. This controversy is deeply influenced by the

North and South debate.

Traditionally biological resources were considered a “common heritage of

mankind,” which means in a broader sense that “the natural resources and vital life-

support services belong to all mankind rather than to any one country.”63 Consequently,

these resources can be considered goods that are commonly owned by the whole human

race, but not by any specific group. To this respect, John Stuart Mill suggested that “the

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Earth itself, its forest and water above and below the surface. These are the inheritance of

the human race, and there must be regulations for the common enjoyment of it.”64 This

perception meant that biological resources where considered public goods, and

consequently, freely accessible.

For this reason, many pharmaceutical companies and botanic gardens collected

significant samples from bio-rich countries for experimental and commercial purposes.

As a result, the benefits from exploitation of biological resources were hoarded by third

parties instead of being used for the benefit of the countries where the biological

resources were found. For instance,

as recently as the 1980s, the plant rosy periwinkle (Catharanthus roseus)65 gave rise to two important drugs, vinblastine and vincristine, which are used to treat Hodgkin's disease and childhood leukemia, respectively. Together, the two drugs, manufactured primarily by Eli Lilly, net $100 million dollars annually, yet the source countries have never received a penny in royalties or other compensation.66

This kind of episode aggravated the historical friction between biologically rich

countries in the South and technologically rich countries in the North. From this point of

view, since colonialism, biodiversity rich countries or mega-diverse hotspots have been

the principal suppliers of raw material to industrialized countries that own the technology

to process and transform bioresources into final products. Therefore, this posture

suggests that countries in the South have been exploited by developed countries in the

North.

If we translate the North-South debate to the access and management of biological

resources, we would find that southern countries feel outraged over the supposed

misappropriation by northern countries of plant material and traditional knowledge for

agricultural and pharmaceutical purposes. Global conditions show that countries in the

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South are the principal source of biodiversity. Therefore, they become undeniable fonts

of genetic resources for bioprospecting and product development.

Biodiversity is distributed unevenly over the globe. Generally speaking, there is more diversity in warmer and wetter climates than in cooler and drier ones.67 Seventy percent of the world’s biodiversity is found in only 12 mega-diverse countries- Colombia, Ecuador, Peru, Brazil, Zaire, Madagascar, China, India, Malaysia, Indonesia, Australia and Mexico- which, with the exception of Australia are all developing, non-Western nations. A wealth of biodiversity is also found in many other countries; for instance, South Africa contains the most biological diversity in plant species.68

On the other hand, northern countries are the ones that hold the technology and the

knowledge necessary to economically exploit these resources. Consequently, the

knowledge, technology, and market systems maintained by these countries allow them to

concentrate the financial wealth. In addition, this economic expansion occurred without

consideration for the conservation of the environment; therefore, in some cases over-

exploitation of natural resources was the motor for the economic growth of industrialized

nations.

An industrial approach to natural resources facilitates overharvesting and consumption of natural resources, thereby posing a major threat to biodiversity. The global consumption pattern of biodiversity components supports this fact. Only 25 per cent of the global population controls the technologies and 85 percent of the global financial wealth needed for the deployment and consumption of natural resources. These consist mainly of the industrialized countries of the North. The tropical countries (including China) have 75 percent of the world’s population and only 15 per cent of the global financial wealth. Collectively, people in developing countries use 20 per cent of industrial energy and less of most other materials that contribute to their standard of living, and include among their members only 6 percent of world scientists and engineers, according to the United Nations and the World Bank.69

This scheme of production without consideration for the sustainability management

of biological resources; combined with the inequities derived from the lack of

compensation to local communities, which were the holders of traditional knowledge,

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brought a need to change this model. As a result, the international community decided to

rethink the parameters of access to biological resources and biodiversity management.

Thus, in 1992 the Convention of Biological Diversity (CBD) was signed. This new

international legal framework states as an objectives “the conservation of biological

diversity, the sustainable use of its components and 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 relevant technologies, taking into

account all rights over those resources and to technologies, and by appropriate

funding.”70 In order to effect adequate compensation for access to genetic resources and

traditional knowledge, the CBD recognizes “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.”71 We will analyze deeply the

text of the CBD and its impact in the international community in the next chapter.

This change produced significant modifications in the management of bioresources

and biodiversity. This is because for the first time, bioprospectors have an obligation to

compensate source countries and indigenous communities that contributed their

traditional knowledge. Thus, property rights over biological resources have been created,

and the doctrine “common heritage of mankind” has been overturned.

Nevertheless, it has been overturned only in this field, because access to crop

genetic resources for Food and Agriculture still maintains the doctrine of “common

heritage of mankind.” This is due to a global concern about food security. Thus, the

FAO Commission and International Undertaking affirmed a resolution establishing that

“plant genetic resources are a heritage of mankind and consequently be available without

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restriction.”72 We will analyze this point and its status within the international legal

framework in the next chapter.

After the CBD came into force in 1993, it was perceived by the international

community as a tool to calibrate the conditions of access to genetic resources. Thus, it

facilitates access to genetic resources and at the same time promotes biodiversity

conservation. In addition, through the establishment of the principles of benefit and

sharing, life conditions in the source countries and indigenous communities could be

improved.

In reference to the previous situation and the new conditions after the establishment

of the CBD, Richard S. Cahoon, vice president of the Cornell Research Foundation and

associate director of patents and technology marketing at Cornell University in Ithaca,

New York, says that:

This meant that there was no law or moral obligation requiring a company that collected biological material from another country to pay for access to that material," (...) "What has changed is that we've begun to recognize property rights in all biota. We also recognize how bioprospecting can be used to encourage economic development and conservation in Third World countries.73

Nevertheless, despite the recognition of national sovereignty over natural resources

and the establishment of the principles of access, benefit, and sharing, the South is still

skeptical about facilitating access to genetic resources. As a result, without adequate

mechanisms to implement the CBD, the sovereignty that was considered one of the

biggest achievements of this Convention could work against the objectives of this

instrument. A “brute nationalism”74 adopted by the South resulted in a system in which

sovereignty was used to restrict access and not to facilitate it. The CBD empowers the

countries of origin to control the conditions and terms of access to genetic resources.

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Nevertheless, in some cases, the lack of experience drafting contracts for access to

genetic resources and the absence of laws have caused bioprospecting projects to be

postponed.

For example, in August 2008, the Global Institute for BioExploration (GIBEX) and

Universidad San Francisco de Quito made their formal presentation to the Ministry of

Environment in order to obtain authorization to start a bioprospecting project in the

following regions: Maquipucuna – Choco-Andean; Tiputini - Amazonas and Gaias –

Galapagos. The objective of this project was to screen some biological resources in order

to find active compounds that could be used in the medical field. According to the terms

of the proposal, all screening was going to take place in Ecuador; therefore, no sample of

biological resources was going to be taken out of the country. In addition, any

intellectual property right derived from the project was going to be assigned to Ecuador.

Nevertheless, the government stated that there is no local regulation to govern the project;

therefore, it has to be postponed until they develop the statute.75

In addition, some members of ecological organizations still believe that

bioprospecting is merely a justification to misappropriate biological resources that belong

to southern countries. To this respect, Elizabeth Bravo, the President of the Institute of

Ecologists Studies of the Third World, confuses the terms bioprospecting and biopiracy.

Thus, she states that the only goal of bioprospecting is the commercialization of products,

and therefore, its objective is to obtain revenue. Consequently, it is just a mechanism to

loot biological resources and traditional knowledge from the third world. She concludes

that “these facts not only constitutes a violation of the Constitutional rights but also is a

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mechanism to privatize the life and the traditional knowledge that has been elaborated

and used in a collective way.”76

This kind of statement reflects the lack of knowledge and the irrational nationalism

that exist on the topic of management of biological resources. First, if it is true that the

final objective of bioprospecting is to obtain a product susceptible to commercialization,

then its intrinsic purpose is to enhance human welfare. To this respect, David Kingston, a

professor of bioorganic and natural products chemistry at Virginia Polytechnic Institute

and State University in Blacksburg, sees bioprospecting as a win-win situation for

bioprospectors, public health, and source countries when treaties are equitable. “The host

country has nothing to lose…Bioprospecting is not solely driven by interest in money,”

he says. The hope that cures to cancer, AIDS, and other diseases are hidden in some

endangered habitat still fuels enthusiasm for bioprospecting. Kingston believes we can't

afford to stop looking at natural products. “No chemist could ever dream up the

chemistry of Taxol,” he says, referring to the drug for fighting breast and other cancers

that is derived from the bark of the Pacific yew tree (Taxus).77

Moreover, it is fundamental to distinguish bioprospecting from biopiracy.

Biopiracy and bioprospecting are two completely different concepts, but sometimes they

are associated and confused. As we stated before, bioprospecting has a positive

connotation because it focuses on the search for genetic resources for their elaboration

into final products that improve life conditions. Thus, even if it is true that in some ways

bioprospecting has an economic and commercial purpose, in its beginning, the principal

objective is searching for chemical compounds with useful characteristics.

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On the other hand, biopiracy is defined by Shiva “as a process by which the rights

of indigenous cultures to their genetic resources and associated traditional knowledge are

replaced by monopoly78 rights of those who exploit these resources”79 Others assert that

biopiracy “refers to the use of intellectual property laws (patents, plant breeder’s rights)

to gain exclusively monopoly control over genetic resources that are based on the

knowledge and innovation of farmers and indigenous peoples.”80

Thus, biopiracy is understood as a misappropriation of genetic resources and

traditional knowledge associated through the use of intellectual property rights.

According to this perception, intellectual property regimens encourage biopiracy.81

Nonetheless, it is an arguable point that we will discuss in Chapter VI. Biopiracy can be

cataloged within the tort of misappropriation because it involves an unfair invasion of

other's property that causes a prejudice. Carol McHugh analyzing the Board of Trade v.

Dow Jones & Co.82 case makes an interesting point about misappropriation:

In evaluating misappropriation claims, courts generally require the plaintiff to prove both that it has suffered injury in the marketplace and that the defendant, a direct competitor, has been unjustly enriched through the wrongful appropriation. The competitive injury requirement, however, has been relaxed as misappropriation has evolved as part of the common law tort of unfair competition.(...)This new test is a departure from traditional misappropriation law, especially in its support for the originators of intellectual property. Traditionally, some courts have defined the concept of competitive injury narrowly, making it very difficult for misappropriation plaintiffs to prevail. The Dow Jones court eliminated competitive injury from its analysis and instead stressed a balancing approach. This approach removed the inflexibility from the Illinois misappropriation doctrine. Rather than treating the type of competition between the parties as determinative, the court focused on the unjust enrichment that would have resulted to the CBT if it were allowed to use the Dow Jones index with impunity. This focus emphasized the broader principle underlying the misappropriation doctrine: that property of commercial value should be protected from another's unauthorized use for profit. (...)The Dow Jones decision correctly recognized that the misappropriation doctrine must be flexible enough to provide courts a panoply of resources to facilitate the eradication of enterprise piracy from the marketplace.83

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As a consequence, if we follow this approach, in some cases biopiracy can be

considered as a case of misappropriation. First of all, genetic resources and traditional

knowledge sometimes are valuable assets within the market. Second, there is an

economic detriment that genetic resources owners and traditional knowledge holders

suffer because they do not receive a fair compensation for the use of these assets. Third,

there is a possibility that genetic resources and traditional knowledge can be appropriated

by a third party in a wrongful way, which means without consent and an equitable

benefit-sharing (CBD). Then, we can say that biopiracy can be one of misappropriation

faces.

Therefore, understanding biopiracy as an unfair appropriation of bioresources and

traditional knowledge, it is without any doubt a practice that should be eliminated. For

this reason, it is important to develop a strong legal framework in which the principles of

access and benefit-sharing can be applied in an effective way. Only, with a strong, clear

and enforceable framework that effectively enforces the CBD we will achieve reasonable

protection for bioresources and traditional knowledge.

Biopiracy sullies the legitimacy of bioprospecting. However, it is important to

distinguish when the supposed biopiracy takes place and under which conditions. It is

relevant because the circumstances and parameters for the management of biological

resources significantly changed after the CBD. For this reason, all the acts that occurred

under the old approach, the “common heritage of the mankind,” are difficult to reproach,

because they were committed under the rules of that time. To this respect, James S.

Miller from the Missouri Botanical Garden stated that “it’s unfair to label the rosy

periwinkle discoveries or any other bioprospecting done before the CBD was signed as

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biopiracy. It was (...) just the normal way of doing things. There wasn’t anything

malicious or malevolent about it.”84

Furthermore, bioprospecting after the CBD provides an opportunity to strengthen

the national economy, to improve the life of the traditional knowledge holders, to

contribute with the promotion of science and inventions, and to conserve biodiversity

under a sustainability approach. It is true that all these benefits from the CBD sound

unreal and difficult to achieve. Enforcing and applying the CBD involves a difficult and

complex challenge that requires the cooperation of the international community, the local

governments, and the indigenous people.

However, the first step is to eliminate the fear that exists regarding bioprospecting.

First, we have to clarify that bioprospecting is not biopiracy. Therefore, the major part of

bioprospecting projects have as a main purpose to research and find helpful compounds

to be used for the treatment of medical diseases, nutrition, and cosmetology. Thus, the

main goal of bioprospecting is to enhance the human wellness. However, in order to

maximize the benefits of bioprospecting, it is important that the contracts governing

access to genetic resources and the prior informed consent agreements85 be signed under

a fair and reasonable basis. For this reason, it is important to have a clear and effective

regulation and to educate government officers and indigenous people about the issues and

legal implications that surround these instruments.

Second issue that is relevant to this topic is the fact that bioprospecting does not

imply an over-exploitation of nature. On the contrary, bioprospecting involves a good

opportunity to obtain resources for the conservation of nature. Bioprospecting does not

necessarily require the use of large samples of bioresources because it generally focuses

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on genetic material (however, it is important to do not overexploit the resource). Thus,

bioprospectors can use small quantities to do their screening and research. This small use

of biological resources does not constitute a threat to the environmental equilibrium.

However, if the bioprospecting brings favorable resources, the results can be used for the

creation of final products, and the country of origin would receive a fair remuneration

that should be used to conserve nature.

Bioprospecting involves searching for, identifying, and collecting appropriate biospecimens. In addition, bioprospecting uses various cutting-edge technologies to process and develop genetic material from these specimens that exhibit characteristics desirable in a commercial product. It is the genetic material, not the biospecimen itself that is of interest. Generally then, it would be inefficient, irresponsible, and unnecessary for bioprospectors to collect massive volumes of plants or animals for processing. Consequently, it is a misconception that bioprospecting decimates an organism's population to near extinction and denudes entire rainforests like wholesale strip-mining for gold. Bioprospecting firms or their partners or clients generally need only a few specimens to extract the genetic material they need.86

Another fear regarding bioprospecting is the possibility that traditional knowledge

may be misappropriated, limited, or threatened. This fear raises the possibility that

bioprospectors could obtain intellectual property rights to traditional knowledge without

recognizing the substantial participation of traditional knowledge holders. In addition, in

the case that those intellectual property rights were acquired by bioprospectors in the

jurisdiction in which traditional knowledge holders live; then, indigenous people would

not be able to continue using and applying their own traditional knowledge in their

territory. This problem could bring a limitation of traditional knowledge and practices

that can undermine indigenous people culture. Therefore, in order to avoid any

possibility of biopiracy, it is fundamental to have a consistent legal framework and legal

instruments to secure the rights of indigenous communities. Thus, intellectual property

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rights can be used as a mechanism of protection of traditional knowledge; however it is

important to define the most convenient type to safeguard the interest of indigenous

people.

Indigenous people are not opposed to bioprospecting or to the adoption and practice

of the principles of access, benefit, and sharing stated in the CBD. However, they have

clearly stated that to continue with the application of these principles, it is important that

their culture and traditions be respected. Indigenous communities are willing to share

their knowledge to contribute to the good of humanity, but they do not want to be abused

or exploited. Thus, during the discussion of the CBD, indigenous people manifested their

concern and conditions regarding to the objectives of the CBD.

...knowledge is not merely a commodity to be traded like any other in the market place. Our knowledge of biodiversity is indivisible from our entities and our laws, institutions, value systems and cosmovisions as Indigenous Peoples. For generations, our peoples have been and continue to be custodians of nature of nature upon which we all depend. We are therefore fully committed to the first two objectives of the Convention, that is, the conservation and sustainable use of biodiversity. However, any discussion of the third objective that of access and benefit sharing, must recognize our fundamental rights to control our own knowledge, our right to free, prior informed consent as peoples, and our collective land and territorial security.87

Traditional knowledge can be very valuable for bioprospecting, because it can save

time and costs, which constitutes an aggregate value for researchers. This fact puts

indigenous communities in a good position to negotiate. However, it is important that

bioprospectors consider that the terms of negotiation are not limited to the economic

issue, because there are social, cultural, and spiritual values that also have to be

considered. In addition, it is also important that indigenous communities have a more

realistic idea of the percentage and value that traditional knowledge represents. The

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significant contribution of traditional knowledge, especially in the drug discovery field, is

evidenced in the following quote:

An evaluation study for the US Congress (1993) concludes that the success by NCI88 could have been doubled, if had they taken into account the knowledge of medicinal folk to target testable species. Therefore, successful search processes are based on some ground truth of finding a probability of favorable outcome. Otherwise, scientists of Novartis and Merck could not have traveled in the wilderness of the Amazon and Costa Rica forest in search of unique phytochemicals which cannot be imagined to synthesize in the laboratory of combinatorial chemistry. Therefore, one finds enough evidence that the value of benefits of bioprospecting may be quite significant and that local’s information in the search process can significantly enhance the strike rate of a hit.89

As a consequence, the value of traditional knowledge associated with biological

resources is not only a patrimony for indigenous people but also for the entire human

race. Therefore, the global community should take the same position regarding

biodiversity in the case of traditional knowledge. Thus, it should be considered a

common concern of mankind, because it has evolved with biodiversity through the time,

space, and change. Consequently, bioprospecting should be used as a practice to enhance

the moral, spiritual, and economic value of traditional knowledge in order to constitute an

incentive for new generations of indigenous people to continue and maintain their

traditions.

In conclusion, bioprospecting is a legitimate practice that should be promoted under

fair and reasonable parameters. It is impossible to negate all the benefits that

bioprospecting brings to the human race, especially in the food security and human health

fields. However, it is important to establish adequate legal mechanisms to allow

bioprospecting within a sustainable and fair framework. In addition, it is important to

valuate bioprospecting with regard to both its economic value and its social value. That

would encourage a system wherein all the legal instruments created to facilitate the

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access, benefit, and sharing would not consider bioresources and traditional knowledge

through only an economic lens, but as holistic concepts, representing the needs and

aspirations of all the parties involved.

The bioprospecting perspective expresses optimism that through bioprospecting, all three objectives of the CBD –sustainable use, conservation of biological resources, and benefit- sharing- can be met. In this perspective, bioprospecting is seen a venue of revenue generation from potentially valuable traditional knowledge and genetic resources situated in the South. In the presence of wee-designed laws and contracts, bioprospecting presents a win-win situation where benefits generated can be used for a range of purposes - improvement to livelihoods of indigenous and local communities, biodiversity conservation programs and biotechnological capacity building.90

5. Biopiracy: What it is and what it is not?

As we have stated, biopiracy is a practice that awaken many fears and rivalries

between North and South. Biopiracy has been broadly exploited as a political issue and

in some cases exaggerated. As a consequence, the South fears and distrusts

bioprospecting projects. “Third World States contend that industrialized states, business

entities and research institutions are ‘pirating’ their biological resources.”91

This perception has encouraged activists to use concerns over biopiracy as a tool to

attack researchers and bioprospectors, transforming these cases into media productions

instead of dealing with the real issues of the case. For instance, in the Quinoa case

RAFI92 “rather than attacking the patent in the USPTO (...) chose to mount a media

political campaign against the two academics who filed the patent and the academic

employer (a form of harassment that has become sufficiently common that academics

now speak of it as ‘getting RAFI’d)”93

As a result, the organizations and groups attacking biopiracy do not always deeply

analyze the facts to determine if they are dealing with a case of biopiracy. Instead, these

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organizations make a big show to exacerbate the inner feeling of the different actors,

losing their objective perspective of the case. Moreover, biopiracy can be used as a

political speech used by developing country politicians who are most interested in

obtaining the vote of indigenous people than to investigate the real facts of the alleged

biopiracy. Thus, many experts have agreed that this has become a rhetorical practice in

the biodiversity and intellectual property debate. Some of them believe that tales of

biological exploitation with predictable scripts have been developed, for instance:

<Large northern corporation> <seeks/is developing> a highly sophisticated <plant variety/pharmaceutical product> and sends researchers to <exotic place>. After interviewing local <farmers/foragers>, the company’s researchers identify a <species/variety/breed> of <life form> that seems responsible for <desirable trait>. The researchers collect a few specimens and collate their interviews. The samples and the local lore inspire a successful program of <cross-breeding/ genetic engineering/pharmaceutical development>, which saves the company thousands of hours and enables it to eclipse its competition. The company never shares its profits, however, with the local community from which it derived genetic resources and traditional knowledge.94

These kinds of speculations do great harm to both bioprospectors and to

biodiversity rich countries that are losing an opportunity to sustainably exploit their

bioresources, conserve biodiversity, improve life conditions of traditional knowledge

holders, and contribute to humanity through the development of drug compounds, crops,

and products in general. Therefore, it is important to analyze the root of the problem, if it

is indeed a case of biopiracy, and what solutions are available. To do that, we are going

to focus our analysis on five of the most controversial cases of alleged biopiracy.

As we stated before, biopiracy has a close link with the grant of intellectual

property rights over genetic resources and traditional knowledge. One of the most

controversial countries is the United States of America, where many patents over

“bioresources and traditional knowledge” have been granted. Consequently, it is

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important to state the relevant sections of the U.S. patent law in order to define if the

patents granted are valid or void. In addition, we will analyze in each case the subject

matter under protection of the patent, to determine whether the genetic resource and the

traditional knowledge (in their natural state) have been subjects of patent protection.

Depending on the subject matter under protection, we can find different types of

patents, including utility patents, design patents, plant patents, and also sui generis

systems such as the plant variety protection. For the purposes of our study, the most

relevant types of patents are the utility patents and the plant patents. The utility patent is

an intellectual property right for “apparatus, compositions of matter, methods or

processes of using apparatus and compositions of matter.”95 To be granted a patent, an

invention must meet the following requirements: patentable subject matter, the utility

requirement, the novelty requirement, the non-obviousness requirement, the enablement

requirement, the best mode disclosure, and the description requirement.96

The plant patent is a patent granted to “whoever invents or discovers and asexually

reproduces any distinct and new variety of plant, including cultivated sports, mutants,

hybrids, and newly found seedlings, other than a tuber propagated plant or a plant found

in an uncultivated state, may obtain a patent therefore, subject to the conditions and

requirements of this title.”97 Plant patents should meet the requirements of novelty,

distinctness, and non-obviousness, plus they should prove that the plant is stable and

reproduced by asexual reproduction. Plant patent protection, according to some experts,

is closely related to copyrights because the objective is to avoid the unauthorized

reproduction of the plant.98

In addition, according to the U.S. Patent Law under the conditions of patentability,

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A person shall be entitled to a patent unless (a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, or (b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States (...)99

The U.S. Patent Law follows a relative novelty bar, which means that if the

invention was known or used in a foreign country without a patent or a printed

publication, the patent acquired in the U.S. over this invention is valid even though it was

invented, known and used by others before. In this respect, the U.S. Supreme Court in

Gayler v. Wilder100 states:

If the foreign invention had been printed or patented, it was already given to the world and open to the people of this country, as well as of others, upon reasonable inquiry. They would therefore derive no advantage from the invention here. It would confer no benefit upon the community, and the inventor therefore is not considered to be entitled to the reward. But if the foreign discovery is not patented, nor described in any printed publication, it might be known and used in remote places for ages, and the people of this country be unable to profit by it. The means of obtaining knowledge would not be within their reach; and, as far as their interest is concerned, it would be the same thing as if the improvement had never been discovered. It is the inventor here that brings is to them, and places it in their possession. And as he does this by the effort of his own genius, the law regards him as the first and original inventor, and protects his patent, although the improvement had in fact been invented before, and used by others.101

Consequently, this relative novelty bar constitutes a threat to traditional knowledge

because the lack of inventories, printed descriptions and patents of traditional practices

and knowledge. Thus, it is easier to appropriate traditional knowledge that is possessed

by indigenous and local communities in foreign countries and then acquire a patent in the

United States. In addition, it can be considered as a discriminative rule against non-

literacy societies that fund the spread of their knowledge in the oral tradition.102

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Finally, according to U.S. case law, in Diamond vs. Chakrabarty, 447 U.S. 303

(1980)103, the U.S. Supreme Court decided that they had the duty to construe the

language of § 101; and that, the subject matter of patentability includes anything under

the sun that is made by man. It is because, the Congress "in choosing such expansive

terms as 'manufacture' and 'composition of matter,' modified by the comprehensive 'any',

Congress plainly contemplated that the patent laws would be given a wide scope".104 In

addition, the Court notes that "the Committee Reports accompanying the 1952 Act

inform us that Congress intended statutory subject matter to 'include anything under the

sun that is made by man.'"105 Thus, a genetically altered bacterium could be granted a

utility patent under this standard. This case marks the most important stage in the

expansion of intellectual property right protection for genetic resources and living

organisms.

With this important background information in mind, we will proceed to analyze

five controversial biopiracy cases, with the goal of showing which are cases of biopiracy

and which are not.

a. The Enola Bean Patent: The Enola Bean Patent can be cataloged as the most serious

case of biopiracy generated by an U.S. Patent.106 The Enola bean patent constitutes a

real case of biopiracy. On April 13, 1999, Larry Proctor, the president of a

Colorado-based seed company, won the utility patent No. 5,894,079 on a yellow

bean variety of Mexican origin. According to Larry Proctor, the bean variety was

developed from a bag of commercial beans that he brought from Mexico in 1994.107

Moreover, Proctor after obtaining the US patent and a plant breeders’ rights

certificate, decided to sue Mexican farmers for infringement, because they were

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selling yellow beans in the U.S.108 "In 2003 geneticists performed “genetic

fingerprinting” of Proctor’s patented yellow bean and found that his claim of novelty

was spurious – the patented Enola bean is, not surprisingly, identical to a pre-

existing Mexican cultivar.109 ‘We conclude that Enola is neither a novel nor non-

obvious derivative from a Mexican yellow bean cultivar, probably Azufrado

Peruano 87.’110 "111 The International Center for Tropical Agriculture (CIAT), in

December 2000, filed a formal request for re-examination of US patent no.

5,894,079 (yellow bean or "Enola bean" patent) at the US Patent & Trademark

Office.112 "CIAT's official request for re-examination of US Patent No. 5,894,079

(…) refutes all of the patent's 15 claims as invalid. CIAT charges that the claims fail

to meet the statutory requirements of novelty and non-obviousness, and ignore prior

art widely available in the literature. (…) CIAT's patent challenge also points out

that the yellow bean was "misappropriated" from Mexico, and violates Mexico's

sovereign rights over its genetic resources, as recognized by the Convention on

Biological Diversity."113 The USPTO issued a “preliminary decision in 2003

rejecting all the patent claims and gave a final rejection in December 2005.”114

However, Proctor filed an appeal; as a consequence, the patent remained in force

while the appeal was solved by the Board of Patent Appeals and Interferences.

Finally on May 2nd, 2008, The USPTO rejected all of patent claims for the Enola

Bean (yellow bean).115 This case shows us the importance of disclosing the origin

of genetic resources as a step within the patent process.116 It is the only way to

avoid that pseudo inventors misrepresent the creation of a new product that already

exists as in this case. In addition, this case can bring a right to Mexican farmers to

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sue Proctor for unfair competition as well for damages originated for the antitrust

claim that Proctor filed against them.117

b. The Neem Patents: Neem products have been significantly patented around the

world, “with more than 40 in the US alone and at least 150 worldwide.”118 All of

these inventions apparently used public domain traditional knowledge as a starting

point.119 However, the most controversial and challenged case was the 1992 grant

of a U.S. patent to W.R. Grace & Co. for a “storage stable azadirachtin

formulation.” Azadirachtin is an active compound derived from the Neem Tree.

Traditionally, the seed of the Neem Tree has been used in India as a natural insect

repellent. This natural product is unstable, which means that it easily loses its

repellent properties. Therefore, W.R. Grace developed “a method of production and

a resulting product consisting of storage stable solution ‘containing azadirachtin’

wherein the solution was ‘non-degrading to azadirachtin.’”120 Under this context, the

U.S. patent law was granted over this new process and the new improved product,

not over the Neem seed itself or its natural use. In addition, “the particular method

and product claimed in the W.R. Grace patent were arguably new, at least in the

United States and perhaps in India itself.”121 As we can see, in this case, the

scientists used information that was in the public domain and developed a new

product that significantly improved the properties of the product in its natural state.

Thus, the new compound is a manmade product that was subject to patentability.

Consequently, it cannot be considered a case of biopiracy because it was a valid

patent that met the requirements of utility, novelty, and non-obviousness. It is the

first product in the market with these characteristics. Moreover, this invention did

148

not limit the right of Indian people to continue extracting the azadirachtin according

to their traditional knowledge and practices. Therefore, this is a valid patent that

was issued with the objective of promoting science and motivating the inventor to

continue with his/her work on behalf of human wellness. However, it is important

to note that this patent was issued in 1992, before the CBD went into effect. After

the CBD, if the domestic law has incorporated the provisions established on the

CBD; we have to analyze whether the government authorized access to genetic

resources. If not, this case can be considered biopiracy because the CBD requires

that access to genetic resources must be previously authorized by the government,

and that the parties agree about how are they going to share the benefits derived

from the use of those resources. Therefore, if the genetic resources were accessed,

owned, and commercialized without previous authorization and remuneration to the

country of origin, this is biopiracy.

c. The Ayahuasca Plant Patent: “Shamans of indigenous tribes throughout the

Amazon Basin have processed the bark of [B.] caapi to produce a ceremonial drink

known as ‘ayahuasca,’ which is used in religious and healing ceremonies to

diagnose and treat illness, meet with spirits and divine the future.”122 As was

explained in chapter two, the Shaman is the link between the community and its

ancestors; therefore, in order to guide people, the Shaman takes a magic flight to

meet with the spirits, gods, and ancestors. To do that, the Shaman has to drink the

ayahuasca, which is the sacred juice that allows the Shaman to have contact with the

spiritual world. Loren Miller, an American pharmacologist, took samples of the

Banisteriopis Caapi while he was studying in Ecuador.123 In 1986, Loren Miller

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obtained a plant patent for a variety of Banisteriopis Caapi that he denominated “Da

Vine.” Miller argues that his variety has “various physical characteristics such as

flower color, leaf shape, and so forth.”124 CIEL, on behalf of the Amazon Coalition

and The Coordinating Body of Indigenous Organizations of the Amazon Basin

(COICA)125, filed a Request for Reexamination of U.S. Plant Patent 5,751 (the

Request) on March 30, 1999.126 The Request stated that

The Request presented several arguments as to why Miller's patent failed to satisfy the requirements of the Plant Patent Act and accordingly deserved to be canceled. First, the Request explained that a review of the prior art revealed that Da Vine was neither distinct nor new. The medicinal and morphological characteristics on which the claim was based were well within the normal range of variation for individual plants of the species. Both the species and the characteristics described in the patent were widely known, not only in the scientific literature, but also in the systems of traditional knowledge of indigenous groups throughout the Amazon. Second, Da Vine, like other forms of the species B. caapi, could not be patented under the explicit terms of the Plant Patent Act because it is "found in an uncultivated state." Finally, the requesters argued that issuance of the patent did not meet the public policy and morality aspects of the Patent Act, which preclude awarding a patent on a plant that is sacred to indigenous peoples throughout the Amazon region and has been used and revered in their cultures for many generations.127

The USPTO rejected the patent claim in 1999. Nevertheless, Miller decided to

appeal the rejection, and in 2001, the USPTO reversed the earlier decision. This

case goes against the Plant Patent Law and constitutes a biopiracy case. The “Da

Vine” variety does not present any significant variation from Banisteriopis Caapi;

therefore, it cannot be considered distinct. In addition, 35 U.S.C. §161 states that a

plant patent cannot be issued if the plant is found in an uncultivated state. The

Banisteriopis Caapi is not domestically cultivated in the Amazon, so it is found in an

uncultivated state. Professor Charles McManis argues that the plant patent “could

not conceivably cause any economic harm to indigenous communities in the

Amazonian Basin unless some of those indigenous communities should eventually

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overcome any lurking religious scruples and decide to start importing into the

United States any varieties of B. caapi that Loren Miller might argue were asexually

reproduced from his US protected variety.”128 It is true that economic harm is

improbable, mainly because the indigenous community does not value within their

holistic point of view the economic exploitation of a sacred plant. However,

indigenous communities could have suffered (according the Ecuadorian civil law)

moral damages129 associated with the limitation of practicing their sacred rituals

using ayahuasca, because it was protected under a patent. It is true that any patent,

including plant patents, only has effect within the territory that granted it. However,

at the time that the indigenous groups decided to challenge the ayahuasca patent,

“the Ecuadorian government was considering entering into a trade agreement with

the U.S. that would have led to patents granted in the US being extended to

Ecuador.”130 Consequently, despite the fact that the government did not sign the

agreement, the indigenous communities in Ecuador still live in fear that an

ayahuasca patent could destroy their right to practice their sacred rituals according to

their ancient tradition. As a result, this case shows that we have to consider not only

economic aspects but also moral and spiritual aspects that can be affected by the

grant of a patent. For indigenous people, the maintenance of their religious beliefs

and spiritual rituals is so valuable that it cannot be translated into a price.

d. The Quinoa Patent: Quinoa is “a highly nutritious drought resistant food crop

grown in the cold high-elevation regions of the Andean countries of South

America.”131 “Indigenous communities (...) have bred numerous varieties, including

Apelawa, named after a village in Bolivia.”132 “In order for plant breeders to

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produce hybrids from self-pollinating quinoa plants, the male properties of one

parent must be eliminated”133 Use of male sterile plants can avoid the labor-

intensive removal of anthers from plants.134 In 1994, the USPTO granted to Sarah

Ward and Duane Johnson a patent over a reliable system of cytoplasmic male sterile

plants. “The patent accepts that male sterile quinoa lines have been reported in the

literature, but the specification claims that ‘a reliable system of cytoplasmic male

sterility has not been reported, and cytoplasmic male sterile plants have not

heretofore been available for commercial production of quinoa hybrids.”135 The

patent said that “the cytoplasm conferring the property of male sterility is derived

from the Apelawa variety of Quinoa.”136 However, the cytoplasm was found in

Apelawa varieties that were growing in Colorado, not in the Bolivian ones.

Consequently, this is a valid patent because the new product contains a reliable

system of cytoplasmic male sterility that was not previously available. The patent

was not issued over the quinoa - Apelawa in its natural state, so the innovation was

clear. Nevertheless, some time later, the patent holders decided to abandon the

patent because it “could not be used for commercial production of hybrid quinoa

seed because it has not been possible to find another necessary complementary

germplasm in quinoa (...) it appears that the patent has no value because it will not

lead to commercial hybrid quinoa.”137 Consequently, this case is evidence that if the

patent cannot finally be applied in a product susceptible of commercialization, it is

not worthy of maintenance. However, because this patent was granted after the

CBD, and assuming that the domestic law has already incorporated the CBD

provisions, if the patent were able to be used for the production of hybrid quinoa, the

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patent holders should have shared the benefits with the country of origin, because

the samples of Quinoa Apelawa were the ones that made possible the development

of the new variety. To this respect, “the most important lesson to be drawn from the

quinoa patent controversy is the wisdom of requiring (where feasible) the patent

applicants ‘disclose the origins of all source biological material from which the

inventions they claimed are derived.’”138,139 The disclosure constitutes an important

element in this situations because it prevents the country of origin from feeling

economically injured by the patent, and the patent holder avoids the moral problem

of having been involved in a biopiracy case.

e. The Turmeric Patent: In 1995, the USPTO granted to Suman K. Das and Hari Har

P. Cohly, two Indian researchers based at the University of Mississippi Medical

Center, a patent over “the Use of Turmeric in Wound Healing.”140 The Indian

Council of Scientific and Industrial Research (CSIR) challenged the validity of the

patent, “arguing that turmeric has been used for thousands of years for healing

wounds and rashes and therefore its medical use was not novel.”141 This is one of the

most notorious cases of the grant of a bad patent because the use of turmeric for

wound healing was not only part of indigenous traditional knowledge, but was also

strongly documented and supported. Thus, the CSIR presented “documentary

evidence of traditional knowledge, including an ancient Sanskrit text and a paper

published in 1953 in the Journal of the Indian Medical Association.”142 According

to the U.S. Patent Law § 102, a person shall be entitled to a patent unless (a) the

invention was known or used by others in this country, or patented or described in a

printed publication in this or a foreign country, before the invention thereof by the

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applicant for patent. In this case, the use of the Turmeric was published in a foreign

country before the application for the patent; therefore, the patent was revoked. .

The U.S. Patent Law § 102 constitutes a discrimination against non-literate societies

and a legitimate concern about the relative novelty standard. If India did not have

any publication of the traditional use of the Turmeric, the patent would not have

been revoked. In this way, if the case were about the use of traditional knowledge

developed by a non-literate community, the lack of a print publication of their

traditional knowledge, would have brought as a result that the patent would not have

been revoked. Because biodiverse rich countries cannot oblige the United States to

change their domestic law, it is important for them to protect their traditional

knowledge within parameters that can be effectively employed worldwide and

against these kinds of provisions. Consequently, the protection of traditional

knowledge and bioresources through sui generis systems is not efficient if the sui

generis system is only applied locally. Therefore, the legal system of protection of

traditional knowledge should be adopted by the international community; it is the

only way to prevent the misappropriation of traditional knowledge by third parties

that did not participate in their development. Until that, we have to work on the

existing legal mechanisms, which are already accepted by the international

community, in order to develop a system that can successfully protect these

important assets.

As we can see in these biopiracy episodes, there are three cases in which we can

argue the existence of a biopiracy issue: 1) the grant of a bad patent; 2) the grant of a

valid patent under patent standards that can be considered too low (relative novelty

154

and/or non-obviousness) 3) the omission of the principles of access, benefit, and

sharing established by the CBD. Therefore, it is crucial before challenging a patent

to analyze it and determine whether it meets the requirements of patentability or if it

is a valid patent. Then, it is important to analyze whether the country of origin or

the traditional knowledge holders are suffering an economic detriment produced by

a violation of the principles of access, benefit, and sharing. However, it is important

to realize that the best way to protect our biological resources and traditional

knowledge is not by challenging patents. On the contrary, the best protection is the

creation of an efficient legal framework that guarantees the rights of the country of

origin and the rights of the indigenous communities. Prevention is the best way to

avoid biopiracy and to obtain benefits from these important sources.

6. Biodiversity in Ecuador

As stated in chapter two, the World Bank, Conservation International, the World

Wildlife Fund, and others consider Ecuador to be one of the world’s richest sources of

biological diversity. The national and international scientific community agrees that

Ecuador is one of the seventeen most megadiverse countries and the most biodiverse in

the world, if we consider the number of species vertebrates for each 1.000 square

kilometers.143 Therefore, the country represents a significant variability among living

forms that is attributed to its particular geographic and climatic conditions.

For this reason, Ecuador is considered one of the world’s biodiversity hotspots.

The Tropical Andes meets the two criteria required to be considered a hotspot, that the

region “must contain at least 1,500 species of vascular plants (> 0.5 percent of the

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world’s total) as endemics, and it has to have lost at least 70 percent of its original

habitat.”144

The richest and most diverse region on Earth, the Tropical Andes spans 1,542,644 km², from western Venezuela to northern Chile and Argentina, and includes large portions of Colombia, Ecuador, Peru, and Bolivia. Roughly bounded by the Tropic of Capricorn in the south and the end of the Andes range in Colombia and Venezuela in the north, the region follows the tropical portion of the Andes Mountains and several adjoining cordilleras. The Tropical Andes hotspot extends downward to an elevation of 1,000 meters in the west, where it borders the Tumbes-Chocó-Magdalena Hotspot. In the east, the hotspot reaches down to 500 meters in elevation, a cutoff between the forests of the Andean slopes and the Amazonian lowlands.145

It is important to show some data that corroborates the fact that Ecuador is one of

the richest reserves biodiversity in the world.

DIVERSITY INDICATOR OF SPECIES IN ECUADOR

Indicators Mammals Birds Reptiles Amphibians Vascular Plants

Number of

reported species

369 ^ 1616 379 418 ` 15.306 ‘

Number and

percentage of

endemic species *

30

(8.1)

52

(3.2)

114

(30.1)

138

(33)

4.173 •

(27.3)

World

biodiversity

percentage ~

7.7 16.2 4.8 8.4 1.7

156

DIVERSITY INDICATOR OF SPECIES IN ECUADOR

Sources

Main Source: Ministry of Environment, EcoCiencia & UICN (2000)

^ Inventario Mastozooligico a 1999

` Coloma, L.A. & A. Quijango (2000). Anfibios de Ecuador: lista de especies y distribución

altitudinal. Museo de Zoología, Pontificia Universidad Católica del Ecuador. Quito - Ecuador.

‘ Number of native species (Jorgensen, P. M., D. A. Neill & S. León (1999). Catálogo de plantas vasculares del

Ecuador. www.mobot.org/MOBOT/research/ecuador/welcomesp.htm -not available anymore.

* Percentage of endemic species in parenthesis

• Jorgensen, P. M., D. A. Neill & S. León (1999). Catálogo de plantas vasculares del

Ecuador. www.mobot.org/MOBOT/research/ecuador/welcomesp.htm -not available anymore.

~ Estimation of the number of current published species in the red list of threaten species 2000 (UICN, 2000)

Mammals= 4763, Birds =9946, Reptiles= 7970, Amphibians=4950, Vascular Plants= 250876

Source146

ECOSYSTEMS OF CONTINENTAL ECUADOR

COAST SIERRA JUNGLE

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ECOSYSTEMS OF CONTINENTAL ECUADOR

-Manglar (Mangrove swamp) -Manglillo (Little mangrove swamp) -Bosque siempreverde de las tierras bajas de la Costa (Evergreen Forest of the Coast low lands) -Guandal (Flooded Forest) -Bosque siempreverde piemontano. (Piemontano evergreen forest) -Bosque siempreverde piemontano de la Cordillera de la Costa ( Evergreen Forest from the Coast Range) -Bosque siempreverde montano bajo de la cordillera de la costa. (Low montane evergreen forest of the coast range) -Bosque de neblina montano bajo la Cordillera de la Costa (Montane Mist Forest under the Coast Range) -Bosque semideciduo de las tierras bajas (Semi-deciduous forest from the low lands). -Bosque deciduo piemontano (Piemontano deciduous forest). - Bosque semideciduo piemontano de la costa (Piemontano semi-deciduous forest of the coast). -Bosque semideciduo montano bajo (Low montane semi-deciduous forest). -Bosque deciduo de tierras bajas (Deciduous forest of the low lands) - Sabana (Savanna) -Matorral seco de las tierras bajas (Dry thicket of the low lands). -Hebazal de las tierras bajas (Gassland of the low lands).

-Bosque siempreverde montano bajo de los Andes occidentales (Low montano evergreen forest of the occidental Andes). -Bosque de neblina montano bajo de los Andes occidentales (Low montane mist forest of the occidental Andes). -Bosque siempreverde montano alto de los Andes occidentales (High montane evergreen forest of the occidental Andes) -Bosque siempreverde montano bajo de los andes orientales del norte y centro (Low montane evergreen forest of the north center and east Andes) -Bosque siempreverde montano bajo de los Andes orientales del sur (Low montane evergreen forest of the south east Andes). -Bosque de neblina montano de los Andes orientales (Montane mist forest of the eastern Andes) -Bosque siempreverde montano alto de los Andes orientales. (High montane evergreen forest of the eastern Andes) -Matorral humedo montano de los Andes del norte y centro (Montane humid thicket of the north and central Andes). -Matorral humedo montano de los Andes del sur (Montane humid thicket of south Andes). -Matorral seco montano bajo (Low dry montane thicket) -Matorral seco montano de los Andes del norte y centro (Dry montane thicket od the north and central Andes). -Matorrral seco montano de los Ander del sur (Dry montane thicker of the south -Paramo de los frailejones (Frailejon Moorland) -Paramo herbaceo (Herbaceous moorland) -Paramo de almohadillas (Pads moorland) -Paramo seco (Dry moorland) -Paramo arbustivo de los Andes del Sur (Shrubby moorland of the south Andes) -Herbazal Montano (Montane grassland) -Herbazal montano alto (High montane grassland) -Gelidofitia -Nieves perpetuas (Everlasting snow)

-Bosque siempreverde de las tierras bajas de la Amazonia (Evergreen forest of the Amazonian low lands). -Bosque de tierras bajas de palmas y aguas negras (Low lands forest of palms and black water). -Bosque innundable de tierras bajas por aguas blancas (Low lands flooded forest by white water) -Bosque siempreverde piemontano de la Amazonia (Piemontano evergreen forest of the Amazonian). -Bosque siempreverde montano bajo de las cordilleras Amazonicas. (Low montane evergreen forest of the Amazonian range) -Bosque siempreverde montano de las cordilleras Amazonicas. (Montane evergreen forest of the Amazonian range) -Matorral humedo montano de las cordilleras Amazonicas (Montane humid thicket of the Amazonian range). -Matorral humedo montano alto de las cordilleras Amazonicas (High montane humid thicket of the Amazonian range). -Herzabal de tierras bajas de la Amazonia. (Low lands grassland of the Amazonian)

Source147

158

VERTEBRATES DIVERSITY AND EXTENSION OF THE MEGADIVERSE ANDEAN COUNTRIES

Number of vertebrates species per country

(birds, reptiles, mammals and amphibians

except fishes)

Extension (km 2)

Colombia 3 374 (first place)

Ecuador 2 606 (fourth place)

Peru 2 586 (fifth place)

Venezuela 2 145 (ninth place)

1,141,748

256,370

1,285,210

912,050

Source: Mittermeier148

COMPARATIVE VALUES PER SPECIE IN RELATION TO THE 12 MEGADIVERSE COUNTRIES IN THE WORLD

Country Birds Mammals Reptiles Amphibians

Colombia 1815 (first place) 456 (fourth place) 520 (third place) 583 (first place)

Venezuela 1360 (sixth place) 288 (it is not

considered

megadiverse in this

group)

293 (it is not

considered

megadiverse in this

group)

204 (ninth place)

Ecuador 1559 (fourth place) 271 (it is not

considered

megadiverse in this

group)

374 (eighth place) 402 (third place)

Source: Mittermeier149

As we can see in the data, Ecuador is one of the most privileged countries in the

world because of its rich biodiversity. It is important to point out that despite the fact that

159

Ecuador is not a big country; the variability of species is so high that it has been

categorized as one of the most megadiverse places in world. This occurs because of the

nation’s variety of ecosystems. This rich biodiversity represents a strategic resource for

the country, which it can start sustainably exploiting and commercializing the products

derived from its biodiversity. Therefore, it is crucial that the government determines

measures to sustainably manage and conserve biodiversity.

7. Biodiversity Legal Framework in Ecuador

Biodiversity and biological resource management is a field that has been strongly

considered within the Ecuadorian Legal Framework. Nonetheless, it is important to

determine whether the law and regulations that have been developed in this area are

efficiently applied or if they are just a well-written text without results. First, Ecuador

has signed international treaties such as the Convention on Biological Diversity (CBD)

and the International Treaty on Plant Genetic Resources for Food and Agriculture

(ITPGRFA). Moreover, Ecuador is bound by the Andean Decision 391 on a Common

Regimen on Access to Genetic Resources and the Andean Decision 486 on a Common

Intellectual Property Regime. However, we will not discuss these legal documents in this

chapter, because they will be analyzed with respect to the international legal framework

that surrounds this field.

Therefore, for the purpose of this study, we will focus on the national legal

framework of biodiversity and biological resources management. Thus, we will

determine the legal status of biodiversity and how the country is working to be aligned

160

within the policy of access, benefit, and sharing. This study will analyze the most

important regulation regarding this field.

a. Constitution of Ecuador

The Ecuadorian Constitution enacted in 2008 is without any doubt an

environmentalist legal document. “The new Constitution of Ecuador is markedly

socialist, environmentalist, nativist and politically correct.”150 This Constitution takes an

anthropocentric-holistic approach. It is anthropocentric in the sense that it considers the

human being to be the main subject and objective of the system. However, it can be

considered holistic too because it ascribes significant importance to nature and supports

the notion that all parts of the system should work in equilibrium between the society,

state, economy, and nature. As an embodiment of this vision, Article 283 clearly states

that: “The economic system is social and supportive; it recognizes the human being as a

subject and objective; seeks a dynamic and balanced relationship between society, state

and market, in harmony with nature; and its goal is to guarantee the production and

reproduction of the material and immaterial conditions that make the good life

possible.”151

In accordance with this environmentalist- holistic perspective, the Ecuadorian

Constitution makes an important step through the grant of rights to nature. Article 10

states that nature will be the subject of the rights that the Constitution recognizes

regarding it.152 Later, Article 71 states that “Nature or Pachamama, where the life births

and reproduces, has the right to be integrally respected in its existence, maintenance and

regeneration of its vital cycles, structure, functions and its evolutive processes.”153

161

Moreover, in Article 73, the Constitution mandates that the government take “precaution

and restriction measures in all the activities that can lead to the extinction of species, the

destruction of the ecosystems or the permanent alteration of the natural cycles.”154

These articles make it possible for nature to be a subject of rights and not an object

of exploitation. This new status of nature not only protects nature from being

overexploited, but it also brings the whole system closer to the indigenous approach. It is

a very interesting achievement for a mega-diverse and plurinational country, because it

allows indigenous communities to identify with the State and become an active part of

this new reality and society.

Dr. Mario Melo, a lawyer specializing in Environmental Law and Human Rights and an advisor to Fundacion Pachamama Ecuador, said that the new constitution redefines people's relationship with nature by asserting that nature is not just an object to be appropriated and exploited by people, but is rather a rights-bearing entity that should be treated with parity under the law. In this sense, the new constitution reflects the traditions of indigenous peoples living in Ecuador, who see nature as a mother and call her by a proper name, Pachamama.155

Nevertheless, despite the big achievement that nature’s rights represent in the

fight for environment and biodiversity conservation, it is not an easy task to make them

operable. Before to the approval of the Constitution, experts made some comments to

visualize this new reality; such as “Jaguars, spectacled bears, brown-headed spider

monkeys, and plate-billed mountain toucans may all just breathe a little easier next week

if Ecuadorians approve a new constitution in a referendum on Sunday that would grant

these threatened animals' habitats with inalienable rights.”156 This statement contains an

ironic bargain that for many people can be considered funny; however, it embraces the

current reality and fears beyond the efficient applicability of these rights.

162

The main issue here is who has the right to exercise these rights? According to the

Constitutional text, every person, community, pueblo, or nationality can exercise these

rights on behalf of nature.157 Nonetheless, the major part of the actors that have not really

been empowered by the Constitution to act in the interest on nature, and they do not

understand the importance of this new precept. The majority of Ecuadorians do not share

the holistic and indigenous approach. For this reason, we do not perceive nature as a

sacred element; instead we consider it as a source of goods and services for our survival.

In addition, judges do not have the training to deal with these cases. Consequently, it is

important to educate society in general and the judges specifically in order to make these

rights operable.

In this respect, Christopher Stone a Professor of University of Southern

California, in 1972 wrote an interesting article about the tendency in law to persistently

extends rights. In that way, he analyzes through the history how law has evolved in this

topic and he states "We have been making persons of children although they were not, in

law, always so. And we have done the sale, albeit imperfectly sole would say, with

prisoners, aliens, women (especially of the married variety), the insane, Blacks, fetuses,

and Indians."158

Moreover, Stone notes how rights are not exclusive of humans and as a result

corporations, institutions, trust, etc are subjects of rights. As a consequence, he considers

that trees and the Nature in general someday will become a subject of rights. "The fact, is

that each time there is a movement to confer rights onto some new 'entity' the proposal is

bound to sound odd or frightening or laughable. This is partly because until the rightless

thing receives its rights, we cannot see it as anything but a thing for the use of 'us.'"159

163

Therefore, following this thought, the Ecuadorian Constitution has extended the right to

Nature; however it is important to make them operable, only in that way we can consider

Nature as a subject of rights.

Furthermore, the Constitution of Ecuador aligns its provisions to the global

perspective. Thus, it declares that the preservation of the environment, the conservation

of ecosystems, biodiversity and the integrity of the genetic patrimony of the country are

issues of public interest and concern.160 This is important because through this

disposition, the State acknowledges the importance of environmental protection and

biodiversity conservation. The fact that this principle has been settled in the Constitution

makes it a parameter of public policy. Consequently, Article 313 establishes that

biodiversity and genetic patrimony are strategic sectors. This categorization means that

these resources are to have special management that focuses on conservation, but at the

same time, they are considered important sources for the economic development of

Ecuador.

The Constitution designates the environmental principles that constitute the

parameters for the management of nature. The first part of this article says that “the state

shall guarantee a sustainable model of development, environmentally balanced and

respectful of cultural diversity, which shall preserve biodiversity and the capacity of

ecosystems to naturally regenerate, and which shall ensure that the needs of present and

future generations are met.”161 This provision is completely consistent with the holistic

perspective, in which the balance of nature and culture are the basis for the survival of

life itself. Furthermore, the purpose to ensure that the needs of future generations are

satisfied points to many issues, such as the importance of food security, human health,

164

and environmental balance. Therefore, this first statement of principles encompasses

perfectly the spirit of the Constitution, which conciliates the anthropocentric and holistic

approach.

In addition, the Constitution follows the Convention on Biological Diversity, as it

ratifies the “sovereignty over biodiversity”162 and the importance of fair benefit sharing.

Article 408 states that biodiversity and genetic resources are property inalienable,

imprescriptibly, and unattachable in Ecuador, and that the State will share the benefits

obtained for their exploitation.163 Moreover, the state promotes the participation of

indigenous communities in decisions that can alter the ecosystem and exhorts the

continuance and maintenance of traditional practices. Consequently, the Constitution

facilitates access to biodiversity and genetic resources, but at the same time it clearly

states that some conditions have to be met to authorize this access. It is important that the

Constitution be aligned with the CBD and the Andean Decision 391, because that is the

only way to effectuate these international agreements.

Finally, Article 402 of the Constitution says that “It is prohibited the issuance of

any right, including intellectual property rights, over products derived or synthesized,

obtained from the traditional knowledge associated with the national biodiversity.”164 If

we follow the literal meaning of this provision, we can conclude that the only rights that

are forbidden are those that involve products that were elaborated with the use of

traditional knowledge. In other words, if the final product does not employ traditional

knowledge, but it has been derived from biodiversity, this product can be considered the

subject matter of protection under any right. Consequently, this provision mostly harms

indigenous communities that cannot obtain any kind of right over the products obtained

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with the use of their traditional knowledge and biodiversity associated.

In addition, it can be stated that Article 402 runs against the TRIPS Agreement;

for instance, in Article 27. 1 the TRIPS Agreement states that "patents shall be available

for any inventions, whether products or processes, in all fields of technology, provided

that they are new, involve an inventive step and are capable of industrial application."165

Article 402 of the Constitution prohibits without exception the issuance of IPR over

products derived or synthesized from genetic resources and TK. As a result, it is not

consistent with article 27.1 of the TRIPS. In addition, it is difficult that the broad text

used in Article 402 of the Constitution can be considered as acceptable within the

exclusions from patentability established by article 27.2 and 27.3 of the TRIPS

Agreement.

In conclusion, the Constitution of Ecuador presents a broad regulation of

biodiversity and genetic resources. Nevertheless, it is important to see whether these

provisions can be operable and the objectives accomplished. Right now, it is very early

to see whether these changes have produced the expected results. However, for many

critics of the Constitution, this is an idealistic document that exposes good intentions and

purposes, but it is very difficult to achieve the idealized goals with the current reality. In

that way, the fight against poverty makes the exploitation of non-renewable resources

necessary; however, it undermines biodiversity. To this respect, Melo says: “On various

occasions, President Correa has stated his will to amplify border-region projects for the

extraction of natural resources, especially petroleum and metals, and this can only be

done in Ecuador at the cost of natural resources important for their biodiversity, since

they are the source of rivers and the homes of local communities.”166

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b. Environmental Law

As stated in chapter two, the Ministry of Environment is the entity which is in

charge of the management of biodiversity conservation, access to biological resources,

and traditional knowledge protection. For this reason, many laws have been developed to

satisfy the needs of these areas. The most important laws contained in the environmental

legal frameworks are the Forestall, Natural Fields, and Wild Life enacted in 1984, the

Environmental Management Law issued in 1999, The Special Regime for the

Conservation and Development of Galapagos enacted in 1998, and the Law that Protects

Biodiversity that was issued in 1996.

All these laws are directly focused on biodiversity conservation and

environmental protection. The only one that mentions the topic of biodiversity and

traditional knowledge is the Law for the Protection of Biodiversity.167 This law clearly

confirms one of the precepts of the CBD – that the country has sovereignty over its

biological resources and that has the right to exploit them. Furthermore, it states that the

exploitation of bioresources will be subject to a special regulation that guarantees the

ancestral rights of indigenous communities to have control over their traditional

knowledge and biodiversity.168

However, Ecuador still does not have a law that addresses important topics such

as access to genetic resources and benefit sharing; in other words, it does not have a law

that facilitates proper implementation of the CBD. In that way, important topics like the

respect and protection of traditional knowledge, the conditions for accessing genetic

resources and the incentives to protect and conserve biodiversity and its ecological

services have not been developed by any legal instrument. Since 2002, the Law for the

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Conservation and Sustainable Management of Biodiversity has been analyzed by the

Legislature. Nevertheless, currently this is not even a topic that is in the immediate

agenda of the National Assembly. The Ministry of Environment is working on a statute

to address access to genetic resources that will make the Andean Decision 391 operable;

however, there is no official version of the document.

The Ministry of Environment, in order to simplify the management of regulations

regarding to this field, issued the Unified Text of the Secondary Environmental

Legislation in 2003. In this legal instrument, chapter four focuses on Biodiversity.

Nonetheless, these provisions focus on biodiversity conservation. The only topics related

to our study that are touched on in this statute occur when the Statute ratifies that for any

access to biological resources, the person who is interested in must ask permission from

the Ministry of Environment. This authorization would be discretionary and subject to

the environmental conditions, the type of study, and the biological resources that are

required to be accessed.169 In addition, Title VII of the same text refers to bio-security.

The provisions in this title are directed to the management and development of

genetically modified organisms.

Finally, one of the most relevant documents regarding the management of

biodiversity and traditional knowledge protection is the National Biodiversity Strategy

and Action Plan that was issued through the Decree 2232.170 This Strategy and Action

Plan has been created to accomplish the provisions and objectives defined in the

Convention of Biological Diversity. Therefore, the main objectives of the strategy are

the ones contained in the CBD, which means “the conservation of biological diversity,

the sustainable use of its components and the fair and equitable sharing of the benefits

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arising out of the utilization of genetic resources, including by appropriate access to

genetic resources and by appropriate transfer of relevant technologies, taking into account

all rights over those resources and to technologies, and by appropriate funding.”171

The strategy defines four strategic lines of action: 1) Consolidation and promotion

of sustainable productive activities based on native biodiversity; 2) Guarantee the

existence, integrity and functionality of biodiversity components, such as ecosystems,

species, and genes; 3) Balance the pressures between conservation and sustainable use of

biodiversity; 4) Guarantee the respect and exercise of the individual and collective rights

of citizens to participate in the decisions relative to the access and control of resources,

and secure that the benefits of conservation and use of biodiversity, traditional

knowledge, innovations and practices of local communities and populations be fair and

equitably shared.172

According to the purpose of our study, within the strategic lines, the most relevant

results that they sought were the production and international commercialization of

biodiverse generic resources and the fair and equitable distribution of the benefits that

come from the exploitation of these resources. These objectives were formulated on the

basis that a sustainable exploitation of biodiversity and genetic resources will promote the

commercial development of new products and services that will generate income to the

people and the country in general; and at the same time, they will contribute to

biodiversity conservation.173

The strategy took into account that in order to achieve this objective, it was

important to solve some problems, such as limited knowledge of the genetic resources

that could be exploited, the lack of regulation of access to genetic resources and benefit

169

sharing, and the limited development of the biotechnology industry in the country.174

Nevertheless, despite the recognition of these problems, the Ministry of Environment did

not execute any consistent project to facilitate the production and commercialization of

products derived from bioresources through access and benefit-sharing. Nine years have

passed since the enactment of this strategy and only in 2008-2009 did the Ministry start

working on a regulation to facilitate access to these genetic resources. However, it is still

in the project state, and it has to be discussed and shared with the citizens prior its

approval.

Furthermore, the strategy was to look for a mechanism of benefit sharing that

promotes the generation of strategic partnerships between the population, industry, and

government with the objective to obtain sustainable management of biodiversity. The

strategy stated that the application of the principles of benefit-sharing through a

sustainable management of biodiversity will generate jobs and income resulting from the

creation of business associated to the use of biodiversity.175

In addition, the strategy considered crucial the participation of social actors in the

negotiation of contracts for the use of traditional knowledge. Also, it stated that the

benefits derived from this access to genetic resources and traditional knowledge will be

invested in biodiversity conservation and in the development of local communities.176

These purposes were aligned to the CBD, and the actors were looking to secure a fair and

equitable compensation for the traditional knowledge holders. Nonetheless, as stated

above, without a regulation that effectively facilitates access to genetic resources, that

access is not possible. As a consequence, until now, strategies in this field can be

considered mere proposals of good intentions.

170

Consequently, environmental law in Ecuador is still deficient in the field of access

to genetic resources, benefit, and sharing. This demonstrates that despite the fact that the

Constitution and the environmental laws acknowledge that biodiversity and genetic

resources are strategic reserves for Ecuador, this constitutes a mere declaration. If the

country does not create effective mechanisms that facilitate the sustainable exploitation

of bioresources and compensation for tradition knowledge holders, Ecuador will never

maximize the potential benefits of its biodiversity. In addition, the lack of an effective

legal framework leaves these resources and traditional knowledge totally unprotected and

therefore susceptible to abuse and overexploitation.

8. Conclusion

In conclusion, biodiversity is a valuable resource for humanity that not only

facilitates life but also constitutes a permanent source of goods and services for the

satisfaction of human needs. Therefore, the conservation of biodiversity is crucial point

for the survival of the mankind. Consequently, it is important to create incentives that

motivate people to conserve and preserve biodiversity to secure the life of future

generations. One way is to promote a sustainable exploitation of biodiversity through the

incorporation of practices that allow people to obtain revenue while conserving

biodiversity.

Bioprospecting as a practice that looks for chemical compounds for the production

of new products is an interesting way to maximize the value of biodiversity. As we saw

in this chapter, bioprospecting should not have a negative connotation; on the contrary is

a practice that tends to improve standards of living. However, it is important to define

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the limits and conditions under which bioprospecting take will place in order to secure a

proportional, fair, and equitable share of the benefits.

Moreover, within this process it is crucial to consider the position of indigenous

communities and their perception of biodiversity. This will allow the continuation of

bioprospecting projects without disrespecting indigenous knowledge and beliefs. As a

result, all the actors can benefit, indigenous communities will obtain compensation for

their knowledge according to their conditions, the country of origin will benefit from the

access to genetic resources, the bioprospector will get revenues as a compensation for

his/her work and investment, and society will take advantage of the new products derived

from biodiversity.

Consequently, it is urgent that the international community – especially biodiverse

countries like Ecuador – take legal measures and enact mechanisms to facilitate access to

genetic resources and the application of the principles of benefit and sharing. It is

important that society be conscious of the importance of biodiversity because it is not

only a subject of concern, but also a source of wealth. For this reason, we have to

educate all the actors in order to destroy the fears that stop the development of the South.

The only way to build a consistent mechanism that will allow the conservation and

sustainable management of biodiversity, while all the actors benefit from its results, is the

construction of an efficient legal framework that can be applied worldwide. Therefore, if

the international community is not willing to correct the existing legal framework (CBD)

in order to make it enforceable, the solution is that each country looks for the means to

use the exiting international instruments to provide an adequate process to conserve and

sustainably exploit biodiversity.

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1 Graciela Chichilnisky, Property Rights on Biodiversity and the Pharmaceutical Industry 5, http://www.chichilnisky.com/pdfs/papers/89.pdf 2 S. Biber-Klemm & T. Cottier, Rights to Plant Genetic Resources and Traditional Knowledge 4, (S. Biber-Klemm &T. Cottier eds.,CABI, UK, 2006). 3 Id. 4 Jeffrey A. McNeely et al., Conserving the World’s Biological Diversity 17, (Jeffery A. McNeely et al. eds., Washington, DC: IUCN, 1990). 5 http://biodiversity.ca.gov/Biodiversity/biodiv_def2.html (last visited 14 May, 2009). 6 http://www.cbd.int/ (then follow the Convention hyperlink; then follow Text of the Convention hyperlink; then follow Article 2 Use of Terms hyperlink) (last visited 14 May, 2009). 7 K.J. Gaston, What is Biodiversity?, in Biodiversity. A Biology of Numbers and Difference 1-7, (K.J.Gaston ed., Blackwell Science, Oxford UK, 1996). 8 Paul Wood, Biodiversity and Democracy: Rethinking Society and Nature 37, (Paul Wood ed.,Vancouver: UBC Press, 2000). 9 See CBD, supra note 6. 10 Chidi Oguamanam, International Law and Indigenous Knowledge 36-7, (Chidi Oguamanam ed., University of Toronto Press, Canada, 2006). 11 Dan L. Perlman & Glenn Adelson, Biodiversity: Exploring Values and Priorities in Conservation 39, (Malden ed., MA: Blackwell Science, 1997). 12 Id. 13 Id. 14 See Oguamanam, supra note 10, at 49. 15 See Biber-Klemm & Cottier, supra note 2, at 7. 16 See Chapter II. 17 James Henderson, ‘Ayukpachi: Empowering original Thought’, in Reclaiming Indigenous Voices and Vision 259, (Marie Battiste, ed., Vancouver: UBC Press, 2000). 18 See Biber-Klemm &Cottier, supra note 2, at 7. 19 Id. 20 CBD, Report of the Consultation on the Cross-Cutting Initiative on Biodiversity for Food and Nutrition 4 (2005), http://www.cbd.int/doc/meetings/agr/ibfn-01/official/ibfn-01-03-en.pdf. 21 Commission on Genetic Resources for Food and Agriculture/ Working Group on Plant Genetic Resources for Food and Agriculture, Support for Countries to Generate, Compile and Disseminate Cultivar-Specific Nutrient Composition Data, and the Relative Priority of Obtaining Cultivar-Specific Dietary Consumption Data 29 (2005), ftp://ftp.fao.org/docrep/fao/010/a1582e/a1582e00.pdf.

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22 Edward O. Wilson, Biodiversity 15, (Edward O. Wilson ed., Washington DC: National Academy Press, 1988). 23 Food and Agriculture Organization of the United Nations, Expert Consultation on Nutrition Indicators for Biodiversity 1 (2008), ftp://ftp.fao.org/docrep/fao/010/a1582e/a1582e00.pdf. 24 S. Bernsteind & S. Ludwing, The importance of Biodiversity to Medicine, in The Journal of the American Medical Association VOl. 300 No. 19, November 19, 2008, http://jama.ama-assn.org/cgi/content/full/300/19/2297. 25 World Health Organization, Ecosystems and the Human well-being 12 (2005), http://www.who.int/globalchange/ecosystems/ecosysq1.pdf. 26 Id. at 20. 27 Norman R. Farnsworth, Screening Plants for New Medicines, in Biodiversity 91, 83 (O. Wilson ed., National Academy Press ed., Washington DC, 1988). 28 Id. at 93. 29 See Biber-Klemm & Cottier, supra note 2, at 7. 30 Id. at 9. 31 E.B. Barbier, Ecological economics, uncertaintly and implications for policy setting priorities for biodiversity conservation, in Investing in Biological Diversity: The Cairns Conference 116 (Organization for Economic Co-operation and Development ed., Paris, 1997). 32 See Chapter II. 33 See Oguamanam, supra note 10, at 47. 34 T.M. Swanson, The International Regulation of Extinction 246, (T.M. Swanson ed., New York University Press, New York, 1994). 35 L. Glowka, F. Burhenne-Guilmin & H. Synge, A Guide to the Conservation of Biological Diversity 9, (Environmental Policy and Law Paper No.30, IUCN, Gland, Switzerland, 1994).T.M. Swanson, The appropriation of evolution’s values: an institutional analysis of intellectual property regimes and biodiversity conservation, in Intellectual Property Rights and Biodiversity Conservation: An Interdisciplinary Analysis of the Values of Medicinal Plants 161-162, (T.M. Swanson ed., Cambridge University Press, Cambridge, UK, 1995). 36 I. Serageldin, Equity an ethics: twin challenges, twin opportunities, in Ethics and Equity in Conservation and Use of Genetic Resources for Sustainable Food Security, (International Plant Genetic Resources Institute, Rome, 1997). 37 See Chapter II. 38 Carlos Correa, Traditional Knowledge and Intellectual Property 5, Quaker United Nations Office Geneva, November 2001, available at http://www.quno.org 39 See Henderson, supra note 17, at 258.

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40 D. Irvine, Succession management and resource distribution in an Amazonian rain forest 223-37, (D. Irvine ed., Adv. Econ. Bot. 7, 1989). 41 Convention on Biological Diversity, Preamble states: “Affirming that the conservation of biological diversity is a common concern of humankind.” 42 R.B. Primack, Naturschutzbiologie 95-6, (R.B. Primack ed., Spektrum Akademischer Verlag, Heidelberg, Germany, 1995). 43 Peter Raven & Jeffrey McNeely, Biological Extinction:Its Scope and Meaning for Us, in Protection of Global Diversity: Converging Strategies 13 (D.Lakshman, Guruswamy &Jeffrey A. McNeely eds., Duke University Press, Durham, NC, 1998). 44 See Biber-Klemm &Cottier, supra note 2, at 10. 45 W.E. Rees & Wackerbagel, Ecological Footprints and Appropriate Carrying Capacity: Measuring the Natural Capital Requirements of the Human Economy, in Investing in Natural Capital: Ecological Economist Approach to Sustainability 364, (Ann-Marri Jansson et al., eds., Island press, Washington, DEC, 1994). 46 A. Wood, P. Stedman-Edwards and J. Mang, The Root Causes of Biodiversity Loss 12, (Wood ed., Earthscan Publications, London, 2000). 47 Peter Raven, The Epic Evolution and the Problem of Biosiversity Loss, in Biodiversity & the Law 30, (Charles McManis ed., Earthscan, London, 2007). 48 See Biber-Klemm & Cottier, supra note 2, at 11. 49 See Oguamanam, supra note 10, at 41. 50 http://en.wikipedia.org/wiki/Climate_change (last visited May 22, 2009). 51 Millennium Ecosystem Assessment, Ecosystems and Human Well-being: Biodiversity Synthesis, (World Resources Institute, Washington, DC, 2005). 52 Food and Agriculture Organization of the United Nations, Climate Change and Biodiversity for Food and Agriculture: Technical Background Document from the Expert Consultation 2, (Rome, 13-14 February 2008), at ftp://ftp.fao.org/docrep/fao/meeting/013/ai784e.pdf (last visited May 24, 2009). 53 See Biber-Klemm & Cottier, supra note 2, at 11. 54 Id. 55 Organization for Economic Cooperation and Development, Saving Biological Diversity, Economic Incentives 51, (OECD, Paris, 1996). 56 See Wood, supra note 46, at 3. 57 Id at 12. 58 See Biber-Klemm & Cottier, supra note 2, at 14.

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59 http://www.who.int/ (follow “Programmes and projects” hyperlink; then follow “Global environmental change” hyperlink; then follow “ Ecosystems and health” hyperlink; then follow “Millennium Ecosystem Assessment” hyperlink). 60 Thomas Eisner, Chemical Prospecting: a proposal for action, in Ecology, Ethics and Economics: The Broken circle 196-202, (F.H. Bormann and Stephen R. Kellert eds., Yale University Press, New Haven/London, 1991). 61 Corliss Karasov, Who Reaps the Benefits of Biodiversity?, in Environmental Health Perspectives A582, Vol. 109, No. 12 (Dec., 2001), Brogan & Partners, http://www.jstor.org/stable/3454734 (last visited May 19, 2009). 62 Reid, Laird, Gamez, Sittenfeld, Janzen, Gollin & Juma, Biodiversity Prospecting: Using Genetic Resources for Sustainable Development 7 (Reid et al eds., World Resources Institute, USA, 1993). 63 Gareth Porter & Janet Welsh Brown, Global Environmental Politics 13, 2nd Edition, (Boulder ed., Westview Press, 1996). 64 John Stuart Mill, Principles of Political Economy with some of their Applications to Social Philosophy 70 (William J. Ashley, ed., Longmans, Green and Co., 7th Edition, London,1909) (1848). 65 The rosy periwinkle case is an excellent example of "how difficult it can be to disentangle proprietary claims originating in folk traditions." At the beginning this case arose a significant controversy because the rosy periwinkle was alleged to be a native species of Madagascar. Therefore, it was alleged that "Madagascar was unfairly denied revenues from drugs whose discovery depend on its biodiversity and ethnomedical traditions." However, after revising the facts, it was stated that the Catharanthus roseus "is a resolutely cosmopolitan species now cultivated on six continents and thoroughly integrated into the folk healing traditions of countries as distant from one another as England, Pakistan, Vietnam, and Dominica (…) Far from being endangered species, Catharanthus roseus is regarded, at least in the state of Florida, as an aggressive exotic that gardeners should banish from their gardens." In addition, "according to the scientists working at Eli Lilly, the literature available to them identified the rosy periwinkle as a folk treatment for diabetes, not as a cancer medicine. (…) Instead, scientists came upon alkaloids that proved effective as agents for trating cancer. This discovery coupled with innovative extraction techniques, led to the development of vincristine and vinblastine, drugs that have helped doctors achieve remission rates of 90 percent or more in cases of childhood lymphocytic leukemia." Therefore, it is arguable to affirm that Madagascar had legitimate rights to participate from the profits. For further discussion see Michael F. Brown, Who owns native culture? 135-38, (Michael F. Brown ed., Harvard University Press, 2003). 66 See Karasov, supra note 61, at A582. 67 J.A. McNeely, K.R. Miller, W.V. Reid, R.A. Mittermeier & T.B. Werner, Conserving the World’s Biological Diversity, (McNeely et al eds., World Bank Publications, Wahington DC, 1990). 68 E.O. Wilson, The Diversity of Life 260 (Penguin Books Ltd., London, 1992). 69 See Oguamanam, supra note 10, at 54. 70 See CBD, supra note 6, Article 1. 71 Id. at Article 15. 1. 72 Food and Agricultural Organization of the United Nations (FAO) (1987), Extract of the twenty-second session of the FAO conference”, Rome, 5-23 November 1983. Resolution 8/83- International Undertaking on Plant and Genetic Resources and Annex, CPGR/87/Inf.3. FAO, Rome.

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73 See Karasov, supra note 61, at A 584. 74 Term used by Vogel while explaining the position of the South countries during the negotiations of the CBD. 75 Taken from personal notes took in Ecuador, August 2008, at the Offices of the Ministry of Environment. In this meeting, Professor Manuel Baldeon from Universidad San Francisco de Quito and Professor Elvira de Mejia from University of Illinois, Urbana-Champaign made the presentation of the project. 76 Elizabeth Bravo, La Bioprospeccion en el Ecuador, in Biodiversidad, Bioprospeccion and Bioseguridad 131, (Ana MAria Varea ed. ABYA YALA, Quito, 1997). 77 See Karasov, supra note 61, at A 587. 78 See Chapter I. 79 Vandana Shiva, Biopiracy: The Plunder of Nature and Knowledge 31, ( Vandana Shiva ed., South End Press, Cambridge MA, 1997). 80 Rural Advancement Foundation International (RAFI), 1996 Biopiracy Update US Patents Claim Exclusively Monopoly Control of Food Crop, Medicinal Plants, Soil Microbes and Traditional Knowledge from the South, http://www.etcgroup.org/en/materials/publications.html?pub_id=460 (last visited May 26, 2009). 81 Charles R. McManis, Fitting Traditional Knowledge Protection and Biopiracy Claims into the Existing Intellectual Property and Unfair Competition Framework, in Intellectual Property and Biological Resources 425, ( Burton ONG ed., Marshall Cavendish Academic, Singapore 2004). 82 Board of Trade v. Dow Jones & Co., 108 Ill.App.3d 681, 685, 439 N.E.2d 526, 529 (1982). 83 Carol McHugh, Separating commercial parroting from Pirating: BOARD OF TRADEv. DOW JONES & CO., 33 DePaul L. Rev. 595,612 (1984). 84 See Karasov, supra note 61, at A 586. See also, supra note 65. 85 Prior informed consent agreements are those contracts that have to be subscribed by the indigenous communities that are contributing to the research with their traditional knowledge. It is a way to ensure that they receive the equitable remuneration if their knowledge is used to make a final product, or to recognize their participation an collaboration if any right has to be granted. We will analyze this important point in Chapter VI. 86 Peter G. Pan, Bioprospecting Issues and Policy Consideration 4, (Honolulu, HI: Legislative Reference Bureau, January 2006), http://www.oha.org/pdf/bioprospecting/legs/Peter_G_Pan.pdf (last visited May 27, 2009). 87 Statement of the International Indigenous Forum on Biodiversity at the Ad Hoc Open-Ended Working Group on Access and Benefit sharing, CBD, 22-26 October 2001, Bonn, Germany, reprinted in TEBTEBBA Briefing Paper No.8. 88 National Cancer Institute (NCI). 89 Nirmal Sengupta, Economic Studies of Indigenous and Traditional Knowledge 213 (Nirmal Sengupta ed., Academic Foundation, New Delhi, 2007). 90 Padmashree Gehl Sampath, Regulating Bioprospecting 5 (United Nations University Press, US, 2005).

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91 Ikechi Mgbeoji, Global Biopiracy 12 (UBC Press, Canda, 2006). 92 RAFI is the rural Advancement FOundation International, now the Action Group on Erosion, Technology and Conservation (ETC). 93 See McManis, supra note 81, at 460. 94 Jim Chen, There's No Such Thing as Biopiracy ... And It's a Good Thing Too 4 (McGeorge Law Review, Vol.36, 2006) . This fill-in-the-blank biopiracy form is inspired by Paul J. Heald, The Rhetoric of Biopiracy, 11 CARDOZO J. INTL’I.&COMP.L.519,521 (2003). 95Michael Brodoswski, Thomas Turano, Christine Vito & K&L Gates, Managing Innovation: Patent Basics for Biotechnology Counsel, in Biotechnology and the Law 28, (Hugh B. Wellons, Eileen Smith Ewing, Robert Copple, William Wofford & Erika Leitzan, eds., ABA, USA, 2007). 96 35 U.S.C. §§101-103. 97 Id. at §161. 98 Charles Mc Manis has stated that plant protection is more analogous to copyright protection, in the sense that it merely protects against unauthorized reproduction. But unlike copyright law, it requires subject matter to meet standard of non-obviousness. See McManis, supr note 81, at 458. 99 35 U.S.C. § 102. 100 Gayler v. Wilder, 51 U.S. (10 How.) 477 (1850) 101 Gayler v. Wilder, 51 U.S. (10 How.) 477, 497 (1850) 102 See Chapter II, characteristics of traditional knowledge. 103 Diamond v. Chakrabarty, 447 U.S. 303 (1980) 104 Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980) 105 S. Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952); H. R. Rep. No. 1923, 82d Cong., 2d Sess., 6 (1952). 106 See McManis, supra note 81, at 465. 107 ETC Group, What Happened to the Enola Bean Patent Challenge, 21 December, 2005, available at http://www.ciat.cgiar.org/newsroom/pdf/genotypeenola05%5B1%5D.pdf. See also, McManis, supra note 81, at 465. 108 Id. 109 L. Pallotini, J Kami, G. Barcaccia, P. Gepts, The Genetic Identity of a Patented Yellow Bean, a paper presented at the American Society of Agronomy Annual Meeting, Denver, November 2-5, 2003. 110 Id. 111 See ETC Group, supra note 107, at 2. 112 CIAT, http://www.ciat.cgiar.org/newsroom/release_02.htm (last visited Oct. 21, 2009). 113 Id.

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114 CIAT, http://www.ciat.cgiar.org/newsroom/enolabean2008.htm (last visited Oct. 21 2009). 115 Id. 116 See McManis, supra note 81, at 466. 117 Id. 118 Graham Dutfield, Intellectual Property, Biogenetic Resources and Traditional Knowledge 53 (Earthscan, UK, 2004). 119 See McManis, supra note 81, at 454. 120 Id. at 455. 121 Id. at 456. 122 David R. Downes, How Intellectual Property Could be a Tool to Protect Traditional Knowledge, 25 Colum.J.Envtl.L.253,279 (2000). 123 J.M. FInger & Philip Schuler, Poor people’s knowledge 169 (J.M. FInger & Philip Schuler eds., The World Bank, Washington DC, 2004). 124 Id. at 170. 125 COICA is an umbrella group representing over 400 indigenous tribes of the region. 126 Glenn M. Wiser, PTO Rejection of the Ayahuasca Patent Claim, available at (http://www.ciel.org./Biodiversity/ptorejection.html) (last visited May 29, 2009). 127 Id. 128 See McManis, supra note 81, at 459. 129 Article 2232 of the Ecuadorian Civil Code determines the right to start a law suit claiming for the indemnification or monetary reparation in the case that a person or community can suffer moral damages. Moral damages are understood as any damage that can harm a person or community. For instance, damages caused by a lesion, a physical or psychic suffering. Therefore, applying the Ecuadorian law the fact that the indigenous community be limited to practice their ancestral rituals can be considered as a moral damage. http://www.derechoecuador.com/index.php?option=com_content&task=view&id=4112 130 http://www.biopark.org/peru/biopiracy1.html (last visited May 29, 2009). 131 Graham Dutfield, Intellectual Property Rights, Trade and Biodiversity 66. Case Study 5.5: The Neem Patents and Appendix 1 (Graham Dutfield ed., Earthscan Publications, 1999). 132 Id. 133 Id. 134 Id. 135 See Dutfield, supra note 118, at 54.

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136 Id. 137 See McManis, supra note 71, at 462. 138 See Dutfield, supra note 131, at 66. 139 See McManis, supra note 81, at 462. 140 Id at 462. 141 Id at 462. 142 Commission on Intellectual Property Rights, Final Report Ch. 4 at 76 (2002) available online: (http://www.iprcommission.org/graphic/documents/final_report.htm) (last visited May 27, 2009). 143 Ministry of Environment, National Biodiversity Strategy and Policy 2001-2010, Decree 2232, available online (http://www.ambiente.gov.ec/docs/Politica_Biod.pdf) (last visited May 30, 2009). 144 http://www.biodiversityhotspots.org/Pages/default.aspx (follow “Hotspots Science” hyperlink; then follow “Hotspots Defined” hyperlink). 145 http://www.biodiversityhotspots.org/Pages/default.aspx (follow “Hotspots by Region ” hyperlink; then follow “Tropical Andes” hyperlink). 146 See National Biodiversity Strategy and Policy 2001-2010, supra note 143. 147 Id. 148 R. Mittermeier, Megadivesidad: los paises biologicamente mas ricos del mundo (R. Mittermeier ed., Quebecor Printing. PEMEX, Mexico D.F., 1997). 149 Id. 150 Carlos Arturo Serrano Gomez, The New Constitution of Ecuador: Conclusion, (http://english.ohmynews.com/articleview/article_view.asp?menu=c10400&no=383956&rel_no=1&back_url=) (last visited May 29, 2009). 151 Constitution of Ecuador Article 283 (translated). 152 Constitution of Ecuador Article 10 153 Constitution of Ecuador Article 71 154 Constitution of Ecuador Article 73 155 Cyril Mychalejko, Ecuador’s Constitution Gives Rights to the Nature, (http://www.opednews.com/articles/1/Ecuador-s-Constitution-Giv-by-Cyril-Mychalejko-080925-102.html) (last visited May 29, 2009). 156 Id. 157 Constitution of Ecuador Article 71 paragraph 2 158 Christopher D. Stone, "Should Trees Have Standing?-Toward Legal rights for Natural Objects", 45 University of South California Law Review 450, 482 (1972).

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159 Id. 160 Constitution of Ecuador Article 14. 161 Constitution of Ecuador Article 395 1. 162 Constitution of Ecuador Article 400. 163 Constitution of Ecuador Article 408. 164 Constitution of Ecuador Article 402. 165 TRIPS Agreement, Article 27.1, available at http://www.wto.org/english/tratop_e/trips_e/t_agm3c_e.htm#5 166 See Mychalejko, supra note 155. 167 Law that Protects Biodiversity in Ecuador, Official Registry Supplement 418, September 10th, 2004. 168 Law for the Protection of Biodiversity, Article 1, Official Registry 35,27-IX-96. 169 Unified Text, Chapter IV Biodiversity, Title II, available on line (http://www.ambiente.gov.ec/docs/libroIV_TII.pdf) (last visited May 30, 2009). 170 See National Biodiversity Strategy and Policy 2001-2010, supra note 143. 171 See CBD, supra note 6, Article 1. 172 See National Biodiversity Strategy and Action Policy 2001-2010, supra note 143. 173 Id. at 18. 174 Id. 175 Id. at 30. 176 Id. at 31.

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CHAPTER IV

INTERNATIONAL LEGAL SYSTEM RELATED TO BIODIVERSITY, TRADITIONAL KNOWLEDGE AND INTELLECTUAL PROTERTY PROTECTION:

THE INTEREST BEHIND THE RIGHT 1. INTERNATIONAL LEGAL FRAMEWORK

The international legal regime related to biodiversity, traditional knowledge, and

intellectual property rights protection has been marked by significant instruments that

clearly represent the position of developing and industrialized countries. This chapter

highlights the most important treaties that deal with the management and use of

biodiversity in general and genetic resources in particular, as well as with the protection

of traditional knowledge; such as the Convention on Biological Diversity and the

International Treaty on Plant Genetic Resources for Food and Agriculture In addition,

because of the close relationship of genetic resources management and traditional

knowledge with intellectual property rights, we also have included the analysis of the

TRIPS Agreement to identify its most relevant provisions related to this topic. The

purpose of this analysis is to review the most significant international instruments that

deal with this topic as well to define how their provisions have impacted the treatment,

management, and use of genetic resources and traditional knowledge within the

international community.

2. THE CONVENTION ON BIOLOGICAL DIVERSITY

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a. General overview and history The Convention on Biological Biodiversity (CBD) is a treaty that is more than an

instrumental text for the conservation and sustainable use of biodiversity. Vicente

Sanchez, former Chairman of the Intergovernmental Negotiating Committee (INC) states

that the CBD is: “a convention which delicately balances on conservation of genetic

resources, technological development, regulated access to genetic resources and

international equity. It was agreed that States have the sovereign right to exploit their

biological resources but also the responsibility to conserve and use them in a sustainable

fashion”1 The CBD is the result of a long process of negotiation that pitted the North and

South in a political debate that is ongoing. Despite the fact that the CBD achieves many

of the goals of developing countries, it is still debatable whether all the proposals

contained on this instrument can be effectively applied.

The CBD has its origins in 1987 during 14th Governing Council (GC) of the

United Nations Environment Programme (UNEP). One month before the 14th GC, the

World Commission on Environment and Development issued a report called “Our

Common Future” that was the product of a world-wide consultation of governments, non-

governmental organizations, and individuals from different regions.2 This report

addressed the “importance of economic as well other reasons for conserving the sum and

variety of species on earth, ‘a common heritage,’ and proposed a Species Protection

Convention which would need to be accompanied by appropriate funding

arrangements.”3 In addition, during the 14th GC, the United States proposed a global

convention on biological diversity, the main purpose of which was to create an umbrella

framework that encompasses the existing international conservation agreements.4

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Despite the fact that neither the United States proposal nor the report raised an

immediate need to work on the CBD; the environment of the 14th GC was characterized

by a strong concern for environmental conservation and sustainable management issues.

As a consequence, the 14th GC decided to issue a decision oriented to the creation of a

group of experts to study the feasibility of developing an umbrella convention for these

issues. The UNEP Decision 14/26 clearly states that that the Governing Council:

Concerned about the disappearance of plant and animal species as a result of the destruction of their habitats and their exploitation for commercial and other purposes, Recognizing the need for an adequate protection and preservation of biological diversity, because of both the intrinsic and economic value of the species concerned, (...) Requests the Executive Director, in consultation with Governments within available resources, to establish an ad hoc working group of experts to investigate in close collaboration with the Ecosystems Conservation group and other international organization the desirability and possible form of an umbrella convention to rationalize current activities in this field, and to address other areas which might fall under such a convention (...)5

This ad hoc working group of experts was formed and held three sessions. On the

basis of the final report of the ad hoc working group of experts, the UNEP’s 15th

Governing Council, held in Nairobi in May 1989, agreed to start working on an

international legal instrument to negotiate all the conservational, economic, and social

issues related to biological diversity. The GC decided that this instrument should be

negotiated by another ad-hoc working group of experts.

...the GC agreed to authorize the Executive Director to start work on “an international legal instrument” which would not only address conservation questions but also social and economic issues and “the use of genetic resources in biotechnology development”. The instrument would be negotiated by “an ad hoc working group of legal and technical experts”- not to be confused with the ad hoc Working Group of Experts which had only met once but was now asked to hold further sessions to provide a firm scientific basis for the negotiations.6

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The first meeting of the ad hoc Working Group of Legal and Technical Experts

took place in Nairobi in November 1990. This meeting included the participation of

seventy countries. Despite the fact that the objective of this meeting was the negotiation

of the terms of the Convention on Biological Diversity, it was not possible because of the

absence of a draft text convention and the lack of procedures for the discussion.

Therefore, the meeting turned into an informal discussion in which the delegates treated

the topic in general terms. However, in an effort to make a progress, a Working Group

was created to deal with the main elements of the Convention. The structure of the

Convention and the proposed elements were mainly contained in the following:

...the secretariat’s original short list included several difficult elements: access to biotechnology; new and additional funding and favorable technology transfer. A plethora of further elements was proposed: biosafety regulation, funds for conservation; funds for country studies; funds for training; the role of the newly established Global Environment Facility (GEF); funds for scientific research; restriction on multinational companies; global lists of endangered species and/or habitats; ex situ conservation; abolishing of intellectual property rights; extending intellectual property rights.7

The conflicting proposals reflected the position of two major groups. The one

formed by the industrialized countries, who in United Nations terminology are known as

WEOG (Western European and Others Group),8 and the other constituted by the Latin

American and Caribbean, the Africans, and the Asians, who transform themselves into

G77 ( The Group of 77 and China)9 to lead and represent the developing countries.

The G77, representing the interest of developing countries, wanted better

conditions for accessing the biotechnology developed from their biological resources, as

well as technology transfer in general than were granted in the proposed Convention. In

addition, the G77 objected to the possible consideration of biological resources as the

common heritage of the mankind. On the other hand, the WEOG were arguing for a huge

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extension of the world’s protected areas, but at the same time were resistant to extending

financial cooperation as a blank cheque. In addition, the United States was hesitant about

the inclusion of biotechnology in the Convention. Another point under discussion was

the treatment of intellectual property rights, and while the G77 proposed the abolition of

intellectual property rights, the WEOG promoted their extension.10

In February 1991 the second meeting of the ad hoc Working Group of Legal and

Technical Experts took place. In this meeting, the procedures for the negotiation were

established, and the Secretariat Mostafa Tolba presented a draft skeleton text of a

convention that was the base for the discussion. Here, two working groups were formed.

The first one was to work on the preamble, objectives, conservation provisions, and

legal/technical issues. The second group was concerned about issues related to finance,

technology, biotechnology, and access to biological resources. At the end of the session

there was no significant progress, and no agreement had been reached on most of the

important issues, such as technology transfer and funding mechanisms.11

During the UNEP’s 16th Governing Council in Nairobi in May 1991, the ad hoc

Working Group of Legal and Technical Experts became the Intergovernmental

Negotiating Committee for a Convention on Biological Diversity. “The Decision

stressed that this would not be a new negotiating body and that there would be no change

to the rules of procedure. Nevertheless it greatly pleased the diplomats who were neither

‘legal’ nor ‘technical’ and who had expressed extreme horror at the thought of being

considered ‘experts.’”12 This shows that the CBD was negotiated by delegates who were

not experts in biodiversity conservation and sustainable management. Although some

delegations included scientific experts,13 a significant number of delegations did not have

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this support. This fact undeniably brought consequences in the final document and its

implementation.

The Intergovernmental Negotiating Committee (INC) for a Convention on

Biological Diversity held the following meetings: the third negotiating session/first

session of INC in Madrid, Spain, from June 24 to July 3, 1991; the fourth negotiating

session/second session of INC in Nairobi, Kenya, from September 23 to October 2, 1991;

the fifth negotiating session/ third session of INC in Geneva, Switzerland, from

November 25 to December 4, 1991; the sixth negotiating session/fourth session of INC in

Nairobi, Kenya, from February 6 to 15, 1992; and the final negotiating session in

Nairobi, Kenya from May 11-22,1992.14

The work of the INC culminated on May 22, 1992 with the Adoption of the

Agreed Text of the Convention on Biological Diversity in Nairobi, Kenya. All members

of the United Nations were invited to participate in the Conference. The countries that

accepted the invitation and participated in the Conference were:

Algeria, Argentina, Australia, Austria, Bahamas, Bangladesh, Barbados, Belgium, Bhutan, Botswana, Brazil, Bulgaria, Burkina Faso, Burundi, Cameroon, Canada, Central African Republic, Chile, China, Colombia, Comoros, Congo, Costa Rica, Cote D’Ivoire, Cuba, Czechoslovakia, Denmark, Djibouti, Ecuador, Egypt, Equatorial Guinea, Ethiopia, Finland, France, Gambia, Germany, Ghana, Greece, Guinea, Guinea-Bissau, Guyana, Hungary, India, Indonesia, Iran (Islamic Republic of), Ireland, Italy, Japan, Jordan, Kenya, Lesotho, Libyan Arab Jamahiriya, Madagascar, Malawi, Malaysia, Maldives, Malta, Mauritius, Mexico, Morocco, Mongolia, Mozambique, Myanmar, Netherlands, New Zealand, Niger, Nigeria, Norway, Oman, Pakistan, Papua New Guinea, Peru, Philippines, Poland, Portugal, Republic of Korea, Romania, Russian Federation, Rwanda, Sao Tome and Principe, Saudi Arabia, Senegal, Seychelles, Spain, Sri Lanka, Sudan, Sweden, Switzerland, Thailand, Turkey, Uganda, United Kingdom of Great Britain and Northern Ireland, United Republic of Tanzania, United States of America, Uruguay, Venezuela, Yemen, Yugoslavia, Zaire, Zambia and Zimbabwe. The European Economic Community also participated.15

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In this Conference, the countries agreed to open the Convention for signature on

June 5 at the United Nations Conference on Environment Development (the Rio “Earth

Summit”) in Brazil. During the Rio Earth Summit, the Convention on Biological

Diversity became headline news. All the media around the world congregated in Rio to

witness the adoption of a legal instrument the main objective of which was the

sustainable conservation of biodiversity. For instance, Time magazine’s cover

announced “COMING TOGETHER TO SAVE THE EARTH.”16

However, not all the articles were completely agreed upon by the country

members. As a result, United Kingdom and the United States were not confident about

signing the document. The main concern of the United Kingdom was Article 21

financial mechanisms; however, after scrutinizing the text in depth, the United Kingdom

decided to sign the document. As a result, the United States of America was isolated in

its refusal to become a part of the Convention.

The international delegations continued working on the final text. Here, the major

issues were on the biotechnology chapter, especially those topics regarding biosafety and

the possible legislation on liability and compensation for damage resulting from

applications of biotechnology. The G77 was eager to adopt strong biosafety methods and

the compensation clause. However, the WEOG countries were divided, and the

European Community could not find a unanimous position. At the end, the controverted

text was approved, and no compensation clause was added.17

After many sessions of exhaustive negotiation, the Convention was approved and

opened to signing. However, the United States of America did not sign the Convention.

Thus, “President Bush made a defiant speech concentrating on the shortcomings of the

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biodiversity convention: ‘I didn’t come here to apologize... The financing scheme will

not work;... [the convention] threatens to retard biotechnology and undermine the

protection of ideas.’”18 This position clearly shows the American concern about the

treatment of intellectual property rights related to biodiversity, traditional knowledge, and

biotechnology. However, does the CBD constitute a threat to hold back biotechnology

and undermine the protection of ideas, or is it a mechanism that tries to facilitate access

to biological resources and promote biotechnology and the generation of intellectual

property rights? We will try to answer this question after analyzing the final text of the

CBD.

The Convention was opened for signatures from June 5, 1992 until June 4, 1993,

by which time it had received 168 signatures. The Convention entered into force on

December 29, 1993, which was ninety days after the thirtieth ratification. The first

session of the Conference of the Parties was scheduled for November 28 to December 9,

1994 in the Bahamas.19

b. Convention on Biological Diversity: Access to biological resources and traditional

knowledge.

The Convention on Biological Diversity has become a complex legal instrument

that encompasses important aspects of biodiversity. Thus, the treaty focuses not only on

biodiversity in situ and ex situ conservation, but also on the sustainable use of it.

Important topics were considered by this instrument; such as the sustainable use of

biodiversity; access to genetic resources and traditional knowledge; equitable sharing of

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benefits and technology transfer. The objectives of the Convention clearly show the

scope the instrument.

Article 1. 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 and 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 relevant technologies, taking into account all rights over those resources and to technologies, and by appropriate funding.20

For the purposes of this chapter, we will focus our analysis on the second and

third objectives of the CBD, which are 2) the sustainable use of biodiversity components

and 3) the fair and equitable sharing of the benefits arising out of the utilization of genetic

resources, including appropriate access to genetic resources and appropriate transfer of

relevant technology. Consequently, we will study the most relevant issues related to

access to and use of genetic resources, valuation and equity, prior informed consent,

treatment of traditional knowledge, and intellectual property issues associated with

technology transfer. This analysis will be done under the text of the CBD in order to

determine the impact of the CBD and the new legal status of access to genetic resources,

traditional knowledge, and biotechnology in the world.

Because the CBD is oriented not only to the conservation of biological diversity

but also to its sustainable management, the text of the Convention emphasized genetic

resources rather than ecosystems and habitats, which are emphasized by other

conservation treaties. This is a significant step within the biodiversity management field

because genetic resources are elements of biodiversity that can be subject to trade. They

can acquire significant commercial value because of technological development,

especially within the biotechnology industry. Thus, biodiversity is not only conceived as

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an object of protection, but also as a proactive economic resource for conservation and

development. The CBD incorporates some definitions that denoted the economic value

of genetic resources.

Genetic resources mean genetic material of actual or potential value. Genetic material means any material of plant, animal, microbial or other origin containing functional units of heredity.

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.21

The introduction of the commercial value of biodiversity has as an objective the

self-financing of biodiversity conservation, as well as a motivation to protect biodiversity

and execute activities based on the sustainable use of it.22 Therefore, this new concept is

merely a mechanism to achieve the objectives of the CBD while promoting a new way of

doing businesses that uses and protects biodiversity. As Lesser states:

The treatment of genetic resources as the subset of genetic materials with actual or potential market value is particularly relevant here as emphasis is on the use of biodiversity, and, where needed, the creation of markets, to achieve relevant Convention objectives. This does not imply that the end goal of the Convention objectives is monetary-nor that funds can achieve all its objectives. Instead, it says that some objectives can be enhanced through market activities, including payment (...).23

i. Access to genetic resources according to the CBD Access to genetic resources is one of the most important and controversial

elements of the CBD. Presently, genetic resources constitute a crucial component of

technological development, especially in the area of biotechnology. As a result, this use

of genetic resources has enormously increased their commercial value, and therefore

increased the level of interest in creating property rights that protect the status of the

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providers of genetic resources and the developers of technology. “In economic terms,

property rights are typically created in response to rises in value. (...) Genetic resources

are following a similar pattern of interest in explicit property rights at a time when

biotechnology increases the value of those resources.”24

This debate is aggravated by the actors that participate in this field. On one side,

we find the providers of genetic resources, which are mainly developing countries of the

South that contain the most significant percentage of the world’s biodiversity. On the

other side, we have the holders of technology, which are industrialized countries of the

North. Therefore, the North and South dichotomy is intensified by opposite interests and

historical rivalry. Consequently, through the CBD, the country members tried to

equilibrate the positions. Thus, “The Convention attempts to provide a framework which

both respects donor countries’ sovereign rights over their biological and genetic resources

and facilitates access by users.”25

The CBD’s Preamble reaffirms that States have sovereign rights over their

biological resources. Later in Article 3, the CBD states that “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 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.”26 Finally, Article 15.1 recognizes “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.”27

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Sovereignty is a principle of international law that determines that States have

supreme, absolute and independent authority over their territory; therefore, “all states are

juridically equal and (...) there is no authority superior to states.”28 This sovereignty

extends to all dimensions of the State’s territory, including natural resources. “One of the

specific elements of state sovereignty concerns the control of the natural, biological and

genetic resources found in areas under their jurisdiction.”29 Sovereignty over natural

resources was a debated topic, especially in light of the doctrine of the common heritage

of mankind discussed in Chapter III. However, the United Nations General Assembly

Resolution 1803 on December 14, 1962 recognized the States’ Permanent Sovereignty

over Natural Resources.

The CBD not only ratifies and recognizes this sovereignty right, but also it makes

the State responsible for the conservation and sustainable use of biological and genetic

resources. In addition, the CBD gives the States the right to share the benefits derived

from the exploitation or use of biological and genetic resources and encourages them to

develop the legal framework to achieve the treaty’s goals. Consequently, the CBD makes

explicit that the national government of each State has the authority to determine the

conditions and terms for access to genetic resources and to control their use through the

issuance of national law. For this reason, the operational scheme of the CBD greatly

depends on the action of each State, because without national law, the CBD cannot be

applied.

Governments must act formally to assert sovereign rights through access legislation. Some have argued that national legislation is not required, that the reference to sovereign rights in the CBD (UNEP/CBD/COP/2/17), once ratified nationally, created legal requirement for benefit sharing, etc. That interpretation, however, is incorrect. The CBD establishes only national authority; domestic legislation is required to implement it (FAO, 1995; App.3).30

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In addition, the CBD is more specific and recognizes sovereign rights over

biological resources in general and genetic resources in particular. The inclusion of

genetic resources constitutes a challenging issue because it is more difficult for the States

to control genetic resources than biological resources. In addition, as we already said, the

development of new technologies has added value to genetic resources, making urgent

the establishment of new conditions for accessing them within fair terms. The CBD gives

the authority to each State to control and determine the conditions of access to genetic

resources. However, despite the sovereignty right over genetic resources that the CBD

contains, it encourages States to facilitate access to genetic resources and not to unduly

restrict it. Consequently, Article 15 2) reads: “Each Contracting Party shall endeavor 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.”31

Because the CBD states that each State’s government will establish the conditions

of access to genetic resources, it follows a bilateral approach. In other words, the CBD

considers that the most appropriate mechanism to regulate access to genetic resources is a

relationship between the country of origin and the user of the genetic resources. Thus, it

is the country of origin who determines the conditions under which the agreement will be

signed. In addition, both parties should agree on the terms contained in the contract that

granted the access to genetic resources, and these terms must be consistent with the

CBD.32

These agreements about access to genetic resources are known as Material

Transfer Agreements (MTA). “MTAs are being used when the owners of the materials

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are known and willing to provide use permission at least conditionally”33 In this case,

genetic resources are the material subject of the transfer, and the State should create

national legislation to establish the conditions under which these MTAs will be

negotiated.

Usually, the MTA contains the description of the material and the scope of the

grant, including the authorized uses of the material and a prohibition to distribute the

material to third parties.34 However, these MTAs should be elaborated according to the

public needs and public policy of each State. Therefore, it is not an easy task to elaborate

and negotiate an MTA, especially because of the lack of expertise of public authorities

and communities regarding crucial issues that are involved in the agreements. On the

subject of MTAs, Lesser states that “Negotiation, once the components are identified,

requires a knowledge of standard practices and familiarity with the interpretation of

terminology. This, in turn, implies the need for capacity building for many countries and

communities.”35

The lack of knowledge in the elaboration and negotiation process of MTAs

constitutes a significant problem for the countries of origin. For instance, in the

Ecuadorian case, the Ministry of Environment has never elaborated, negotiated, or signed

an MTA. During one of the meetings between the project GIBEX and this Ministry, the

authorities established that they do not have specialized professionals to elaborate these

kinds of instruments.36 It is undeniably an important concern for the authority because

the other parties (usually researchers, universities, biotechnology corporations, or

pharmaceutical companies) have a high level of expertise elaborating and negotiating

these agreements. Therefore, the countries of origin can be situated in an unequal

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position that can undermine their rights and interests over genetic resources. This lack of

knowledge can be deemed as a barrier for access to genetic resources; therefore, it is

fundamental to start training specialists in this area that can assist the government.

Moreover, according to Article 15 of the CBD, two elements should be contained

in the agreement as conditions of the grant. First, access to genetic resources should be

subject to prior informed consent of the country of origin (the party who provides and

controls the resources), unless otherwise determined by this Party.37 Secondly, the results

of research and development and the benefits arising from the commercial and other

utilization of genetic resources should be fairly and equitably shared with the Contracting

Party providing such resources. In order to do this, the CBD states that each contracting

party shall take legislative, administrative, or policy measures to guarantee the benefit

sharing.38 Therefore, once again the Convention determines the need for national

legislation or procedures in order to make enforceable the principle of benefit sharing. In

addition, the percentages of participation should be contained in the agreement.

ii. Prior Informed Consent

According to the CBD, access to genetic resources and biosafety procedures shall

be subject to prior informed consent. However, the CBD does not contain a formal

definition of prior informed consent and the spectrum that it encompasses. According to

the Secretariat of the CBD, “Prior informed consent means that permission from the

competent national authority, or authorities of the provider country is to be obtained prior

to accessing genetic resources, in accordance with national legislation.”39 Prior informed

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consent is mentioned in Articles 15 and 19 of the CBD, where it is used to manage topics

related to access to genetic resources and biosafety.

Article 15 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.

Article 19 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.

Nevertheless, prior informed consent goes beyond a simple authorization for

accessing genetic resources and biodiversity management. Therefore, the more complex

issues related to prior informed consent are the ones related to its implementation. In

other words, this concerns issues like the scope of consent, who should provide the prior

informed consent, under which informational basis the provider authorizes the access,

and what kind of activities the access authorizes. For this reason we have to realize the

importance of analyzing the origin of the prior informed consent concept and how it

should be adjusted within the CBD framework.

Prior informed consent is a practice originated in the medical field. “Medical

literature where informed consent has been both a philosophical and practical

consideration is traceable back at least 1822.”40 It was incorporated in this area because

of the unique relationship between doctors and patients, as well as the obligation of

doctors to inform patients about the potential effects and risks of the treatment.

Consequently, doctors have the obligation to “disclose information to the quality of a

patient’s or subject’s understanding and consent.”41

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Within the medical field, prior informed consent finds its foundations in three

areas:

• within the context of the Hippocratic oath for medical practitioners, PIC can help protecting patients from harm;

• an aspect of assuring the greatest good for the greater number (utilitarian); and • the individual’s right to self determination42

In the process to translate the meaning and application of prior informed consent

from the medical field to the CBD context, we can state that the line of justification that

was followed was the individual’s right to self determination. This foundation can be

interpreted as the State’s power to enforce its sovereign right over the biological and

genetic resources that exist in its territory.43 Therefore, the right to self determination can

be applied to States that have the autonomy, independence, and authority to control and

manage the resources that exist within their territory. Also, it is understood as a

mechanism to be protected against any harm suffered as a consequence of transboundary

activity.

The idea of PIC modified to fit individual MEAs’44 needs, rather than used as a unified term, has been regularly applied in MEAs as a mechanism to ensure that the autonomy of nations likely to be affected by the transboundary activities is fully respected. Of course, the implementation of PIC could also safeguard national public interest from undesirable damage as a result of unregulated transnational activities.45

PIC has developed into an essential principle in international relations as a necessary corollary to the permanent sovereignty of States over their natural resources. It has also become more and more important to sustainable development as global interdependencies, both economic and environmental, increase. Beginning in 1989 with the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, multilateral environmental agreements, for instance, consistently acknowledge PIC as a tool to control the movement of potentially harmful materials. The right of States to some form of prior informed consent is thus recognized in various contexts, including the transboundary movements of hazardous and toxic materials, genetically engineered organisms, and persistent organic pollutants.46

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As a consequence, prior informed consent constitutes not only a contractual

matter for access to genetic resources or biosafety management; it is also a mechanism

that effectuates the sovereignty right that States have other their resources. However, the

CBD only mentions the need for prior informed consent in a broad way, without giving

any kind of procedure or guide to make it operative. Thus, it left each country to

determine the scope and conditions under which prior informed consent will work. This

vague status of prior informed consent in the CBD created many gaps and doubts that

must be addressed.

The absence of both a clear definition of the term and detailed configuration of the PIC system to sustain it leaves much room to be filled in. The single provision of the CBD alone cannot provide resolution for a variety of issues that may be of critical importance including, inter alia, the following:

1. Who is entitled to grant the consent on GR access: national authority, private owner, and/or local community? Should the PIC should be a system of single subject-given consent or it should hinge on multi-subject consent granting?

2. What are the specific rights and obligations allocated among GR providers and users? For instance, what sort of information should be submitted by GR users to obtain the consent?

3. What is the due procedure governing a PIC system? What role should PIC play in the context of access to GR? 47

In order to clarify the process and provide guidelines for the implementation of

the CBD and its principles of access and benefit sharing, the Conference of the Parties

(COP) to the CBD, at its Fifth meeting in Nairobi, Kenya in May 2000.

…decide[d] to establish an Ad Hoc Open-ended Working Group, composed of representatives, including experts, nominated by Governments and regional economic integration organizations, with the mandate to develop guidelines and other approaches for submission to the Conference of the Parties and to assist Parties and stakeholders in addressing the following elements as relevant to access to genetic resources and benefit-sharing, inter alia: terms for prior informed consent and mutually agreed terms; roles, responsibilities and participation of stakeholders; relevant aspects relating to in situ and ex situ

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conservation and sustainable use; mechanisms for benefit-sharing, for example through technology transfer and joint research and development; and means to ensure the respect, preservation and maintenance of knowledge, innovations and practices of indigenous and local communities embodying traditional lifestyles relevant for the conservation and sustainable use of biological diversity, taking into account, inter alia, work by the World Intellectual Property Organization on intellectual property rights issues.48

The Ad Hoc Open-ended Working Group on Access and Benefit-Sharing (the

Working Group) met at the International Congress Center Bundeshaus, in Bonn,

Germany, from October 22-26, 2001. The Working Group concluded its work with the

draft of the Bonn Guidelines that were included as a recommendation in the report that

was submitted to the COP at its sixth meeting.49 The COP’s sixth meeting was held in

The Hague in April 2002. Here, the COP adopted the “Bonn Guidelines on Access to

Genetic Resources and Fair and Equitable Sharing of the Benefits Arising out of their

Utilization.”50

The Bonn Guidelines are standards that provide assistance to Parties for the

implementation and operability of access and benefit-sharing strategies, policies, and

administrative and legislative provisions.51 Thus, the guidelines give a detailed

framework of the steps that country members must follow in order to execute the

principles of access and benefit-sharing contained in the CBD. These guidelines

highlight the importance of prior informed consent. Despite the fact that they do not

define the term, they nonetheless determine important references that Parties can use to

carry out prior informed consent schemes.

The Guidelines identify the steps in the access and benefit-sharing process, with an emphasis on the obligation for users to seek the prior informed consent of providers. They also identify the basic requirements for mutually agreed terms and define the main roles and responsibilities of users and providers and stress the importance of the involvement of all stakeholders. They also cover other elements such as incentives, accountability, means for verification and dispute settlement.

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Finally, they enumerate suggested elements for inclusion in material transfer agreements and provide an indicative list of both monetary and non-monetary benefits.52

The Bonn Guidelines, within the provisions mandated by the CBD, try to provide

Parties and stakeholders with a transparent framework to facilitate access to genetic

resources and to ensure fair and equitable sharing of benefits.53 As a result, these

guidelines include all the possible actors that might be involved in accessing genetic

resources and recognize their right to be considered in this process.54 This is an important

step for indigenous and local communities that are allowed to participate actively in this

process. It is undeniable that this is a crucial point because of the cultural, social, and

economic interdependence existing between these communities and biodiversity.

In addition, the guidelines acknowledge the importance of providing capacity-

building to ensure a fair and effective negotiation and implementation of ABS

strategies.55 This point is fundamental, especially considering the gigantic difference in

proficiency of accessing genetic resources between the players. Thus, governments and

local indigenous communities have insufficient understanding in this area. On the other

hand, genetic resource users (academics, researchers, pharmaceutical companies, and

biotechnology corporations) have more experience in negotiating access to genetic

resources. Therefore, these provisions have a final goal of setting fair and balanced

access parameters to be included in the related national policy and

legislation.56Nevertheless, it is important to keep the transactional costs down.

The Guidelines manage to provide a roadmap to assist relevant GR players such as GR providers, users and indigenous and local communities to locate their duties and rights within the ABS regime. As a result, the major contribution of the Guidelines is to help nations in identifying the steps involved in the process of ABS and to provide them with useful guiding principles in the design and establishment of an appropriate national regime.57

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The Bonn Guidelines also provide a system for the establishment of prior informed

consent in accordance with Article 15 of the CBD.58 This system for the implementation

of prior informed consent is composed of two main areas: the principles and the elements

of prior informed consent. Thus, the system considers a basic set of values that constitute

a referent and a compendium of steps to make prior informed consent operative. In that

way, the Bonn Guidelines try to satisfy the CBD’s gaps in the area of prior informed

consent.

Basic principles of a prior informed consent system The basic principles of a prior informed consent system should include: (a) Legal certainty and clarity; (b) Access to genetic resources should be facilitated at minimum cost; (c) Restrictions on access to genetic resources should be transparent, based on legal grounds, and not run counter to the objectives of the Convention;

(d) Consent of the relevant competent national authority (ies) in the provider country. The consent of relevant stakeholders, such as indigenous and local communities, as appropriate to the circumstances and subject to domestic law, should also be obtained.59

These principles try to establish a clear and fair framework for accessing genetic

resources. They reaffirm the State’s sovereign right of control over biological and

genetic resources. As a result, the principles clearly determine that the relevant national

authority is competent to provide prior informed consent. In addition, it goes beyond the

CBD, because (d) clearly says that the “consent of relevant stakeholders, such as

indigenous and local communities, as appropriate to the circumstances and subject to

domestic law, should also be obtained.” Therefore, stakeholders in indigenous and local

communities that could be affected by the access to genetic resources should be

consulted. However, the national laws are the ones that should determine in which

scenario this prior informed consent proceeds.

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Moreover, these principles emphasize the need to facilitate access to genetic

resources. Thus, even though the State’s sovereign right is recognized, it should not be

restrictive of or contradictory to the CBD provisions. As a result, States should

implement procedures that do not constitute an obstacle for access to genetic resources;

on the contrary they should promote this activity. As a result, the guidelines prevent

States from abusing their sovereign rights.

The application of the principles of legal certainty, economy, and transparency in PIC will ensure any national GR access system to facilitate bio-prospecting and to avoid unnecessary barriers and restrictions to GR prospective users.60 The principles seem to send a clear message to national governments that they should refrain from abusing or misusing the system, and are expected to run it on a fair and open basis.61

Furthermore, in an effort to make prior informed consent operative, the Bonn

Guidelines suggest several elements that have to be considered within the PIC system:

Elements of a prior informed consent system62 Elements of a prior informed consent system may include:

(a) Competent authority (ies) granting or providing for evidence of prior informed consent;

(b) Timing and deadlines; (c) Specification of use; (d) Procedures for obtaining prior informed consent; (e) Mechanism for consultation of relevant stakeholders; (f) Process. In this section, the guidelines reaffirm the need for a competent authority (a) and

for the integration of all the players in the procedure (e). This authority is a backbone of

the prior informed consent system because it permits articulation of the ABS strategy.

The guidelines state that this national authority shall be organized according to national

legislation, and PIC may be required from different levels of government. In addition, it

says that the legislation should facilitate the involvement of relevant stakeholders in

indigenous local communities.63

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These provisions represent a real challenge because of the significantly different

interests between the players and the lack of knowledge and expertise in accessing

genetic resource topics. In addition, the possible integration of different levels of

government can produce an excessive bureaucracy that can become an economic and

administrative obstacle. Therefore, it is important to create a national authority that

coordinates the prior informed consent process with all the players in order to avoid

unnecessary steps and bureaucratic laws that delay and increase the cost of access to

genetic resources. “Extremely bureaucratic access laws may mean that costs involved in

following the access procedures make working of firms in these countries

uncompetitive”64

The rest of the elements determined in the guidelines talk about operative issues.

Thus, the guidelines state the celerity principle, which specifies that the authorities should

provide consent within a reasonable time period. In addition, (c) establishes the scope of

the grant; in other words, the prior informed consent should be given for a specific use,

and any other use requires separate authorization. Within the procedures in section (d),

the guidelines define the information that should be contained in the application to obtain

prior informed consent. Finally, the process details the formalities of the application,

such as the written requirement and the fact that prior informed consent should be granted

through a permit or a license.65

In conclusion, the Bonn Guidelines provide states with a regulatory framework that

facilitates the implementation of the access and benefit sharing strategy. In addition, it is

undeniable that the guidelines give specific steps for implementing the prior informed

consent. Another important fact about the Bonn Guidelines is that they require the

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involvement of all significant players involved in accessing the genetic resources; this

point is fundamental for the recognition of indigenous and local communities’ rights.

Moreover, they try to implement a fair and clear framework for the access to genetic

resources that pragmatically promotes this activity for the improvement of life conditions

and biodiversity conservation.

As a consequence, the guidelines balance the rights, benefits, and responsibilities of

the parties that are involved in this field. “Overall, the Guidelines are delicately-

constructed and are devoted to the creation of a balance of rights and obligations between

PIC seekers, namely GR access applicants, and consent-givers, CNA and/or domestic

stakeholders with a view to encouraging the disclosure of necessary information and

avoiding the abuse of consent rights.”66

iii. Equitable Benefit- Sharing

Through the establishment of the benefit-sharing67 requirement, the CBD changed

the traditional approach to accessing genetic resources. As it was noted, before the CBD,

genetic resources were considered the common heritage of mankind; therefore, they were

treated as a freely accessible commodity. The CBD shifted the traditional scheme of

genetic resource management. As a result, it not only ratified the sovereignty of states

over their biological and genetic resources, but it also introduced the principle of benefit-

sharing as a condition of accessing genetic resources. In its efforts to ensure the fairness

of the negotiation, the CBD clearly states that this equitable benefit-sharing should be

mutually agreed by the Parties.

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Nevertheless, the CBD does not provide a detailed explanation about how the

objectives of the equitable benefit-sharing provision could be achieved. Therefore, the

Bonn Guidelines are the ones that provide a complete explanation of how benefit-sharing

should be implemented and how the mechanisms to obtain it operate. For instance, the

guidelines state that “mutually agreed terms could cover the conditions, obligations,

procedures, types, timing, distribution and mechanisms of benefits to be shared. These

will vary depending on what is regarded as fair and equitable in light of the

circumstances.”68 Later, the guidelines give an exhaustive explanation about how these

clauses should be developed.

The main articles that address equitable benefit-sharing in the CBD are: 8 (j), 15

(7), 16, and 19 (1) (2). These provisions give an overall idea about how this principle

should be applied.

Article 8 (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;

Article 8 (j) reinforces the statement contained in the Preamble of the CBD that

recognizes “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.”69 Thus, Article 8 (j) acknowledges the right of traditional

knowledge holders to participate from the benefits derived from the utilization of such

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knowledge, innovation, and practices. However, it does not state how these communities

are going to benefit from sharing their knowledge. The CBD and the Bonn Guidelines

merely state that the national legislation will determine the mechanisms of traditional

knowledge protection and benefit-sharing regimes.70 In addition, the Bonn Guidelines

state that an indicator of mutually agreed terms is when “the knowledge, innovations and

practices of indigenous and local communities have been respected, preserved and

maintained, and whether the customary use of biological resources in accordance with

traditional practices has been protected and encouraged.”71 Therefore, if traditional

knowledge practices are promoted and respected, the terms of access to genetic resources

could be considered mutually agreed and hence equitable and fair.

Therefore, despite the existence of the CBD and the Bonn Guidelines, the

mechanism to make the equitable benefit-sharing principle operable is still vague. In

addition, each State is responsible for taking the administrative and legislative measures

to make these provisions effective. As a result, these rights depend on the political

decision of the legislative branch of every nation. Access and benefit sharing is “the

fusion of two concepts which are politically and (...) legally or contractually linked. In

general, ‘access’ is perceived to be primarily the responsibility of the source country,

source community or individual, while ‘benefit sharing’ is founded on the user (private

company or entity) to be made legally effective by the country with jurisdiction over that

user.”72

This political discretion, along with the occurrence of previous episodes of

biopiracy, still leaves several uncertainties about the effectiveness of the equitable

benefit-sharing principle. To this respect, Professor Charles MacManis says:

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Less clear is what indigenous peoples and biodiversity-rich developing nations in general will receive in the way of benefits from this surge of biodiversity prospecting activity. The reason for concern over the question, however, is abundantly clear. One of the more notorious recent examples from a 350 year history of uncompensated takings is the widely reported windfall that the U.S. pharmaceutical company, Eli Lily73, netted thirty years ago from the rosy periwinkle of Madagascar. (...) While representatives of the U.S. biotechnology industry concede that such stories are now a thing of the past, it remains to be seen whether there will actually be a fair and equitable sharing of the benefits derived from the utilization of genetic resources.74

Continuing with the CBD analysis, Article 15 contains important dispositions

regarding equitable benefit-sharing. However, these provisions should be read in

conjunction with Articles 16 and 19 (1) and (2). Article 15 (7) provides a general

overview of the principles of access and benefit-sharing, and expressly mandates that the

direct and indirect benefits derived from the use of genetic resources should be equitably

shared with the Party who provided such resources.

15 (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.75

According to the CBD and the ABS system, the benefits include monetary and

non-monetary values. It is expressly stated in Article 15 (7) that “(...) benefits arising

from the commercial and other utilization of genetic resources (...).” For this reason, we

have to analyze Articles 15, 16 and 19 (1) and (2) together. These provisions state that

scientific research based on genetic resources, technology (including biotechnology), and

biotechnology research and its benefits should be developed with the participation of and

shared by both Parties.76

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As a result, the Provider Party (usually the country of origin77, the local or

indigenous community) will be benefited by the transfer of technology and the results

and fruits of the research and products derived from genetic resources. Therefore, it is

fundamental that both Parties take legislative, administrative, or policy measures to

provide for the effective transfer of and participation in scientific, technological, and

biotechnological research to the country of origin.78 Moreover, these measures should

“promote and advance priority access on a fair and equitable basis by Contracting Parties,

(...), to the results and benefits arising from biotechnology based upon genetic

resources.”79 This last provision emphasizes the importance of ensuring that developing,

biodiversity-rich countries benefit from the use of their genetic resources.

As we can see, the CBD promotes an interchange of assets for the common

welfare. Thus, industrialized countries gain access to genetic resources (and all the

advantages that they represent), and developing countries (genetic resource providers)

gain access to new technology (including biotechnology) and research expertise as a fair

reward for the use of their genetic resources. In addition, the provider Party can also gain

monetary benefits from their participation in the transfer of technology and research.

Paragraph 46 of the Bonn Guidelines states that the provider Party can obtain monetary

or non-monetary benefits, and in Annex II, the guidelines list the possible options.

Monetary benefits may include, but not be limited to: (a) Access fees/fee per sample collected or otherwise acquired; (b) Up-front payments; (c) Milestone payments; (d) Payment of royalties; (e) License fees in case of commercialization; (f) Special fees to be paid to trust funds supporting conservation and sustainable

use of biodiversity; (g) Salaries and preferential terms where mutually agreed; (h) Research funding;

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(i) Joint ventures; (j) Joint ownership of relevant intellectual property rights. Non-monetary benefits may include, but not be limited to: (a) Sharing of research and development results;

(b) Collaboration, cooperation and contribution in scientific research and development programmes, particularly biotechnological research activities, where possible in the provider country;

(c) Participation in product development; (d) Collaboration, cooperation and contribution in education and training; (e) Admittance to ex situ facilities of genetic resources and to databases;

(f) Transfer to the provider of the genetic resources of knowledge and technology under fair and most favorable terms, including on concessional and preferential terms where agreed, in particular, knowledge and technology that make use of genetic resources, including biotechnology, or that are relevant to the conservation and sustainable utilization of biological diversity; (e) Strengthening capacities for technology transfer to user developing country Parties and to Parties that are countries with economies in transition and technology development in the country of origin that provides genetic resources. Also to facilitate abilities of indigenous and local communities to conserve and sustainably use their genetic resources;

(h) Institutional capacity-building; (i) Human and material resources to strengthen the capacities for the administration and enforcement of access regulations; (j) Training related to genetic resources with the full participation of providing Parties, and where possible, in such Parties;

(k) Access to scientific information relevant to conservation and sustainable use of biological diversity, including biological inventories and taxonomic studies; (l) Contributions to the local economy;

(m) Research directed towards priority needs, such as health and food security, taking into account domestic uses of genetic resources in provider countries;

(n) Institutional and professional relationships that can arise from an access and benefit-sharing agreement and subsequent collaborative activities; (o) Food and livelihood security benefits; (p) Social recognition; (q) Joint ownership of relevant intellectual property rights.80 The Access and Benefit-sharing system contained in the CBD and the Bonn

Guidelines can be understood as a motivation/incentive mechanism for biodiversity

conservation and its sustainable use.81 In this respect, Lesser states that “cash payments

provide a clear incentive for the conservation of genetic resources.”82 As a result, the fact

that the provider party may receive a monetary or non-monetary benefit constitutes an

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incentive/motivation to protect and conserve biodiversity, and also to effectively

implement the CBD and the guidelines through national legislation. These benefits can

be used by the provider party as sources to implement biodiversity conservation programs

and also to improve the living conditions of the local and indigenous communities that

have participated in the process. In addition, the technology transfer benefit constitutes a

great opportunity to enhance the national economy and also to promote the preservation

and development of traditional knowledge and practices.

On the other hand, the user party can benefit because it gets legal, authorized access

to genetic resources and traditional knowledge (if it is the case). In the case of

commercial users (industry), this fact increases its opportunities to develop more products

or technologies and to obtain profits. Moreover, for the non-commercial users, following

the ABS system constitutes a guarantee that the research or bioprospecting project has

been conducted within legal parameters. It is undeniable that this is an aggregate value

for their reputation and name within this field. All these incentive systems can be

improved or added into the domestic legislation. For instance,

In 2005, the Japanese Ministry of Economy, Trade and Industry (METI), in conjunction with the Japan Bioindustry Association, concluded a multi-year process through which they developed a set of guidelines for users of genetic resources (the “Japanese Guidelines”). Based on the Bonn Guidelines, the Japanese Guidelines provide a set of basic principles and suggestions for users seeking to comply with best practices for ABS compliance. There are two factors which cause the Japanese Guidelines to stand out when compared with other such guidelines. First, they are directly focused on clarifying the obligations of users as conceived under the Bonn Guidelines; and second, they include a direct incentive for users to comply with the guidelines. In Part IV, they discuss the ability of METI to provide assistance and advice, and other kinds of support, for businesses that “do business in a way that conforms to the [Japanese] Guidelines.” In essence, this provision is an incentive measure – offering government assistance to any company that complies with the guidelines and still encounters difficulty in obtaining provider approval and other activities. The desire to avoid being labeled or without misconstrued as

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“biopirates,” coupled with this incentive may be a major factor in encouraging Japanese companies to comply with the Japanese Guidelines.83

Reaching the goal of equitable benefit-sharing is not an easy task. It depends on the

collaboration of all the players in this field. The country of origin or provider party is a

crucial actor in this process, because the national law defines the terms and conditions for

access to genetic resources and benefit-sharing of its products and uses. A determination

of whether the benefit-sharing is fair and equitable depends on the negotiation terms of

each and every case. However, it is important to consider two general elements, the first

one being the balance of the negotiation and the second one being the definition of the

term “equitable.”

Access to genetic resources is a field that is characterized by the user party’s

expertise and the provider party’s lack of knowledge. “Perfect knowledge, in the context

of genetic resources, says that sellers and buyers must be informed of the characteristics

of the resources, and the prevailing prices. This has not been true to date when the major

multinationals firm buyers are considered to be more knowledgeable of the market than

sellers, creating an imbalance.”84 Therefore, in order to achieve a fair negotiation and

mutually agreed terms, it is necessary that both parties disclose all the information

relevant to this process.

Moreover, it is important that each country has defined a standard of equitable

sharing. It is true that if the terms of the negotiation are fair and the contract is based on

mutually agreed terms, the benefit-sharing will be fair and equitable. However, the lack

of experience of the provider party makes it necessary that the national regime adopt a

criterion that permits the evaluation of the equitability of the benefit-sharing.

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It is important to create a standard, to guide the courts in determining whether a share is “fair and equitable.” This issue may arise especially where there is no ABS contract to aid the court in ordering payment of an “equitable share” (...) Even where the contract is “fairly negotiated,” a court can revise it, if it finds that the amount paid or given is unfair in absolute terms.85

iv. Treatment of traditional knowledge

Traditional knowledge is one of the subjects of the CBD. The CBD highlights

through the whole treaty the importance of traditional knowledge protection,

conservation, and promotion. In addition, it recognizes the strong relationship that exists

between local and indigenous communities and biodiversity, as well as how it represents

the basis for local and indigenous culture and traditional lifestyles.86 However, the CBD

only encourages country members to develop and implement strategies regarding the

treatment of traditional knowledge, but it does not provide any clear mechanism to

achieve the goals established for this topic.

A number of articles within the CBD address traditional knowledge. Some of

them are more focused on respect, preservation, and maintenance of traditional

knowledge. Other articles consider traditional knowledge to be a key element for the

conservation and sustainable use of biodiversity.87 In addition, some of them emphasize

the importance of applying and transferring traditional knowledge as another form of

technology. They also state that traditional knowledge holders should participate in an

equitable way from the benefits that result from the use of genetic resources and the

associated traditional knowledge. We will analyze these articles in close detail.

Article 8 (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

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encourage the equitable sharing of the benefits arising from the utilization of such knowledge, innovations and practices;88

Article 8 (j) constitutes the backbone provision for traditional knowledge.

Therefore, it is important to analyze its language in order to understand its content and

effects. First of all, Article 8 (j) does not specifically mention traditional knowledge. It

talks about “knowledge, innovations and practices of indigenous and local communities

embodying traditional lifestyles.” As Lewinski says, “this clearly goes along with the

notion of traditional knowledge.”89 However, it is possible that this language was

approved in order to give a broader notion and does not limited the scope of this

provision to the definition of traditional knowledge, which can vary among societies.

In addition, this article does not just talk about “indigenous people,” it mentions

“indigenous and local communities.” As we stated in Chapter II, traditional and

indigenous knowledge are not the same. In fact, indigenous knowledge is a kind of

traditional knowledge. Therefore, the objective of the CBD was to extend traditional

knowledge protection not only for indigenous people, but also for other communities that

have developed this knowledge. To this respect, some authors have said:

The term “communities” may be considered appropriated to refer more precisely to particular locations or settlements instead of addressing a people who may be located across a much larger region in its entirety. However, it is clear that the creation of a different term is also due to political reasons, as it certainly may have been difficult for some States to accept the notion of “indigenous peoples” in this context.90

Regarding the content, it is important to notice that the respect, preservation,

maintenance, and promotion of traditional knowledge are subject to national legislation.

That means that it does not matter that the CBD contains significant provisions about

traditional knowledge protection, because they are not enforceable without domestic law.

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This gives a huge responsibility to country members because they have the option to

create a legal framework for traditional knowledge protection that is consistent with the

CBD. It has represented one of the biggest obstacles for the effective application of the

CBD and the respect of traditional knowledge holder rights, because the lack of

experience, as well as the absence of interest, have caused only some countries to develop

an effective legal framework. Thus, several countries have discussed this point, but how

many are effectively taking appropriate measures?

In an effort to help and advice country members on topics related to the

application of Article 8 (j), the Conference of the Parties established the Working Group

on Article 8(j) and related provisions in 1988. The objective of this group was to develop

guidelines for the creation of national legislation, policies, and other mechanisms to

ensure the participation of local and indigenous communities in the accomplishment of

the CBD objectives. In this respect, the guidelines should guarantee the application of the

equitable benefit-sharing principle, as well as respect for due process within the accessing

procedure. This means that the user gets prior informed approval.

The Working Group on Article 8(j) and related provisions developed the Akwe:

Kon voluntary guidelines for the conduct of cultural, environmental, and social impact

assessments regarding developments proposed to take place or which are likely to impact

sacred sites, lands, and waters traditionally occupied or used by indigenous and local

communities.91

These guidelines are intended to provide a collaborative framework ensuring the full involvement of indigenous and local communities in the assessment of cultural, environmental and social concerns and interests of indigenous and local communities of proposed developments. Moreover, guidance is provided on how to take into account traditional knowledge, innovations and practices as part of the impact-assessment processes and promote the use of appropriate technologies.92

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Nevertheless, despite this effort to clarify and make operative the implementation

of Article 8 (j), there is no registry about how many countries have adopted these

guidelines. This is very disappointing, considering that the only way to obtain an

effective protection of traditional knowledge is through the application of international

uniform frameworks. In addition, this fact raises several concerns about how many

countries are considering this element as a strategic point within this national policy. The

ad hoc open-ended inter-sessional working group on Article 8 (j) and related provisions

reported:

Question 59: Has your country initiated a legal and institutional review of matters related to cultural, environmental and social impact assessment, with a view to incorporating the Akwé:Kon Guidelines into national legislation, policies, and procedures? No country reported on the actual implementation of the Akwé:Kon Guidelines. However, Estonia and Thailand reported on review processes that are considering the protection of sacred sites and the improvement of environmental impact assessment mechanisms. Norway indicated that they already have sufficient legislation and mechanisms to protect Sami cultural heritage. Sweden has provided funding for indigenous communities in the developing world to hold workshops and build capacity regarding the implementation of the Akwe:Kon Guidelines. Zimbabwe reported that there is no review being undertaken, but present EIA legislation addresses some of the Guidelines.93

Article 8 (j) contains three main parts regarding traditional knowledge protection.

Thus, the first obligation is to “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.” This obligation

is later reaffirmed by Article 10 (c), which reads “Each Contracting Party shall, as far as

possible and as appropriate: Protect and encourage customary use of biological resources

in accordance with traditional cultural practices that are compatible with conservation or

sustainable use requirements.”94

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As we saw in Chapter II, traditional knowledge can be appreciated in different

fields, such as traditional medicinal knowledge, traditional agricultural knowledge, and

traditional environmental knowledge. Therefore, these articles recognize the importance

of traditional knowledge within the local and indigenous community lifestyles and

acknowledge the significance of these practices for the conservation of biodiversity. In

addition, the CBD expresses the value of traditional knowledge for sustainable

development. Therefore, it encourages country members not only to protect traditional

knowledge, but also to maintain and promote its application.

The second part of Article 8 (j) refers to the obligation to “promote their wider

application with the approval and involvement of the holders of such knowledge,

innovations and practices.” This article contains two important elements: first, the

requirement of obtaining prior informed approval for accessing and using this traditional

knowledge, and second, the broad application of this knowledge to areas beyond the local

and indigenous community.

Through Article 8 (j), traditional knowledge holders should be required to provide

their authorization before the traditional knowledge is accessed and used. It is unclear

why the CBD uses the term “approval” instead of “consent.” For the purposes of this

article, approval “embraces the notion of consent.”95 However, the terminology is not the

major issue in this article. For many jurists, the denomination of traditional knowledge

holders creates a sort of intellectual property right over this type of knowledge, practices,

and innovations.96 For some indigenous groups, this element recognizes the existence of

collective rights of indigenous people to their knowledge and practices.97 It is difficult

and risky to assert that the creation of these rights was intended by the CBD.

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Nevertheless, it is clear that the main objective of this provision is to eliminate the abuse

suffered by indigenous and local communities that were deprived of their own traditional

knowledge without previous authorization. Therefore, through this article, local and

indigenous communities can approve or disapprove of the access to and use of their

traditional knowledge.

Art. 8 (j) envisages some sort of proprietary position of the holders of relevant knowledge. It seems to be clear that reference to a “right holder” cannot be readily understood to be confined to rights in the sense of existing entitlements under applicable national law. The term “right” in this context, very likely refers to a more general concept of rights of indigenous and local communities rather to existing entitlements under applicable intellectual property rights in a technical sense. Notwithstanding this qualification of the notion “right holder” approval and involvement as mentioned in the provision necessarily presupposes a right of the respective communities and individuals to disapprove any such wider application.98

However, this asseveration does not take away each nation’s ability to apply their

own kind of legal framework for the protection of traditional knowledge. As a result,

because the CBD must be implemented though the development of domestic national

law, each nation has the best ability to achieve the protection of traditional knowledge.

In this sense, existing intellectual property rights as well as any sui generis system can be

adopted to ensure respect for traditional knowledge practices.

Regarding the second part of this obligation, it means the promotion of the wider

application of traditional knowledge and practices. The CBD tries to look for more

applications of traditional knowledge that are not restricted to the indigenous and local

communities, but that can also be shared with the rest of the society. In this respect, the

advance of technology in general, and biotechnology in particular, brings a huge

spectrum in which traditional knowledge can be applied. The use of traditional

knowledge within the research activities reduces time and costs, as well as bringing better

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results. For this reason, it is appreciated by bioprospectors and industries. In this respect,

Lisa Conte, the CEO of Shaman Pharmaceuticals Inc., states that traditional knowledge

constitutes an important intellectual contribution for the identification of drug

discovery.99

In order to re-enforce this idea and promote the expansion of traditional

knowledge to other spheres, the CBD includes two more Articles to treat this topic.

Article 17 (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 (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.

These articles clearly state that traditional knowledge should be part of the

exchangeable information necessary for the conservation and sustainable use of

biodiversity. Moreover, they consider traditional knowledge to be a kind of technology

or asset that can be used for the achievement of the Convention’s objectives.

Nevertheless, the moment that these articles talk about exchange and transfer of

traditional knowledge and traditional technologies, they imply the need for a mechanism

of protection that secures the rights of the traditional knowledge holders. Are these rights

the ones that allow local and indigenous communities to control their knowledge and to

determine the terms and conditions of access and use? In this respect, Lesser states that:

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Where attention is focused here is on aspects of promoting wider application and equitable sharing benefits. Specifically, the subject of this chapter is mechanisms for claiming ownership to L/I knowledge. Without such mechanisms, knowledge must be protected by absolute secrecy or it becomes part of the public domain. Explicit ownership systems for their part allow both control, possibly including refusal to share when use would be counter to community norms, and a basis for negotiation equitable sharing. A challenge is how to provide for the commercialization of L/I knowledge ‘without destroying the continuation of the social structures that have generated this knowledge and on which the livelihoods of many indigenous communities depend’ (UNDP, 1995, section B, Par I.8).100

Finally, the last obligation of Article 8 (j) is to “encourage the equitable sharing of

the benefits arising from the utilization of such knowledge, innovations and practices.”

As previously stated, the CBD encourages the promotion, application, and use of

traditional knowledge in different areas. Therefore, it is fundamental that local and

indigenous communities, who are the providers of this traditional knowledge, receive fair

and equitable compensation for their contribution. In accordance with the spirit of the

CBD, this equitable benefit-sharing should be agreed upon by the Parties prior the

disclosure of the information. Therefore, it is crucial that local and indigenous

communities get assistance from the national governments in order to create capacity

building to train traditional knowledge holders and prepare them for the negotiation

process. In addition, this benefit-sharing should act as an incentive for future generations

to continue maintaining and developing traditional knowledge.

The implementation and effective application of Article 8 (j) constitutes a

decisive step in the enforcement of the CBD. Article 8 (j) gives local and indigenous

communities the right to control their knowledge and to receive an equitable

remuneration for its use. However, the provisions of the CBD only constitute exhortation

that cannot bring any results without the creation of domestic law. The parties of the

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CBD have reported several challenges and obstacles for the implementation of this

article; such as:

Lack of financial, human, and technical resources; Lack of economic incentive measures; Lack of public education and awareness at all levels; Existing scientific and traditional knowledge not fully utilized; Lack of adequate scientific research capacities to support all the objectives; Lack of horizontal cooperation among stakeholders; Lack of capacities for local communities; Lack of synergies at national and international levels; Lack of appropriate policies and laws; Inadequate capacity to act, caused by institutional weaknesses; Poverty was also considered a high challenge particularly among African countries.101 It is important that states be conscious about the importance of creating

mechanisms and strategies to surpass these obstacles. The failure of existing property

rights systems to protect traditional knowledge has located local and indigenous

communities in a vulnerable position that has to be redeemed. Therefore, it is urgent to

work on a national strategy that contemplates the participation of the main stakeholders

such as indigenous and local communities, the public sector, the private sector, and

academia. The representation of each sector is essential to the creation of a mechanism

that encompasses common interests and answers the particular concerns of each group.

Consequently, country members should promote this initiative within all sectors of

society to look for an efficient and enforceable system of traditional knowledge

protection and the application of Article 8 (j).

v. Technology transfer- Biotechnology and Intellectual Property Rights

Technology transfer was one of the most controversial topics within the Earth

Summit. The issue here focuses on the conditions and terms under which the technology

transfer will occur. The CBD considers technology transfer to be one of the basic

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mechanisms to achieve the objectives stated in the CBD. For this reason, it is expressly

stated in Article 1 that appropriate transfer of relevant technology is one of the means for

accomplishing the conservation and sustainable use of biodiversity, as well as the fair and

equitable benefit-sharing of the benefits resulting from its use.102 “(...) the general sense

suggests that access to genetic resources and technology transfer is one mechanism for

achieving the goals of conservation and sustainable use. Moreover, because transfer is

the only mechanism specifically identified, it may be inferred that technology transfer is

to be accorded special significance.”103 This argument is reaffirmed in Article 16 (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.104

This article acknowledges that technology is a means, but it also extends the

scope of technology to include traditional knowledge. This is because traditional

knowledge is understood to be a relevant source of knowledge for conservation and

sustainable use of biodiversity. To this respect, Jeffery states that “by defining

‘technology’ in this way it ensures traditional and indigenous applied knowledge also

falls within this provision.”105 We can state that a possible justification for this is that the

CBD tries to equilibrate the positions of the northern and southern countries. Thus, the

only two mechanisms that have been defined to reach the goals of the CBD are access to

genetic resources and transfer of technology. In this way, both sides collaborate and

mutually benefit from this relationship. On one side, industrialized countries obtain legal

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access to genetic resources and traditional technology (traditional knowledge), and on the

other, developing countries gain access to new technology.

The CBD demonstrates through its provisions that facilitating access to genetic

resources does not allow indiscriminate exploitation of biodiversity-rich countries. On

the contrary, access to biodiversity is the path to obtaining new technology and resources

that will contribute to the growth of developing countries. That is the reason that the

Preamble to the CBD emphasizes the need to create provisions to satisfy developing

countries’ needs. “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.”106

Despite the fact that technology is the only practice expressly established to

accomplish the CBD objectives, it is not clearly defined in the text. Article 2: Use of

Terms merely reads “‘Technology’ includes biotechnology.”107 This broad definition

raises two problems. One is that technology can be understood in general terms; so,

according to the text, it includes all types of technology, existing or future. Therefore,

country members should consider the rights of technology holders. The other issue is the

emphasis that the article makes on biotechnology. Why is it the only variety of

technology that is particularly identified?

Despite the fact that technology embraces biotechnology, the special features of

biotechnology cause it to have a singular place. Biotechnology can be defined as “a term

of art that encompasses the alteration and application of living matter- for example, the

genetic manipulation of microbes- for human use.”108 Therefore, the close relation

between biotechnology and genetic resources means that this kind of technology deserves

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specific attention. Moreover, the mechanisms of protection for biotechnology can vary

depending on the stage of the process. Another reason for giving this place to

biotechnology is its huge and increasing development in many areas. This expansion has

brought as a result an increasing economic value of genetic resources and the need to

look for legal protection to secure their trade.

Because of the vastness of biotech development and application, it might be better to define biotech to encompass all things medicinal and/or biological, and then break the area down into three functional branches. The first branch is pharmacological, referred to in the industry as “pharma”, which includes medicines, vaccines, and some diagnostic tools. The second branch is medical devices, used for research, diagnostics, and the application of medicines and therapies. The third branch might be described as the genetics, biologics or ‘Jurassic Park’ branch and includes DNA technologies to create medical therapies, as well as agricultural plants and animals.109

Furthermore, it is important to consider that if biotechnology can be used to

conserve and sustainably use biodiversity, then it can enhance life conditions,

environmental conservation, and economic development. At the same time,

biotechnology can bring some risks that should be analyzed according to a specific

context. For instance, in the field of genetically modified organisms (GMO/GM), the

debate is highly controversial.

The debate is highly polarized with one extreme claiming that GM agriculture will greatly harm both global agriculture and the environment. Strong advocates, on the other hand, maintain that there are few, if any, new risks and that GM crops may, in fact, be the saviour of both global agriculture and the environment. As with many highly polarized debates, there is a vast middle ground that, in the case of GM agriculture, acknowledges the great potential of biotechnology but also raises science-based concerns.110

After explaining why biotechnology is particularly stated in the Convention, it is

important to analyze the general context of technology transfer and examine the

controversial issues that surround this topic. Technology transfer refers to a situation

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“when a country acquires, imitates, or adopts technology developed elsewhere. And the

term technology itself has been referred to as applied knowledge with a problem-solving

intent.”111 From these definitions, we can infer that this technology was developed after a

process that demanded effort, knowledge, and cost. Therefore, this technology should be

protected by intellectual property rights or another type of legal framework that protects

the rights and interests of the inventors. Consequently, this technology transfer should

occur under parameters that protect the interests of technology developers, avoiding the

possibility that this knowledge/invention could enter the public domain and become

freely accessible, thus damaging the right holder.

Within this Convention framework then, technology is a means to achieve objectives, and technology transfer is a means to provide technologies where needed. (...) The complication arises that, while much technology is in the public domain, much is also held by private interests. (...) That means access is feasible only if the requirements of the private sector owners are satisfied.112

As a result, intellectual property rights become a controversial element of the

CBD. While industrialized countries wanted to strengthen intellectual property rights,

developing countries tried to obtain more flexible conditions for technology transfer.

Developing countries argued that intellectual property rights constitute an obstacle for an

effective technology transfer. But who is correct? As we see in Chapter I, intellectual

property rights are a mechanism of protection that promotes the development of

innovation and art. Around the intellectual property system exist many fears, one of the

strongest being the possibility of a monopoly. However, without an efficient intellectual

property system, technology developers would not be motivated to transfer their

technology.113 This situation would cause significant detriment to the economies of

developing countries, which would be isolated from new technological advances. In

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addition, intellectual property rights serve “as an aid in accessing current technologies

(including biotechnology) and to foster the development of national adoptive capacity.

Second, if a country is at a low level of development, including a small domestic market,

then companies are unlikely to go to the expense of patenting these anyway.”114

As a result, Article 16 of the CBD contains various provisions regarding

technology transfer and intellectual property rights. This article expressly addresses the

issue of intellectual property rights and establishes procedures and parameters that have

to be considered for technology transfer in order to ensure the respect (but not the abuse)

of intellectual property rights. Moreover, other articles talk about topics that can be

associated with intellectual property rights, such as local and indigenous knowledge

(Article 8j), creation of incentives measures (Article 11), research cooperation (Article

12c), access to genetic resources (Article 15), technical and scientific cooperation

(Article 18.1), effective participation on biotechnological research (Article 19.1), and

financial support and incentives (Article 20.1).115

Article 16 (2) states that access to and transfer of technology “shall be provided

and/or facilitated under fair and most favorable terms” and that “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.” This provision tries to reconcile both sides of the debate on

intellectual property rights. On one side, it states that access and transfer should be

facilitated under the fairest and most favorable terms, which means that intellectual

property rights shouldn’t be abusive or restrictive. On the contrary, they should

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constitute a framework that clarifies the relationship between technology users and

providers, creating a system to facilitate technology transfer under reasonable conditions.

On the other hand, the article uses the phrase “adequate and effective protection

of intellectual property rights,” which means that developing countries should create the

conditions to secure the rights of technology developers. In addition, some experts have

suggested that the use of these words has as an objective to create a direct association

with the TRIPS Agreement that uses the same language.116 As a consequence, the CBD

requires that country members follow the intellectual property right standards adopted by

the international system.

This approach is reaffirmed by Article 16 (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 necessary, through the provisions of Articles 20

and 21 and in accordance with international law and consistent with paragraphs 4 and 5

below.” Even though this provision specifically refers to the transfer of technology that

uses genetic resources, it does not state the obligation of the transfer. On the contrary, the

main point of this is to encourage developing countries to create a legal framework

consistent with international law that effectively protects intellectual property rights.117

Moreover, Article 16 (4) determines that “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

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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.” This provision is consistent with the previous one. Here,

the intention is to create an intellectual property right system that can act as an incentive

for the private sector. Because many rights and interests are involved, it is important to

create the conditions that make right holders feel secure and comfortable, motivating

them to proceed with the technology transfer. This will benefit the governmental

institutions and the private sectors of developing countries because access to new

generation technology can enhance their productivity.

Finally, Article 16 (5) reads: “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.” Through this disposition, the CBD expresses its interest in the protection of

intellectual property rights as an aim to achieve the objectives of the Convention. Access

to genetic resources and technology transfer constitute the means by which to accomplish

the CBD goal. However, according to the Convention text, the only way to ensure that

these mechanisms operate properly is through the implementation of an efficient

intellectual property right legal framework. An intellectual property right system will

provide incentives and guarantees to every stakeholder involved in the process of

accessing genetic resources for the conservation and sustainable us of biodiversity. In the

final chapter, we will explain how intellectual property rights constitute a tool and

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aggregate value for developing and developed countries that look for a sustainable use of

genetic resources and traditional knowledge.

Therefore, in order to show the interaction between access to genetic resources-

traditional knowledge and intellectual property rights, we have considered necessary to

analyze the Agreement on Trade-Related Aspects of Intellectual Property Rights

(TRIPS). The TRIPS Agreement is the main international regulation regarding

intellectual property rights and some of its provisions have a significant impact on the

management and access to genetic resources and traditional knowledge. The following

section will explore the most important provisions of TRIPS and its effects within the

access to genetic resources and traditional knowledge field.

2. THE AGREEMENT ON TRADE-RELATED APECTS OF INTELLECTUAL PROPERTY RIGHTS (TRIPS) AND IT’S IMPACT WITHIN THE GENETIC RESOURCES, BIODIVERSITY AND TRADITIONAL KNOWLEDGE FIELD.

The Agreement on Trade-Related Aspects of Intellectual Property Rights

(TRIPS)118 is without doubt a milestone within the intellectual property field. TRIPS

established a set of minimum standards and principles intended to reduce distortions and

impediments to international trade and to promote effective and adequate protection of

intellectual property rights within the World Trade Organization (WTO) country

members. One of the objectives of the TRIPS provisions is to ensure that these measures

of intellectual property right enforcement do not themselves comprise obstacles or

barriers to legitimate trade.119 As a result, TRIPS established new rules for the treatment

and implementation of intellectual property rights around the world, which were intended

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to homologize the international legal framework in this area to facilitate international

trade.

The TRIPS Agreement was signed on April 15, 1994 and came into effect on

January 1, 1995. This multilateral agreement establishes the minimum standards of

protection in a number of areas of intellectual property, such as copyright and related

rights, trademarks and service marks, geographical indications including appellations of

origin, industrial designs, patents including plant variety protection (PVP), the layout-

designs of integrated circuits, and undisclosed information including trade secrets and test

data. TRIPS contain three main sets of provisions that cover the most important issues,

such as standards, enforcement, and dispute settlement. Thus, TRIPS requires that every

country member has to develop or modify national legislation in order to incorporate the

parameters and principles defined by TRIPS. For the implementation of TRIPS,

developing and less-developed countries have a transitional period that allows them to

take the necessary steps to adopt these provisions; however, by this time, these periods

have expired for developing countries, and there still is significant work to do.120

In relation to genetic resources and traditional knowledge protection, TRIPS does

not cover this topic specifically; however, it contains provisions that undeniably affect

these areas. For instance, Article 7 states:

The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.121

The origin of this provision can be found in a proposal122 presented to the

Uruguay Round Negotiation Group on Trade-Related Aspects of Intellectual Property

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Rights, including Trade in Counterfeit Goods by the delegations of Argentina, Brazil,

Chile, China, Colombia, Cuba, Egypt, India, Nigeria, Peru, Tanzania, and Uruguay.

Article 7 is strongly influenced by the objectives contained in the proposal that seek a

balance between the needs for economic, social, and technological development and the

rights granted to IPR holders to prevent IPR protection from opposing public concerns.123

In addition, Article 7 clearly reflects the principles of the proposal.

(1) Parties recognize that intellectual property rights are granted not only in acknowledgement of the contributions of inventors and creators, but also to assist in the diffusion of technological knowledge and its dissemination to those who could benefit from it in a manner conducive to social and economic welfare and agree that this balance of rights and obligations inherent in all systems of intellectual property rights should be observed. (...) (3) Parties agree that the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and enhance the international transfer of technology to the mutual advantage of producers and users of technological knowledge.124

As a result, developing countries tried to ensure that the grant of intellectual

property rights would not only benefit IPR holders, but also that this grant should

encourage other activities to promote social welfare, such as the transfer of technology.

This article intends to balance public and private rights and interests for the convenience

of the whole community. “This general provision was proposed by developing countries

and intent to safeguard the proper balance between private rights and public goods

against one-sided and detrimental effects that IPRs may have, and in order to promote

their use as incentives for foreign investment and technology transfer.”125

In the field of genetic resources and traditional knowledge, this provision is

important because it expressly determines that one of the objectives of IPR is the

promotion of technological innovation and technology transfer. As we have seen, genetic

resources and traditional knowledge have acquired significant value for their use in the

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technology field and within the elaboration of final products derived from these

elements.126 Moreover, the CBD highlights the need for determinate measures to ensure

technology transfer.127 As a result, Article 7 is a norm that can be read and interpreted in

conjunction with the CBD in order to conciliate some objectives and positions regarding

the treatment of genetic resources and traditional knowledge. Thus, the balance of rights

and obligations can be applied to access to genetic resources and traditional knowledge,

and to the benefit-sharing principles.

Another provision contained in TRIPS that is closely related to genetic resources

and traditional knowledge is Article 8. This provision allows country members to adopt

mechanisms to “protect public health and nutrition, and to promote the public interest in

sectors of vital importance to their socio-economic and technological development,

provided that such measures are consistent with the provisions of this Agreement.”128 In

addition, it allows country members to take steps to “prevent the abuse of intellectual

property rights by right holders or the resort to practices which unreasonably restrain

trade or adversely affect the international transfer of technology.”129 Therefore, country

members can adopt an intellectual property rights system that contains measures

consistent with TRIPS but oriented to the protection and promotion of the public interest

in “sectors of vital importance” and that does not constitute an obstacle for trade or

technology transfer.

During the Uruguay Round negotiations, developing countries were worried that the future TRIPS Agreement would leave their hands tied as to the adoption of measures of public policy that could have an impact on intellectual property rights. Under Article 8, therefore, governments are permitted to adopt such measure, provided the conditions therein established are complied with.130

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Traditional knowledge and genetic resources constitute a valuable sector for bio-

diverse rich countries;131 therefore, they can be considered, by many countries, as

“sectors of vital importance to their socio-economic and technological development.”

Consequently, the protection of traditional knowledge and genetic resources can follow

this approach and adopt mechanisms that maximize the public welfare within the TRIPS

framework. As a result, this provision represents a door that allows country members to

adapt intellectual property rights legislation according to their culture, reality, and

idiosyncrasies.

Most importantly, TRIPS contains crucial provisions related to traditional

knowledge and genetic resources. In general, the ones that cause a significant impact in

the achievement of the CBD objectives are the ones related to patents, PVP and

protection of undisclosed information. Therefore, Article 27 acquires a significant

position in this analysis, because it covers the patentable subject matter, hence the

minimum standards of protection and the exceptions defined in consideration of public

interests.

Article 27: Patentable subject matter:

1. Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and paragraph 3 of this Article, patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.

2. Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.

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3. Members may also exclude from patentability: (a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals; (b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.132

Article 27.1 states that patents shall be granted “for any inventions (...) in all

fields of technology (...) without discrimination as to the place of invention, the field of

technology and whether products are imported or locally produced.” This provision

extends the subject matter under protection and provides that the patent shall be granted if

the product or process meet the requirements of patentability. The fundamental reason to

enlarge the patentable subject matter was the controversial exclusions of patentability in

many areas, especially pharmaceuticals, chemicals, and food industries.133 Around fifty

countries were not conferring patent protection to medicine, food, and beverages by the

time the Round started.134

These controversial circumstances caused discomfort among the industrialized

countries that were looking for protection that would facilitate international trade. For

this reason, the European Community, Japan, and the United States of America submitted

a report of the Problems Encountered in Connection with Intellectual Property Rights135

to the Uruguay Round Negotiation Group on Trade-Related Aspects of Intellectual

Property Rights, including Trade in Counterfeit Goods. Here, the participants highlighted

the problematic issue of the exclusion of patentability in fields that require protection for

the representative amount of work and resources invested. The position presented by the

European Community summarizes the criterion of the other participants who elaborated

the report and reads as follows:

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Specific exclusions from patentable subject matter, in particular, those relating to food, chemical and pharmaceutical products have exposed Community firms to unfair competition in certain important export markets. The fact that certain countries grant only process, as opposed to product, patents in the chemical sector can give rise to "counterfeiting" which often cannot be the subject of judicial proceedings. In addition, plant breeders' rights are protected under different systems (specific legislation or patent law) and frequently no protection at all exists.136

Therefore, the availability of patents for any inventions, products, and processes,

“in any fields of technology” opened the door for the patentability of medicinal,

pharmaceutical, biotechnological, and agrochemical products. The acknowledgement of

patent protection in this field had as a main objective to ensure the continuation of

research and development in these areas. Consequently, patent protection was conceived

as a mechanism to encourage the development of new products in exchange for

proprietary rights over the results of research and development. 137

As we noticed before, Article 27.1 states that patent protection is available for any

invention. However, the term “invention” has not been defined by the TRIPS. This fact

allows country members to discretionally adopt their own definitions for “invention” in

their domestic regulations.138 This point has a significant impact within the genetic

resources field, because each country member decides whether genetic resources can be

patentable inventions. “This manner of regulating protection may well entail

consequences in connection with the patenting of natural materials as well, in particular

biological material of natural origin (e.g. DNA, cell lines, etc), for the TRIPs Agreement

does not contain any mandatory rules on the essential delimitation between ‘discoveries’

and ‘inventions.’”139

Therefore, since each WTO member has the faculty to adopt the most convenient

approach, they can choose to either follow the strict meaning of “invention” or to define

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it with a broader sense and include types of discoveries that can meet the patentability

requirements because of their context. In order to clarify these two possible positions

within the genetic resources field, it is necessary to introduce the statement of the

Nuffield Council on Bioethics, which reads:

…genes are naturally occurring entities that are there to be discovered, like new species or new planets. They are not invented. In our common usage of the term, a ‘discovery’ is the acquisition of knowledge of a new but already existing fact about the world. An ‘invention’, on the other hand, is something that someone creates or develops which did not previously exist. Thus, on the usual interpretation of the words, it seems apparent that the identification of a gene is a discovery, since genes exist in the world, in our bodies.140

However, what happens when the genes have been subject to human intervention

that allows them to keep their original composition under different conditions from the

ones found in nature? Can they be patentable subject matter? The answer is not simple

because it will depend on the approach adopted in the domestic legislation. For instance,

the United States of America and the European Community grant patents to isolated and

purified genes.141 Thus, the United States of America follows a standard of patentability

established by Diamond v. Chakrabarty (1980)142 which basically states that anything

under the sun that is made by man143 can be subject to patent protection. Moreover, the

Directive 98/44/EC of the European Parliament and of the Council of July 6, 1998 on the

legal protection of biotechnological inventions states in Article 3.2 that, “Biological

material which is isolated from its natural environment or produced by means of a

technical process may be the subject of an invention even if it previously occurred in

nature.”144

Nevertheless, these positions do not mean that all WTO country members have to

adopt the same posture. They can deny patent protection for genes. “Hence, the

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extension of the concept of invention to genes and other matters found in nature cannot

be deemed universally accepted or incorporated into TRIPS Agreement. WTO Members

can legitimately exclude the patentability of genes claimed in various forms, including

human genes, as found in nature, even if isolated or purified.”145

In addition, Article 27.1 states that “patents shall be available and patent rights

enjoyable without discrimination as to the place of invention, the field of technology and

whether products are imported or locally produced.” The non-discrimination clause is

subject to these provisions:

• paragraph 4 of Article 65 allowing Members to discriminate, until 1 January 2005, with regard to areas of technology for which product patents were not conferred on the general date of application of the Agreement for that Member;

• paragraph 8 of Article 70, which establishes the so called ‘mail box’ for patent applications relating to pharmaceuticals and agricultural chemical products, applicable where a Member did not make available as of the date of entry into force of the WTO Agreement patent protection for such product; and

• paragraph 3 of Article 27, which allows for some exceptions in the biotechnological field.146

The non-discriminatory clause contained in Article 27.1 refers to the obligation of

country members not to discriminate in the acquisition and enforcement of patent rights.

Therefore, no discrimination is allowed on the basis of “place of invention, the field of

technology and whether products are imported or locally produced.” The obligation of

non-discrimination as to the place of the invention prevents country members from

providing “differential treatment based on the location whether the invention was

made.”147 The justification for this clause was the impossibility of convincing the United

States of America to eliminate the “first to invent system.” In this way, the WTO country

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members at least convinced the United States to abolish discriminatory treatment against

foreign inventions that was caused by this system before the TRIPS.148

Moreover, the obligation of non-discrimination in the field of technology

reaffirms those patents should be available to any field of technology, biotechnology

included. As a consequence, the pharmaceutical and chemical fields, which before

TRIPS were excluded from patentability, especially by developing countries, can count

on the grant of patent protection. However, although it is true that discriminatory

treatment is prohibited, differentiate treatment is not, so country members can adjust the

acquisition and enforcement of patent rights to the conditions and nature of the subject

matter under protection. This provision has a significant impact within the field of

genetic resources and biotechnology, because of the possibility to grant patents. In this

respect, Dr. Nuno Pires de Carvalho states that:

Patents shall be available and patent rights enjoyable without discrimination as to the field of technology. Patentability, therefore may not be excluded for certain areas which have been traditionally subject to discrimination, such as the pharmaceutical and chemical fields. Nor can WTO Members diminish rights in those fields, such as reducing patent terms or establishing facilitated conditions for compulsory licenses. Nothing prevents WTO Members, however, from dealing with separate fields of technology in a different manner. When it comes to biotechnological inventions, it is normal that disclosure of the invention may take place in a manner that is appropriate to that specific field, taking into account not only the difficulty in reproducing inventions such as microorganisms, but also the necessary care in keeping dangerous living materials in security. The application of procedures like those of the Budapest Treaty, albeit different from those that apply to other fields of technology, is nonetheless justified by the technical characteristics of the invention in question. As explained above, this differential treatment-that is, one that acknowledges different situations and aims at equalizing them- not discriminatory treatment-that is, one that treats identical situations differently.149

Finally, the non-discriminatory obligation regarding whether the products are

imported or locally produced mandates that country members must make patents

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available and enforceable without considering the origin of the product. The

interpretation of this clause was extremely controversial during the Uruguay Round.

However, in the end, this provision should be understood as “prohibiting any obligation

to locally work a patented invention and the possibility of granting compulsory licenses

due to lack or insufficient working (...)”150

Moreover, Article 27.2 states an exclusion of patentability. The provision allows

members to “exclude from patentability inventions, the prevention within their territory

of the commercial exploitation of which is necessary to protect ordre public or morality,

including to protect human, animal or plant life or health or to avoid serious prejudice to

the environment, provided that such exclusion is not made merely because the

exploitation is prohibited by their law.”151 This article does not mandate that country

members exclude from patentability the inventions that can run against ordre public or

morality; including inventions that can affect health, environment, and/or human, animal,

or plant life. However, it gives country members the option to adopt this measure under

the grounds specified in the article.

Article 27.2 incorporates in its language the term “ordre public,” which was

inspired by the European Patent Convention Article 53 a).152 There is no generally

accepted definition of ordre public; however it pertains to matters that can possibly

jeopardize the foundations of a society.153 The European Patent Office considers the term

“public order” as closely related to matters oriented to the protection of the “public

interest and of the physical integrity of individuals, from morality grounds.”154 However,

because the definition of “public ordre” has not been internationally accepted, WTO

members are under no obligation to follow the European interpretation. Therefore, public

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order should be defined by each country member according to their reality, values, and

culture.155 To this respect, Correa states that “WTO Member countries have considerable

flexibility to define which situations are covered under ‘ordre public,’ depending upon

the Members’ conception about what public values need to be protected.”156

Another ground of exclusion from patentability is the protection of morality.

According to Ladas, morality “...reflects customs and habits anchored in the spirit of a

particular community. There is no clearly objective standard of feelings, instincts, or

attitudes toward a certain conduct. Therefore, specific prescription involving uniform

evaluation of certain acts are extremely difficult.”157 Therefore, morality is intrinsically

related to the values existing in a determinate society. As a consequence, there can be no

generalized definition of what type of invention threatens morality. According to Correa,

“it is a matter of national public policy to determine when a certain conduct may be

deemed contrary to fundamental values of society, and whether this is an aspect relevant

for the grant or refusal of a patent.”158

Article 27.2 also states that the exclusion from patentability based on ordre public

and morality grounds also includes the protection of “... human, animal or plant life or

health or to avoid serious prejudice to the environment (...).” The fact that this article

highlights the protection of human, animal, or plant life or health does not mean that

these circumstances represent grounds to exclude them from patentability. On the

contrary, they can be considered “sub-species of ordre public and morality.”159

Nevertheless, the nature of these interests makes it difficult to visualize any scenario in

which a threat to human, plant, or animal life or health could be considered anything

other than matters of public ordre and morality.

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However, in the case of environmental protection, the language of the article

circumscribes the possibility from exclusion of patentability only in the case of “serious

prejudice.” Thus, the seriousness of the prejudice should be determined by each country

according to the circumstances. This is a norm that directly impacts biodiversity

conservation and sustainable use. Thus, if the invention that needs patent protection can

pose a serious threat to biodiversity, and hence the environment, then it can be excluded

from patentability.

Article 27.2 constitutes a crucial referent for the treatment of genetic resources,

biodiversity, and traditional knowledge. This provision gives country members a broad

power to elaborate and adjust domestic legislation according to their values and

principles. Therefore, the circumstances for the exclusion of patentability can be

subordinated to the consideration of the national authority about what constitutes a

menace to public order and morality. In addition, this provision embraces one of the

TRIPS flexibilities that can be used by country members to protect public health.160 To

this respect, the Doha Declaration on the TRIPS Agreement and Public Health states that:

TRIPS Agreement does not and should not prevent Members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO Members' right to protect public health and, in particular, to promote access to medicines for all.161

Nevertheless, we have to consider that despite the possibility that each country

member may regulate these matters and define the terms of this article according to the

country’s unique reality, these provisions are subject to some conditions. To this respect,

Article 27.2 clearly states that country members may “exclude from patentability

inventions, the prevention within their territory of the commercial exploitation of which

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is necessary to protect ordre public or morality.” That means that the exclusion from

patentability should be preceded or accompanied by the exclusion of commercial

exploitation. According to Dr. Nuno Carvalho, this provision implies a two-step test that

has to be analyzed under criteria developed within the WTO legal system.

(a) With respect to the necessity of excluding an invention from commercial exploitation WTO Members must take into account the provisions of Article 2.2 of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (the “SPS Agreement”), which provides: “Members shall ensure that any sanitary or phytosanitary measures is applied only to the extend to protect human, animal or plant is based on scientific principles and is not maintained without sufficient scientific evidence”162

(b) Once the first step is passed, and evidence is found that the exclusion of an invention from commercial exploitation contributes indeed to the protection of morality or ordre public, WTO Members must look then at the necessity of excluding an invention from patentability in order to prevent its commercial exploitation. This second step must take the provisions of Article 2 of the WTO Agreement on Technical Barriers to Trade (the TBT Agreement) into account. The relevant language of Article 2 reads:“(2) Members shall ensure that technical regulations are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade. For this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfill a legitimate objective [...].” “(3) Technical regulation shall not be maintained if the[...] objectives can be addressed in a less trade-restrictive manner.”163

In other words, if the objective of excluding the commercial exploitation of

inventions in a certain field of technology can be achieved in a way that does not require

the exclusion of the invention from patentability, then that way should always be

preferred.164

In addition, the final part of Article 27.2 provides that “such exclusion is not made

merely because the exploitation is prohibited by their law.” This mean that even though

another law prohibits an exploitation, if this does prejudice ordre public or morality, then

the exclusion from patentability cannot be applied. In other words, the “patent should be

granted or rejected on ground of patentability only.”165 Therefore, the two-step test and

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the grounds of public ordre and morality should be met before an invention is excluded

from patentability. Consequently, any invention that involves genetic resources or is

based on traditional knowledge can be evaluated by each country under this criterion, and

if it does not represent any danger to public ordre or morality, then it can be considered

proper subject matter of patent protection.

Other exclusions from patentability are contained in Article 27.3, which says the

following:

Members may also exclude from patentability: (a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals; (b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.

The exclusion from patentability of diagnostic, therapeutic, and surgical methods

for the treatment of humans or animals specifically refers to those processes or skills that

doctors or practitioners have developed in this field. Therefore, the nature of the method

makes it ineligible for patent protection because the skill that a professional develops in a

certain field of medicine is unlikely to be mass-marketed. For instance, within the

European Community law, patent protection would not be possible because of the lack of

industrial application. In the case of the United States, the patentability of medical

methods will depend on the satisfaction of the definition of “process” and the compliance

with the rest of the patent requirements.166 It is important to note that this exclusion of

patentability does not include any equipment, apparatus, or diagnostic kit that can be used

for diagnosis or treatment.167

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Furthermore, Article 27.3 (b) allows members to exclude from patentability

“plants and animals other than micro-organisms, and essentially biological processes for

the production of plants or animals other than non-biological and microbiological

processes. However, Members shall provide for the protection of plant varieties either by

patents or by an effective sui generis system or by any combination thereof.” This

provision represents the contradictory interests of developed and developing countries

regarding to the patentability of higher life forms. The clause allows members to prevent

the acquisition of patents right over plants, animals, and essentially biological processes;

which without any doubt undermines the expectations of the biotechnology industry.

However, this same provision makes mandatory the issuance of patents over micro-

organisms and non-biological and microbiological processes, and it obliges country

members to protect plant varieties either by patents or a through a sui generis system.

These provisions cause particular discomfort in the agricultural field because farmers

cannot gain patent protection over their non-new traditional breeding methods and

products, but plant breeders can gain intellectual property protection over their new plant

varieties because of the direct intervention of man over these new species.168

Nevertheless, this discomfort is also the result of a lack of understanding and the no

bright line between farmers and breeders, because PVP is also available for innovative

farmers’ methods and products.

The inclusion of a sui generis system for the protection of plants varieties was an

issue that had its starting point with the International Convention for the Protection of

New Varieties of Plants, on December 2, 1961, lastly revised on March 19, 1991.169 The

UPOV Convention is a sui generis system for the protection of plants because it was not

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derived from any previous industrial property rights mechanism.170 Therefore, it gives

“more flexibility to adapt to particular circumstances arising from the technical

characteristics of inventions [...], such as novelty and disclosure.”171 As a consequence,

the UPOV convention adapted the existing intellectual property protection to a new

reality called new plants varieties, and it developed a new system of protection that

responded to the needs of this unique subject matter.

The UPOV Convention of 1978 “limits the grounds on which plant varieties

certificates may be annulled and cancelled by the government. It also prohibits

governments to restrict the free exercise of the right accorded to breeders ‘otherwise than

for reasons of public interest’ and establishes that all measures shall be taken to ensure

that the breeder receives equitable remuneration (Article 9).”172 In addition, it implied

the farmers’ exception and allowed them to save seeds and reuse them for re-sowing in

their farms.173

UPOV Convention of 1991 strengthened these mechanisms of protection. As a

result, it extended the protection to all plant genera and species and eliminated reciprocity

in additional protection of breeders’ rights. It established a national exhaustion regime,

extended protection for essentially derived varieties, and defined more detailed the

exceptions to the rights conferred. As a result, the breeders’ rights were defined more

extensively to include any acts of production or reproduction regardless of their purpose

or commercial nature; therefore, farmers’ privileges “could no longer been implied.”174

Therefore, during the TRIPS Agreement negotiations, developing countries were against

the inclusion of the UPOV 1991 reference in the Treaty’s provisions because of the

adverse impact that this extension of breeders’ rights could have on farming activities.

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However, despite the controversy and opposition to the UPOV 1991 provisions, no other

set of standards was ever developed outside the UPOV until now.175

Article 27.3 (b) has been one of the most controversial provisions in the TRIPS,

and for this reason it was subject to an early review. Developing countries have led the

revision of Article 27. 3 b), particularly with the objective “to clarify their options

regarding sui generis systems of plant variety protection, narrow the scope of

patentability, and add provisions that would require disclosure of the origin of genetic

materials used in inventions and more thorough searches of prior art.”176

If it is true that article 27.3 b) states the possibility of excluding plants and

animals from patentability, it is also true that by contrario sensu, members are allowed to

make patent protection over plants and animal available and enforceable. This fact is

considered a menace by developing countries that feel that their biodiversity resources

and the associated traditional knowledge could be subject to misappropriation. However,

because the possibility of patent protection can also constitute a mechanism to achieve

sustainable use of biodiversity, developing countries are proposing the introduction of the

disclosure of origin requirement for the attainment of patent rights over inventions based

on genetic resources or traditional knowledge. In this way, developing countries ensure

the effectiveness of the principles of equity and benefit-sharing defined in the CBD. In

addition, the satisfaction of the access requirements constitutes a guarantee that the

exploration would occur under parameters that support biodiversity conservation and its

sustainable use.

The TRIPS Agreement addresses another important provision that impacts the

treatment and protection of traditional knowledge: the protection of undisclosed

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information. Undisclosed information is referred in the TRIPS Agreement as one of the

categories of intellectual property177 and, during the discussions of the TRIPS

Agreement, this point was very controversial. Developing countries established their

resistance to include trade secrets as a category of intellectual property because their

nature is contrary to the intellectual property objective that looks for disseminating

information and not for concealing it.178 However, undisclosed information was included

in the final TRIPS Agreement and the justification for that is well contained in the

submission of the Swiss delegation that establishes that the protection of proprietary

information “embodies the central idea underlying IPR protection, namely that of the

preservation of the exclusive commercial use of information created by investment of

time, human and financial resources.”179 Consequently, the protection of undisclosed

information was included in the TRIPS Agreement in Article 39, which reads:

1. In the course of ensuring effective protection against unfair competition as provided in Article 10bis of the Paris Convention (1967), Members shall protect undisclosed information in accordance with paragraph 2 and data submitted to governments or governmental agencies in accordance with paragraph 3.

2. Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices so long as such information: (a) is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question; (b) has commercial value because it is secret; and (c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

3. Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public or unless steps are taken to ensure that the data are protected against unfair commercial use.

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The fact that the TRIPS Agreement includes the protection of undisclosed

information as a category of intellectual property does not imply that it creates any type

of property rights.180 It means that the holder of undisclosed information does not have

the right to exclude others from the use of that information; the holder has the right to

oppose the disclosure of such information by unauthorized people or in a manner that is

contrary to honest commercial practices.181 Therefore, the protection of undisclosed

information is circumscribed to avoid unfair competition practices.182

In this respect, Article 39.1 establishes that “In the course of ensuring effective

protection against unfair competition as provided in Article 10 bis of the Paris

Convention (1967), Members shall protect undisclosed information in accordance with

paragraph 2 and data submitted to governments or governmental agencies in accordance

with paragraph 3.” From this provision we can highlight three aspects. First, the article

expressly states that the objective of protecting undisclosed information is to fight against

unfair competition practices. Second, that the protection against unfair competition

should be done according to the provisions contained in Article 10 bis of the Paris

Convention. Third, the provision does not give a definition of undisclosed information,

which provides with a certain degree of flexibility for domestic legislation.

Intellectual property protection is a matter that is closely related to the

maintenance and promotion of business ethics and is translated into honest and moral

practices in the market. Thus, “[t]he common practice in trade is that competitors will

respect others’ specific intangible assets and do not attempt to mislead consumers by

eliminating the differences that separate them from their competitors. Intellectual

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property and the respect of intellectual property are obviously a matter of honest

practices.”183

Consequently, the inclusion of provisions oriented to the protection of

undisclosed information is consistent with this role of intellectual property, because

unfair competition can be classified as a dishonest practice within the market. In this

way, an act of unfair competition can be defined as “any act that a competitor or another

market participant undertakes with the intention of directly exploiting another person’s

industrial or commercial achievement for his own business purposes without substantially

departing from the original achievement.”184 Nevertheless, it is important to note that the

standards of unfair competition should be defined according to the moral or each society.

To this respect,

Morality, which is the source of the law of unfair competition, is a simple notion in theory only. In fact it reflects customs and habits anchored in the spirit of a particular community. There is no clearly objective standard of feeling, instincts, or attitudes toward a certain conduct. Therefore, specific prescriptions involving uniform evaluation of certain acts are extremely difficult... The pressures existing in the various countries for the suppression of acts of unfair competition differ greatly. Generally, the development of the law of unfair competition depends of active and intense competition in the marketplace by competing enterprises. It is the pressure of conflicting interests which leads to the establishment of clear rules of law. This pressure is not uniform in all countries and indeed it is evolving continuously.185

Article 39.1 clearly states that WTO Members must protect undisclosed

information as provided in Article 10 bis of the Paris Convention. Article 10 bis of the

Paris Convention states that

b. The countries of the Union are bound to assure to nationals of such countries effective protection against unfair competition.

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c. Any act of competition contrary to honest practices in industrial or commercial matters constitutes an act of unfair competition.

d. The following in particular shall be prohibited: l. all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor; 2. false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the industrial or commercial activities, of a competitor; 3. indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods.186

As we can see, the TRIPS Agreement not only addresses the protection of

undisclosed information to the rules provided by Article 10 bis of the Paris Convention;

but also it makes clear that the protection of undisclosed information is an existing

matter. In this respect, Nuno Pires de Carvalho states that

Actually, the purpose of the first sentence of Article 39 (...) is to make it clear that protection of trade secrets is not a new matter but rather and existing obligation under Paris Convention for those GATT Contracting Parties that were Members of the Paris Union. The first sentence has, therefore, a declaratory function which goes beyond the simple incorporation of Article 10 bis of the Convention by Article 2.1 of the TRIPS Agreement.187

Finally, undisclosed information is not defined by Article 39.1 of the TRIPS

Agreement because the treaty considered that it was better to establish a neutral

terminology that only outstands the undisclosed character of this information without

specifying the content itself.188 According to the UNCTAD

Undisclosed information covers any secret information of commercial value, including

i. technical know-how, such as design, process, formula and other technological knowledge often resulting from experience and intellectual ability;

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ii. data of commercial value, such as marketing plans, customers lists and other business-related information that provides an advantage over competitors;

iii. test and other data submitted for the approval of pharmaceutical and chemical products for agriculture.189

Furthermore, Article 39.1 states that “Members shall protect undisclosed

information in accordance with paragraph 2 and data submitted to governments or

governmental agencies in accordance with paragraph 3.” This statement can be

misunderstood, in the sense that it can be interpreted as the provision requires the

protection of two different assets, undisclosed information and data submitted to

governments. Nonetheless, according to Nuno Pires de Carvalho “[w]hat matters is the

Section’s heading. And the heading of Section [7] only mentions ‘undisclosed

information;’ it does not make any distinction between the subject matters of paragraph 2

and 3. So, data are, for all purposes, undisclosed information. Using the most common

terminology, this can be said in another manner: for all purposes, test data are trade

secrets.”190

The main objective of Article 30 paragraphs 2 and 3 is to define the scope of

protection of undisclosed information. Thus, Article 39.2 states that

Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices so long as such information: (a) is secret191 in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question; (b) has commercial value because it is secret; and (c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

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Article 39.2 determines the requirements that the information needs to meet in

order to be considered as undisclosed information and become subject of protection.

Thus, information must be secret, has commercial value and be subject to reasonable

steps under the circumstances in order to keep it secret. First of all, Article 39.2 does not

define trade secrets; thus, any type of information that it is not generally known, has a

commercial value and has been kept secret is subject of protection under this legal

framework.

Trade secrets are ‘information’. TRIPS negotiators have preferred not to define the subject matter or give illustrative examples. This means that the notion of trade secrets, as far as their subject matter is concerned, must be accepted in the broadest terms. Information is knowledge of any kind: ‘knowledge communicated or received concerning a particular fact or circumstance; knowledge gained through study.” This means that Article 39.2 does not only cover information that results from study and observation, but also facts that are learned randomly and by bodies of knowledge that is used in the economic process of creating and transferring goods and services, but also isolated acts or facts (...). Negative knowledge is protected too.192

Therefore, if we apply this reasoning, trade secrets must be understood in the

broadest terms; consequently, trade secrets are information. Considering that information

is knowledge; then traditional knowledge is a type of trade secret. As a consequence,

traditional knowledge can be protected under the unfair competition regime. However, it

is important that traditional knowledge meets the conditions of protection stated in

Article 39.2. If it does, then it is totally feasible that undisclosed information can be used

for the legal protection of traditional knowledge.

The protection of undisclosed information is achieved by the repression of unfair competition. The provisions against unfair competition may also be used to protect undisclosed traditional knowledge, for instance traditional secrets kept by native and indigenous communities that may be of technological and economic value. Acknowledgement of the fact that secret traditional knowledge may be

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protected by means of unfair competition law will make it possible for access to that knowledge, its exploitation and its communication to third parties to be monitored. Control over the knowledge, and regulation of the manner in which it may be acquired, used and passed on, will in turn make it possible to arrange contracts for the licensing of secret traditional knowledge and derive profit from its commercial exploitation. It is necessary to publicize more, within the sectors and communities concerned, the opportunities that the secrecy regime offers for controlling the dissemination and exploitation of traditional knowledge.193

Second, Article 39.2 does not create property rights; thus it only mentions control.

In this respect, Correa states that “[u]nlike the provisions on patents and trademarks, that

Article does not refer the ‘owner’ of undisclosed information but to persons who have

‘information lawfully within their control.’ Control does not imply ownership or

property.”194 This fact brings important effects regarding the rights that this protection

creates. In this sense, the right in undisclosed information does not comprise an

exclusive right, but the right to oppose their disclosure, use or acquisition by unlawful or

dishonest means.

The right in trade secret consists in the right to oppose their disclosure, acquisition and use by others. This enunciation of acts follows a chronological order: first, trade secrets shall not to be disclosed; second, if their disclosure is a possibility (...), it shall not be acquired; and third, even if disclosed and acquired by third parties by unlawful manner, it shall not be used. But there is no need that all three acts be unlawful.195

For purposes or Article 39.2 as manner contrary to honest commercial practices

“shall mean at least practices such as breach of contract, breach of confidence and

inducement to breach, and includes the acquisition of undisclosed information by third

parties who knew, or were grossly negligent in failing to know, that such practices were

involved in the acquisition.”196 Therefore, a trade secret can be disclosed through

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manners that are not contrary to honest commercial practices, such as reverse

engineering.

Third, Article 39.2 provides that natural and legal persons shall have the

possibility of preventing information lawfully within their control from being disclosed

to, acquired by, or used by others without their consent in a manner contrary to honest

commercial practices. To effectively apply this disposition the person should enforce

these rights within an economic environment.197 It is because one of the requirements of

protection is that the information has an economic value within the market. However, it

does not mean that the holder of the trade secret must necessarily be engaged in trade, but

that this information has an economic value that can be used as a competitive advantage

within the market. In this respect, “[c]ontrary to the misimpressions fostered by both

proponent and opponents of intellectual property protection, know-how protection is not

limited to those who are engaged in the trade or business, but extends to any natural

person or legal entity possessed of information that is valuable because it is not generally

known.”198

Consequently, applying the provision stated in article 39.2 and its interpretations,

it can be stated that if traditional knowledge meets the conditions defined in the

mentioned article, it should be subject of protection as undisclosed information. In this

respect, Professor Charles McManis states that “[a]ny traditional knowledge that meets

these relatively minimal requirements for protection as undisclosed information thus

qualify for the legal protection mandated by Article 39 of the TRIPS Agreement, whether

or not the information happens to be used in a conventional trade or business.”199

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Article 39.3 determines that “Members, when requiring, as a condition of

approving the marketing of pharmaceutical or of agricultural chemical products which

utilize new chemical entities, the submission of undisclosed test or other data, the

origination of which involves a considerable effort, shall protect such data against unfair

commercial use. In addition, Members shall protect such data against disclosure, except

where necessary to protect the public or unless steps are taken to ensure that the data are

protected against unfair commercial use.” As we said before, paragraphs 2 and 3 are

oriented to regulate undisclosed information. However, in some extent both paragraphs

deal with different matters. Thus, paragraph 3 deals with undisclosed information (data)

that has to be submitted to governments for acquiring marketing approval.

Therefore, the protection under paragraph 3 contains certain limitations; such as,

it applies only to pharmaceutical or to agricultural chemical products, it is protected only

against unfair commercial use and it is oriented to impose obligations over governments

rather than competitors.200 Therefore, it goes beyond Paris Convention, which provisions

are oriented to regulate business ethics. Thus, TRIPS Agreement with the inclusion of

paragraph 3 introduces a new actor, the government. As a result, the nature of this

provision is not consistent with article 10 bis of the Paris Convention, which mostly

regulates the relationship between competitors within the market. Nevertheless, this

provision is still important within the context of traditional knowledge and genetic

resources protection. In this respect, Professor Charles McManis states

Equally important for the protection of undisclosed traditional medicinal and agricultural knowledge, Article 39.3 goes on to specify that WTO members, when requiring, as a condition of approving the marketing of pharmaceutical or agricultural chemical products that utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. The italicized

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language in this provision appears broad enough to cover any traditional knowledge that WTO members might require to be disclosed to a government agency (...).201

Consequently, undisclosed information can be used as a mechanism to protect

traditional knowledge. Therefore, the understanding and correct interpretation of Article

39 of the TRIPS Agreement is basic for the protection of traditional knowledge in all its

dimensions. The fact that Article 39 conceives undisclosed information within the

broadest terms makes it possible for traditional knowledge to become subject of this type

of protection. In addition, the non-proprietary nature of undisclosed information is

consistent with traditional knowledge that mainly talks about holders and not owners.202

As a consequence, if the traditional knowledge matches the requirements and conditions

of Article 39, it can be subject of protection and any natural or legal person can enforce

these rights without the need of specific legislation.203

In conclusion, through this study, we had the opportunity to determine the impact

that intellectual property rights provisions contained in the TRIPS have over genetic

resources, biodiversity, and traditional knowledge, and, therefore, in the accomplishment

of the objectives stated in the CBD. The fact that the TRIPS Agreement is considered the

leading instrument for the treatment of intellectual property rights, along with the fact

that the provisions contained in the CBD are highly sensitive to intellectual property

rights protection, means that these two international treaties are closely related. It has

been argued that these two instruments contain inconsistencies and contradictions that

make them incompatible. However, from the content of these instruments, it is clear that

both contain some flexibility that enables them to operate together.

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To this respect, the TRIPS Agreement defines minimum legal standards for the

protection of intellectual property that should be applied by each country member in their

domestic legislation. Nevertheless, the same treaty has established flexibilities in several

areas that facilitate the adaptation of the national law to the international standards. For

instance, the TRIPS allow flexibilities in respect to the:

(a) variation in the details of patent procedure;

(b) exceptions from patenting where preventing commercial exploitation is necessary to avoid serious prejudice to the environment;

(c) sui generis systems of plant variety protection;

(d) choice as to whether to issue patents for modified plants or animals other than microorganisms; and

(e) variation in levels of IPR protection by setting minimum, but not maximum, standards.204

These flexibilities allow country members to design their intellectual property

systems according to their national needs. The flexibility presented in both agreements,

plus the subject matter of their dispositions, makes it possible for the TRIPS and the CBD

to support each other. To this respect, both treaties consider fundamental to the

achievement of their objectives the respect of intellectual property rights. In addition,

both highlight the importance of the promotion of technology transfer. Both instruments

are also against the abuse of intellectual property rights. As a consequence, the CBD can

use the provisions stated in the TRIPS to promote the conservation and sustainable use of

biological diversity and to make operative the principles of benefit-sharing. According to

Dr. Nuno Carvalho:

...there is no conflict between the provisions of the TRIPS Agreement and the CBD. Actually, the TRIPS Agreement, if correctly implemented supports the objectives of the CBD, in the sense that protection of intellectual property

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contributes to the promotion of technological innovation which is relevant for the conservation and sustainable use of biodiversity. Furthermore, the use of intellectual property rights that run counter the objectives of biodiversity may be prevented by governments.205

Nevertheless, there is still a lot of work to do to make these two agreements

operable and complementary. If it is true that there is no incompatibility or contradiction

among the provisions contained in these instruments, it is also true that the TRIPS does

not make direct mention of the CBD, its objectives, or the specific topics treated in the

Convention, such as traditional knowledge protection. However, that does not mean that

the TRIPS is opposed to the achievement of these objectives. On the contrary, the TRIPS

Agreement provides a legal framework that can constitute a base for the protection of

traditional knowledge as well as the achievement of the objectives of the CBD.

Consequently, the adaptation that each country makes in their national legislation is

fundamental to making these two treaties work together.

4. THE INTERNATIONAL TREATY ON PLANT GENETIC RESOURCES FOR

FOOD AND AGRICULTURE.

The beginning of agriculture and plant innovation traces back 10,000 years ago.206

Since that time farmers have been selecting and improving crops creating new varieties

that supported and complemented their nutritional needs. In this respect, Jose Esquinas

Alcazar states that “the process of domesticating plants and animals and spread of

agriculture were slow enough to allow a new equilibrium to emerge ... Genetic

diversity was maintained, and even increased during this long period; the

heterogeneous varieties developed by farmers in each location became well-adapted to

varying local conditions.”207

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Historically, plant genetic resources have been considered as a common heritage

of humankind.208 In that sense, crops management was based on free exchange and not

on property. In this respect, Clive Stannard explains that “[f]rom the beginning,

human groups swapped their crops, and within their crops, their local varieties or

landraces. Agriculture has always been based on access and exchange, not on

exclusivity. Even at the most local level, farmers exchange seeds and breeds exotic

material into their crops, in order to avoid productivity declines.”209

However, the introduction of new technologies in the agricultural field and the

need of a legal protection for these innovations have originated the creation of property

rights in some cases. The main reason is that “[p]lant innovation is initially costly

and time-consuming to produce but is relatively easy and inexpensive to reproduce.

For that reason, the availability and scope of intellectual property protection for plant

innovation has important implications for stimulating plant innovation by plant

breeders.”210 As a consequence, TRIPS Agreement in Article 27. 3 (b) states that

“[m]embers shall provide for the protection of plant varieties either by patents or by an

effective sui generis system or by any combination thereof.” In addition, the CBD

expressly recognizes the existence of sovereignty rights over plant genetic resources.

The existing environment creates the need to reconcile the property regimes

established by the CBD and the TRIPS with the global concern of food security211.

The nature of this topic created an international controversy that once again was

characterized by the North and South divide. In an attempt to reconcile the positions,

the FAO Treaty was proposed. In this respect,

One of the most heated aspects of the international debate over extending intellectual property protection to the innovations of plant breeders concerns

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how to balance the intellectual property claims of plant breeders with countervailing claims to a fair and equitable sharing of benefits arising out of the utilization of pre-existing plant genetic resources (PGRs) contributed by farmers and others. In response to this often acrimonious North-South debate—in which Northern accusations of intellectual property “piracy” in the developing world are regularly met with counter-accusations of “biopiracy” on the part of innovators in the industrialized world--the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA), which was promulgated by the FAO on November 2, 2001, and entered into force on June 29, 2004, represents the first binding international agreement attempting to address this issue by introducing a “Multilateral System” for facilitating access to and benefit-sharing arising out of the use of selected plant genetic resources.212

The International Treaty on Plant Genetic Resources for Food and Agriculture

(ITPGRFA) constitutes an interesting and innovative proposal for the treatment of plant

genetic resources. This treaty has as its starting point the importance of plant genetic

resource management for food security and agriculture. It recognizes that plant genetic

resources for food and agriculture are a common concern of mankind, and therefore they

deserve special treatment. As a result, the treaty represents the global concern and

commitment to work on the satisfaction of nutrition needs around the world and to

prevent food scarcity in the future.

The entry into force of the International Treaty on Plant Genetic Resources for Food and Agriculture marks a very important milestone in international management and governance of biological diversity. It represents the commitment of the world community to a new kind of international synergy- a freestanding convention directed at addressing, in combination, global needs for food security, and international agreed objectives regarding the concepts of “access and benefit-sharing” found in the Convention on Biological Diversity. As such, this Treaty contributes to improving human livelihoods, preventing hunger and conserving biological diversity.213

The ITPGRFA was adopted in the thirty-first session of the FAO Conference on

November 3, 2001. The objectives of this treaty are “the conservation and sustainable

use of plant genetic resources for food and agriculture and the fair and equitable sharing

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of the benefits arising out of their use, in harmony with the Convention on Biological

Diversity, for sustainable agriculture and food security.”214 The origin of this treaty can

be found in the International Undertaking on Plant Genetic Resources,215 adopted by the

FAO Conference in 1983. This non-binding agreement has its foundation in the principle

that plant genetic resources were “a heritage of the mankind and consequently should be

available without restriction.”216 With this starting point, the Undertaking sought “to

ensure that plant genetic resources of economic and/or social interest, particularly for

agriculture, will be explored, preserved, evaluated and made available for plant breeding

and scientific purposes.”217

The main provisions of the ITPGRFA related to traditional knowledge and access

to genetic resources are the ones contained in the general provisions for conservation and

sustainable use of plant genetic resources for food and agriculture, the Farmers’ Rights,

and the Multilateral System of Access and Benefit-Sharing. All of these clauses respond

to the nature of the Treaty and its Multilateral System for the effective application of the

principles of access and benefit-sharing contained in the CBD. In addition, they

acknowledge the importance of plan genetic resources (PGR) for sustainable agricultural

development and food security, as well as PGR’s fundamental role in the area of crop

genetic improvement oriented to adaptation to unpredictable environmental changes and

human needs.218

The general provisions regarding the conservation and sustainable use of genetic

resources establish a set of rules, mechanisms, and compromises that parties should

utilize within the management of PGR for food and agriculture. Thus, Article 5

establishes that contracting parties within domestic legislation should promote the

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exploration, conservation, and sustainable use of plant genetic resources for food and

agriculture. In addition, Article 6 highlights the need to implement measures for the

promotion of sustainable use, such as strengthening research to enhance biological

diversity conservation and the promotion, development, and maintenance of framing

systems with fair policies. This approach is very important within the field of traditional

knowledge protection. The preservation of farming practices as a public policy could

constitute a significant incentive for local and indigenous communities because it not

only recognizes the importance of their knowledge, but also encourages its continuance

in order to achieve the objectives of the treaty. Finally, Articles 7 and 8 state the national

and international commitments, as well the importance of technical assistance and

international cooperation, to facilitate the entry into force of this instrument.

Moreover, the Treaty includes Article 9, which contains all of the provisions

related to farmers’ rights. This constitutes one of the major achievements of this

instrument because through this disposition, the Treaty tries to eliminate the disparities

existing between the breeders’ and farmers’ rights. First of all, Article 9.1 recognizes the

contribution of local and indigenous farmers around the world to the conservation and

development of plant genetic resources, which are considered to be the foundation of

food and agriculture worldwide.219 However, despite the important role of local and

indigenous farmers in this field, this provision is “merely [a] symbolic expression of

gratitude;” therefore, no pragmatic mechanism is offered for the implementation of these

rights at the international level.220 In addition, Article 9 contains one of the principal

provisions related to the implementation of the principles of access and benefit-sharing,

as well as the legal protection of traditional knowledge. Thus, Article 9.2 reads:

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9.2 The Contracting Parties agree that the responsibility for realizing Farmers’ Rights, as they relate to plant genetic resources for food and agriculture, rests with national governments. In accordance with their needs and priorities, each Contracting Party should, as appropriate, and subject to its national legislation, take measures to protect and promote Farmers’ Rights, including: (a) protection of traditional knowledge relevant to plant genetic resources for food and agriculture; (b) the right to equitably participate in sharing benefits arising from the utilization of plant genetic resources for food and agriculture; and (c) the right to participate in making decisions, at the national level, on matters related to the conservation and sustainable use of plant genetic resources for food and agriculture.

As we can appreciate from the content, this provision is aligned with the

dispositions contained in the CBD. As a result, it not only promotes the maintenance,

preservation, and development of traditional knowledge, but it also states the right of

local and indigenous farmers to equitably share the benefits that arise from these genetic

resources and to actively participate in the decision-making regarding matters related to

plant genetic resources for food and agriculture. Moreover, it mandates that these

policies and mechanisms be adopted through domestic legislation. Therefore, once again

the effectiveness and enforceability of these provisions depends on the ability of local

governments to implement these norms within their national legal systems. Discussing

Article 9.2, Michael Blakeney states that “the content of these rights is defined in the

balance of that provision and embraces the protection of traditional knowledge, equitable

benefit-sharing and the right to participate in the decision making. The Treaty leaves

open the legal context within which Farmers’ Rights are to be enacted.”221

Furthermore, Article 9.3 allows the farmers to save, use, exchange, and sell farm-

saved seed/propagating material, subject to national law and as appropriate. This

recognition of farmers’ rights to save their seeds is also acknowledged by Article 15.2 of

the UPOV (1991), which states that “each Contracting Party may, within reasonable

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limits and subject to the safeguarding of the legitimate interests of the breeder, restrict the

breeder's right in relation to any variety in order to permit farmers to use for propagating

purposes, on their own holdings, the product of the harvest which they have obtained by

planting, on their own holdings, the protected variety or a variety covered by Article

14(5)(a)(i) or Article 14(5)(a)(ii).”222 Therefore, the domestic law will define the

conditions under which the farmers’ rights and privileges will operate.

Nevertheless, according to some scholars “the weak provision on farmers’ rights

finally retained in the IT might contravene some provisions of the CBD of an equitable

nature, (...), unless Article 13.2 of the IT is fully implemented.”223 Article 13.2 from the

ITPGRFA states that “(...) benefits arising from the use, including commercial, of plant

genetic resources for food and agriculture under the Multilateral System shall be shared

fairly and equitably through the following mechanisms: the exchange of information,

access to and transfer of technology, capacity-building, and the sharing of the benefits

arising from commercialization (...).”

This provision without adequate mechanisms can become a mere exhortation of

good intentions. Sharing benefits from the use of plant genetic resources can be

complicated if the domestic law does not incorporate efficient procedures to implement

the equitably sharing and to organize the information regarding traditional knowledge

and access to genetic resources that are conserved in situ and ex situ. In this respect,

Regine Andersen establishes that “[o]ther potential barriers invoked, especially

concerning the implementation of the benefit-sharing provisions of both the CBD and the

IT, derive from the lack of documentation of farmers’ knowledge and the absence of an

organized network for the access to genetic resources stored ex situ.”224

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Part IV contains the clauses regarding the Multilateral System of Access and

Benefit-Sharing. This Multilateral System is the key element of the treaty because its

objective is to facilitate access to plant genetic resources for food and agriculture, and to

ensure equitable sharing of the benefits arising from the utilization of these resources.225

Thus, the Multilateral System conceives the implementation of a common seed pool of

plant genetic resources that are under the control of country members and in the public

domain.226 In a comparison between the use of multilateral and bilateral systems the

ASSINEL227 states that

A multilateral approach offers participants access for a far greater range of germplas than is generally possible in bilateral agreements. Thus multilateral arrangements are preferable for crops with wide geographical distribution. This advantage is even greater if one considers multilateral agreements covering a range of crop species... The evaluation of data from a large number of environments leads to be a better understanding of the proprieties of the exchanged material, adding significantly to its value and increasing the chances that it will be used.

Nevertheless,

Bilateral approaches may be most appropriate for instance when a small number of countries have, or need, access to genetic diversity of a particular species or group of species, and/or when highly expensive and specialized research gives a strong competitive advantage to a single or limited number of institutions. Such conditions may prevail in the case of some industrial crops.228

The Multilateral System, contained in the FAO Treaty, has its foundations in the

sovereignty rights of states over their own plant genetic resources for food and

agriculture. Thus, country members, in using the powers created by the sovereignty

right, agree to contribute out of the plant genetic resources for food and agriculture that

are under their control and management229 to the Multilateral System to facilitate access

to agricultural development and food security on behalf of the mankind. At the same

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time, this Multilateral System articulates a mechanism to make operable the principles of

access and benefit-sharing. The benefit-sharing starts with the facilitation of access to

plant genetic resources for food and agriculture, and it is complemented by the exchange

of information, access to and transfer of technology, capacity-building, and the sharing of

the benefits arising from commercialization.230 In this way,

The FAO Multilateral System is particularly noteworthy because it represents the first international attempt to combine an open-source system of facilitated access to plant genetic resources with a mandatory system of benefit sharing, including mandatory sharing of monetary and other benefits arising out of commercialization of certain patent- protected plant innovation, thus implicitly recognizing a role for intellectual property protection and proprietary plant innovation in generating monetary benefits to maintain the open-source system.231

Under the Multilateral System, access to plant genetic resources for food and

agriculture is limited to “utilization and conservation for research, breeding and training

for food and agriculture, provided that such purpose does not include chemical,

pharmaceutical and/or other non-food/feed industrial uses.”232 In addition, “recipients

shall not claim any intellectual property rights or other rights that limited the facilitated

access genetic resources for food and agriculture, or their genetic parts or components, in

the form received from the Multilateral System.”233 This was a controversial provision

because of the treatment of intellectual property rights; therefore, a gene that was merely

isolated and purified would not be eligible for intellectual property right protection

because it is a “genetic part or component” of the plant genetic resources for food and

agriculture. To this respect, Helfer states that this provision embraces the discussion

between developing and industrialized countries about “whether to bar patenting of

isolated and purified genes extracted from seeds placed in the common seed pool.”234

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In addition, the recipients should continue to make available to the Multilateral

System those plant genetic resources that were accessed under the same mechanism.

This provision guarantees the continuance of facilitated access under the same terms of

the Treaty.235 In order to effectuate the provisions contained in the Treaty, it stipulates

the adoption of a standard material transfer agreement (MTA) by the Governing Body

that will contain all the provisions related to facilitation of access, benefit sharing, and

other relevant dispositions. “The SMTA is particular in that it organizes transfers of

germplasm between public institutions and private operators, with a view to reducing

transaction costs. In so doing, the FAO Treaty is supposed to promote food security,

conservation of genetic resources and equity in terms of achieving a fair distribution of

benefits based on multilateralism.”236 This standard MTA should be used in any kind of

transfer that involves plant genetic resources facilitated by the Multilateral System.237

Talking about the ITPGRFA, Charles McManis says that:

This treaty creates a multilateral system, a form of “limited common property,” which is designed to facilitate access by member countries and their nationals to germplasm of 64 staple crops held in government and international seed banks for research, breeding, and crop development purposes. Under this system, private parties who develop commercial products using genetic materials from the multilateral system must accept a Material Transfer Agreement (MTA), the terms of which were adopted by the Governing Body of the ITPGRFA in 2006, and then obligatorily pay “an equitable share of the benefits” to a fund to be used to promote conservation and sustainable use of germplasm when the product has restrictions on its availability to others for further research and breeding, and they are encouraged to pay voluntarily when the products is available without restriction for such purposes.238

In conclusion, the ITPGRFA constitutes a unique model for the management of

plant genetic resources for food and agriculture. It encompasses and complements the

international intellectual property rights system with the legal mechanisms concerning

access to genetic resources and benefit-sharing. In addition, the Multilateral System

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represents a new form of management of plant genetic resources in which the bilateral

agreements are replaced by a multilateral scheme in which country members, in use of

their sovereignty rights, waive their rights over some plant genetic resources existing

under their control to benefit the common seed pool.

This Multilateral System not only provides private parties with a facilitated

access, but also introduces a centralized Governing Body that coordinates the

mechanisms and measures defined to achieve equitable benefit-sharing from the benefits

arising from the use of these plant genetic resources. This benefit-sharing should be

especially focused on local and indigenous farmers who conserve and sustainably use

plant genetic resources for food and agriculture.239 It is important to note that the access

to plant genetic resources for food and agriculture, as well as equitable benefit-sharing,

should be consistent with the provisions of this Treaty and with other relevant

international agreements and national laws.240 As a consequence, the CBD and the

TRIPS Agreement should be considered a binding legal framework for the

implementation of this instrument. As Muriel Lightbourne says “[t]he impact of the FAO

Treaty might not be tremendous, but the world is better off with it than without it, even

though it meant compromising farmers’ rights (...). What would, along with the FAO

Treaty, help make a difference would be not only an international treaty on access and

benefit-sharing, but also a fair deal regarding the WTO Agreement on Agriculture.”241

5. CONCLUSION

The current system of international law, as embodied in the CBD, the TRIPS

Agreement, and the ITPGRFA, provides a good legal framework for the regulation of

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access to genetic resources, biotechnology, and traditional knowledge protection.

Nevertheless, it is not a perfect system; in that way, these legal frameworks still present

some weaknesses such as the fact that they do not promote symmetry in the bargaining

power of developed and developing countries. As a result, the legal protection of genetic

resources and traditional knowledge has not been perfectly performed, but it does not

mean that it is not feasible.

The TRIPS Agreement sets international minimum standards for the protection

and enforcement of the IPR, which includes binding and enforceable provisions that

satisfy the requirements and interests of the industrialized world. This fact has been used

as an argument to reinforce the idea that the CBD and TRIPS are inconsistent and

incompatible. Nevertheless, if it is true that TRIPS Agreement mainly reflects the

position of the North and those important topics; such as, biodiversity, biotechnology,

and traditional knowledge were not well discussed in the TRIPS agreement; it is also true

that TRIPS’ provisions contain a degree of flexibilities that facilitates the regulation of

these topics within the domestic law. These flexibilities allow WTO members to tailor

their intellectual property systems according to their needs and conciliate the apparent

inconsistencies with the CBD. Moreover, the CBD and the TRIPS agreement have a

number of common points and objectives that can work together. Therefore, if it is true

that TRIPS agreement does not address directly and specifically the access to genetic

resources and traditional knowledge; it does not mean that the existing system does not

provide with enough mechanisms to give a fair protection of genetic resources and


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On the other hand, the CBD without any doubt is a legal framework that

incorporates relevant topics; such as the obligation to conserve, sustainably use, and

guarantee access to genetic resources in return for a fair and equitable sharing of benefits

arising from the utilization of those resources.242 Nevertheless, the CBD forgot a crucial

element – the element of enforceability. The majority of the provisions in this document

included declarations of good intentions that could not be enforced by any legal

mechanism. In that way, “the treaty language of the CBD, including that recognizing the

need to protect traditional knowledge, is hortatory rather than mandatory.”243 Moreover,

the CBD’s provision regarding the sovereignty of each country over the resources of its

biodiversity created an excessive power that, when combined with the fears associated

with access to genetic resources and traditional knowledge, resulted in defensive systems

of protection that created more restrictions, thus hindering efficient access to genetic

resources in the benefit-sharing model. Therefore, it is the domestic law the one that has

to correct the weaknesses contained in the CBD and take advantage of the interesting

mechanisms that the CBD provides for the access to genetic resources and traditional

knowledge.

Finally, the ITPGRFA represents an interesting model for the management of

plant genetic resources for food and agriculture. However, its limited field circumscribes

the effectiveness of the Multilateral System only to plant genetic resources for food and

agriculture. In addition, we have to consider that this is a new instrument that requires a

lot of work within the national legislation of each country member; therefore, it is still too

soon to evaluate the results and achievements of this Treaty. Nevertheless, it is important

to note that the Multilateral System is a mechanism that should be considered and

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evaluated for the treatment and management of other genetic resources in order to

maximize their use within clear terms of access and benefit-sharing

Therefore, even if it is true that these international instruments provide a non-

contradictory legal framework for the treatment of biodiversity, biotechnology, and

traditional knowledge protection, then it is also true that the parties to these agreements

will still have to deal with many gaps and vague language in these instruments regarding

these topics. For this reason, the international community should work on a project that

can effectively integrate these legal instruments to accomplish the principles stated in the

CBD (access and benefit-sharing) under the International IP legal framework contained

in the TRIPS. Nevertheless, success will depend on the level of international political

will to work on this project. Until that happens, it will be the responsibility of national

governments to look for the mechanisms and use the flexibility existing in the current

agreements to create a reasonable legal framework that can provide effective protection

to biodiversity, traditional knowledge, and biotechnology.

1 Secretariat of the Convention on Biological Diversity, The Convention on Biological Diversity from Conception to Implementation 5, (2004), available at http://www.cbd.int/doc/publications/CBD-10th-anniversary.pdf 2 Fiona McConnell, The Biodiversity Convention A negotiation History 5, (Fiona McConnell ed., Kluwer Law International, London, 1996). 3 Id. at 5. 4 Id. 5 Id. at 152. 6 Id. at 12. 7 Id. at 26. 8 Id. at 16. 9 Id.

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10 Id. at 3 to 44. 11 Id. at 29 to 33. 12 Id. at 44. 13 Talking about the first meeting of the ad hoc Working Group of Legal and Technical Experts McConnell states that “There were scientific experts on most delegations who knew something about nature conservation or biotechnology, but for the majority the eight days in Nairobi were an opportunity to learn about the issues that would have to be addressed in a convention dealing with biological diversity.” Id. at 24. 14 Nairobi Final Act of the Conference for the Adoption of the Agreed Text of the Convention on Biological Diversity, available at http://www.cbd.int/doc/handbook/cbd-hb-09-en.pdf 15 Id. 16 See McConnell, supra note 2, at 105. 17 Id. at 104 to 112. 18 Id. at 111. 19 http://www.cbd.int/history/ (last visited 18 July 2009). 20 Convention on Biological Diversity, Article 1 available at http://www.cbd.int/convention/articles.shtml?a=cbd-01. 21 Convention on Biological Diversity, Article 2 available at http://www.cbd.int/convention/articles.shtml?a=cbd-02 22 Secretariat of the Convention on Biological Diversity (2002). Bonn Guidelines on Access to Genetic Resources and Fair and Equitable Sharing of the Benefits Arising out of their Utilization.Montreal:Secretariat of the Convention on Biological Diversity para 22, available at http://www.cbd.int/doc/publications/cbd-bonn-gdls-en.pdf 23 W. Lesser, Sustainable Use of Genetic Resources under the Convention on Biological Diversity Exploring Access and Benefit Sharing Issues 5, (W. Lesser ed., CAB International, London, 1998). 24 Id. at 19-20. 25 S. Biber-Klemm & T. Cottier, Rights to Plant Genetic Resources and Traditional Knowledge 62, (S. Biber-Klemm & T. Cottier, CABI, UK, 2006). 26 Convention on Biological Diversity, Article 3 available at http://www.cbd.int/convention/articles.shtml?a=cbd-03 27 Convention on Biological Diversity, Article 15 1) available at http://www.cbd.int/convention/articles.shtml?a=cbd-15 28 See Biber-Klemm & Cottier, supra note 25, at 57. 29 Id. 30 See Lesser, supra note 23, at 13.

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31 Convention on Biological Diversity, Article 15 2) available at http://www.cbd.int/convention/articles.shtml?a=cbd-15 32 Convention on Biological Diversity, Article 15 4) available at http://www.cbd.int/convention/articles.shtml?a=cbd-15 33 See Lesser, supra note 23, at 29. 34 Id. 35 See Lesser, supra note 23, at 41. 36 Taken from personal notes of the meeting between the representatives of Project Gibex and the Ministry of Environment, August 2008, Quito-Ecuador. 37 Convention on Biological Diversity, Article 15 5) available at http://www.cbd.int/convention/articles.shtml?a=cbd-15 38 Convention on Biological Diversity, Article 15 7) available at http://www.cbd.int/convention/articles.shtml?a=cbd-15 39 The Secretariat of the Convention on Biological Biodiversity, Frequently Asqued Questions on Access and Benefit -Sharing (ABS), available at http://www.cbd.int/doc/programmes/abs/factsheets/ABS-factsheet-faqs-en.pdf 40 See Lesser, supra note 23, at 87. 41 Tom L. Beauchamp & James F. Childress, Principles of Biomedical Ethics 77 (Tom L. Beauchamp & James F. Childress eds., Oxford University Press, 5 ed., 2001). 42 See Lesser, supra note 23, at 88. 43 Article 3 of the CBD recognizes that “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 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.” 44 Multilateral Environmental Agreements. 45 Kuei-Jung Ni, Legal Aspects of Prior Informed Consent on Access to Genetic Resources: An Analysis of Global and Local Implications towards an Optimal Normative Construction 12, http://works.bepress.com/cgi/viewcontent.cgi?article=1000&context=kuei_jung_ni 46 Anne Perrault & Maria Julia Oliva, Prior Informed Consent and Access to Genetic Resources 1, (WTO Public Symposium, Geneva, April 21 2005), http://www.ciel.org/Publications/PIC_PerraultOliva_Apr05.pdf 47 See Kuei-Jung Ni, supra note 45, at 13. 48 Decision V/26 A, The Fifth Meeting of the Conference of Parties to the Convention on Biological Diversity, Nairobi, May 15-26, 2000, U.N. Doc. UNEP/CBD/COP/5/23, 196 (2000), available at http://www.cbd.int/doc/decisions/COP-05-dec-en.pdf.

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49 Meeting of the Ad Hoc Open-ended Working Group on Access and Benefit-sharing, available at http://www.cbd.int/abs/ab-wg-01.shtml 50 See Bonn Guidelines, supra note 22. 51 Id. para. 12 52 Id. at IV 53 Id. para. 11 (b) 54 Id. para. 11 (d), (g) 55 Id. para. 11 (e) 56 Id. para. 11 (c) 57 See Kuei-Jung Ni, supra note 45, at 14. See also Bonn Guidelines, supra note 22, at para. 13-16. 58 See Bonn Guidelines, supra note 22, at para 25. 59 Id. at para 26. 60 Michael I. Jeffery, Bioprospecting: Access to Genetic Resources and Benefit-Sharing under the Convention on Biodiversity and the Bonn Guidelines, 6 SING. J. INT’L & COMP. L. 797, (2002). 61 See Kuei-Jung Ni, supra note 45, at 15. 62 See Bonn Guidelines, supra note 22, at para 27. 63 Id. at para 14. 64 Padmashree Gehl Sampath, Regulating Bioprospecting 144, (Padmashree Gehl Sampath ed., United Nation University Press, USA, 2005). 65 See Bonn Guidelines, supra note 22, at para. 28-40. 66 See Kuei-Jung Ni, supra note 45, at 20. 67 Convention on Biological Biodiversity, Article 1: 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 and 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 relevant technologies, taking into account all rights over those resources and to technologies, and by appropriate funding. 68 See Bonn Guidelines, supra note 22, at para 45. 69 Convention on Biological Biodiversity, Preamble available at http://www.cbd.int/convention/articles.shtml?a=cbd-00 70 Id. at Article 8 (j). See also Bonn Guidelines, supra note 22, at para 11 (j). 71 See Bonn Guidelines, supra note 22, at para 44 (g).

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72 Tvedt, Morten Walløe & Tomme Young, Beyond Access: Exploring Implementation of the Fair and Equitable Sharing Commitment in the CBD 2, (IUCN, Gland, Switzerland xx + 148, 2007), available at http://data.iucn.org/dbtw-wpd/edocs/EPLP-067-2.pdf 73 See Chapter III to have more information about this case. 74 Charles R. McManis, The Interface Between International Intellectual Property and Environmental Protection: Biodiversity and Biotechnology, 76 Wash. U. L.Q. 255, 273–74 (1998). 75 Convention on Biological Biodiversity, Article 15 (7) available at http://www.cbd.int/convention/articles.shtml?a=cbd-15 76 See Convention on Biological Biodiversity, Articles 15 (6), 16, 19 (1), available at http://www.cbd.int/convention/articles.shtml?a=cbd-15 77 It is important to note the difference between source and origin. According to the CBD, "Country of origin of genetic resources" means the country which possesses those genetic resources in in-situ conditions. However, when we talk about the source it could be a supplier of “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.” 78 Convention on Biological Biodiversity, Article 19 (1), available at http://www.cbd.int/convention/articles.shtml?a=cbd-19 79 Convention on Biological Biodiversity, Article 19 (2), available at http://www.cbd.int/convention/articles.shtml?a=cbd-19 80 See Bonn Guidelines, supra note 22, at Annex II. 81 Convention on Biological Biodiversity, Article 11 “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.” 82 See Lesser, supra note 23, at 84. 83 See Tvedt, Morten Walløe &Tomme Young, supra note 72, at 48. 84 See Lesser, supra note 23, at 84. 85 See Tvedt, Morten Walløe & Tomme Young, supra note 72, at 39. 86 Convention on Biological Diversity, Preamble: 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, available at http://www.cbd.int/convention/articles.shtml?a=cbd-00. 87 This is also recognized by the Rio Declaration, 1992, Principle 22: “Indigenous people and their communities and other local communities have a vital role in environmental management and development because of their knowledge and traditional practices. States should recognize and duly support their identity, culture and interests and enable their effective participation in the achievement of sustainable development”, available at http://www.unep.org/Documents.Multilingual/Default.asp?documentID=78&articleID=1163

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88 Convention on Biological Diversity, Article 8, available at http://www.cbd.int/convention/articles.shtml?a=cbd-08 89 Silke von Lewinski & Anja von Hahn, Indigenous heritage and intellectual property: genetic resources, traditional knowledge and folklore 23, (Silke von Lewinski ed., Kluwer Law International, London, 2003). 90 Id. at 26. 91 Secretariat of the Convention on Biological Diversity (2004).Akwé: Kon Voluntary Guidelines for the Conduct of Cultural, Environmental and Social Impact Assessment regarding Developments Proposed to Take Place on,or which are Likely to Impact on, Sacred Sites and on Lands and Waters Traditionally Occupied or Used by Indigenous and Local Communities Montreal,25p.(CBD Guidelines Series), available at http://www.cbd.int/doc/publications/akwe-brochure-en.pdf. 92 Working Group on Article 8 (j), http://www.cbd.int/convention/wg8j.shtml 93 Ad hoc open-ended inter-sessional working group on Article 8 (j) and related provisions of the Convention on Biological Diversity, PROGRESS REPORT ON THE IMPLEMENTATION OF THE PROGRAMME OF WORK ON ARTICLE 8(j) AND RELATED PROVISIONS AT THE NATIONAL LEVEL, Fourth Meeting, Grenada, 23-27 (January 2006), available at www.cbd.int/doc/meetings/tk/wg8j-04/official/wg8j-04-11-en.doc 94 Convention on Biological Diversity, Article 10 (c), available at http://www.cbd.int/convention/articles.shtml?a=cbd-10 95 Australian Indigenous Law Reporter, The Biodiversity Convention: The concerns of Indigenous Peoples, (1996) available at http://www.austlii.edu.au/au/journals/AILR/1996/84.html#Heading16. 96 See Silke von Lewinski & Anja von Hahn, supra note 89, at 108. 97 See Australian Indigenous Law Reporter, supra note 95. 98 See Silke von Lewinski & Anja von Hahn, supra note 89, at 29. 99 Steven R. King, Julie Anne Chinnock, Michael J. Balick, Silvano Camberos Sanchez, Katy Moran, & Charles Limbach, Traditional Knowledge , Biological Resources and Drug Development: Building Equitable Partnerships to Conserve, Develop and Respect Biocultural Diversity, in Intellectual Property and Biological Resources 289, (Burton Ong ed., Marshall Cavendish Academic, London, 2004). 100 See Lesser, supra note 23, at 115. 101 See Ad hoc open-ended inter-sessional working group on Article 8 (j) and related provisions of the Convention on Biological Diversity, supra note 93. 102 Convention on Biological Diversity, Article 1, available at http://www.cbd.int/convention/articles.shtml?a=cbd-01 103 See Lesser, supra note 23, at 136. 104 Convention on Biological Diversity, Article 16 (1), available at http://www.cbd.int/convention/articles.shtml?a=cbd-16

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105 Michael I. Jeffery, Intellectual Property Rights and Biodiversity Conservation: Reconciling the Incompatibilities of the TRIPS Agreement and the Convention on Biological Diversity 190-91, in Intellectual Property and Biological Resources, (Burton Ong ed., Marshall Cavendish Academic, London, 2004). 106 Convention on Biological Diversity, Preamble, emphasis added, available at http://www.cbd.int/convention/articles.shtml?a=cbd-00 107 Convention on Biological Diversity, Article 2, available at http://www.cbd.int/convention/articles.shtml?a=cbd-02 108 Hugh B. Wellons, Eileen Smith Ewing, Robert Copple, William Wofford & Erika Leitzan, Biotechnology and the Law 4, (Hugh B. Wellons and Eileen Smith Ewing eds., American Bar Association, USA, 2007). 109 Id. at 5. 110 Barbara A. Schaal, Biodiversity, Biotechnology and the Environment, in Biodiversity and the Law137, (Charles McManis ed., Earthscan, London 2007). 111 See Lesser, supra note 23, at 139. 112 Id. at 138. 113 See Chapter I. 114 Id. at 173. 115 Id. at 161, also See the Convention on Biological Diversity. 116 See Michael I. Jeffery, supra note 105, at 191. 117 Id. 118 Final Act Embodying the Results of the Uruguay Round of the Multilateral Negotiations, April 15, 1994, LEGAL INSTRUMENTS—RESULTS OF THE URUGUAY ROUND vol. 1 (1994), 33 I.L.M. 1125 (1994) [hereinafter Final Act]; Agreement on Trade–Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994 [hereinafter WTO Agreement], Annex 1C, LEGAL INSTRUMENTS—RESULTS OF THE URUGUAY ROUND vol. 31; 33 I.L.M. 81 (1994) [hereinafter TRIPS Agreement]. 119 See TRIPS Agreement, supra note 118, Preamble, para.1 120 World Trade Organization, Overview the TRIPS Agreement, available at http://www.wto.org/english/tratop_e/trips_e/intel2_e.htm 121 See TRIPS Agreement, supra note 118, at art. 7 122 See GATT document MTN.GNG/NG11/W/71 of 14 May 1990, available at http://www.wto.org/gatt_docs/English/SULPDF/92100147.pdf 123 Id. at Part II, Chapter I, Article 1.1 124 Id. at Part II, Chapter I, Article 2.

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125 See Biber-Klemm & Cottier, supra note 25, at 75. 126 See Hugh B. Wellons et. Al, supra note 108, at 5. 127 See Convention on Biological Diversity, Article 16. 128 See TRIPS supra note 118, at article 8. 129 Id. 130 Nuno Pires de Carvalho, The TRIPS Regime of Antitrust and Undisclosed Information 105, (Nuno Pires de Carvalho ed., Kluwer Law, United Kingdom, 2008). 131 See Chapter III, Biodiversity Value. 132 See TRIPS supra note 118, at article 27. 133 See Carlos M. Correa, Trade Related Aspects of Intellectual Property Rights 271, (Carlos M. Correa ed., Oxford University Press, Great Britain, 2007). See also Nuno Pires de Carvalho, The TRIPS Regime of Patent Rights 141, (Nuno Pires de Carvalho ed., Kluwer Law ed. London, 2003). 134 Id. 135 See GATT document MTN.GNG/NG11/W/7 of 29 May 1987, available at http://www.wto.org/gatt_docs/English/SULPDF/92020130.pdf 136 Id. at B. Limitations on patentable subject matter, para 4. 137 See Carlos M. Correa, supra note 133, at 275. 138 J Straus, Implications of the TRIPs Agreement in the field of patent law, in From Gatt to TRIPs- The Agreement on Trade-Related Aspects of Intellectual Property Rights187, (F-K Beier and G Schricker eds., Max Planck Institute for Foreign and International Patent, Copyright and Competition Law, Munich, 1996). 139 Id. 140 Nuffield Council on Bioethics, The ethics of patenting DNA. A discussion paper 23, (London, 2002). 141 See Carlos M. Correa, supra note 133, at 272. 142 Diamond v. Chakrabarty, 447 U.S. 303 (1980). 143 Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980). 144 Directive 98/44/EC of the European Parliament and of the Council, on the legal protection of biotechnological inventions, of 6 July 1998, Article 3.2, available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:1998:213:0013:0021:EN:PDF 145 See Carlos M. Correa, supra note 133, at 273. 146 Id. at 281. 147 Id. at 282. 148 See Nuno Pires de Carvalho, supra note 133, at 160-61.

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149 Id. 150 See Carlos M. Correa, supra note 133, at 284. 151 See TRIPS supra note 114, at article 27.2. 152 See Nuno Pires de Carvalho, supra note 130, at 170. 153 UNCTAD-ICTSD, Resource Book on TRIPS and Development 375-383, (Cambridge University Press, United States of America, 2005). 154 See Decision of the EPO Board of Appeal T356/93 (Plant Genetic Systems). 155 See Carlos M. Correa, supra note 133, at 287-291. Also See UNCTAD-ICTSD, supra note 153. 156 See Carlos M. Correa, supra note 133, at 288. 157 Stephen P. Ladas, Patents, Trademarks, and Related Rights. National and International Protection 1685-1686, (Stephen P. Ladas ed., Harvard University Press, 1975). 158 See Carlos M. Correa, supra note 133, at 288. 159 Id. at 289. 160 Id. at 290. 161 See the Doha Declaration on the TRIPS Agreement and Public Health, para 4, available at http://www.who.int/medicines/areas/policy/tripshealth.pdf 162 Agreement on the Application of Sanitary and Phytosanitary Measures, Annex 1A to the Marrakesh Agreement Establishing the Word Trade Organization. 163 Agreement on Technical Barriers to Trade, Annex 1A to the Marrakesh Agreement Establishing the World Trade Organization. 164 See Nuno Pires de Carvalho, supra note 130, at 172-173. 165 Id. at 174. 166 See Carlos M. Correa, supra note 133, at 292. 167 Id. 168 See Carlos M. Correa, supra note 133, at 292-294. Also See UNCTAD-ICTSD, supra note 153, at 388-397. Also See Nuno Pires de Carvalho, supra note 130, at 177-185. 169 International Convention for the Protection of New Varieties of Plants of December 2, 1961, as Revised at Geneva on November 10, 1972, on October 23, 1978 and on March 19, 1991, available at http://www.upov.int/en/publications/conventions/1991/act1991.htm 170 See Nuno Pires de Carvalho, supra note 130, at 178-82. 171 See WTO document IP/C/W/216, of October 3, 2000.

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172 See Nuno Pires de Carvalho, supra note 130, at 181. 173 See UPOV 1978, Article 5. Also See Nuno Pires de Carvalho, supra note 130, at 182. 174 See Nuno Pires de Carvalho, supra note 130, at 181-84. 175 Id. at 178-85. 176 Carolyn Deere, The Implementation Game: The TRIPS Agreement and the Global Poilitics of Intelelctual Property Reform in Developing Countries 125, (Carolyn Deere ed., Oxford University Press, New York, 2009). 177 TRIPS Agreement, Article 1.2, available at http://www.wto.org/english/tratop_e/trips_e/t_agm2_e.htm 178 See Meeting of Negotiating Group of 20 July 1990, Note by the Secretariat, GATT Doc. No. MTN.GNG/NG11/24 (24 August 1990), 2. NUNO P. 200 (403). 179 See Meeting of Negotiating Group of 11,12 and 14 December 1989, Note by the Secretariat, GATT Doc. No. MTN.GNC/NG11/17 (January 23, 1990). 180 See Carlos M. Correa, supra note 133, at 368. 181 See Nuno Pires de Carvalho, supra note 130, at 227. 182 See TRIPS Agreement Article 39.1, available at http://www.wto.org/english/tratop_e/trips_e/t_agm3d_e.htm#7 183 See Nuno Pires de Carvalho, supra note 130, p.11 184 WIPO, Protection agains Unfair Competition 55, Geneva, 1994. 185 S. Ladas, Patents, Trademarks and Related Rights-National and International Protection 1685-6, ( S. Ladas ed., Harvard University Press, Cambridge, 1975). 186 Paris Convention, Article 10 bis, available at http://www.uspto.gov/web/offices/pac/mpep/documents/appxp_10_bis.htm#parart10bis 187 See Nuno Pires de Carvalho, supra note 130, at 204. 188 See UNCTAD-ICTSD, supra note 153, at 521. 189 Id. 190 See Nuno Pires de Carvalho, supra note 130, at 190. 191 It is important to note that “[t]he established secrecy standard is relative in the sense that it does not require that the person seeking protection be the single one in control of the information. This may be available to other competitors (who also keep it as confidential) but should not be known to or readily accessible to most or every competitor in the circles that normally deal with that kind of information.” See UNCTAD, supra note 153, at 529. 192 Id. at 225. 193 WIPO/GRTKF/IC/1/5, Intergovernmental Committee on Intellectual Property and Genetic Resources and Folklore, Traditional Knowledge and the Need to Give it Adequate Intellectual Property Protection, Annex II, Geneva, 2001.

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194 See Carlos M Correa, supra note 133, at 368. 195 See Nuno Pires de Carvalho, supra note 130, at 227. 196 TRIPS Agreement, Article 39.2, footnote 10, available at http://www.wto.org/english/tratop_e/trips_e/t_agm3d_e.htm#7 197 See Nuno Pires de Carvalho, supra note 130, at 225. 198 Charles McManis, Fitting Traditional knowledge Protection and Biopiracy Claims into the Existing Intellectual property and Unfair Competition Framework, in Intellectual Property and Biological Resources 437, (Burton Ong., ed. , Marshall Cavendish Academic, Singapore, 2004). 199 Id. 200 See Nuno Pires de Carvalho, supra note 130, at 265. 201 See Charles McManis, supra note 198. 202 See Chapter II. 203 See Nuno Pires de Carvalho, supra note 130, at 224. 204 Conference of the Parties to the Convention on Biological Diversity, The Convention on Biological Diversity and the Agreement on Trade-Related Intellectual Property Rights (TRIPS): Relationships and Synergies, (UNEP/CBD/COP/3/23, 4-15 November 1996), available at http://www.iisd.ca/biodiv/cop3/COP3-23-vfinal.htm 205 Also See Nuno Pires de Carvalho, supra note 129, at 206. 206 Muriel Lightbourne, Food Security, Biological Diversity and Intellectual Property Rights 3, ( Muriel Lightbourne ed., Ashgate, Great Britain, 2009). 207 Jose Esquinas Alcazar, Science and society: Protecting crop genetic diversity for food security technical challenges, in Nature Reviews Genetics 946-953, vol. 6, 2005. 208 See Charles McManis, The Interface of Open Source & Proprietary Agricultural Innovation: Facilitated Access & Benefit Sharing under the New FAO Treaty 1, 2008 (forthcoming). 209 Clive Stannard, Genetic Resources: Adding Value or Biopiracy?, World Intellectual Property Organization, Conference on the International Patent System, Geneva, Switzerland, 2002. 210 Id. at 2. 211 According to the 2005 FAO State of Food and Agriculture report. ‘[f]ood security exists when all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life.’ FAO, SOFA, Chapter 6, p.2, 2005. 212 Id. at 3. 213 Alejandro Iza & Emile Frison, Preamble, in Explanatory Guide to the International Treaty on Plant Genetic Resources for Food and Agriculture, (Gerald Moore & Witold Tymowski eds., IUCN, Gland, Switzerland and Cambridge, UK).

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214 The FAO International Treaty on Plant Genetic Resources for Food and Agriculture (Nov.3, 2001), Article 1.1, available at ftp://ftp.fao.org/ag/cgrfa/it/ITPGRe.pdf 215 International Undertaking on Plant Genetic Resources, Res. 8/83, FAO Conference, 22nd Sess. (Nov. 23, 1983), available at ftp://ftp.fao.org/ag/cgrfa/iu/iutextE.pdf 216 Id. at Article 1 217 Id. 218 Id. at Preamble para.3, 5. 219 Id. at Article 9.1 220 See Gregory Rose, International Law of Sustainable Agriculture in the 21st Century: The International Treaty on Plant Genetic Resources for Food and Agriculture 622-24, 15 GEO. INT’L ENVTL. L. REV. 583, 620 (2003). 221 Michael Blakeney, Bioprospecting and Biopiracy, in Intellectual property and Biological Resources 419, (Burton Ong. ed., Marshall Cavendish Academic, London, 2004). 222 International Convention for the Protection of New Varieties of Plants of December 2, 1961, as Revised at Geneva on November 10, 1972, on October 23, 1978 and on March 19, 1991, Article 15, available at http://www.upov.int/en/publications/conventions/1991/act1991.htm 223 See Muriel Lightbourne, supra note 206, at 153. 224 Regine Andersen, The Farmers’ Rights Project- Background Study 2- Results from an International Stakeholder Survey on Farmers’ Rights 75, (Regine Andersen ed., Fridtjof Nansen Institute of Norway, 2005). 225 See The FAO International Treaty on Plant Genetic Resources for Food and Agriculture, supra note 169, Article 10.2 226 Id. at Article 11.2. 227 Institution replaced in 2002 with the International Seed Federation. 228 ASSINEL, Position on Access to Plant Genetic Resources for Food and Agriculture and the Equitable Sharing of Benefits Arising from their Use. 229 Id. at Articles 10.1, 10.2, 11.1 and 11.2. 230 Id. at Articles 13.1 and 13.2 231 See Charles R. Mc Manis, supra note 208, at 3. 232 See The FAO International Treaty on Plant Genetic Resources for Food and Agriculture, supra note 169, Article 12.3 (a). 233 Id. at 12.3 (d) 234 Laurence R. Helfer, Using Intellectual Property Rights to Preserve the Global Genetic Commons: The International Treaty on Plant Genetic Resources for Food and Agriculture, in International Public Goods

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and Transfer of Technology under a Globalized Intellectual Property Regime 220 (Keith E. Maskus & Jerome H. Reichman eds., Cambridge, 2005). 235 See The FAO International Treaty on Plant Genetic Resources for Food and Agriculture, supra note 169, Article 12.3 (g). 236 See Muriel Lightbourne, supra note 206, at 194-5. 237 Id. at 12.4 238 See Charles Mc Manis, supra note 198 at 25. 239 See The FAO International Treaty on Plant Genetic Resources for Food and Agriculture, supra note 169, Article 13.3. 240 Id. at 12.3 (f). 241 See Muriel Lightbourne, supra note 206, at 265 242 For a general discussion of the limited accomplishments of the Earth Summit and the difficulties encountered there, see Sir Geoffrey Palmer, The Earth Summit: What Went Wrong at Rio?, 70 Wash. U.L.Q. 1005 (1992). 243 Charles R. McManis, Biodiversity, Biotechnology and Traditional Knowledge Protection: Law, Science and Practice, in Biodiversity and the Law 5, (Charles R. McManis ed., Earthscan, London, 2007).

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CHAPTER V

INTELLECTUAL PROPERTY, BIODIVERSITY AND TRADITIONAL KNOWLEDGE PROTECTION: REGIONAL AND NATIONAL SAMPLES OF

LEGAL FRAMEWORKS

As we have seen in past chapters, the role of intellectual property rights in matters

related to access to genetic resources, traditional knowledge preservation, and equitable

use is a topic of great interest to the international community. As a consequence, a

significant international legal framework that involves these important fields has been

developed. Legal tools include the Convention on Biological Diversity (CBD)1, the

Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)2, the

International Convention for the Protection of New Varieties of Plants, which was

created on December 2, 1961 and most recently revised on March 19, 1991,3 and the

International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA).4

It is important to see how biodiversity-rich countries have adapted the provisions

established in these international agreements within their national legislation. The

purpose of this chapter is to determine, review, and analyze the different regulatory

initiatives that have been taken by biodiversity-rich countries in order to face the

challenge of applying intellectual property rights in the field of access to genetic

resources and traditional knowledge. Consequently, we have selected three models that

reflect the strategies that a developing continent, region, and country have adopted. The

selected models are the African Model Legislation, the Andean Community decisions,

and the Peruvian legal framework.

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It is relevant to notice that the African Model Legislation and the Andean

Community decisions have been adopted as recognition of the need of biodiversity rich

countries to make effective the provisions stated in the CBD. As a result, these

continental and regional institutions have decided to develop binding legal provisions5 to

adequately address these relevant issues (access to genetic resources and traditional

knowledge) for their countries. Nonetheless, despite these proposals are legally binding

instruments for the country members; each country needs to develop domestic law in

order to make them effective; such as the Peruvian Law. This fact brings some problems

regarding the effective application of the legal provisions. However, at least the

continental and regional institutions have established the parameters for the treatment of

this topic. Consequently, this chapter will show if those parameters facilitate the access to

genetic resources and traditional knowledge or if they constitute obstacles to this end.

1. The African Model Legislation

The African Model Legislation for the Protection of the Rights of Local

Communities, Farmers, and Breeders, and for the Regulation of Access to Biological

Resources (AU Model)6 has its origin within the context of the CBD and the TRIPS

Agreement.7 After participating in the negotiation process of the TRIPS Agreement and

the CBD8 and facing the new challenges that these two treaties brought to the African

context, the Organization of African Unity (now the African Union) decided to start

working on a regional model for the legal treatment of these issues. As a result, the AU’s

Scientific, Technical, and Research Commission was the lead organization that

commanded the drafting of the AU Model.9 The AU Model was intended to create a “sui

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generis system to regulate access to biological resources and protect the related rights of

local communities, farmers, and breeders. The Model Law was developed through a

consultative process at the regional, subregional, and national levels, which involved all

relevant stakeholders and encouraged public debate.”10

As a consequence, the principal goal of the AU Model is to develop a system that

ensures the conservation, evaluation, and sustainable use of biological resources, which

includes genetic resources, agricultural resources, and medicinal resources, as well as

traditional knowledge and practices.11 The model looks “to improve diversity as a means

of sustaining all life support systems.”12 In view of the above, the AU Model has

established specific objectives for this legislation, which are:

a) recognize, protect and support the inalienable rights of local communities including farming communities over their biological resources, knowledge and technologies; b) recognize and protect the rights of breeders; c) provide an appropriate system of access to biological resources, community knowledge and technologies subject to the prior informed consent of the State and the concerned local communities; d) promote appropriate mechanisms for a fair and equitable sharing of benefits arising from the use of biological resources, knowledge and technologies; e) ensure the effective participation of concerned communities, with a particular focus on women, in making decisions as regards the distribution of benefits which may derive from the use of their biological resources, knowledge and technologies; f) promote and encourage the building of national and grassroots scientific and technological capacity relevant to the conservation and sustainable use of biological resources; g) provide appropriate institutional mechanisms for the effective implementation and enforcement of the rights of local communities, including farming communities and breeders, and the conditions of access to biological resources, community knowledge and technologies; h) promote the conservation, evaluation and sustainable utilization of biological resources with a particular focus on the major role women play; i) promote improvements in the productivity, profitability, stability and sustainability of major production systems through yield enhancement and maintenance of biological diversity; j) promote the supply of good quality seed/planting material to farmers; and k) ensure that biological resources are utilized in an effective and equitable manner in order to strengthen the food security of the nation.13

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The AU Model encompasses different issues, such as biodiversity conservation,

access to biological resources and traditional knowledge, prior informed consent,

equitable benefit-sharing, community rights, farmers’ rights, and plant breeder’s rights.

The selection of these topics represents the African common position that tries to look for

a legal framework that reconciles and harmonizes the TRIPs Agreement, the CBD, and

the FAO’s International Understanding on Plant Genetic Resources.14 Therefore, this

legal framework was developed with specific reference to the CBD and to Article 27.3

(b) of the TRIPs Agreement.15 The African Common Position with respect to article 27.3

(b) of the TRIPs Agreement can be summarized in the following phrase: “prohibiting

patenting of life forms,” this position in some extend can be argued to run against the

main objectives of the regulation and the international treaties. Nevertheless, according

to Ekpere,

This African response to article 27.3(b) of the TRIPs Agreement is predicated on a commitment to regional cultural norms and values, as well as the spirit, principles, and relevant provisions of the CBD. [...] Africa is a multiethnic continent with a profound sense of moral, religious, and cultural values. Its population consists of a diverse array of local communities and peoples whose environments are an integral component of their lifestyle and define their fellowship with others. African nations have a chequered political existence, and have experienced erratic growth and development patterns. They have been influenced significantly by their interactions with Western civilisation, mostly through colonisation. The cultural values of African societies are currently threatened as a result of these interactions, as well as by the process of globalisation with its associated trend toward profit-driven privatisation, science and technology research activities, and corporate monopoly of knowledge through the utilisation of IPRs. Africa’s reaction suggests that these incursions are largely at variance with its cultures and traditions and, on the whole, are adverse to its interests to a large extent. Africans recognise their obligations to an ever integrating world driven by science and technology, international agreements, and the concept of free trade based on the free flow of knowledge and information. However, many of these developments are associated with principles and activities that are detrimental to Africa’s sustainable development. The development of new technologies and the dissemination of innovation is indeed a desirable ongoing process that must be supported by national governments through appropriate incentives.16

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As a consequence of the dominant approach and referents of the African Unity,

the African Model is characterized by distinctive provisions, such as food security, state

sovereignty, community rights, importance of community knowledge and technology,

participation in decision making, regulation of access to biological resources, prior

informed consent, and fair and equitable sharing of benefits.17

1. Food Security: The law recognizes that the major part of Africa’s food supply is

generated by farmers who have made use of traditional practices for the development

of new crops to satisfy the region’s needs. In this respect, “for most communities,

locally produced biological resources provide over 95 percent of their requirement for

survival.”18 Therefore, the AU Model tries to ensure food security through the

conservation of local biodiversity and the preservation and promotion of traditional

knowledge, innovation, technology, and practices.19 As a consequence, the model

“recognizes farmers’ rights as a counter-balance to breeders’ rights as a means for

preserving farmers’ traditional methods of saving and exchanging seed (and where

necessary produce farmer-certified seed).”20 Here we can have a problem because the

line of demarcation between farmers’ rights and breeder’s rights is not completely

clear. Thus, some species developed through traditional practices (by farmers) can be

subject of breeders’ rights protection. Therefore, the creation of farmers’ rights should

not impair or create an unfair legal mechanism in this field. According to Stephen

Brush, the AU Model creates farmers’ rights in for ways:

First, farmers can certify their varieties as intellectual property without meeting the criteria of distinction, uniformity and stability that breeders must meet. (…) Second, farmers are given the right to ‘obtain an equitable share of benefits arising from the use of plants and animal genetic resources. (…) Third, farmers are guaranteed an exemption to Breeders’ Rights restrictions,

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to ‘collectively save, use, multiply and process farm-saved seed of protected varieties’ (…) Fourth, farmers’ varieties are to be certified as being derived from ‘the sustainable use of biological resource.’21

2. State Sovereignty: The AU Model follows article 15.1 of the CBD, which recognizes

“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.”22 As a consequence, the AU Model expressly states in its

preamble that the “State and its people exercise sovereign and inalienable rights over

their biological resources.”23 The recognition of state sovereignty rights can undercut

private rights; therefore, it is a topic that should be adequately managed.

3. Community Rights: The AU Model, considering the strong linkage between

indigenous and local communities and the preservation and conversation of biological

resources and traditional knowledge, recognizes the existence of community rights. In

this respect, Part II defines community rights as “those rights held by local

communities over their biological resources or parts or derivatives thereof, and over

their practices, innovations, knowledge and technologies.”24 In addition, Article 16 of

the AU Model acknowledges and defines the rights of indigenous and local

communities as follows:

The State recognizes the rights of communities over the following:

(i) their biological resources; (ii) the right to collectively benefit from the use of their biological resources; their innovations, practices, knowledge and technologies acquired through generations; (iii) the right to collectively benefit from the utilisation of their innovations, practices, knowledge and technologies; (iv) their rights to use their innovations, practices, knowledge and technologies in the conservation and sustainable use of biological diversity; (v) the exercise of collective rights as legitimate custodians and users of their biological resources;25

According to Ekpere, the major argument to recognize community rights is that:

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The African Model Law is based on the principle that the knowledge, technologies, and biological resources of local communities are the result of tried and tested practices of several past generations. They are held in trust by present generations for future generations, and no one has the right to create exclusive property rights over them. The Model Law formally recognises community rights, acknowledging them as particularly important to protect Africa’s rich and multiethnic societies and cultural and biological heritage.26

According to the AU Model, the recognition of community rights is fundamental

for the effective application of the principles of access and benefit sharing established

by the CBD. As a consequence, indigenous and local communities have the legal

framework to support claims for misappropriation of traditional knowledge and also

to request a fair reward for the use of their knowledge. As a result, this creates an

incentive for native communities to maintain and develop traditional knowledge.

Nevertheless, the creation of community rights can undercut private and individual

rights. This constitute a problem because traditional knowledge can be developed by

individuals27, so the recognition of community rights constitute and obstacle for those

individuals to obtain intellectual property rights over their creations. In addition, the

AU Model allows indigenous and local communities to prohibit access to their

resources and knowledge in cases where that access might threaten their socio-

economic life or their natural or cultural heritage.28 This approach has resulted in the

creation of community intellectual rights, which are established in Article 23 of the

AU Model.

1) The Community Intellectual Rights of the local communities, including traditional professional groups, particularly traditional practioners, shall at all times remain inalienable, and shall be further protected under the mechanism established by this legislation. 2) An item of community innovation, practice, knowledge or technology, or a particular use of a biological or any other natural resource shall be identified, interpreted and ascertained by the local communities concerned themselves under their customary practice and law,

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whether such law is written or not. 3) Non-registration of any community innovations, practices, knowledge or technologies, is not to mean that these are not protected by Community Intellectual Rights. 4) The publication of a written or oral description of a biological resource and its associated knowledge and information, or the presence of these resources in a genebank or any other collection, or its local use, shall not preclude the local community from exercising.29

4. The Importance of Community Knowledge and Technology: The Model Law follows

the CBD provisions regarding the importance of traditional knowledge, practices, and

technology for biodiversity conservation. As a result, this legal framework tries to

establish mechanisms to effectively protect biodiversity and community knowledge

and technology.30

5. Participation in Decision Making: The AU Model uses as parameter Article 8 (j) of

the CBD, which states that “[s]ubject 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.”31 As a result, the AU Model empowers

indigenous and local communities to actively participate in the decision-making

process governing access to genetic resources and traditional knowledge, as well in

the application of the principles of access and benefit-sharing. The AU model

includes some provisions to ensure the participation of native communities in this

field. For instance, since the Preamble the AU Model states that “the State recognizes

the necessity of providing adequate mechanisms for guaranteeing the just, equitable

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and effective participation of its citizens in the protection of their collective and

individual rights and in making decisions which affect its biological and intellectual

resources as well as the activities and benefits derived from their utilization.”32 In

addition, PART I (e) states that one objective of the law is to “ensure the effective

participation of concerned communities, with a particular focus on women, in making

decisions as regards the distribution of benefits which may derive from the use of

their biological resources, knowledge and technologies.”33 Moreover, Article 18

expressly states the obligation to obtain the prior informed consent of local

communities. It reads: “Any access to a biological resource, innovation, practice,

knowledge or technology, shall be subject to the prior informed consent (pic) of the

concerned community or communities ensuring that women fully and equally

participate in decision making.”34

6. Regulation of Access to Biological Resources: The AU Model establishes a system to

regulate access, which is subject to the prior informed consent of the state and local

communities.35 The provisions of this model include the requirements that must be

satisfied by the applicants, the information to be provided by the applicant to the

National Competent Authority, the procedure for granting the access, and the content

of the agreement.36

7. Prior Informed Consent (PIC): Here, the AU Model again follows the CBD, which in

Article 15.5 subordinates access to genetic resources to the prior informed consent of

the provider of the resource.37 Therefore, the AU Model requires the prior informed

consent of the state and the concerned local communities before granting access to

biological resources.38 In addition, the Model establishes that prior informed consent

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of the indigenous or local community it is also necessary for access to traditional

knowledge, technology, and practices.39 In addition, the National Competent

Authority should corroborate with the indigenous or local communities that prior

informed consent has been granted.40 Therefore, “the responsibility to ensure

appropriate consultation rests with the National Competent Authority.”41

8. Fair and Equitable Sharing of Benefits: Following the principles of access and

benefit-sharing established in the CBD, the AU Model recognizes benefit-sharing as a

right of the state and local communities. In this respect, the law defines benefit-

sharing as “the sharing of whatever accrues from the utilization of biological

resources, community knowledge, technologies, innovations or practices.”42 In

addition, Article 12 states that “1. The access permit should be subject to the

payment, made before commencement of collection, of a fee the sum of which will

depend on whether or not the collection is to be used for commercial purposes, and

the number of samples, the area of collecting, the duration of collection and whether

or not the collector is granted exclusive rights. 2. The State and the community or

communities shall be entitled to a share of the earning derived from when any

biological resource and/or knowledge collected generates, directly or indirectly, a

product used in a production process.”43 In addition, the AU Model establishes that

the State shall ensure that at least fifty per cent of benefits44 be shared with the local

community. As a result, this model tries to effectively achieve the principles of

access and benefit-sharing by ensuring that the concerned community that has given

access to their genetic resources and/or traditional knowledge receive fair

compensation for the use of these resources.

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In conclusion, the AU Model Law is a legal framework that tries to provide a guide

for the countries of this region regarding access to genetic resources and traditional

knowledge. This model is consistent with the CBD and emphasizes the importance of a

correct implementation of the principles of access and benefit-sharing. However, the AU

Model presents some problems, including the fact that not all African countries have

adopted it. In addition, it is a protectionist model, and in that sense, it provides a legal

framework that focuses on regulating access to genetic resources and traditional

knowledge without implementing incentives or conditions to accomplish an effective

sharing of benefits. Moreover, it is not a legal framework that encourages bioprospecting

activities or the adequate and sustainable exploitation of genetic resources and traditional

knowledge for the benefit of the whole region. In this respect, Graham Dutfield states

that:

As an awareness-raising exercise, the draft legislation is very important. Nevertheless, it is incomplete since it lacks definitions of the relevant key terms and concepts. Moreover, in its present form, the legislation does not make clear how African countries and their communities can gain substantially from its provisions, and therefore requires further elaboration. The emphasis is very much on controlling access rather than establishing favorable conditions for benefit sharing, conservation and capacity building, and equitable partnerships with the private sector. While controlling access is of course vital, this should be a means to an end rather than the end in itself. One of the main objectives of such legislation should be to enable African countries and communities to capture a greater share of the benefits from the commercial exploitation of their biological resources.45

2. The Andean Community Decisions

The Andean Community is the result of the voluntary joint efforts of Bolivia,

Colombia, Ecuador, and Peru to achieve an effective, balanced, and autonomous

development among the nations of the Andean Region.46 The Andean Community had its

beginning in 1969, when Bolivia, Chile, Colombia, Ecuador, and Peru signed the

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Cartagena Agreement to jointly work on their integration and their economic and social

cooperation to improve the living standards of their people and to reach a balanced and

harmonious level of development. Chile withdrew from it in 1976. Venezuela became a

member on February 13, 1973, and decided to separate from the Andean Community on

April 22, 2006.47 The objectives of the Andean Community are:

1) Promote the Member Countries’ balanced and harmonious development under equitable conditions through integration and economic and social cooperation; 2) Step-up their growth and job creation; Facilitate their participation in the regional integration process, with a view to the gradual formation of a Latin American common market; 3) Reduce the Member Countries’ external vulnerability and improve their position in the international economy; 4) Reinforce subregional solidarity and reduce differences in development among the Member Countries; and 5) Seek the continuing improvement of the living standards of the subregion’s inhabitants.48

The legal treatment of genetic resources and traditional knowledge is a theme of

special importance for Andean countries because of their rich biodiversity as well as the

different ethnic groups and cultures that exist in these nations. Therefore, the wealth and

biodiversity existing in the Andean region are the main reasons to consider this topic a

strategic resource. In this respect, the Andean region contains twenty-five percent of the

world’s biodiversity.49

Tropical Andes constitute an ecoregion considered by international experts to be the ‘epicentre of biodiversity,’ since the area is first in the world in diversity of vascular plants, birds, amphibians and total vertebrates (without considering fish). Additionally, important Andean-Amazonian phitogenic resources, which provide about 35 percent of the world’s agro-industrial and nutritional production, have their origin in the Andean tropics. As if that were not enough, 16.8 percent of birds, 10.5 percent of the amphibians and 10.3 percent of the mammals in the entire world are concentrated in the subregion.50

In addition, the Andean Community considers traditional knowledge a significant

asset for the region.51 The fact that traditional knowledge involves information,

traditional practices, and cultural expressions means that it becomes crucial not only for

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the economic development of Andean countries but also for the preservation and

promotion of the Andean culture. Moreover, the Andean Community recognizes the

indissoluble relationship between traditional knowledge, traditional practices, and the

environment.52 As a consequence, the Andean Community considers traditional

knowledge to be a significant resource that facilitates access to genetic resources as well

as an aid for the scientific identification of the attributes and active principles of genetic

resources.53

It is estimated that 80 percent of the population of developing countries treats illnesses on the basis of its knowledge of medicinal plants; at the same time, the North American pharmacopeia includes 150 drugs which come from plants known to the natives of the Andean region, whose traditional knowledge was vital in their preparation. Likewise, other plants and the knowledge associated with them, such as quinoa, ayahuasca, sangre de drago (...), maca, coloured cotton, etc. are being used by European pharmaceutical industry, with no benefit to the indigenous community.54

This status of the art, plus the fact that the international community was

discussing important agreements related to this topic, such as the CBD and TRIPS,

caused the Andean Community to decide to develop appropriate regulations to adapt

Andean countries to the international context of access to genetic resources, traditional

knowledge, and intellectual property rights. As a result, the Andean Community issued

Decision 391 and Decision 486. Both of these documents follow the principles of access

and benefit-sharing established in the CBD.

a. Decision 391: Common Regime on Access to Genetic Resources

On July 2, 1996, the Andean Community adopted Decision 391 on a Common

Regime on Access to Genetic Resources. Decision 391 constitutes a turning point within

the international, regional, and national legal framework and policy development related

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to access to genetic resources and traditional knowledge.55 Decision 391 was developed

within the access and benefit-sharing principles. Thus, it encompasses a legal framework

oriented to:

a) Establish the conditions for just and equitable participation in the benefits of the access; b) Lay the foundations for the recognition and valuation of the genetic resources and their by-products and of their associated intangible components, especially when native, Afro-American or local communities are involved; c) Promote conservation of the biological diversity and the sustainable use of the biological resources that contain genetic resources; d) Promote the consolidation and development of scientific, technological and technical capacities at the local, national and subregional levels; and e) Strengthen the negotiating capacity of the Member Countries.56

Decision 391 reaches back to 1993, when access and benefit-sharing issues were

discussed within the negotiation process of a regional legal framework for a common

regime on plants breeders’ rights (Decision 345).57 This concern, plus the international

interest in strengthening intellectual property rights, accessing genetic resources, and

protecting traditional knowledge (raised by the TRIPS Agreement and the CBD) caused

the Andean Countries to take seriously their duty to develop a legal system to regulate

these issues. In addition, the existing conflict between biodiversity rich countries and

industrialized countries brought an extra component to the table, economic interests, and

an increasing desire to regulate in favor of specific sectors.

The Andean regime was developed in a context where CBD ABS principles where the main available guidelines to orient national policy and regulatory processes. Comparative law and legal doctrine offered little assistance on the subject. Equally relevant, was the fact that, at the time, tensions between “biodiversity rich” but technologically poor countries and industrialized but “biodiversity poor” nations were probably at their peak. Expectations on high economic benefits and returns associated to bioprospecting and overall inequities in technological and genetic resources flows, the way the intellectual property system operated and the manner in which economic benefits resulting from these flows were distributed between developed and developing countries, also influenced national and regional policies.58

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Another reason to think about a common regime on access to genetic resources

was the fact that Andean countries share the same type of biodiversity;59 therefore, the

species that can be found in these territories are the same or at least similar. The main

goal driving the development of a common regime was to avoid a “price war over mostly

shared resources and thus undermine common interests.”60 In this respect, Joseph Vogel

proposes the creation of a biodiversity cartel to diminish the possible effects of a price

war and maximize the benefits from biodiversity and traditional knowledge. Vogel states

that

The sovereignty of each nation to negotiate access militates any nation capturing a significant benefit and therefore defeats the objectives of the CBD to share benefits and conserve biological diversity. Competition among countries drives the price of access down to the marginal cost of botanical samples – a nominal fee- thereby restoring the “common heritage of mankind” de facto. (…) The role of the economist, practicing the “universal grammar of social science”, is to explain to the delegates of the COP that if one accepts monopoly patents, copyrights, trademarks as legitimate instruments to enable the emergence of a market for artificial information, then one should also accept oligopoly rights over genetic resources to enable the emergence of a market for natural information. Countries of origin should fix a royalty rate and distribute economic rents. Countries with industries that want genetic resources should enforce the terms of the cartel as payment promotes a sustainable supply. Whereas TRIPS is the legal vwhicle to achieve monopolies through patents, copyrights and trademarks, the CBD can become the legal vehicle to achieve an oligopoly over biological diversity.61 Therefore, the Andean Community started working on Decision 391 to promote a

regional mechanism for accessing genetic resources according to the access and benefit-

sharing principles. The major concerns that arose during the beginning of the process

were:

Firstly, whether the regime should address biodiversity conservation and protection measures and only thereafter ABS issues. Secondly, what was the legal status of genetic resources in the region and, therefore, the rights and role of the State. Thirdly, whether the system should focus on strict control of access to and use of genetic resources (and how to achieve this) or rather regulate more flexibly

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an ongoing flow of these resources. Finally, the issue of indigenous peoples rights over their knowledge, innovations and practices related to biodiversity and whether and how would an ABS address it was also a critical discussion point.62

Finally, the Andean Community established Decision 391 on Access to Genetic

Resources, which brought interesting provisions and mechanisms to the table. Thus,

Decision 391 not only recognizes the sovereignty of Member Countries over their

biological resources,63 but it also extends this right to their by-products. Article 5 clearly

states that: “The Member Countries exercise sovereignty over their genetic resources and

their by-products and consequently determine the conditions for access to them, pursuant

to the provisions of this Decision.”64 Therefore, Decision 391 goes far beyond the CBD,

which does not acknowledge a sovereignty right over the derived products. In addition,

this provision can be interpreted as inconsistent with the TRIPS Agreement. In this

respect, Graham Dutfield explains the implications and consequences of this provision:

[...] the Common System proclaims that member countries have sovereign rights over the use and exploitation of their genetic resources and the right to determine conditions of access. However, the Andean Community has gone further than the CBD by extending sovereign rights to the derivatives of these resources. A derivative is defined as a molecule or combination or mixture of natural molecules, including raw extracts of living or dead organisms. This is not the same thing as a synthesized product, which is a substance obtained through an artificial process using genetic information or molecules and which may include semi-processed extracts. Even so, it appears that isolated bio-compounds could become subject to the claims of Andean Community member states even if the compound has been isolated and patented by a company outside the Andean Community region. It is by no means certain that such a measure is TRIPS-compatible.65

In addition, Article 6 determines that “The genetic resources and their by-products

which originated in the Member Countries are goods belonging to or the heritage of the

Nation or of the State in each Member Country, as stipulated in their respective national

legislation. Those resources are inalienable, not subject to prescription and not subject to

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seizure or similar measures, without detriment to the property regimes applicable to the

biological resources that contain those genetic resources, the land on which they are

located or the associated intangible component.” As a consequence, all genetic

resources, derived products, and genetic information contained in these resources are

subordinated by the authority and property of the State. “[...] the ratio legis of this article,

as expressed during Decision 391 drafting, is that basically, the State has and retains

property rights over genetic resources in all circumstances.”66 This fact brings some

consequences, especially in the field of farmers’ rights. For instance,

The state is the exclusive holder of the property rights over the genetic resources. This means that the genetic information contained in domesticated plants and crops bred by farmers and indigenous communities falls under the authority of the state, the individual holders not being allowed to decide about the use made of the genetic information. Farmers and local communities have no rights either to genetic information contained in their varieties, or to the biochemical information contained in, for instance, medicinal plants.67

In addition, it is important to notice that Article 6 differentiates between

biological resources and genetic resources. Thus, genetic resources and biological

resources are subordinated to two different legal regimes. As a consequence, genetic

resources are always under state domain, and no consideration is given to the owner of

the biological resource that contains this genetic information. According to Manuel Ruiz

Muller, this conceptual approach, which provides for unique legal treatment of genetic

resources based on the fact that these are a source of code information, produces some

important consequences, such as the need to elaborate different contracts to be

negotiated, the lack of incentives for the owner, possessor, or administrator of the

biological resources to conserve them,68 the exercise of property rights over genetic

information (because information is a non-rival and non-exclusive69 good that will

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require intellectual property protection), and the difficulty for the State to control every

movement of biological resources (in this respect, the legislation should create incentives

to interested parties to comply with the regulation rather than creating obstacles that

cause them to look for easier options for accessing these resources).70

As a consequence of the legal status of biological and genetic resources, as well

as the recognition of the sovereignty right, the state becomes a key actor in the process of

accessing genetic resources. In effect, Decision 391 follows the dispositions established

in the CBD’s Article 15.1, which states that “[...] the authority to determine access to

genetic resources rests with the national governments and is subject to national

legislation.”71 Therefore, the legislative branch of every nation defines the requirements,

procedures, and conditions that govern access to genetic resources. As a result, the State,

through the Competent National Authority, has absolute control over the property and

management of every issue related to this field. In this respect, Article 50 delineates all

of the attributions that the Competent National Authority has regarding access to genetic

resources, including administrative duties, the negotiation process, the subscription of the

access contract, and the registry.72

The crucial role of the State regarding access to genetic resources, plus the

conception of sovereignty and property rights of the State over these resources, resulted

in a complex model for accessing genetic resources, which is characterized by the

existence of multiple contracts. Manuel Ruiz Muller summarizes the access procedure

contained in Decision 391 in seven steps.

Step 1. Review general minimum conditions for access (article 17) to be included in application and / or access contract. Conditions could include: terms of transfer of materials to third parties (see final paragraph of Section 2.3 above), submission of research results, support to conservation and sustainable use of

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biodiversity research, participation of Member State nationals in research activities, among others.

Step 2. Submit an access application to the national competent authority (article 26).

Step 3. Conclude an accessory contract (between applicant and ex situ conservation centre; owner or person in possession of land where biological resource is located; owner or person in possession of the biological resource or the national support institution) (article 41), and / or an accessory contract (or Annex) between applicant and provider of the intangible component (knowledge, whether from an indigenous community or not) (article 35).

Step 4. Access contract is concluded between the National Competent Authority and the applicant seeking access. All other contracts are subject to the results of the negotiations of the access contract (article 32). The State will take into account the interests of the providers of the biological resources and the intangible component (article 34). All accessory contracts will only enter into effect once the access contract has been signed (article 42).

Access by research and ex situ centers

Step 5. If bioprospecting is to be carried out by universities or recognized research institutions and researchers and they involve multiple access activities, a framework access agreement must be concluded with the National Competent Authority (article 36).

Step 6. If ex situ centers or other institutions seek to carry out access related activities they must conclude an access contract with the National Competent Authority. The National Competent Authority may conclude access contracts with third parties who seek to access resources deposited in these centers of which Member States are countries of origin (article 37).

Step 7. The National Competent Authority may conclude deposit, administration and intermediation contracts with universities or recognized research institutions and researchers (Fifth Complementary Disposition).73

The procedure established by Decision 391 is characterized by a complex

contractual procedure. In this respect, a contractual negotiation process should be applied

to all bioprospecting activities. In addition, Decision 391 contemplates the existence of

ancillary and accessory contracts for access to genetic resources and traditional

knowledge (See Step 3). These provisions require the applicant to subscribe layers of

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contracts with a variety of stake holders who are situated in different locations and who

have different interests. Moreover, the subscription of these accessory contracts does not

guarantee access to genetic resources and traditional knowledge because the last

negotiation and final authorization is conditioned upon the procedure and the will of the

National Competent Authority. Therefore, this contractual approach and the dominant

role of the State can increase costs and time, as well as constituting an obstacle to

accessing genetic resources and traditional knowledge. As a result, we have to question if

this complex process can facilitate access or on the contrary it can become a legal barrier

for accessing to genetic resources and traditional knowledge.

Decision 391 is also a binding legal framework that creates an evident linkage

between access to genetic resources and the Intellectual Property Rights system.74

Decision 391 establishes two important provisions within this context,

The Second Complementary Disposition of Decision 391 establishes that

The Member Countries shall not acknowledge rights, including intellectual property rights, over genetic resources, by-products or synthesized products and associated intangible components, that were obtained or developed through an access activity that does not comply with the provisions of this Decision. Furthermore, the Member Country affected may request nullification and bring such actions as are appropriate in countries that have conferred rights or granted protective title documents.

The Third Complementary Disposition establishes that The Competent National Offices on Intellectual Property shall require the

applicant to give the registration number of the access contract and supply a copy of it as a prerequisite for granting the respective right, when they are certain or there are reasonable indications that the products or processes whose protection is being requested have been obtained or developed on the basis of genetic resources or their by-products which originated in one of the Member Countries [...].

The main objective of these two provisions is to guarantee the rights and interests

of Member Countries as countries of origin.75 In addition, because these articles

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subordinate the grant of intellectual property rights to compliance with the provisions and

access procedures established in Decision 391, they also constitute a safeguard for the

rights and interests of the suppliers of genetic resources and traditional knowledge.

Consequently, these legal provisions try to avoid misappropriation or unfair use of

genetic resources and traditional knowledge. These provisions also constituted a referent

for the development of the Common Intellectual Property Regime contained in Decision

486.

Finally, but not least important, is the treatment of traditional knowledge within

Decision 391.76 Decision 391 acknowledges the importance of traditional knowledge and

recognizes the strong linkage existing between biological resources and indigenous,

Afro-American, and local communities. For instance, in the Preamble of Decision 391, it

is expressly declared that “A close interdependence exists between the native, Afro-

American and local communities and the biological resources that should be reinforced,

in keeping with the conservation of the biological diversity and the economic and social

development of those communities and of the Member Countries”77

Furthermore, Article 7 of Decision 391 states that “the Member Countries, in

keeping with this Decision and their complementary national legislation, recognize and

value the rights and the authority of the native, Afro-American and local communities to

decide about their know-how, innovations and traditional practices associated with

genetic resources and their by-products.” This provision gives the traditional knowledge

holder the right to control access to the information, innovations, and traditional practices

developed for centuries by these communities.

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Therefore, this article represents an important step within the legal framework of

traditional knowledge protection because it empowers native and local communities to

determine the conditions and terms for the use of traditional knowledge by third parties.

In addition, this provision extends the rights of native and local communities, because it

not only allows them to decide about the traditional knowledge associated with their

genetic resources, but it also gives them agency over the resulting by-products. This

element constitutes a legal support for native and local communities who may benefit

from legitimate and equitable compensation for the use of their knowledge in products

derived from genetic resources.

Decision 391 introduces a new term, “intangible component.” According to the

definition provided by the Decision, the intangible component includes “all know-how,

innovation or individual or collective practice, with a real or potential value, that is

associated with the genetic resource, its by-products or the biological resource that

contains them, whether or not protected by intellectual property regimes.” This broad

concept allows country members to incorporate and regulate non-protected knowledge

that could be understood as a part of the public domain. In this respect, Graham Dutfield

states:

A legitimate objection to the intangible component concept is that it removes non-IPR-protected knowledge from the public domain. It could be argued that upholding rather than undermining the public domain may be in the better long-term interests of society as a whole. On the other hand, the concept may provide legal support to indigenous peoples and local communities contesting misappropriation of their knowledge and negotiating know-how agreements with companies.78

As Dutfield says, Decision 391 establishes legal means to enable indigenous

communities to negotiate the equitably benefit from the use of their knowledge as well as

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having a legal fundament to contest misappropriation. As a result, while regulating the

access contract, Decision 391 expressly determines the need to look for the rights and

interests of the providers of genetic resources and traditional knowledge. Thus, Article

34 states that “The access contract shall bear in mind the rights and interests of the

suppliers of genetic resources and their by-products, the biological resources that contain

them and the intangible component as applicable, in accordance with the corresponding

contracts.”79

Furthermore, Article 3580 sets forth the principles of access and benefit-sharing.

Through this provision, indigenous peoples and local communities allowing access to

genetic resources with an intangible component must be rewarded through an equitable

and fair remuneration. Moreover, the provision stipulates that an Annex containing the

fair and equitable distribution of profits must be signed by the applicant, the traditional

knowledge holder, and the National Competent Authority. Finally, the failure to

subscribe the annex in the way established by Decision 391 can result in the rescission

and nullification of the access contract. Therefore, according to Decision 391,

indigenous and local communities have the right to participate in the decisions regarding

their traditional knowledge, as well as being equitably benefitted by the profits obtained

from the use of their intangible component.

In conclusion, despite the complex system established in Decision 391 for access to

genetic resources, it is important to notice that without any doubt, this system can be

cataloged as a pioneer legal system for the application of the principles of access and

benefit-sharing stated in the CBD. Therefore, Decision 391 is “a very important

milestone on the regional and international level, as this was the first regional and global

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juridical instrument which set out specific regulations and principles on how and under

what conditions it is possible to access and use components of the biological and genetic

patrimony of the sub-region.”81 Nevertheless, it would be necessary to evaluate if this

regulation constitutes an effective mechanisms to rule access to traditional knowledge

and genetic resources or if it is just an unsuccessful intent.

Decision 391 facilitated discussion among the Andean Countries on important

topics for the region, such as access to genetic resources and traditional knowledge.

Nevertheless, only a few countries have developed a consistent legal framework

regarding biodiversity, access to genetic resources, traditional knowledge, and intellectual

property rights. Therefore, it is fundamental that Andean Countries realize the relevance

of these issues and develop policies and regulatory systems.

In order to develop an effective legal framework, it is crucial to note that one of the

objectives of the CBD is to facilitate access to genetic resources. Therefore, since

Decision 391 is consistent with the CBD, it is important that domestic regulations create

incentives for accessing genetic resources. The issue here is that the dominant role of the

State in Decision 391 can create obstacles and discourage bioprospecting activities.

Consequently, Andean Countries should develop domestic regulations that facilitate the

development of bioprospecting projects and access to genetic resources instead of

creating obstructions that can cease the growth of a valuable market for the region.

b. Decision 486: Common Intellectual Property Regime

Decision 486 was adopted by the Andean Community in September 2000 and

entered into force the following December. The main objective of Decision 486 is to

establish a Common Intellectual Property Regime for the region that reconciles the

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treatment of genetic resources and traditional knowledge as defined by the CBD with the

international legal regime of IPR as established in the TRIPS Agreement. Decision 48682

brought interesting provisions to the table that established an operable link between the

application of TRIPS and the CBD. For this reason, it is recognized as an innovative

system that lays the future pathway for mega-diverse countries. This decision is one of

the most innovative mechanisms in place to ensure the application and conciliation of the

CBD and the TRIPS agreement. Manuel Ruiz Muller states that Decision 487

[...] contains a number of extremely interesting elements that allow us to envisage a future where megadiverse countries that traditionally provide biological material -consequently used in inventions and protected by patents - could share the benefits arising from access to and the use of this material. It also offers a possibility for these countries to exercise greater control on the use of this material by pharmaceutical, biotechnology and agro-industrial companies. [...] The new Andean Community regime on industrial property contains a series of provisions directly related to biological diversity and the protection of indigenous communities’ traditional knowledge, thus establishing links between the CBD and a regional industrial property regime, which only a short time ago were considered extremely complicated and close to unviable by international negotiators and political circles.83

As a consequence, the Andean Community, through Decision 486, established a

unique regime that incorporates intellectual property rights to the field of access to

genetic resources and traditional knowledge. One of the major motivations to become the

leader in this field was the fact that Andean Countries are considered some of the most

biodiverse countries in the world.84 Recognizing the importance of protecting intellectual

property rights and respecting the principles of access and benefit-sharing, Decision 486

states in Article 3:85

Article 3: The Member Countries shall ensure that the protection granted to intellectual property elements shall be accorded while safeguarding and respecting their biological and genetic heritage, together with the traditional knowledge of their indigenous, African American, or local communities. As a result, the granting of patents on inventions that have been developed on the basis of material obtained

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from that heritage or that knowledge shall be subordinated to the acquisition of that material in accordance with international, Andean Community, and national law.

This provision is intended to protect the Andean heritage of genetic and traditional

knowledge. As a result, any intellectual property right that can be granted over biological

resources and traditional knowledge cannot harm the genetic and biological heritage of

Member Countries or the traditional knowledge, practices, or cultural expressions of their

native communities. In addition, it subordinates the grant of any intellectual property

right to the accomplishment of the provisions stated in Decision 391.

Consequently, intellectual property rights over biological resources and traditional

knowledge can be granted only if the applicant has satisfied the requirements established

in Decision 391. This means that the existence of an agreement that contains the prior

consent and the equitable benefits that the provider of resources is going to obtain

becomes a condition for the issuance of intellectual property rights. In that way, this

provision is intended to ensure that Country Members receive fair compensation as the

countries of origin, and that the indigenous and local communities will equitably share

the benefits derived from the use of their traditional knowledge.

In this respect, this provision resembles the disclosure of origin requirement,86 with

the difference that this provision subordinates the grant of an intellectual property right to

the obligation not only to disclose the origin, but also to subscribe to a contract that

determines fair and equitable conditions regarding access, benefit, and sharing.

Therefore, this article is stronger than the disclosure requirement. Decision 486 does not

merely request information about the genetic resource or traditional knowledge utilized in

the inventive process; it requires that the contractual obligations of benefit sharing have

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been defined in contracts that contain the conditions of the access. These contracts must

be attached during the filing process.

As a consequence, at the moment of the filing of a patent application, the applicant

must attach the following:

Article 26:87 Applications for patents shall be filed with the competent national office and shall contain:

h) a copy of the contract for access, if the products or processes for which a patent application is being filed were obtained or developed from genetic resources or byproducts originating in one of the Member Countries;

i) if applicable, a copy of the document that certifies the license or authorization to use the traditional knowledge of indigenous, African American, or local communities in the Member Countries where the products or processes whose protection is being requested was obtained or developed on the basis of the knowledge originating in any one of the Member Countries, pursuant to the provisions of Decision 391 and its effective amendments and regulations;

Consequently, the grant of a patent right is subject to the consent of the traditional

knowledge holder and the existence of the access agreement. As a result, this provision

is intended to effectuate the benefit and sharing mechanism stated in the CBD. It is

important to note that Decision 486 includes mechanisms to make these provisions

enforceable. The provision contained in Article 75 contemplates the possibility of

nullifying any patent that has not completed the requirements stated in article 26.

Article 75:88 The competent national authority may, either ex officio or at the request of a party, and at any time, declare a patent null and void, where: [...] (g) when pertinent, the products or processes in respect of which the patent is being filed have been obtained and developed on the basis of genetic resources or their byproducts originating in one of the Member Countries, if the applicant failed to submit a copy of the contract for access to that genetic material; (h) when pertinent, the products or processes whose protection is being requested have been obtained or developed on the basis of traditional knowledge belonging to indigenous, African American, or local communities in the Member Countries, if the applicant has failed to submit a copy of the document certifying

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the existence of a license or authorization for use of that knowledge originating in any one of the Member Countries; [...]

Nevertheless, these provisions can cause some problems, such as incompatibility

with the TRIPS Agreement. Dr. Nuno Pires de Carvalho says that the disclosure

requirement is a formal requisite that does not concern the nature of the invention.

Therefore, if one adds the requirement as a condition during the process of obtaining a

patent, one is inconsistent with the TRIPS Agreement. If the requirement is implemented

through measures that are inconsistent to the TRIPS Agreement, the CBD will also be

violated.89

The solution that Dr. Carvalho proposes is a new approach to the requirement: the

unclean hands doctrine. This proposal states that the requirement should not be

considered a condition of patentability, but that the unclean hands doctrine can be used to

suspend the patent until its owner cleans his/her hands through benefit-sharing.90 As a

result, the same interpretation and solution can be applied to the provisions of Decision

486. However, another option is that this requirement can be interpreted as an

administrative condition that is not trying to interfere in the nature of the invention.

Nevertheless, no legal claims to this respect have yet been raised, and this issue would be

decided by the WTO dispute settlement process.

Nevertheless, it is important to recognize that the inclusion of this provision

requiring patent applicants to disclose the origin of the genetic resource and traditional

knowledge associated is without any doubt an important step of the application for access

and benefit-sharing principles. In addition, for some experts, this requirement constitutes

an incentive for biodiversity conservation and traditional knowledge preservation and

promotion. Discussing Decision 486, Caillaux and Clark make the following point:

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The Andean Community Decision 486 on a Common regime on Industrial Property, has made great headway by requiring patent applicants to disclose if any traditional knowledge forms part of the claimed invention. Patent applicants have the burden of providing evidence of prior informed consent and equitable benefit-sharing with source communities and countries when they incorporate traditional knowledge into a claimed invention. It is essential to require that a patent applicant disclose traditional knowledge used in an invention, forming part of the state of the art or prior art, in order to promote the progress of science on both small and on a larger scale. Requiring disclosure of traditional knowledge in a patent invention would create an incentive for the maintenance of traditional knowledge systems on a small scale by protecting the development and ownership of traditional practices. On a larger scale, traditional knowledge systems would be supported by the continued maintenance of biodiversity in-situ by indigenous communities, and by the elevation and promotion of the status of traditional knowledge itself.91

Moreover, it is important to notice that Decision 486 has been drafted in

compliance with the TRIPS Agreement. In this respect, Article 1492 states the patentable

subject matter and reads: “The Member Countries shall grant patents for inventions,

whether goods or processes, in all areas of technology, that are new, involve an inventive

step, and are industrially applicable.” This provision gives a broad subject matter of

patentability, and the inclusion of the phrase “in all areas of technology” makes it

possible that biotechnology inventions can be subject to patent protection. Nonetheless,

Decision 486 makes use of TRIPS flexibilities and exclusions from patentability. In this

respect:

Article 15.- The following shall not be considered inventions: [...] b) Any living thing, either complete or partial, as found in nature, natural biological processes, and biological material, as existing in nature, or able to be separated, including the genome or germ plasm of any living thing; [...] Article 20.- The following shall not be patentable: a) inventions, the prevention of the commercial exploitation within the territory of the respective Member Country of the commercial exploitation is necessary to protect public order or morality, provided that such exclusion is not merely because the exploitation is prohibited or regulated by a legal or administrative provision; b) inventions, when the prevention of the commercial exploitation within the respective Member Country of the commercial exploitation is necessary to protect human or animal

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life or health or to avoid serious prejudice to plant life and the environment, provided that such exclusion is not made merely because the exploitation is prohibited or regulated by a legal or administrative provision; c) plants, animals, and essentially biological processes for the production of plants or animals other than non-biological or microbiological processes; d) diagnostic, therapeutic, and surgical methods for the treatment of humans or animals.

These provisions limit the scope of patentability. Therefore, even though it is

possible to obtain patent protection over any invention in any all fields of technology; it

is also true that inventions looking for this type of protection should not be within the

ones established in Articles 15 and 20. Analyzing Article 15, S. Biber and Kemm states

that “[i]t narrows the possible scope of patents in excluding not only life forms, in whole

or in part, as they are found in nature, natural biological processes and biological material

which exist in nature, but also material that can be isolated from any life form, including

genomes or germplasm.”93 Therefore, the possibility to obtain a patent over an isolated

and purified gene is not possible under Decision 486. Although the isolation and

purification of genes involve the use of a non-natural mechanism and the participation of

men, it is not enough for being considered as an invention itself under the Andean

Regime.

In conclusion, Decision 486 constitutes an innovative legal system that tries to

reconcile the provisions contained in the CBD and the intellectual property system

defined by the TRIPS Agreement. One important element of Decision 486 is the way

that it creates synergy between the legal framework that regulates access to genetic

resources and traditional knowledge and the one that orders the IPR system. Decision

486 incorporated remarkable innovative mechanisms in order to ensure the effective

application of the principles of access and benefit-sharing, not only for the Country

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Members (as the countries of origin), but also for the native and local communities (as

traditional knowledge holders).

Nevertheless, the territorial character of intellectual property rights makes this

mechanism mandatory only to the countries of the Andean Community, so there is no

international recognition of these provisions. Therefore, the international community

does not count on a binding legal framework that can make an effective linkage between

access to genetic resources, traditional knowledge, and intellectual property rights.

Moreover, it is important that Andean countries define if they are going to incorporate the

disclosure requirement as a condition of patentability, because in some extend this

provision can bring some inconsistencies with TRIPS. It is also crucial that the Andean

Countries work on their domestic legislation in order to make these provisions effective

and operable.

3. Peruvian Legislation

Peru has developed one of the most advanced legal frameworks for access to

genetic resources and traditional knowledge protection. Peru has elaborated legislative

and regulatory mechanisms in order to incorporate and implement the CBD, the TRIPs

Agreement, and the Andean framework for access to genetic resources and traditional

knowledge. Therefore, the laws that regulate these fields are contained in the following

regulation: 1. The Law on the Conservation and Sustainable Use of Biological

Diversity94; 2. The Regulation on Access to Genetic Resources95; and 3. The Law

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introducing a Protection Regime for the Collective Knowledge of Indigenous People

derived from Biological Resources (Law 27811).96

The Law on the Conservation and Sustainable Use of Biological Diversity focuses

on the conservation of biological diversity through the application of the principles

established in the CBD. Thus, the CBD prevails for the application of this law.97 As a

consequence, this law is founded on the sovereignty right of the State over its natural

resources.98 This is also supported by Article 66 of the Constitution of the Republic of

Peru, which states that “[a]ll natural resources, renewable and nonrenewable, are the

nation's patrimony. The government enjoys the sovereign right to their development.

Organic laws define the terms for their use and concession to private parties. Such

concessions grant real rights to the holders subject to such laws.”99 Furthermore, the law

recognizes the value of traditional knowledge and gives traditional knowledge holders the

right to participate and be consulted in activities that involve the use of this resource.100

In addition, the Law on the Conservation and Sustainable Use of Biological

Diversity follows the approach adopted by the Andean Decision 391 regarding the

proprietary treatment of biological and genetic resources. This means that the State

maintains its domain and control over genetic resources without consideration for who

has the proprietary right over the biological resource that contains this genetic

information.101 Moreover, according to Article 29, access to genetic resources can be

limited or denied for reasons such as the following:

a. Endemism, rare or endangered species subspecies, varieties or races ;b. Conditions of vulnerability or fragility in the structure or function of ecosystems that could be aggravated by access activities; c. Adverse effects of access activity on human health or essential elements of the cultural identity of local communities (pueblos); d. environmental impacts relating to access activities that are difficult to control or undesirable relating to species and ecosystems; e.

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Danger of genetic erosion caused by access activities; f. Regulations on biosafety; or, g. strat.102

The Regulation on Access to Genetic Resources is a relatively new legal

framework that became effective in 2008 and was ratified by a Supreme Decree of the

Environmental Ministry in 2009. The main objective of this regulation is to make

operable the provisions stated in the Andean Decision 391.103 Thus, the regulation is

intended to a) establish the conditions of access according to the principles of benefit-

sharing, b) establish the basis for the recognition and valuation of genetic resources and

the intangible components associated, especially when these are held by indigenous

communities, c) promote the conservation of biological diversity and the sustainable use

of biological resources that contain genetic resources, d) promote the development of

capacity building within the scientific, technological, and technical fields, and e) strength

the country’s negotiation power.104

The Regulation on Access to Genetic Resources establishes the competent

authorities, the minimum conditions for access, the types of contracts, the conditions of

compensation, and the general procedures for access to genetic resources and traditional

knowledge. With regard to traditional knowledge, the regulation expressly determines

that the protection of traditional knowledge and the rights of traditional knowledge

holders will be regulated by law, introducing a Protection Regime for the Collective

Knowledge of Indigenous People derived from Biological Resources.105 Furthermore,

with regard to access to genetic resources, the regulation establishes that the main

authority will be the Environmental Ministry. This entity must develop the national

policy for access to genetic resources, the procedures and parameters that regulate access,

the registry of access contracts, and the management of all issues related to this field.106

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Moreover, the regulation determines the existence of management and execution

authorities, which are in charge of the subscription of access contracts; the evaluation,

admission, or rejection of the access applications; the negotiation process; and

supervision and control of the conditions of access.107 In other words, these authorities

have to manage all the procedures that guarantee access to genetic resources in

accordance with the principles of benefit-sharing. The authorities are defined according

to the nature of the genetic resources that are the object of the access contract.108

The access contract will be established between the management and execution

authority and the applicant. This contract should follow the parameters established in the

CBD and the Bonn guidelines. In addition, the regulation also contemplates the existence

of accessory contracts between the applicant and the resource provider that should

contain the parties’ prior informed consent, the conditions of access, and the terms of

benefit-sharing.109 The regulation includes the minimum conditions that the access

contract must contain. Most of them are focused on technology transfer, capacity

building, access and benefit-sharing, and property issues.110

The regulation also states the prohibition on claiming property rights over the

material per se or its derived products.111 The prohibition on claiming property rights

over derived products can be understood as inconsistent with the TRIPs Agreement,

because it constitutes a restraint on the lawful acquisition of intellectual property rights.

However, the same article recognizes the existence of intellectual property rights over

process or products resulting from the utilization of genetic resources or their derivates

and the intangible component.112 Therefore, these provisions are inconsistent and

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confusing. It would be important to determine the intention of the legislator regarding

this provision, in order to clarify the terms.

Finally, the Law introducing a Protection Regime for the Collective Knowledge

of Indigenous People derived from Biological Resources (Law 27811)113 is considered to

be the first comprehensive legal framework that addresses the protection of traditional

knowledge associated with biodiversity.114 Peruvian Law 27811, issued on August 10,

2002, constitutes “Peru’s first effort to implement Article 8 (j) of the CBD and article 63

of the national Industrial Property Law of 1996.”115 Law 27811 implements a sui generis

system for the protection of indigenous collective knowledge related to biological

diversity. It provides indigenous and local communities with rights to prevent

unauthorized use as well as the legal ability to claim an equitable share of the benefits

obtained from the use of their knowledge.116 In addition, Law 27811 gives indigenous

communities the right to control the use of and access to their traditional knowledge.

Article 1 states that “The Peruvian State recognizes the rights and power of indigenous

peoples and communities to dispose of their collective knowledge as they see fit.”117

The scope of protection established by Law 27811 contemplates the protection of

the collective knowledge of indigenous peoples that is connected with biological

resources. According to the law, collective knowledge is “the accumulated,

transgenerational knowledge evolved by indigenous peoples and communities concerning

the properties, uses and characteristics of biological diversity.”118 This means that

knowledge generated by individuals that are part of the community cannot be protected

under this sui generis system. This is reinforced by a provision contained on Article 10,

which states that knowledge “protected under this regime shall be that which belongs to

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an indigenous people and not to particular individuals forming part of that people

[...]”119This approach can raise complex issues because traditional knowledge can be

developed by the whole community or by individual members.120 In addition, depending

on the complexity of the knowledge, it can be held and known by the whole community

or simply by a determinate member,121 a fact that can cause problems with the authorship

and the system of protection. Therefore, this article creates a gap that can leave

important traditional knowledge unprotected.

The main objectives of Law 27811 are determined by Article 5, which reads as

follows:

Article 5.- Objectives of the regime122 The following shall be the objectives of this regime:(a) To promote respect for and the protection, preservation, wider application and development of the collective knowledge of indigenous peoples; (b) To promote the fair and equitable distribution of the benefits derived from the use of that collective knowledge; (c) To promote the use of the knowledge for the benefit of the indigenous peoples and mankind in general; (d) To ensure that the use of the knowledge takes place with the prior informed consent of the indigenous peoples; (e) To promote the strengthening and development of the potential of the indigenous peoples and of the machinery traditionally used by them to share and distribute collectively generated benefits under the terms of this regime; (f) To avoid situations where patents are granted for inventions made or developed on the basis of collective knowledge of the indigenous peoples of Peru without any account being taken of that knowledge as prior art in the examination of the novelty and inventiveness of the said inventions.

As we can appreciate, the principal objective of Law 27811 is the protection,

preservation, and promotion of collective traditional knowledge through the application

of the principles of access and benefit-sharing and prior informed consent. Therefore,

Law 27811 has established diverse types of mechanisms to secure the protection of

collective traditional knowledge. The law uses a “system to control access to the

collective knowledge, a system of registers of collective knowledge, and an additional

funding system, which is to contribute to the integral development of the indigenous

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people.”123 In order to make these systems operable and effective, Law 27811 introduces

the use of different instruments, such as “contracts, trade secrets, registers, measures to

prevent unfair competition, and bio-prospecting agreements, although this might require

an adjustment of their traditional uses to include these new areas of protection.”124

According to Law 27811, access to collective traditional knowledge is subject to

the prior informed consent of the representative organizations of the indigenous

communities that possess collective knowledge.125 The fact that the representative

organizations give the prior informed consent helps to facilitate access to collective

knowledge because the applicant does not have to negotiate with every single community

that shares the knowledge. Instead, the law establishes that the representative

organization must “inform the greatest possible number of indigenous peoples possessing

the knowledge that it is engaging in negotiations and shall take due account of their

interests and concerns, in particular those connected with their spiritual values or

religious beliefs.”126 Therefore, this provision effectively responds to the characteristics

of Peru and the Andean countries, where indigenous communities share knowledge.

Moreover, Law 27811 promotes mutually agreed terms by establishing the

requirement of signing a license in situations where the parties intend to utilize the

collective knowledge for commercial or industrial applications. Thus, the terms

contained in this contract should ensure an equitable sharing of the benefits obtained

from the use of collective knowledge.127 The license should contain at least the minimum

conditions enumerated in Article 27.

These include, inter alia, a minimum compensation in favor of indigenous communities (5 percent of gross sales of commercial products derived from collective knowledge), as well as providing information on research results and assisting in the strengthening of indigenous communities’ organizations.

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Monetary benefits will go to the National Fund for the Development of Indigenous Peoples (article 37). All indigenous communities will have the right to access the Fund’s financial resources.128

Furthermore, Law 27811 establishes a register system. The law created three

types of registers: (a) Public National Register of Collective Knowledge of Indigenous

Peoples, (b) Confidential National Register of Collective Knowledge of Indigenous

Peoples, and (c) Local Registers of Collective Knowledge of Indigenous Peoples.129 The

main purposes of the register system are “(a) to preserve and safeguard the collective

knowledge of indigenous peoples and their rights therein; (b) to provide INDECOPI with

such information as enables it to defend the interests of indigenous peoples where their

collective knowledge is concerned.”130 The nature of the collective knowledge

determines which register will list it. Thus, the public national register is managed by the

National Intellectual Property Institute (INDECOPI) and compiles all the collective

knowledge existing in the public domain.131 The confidential register may be used for

any purpose defined by indigenous people.132 The local register will be developed and

managed by the indigenous peoples themselves. This constitutes a defensive instrument

intended to prevent exploitation of this knowledge by third parties.

In addition, Law 27811 states the rights of indigenous peoples regarding their

collective knowledge. Thus, Article 42 states that “Indigenous peoples possessing

collective knowledge shall be protected against the disclosure, acquisition or use of that

collective knowledge without their consent and in an improper manner provided that the

collective knowledge is not in the public domain. It shall likewise be protected against

unauthorized disclosure where a third party has legitimately had access to collective

knowledge covered by a safeguard clause.”133 As a consequence, the law creates an

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unfair competition procedure intended to defend indigenous people against the

misappropriation or unauthorized use of their collective knowledge. Consequently, it

establishes their ability to bring infringement actions134 against third parties who violates

the rights contained in Article 42.

In conclusion, the Peruvian legal framework presents an interesting model for the

treatment and protection of genetic resources and traditional knowledge. It is interesting

to see how the Peruvian law has developed three different legal norms oriented to

specifically treat important topics such as biodiversity conservation and access to genetic

resources and traditional knowledge. In addition, it is important to note the effort that the

Peruvian legislation makes in order to follow the provisions established in the CBD, the

TRIPs Agreement, and the Andean Regime. The Peruvian model gives an aggregate

value in the sense that it tries to reconcile the different systems and provide an operable

approach for the management of these topics. In addition, Law 27811 is a good proposal

for the protection of traditional knowledge in the sense that it incorporates different

instruments as contracts, registers, and unfair competition rules in order to achieve the

protection and preservation of traditional knowledge.

Nevertheless, despite the positive advances of this legal framework, it still

presents significant problems. For instance, the regulation of access to genetic resources

contemplates the existence of many contracts on many levels. This undoubtedly becomes

a mechanism to block instead of facilitate access. In addition, it seems that the legal

framework in general develops interesting mechanisms without considering the reality of

the national and indigenous communities involved. As a result, many of the provisions

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are difficult to apply because of the huge gap existing between the law and the national

context.

4. CONCLUSION

Despite the fact that these legal systems present interesting and innovative

proposals for the management of genetic resources and traditional knowledge, they still

have foundational problems. Apparently, developing countries have misunderstood the

nature of the sovereignty rights over natural resources established in the CBD. These

countries have used these rights as a legal foundation to create protectionist systems that

discourage bioprospecting activities. As a result, instead of facilitating access to genetic

resources and traditional knowledge, they have created complex mechanisms of access

that result in barriers to development.

These legal frameworks reflect the concerns and desires of developing countries

regarding access to genetic resources and traditional knowledge. Unfortunately, they did

not see the other side of the negotiation, which led them to develop legal provisions

focused on securing economic and non-economic benefits solely for their own country

and national stakeholders. Therefore, bioprospectors and other applicants do not have

enough incentive to initiate a negotiation to obtain access to genetic resources and


In addition, the legal mechanisms that these frameworks contain do not consider

the social, cultural, economic, and educational contexts of their countries. As a result,

these legal systems create a process that requires the active participation of public

institutions, indigenous communities, and other stakeholders. However, they do not

consider the fact that these stakeholders are not prepared to deal with these types of

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negotiations. For instance, “indigenous peoples often justifiably claim they face

difficulties in understanding and effectively making use of IK policies and laws. These

are often too complex for effective use by indigenous peoples and involve high

'transaction costs', which act as an overall disincentive.”135

Finally, the fact that most analyzed legislation creates sui generis systems of

protection constitutes a problem per se because these kinds of systems work with

jurisdictional and territorial limitations. As a result, the legal rights and mechanisms

created by these frameworks are binding only for the countries that adopt the system.

Therefore, the legal protection is still limited and does not constitute an efficient

protection that can be applied globally.

1 The Convention on Biological Diversity, available at http://www.cbd.int/convention/convention.shtml 2 Final Act Embodying the Results of the Uruguay Round of the Multilateral Negotiations, April 15, 1994, LEGAL INSTRUMENTS—RESULTS OF THE URUGUAY ROUND vol. 1 (1994), 33 I.L.M. 1125 (1994) [hereinafter Final Act]; Agreement on Trade–Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994 [hereinafter WTO Agreement], Annex 1C, LEGAL INSTRUMENTS—RESULTS OF THE URUGUAY ROUND vol. 31; 33 I.L.M. 81 (1994) [hereinafter TRIPS Agreement]. 3 International Convention for the Protection of New Varieties of Plants of December 2, 1961, as Revised at Geneva on November 10, 1972, on October 23, 1978 and on March 19, 1991, available at http://www.upov.int/en/publications/conventions/1991/act1991.htm 4 The FAO International Treaty on Plant Genetic Resources for Food and Agriculture (Nov.3, 2001), available at ftp://ftp.fao.org/ag/cgrfa/it/ITPGRe.pdf 5 African Union: http://www.africa-union.org/rule_prot/exec-council.pdf / Andean Community: http://www.comunidadandina.org/ingles/normativa/ande_trie2.htm 6 OAU, African Model Legislation for the Protection of the Rights of Local Communities, Farmers and Breeders, and for the Regulation of Access to Biological Resources, Algeria, 2000, available at http://www.opbw.org/nat_imp/model_laws/oau-model-law.pdf 7 S.Biber-Klemm & T. Cottier, Right to Plant Genetic Resources And Traditional Knowledge Basic Issues and Perspectives 82, (S.Biber-Klemm & T. Cottier eds., CABI, UK, 2006). 8 J.A. Ekpere, African Model Law on the Protection of the Rights of Local Communities, Farmers and Breeders, and for the Regulation of Access to Biological Resources, in African Perspectives on Genetic

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Resources: A Handbook on Laws, Policies, and Institutions Governing Access and Benefit Sharing 276, (Kent Nnadozie,Robert Lettington, Carl Bruch, Susan Bass & Sarah King, eds., Published by AU and Environmental Law Institute, 2003), available at www.elistore.org 9 Id. at 275-78. 10 Id. at 278. 11 See OAU Model, supra note 5, at Part I Objectives. 12 Id. 13 Id. 14 Kolawole O. Adeniji, The African Union and the African Model Law 4, http://www.eli.org/pdf/africa/adeniji.Pdf 15 See J.A. Ekpere, supra note 7, at 278. 16 Id. at 282. 17 Id. at 280. 18 Id. 19 Id.; See also Kolawole O. Adeniji, supra note 13, at 6; See also OAU Model, supra note 5, at Part I Objectives, Article 15, Article 26 and Article 33. 20 Id. 21 Stephen B. Brush, The Demise of Common Heritage and Protection for Traditional Agricultural Knowledge, in Biodiversity and the Law 310, (Charles McManis ed., Earthscan, USA, 2007). 22 See Convention on Biological Diversity, supra note 1, at Article 15 23 See OAU Model, supra note 6, at Preamble. 24 Id. at Part II 25 Id. at Article 16 26 See J.A. Ekpere, supra note 8, at 280. 27 See Chapter II. 28 See OAU Model, supra note 6, at Article 20. 29 Id. at Article 23 30 See J.A. Ekpere, supra note 8, at 281. 31 See Convention on Biological Diversity, supra note 1, at Article 8. 32 See OAU Model, supra note 6, at Preamble.

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33 Id. at Part I 34 Id. at Article 18. 35 Id. at Part I (c) 36 Id. at Articles 3-8 37 See Convention on Biological Diversity, supra note 1, at Article 15. 38 See OAU Model, supra note 6, at Article 5. 39 Id. 40 Id. 41 See J.A. Ekpere, supra note 8, at 281. 42 See OAU Model, supra note 6, at Part II. 43 Id at Article 12. 44 Id at Article 22. 45 Graham Dutfield, Intellectual Property Rights, Trade and Biodiversity 116, (Graham Dutfield ed.,IUCN, Earthscan Publications, London, 2000). 46 http://www.comunidadandina.org/ingles/who.htm (follow “English” hyperlink; then follow “About us” hyperlink). 47 http://www.comunidadandina.org/ingles/quienes/brief.htm (follow “English” hyperlink; then follow “About us” hyperlink; then follow “Brief history” hyperlink). 48 http://www.comunidadandina.org/ingles/who.htm (follow “English” hyperlink; then follow “About us” hyperlink). 49 Fabian Novak, Biotechnology and Regional Integration Systems: Legislation and Practices in the Andean Community Countries, in Biotechnology and International Law 404, (Francesco Francioni & Tullio Scovazzi, eds., Hart Publishing, USA, 2006). 50 Id. at 404-5. 51 Andean Community, Decision 391, Preamble, available at http://www.comunidadandina.org/ingles/normativa/d391e.htm 52 Andean Community, Regional Biodiversity Strategy for the Tropical and Andean Countries, 2002, available at http://www.comunidadandina.org/ingles/normativa/Decision523e.pdf 53 Id. at 21. 54 See Fabian Novak, supra note 48, at 409. 55 Manuel Ruiz Muller, Regulating bioprospecting and protecting indigenous peoples knowledge in the Andean Community: Decision 391 and its overall impacts in the Andean region 1, (Manuel Ruiz Muller ed., UNCTAD, Geneva, 2000).

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56 Andean Decision 391, Article 2, available at http://www.comunidadandina.org/ingles/normativa/d391e.htm 57 See Manuel Ruiz Muller, supra note 55, at 2. 58 Id. at 1. 59 Id. at 2. 60 Id. at 3. 61 Joseph Henry Vogel, Sovereignty as a Trojan Horse: How the Convention on Biological Diversity morphs Biopiracy into Biofraud, in Unfinish Constitutional Business? Rethinking Indigenous Self-determination 231-233, (Barbara A. Hocking, ed., Aboriginal Studies Press, Canberra Australia, 2005). 62 See Manuel Ruiz Muller, supra note 55, at 3. 63 Andean Community, Decision 391, Preamble, available at http://www.comunidadandina.org/ingles/normativa/d391e.htm 64 Id. at Article 5. 65 See Graham Dutfield, supra note 45. 66 See Manuel Ruiz Muller, supra note 55, at 8. 67 See S. Biber-Klemm & T. Cottier, supra note 7, at 85. 68 Even though Article 34 states that “… access contracts will take into account the interests of the [physical] providers of the genetic resources …” According to Manuel Ruiz Muller, because of the “context of Member States governmental structures, it seems highly unlikely that benefits will in fact accrue back to these providers as compensation for their conservation effort and therefore act as an effective incentive.” See Manuel Ruiz Muller, supra note 54. 69 According to the Economy of Information theory, information is non rival and non exclusive good, which means that the use of this information by one person does not limit the future use of the same information by others. See Chapter I. 70 See Manuel Ruiz Muller, supra note 55, at 8-9. 71 Convention on Biological Diversity, Article 15.1, available at http://www.cbd.int/convention/articles.shtml?a=cbd-15 72 Andean Decision 391, Article 50, available at http://www.comunidadandina.org/ingles/normativa/d391e.htm 73 See Manuel Ruiz Muller, supra note 55, at 7. 74 See Manuel Ruiz Muller, supra note 55, at 17. 75 Id. at 18. 76 For further discussion of this topic See Chapter II.

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77 Andean Decision 391, Preamble, available at http://www.comunidadandina.org/ingles/normativa/d391e.htm 78 See Graham Dutfield, supra note 45, at 109. 79 Andean Decision 391, Article 34, available at http://www.comunidadandina.org/ingles/normativa/d391e.htm 80 Id. at Article 35, Article 35 “When access is requested to genetic resources or their by-products with an intangible component, the access contract shall incorporate, as an integral part of that contract, an annex stipulating the fair and equitable distribution of the profits from use of that component. The annex shall be signed by the supplier of the intangible component and the applicant for the access. It may also be signed by the Competent National Authority, in accordance with the provisions of national law of the Member Country. If that annex is not signed by the Competent National Authority, it shall be subject to the suspensive condition referred to in Article 42 of this Decision.Failure to comply with the stipulations of the annex shall constitute grounds for the rescission and nullification of the access contract.” 81 Manuel Ruiz Muller, Is a New Juridical Framework for Bioprospecting in the Andean Region Necessary? Brief Critical Review of Decision 391, in Serie Politica y Derecho Ambiental 1, no.14, (Peruvian Environmental Law Association, Lima, Feb.2003). 82 Andean Community, Decision 486: Common Intellectual Property Regime, available at http://www.comunidadandina.org/ingles/normativa/D486e.htm 83 Manuel Ruiz Muller, Andean Community’s New Industrial Property Regime: Creating Synergies between the CBD and Intellectual Property Rights 11, Bridges, v. 4(9): 11-12, available at http://www.iprsonline.org/ictsd/docs/RuizBridgesYear4N9NovDec2000.pdf 84 See Fabian Novak, supra note 49, at 403-10. 85 See Andean Decision 486, supra note 41, at Article 3. 86 The disclosure requirement of origin of any genetic resource or TK utilized in the inventive process and evidence of prior informed consent of the source country and/or community or individuals providing such genetic resources or TK, is a measure that pretends to oblige patent applicants to disclose the country of origin of the biological resources as well that the traditional knowledge involved (if it is the case) has been obtained previous informed consent of their providers. For further discussion of this topic see Chapter VI. 87 See Andean Decision 486, supra note 82, at Article 26. 88 Id. at 75. 89 Nuno Pires de Carvalho, From the Shaman’s Hut to the Patent Officer: A Road Under Construction, in Biodiversity & the Law 251-7, (Charles Mc Manis ed., Earthscan, London, 2007). 90 Id. 91 Jorge Caillaux & Susanna E. Clark, A Brief Review of Legislation on Access to Genetic Resources and the Protection of Traditional Knowledge in Selected Megadiverse Countries, in Intellectual Property and Biological Resources 243, (Burton Ong. ed., Marshall Cavendish, Singapore, 2004). 92 See Andean Decision 486, supra note 82, at Article 14. 93 See, S. Biber-Klemm & T. Cottier, supra note 7, at 86.

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94 Ley sobre la Conservacion y aprovechamiento sostenible de la diversidad biologica, Ley No. 26839, available at http://www.grain.org/brl/brl-ley-peru-es.cfm. See also, Law on the Conservation and Sustainable Use of Biological Diversity, Law No. 26839, Unofficial Private Translation, available at http://www.lclark.edu/law/clinics/international_environmental_law_project/peru_english.php 95 Reglamento de acceso a recursos geneticos, 2008, available at http://www.grain.org/brl_files/reglamento_de_acceso_recursos_g.pdf 96 The Law introducing a Protection Regime for the Collective Knowledge of Indigenous People derived from Biological Resources, Law 27811, available at http://www.grain.org/brl/?docid=81&lawid=2041 97 See Law on the Conservation and Sustainable Use of Biological Diversity, supra note 94, at Article 1. 98 See Convention on Biological Diversity, supra note 1, at Article 15 99 Constitution of the Republic of Peru, Article 66, available at http://www.parliament.go.th/parcy/sapa_db/cons_doc/constitutions/data/Peru/peru.pdf 100 See Law on the Conservation and Sustainable Use of Biological Diversity, supra note 94, at Articles 23-24 101 Id. at Articles 27-28. 102 Id .at Article 29. 103 See Reglamento de acceso a recursos geneticos, supra note 95, at Articulo 1. 104 Id., Unofficial translation. 105 Id. at Article 6 106 Id. at Article 13 107 Id. at Article 14 108 Id at Article 15 109 Id. at Article 20 110 Id. at Article 23 111 Id. 112 The intangible component should be ruled according to the provisions established in Law 27811. 113 See The Law introducing a Protection Regime for the Collective Knowledge of Indigenous People derived from Biological Resources, Law 27811, supra note 96. 114 Manuel Ruiz & Isabel Lapena, New Peruvian Law Protects Indigenous Peoples’ Collective Knowledge, available at http://www.iprsonline.org/ictsd/docs/RuizLapenaBridgesYear6N6Sept2002.pdf 115 See Jorge Caillaux & Susanna E. Clark, supra note 91, at 244. 116 See Manuel Ruiz & Isabel Lapena, supra note 115. Also see Jorge Caillaux & Susanna E. Clark, supra note 90, at 244.

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117 See, The Law introducing a Protection Regime for the Collective Knowledge of Indigenous People derived from Biological Resources, Law 27811, supra note 95, at Article 1. 118 Id. at Article 2 119 Id. at Article 10. 120 See Chapter II. 121 Id. 122 See The Law introducing a Protection Regime for the Collective Knowledge of Indigenous People derived from Biological Resources, Law 27811, supra note 96, at Article 5. 123 See S. Biber-Klemm & T. Cottier, supra note 7, at 88. 124 See Jorge Caillaux & Susanna E. Clark, supra note 91, at 245. 125 See The Law introducing a Protection Regime for the Collective Knowledge of Indigenous People derived from Biological Resources, Law 27811, supra note 96, at Article 6. 126 Id. 127 Id. at Article 7. 128 See Manuel Ruiz & Isabel Lapena, supra note 114. 129 See The Law introducing a Protection Regime for the Collective Knowledge of Indigenous People derived from Biological Resources, Law 27811, supra note 96, at Article 15. 130 Id. at Article 16. 131 Id at Article 16. 132 Manuel Ruiz, National and regional laws to protect IK related to genetic resources, available at http://www.scidev.net/en/policy-briefs/national-and-regional-laws-to-protect-ik-related-t.html 133 See The Law introducing a Protection Regime for the Collective Knowledge of Indigenous People derived from Biological Resources, Law 27811, supra note 96, at Article 42. 134 Id. at 43. 135 See Manuel Ruiz, supra note 132.

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CHAPTER VI

POSSIBLE LEGAL MECHANISMS OF PROTECTION FOR TRADITIONAL KNOWLEDGE AND ACCESS TO GENETIC RESOURCES

Legal protection of traditional knowledge and access to genetic resources is an

issue that garnered the attention of the international community more than two decades

ago.1 Nevertheless, despite its interest in regulating these resources, the international

community has not been able to create an effective mechanism to protect traditional

knowledge and regulate access to genetic resources in all their dimensions. Some

proposals have been made, and many countries have developed domestic law related to

this topic. Nonetheless, there is still a lot of work to do in order to identify an adequate

system of regulation that will protect traditional knowledge and efficiently regulate

access to genetic resources, while satisfying the interests of national policy and the

international community.

The purpose of this chapter is to define possible mechanisms to protect traditional

knowledge and genetic resources. This chapter will be divided into three sections. The

first section will analyze how the existing intellectual property regimes can be applied as

efficient mechanisms for the protection of traditional knowledge and genetic resources.

The second section will examine whether there is a real need for a sui generis system for

the legal protection of traditional knowledge and genetic resources. The third section will

address the Ecuadorian case, defining which proposals fit best into the Ecuadorian legal

system and interests.

1. Legal mechanisms for traditional knowledge protection and access to genetic resources

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Protecting traditional knowledge and the associated genetic resources is not an

easy task because of the nature and characteristics of traditional knowledge. Traditional

knowledge can be understood as a form of “knowledge which is developed, sustained and

passed on within a traditional community, and is passed between generations, sometimes

through specific customary systems of knowledge transmission. A community might see

TK as part of their cultural or spiritual identity. So it is the relationship with the

community that makes it ‘traditional.’”2

After analyzing the dimensions of traditional knowledge, the World Intellectual

Property Organization (WIPO) has decided that for purposes of legal protection, it is not

convenient to state a definition of traditional knowledge. Instead, WIPO has suggested

that for regulatory purposes, the distinctive characteristics of traditional knowledge

should be established. Consequently, Article 3 of the Draft Provisions for Traditional

Knowledge Protection reads:

1. These principles concern protection of traditional knowledge against misappropriation and misuse beyond its traditional context, and should not be interpreted as limiting or seeking externally to define the diverse and holistic conceptions of knowledge within the traditional context. These principles should be interpreted and applied in the light of the dynamic and evolving nature of traditional knowledge and the nature of traditional knowledge systems as frameworks of ongoing innovation.

2. For the purpose of these principles only, the term “traditional knowledge” refers to the content or substance of knowledge resulting from intellectual activity in a traditional context, and includes the know-how, skills, innovations, practices and learning that form part of traditional knowledge systems, and knowledge embodying traditional lifestyles of indigenous and local communities, or contained in codified knowledge systems passed between generations. It is not limited to any specific technical field, and may include agricultural, environmental and medicinal knowledge, and knowledge associated with genetic resources.3

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These provisions have two main objectives, first to state the nature of traditional

knowledge and second to define the scope of protectable subject matter. In that way, the

provisions highlight the holistic, dynamic, and traditional characteristics of traditional

knowledge, but at the same time it states that the protection of traditional knowledge

against misappropriation and misuse can only be used beyond the traditional context.

This means that any constraint related to traditional knowledge management can be

applied only to third parties and not to traditional knowledge holders, who are authorized

to manage their knowledge in the traditional way.

In addition, WIPO uses the term traditional knowledge to refer to all traditional

knowledge categories, which could include “agricultural knowledge; scientific

knowledge; technical knowledge; ecological knowledge; medicinal knowledge,

including related medicines and remedies; biodiversity-related knowledge; ‘expressions

of folklore’ in the form of music, dance, song, handicrafts, designs, stories and artwork;

elements of languages, such as names, geographical indications and symbols; and,

movable cultural properties.”4 For the purposes of this draft, it does not include

traditional cultural expressions (TCE) or expressions of folklore (EoF) as subject matter

of protection. In this respect,

The second paragraph clarifies that these provisions cover traditional knowledge as such. This means that they would not apply to TCEs/EoF, which are treated in complementary and parallel provisions (document WIPO/GRTKF/IC/8/4). In its general structure, but not its content, the paragraph is modeled on Article 2(1) of the Berne Convention which delineates the scope of subject matter covered by that Convention by first providing a general description and then an illustrative list of elements that would fall within its scope. In following a similar approach, this paragraph does not seek to define the term absolutely. A single, exhaustive definition might not be appropriate in light of the diverse and dynamic nature of TK, and the differences in existing national laws on TK.5

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Doctor Nuno Carvalho introduces an interesting classification in this regard:

traditional knowledge stricto sensu and traditional knowledge lato sensu. Traditional

knowledge stricto sensu “consists of knowledge itself, that is, ideas developed by

traditional communities and indigenous peoples, in a traditional and informal way, as a

response to the needs imposed by their physical and cultural environments and that serve

as means of cultural identification.”6 On the other hand, traditional knowledge lato sensu

encompasses expressions of traditional culture or expressions of folklore.7 This approach

facilitates the treatment of ideas and expression within the realm of legal regulation in

order to properly address both topics. As a result, for the purposes of this chapter, we

will only focus on the protection of traditional knowledge stricto sensu (traditional

knowledge).

Protection of traditional knowledge and genetic resources is a topic that involves

policy and intellectual property issues. Because of the nature and characteristics of

traditional knowledge, policy issues address a broad spectrum of matters that involve a

variety of domestic and international concerns. Nevertheless, intellectual property issues

can be summarized in two key ways - defensive protection and positive protection.8

Defensive protection addresses any kind of mechanism developed to prevent third

parties that are not considered traditional knowledge holders from obtaining intellectual

property rights over traditional knowledge.9 Defensive protection has mainly focused on

the patent law system. The main objective is to prevent the acquisition of patent rights

over traditional knowledge through the use of traditional knowledge as prior art. In this

respect,

Defensive protection aims at ensuring that existing TK is not patented by third parties – ideally, by ensuring that relevant TK is taken fully into account when a

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patent is examined for its novelty and inventiveness. Normally, a claimed invention in a patent application is assessed against the so- called “prior art” – the defined body of knowledge that is considered relevant to the validity of a patent. For example, if TK has been published in a journal before the applicable date of a patent application, it is part of the relevant prior art, and the application cannot validly claim that TK as an invention – the invention would not be considered novel. In recent years, concern has been expressed that TK should be given greater attention as relevant prior art, so that patents are less likely to cover existing publicly disclosed TK.10

Positive protection is oriented to the creation of a system that gives traditional

knowledge holders rights over traditional knowledge in order to empower them and allow

them to take action against misuse or unauthorized exploitation of traditional

knowledge.11 This approach also gives traditional knowledge holders an incentive to

promote and protect traditional knowledge. Thus, positive protection uses legal

mechanisms to ensure the protection of traditional knowledge. In this respect,

The options for positive protection include existing IP laws and legal systems (including the law of unfair competition), extended or adapted IP rights specifically focused on TK (sui generis aspects of IP laws), and new, stand-alone sui generis systems which give rights in TK as such. Other non-IP options can form part of the overall menu, including trade practices and labeling laws, the law of civil liability, the use of contracts, customary and indigenous laws and protocols, regulation of access to genetic resources and associated TK, and remedies based on such torts as unjust enrichment, rights of publicity, and blasphemy.12

Defensive protection and positive protection of traditional knowledge are not

mutually exclusive. On the contrary, they are complementary approaches that should be

developed in a coordinated framework, because one is oriented to avoid misappropriation

and to block the acquisition of illegitimate intellectual property rights (defensive

protection), and the other looks for the prevention of unauthorized use (positive

protection). Therefore, they should be considered as balancing elements that are crucial

for the achievement of effective protection of traditional knowledge. This posture also

responds that the nature of traditional knowledge is so diverse that it does not have a

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definite form of protection. Traditional knowledge protection must allow an array of

options and combinations that can be adapted by each nation according to its needs and

the specific characteristics of its traditional knowledge.

[...] the protection of TK has shown that no single template or comprehensive “one-size- fits-all” solution is likely to suit all the national priorities and legal environments, let alone the needs of traditional communities in all countries. Instead, effective protection may be found in a coordinated “menu” of different options for protection. (...) The key is to provide TK holders with an appropriate choice of forms of protection, to empower them to assess their interests and choose their own directions for the protection and use of their TK, and to ensure there is adequate capacity to carry through protection strategies. The way in which a protection system is shaped and defined will depend to a large extent on the objectives it is intended to serve. Protection of TK, like protection of IP in general, is not undertaken as an end in itself, but as a means to broader policy goals. The kind of objectives that TK protection is intended to serve include:

• Recognition of value and promotion of respect for traditional knowledge systems

• Responsiveness to the actual needs of holders of TK • Repression of misappropriation of TK and other unfair and inequitable uses • Protection of tradition-based creativity and innovation • Support of TK systems and empowerment of TK holders • Promotion of equitable benefit-sharing from use of TK • Promotion of the use of TK for a bottom-up approach to development 13

a. Protection of Traditional Knowledge and Genetic Resources under Existing Intellectual Property Regimes. The policy debate over traditional knowledge protection has cataloged the existing

intellectual property rights regimes as inconsistent and contradictory to traditional

knowledge. The unique nature of traditional knowledge makes it difficult for existing

intellectual property regimes to totally satisfy the expectations of traditional knowledge

holders. Thus, some sectors are skeptical about the real purposes and goals of intellectual

property regimes.14 The main reason for this skepticism is based on the different origins

of traditional knowledge and intellectual property rights, and the interests behind them.

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In the growing international debate over the legal protection of traditional knowledge, one frequently hears the view expressed that the traditional knowledge of indigenous peoples and local communities does not readily fit into the existing intellectual property regimes of the industrialized world, that these regimes basically promote the interests of the industrialized world and encourage what has come to be called (and vilified as) “biopiracy.”15

Nevertheless, experience has shown the contrary and demonstrated that existing

intellectual property regimes can legally protect traditional knowledge and genetic

resources from unauthorized use and misappropriation. According to WIPO, “existing IP

laws have been successfully used to protect against some forms of misuse and

misappropriation of TK, including through the laws of patents, trademarks, geographical

indications, industrial designs, and trade secrets.”16 Nevertheless, the existing intellectual

property regime still needs to be adjusted in order to make effective. This section will

analyze how it is possible to fit traditional knowledge into the existing intellectual

property system and the possible modifications that would make the system more

effective.

i. Patent Law

The patent law system is oriented to the promotion of science through a grant by

the state of a legal monopoly to the inventor, who gets the right to exclude others from

the use, production, and sale of the invention. These exclusive rights are granted for a

limited period, during which the inventor can obtain fair compensation for his/her effort,

investment, and time used in the development of the invention. In exchange, the state

gets the full disclosure of the invention, which allows others to continue developing

inventions for the well being of society.

In broad terms, patents can be defined as exclusive rights granted for an invention - either a product or a process - that offers a new technical solution to a specific problem. A patent implies the grant of a “monopoly” to an inventor who has used

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his knowledge and skills to produce a product or process which is new, involves an inventive step and is capable of industrial application. This “monopoly” is limited in time and allows for the patent holder to exercise an exclusive right over the invention and benefit commercially from its exploitation. The grant of a patent is conditioned upon the full public disclosure of the invention in order to enable others to improve on existing inventions and technology in general.17

The procedure for granting patent rights establishes that an invention can gain

patent protection if it satisfies the requirements of novelty, non-obviousness, and

industrial application. In Article 27.1, the TRIPS Agreement clearly states that “[s]ubject

to the provisions of paragraphs 2 and 3, patents shall be available for any inventions,

whether products or processes, in all fields of technology, provided that they are new,

involve an inventive step and are capable of industrial application (...).”18 Therefore, for

the purposes of this study, it is important to clarify the meaning and extension of these

three criteria.

Novelty refers to the “newness” of an established invention. An invention is novel

when there is no prior art. Prior art is the knowledge base that existed before the

invention was discovered or before the invention was disclosed by the filing of a patent

application.”19 There is no international standard of novelty, which means that the

domestic legislation of each country defines the extension of novelty according to their

needs and reality. In that sense, the national laws decide what can be considered prior

art. In this respect, Professor Charles McManis states:

“Novelty” in patent law means little bit more than that the claimed invention is not disclosed in the “prior art,” however the legal term of art turns out to be defined under national law. What counts as prior art and how “novelty” is defined in various patent systems around the world is highly variable, and neither the Paris Convention nor the TRIPS Agreement prescribes a particular definition of either prior art or novelty.20

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Non-obviousness “refers to the presence of an inventive step. In order for an

inventive step to be present, the invention or innovation must not have been obvious at

the time of its creation to anyone having “ordinary skill in the art.” European patent law

is more specific, requiring that the invention or innovation must also solve a problem in a

technical way.”21 That means that the invention not only needs to be new, but that it also

must involve a significant intellectual effort that makes it subject to patent rights. This

inventive step should elevate any prior art to another level, that makes the new invention

non-obvious to a person skilled in the art.

The invention must not simply be novel, but must result from qualified intellectual effort that makes it non-obvious. This criterion thus requires a higher standard of novelty through an inventive step. Strong protection leading to a competitive advantage shall only be granted to inventions that would be an apparent improvement to prior art to a person skilled in the art practiced by the invention. This requirement is justified by the ‘monopoly-profit-incentive’ rationale, according to which strong protection shall only be granted to substantial contributions to the technological progress.22

The requirement that the invention be capable of industrial application or utility

“refers to the existence of a potential market for patented knowledge. To meet this

requirement, a public desire for the patented material must exist or have the potential to

exist.”23 The main objective of this provision is to avoid speculative patents. This is

intended to prevent the acquisition of exclusive rights to innovations that do not have a

marketable product in mind and that can be speculatively used when a possible

commercial application appears.

This condition is particularly relevant within the fields of biotechnology and chemistry, where it is possible for researchers to develop new compounds with relative ease, yet without, at least initially, any immediate practical application in mind. The criterion of utility again became critical in the evaluation of claims for inventions in the area of biotechnology, in order to prevent “speculative booking” of exclusive rights.24

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In addition to the substantive requirements, patent law also requires the satisfaction

of procedural disclosure requirements. This means that the inventor must disclose in the

patent application how to enable the invention or the best mode to put the invention into

practice. The objective of this requirement is to promote innovation by ensuring that

other people can access this information and use it as a referent for the development of

new inventions.

One of the reasons for this condition is based on the exchange theory of the award of the patent: the patent applicant is awarded exclusive rights in return for the disclosure to society of a new, useful and non-obvious invention. Without a disclosure that enables other persons to benefit from the invention for their own research and development work, this exchange between the inventor and the society would not make sense. This condition also performs the function of filtering out speculative applications, since it constitutes a reliable assessment of the usefulness of the invention for the purpose of its industrial application.25

In theory, if traditional knowledge meets these four criteria, then it should be

subject to patent protection. This possibility has been suggested particularly for the

protection of traditional medicinal knowledge.26 However, as Blakeney has exposed,

patent law has been developed by the Western world according to that world’s

technological and industrial needs and circumstances.27 Therefore, is it possible that the

Western approach to patent law could be applied to compensate indigenous peoples and

local communities for their traditional knowledge contributions? We will analyze this

possibility and the possible modifications that could be made for a more realistic and

effective protection of traditional knowledge.

Fitting traditional knowledge within the patent law system causes some intrinsic

and practical problems. Intrinsic issues include the concept of property, the motivation of

commercial exploitation, the novelty requirement, and the conception of the inventor as

an individual.28 With respect to practical issues, one must consider the high costs

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involved with patent acquisition, defense, and use, as well as the lack of intellectual

property expertise of traditional knowledge holders.29

The concept of property, as we know, has been developed according to the Western

approach. According to indigenous world view, the human being and nature occupy

complementary roles, which means that both are connected and interrelated in order to

maintain an equilibrium.30 Thus, for indigenous peoples, “life and its forces are seen as a

gift to be humbly accepted, not as something to be taken for granted or used to

manipulate other life forms. Life is reserved, acknowledged, and reaffirmed through

prayer, ceremony, dance and ritual.”31 This holistic cosmo-vision interrelates all

dimensions of the natural and supernatural world.32 This knowledge about the

interrelation of nature, the human being, the natural, and the supernatural world are the

fundamental basis for traditional knowledge and heritage. As a consequence, because

nature and resources are conceived as crucial elements for life, indigenous peoples have

not developed a concept of property in the way that Western nations have. For

indigenous peoples, resources are to be shared within the community in order to maintain

life but at the same time respect nature. Nevertheless, this communal sense does not

apply to all resources. For instance, specific knowledge is only held by certain members

of the community. In this respect, Graham Dutfield states:

Traditional proprietary systems relating to scarce tangibles such as land, resources and goods, and to valuable intangibles like certain knowledge and cultural expressions, are often highly complex and varied. Generalizations should be made with extreme caution. However, it appears frequently to be the case that knowledge and resources are communally held. While individuals and families may hold lands, resources or knowledge for their own use, ownership is often subject to customary law and practice and based on the collective consent of the community. Nonetheless, the idea that traditional property rights are always collective or communal in nature while Western notions of property are inherently individualist is an inaccurate cliché. While this may appear to contradict what we have just

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stated, specialized knowledge may be held exclusively by males, females, certain lineage groups, or ritual or society specialists (such as shamans) to which they have rights of varying levels of exclusivity. But in many cases, this does not necessarily give that group the right to privatize what may be more widely considered to be the communal heritage.33

Another issue is the motivation of indigenous people regarding commercial

exploitation of traditional knowledge. As previously stated, traditional knowledge is

conceived as a whole, in which the natural and spiritual world work together for the well

being of the community.34 For indigenous people, traditional knowledge has a sacred

value that constitutes an element of identity. As Doctor Nuno Carvalho says, “TK is a

means of cultural identification, be it TK strictu sensu or be it the expressions of TK. In

other words, even the technical elements of TK, because of their particular insertion in a

cultural context, are associated in an indissoluble manner with the identity of the

community. There must be an unbreakable link that connects TK to its creators (...).”

Therefore, indigenous peoples do not conceive traditional knowledge as a commodity

subject to trade. Patent law contemplates a limited period of exclusivity, in which the

inventor can commercialize the invention and obtain a fair reward for their effort.

Nevertheless, this approach can be less attractive for indigenous people because of the

spiritual meaning imputed to TK. In this respect,

Another problem relates to the final goal of patent law. The principal rationale of patent law is to provide an incentive for inventiveness and creativity, commercialization and distribution, by offering the patent holder a period of time during which his rights are immunized from competition. Indigenous peoples have been reported to be not primarily concerned with the commercial exploitation of their knowledge and market economic values. As Balick (...) points out, knowledge may have its greatest value to indigenous peoples because of its ties with cultural identity or its sacred significance (...).35

The novelty requirement is another problem that has to be analyzed within this

field. One of the main characteristics of traditional knowledge is that it is conceived as a

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“creation over a long period of time in which it has been passed down from generation to

generation.”36 This collective character of traditional knowledge creates problems with

the novelty requirement.37 According to the Western point of view, if knowledge is

passed down through generations, that knowledge is in the public domain.38 Therefore,

how can traditional knowledge be novel if it is part of the public domain? This is a

misconception, because not all traditional knowledge is shared by the community. In

fact, some knowledge is reserved by few members or even by one member of the

community, such as the shaman.39 “Recent investigations, (...), have shown that not all

indigenous knowledge is communally shared, and not all of it is considered to be in the

public domain. Various healing methods have been reported to have been held under a

secrecy regime.”40 In addition, traditional knowledge holders have developed their own

mechanisms to regulate access and use of traditional knowledge. Therefore, if the

knowledge is protected by some sort of regime that regulates its management, then it

cannot be considered to be a part of the public domain. In this, respect Dutfield states

that:

Many traditional societies have their own custom-based “intellectual property” systems, which are sometimes quite complex. Customary rules governing access to and use of knowledge do not necessarily differ all that widely from western intellectual property formulations, but in the vast majority of cases they almost certainly do. Nonetheless, there is a tendency to treat such rules with disrespect or to ignore them as if they do not exist. However, knowledge thought to be part of the public domain may in some cases turn out under customary law to remain subject to the legal claims of individuals and communities. Even if one disregards customary law, the unauthorized dissemination or use of certain publicly available traditional knowledge could sometimes be challenged on the basis of concepts existing in the western legal system, such as copyright, breach of confidence and misappropriation. Accordingly and in consequence, nothing is being taken from the public domain that should be there, but only what should not be. (...) The public domain is being promoted in opposition to privatization as part of a debate about intellectual property rights, a discussion that does not easily accommodate the specific interests and claims of non-Western societies. Why is this the case?

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Disclosed TK has from the distant past to the present been treated as belonging to nobody. Consequently, many indigenous peoples’ representatives are concerned that pro-public domain rhetoric, sympathetic as many of them are about the sentiments behind it, may inadvertently threaten their rights. Indeed, the public domain concept is problematic from the perspective of many traditional societies in which TK holders or others, such as tribal elders, have permanent responsibilities concerning the use of such knowledge, irrespective of whether it is secret, is known to just a few people, or is known to thousands of people throughout the world. Custodianship responsibilities do not necessarily cease to exist just because the knowledge has been placed in the so-called public domain. There is no doubt that a tremendous amount of TK has been disclosed and disseminated over the years without the authorization of the holders.41

A fourth impediment is the conception of the inventor as an “individual, solitary,

and original creator, or a group of individuals (so-called joint inventorship), not collective

entities.”42 However, this point is still arguable because not all traditional knowledge is

created by the whole community. It has been stated that some traditional knowledge can

be developed by one individual within the community. “In general, creation of TK is an

incremental and collective process, but it does not follow that TK is not the products of

individuals. Depending on the customary laws and principles applicable to particular

situations, nothing stands in the way of recognizing an individual creation as a genuine

piece of TK.”43 This makes it possible to protect traditional knowledge not only under

patent law, but also under copyright law. In this respect, Balick states that “One way of

strengthening the position of the traditional healer employed in the Belize project has

been to consider these people as colleagues and teachers, rather than as informants. (...)

By including traditional healers who provided information for research as co-authors or

providing acknowledgment using their names, all parties benefit.”44

Another solution for this problem is the use of the concept of joint inventorship.

To use this concept, it is necessary that “each of the joint inventors have contributed to

the inventive conception, working on the same subject matter and making the same

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contributions to the inventive thought ant to the final result.”45 Talking about the

American case, S. Biber-Klemm states that:

In the USA, for instance, the statute recognizes the notion of joint inventorship.46 The main requirements imposed for joint inventorship are that each of the joint inventors must contribute to the inventive element of the protected invention and that they must collaborate with each other. More specifically, the joint inventors must produce an invention by their aggregate efforts and must work on the same subject matter.47 Further, while it may be difficult to distinguish prior art from the distinct contributions to a single invention, the statute recognizes that joint inventors do not have to work together at the same time. It is sufficient that the contribution of the joint inventor that works first in time constitutes an integral part of the process of joint invention.48 Finally, the joint inventors do not need to collaborate on each of the claims made in a patent application and do not need to have made the same type of contribution or contributed equally to the invention.4950

Consequently, if the traditional knowledge holder directly and knowingly

contributes to the inventive element, he/she would be able to qualify as a joint inventor.

In other words, if the traditional knowledge holder meets the joint inventorship

requirements, and its contribution is relevant and closely related to the final invention,

then he/she can be considered as co-inventor and be able to obtain patent rights.

According to S. Biber- Klemm “the only case where joint inventorship seems clearly

barred is the case where the joint inventors do not know of each other’s work.”51

However, this problem can be solved with the use of prior informed consent agreements.

Disclosure of such an agreement as a part of the patent application process would be

required, as it is relevant for determining who the inventor is. Thus, disclosure in this

case does not require any modification to the current regime as we will see later. In this

respect, WIPO states that

If a patent is based on another person’s knowledge (whether traditional or not), to the extent that this knowledge forms a substantive part (or all) of the invention, and that person is not identified as an inventor, this could have substantial legal

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implications. It could form the basis of a claim that this person is entitled to a partial or full share of ownership of the patent or form the basis of invalidation or revocation of the patent. If the knowledge had been disclosed to the public (for instance by the TK holder) prior to the patent’s priority date, then it could also invalidate the claimed invention owing to lack of novelty.52

Despite of the possibility that the traditional knowledge holder can meet the

requirements to be considered as a joint inventor; it is also true that this concept could be

used only under certain circumstances, in which the participation of the traditional

knowledge holder has been tangible and direct throughout the process, as opposed to

isolated or indirect participation. In this respect, Doctor Nuno Carvalho says that

“shamans who supply relevant, if not crucial, genetic material may provide important

support for the activities of the research and development of pharmaceutical and

biotechnological companies, but they are not considered co-inventors of the products and

processes obtains as ultimate derivatives of those genetic resources.”53 Therefore, the

participation of traditional knowledge holders in processes that can evolve into a patent

claim is a key issue that should be addressed in negotiating access and benefit-sharing

agreements. In this respect, WIPO establishes that

The question of inventorship and entitlement to apply for a patent may be at issue in cases where the inventive concept has been derived in whole or in part from a TK holder, such as an individual TK practitioner, but that person is not recognized as the or a[n] inventor of the invention as claimed. This question therefore have potential relevance to traditional knowledge systems, and their potential relevance to patents for inventions that are TK, that use TK or that are otherwise based on TK. Entitlement to apply for a patent, inventorship, rights to ownership, obligations arising from non-inventive contributions, enforcement of contractual obligations, and the formal recognition of ownership, licensing and security interests, are all legally significant issues in acquiring, holding and enforcing patent rights, [and] – and thus may play a role in access and benefit-sharing.54

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Nevertheless, the fact that a traditional knowledge holder cannot qualify as a joint

inventor, should not be a reason to deprive him/her from the benefits obtained from the

invention. One of the possible solutions to this problem is the use of the legal figure of

joint ownership through patent assignments in favor of traditional knowledge holders.

That is the case with the ICBG Project in Peru. The ICBG is a grant which supports the

idea that the “discovery and development of pharmaceutical and other useful agents from

natural products can promote economic opportunities and enhanced research capacity in

developing countries while conserving the biological resources from which these

products are derived.”55 The ICBG Project is a role model, because it incorporates

diverse mechanisms for the protection of traditional knowledge. In this project, prior

informed consent was required for access to genetic resources and traditional knowledge.

Agreements containing the principles of access and benefit-sharing were also signed by

the parties, and existing intellectual property rights as patents were used to protect

traditional knowledge and guarantee fair compensation to traditional knowledge

holders.56

Each agreement recognizes that the traditional knowledge of the indigenous people is their cultural legacy and that the people have a right for such knowledge to be protected from the public domain. They state that such knowledge is being provided voluntarily and is being retained in confidence. Should such information prove valuable, then the original IPR of the indigenous people over such knowledge would be preserved through the filing of appropriate patents, and by the inventors assigning shared ownership of the patents to the indigenous federations. The agreements also recognize the ownership and patrimony of the Peruvian state over certain tangible resources (whole plants) collected by the researchers in Peru for scientific purposes and for making extracts, fractions and isolating compounds of potential commercial use as new pharmaceuticals(…) The project incorporated the goals of the CBD by accessing genetic material and traditional knowledge with the PIC of the people involved. It recognized the rights of the indigenous people to their traditional knowledge and compensated them fairly. It also recognized the sovereign rights of the government of Peru, provided them with benefits,

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particularly by involving source country institutions and transferring back knowledge and technology to the country.57

It is important to note that governments (of country of origin or source countries)

and interested stakeholders should consider some key elements for the success of

bioprospecting projects or any project that involves the use of genetic resources and

traditional knowledge. First, the interested parties should base the negotiation process on

communication, confidentiality and fair compensation.58 These principles will allow the

parties to trust in each other and reduce the possibility of misunderstandings. Second, it

is crucial that the governments of countries of origin or source countries provide

indigenous people with training to allow them to enhance their negotiation capacity and

to understand better the different dimensions of this field.59 Finally, the incorporation of

the disclosure requirement of origin/source within the international legal framework is

fundamental in order to define the possible beneficiaries from new inventions even

though they cannot qualify as right holders. “Once the rights of communities to the

knowledge are recognized, and/or their individuals, such communities will be

automatically compensated for the exploitation of their rights.”60

Finally, there are two main practical impediments to the application of patent law to

traditional knowledge – the high costs involved in patent acquisition, defense, and use,

and the lack of intellectual property expertise of traditional knowledge holders. These are

issues that speak for themselves. Obtaining, maintaining, and enforcing a patent right is

expensive, and it is very difficult for indigenous communities to obtain the economic

resources to afford these costs.

At the practical level, the lack of economic self-sufficiency of many traditional communities, the unequal power relations between them and the corporate world,

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and the high cost of litigation, would make it very difficult for them to protect their IPRs through the patent system. In the US, for example, it costs about US $ 20,000 to prepare a patent application. This is clearly beyond the financial means of local communities (as well as many independent inventors and small companies) in most parts of the world (...).61

In addition, the lack of expertise and knowledge of indigenous people puts them at

a disadvantage. The incorporation of new technologies such as biotechnology has

exposed indigenous people to a complicated context that involves intellectual property

rights. Thus, indigenous peoples not only have been marginalized, but they have also

have been thrown into a completely different world that forces them to confront complex

legal issues. Therefore, adequate intellectual property assistance is crucial to equilibrate

this new scenario.

A consensus should support the benefits of providing intellectual property expertise to developing country and public interest clients. Intellectual property expansionists would recognize the need for expert assistance to realize the promise of intellectual property in innovation in health, agriculture, the environment and industry. Opponents of intellectual property expansion, or of particular types of intellectual property, should support access to intellectual property professionals who may mitigate or avoid negative impacts of intellectual property, balance the unfair advantage of wealthier organizations, which may be collaborators or opponents, and find specific policy/legal initiatives that may be workable and therefore viable alternatives in international policy discussions.62

Nevertheless, despite these issues, we can still maintain the position that if

traditional knowledge meets the requirements established by patent law, it could be

subject to protection. The international community has worked on some proposals to

modify the patent law system in a way that facilitates the protection of traditional

knowledge and genetic resources. One of these proposals consists of requiring disclosure

of the origin of genetic resources and prior informed consent in order to effectuate the

legal protection of genetic resources and traditional knowledge. This proposal will be

analyzed in the next section.

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1. The Disclosure Requirement

The disclosure requirement states that patent law should include a provision that

mandates that patent applications involving the use of genetic resources or traditional

knowledge should disclose the origin of genetic resources and prior informed consent.63

As a consequence, the burden of disclosure would be increased in patent applications.

The introduction of the disclosure requirement is a consequence of the CBD and the

effort to make effective the principles of access and benefit-sharing.64 This proposal tries

to reconcile the existing patent regime with the CBD in order to find a link between

genetic resources and traditional knowledge and the patent system. Consequently, the

disclosure requirement can be seen as a solution for “improving benefit-sharing by

creating a positive link between...patent legislation and... legislation governing access to

genetic resources.”65 In this respect, Doctor Nuno Carvalho states:

Another measure that some governments are taking and which seems to gain accuracy, is to require patent applicants to identify in their applications the geographical origin of any genetic resources used (directly or indirectly) in the making of the claimed inventions as well as to prove that any element of TK (directly or indirectly) used has been obtained with its holders’ prior informed consent (...). This Requirement has a single objective: to help stakeholders monitor compliance with legal or contractual obligations to share benefits derived from the commercial use of the material and immaterial resources obtained, in the light of the recommendation contained in Articles 8 (j) and 15.7 of the CBD.66

The justification for the disclosure requirement is based on the important role that

genetic resources and traditional knowledge play within the biotechnological,

agricultural, and pharmaceutical fields, as well as in society in general. In this respect,

The renowned professor of pharmacology Norman Farnsworth finds that about 85 per cent of traditional medicines involve the use of plant extracts. In his estimation, between 3.5 and 4 billion people in the world rely on plant biodiversity as source of drugs. An equal number depend on plant agro-biodiversity for subsistence. Kerry ten Kate and Sarah A. Laird estimated that the combined annual global markets of genetic resources-derived products from pharmaceuticals, botanical medicines,

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major crops, horticulture, crop protection products, and applications of biotechnology thereof to be between US $ 500 and US $ 800 billion, figures comparable to annual global sales of petrochemicals and world computer soft/hardware and general IT services market. 67

Biodiversity rich countries want to control the access to genetic resources and

traditional knowledge in this growing market. The disclosure requirement will effectuate

the sharing of profits obtained for products derived from genetic resources and traditional

knowledge with the countries of origin and traditional knowledge holders. In addition,

the disclosure requirement will help to establish a record of inventions derived from

genetic resources conserved in situ and/ or traditional knowledge.68 This requirement

will encourage countries of origin and indigenous communities to state a claim against

patent holders that have obtained exclusive rights over products derived from genetic

resources and/or traditional knowledge without acquiring prior informed consent and the

legitimate authorization from the interested stakeholders (countries of origin and

indigenous/ local communities).69

Nevertheless, the issue regarding the implementation of the disclosure requirement

is whether or not the disclosure requirement should be included in the patent law system

as a condition of patentability. To solve this problem, we have to analyze the nature of

the disclosure requirement in light of the TRIPS Agreement. This analysis will help us to

decide whether the inclusion of the disclosure requirement as a condition of patentability

runs against the TRIPS Agreement, and would therefore be inconsistent with the CBD.

Dr. Nuno Carvalho has developed this point, and according to him, the relevant

provisions on the TRIPS Agreement in this field are the ones contained in “article 27.1 on

patentable subject matter; article 29 on conditions on patents applicants; article 62 on

acquisition and maintenance of intellectual property rights and related inter partes

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procedures; and article 32 on revocation and forfeiture of patents.”70 However, for the

purposes of this study, we will focus only on articles 27.1, 29.1, and 62.1.

Article 27.1 establishes the substantive conditions that must be satisfied before the

grant of a patent right. The article reads “[s]ubject to the provisions of paragraphs 2 and

3, patents shall be available for any inventions, whether products or processes, in all

fields of technology, provided that they are new, involve an inventive step and are

capable of industrial application.” Thus, the requirements of novelty, inventive step, and

capable of industrial application are the minimum standards of patentability. These

conditions are substantive because they refer to the exclusive nature of the invention.

Therefore, the nature of the disclosure does not have anything to do with the intrinsic

nature of the invention. In this respect, Dr. Nuno Carvalho explains:

These are substantive conditions in the sense that they refer to the invention per se, because they result from the technical characteristics of the invention. The Requirement quite obviously is not compatible with article 27.1. The manner of obtaining genetic resources used in the development of inventions is an external condition. The outcome of the inventive activity is indeed independent of the ways and means employed to reach it. The situation that arises from an invention derived from the use of genetic resources that have been illegally extracted from their in situ environment is similar to the situation of an invention that has been developed with the assistance of a stolen microscope. This event would infringe the common law but not patent law under article 27.1 of the TRIPS Agreement. In both situations inventors would still be entitled to the patent, provided the conditions of patentability were met. Nonetheless they would be subject to criminal and civil liability for stealing (both the genetic resources, depending on the existence of appropriate legislation, and the microscope) in the country from which the resources had been taken.71

Article 29.1 of the TRIPS Agreement states:

Members shall require that an applicant for a patent shall disclose the invention in a manner sufficiently clear and complete for the invention to be carried out by a person skilled in the art and may require the applicant to indicate the best mode for

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carrying out the invention known to the inventor at the filing date or, where priority is claimed, at the priority date of the application.

This is a formal condition of patentability where the main objective is to determine

the best way to put the invention into practice. Doctor Carvalho states that “[t]his formal

condition is, actually, a consequence of the three substantive conditions above listed: it is

by reading specifications that disclose the invention in an enabling manner that patent

examiners make decisions on whether they find the invention new, non-obvious and

useful.”72

Therefore, the disclosure requirement can be considered a formal condition.

Nevertheless, knowing the origin of genetic resources or prior informed consent for

accessing traditional knowledge is not always helpful to the enablement process. In this

respect Doctor Carvalho says that “[a]s a matter of course, the present language of article

29 is not an appropriate framework for the Requirement. The indication of the origin of

the genetic resources and of other circumstances related to their acquisition is not

generally necessary for the invention to be carried out by a person skilled in the art.”73

Moreover, Article 62.1 establishes that any additional procedure and/or formality

required as a condition of the acquisition or maintenance of the intellectual property

rights shall be reasonable and consistent with the provisions of this Agreement. One of

the reasonable formalities that can be required is proof of ownership. “Reasonable also

are formal conditions that help patent offices and/or courts to identify the inventors and

or their successors in title. This issue comprises two different aspect: one has to do with

the identification of the inventor, the other one with the identification of the owner.”74

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Therefore, if the disclosure requirement helps to identify the authorship or the ownership

of the invention, it could be considered as a formal condition of patentability.

Consequently, it is important to clarify the linkage between the genetic resource or

the traditional knowledge and the final invention. This will help to identify whether the

disclosure requirement can be considered a formal condition of patentability because it is

crucial as an enabling condition or as evidence of inventorship/ownership. In this

respect, the WIPO Intergovernmental Committee on Intellectual Property and Genetic

Resources, Traditional Knowledge and Folklore has stated:

One key factor that determines whether, and how, the reported disclosure requirements apply to relevant information is in fact the relationship between the invention itself and the genetic resources or traditional knowledge. This emerged in the above review of national legal mechanisms in various ways: (i) If access to a genetic resource is required to enable a person skilled in the art to carry out the invention (or to carry out the best known mode where applicable), and it is not readily available to that person (for instance, as a plant variety well known to researchers in the field), then there may be an obligation to disclose its source, because it may otherwise be impossible for third parties to carry out the invention. (ii) If, however, the genetic resource is readily available to third parties who are skilled in the relevant art, then established disclosure requirements may not necessarily create an obligation to identify the specific source (the nature of the genetic resource must however be fully described). (iii) If, on the other hand, the genetic resource is so remote from the claimed inventive concept, as not to be needed in carrying out the invention, then it may not be relevant to the enablement or best-mode test (where applicable) for disclosure; in this case it would be necessary to clarify how the claimed invention could be determined to be based on or derived from the genetic resource. (iv) If TK (known to the applicant) is so close to the claimed invention that it has bearing on the assessment of the validity of the application (e.g. in assessing whether the invention is truly novel and non-obvious), or so that it is necessary for the understanding of the inventive concept, then established obligations to disclose known prior art may apply in systems where there is a duty to disclose known prior art. (v) If TK (known to the applicant) is so close to the claimed invention that it is in fact intrinsic to it under the legal doctrine that determines “inventive contribution” in the jurisdiction concerned, then it may be necessary either to declare the provider of the TK as a joint inventor (or indeed as the sole inventor, where the TK in itself provides the inventive concept of the claimed invention), or to amend the claimed invention to exclude the TK element (in which case it is likely to be (vi) If TK (known to the applicant) is so remote from

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the claimed inventive concept that it is neither relevant to the assessment of validity or determination of inventorship, then it may be necessary to clarify how the claimed invention could be determined to be based on or derived from the TK.75

From the following analysis, we can conclude that if the disclosure requirement is

an element of the enabling disclosure or is fundamental to identifying

ownership/inventorship, then it could be deemed a condition of patentability. However,

in these cases, there is no need to change or modify the patent law, because the existing

legal framework already obligates disclosure of these elements as a condition of

patentability. In other words, the existing patent law system already requires the

disclosure of origin and/or prior informed consent when it is considered crucial for the

enablement or determination of ownership/inventorship of the invention. In this respect

Doctor Carvalho states:

The Requirement may assume different forms according to the specific nature of the TK involved. When the knowledge about the origin of genetic resources or about TK used in the invention is essential for understanding the working of the claimed invention, it becomes an element of the enabling disclosure. Existing international and national patent law already impose the Requirement as a formal condition of patentability in such circumstances. However, TK holders’ authorization to use their knowledge and/or genetic resources incorporating their knowledge is not a technical element but a legal one. A patent application may, theoretically, describe a piece of TK without identifying its holder (s). But when YK is incorporated into the claimed invention as an inventive concept in its own right, then the identification of TK holder (s) and evidence of prior informed consent become an important element for the attribution of inventorship and/or ownership. But, to that extent, the Requirement has already been imposed by existing patent law.76

Consequently, if the disclosure requirement is within these parameters, it is

consistent with the TRIPS Agreement and has already been incorporated into the patent

regime. But what happens if the disclosure requirement does not play any of these roles?

According to Dr. Carvalho, “formal conditions that (1) have nothing to do with helping

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patent examiners to assess novelty, inventiveness and susceptibility of industrial

application; (2) have no connection with inventorship and, consequently, ownership; and

(3) are not aimed at evidencing the payment of fees are beyond the scope of the TRIPS

Agreement and, ultimately, are TRIPS inconsistent.”77 Nonetheless, this does not mean

that the disclosure requirement cannot be included in the patent legislation. It only means

that the incorporation of the disclosure requirement could not be a condition of

patentability. Therefore, as Doctor Carvalho says, “[i]nstead of imposing the

Requirement as a condition of patentability, which conflicts with the TRIPS Agreement,

WTO Members should make the enforceability of patent rights dependent on compliance

with the Requirement.”78

The adoption of the disclosure requirement as a condition of enforcement could

be based on the unclean hands and fraudulent procurement doctrines.79 As a

consequence, instead of including the disclosure requirement as a condition of

patentability, it would be considered a condition of enforceability.80 This approach is not

inconsistent with the TRIPS Agreement. On the contrary, it is contemplated under

Article 8 of this treaty. Article 8 of the TRIPS Agreement establishes that

1. Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement. 2. Appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.81

Applying Article 8 of the TRIPS Agreement within this field, it could be stated

that if a country considers that the incorporation of the principles of access and benefit-

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sharing, as well as regulation related to access and protection of traditional knowledge,

are subjects of vital importance to their socio-economic and technological development,

then the inclusion of the disclosure requirement is consistent with the existing patent

regime and can be adopted.82 Consequently, the acquisition of a patent right over an

invention can be deemed abusive if it involves (directly or indirectly) genetic resources

and/or traditional knowledge that have been obtained in an unlawful manner or without

the acquisition of prior informed consent.83 As a result, if we apply Article 8.2, the

incorporation of the disclosure requirement as a condition of enforceability can be seen as

a measure to prevent the abuse of intellectual property rights. In this respect, Doctor

Carvalho states:

...courts should be able to sanction the lack of candor of patent applicants who knowingly failed to disclose the source in a manner that would facilitate benefit sharing, as established by article 15 of the CBD. Actually, the determination that the concealment of information might lead to the implementation of public policies concerning benefit sharing is fraudulent is a matter of law. Consequently, any attempt to enforce patent rights thus obtained would be an abuse of rights. In compliance with paragraph 2 of article 8 of the TRIPS Agreement and given that infringement both direct and contributory is a tort, it can be imposed that one must have clean hands to obtain relief from an equity court. Only after a patentee abandons its unlawful practice and the effects of the misuse are completely dissipated may it sue infringers. In the case of the Requirement, this implies that patent owners would have to disclose the origin and obtain the appropriate authorizations from the appropriate stakeholders (governments, local authorities, and traditional knowledge holders) before the patent rights could be enforced against infringers.84

The application of this approach brings some practical advantages. First, it is a

proposal that is compatible with the existing legal framework.85 Second, since it does not

interfere with the validity of the patent, then the patent does not become a certificate of

origin.86 Third, it promotes benefit-sharing principles because it gives legal support to

the country of origin (or supplier of genetic resources) and/or the local or indigenous

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community to state a claim for damages or an injunction. Moreover, it facilitates benefit-

sharing because the only option for the patent holder to continue exploiting his/her patent

is through fair compensation and obtaining prior informed consent from the supplier of

genetic resources and/or traditional knowledge.87 In addition, it eliminates the burden on

the patent office to examine a significant number of patent applications involving genetic

resources and traditional knowledge.88 In summary, “the unclean hands doctrine

approach has the advantage that it does not affect the enforceability of the patent- it just

suspends it until the patent owner cleans his/her hands.”89

2. Access, Benefit-Sharing.

In Chapter IV, we analyzed the basis and fundamentals of the principles of access

and benefit-sharing. Moreover, we studied how prior informed consent constitutes the

corner stone of this system. Furthermore, we explored the Bonn Guidelines, which

provide a regulatory framework that facilitates the implementation of the access and

benefit-sharing strategy. In addition, we highlighted the fact that the Bonn Guidelines

give specific steps for implementing prior informed consent and also require the

involvement of all significant players involved in accessing the genetic resources. This

point is fundamental for the recognition of indigenous and local communities’ rights.

Due to these considerations, the implementation of the access and benefit-sharing

system is without any doubt an effective mechanism to regulate access to genetic

resources and protect traditional knowledge. The main objective of the CBD and the

Bonn Guidelines is to implement a fair and clear framework for access to genetic

resources and traditional knowledge that pragmatically promotes this activity for the

improvement of life conditions and biodiversity conservation. That means that states

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have the responsibility to facilitate access to genetic resources and traditional knowledge.

Therefore, all mechanisms and regulations developed within this field cannot constitute

constraints that discourage access to these resources, producing in that way a detriment of

science that can cause a detriment in the technology field.

After analyzing in Chapter V some experiences of implementation of the

principles of access and benefit-sharing, we can see that states misunderstood the

faculties created by sovereignty over genetic resources. As a result, these regulatory

models present uncooperative mechanisms for accessing genetic resources and traditional

knowledge that ultimately constitute obstacles instead of facilitating access. The main

justification for this approach is based on the fears created by biopiracy episodes.90

However, it is important for countries to understand that certain players such as

researchers and universities are fundamental to creation of value from genetic resources

and traditional knowledge. Therefore, it is important to create a mechanism that

differentiates the access for researchers and universities from that of pharmaceutical and

biotechnology companies.

At this point, I want to introduce what I call the “analogy of the amusement park.”

Developing countries (biodiverse-rich countries) should mange the access to genetic

resources and traditional knowledge like an amusement park. When a person goes to an

amusement park, they have to buy a ticket, and in exchange for this value, the person

gains access to games and entertainment in general. However, before the person can

enjoy the attractions of the amusement park, a group of specialists have to work on the

installation of the games and the rest of the park’s features. Of course, the specialists and

employees of the amusement park do not have to pay the ticket price because their work

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is crucial for the success of the business model. What would happen if the specialists that

are going to assemble the park had to pay the same price ticket every time they want to

enter to the amusement park to do their jobs? The specialists would to feel disappointed,

frustrated, discouraged, and betrayed.

The same thing happens in the field of genetic resources and traditional

knowledge. Researchers and universities can be compared to the specialists of the

amusement park. Their job and effort is crucial for the development of products or

knowledge that interest third parties. Therefore, researchers and universities should not

have the same burden to access genetic resources and traditional knowledge as

commercial companies. If bio-diverse countries continue implementing regulation that

involves complex and long steps, researchers and universities are going to feel

discourages about working in that country or with a determined local/indigenous

community (the same case as the specialist that has to buy a ticket to enter to the

amusement park to perform his job).

In the long run, this approach is only going to work against biodiversity-rich

countries that are losing great opportunities for research that can benefit the socio-

economic environment of the nation in general and of the local/ indigenous community in

particular. Consequently, it is important to develop access mechanisms that can

constitute true incentives for researchers and universities that can help to develop useful

products from genetic resources and traditional knowledge. In the end, this will promote

economic opportunities and enhance the research capacity of developing countries, as

well as conserve and protect biodiversity as well as traditions of indigenous peoples.

3. TRIPS Flexibilities: What to patent and what not to patent?

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In Chapter I, we analyzed how much intellectual property we need. Within this

study, we could conclude that traditionally, economists and legal experts have suggested

that the adoption of strong intellectual property rights has a direct impact on economic

growth. It has been argued that the adoption of strong intellectual property standards

results in benefits such as “increased domestic research and development, increased flow

of new products, enhanced value of patent rights, increased inward investment and

technology transfer, improvements in the local knowledge base.”91

Nevertheless, we also conclude that the effects of a stronger intellectual property

system in developing and undeveloped countries are not so positive in the short term.

This is because the adoption of strong intellectual property systems results in the transfer

of wealth from the users of products protected under intellectual property rights (poor

countries) to the holders of IPR (industrialized countries). Moreover, the increase in

research and development and technology transfer is relative because it depends on the

capacity of these countries to get involved in these activities. Furthermore, the increase

of foreign investment does not simply depends on stronger IP systems; it is based on the

general conditions of the country, such as political stability, legal security, and the overall

investment climate. Therefore, not all developing countries benefit from adopting

stronger IP regimes. In this respect, experts have stated that a “developing country never

gains from stronger intellectual property regimes until it is ready to engage in research

and development at the frontiers of knowledge.”92

Considering this previous analysis, as well as the fact that the TRIPS Agreement

has established some flexibility to help WTO Members to adopt the IPR regime that best

fits their needs, we want to explore the extent that patent law should have in developing

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countries. This study’s main objective is to define how biotechnology should be

regulated in developing and least developed countries in order to foster domestic

innovation and promote biotechnology as a mechanism of economic development. The

present section has been based on the study developed by Graham Dutfield, Lois

Muraguri, and Florian Leverve, entitled “Exploring the Flexibilities of TRIPS to Promote

Biotechnology Capacity Building and Appropriate Technology Transfer.”

Article 27.1 of the TRIPS Agreement establishes the minimum standards that

have to be satisfied for the grant of a patent right. In addition, this provision determines

which kind of innovation can be subject to patent protection. In this sense, Article 27.1

states that “[…] patents shall be available for any inventions, whether products or

processes, in all fields of technology, provided that they are new, involve an inventive

step and are capable of industrial application.”93 Consequently, the provision is meant to

ensure that WTO Members will grant patents to any invention that meets the minimum

requirements for the field of technology. Biotechnology is a type of technology, so under

the TRIPS Agreement it could be subject to patent protection. However, biotechnology

is one of the fields that can also be excluded to a certain degree under the TRIPS

Agreement.

While TRIPS does not allow WTO members to exclude biotechnological inventions from their patent systems in any explicit sense, Article 27.3(b) allows them to use their discretion in determining the extent to which inventions in this technological field can be protected. The problem facing developing countries is that if they lack a clear idea of how biotechnology can benefit their economies and improve the lives of their citizens, they are in no position to design an IPR system to promote welfare- enhancing biotechnological innovation. Moreover, many of these countries have no biotechnology industries to speak of, and there is every reason to be highly skeptical that such businesses will spring up just because life-forms and micro- and non-biological processes can be patented.94

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Therefore it is important to understand the scope of these provisions in order to

learn how to deal with them in accordance with the reality and needs of each WTO

Member. The TRIPS Agreement, through the establishment of Articles 27.2 and 27.3,

defines certain restrictions that allow WTO Members to discretionarily exclude such

things from patentability, even though the minimum standards have been fulfilled. In this

respect, Article 27.2 establishes that

Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.95

Furthermore, Article 27.3 states that

Members may also exclude from patentability: (a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals; (b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.96

Article 27.3 (b) represents a bigger bargain for the biotechnology industry

because of the nature of the field. “From its beginnings in the use of micro-organisms as

a factory for the production of compounds of interest, modern biotechnology evolved

toward the use of life forms as such with enhanced capabilities. Breakthroughs such as

the discovery of Bacterium tumefasciens allowed biotechnology to affect much bigger

organisms, plants in that case.”97

From Article 27.3 (b), we can conclude that the following inventions can be

patentable subject matter and cannot be excluded from patentability according to this

provision: micro-organisms and any macro-organisms other than plants or animals, non-

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biological and microbiological processes, and essentially biological process that are not

oriented to the production of plants or animals.98 Therefore, they way that Article 27.3

(b) has been stated leaves certain degree of flexibility in two specific areas: “(i) the

optional subject matter exceptions, specifically plants, animals and essential biological

processes for the production of plants and animals; and (ii) the possibility to define these

terms and others such as micro-organism in a variety of ways.”99 These flexibilities can

be used by WTO Members to adapt their patent regimes in the most favorable manner.

After analyzing the possible interpretations of the terms contained in the TRIPS

Agreement, Dutfield, Muraguri, and Leverve developed the following chart to explain

biotechnology patenting in TRIPS.

Table 1: Biotech patenting in TRIPS: what must be provided and what may not be100

MUST PROVIDE MAY EXCLUDE UNMENTIONED

1. Microorganisms 3. Microbiological processes 4. Non-biological processes 6. Plant varieties (either by patents or by an effective sui generis system or by any combination thereof)

2. Animals and plants (including plant varieties)

5. Essentially biological processes for the production of plants and animals

7. Genes

After identifying the flexibilities contained in TRIPS, it is important to determine

the other elements that are going to play fundamental roles within the promotion of

biotechnology in developing countries. Dutfield, Muraguri, and Leverve have stated that

a crucial element to leveraging the use of IPR and promoting the development of the

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biotechnology industry is determining the biotechnological capacities of the countries. In

this respect, the mentioned experts state:

Measuring biotechnology capabilities is important for a variety of reasons; for the purposes of the present study, two of these stand out: first, it is undisputed that if developing countries are to prosper they must build the capacity to take advantage of new technologies such as biotechnology. Secondly, understanding what biotech capabilities exist in a given country will be instructive in designing appropriate systems and institutions that bolster domestic innovation and encourage technology transfer.101

The authors also state that to define the biotechnological capacities, it is important

to determine indicators. Thus, they present a possible schema that can be used by

developing countries as a road map to define what to patent.

One can envisage a potentially useful schema for different developing countries which builds on the work of economists Sanjaya Lall and Linsu Kim. Such a schema could be based on (i) indicators of biotechnological activity derived inter alia from levels of research and development financed by productive enterprises and patenting activity, (ii) industrial performance, (iii) absorptive and innovation capacities, (iv) and biotechnology product, service and royalty and license fee trade balances. But this section of the report casts a skeptical light on the quantitative methods that such a schema would largely be based upon.102

Determining the biotechnological capabilities is a crucial base to define the state of

the art of each country. This study will help WTO Members to define where they are,

where they have to go, and how to get there. As a consequence, WTO Members will be

able to apply TRIPS flexibilities in the most convenient way and in accordance with their

national interests and reality. In addition, it is important for developing countries to

realize that although regulating biotechnology is a complex field that involves many

socio-economical and technological issues, it is also a field that can promote the nation’s

economy through the enhancement of innovation and biotechnology development.

Therefore, recognizing the weaknesses and strengths of each nation is the first step to

identification of which model of protection the country has to follow. In this respect,

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Graham Dutfield, Lois Muraguri, and Florian Leverve present three ways to implement

Article 27.3 (b) from the TRIPS Agreement and take advantage of its flexibilities.

Option 1 (Table 1) the ‘no exceptions option’. This more or less reflects US practice and is unlikely to be optimal for any developing country. 103 Table 1: Biotech patenting in TRIPS: the ‘no exceptions option’

PROVIDE

Microorganisms (broadly defined)

Animals and plants (including plant varieties by patents and an effective sui generis system) and their parts including seeds, somatic cells, gametes, cells, genes

Microorganisms (broadly defined)

Non- biological processes

Essentially micro- and macro biological processes

Plant varieties also (either by patents or by or by any combination thereof)

Option 2 (Table 2) is the ‘all exceptions option’ which incorporates all of the exceptions while construing the terminology widely or narrowly so that what must be provided is the absolute minimum that is legally acceptable and scientifically reasonable, while as much subject matter as possible is kept outside the patent system.104

Table 2: Biotech patenting in TRIPS: the ‘all exceptions option’105

PROVIDE EXCLUDE

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PROVIDE EXCLUDE

Microorganisms (narrowly defined, e.g. unicellular organisms in the range of 10-5 m maximum size.)

Whole animals and plants (including plant varieties) and their parts including seeds, somatic cells, gametes, genes and gene products

Microbiological processes that are specific to microorganisms

Essentially biological processes for the production of plants or animals (even with substantial human intervention)

Non-biological processes

Plant varieties (only by an effective sui generis system, e.g. modelled on UPOV 1988)

Option 3 (Table 3) is the ‘some exceptions option’. It is not really a single option and the table below aims merely to provide some examples of exclusions and interpretations.(...)

Table 3: Biotech patenting in TRIPS: the ‘some exceptions option’106

PROVIDE EXCLUDE

Microorganisms (narrowly defined) Whole animals and plants

Microbiological processes found in microorganisms that are found in larger organisms too.

Essentially biological processes for the production of plants or animals

Non-biological processes

Plant varieties (only by an effective sui generis system, e.g. modelled on UPOV 1988 or 1991)

Genes (as chemicals with specified function)

The purpose of these tables is to provide countries with different options for patent

regulation, depending on their biotechnology capability. Thus, countries with high levels

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of technology and biotechnology capabilities can apply Option 1, the “no exceptions

option.” On the other hand, countries with low levels of technology, biotechnology

capability, and R&D would do better to apply Option 2, the “all exceptions option.” In

this respect, “for the overwhelming majority of developing countries the all exceptions

option is for the time being the most rational basis for biotech related patent rulemaking.

However for the most advanced of the developing countries which are beginning to

innovate and seek to develop their inventions either alone or in collaboration with foreign

corporations, (...) option 2 may now be desirable.”107

This study has shown that high standards of intellectual property rights are

convenient only for industrialized countries. However, that does not mean that

developing countries should not adopt intellectual property regimes. On the contrary, it

means that the intellectual property regimes adopted by developing countries should be

designed according to the reality of each nation. If the country is not ready to engage in

research and development and strengthen its industry and technology, then it is not

appropriate to adopt a strong intellectual property system. Therefore, it is important to

create a system that would allow developing countries to strengthen their biotechnology

capabilities in order to implement higher standards of IPR that can grow according to the

nation’s technology development. In this respect, Kim, writing on the South Korea case,

concludes:

...strong IPR protection will hinder rather than facilitate technology transfer to and indigenous learning activities in the early stage of industrialization when learning takes place through reverse engineering and duplicative imitation of mature foreign products. (...) only after countries have accumulated sufficient indigenous capabilities with extensive science and technology infrastructure to undertake creative imitation in the later stage that IPR protection becomes an important element in technology transfer and industrial activities.108

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ii. Regime of Undisclosed Information

Traditional knowledge, in all its dimensions, can be protected under the undisclosed

information regime as long as it is a secret, has commercial value, and has been subject to

reasonable steps to keep it secret. In Chapter IV, we analyzed the scope of protection of

undisclosed information established in Article 39 of the TRIPS Agreement. Article 39.2

states:

Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices so long as such information:

(a) is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;

(b) has commercial value because it is secret; and (c) has been subject to reasonable steps under the circumstances, by the person

lawfully in control of the information, to keep it secret.109

Consequently, as long as the traditional knowledge meets these conditions, it can be

considered subject to protection. It is important to analyze the possibility that traditional

knowledge can satisfy these conditions. The first condition states that the information

should be a secret in the sense that it is not generally known or accessible to persons

within the circles of interest. As we studied before, it has been argued that traditional

knowledge is part of the public domain, and as a consequence it could not be considered

a secret.

However, this argument is wrong. If it is true that some traditional knowledge is

generally shared within the community, it is also true that some knowledge is reserved by

few members or one member of the community, such as the shaman.110 As Dutfield says,

“It is very likely that knowledge shared by all members of a community may not qualify

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as a trade secret. However, if a shaman or other individual has exclusive access to

information because of his status in the group, that individual or the indigenous group

together probably has a trade secret.”111 Therefore, some traditional knowledge can be

considered trade secrets.

In addition, the fact that traditional knowledge is shared between some members of

the community does not mean that the information loses its secret character, as long as

they take measures to keep it secret. Dr. Nuno Carvalho makes a point that can be

translated to the traditional knowledge field, stating that “[a] piece of information does

not lose its characteristics of secrecy if it is communicated to one or more employees or

to one or more licensees or business partners, provided that the holder keeps that

information under his control.”112

The second condition is that the information should have commercial value. In this

respect, it could be stated that traditional knowledge does not meet this requirement

because indigenous/local communities cannot be considered market players. Here we

find another misconception that the condition of having economic value translates into a

competitive advantage. Traditional knowledge is valuable information that can save

money and time, as well as increasing the probability of success in the development of

some products. In this regard, “If traditional knowledge is used, the possibility of

developing at least one marketable pharmaceutical from a thousand plant samples rose

from 22 to 78 per cent, or three and a half times.113 Using traditional knowledge, the

efficacy of screening plants for medicinal properties increased by more than 400 per

cent.”114,115 Consequently, it does not matter that indigenous/ local communities are not

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within the industry until their knowledge can constitute a competitive advantage in the

market. In this respect, Charles McManis states:

Contrary to the misimpressions fostered by both proponent and opponents of intellectual property protection, know-how protection is not limited to those who are engaged in the trade or business, but extends to any natural person or legal entity possessed of information that is valuable because it is not generally known. In other words, the justification for know-how protection can be said to extend beyond mere economic concerns, as know-how protection promotes the self-determination of the knowledge holder as well.116

Finally, the third condition is that the information has been subject to reasonable

steps under the circumstances, by the person lawfully in control of the information, to

keep it secret. Here, it could be said that traditional knowledge holders fail to take

reasonable measures to keep traditional knowledge secret. However, as we stated before,

“[m]any traditional societies have their own custom-based “intellectual property”

systems, which are sometimes quite complex.”117 However, western society has ignored

these mechanisms because they are often unfamiliar to western culture. For instance,

Suchman suggests that in some instances, magic is used as one of the mechanisms to

avoid misappropriation in traditional communities.118 Nevertheless, the fact that western

societies are not familiar with these measures of protection does not mean that traditional

knowledge holders have not taken reasonable steps to keep their knowledge secret.

In conclusion, the regime of protection of undisclosed information can be used as

a mechanism to protect traditional knowledge. We have stated that traditional knowledge

might satisfy the conditions that are necessary to be considered protectable subject

matter. Therefore, if traditional knowledge meets the specifications contained in Article

39 of the TRIPS Agreement, it can be protected under this regime, and any natural or

legal person can enforce these rights without the need for specific legislation.

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b. Protection of Traditional Knowledge and Genetic Resources: Sui Generis System. Previously we have seen how traditional knowledge can fit within the existing

intellectual property system. Even though the incorporation of existing intellectual rights

for the protection of traditional knowledge and genetic resources seems to be a feasible

way to fairly protect these resources, there are still some concerns about using rights that

were not developed for this specific subject matter. As we saw in Chapter II, “‘Tradition-

based’ refers to knowledge systems, creations, innovations and cultural expressions

which: have generally been transmitted from generation to generation; are generally

regarded as pertaining to a particular people or its territory; and are constantly evolving

in response to a changing environment.”119 Consequently, traditional knowledge

embraces elements that go far beyond the subject matter of the existing intellectual

property system. To illustrate this point, Dr. Nuno Carvalho developed the Shaman’s

fable and the following discussion that was lately borrowed by WIPO to exemplify this

issue.

A short fable may help illustrate the nature of traditional knowledge and the availability of existing mechanisms of intellectual property that fit its characteristics. Let us imagine that a member of an Amazon tribe does not feel well and requests the pajé’s medical services (pajé is the tupi-guarani word for shaman). The shaman, after examining the patient, will go to his garden (many shamans in the Amazon rain forest are plant breeders indeed120) and collect some leaves, seeds and fruits from different plants. Mixing those materials according to a method only he knows, he prepares a potion according to a recipe of which he is the sole holder. While preparing the potion and, afterwards, while administering it to the patient (according to a dosage he will likewise prescribe), the pajé prays to the gods of the forest and performs a religious dance. He may also inhale the smoke of the leaves of a magical plant (the “vine of the soul”121). The potion will be served and saved in a vase with symbolic designs and the pajé will wear his ceremonial garments for the healing. In certain cultures, the pajé is not seen as the healer, but as the instrument that conveys the healing from the gods to the patient.

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The traditional knowledge of the Amazon shaman is a combination of all those elements. If taken separately, existing intellectual property mechanisms could protect most of, if not all, those elements. For example:

• the different plants from which the shaman has made the potion may be protected under a plant variety protection system, provide the plants are new, stable, distinct and uniform;

• the potion (or the formula thereof) can be the subject matter of a patent, provided it is new, inventive and susceptible of industrial application, or as undisclosed information;

• the use and the dosage of the potion can also be protected by a patent, under the laws of a few Committee Members which make patents available for new uses of substances as well as for new and inventive therapeutic methods;

• the prayer, once fixed, could be copyrighted;122 • the performance, once fixed, can be protected by copyright-related rights,

and the shaman - as performer - can be accorded the right to authorize the fixation of the performance;123

• the vase containing the potion can be patented or protected under a utility model certificate if it has new and inventive functional features; if not, it can be protected under an industrial design system;

• the designs on the vase and on the garments can be protected either by the copyright or by the industrial design systems.124

This example perfectly illustrates the disadvantages of protecting traditional

knowledge under the existing intellectual property system. As we can see in the fable,

existing intellectual property rights can be used to effectively protect separate elements of

traditional knowledge. Nevertheless, the moment that we start dividing the elements of

traditional knowledge to protect them separately, we are ignoring the holistic nature of

traditional knowledge. As we analyzed in previous chapters, traditional knowledge

constitutes a link between the individual and his/her culture and community.125 In

addition, traditional knowledge is conceived as a whole that interrelates the natural and

spiritual worlds.126 Therefore, when we consider each element of traditional knowledge

in a separate way, we are diluting the essence of this knowledge and its role within the

community. In this respect, Carvalho states:

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However, the possibility of separately protecting TK elements does not necessarily correspond to its true nature. Traditional knowledge is not the mere sum of its separated components: it is the consistent and coherent combination of those elements into an indivisible piece of knowledge and culture. For the pajé, needless to say, the merit of the healing resides in the combination of the extract with the religious rituals, and not on the potion individually. The features of the several IP mechanisms mentioned above do not accept such a combination of elements of knowledge as a subject matter. It is necessary, therefore, to design a system that responds to the holistic nature of TK and takes a comprehensive approach to it. Patents, trademarks, designs, etc, may be very effective in providing protection for the individual elements of traditional knowledge; but they do not attend to its holistic nature.127

Consequently, an efficient sui generis system of traditional knowledge protection

has to contemplate the main characteristics of traditional knowledge. That is the only

way to provide traditional knowledge holders with efficient protection that actually

corresponds to the needs, interests, and values that traditional knowledge embraces and

that constitute an element of identity for the community. In this regard, the most

important characteristics of traditional knowledge can be summarized as follows: 1)

Holistic character that makes practical and spiritual elements indivisible and that interacts

as a whole with every dimension of the natural and supernatural world; 2) Evolutive

character – traditional knowledge constitutes the response of the community to a

changing environment, therefore it is dynamic; 3) traditional knowledge is

multidisciplinary, covering a broad spectrum of knowledge that reaches from innovation

to cultural expressions; and 4) traditional knowledge is the result of a informal process,

therefore it cannot be scientifically and technically described like other innovations in the

Western world.128

Development of a system that protects traditional knowledge while reflecting its

holistic nature and its cultural context is the main objective of traditional knowledge

holders and the countries that support their position. Some mechanisms have been

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suggested in this field, such as the use of databases or inventories that can be used to

record the different types of traditional knowledge that come from a defined

community.129 Supporters of this proposal have argued that the only way to achieve an

integral protection of TK and genetic resources is within the development of databases or

inventories. In this respect, Carvalho says that “the only adequate way to document and

formalize the protection of TK is through collections, or inventories, or databases of

TK.(...) Only an inventory of TK would permit such a collection of intertwined data

without obliging the shaman to dismember his knowledge into separate elements. ”130

However, other opinions have been expressed regarding this option. For instance, J. H.

Reichman describes database protection as a “legal monstrosity”131 because of the

acquisition of too much protection for too little intellectual effort.132 However, the

database model has received much support.133

WIPO, through the ICGRTKF, has also considered whether the database or

inventory model could be a good mechanism to conserve and protect the essence of

traditional knowledge. In this respect, they expressed the advantages of adopting the

database or inventory model. According to WIPO:

A system based on an inventory of knowledge would also have the advantage of permitting the updating and modification of its contents, as well as the adding of new contents, without the need for complex and costly formalities, such as a new registration procedure. The fact that the traditional knowledge would be described in its entirety would attend to the complementary nature of its (inseparable) elements. The knowledge of that shaman could therefore be fixed into a database and protected under different (and likewise complementary) sets of rights: the rights to prevent the reproduction and/or fixation of the literary and artistic elements of his knowledge; and the rights to prevent the use of the technical elements of the database contents. Because of the intrinsically practical nature of traditional knowledge, its description and fixation into an inventory would necessarily be extremely flexible, in the sense that the only requirement — particularly as far as technical elements are

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concerned — would be that the description should be comprehensible by a person skilled in that particular field of the art. No one should expect, for example, that the shaman provided the formula or the composition of the formula or molecule of a particular chemical component, but simply a description of the materials he uses, in a manner that another person could reproduce it.134

Using databases or inventories for the protection of traditional knowledge appears

to be an adequate model. This approach reconciles two important concerns regarding

TK, the protection and the conservation of its holistic nature. In addition, it provides both

positive and defensive protection. This model proactively creates rights for the

traditional knowledge holders as well as mechanisms to promote and preserve traditional

knowledge. In addition, the defensive protection is found in the fact that fixing and

documenting TK in databases and inventories constitutes a tool to keep unauthorized

third parties from acquiring intellectual property rights over this TK, treating TK like

prior art.135 Moreover, the implementation of databases or inventories of TK can be

useful tools to facilitate access, because interested parties can enter into agreements that

authorize them to access the knowledge. (Such agreements include the principles of

benefit-sharing as well as prior informed consent.)

Nevertheless, there is a point that can be controversial within the development of

databases for traditional knowledge protection – the authorship issue. According to the

WIPO Copyrights Treaty, databases are protected under copyrights.136 Therefore, it is

important that traditional knowledge holders who want to document their TK in databases

or inventories be able to hold the copyright over these compilations (through assignments

or work made for hire). The BIOZULUA case constitutes a sad episode that shows the

effects of not clearly defining the owner of the intellectual property rights developed.

Encouraged by the economic potential of the database contents and concerned by the lack of legal protection existing at both national and international levels, the

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legally designated proprietors of BIOZULUA, namely FUDECI and MCT, decided to register exclusiveauthorship rights over it and maintain the contents as a secret, even from the communities participating in the study, until such time that that their intellectual property rights can (IPR) can be guaranteed. Naturally the indigenous communities and organizations that have stake in BIOZULUA were outraged by this action and also charged FUDECI with failing to secure their informed consent. (...) following the bitter lesson offered by BIOZULUA , ORPIA, the principal indigenous organization in the Amazon State, issued a statement demanding repatriation of all the information contained in the database and calling for a moratorium on all research involving access to genetic resources and traditional knowledge until all the IPR, consent and compensation issues are worked out at national and international levels.137

Most importantly, for the development of a sui generis system, it is important to

consider the diverse number of interested stakeholders that this topic involves. Protection

of traditional knowledge and genetic resources involves a broad spectrum of interested

parties, such as the state, indigenous communities, environmental organizations, industry,

and others. Therefore, for the development of a sui generis system, it is important to try

to maintain the personal interests of the different groups a part of the final text in order to

avoid harming the public interest. In addition, if we want to create a sui generis system

that can be adopted by the international community, we have to be conscious that we

would have to deal with additional stakeholders and interests, and that the political will

and the interests behind it will have a decisive voice. As Professor McManis states:

...proposls for new, sui generis forms of intellectual property protection generally tend to unleash a phenomenon that can best be described as the “politics of intellectual property” - i.e., good old fashioned political logrolling- the outcome of which is more likely to turn on which of the various competing stakeholders have most political clout than on what is actually in the public interest.138

Consequently, even though the possibility of having a system that embraces all the

dimensions of traditional knowledge and genetic resources is attractive, it requires more

work than using and modifying the existing intellectual property regime. In addition, the

success of developing a sui generis system cannot be granted. Therefore, it is still a

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possibility that a new system can harm the conditions of traditional knowledge holders

and genetic resources suppliers. In this respect, McManis states:

...sui generis intellectual property schemes generally have an unfortunate history of failing to promote not only the public interest, but also the private interests of those the protection is supposed to promote because sui generis schemes have been based on flawed theoretical foundations, both as matter of law and as a matter of economics. If sui generis protection of traditional knowledge is to succeed, it cannot ignore the lessons from the past.139

2. The Ecuadorian Case: Which is the best model for Traditional Knowledge and Genetic Resources Protection?

In Chapters I and II, we discussed the situation in Ecuador regarding the legal

protection of traditional knowledge and genetic resources. We established how the

Constitution of 2008 aims to protect and conserve traditional knowledge and genetic

resources through the incorporation of some provisions that recognize the rights of

indigenous and local communities as well as the value of traditional knowledge.140

Moreover, Ecuador has subscribed to the CBD, the TRIPS Agreement, and the ITGRFA,

therefore, the legal framework established by these treaties is mandatory within the

country.141 Furthermore, it has been explained that Ecuador is member of the Andean

Community of Nations; therefore, Decisions 391 and 486 are part of the Ecuadorian legal

system. Also, the Intellectual Property regime in Ecuador has already adopted the

minimum standards established by the TRIPS Agreement and incorporated the need to

develop a sui generis system for the protection of traditional knowledge.142

With this background, it is important to analyze which road Ecuador should follow

to protect traditional knowledge and genetic resources – a Sui generis system or a system

based on existing intellectual property rights. Before establishing which the most

convenient model for Ecuador is, we must emphasize the fact that even though the

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Ecuadorian Constitution promotes the conservation and protection of traditional

knowledge and genetic resources,143 it also has adopted a defensive approach that

constitutes an obstacle for access and protection of traditional knowledge and genetic

resources. In this respect, Article 57 number 12 contains a prohibition on the

appropriation of traditional knowledge. It states the rights of indigenous and local

communities and establishes that: “(…) Any kind of appropriation of this knowledge,

innovation, and practices is prohibited.”144 In addition, Article 402 prohibits the issuance

of any right, including intellectual property rights, over products derived or synthesized

from biodiversity and traditional knowledge.

The provision contained in Article 57 runs against the interests of indigenous

communities that are not going to be able to acquire any property right over the products

of their intellect. Furthermore, Article 402 not only constitutes a bar for accessing

traditional knowledge and genetic resources, but also it is also inconsistent with the

TRIPS Agreement because it establishes that any invention that meets the criterion is

patentable subject matter in the field of technology.

The adoption of these provisions has shown that regulations that are not carefully

developed will only harm the public interest and the interests of private stakeholders,

such as indigenous communities. These provisions also make it difficult to develop a

scheme that can efficiently protect traditional knowledge. However, since we are

convinced that these provisions can be revised or that the legislator would find an

interpretation that would allow the establishment of an efficient model for the protection

of these resources, we will continue with the discussion of what we consider to be the

right path for Ecuador.

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This Chapter has explored the possible mechanisms of protection for traditional

knowledge and genetic resources. Traditional knowledge has many dimensions that are

per se different and that encompass unique elements. Therefore, there is no single

mechanism that can absolutely meet all the needs for protection that traditional

knowledge and genetic resources demand. Consequently, we believe that the best

approach to the protection of traditional knowledge and genetic resources is one that

effectively combines defensive and positive protection. Therefore, the use of existing

intellectual property rights as well of sui generis models will be required to reach our

goal.

Diversity is the very essence of TK systems, precisely because they are so closely intertwined with the cultural identity of many diverse communities. It is therefore not surprising that practical experience so far with the protection of TK has shown that no single template or comprehensive “one-size-fits-all” solution is likely to suit all the national priorities and legal environments, let alone the needs of traditional communities in all countries. Instead, effective protection may be found in a coordinated “menu” of different options for protection.145

The following table shows the mechanisms that Ecuador can use to protect

traditional knowledge and genetic resources. We are trying to provide interested

stakeholders with a broad spectrum of possibilities that can be adapted to the type of

traditional knowledge that they are interested in protecting. It is important to note that

these possibilities can be used individually or in conjunction depending on the type of


PROTECTION OF TK STRICTO SENSU

MECHANISMS HOW DOES IT WORK?

Existing IP Regime

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Patent Law As it is the current patent law system provides with an effective protection of traditional knowledge and genetic resources that are indispensable for enabling the invention or determine the ownership of the invention or its inventor. According to Articles 29 and 62 of the TRIPS Agreement, in the mentioned cases it is mandatory to disclose the origin or the prior informed consent of genetic resources and traditional knowledge. It is important that the Ecuadorian government initiates programs to teach the interested stakeholders about the possibilities that the current system offers. In addition, it will be important to explicitly incorporate in the law the obligation of disclose the origin or source of TK/GR, as a condition of patentability, in cases in which the invention consist on TK/GR, has used TK/GR or its derived from TK/GR in a way that those elements are indispensable for enabling the invention or determine the ownership of the invention or its inventor.

Patent Law- Inclusion of the Disclosure Requirement

The incorporation of the disclosure requirement as a condition of patentability is only viable under certain circumstances as exposed before. Then, even though Decision 486 of the Andean Community establishes the disclosure requirement as a condition of patentability; it is important that the national regulation adopts the disclosure requirement as a condition of patentability when the TK or genetic resource are crucial for enabling the invention or determine ownership/inventorship of the invention (Current system), and as a condition of enforceability in the rest of cases. The incorporation of the disclosure requirement as a condition of enforceability is an important step that would ensure the satisfaction of the equitable sharing of benefits in the cases that the patent holders have obtained this right over a product that is (directly or indirectly) derived from TK or genetic resources.

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Access, benefit-sharing (ABS) and Prior Informed Consent (PIC)

The inclusion of the principles of ABS and PIC are fundamental for an adequate protection of TK and genetic resources. However, it is important that the regulation that would be developed to regulate these principles will facilitate access to TK and genetic resources. Extremely complex systems discourage the development of research and development, fact that only harm the country of origin or TK holders. Training indigenous communities and governmental authorities in issues regarding access to genetic resources and traditional knowledge will facilitate the development of bioprospecting projects or projects that involve the use and application of TK/GR. The training will enhance the negotiation capacity of the different stakeholders as well as it will allow indigenous people to understand the other side of this topic. In addition, the government should work on incentives to motivate bioprospectors to come to Ecuador and develop strategic partnerships with the country.

Standard of protection for Patent Law

Ecuador should go for Option 2 “all exceptions option.” Until the country is ready to start activities related with research and development (R&D) and the promotion of innovation and technology, it is better to adopt the absolute minimum that is legally acceptable and scientifically reasonable; otherwise, the country could have a negative impact for not being ready to adopt higher standards of IP. However, the country should work on increasing its level of R&D in order to strength the IPR according to the progress in its innovation and technology field.

Undisclosed Information The regime of protection of undisclosed information can be used to protect any traditional knowledge that is considered as a secret and that indigenous/local communities are not willing to disclose it into patent applications or documenting in databases or inventories. It is important that the State makes an explicit recognition of traditional systems (such as magic) to control the access to TK as reasonable methods to keep the information secret.

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Sui Generis System The creation of a database or inventory to fix and document traditional knowledge and genetic resources could be an effective mechanism to provide interested stakeholders with a defensive and positive protection of these resources. In that way, the creation of inventories will help not only to recognize rights of interested stakeholders and empower them to conserve TK and genetic resources, but also as a mechanism to prevent the acquisition of IPR by third parties that are not holders of TK and genetic resources. In addition, it is important to use existing intellectual property rights to protect the databases and the contents. In this respect, the Ecuadorian Intellectual Property Law protects databases under copyrights (see Article 8 of the Ecuadorian Intellectual Propery Law). In addition, the contents can be protected under the IPR that better embraces its nature. If the country is interested in creating a new IPR that encompasses the holistic nature of TK, then it has to consider some factors such as: (i) what is the policy objective of the protection? (ii) what is the subject matter? (iii) what criteria should this subject matter meet to be protected? (iv) who owns the rights? (v) what are the rights? (vi) how are the rights acquired? (vi) how to administer and enforce the rights?; and (vii) how are the rights lost or how do they expire? (See, WIPO, supra note 113, at paragraph 34) For this, the state should initiate conversations and negotiations with the different stakeholders in order to define the interests and perspectives that each party has. We consider that the creation of a new IPR specifically for TK at this moment is not necessary. In that way the generation of a system that incorporates and articulates existing IPR and databases (as noted in the first paragraph of this section) is the best option.

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3. Conclusion

In conclusion, despite the fact that we do not oppose to the idea of a sui generis

system, we believe that it involves a significant investment of human and financial

resources, political consensus146 and a high risk of failure. Therefore, we support the

thesis that countries should work on the application of existing intellectual property

rights, contracts, databases, and other mechanisms that are currently available and that

can be immediately operable. It is also important to consider that even with the creation

of a sui generis system, traditional knowledge is so diverse that it could not be protected

by a single mechanism. The best option is to articulate all the existing legal instruments

and create a system that can provide effective protection for traditional knowledge and

genetic resources. It has been said that existing IPRs are opposed to TK’s nature;

however, the best way to protect TK and respect all that it represents is through an

immediate and effective protection rather than tailoring a sui generis system that can take

years and that does not guarantee a successful regulation in this field.

In addition, training to relevant stakeholders and improvement of research and

development are crucial to the creation of an environment that will effectively protect

traditional knowledge and genetic resources. Moreover, it is important that developing

countries define their capacity building in biotechnology and technology in general,

because that will define the status of the art that will be crucial to define the path of

where does the country want to go. Finally, it is crucial that biodiverse countries

abandon the protectionist scheme which only creates obstacles to accessing genetic

resources and traditional knowledge. These countries need to understand that activities

involving bioprospecting and biotechnology development can greatly contribute to their

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national promotion of innovation and socio-economic development. They should

embrace this opportunity and create strategic partnerships that can bring positive results

for the nation, traditional knowledge holders, the private sector, the academy, and society

in general.

1 WIPO, WIPO/GRTKF/IC/3/8, Elements of a Sui Generis System fot the Protection of Traditional Knowledge paragraph 4, March 29, 2002, available at http://www.wipo.int/edocs/mdocs/tk/en/wipo_grtkf_ic_3/wipo_grtkf_ic_3_8.pdf. The approval of the WIPO/UNESCO Model Provisions for National Laws on the Protection of Expressions of Folklore against Illicit Exploitation and other Prejudicial Actions, of 1982, by a Committee of Experts, and the establishment of the Convention on Biological Diversity, of 1992, are two major landmarks of the debate on the protection of traditional knowledge. 2 WIPO, Intellectual Property and Traditional Knowledge 6, WIPO Publication No. 920 (E), available at http://www.wipo.int/export/sites/www/freepublications/en/tk/920/wipo_pub_920.pdf 3 WIPO, Revised Draft Provisions for the Protection of Traditional Knowledge 21, Article 3, available at http://www.wipo.int/export/sites/www/tk/en/consultations/draft_provisions/pdf/draft-provisions-booklet-tk.pdf 4 WIPO, Intellectual Property Needs and Expectations of Traditional Knowledge Holders 25, WIPO Report on Fact-finding Missions on Intellectual Property and Traditional Knowledge- 1998-1999, WIPO, Geneva, available at http://www.wipo.int/tk/en//tk/ffm/report/final/pdf/part1.pdf 5 See WIPO, supra note 3, at p.22. 6 Nuno Pires de Carvalho, From the Shaman’s Hut to the Patent Office: A Road Under Construction, in Biodiversity and the Law 243, (Charles McManis ed., Earthscan, USA, 2007). 7 Id. 8 http://www.wipo.int/tk/en/tk/ 9 See Nuno Pires de Carvalho, supra note 6, at 247. Also, See WIPO, supra note 2, at 26. 10 See WIPO, supra note 2, at 26. 11 Id. at 12. 12 Id. at 17. 13 Id. at 16. 14 Charles McManis, Fitting Traditional Knowledge Protection and Biopiracy Claims into the Existing Intellectual Property and Unfair Competition Framework, in Intellectual Property and Biological Resources 430-31, (Burton Ong ed., Marshall Cavendish, Singapore, 2004). 15 Id. at 425.

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16 See WIPO, supra note 2, at 17. 17 Manuel Ruiz, The International Debate on Traditional Knowledge as Prior Art in the Patent System: Issues and Options for Developing Countries 5, Center of International Environmental Law, (October, 2002), available at http://www.ciel.org/Publications/PriorArt_ManuelRuiz_Oct02.pdf 18 TRIPS Agreement, Article 27.1, availbale at http://www.wto.org/english/tratop_e/trips_e/t_agm3c_e.htm#5 19 Hansen, Stephen & VanFleet, Justin, Traditional Knowledge and Intellectual Property: A Handbook on Issues and Options for Traditional Knowledge Holders in Protecting their Intellectual Property and Maintaining Biological Diversity 9, (Hansen, Stephen & VanFleet, Justin eds., American Association for the Advancement of Science (AAAS), Washington, DC, 2003), available at http://shr.aaas.org/tek/handbook 20 See Charles McManis, supra note 14, at 443. 21 See Hansen, Stephen & VanFleet, Justin, supra note 19, at 9. 22 Philippe Cullet, Christophe Germann, Andrea Nascimento Muller & Gloria Pasadilla, Intellectual Property Rights, Plant Genetic Resources and Traditional Knowledge, in Rights to Plant Genetic Resources and Traditional Knowledge 126, (Susette Biber-Klemm &Thomas Cottier eds., CABI, UK, 2006). 23 See Hansen, Stephen & VanFleet, Justin, supra note 19, at 9. 24 See Philippe Cullet, Christophe Germann, Andrea Nascimento Muller & Gloria Pasadilla, supra note 22, at 125. 25 Id. at 126. 26 Geertrui Van Overwalle, Holder and User Perspectives in the Traditional Knowledge Debate: A European View, in Biodiversity and the Law 358, (Charles McManis ed., Earthscan, USA, 2007). 27 Blakeney, M., Bioprospecting and the protection of traditional medical knowledge of indigenous peoples: An Australian perspective’, 19 (6) E.I.P.R. 298, 298-303 (1997) (discussing traditional medicinal knowledge protection). 28 See Geertrui Van Overwalle, supra note 26, at 359-60. 29 Id. at 360-61. 30 See Chapter II. 31 James Henderson, ‘Ayukpachi: Empowering Aboriginal Thought’, in Reclaiming Indigenous Voices and Vision 258, (Marie Battiste ed., UBC Press, Vancouver, 2000). 32 Chidi Oguamanam, International Law and Indigenous Knowledge 16, (Oguamanam ed., University of Toronto Press, Canada, 2006). 33 Graham Dutfield, Protecting Traditional Knowledge: Pathways to the Future 2, (Graham Dutfield ed., International Centre for Trade and Sustainable Development (ICTSD), Switzerland, 2006). 34 See Chapter II.

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35 See Geertrui Van Overwalle, supra note 26, at 359. 36 Walter H. Lewis & Veena Ramani, Ethics and Practice in Ethnobiology: Analysis of the International Cooperative Biodiversity Group Project in Peru, in Biodiversity and the Law 394, (Charles McManis ed., Earthscan, USA, 2007). 37 Silke von Lewinski & Anja von Hahn, Indigenous Heritage and Intellectual Property 65, (Silke von Lewinski & Anja von Hahn eds., Kluwer Law International, The Netherlands, 2004). 38 Doris Estelle Long,Traditional Knowledge and the Fight for the Public Domain, 5J.MARSHALL REV.INTELL.PROP.L. 317, 321 (2006). 39 See Chapter 2. 40 See Geertrui Van Overwalle, supra note 26, at 359. 41 See Graham Dutfield, supra note 33, at 8-9. 42 See Geertrui Van Overwalle, supra note 26, at 360. 43 See Nuno Pires de Carvalho, supra note 6, at 243. 44 Michael J. Balick, Traditional Knowledge: Lessons from the Past, Lessons for the Future, in Biodiversity and the Law 287, (Charles McManis ed., Earthscan, USA, 2007). 45 See Geertrui Van Overwalle, supra note 26, at 360. 46 35 United States Code 116. 47 Monsanto Co. vs Kamp, 269 F.Supp.818 (District of Columbia, District Court, 15 June 1967). 48 Shields vs Halliburton Co., 667 F.2d 1232 (US Court of Appeals, 5th Circuit, 19 February 1982). 49 See, for example, Ethicon, Inc. vs United States Surgical Corporation, 937 F.Supp. 1015 (United States District Court, D. Connecticut, 9 September 1996). 50 S.Biber-Klemm & T. Cottier, Right to Plant Genetic Resources And Traditional Knowledge Basic Issues and Perspectives 245, (S.Biber-Klemm & T. Cottier eds., CABI, UK, 2006). 51 Id. 52 WIPO/GRTKF/IC/13/7, of September 18, 2008- ‘Recognition of Traditional Knowledge within the Patent System’, paragraph 43. 53 See Nuno Pires de Carvalho, supra note 6, at 251. 54 See WIPO/GRTKF/IC/13/7, supra note 52, at paragraph 41. 55 See Walter H. Lewis & Veena Ramani, supra note 36, at 400. 56 Id. at 400-10. 57 Id. at 405, 408. 58 Id. at 409.

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59 Id. 60 Id. 61 Graham Dutfield, Intelelctual Property Rights, Trade and Biodivesity 69, (Graham Dutfield ed., Earthscan Publications, London, 2000). 62 Michael A. Gollin, Answering the Call: Public Interest Intellectual Property Advisors, in Biodiversity and the Law 443, (Charles McManis ed., Earthscan, USA, 2007). 63 Nuno Pires de Carvalho, Requiring Disclosure of the Origin of Genetic Resources and Prior Informed Consent in Patent Applications Without Infringing the TRIPS Agreement: The Problem and the Solution, 2 Wash. U. F. L. & Pol’y 371, 371-401 (2000), available at: (http://law.wustl.edu/journal/2/p371carvalho.pdf) 64 Id. at 374. 65 Knowledge, Innovations and Practices of Indigenous and Local Communities, UNEP/CBD/SBSTTA/2/7, 10 August 1996, paragraph 93. 66 See Nuno Pires de Carvalho, supra note 6, at 249. 67 See Oguamanam, supra note 32, at 39. 68 See Nuno Pires de Carvalho, supra note 63, at 375. 69 Id. 70 Id. at 379. 71 Id. at 379-80. 72 See Nuno Pires de Carvalho, supra note 6, at 250. 73 See Nuno Pires de Carvalho, supra note 63, at 380. 74 See Nuno Pires de Carvalho, supra note 6, at 252. 75 WIPO/GRTKF/IC/5/10, of 2 May 2003 -‘Draft Technical Study on Disclosure Requirements Related to Genetic Resources and Traditional Knowledge’, at 30-1. 76 See Nuno Pires de Carvalho, supra note 6, at 250. 77 Id. at 253. 78 See Nuno Pires de Carvalho, supra note 63, at 372. 79 Id. at 394-401. 80 Id., See also, Nuno Pires de Carvalho, supra note 6, at 255-57. 81 TRIPS Agreement, Article 8, available at http://www.wto.org/english/tratop_e/trips_e/t_agm2_e.htm 82 See Nuno Pires de Carvalho, supra note 63, at 395.

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83 Id. 84 Id. at 399. 85 See Nuno Pires de Carvalho, supra note 6, at 256. 86 Id. 87 Id. 88 See Charles McManis, supra note 14, at 471. 89 See Nuno Pires de Carvalho, supra note 6, at 257. 90 See Chapter III. 91 Alan S. Gutterman, The North-South Debate Regarding the Protection of Intellectual Property Rights, 28 Wake Forest L. Rev. 89, 120 (1993) (discussion of the protection of IPR and the different interests existing in relation to this topic). 92 Carsten Fink & Keith E. Maskus, Intellectual Property and Development 8, (Carsten Fink & Keith E. Maskus eds., World Bank and Oxford University Press, Washington D.C., 2005). 93 TRIPS Agreement, Article 27.1, available at http://www.wto.org/english/tratop_e/trips_e/t_agm3c_e.htm#5 94 Graham Dutfield, Lois Muraguri & Florian Leverve, Exploring the Flexibilities of TRIPS to Promote Biotechnology Capacity Building and Appropriate Technology Transfer 11, (November 2006), available at http://ecologic.eu/download/projekte/1800-1849/1802/wp7_final_report.pdf 95 TRIPS Agreement, Article 27.2, available at http://www.wto.org/english/tratop_e/trips_e/t_agm3c_e.htm#5 96 TRIPS Agreement, Article 27.3, available at http://www.wto.org/english/tratop_e/trips_e/t_agm3c_e.htm#5 97 See Graham Dutfield, Lois Muraguri & Florian Leverve, supra note 94, at 8. 98 Id. at 51. 99 Id. at 2. 100 Id. at 53. 101 Id. at 18. 102 Id. 103 Id. at 66. 104 Id. 105 Id. at 67 106 Id.

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107 Id. at 68. 108 L. Kim, The protection of intellectual property rights and technology transfer: a developing country view 5, (Case Study for the ICTSD-UNCTAD Capacity Building Project on IPRs and Sustainable Development, Geneva, 2002). 109 TRIPS Agreement Article 39.2, available at http://www.wto.org/english/tratop_e/trips_e/t_agm3d_e.htm#7 110 See Chapter II. 111 See Graham Dutfield, supra note 61, at 86. 112 Nuno Pires de Carvalho, The TRIPS Regime of Antitrust and Undisclosed Information 232, (Nuno Pires de Carvalho ed., Kluwer Law International, The Netherlands, 2008). 113 Curtis M. Horton, Protecting Biological Diversity and Cultural Diversity Under Intellectual Property Law, 10 Journal of Environmental Law and Litigation 1, 5 (1995). 114 Michael Balick, Ethnobotany and Identification of therapeutic Agents from the Rainforests, in Bioactive Compounds from Plants 22-39, (P.J. Chadwick and J. Marsh eds., John Wiley and Sons, New York, 1990). 115 See Oguamanam, supra note 32, at 5. 116 See Charles McManis, supra note 14, at 437. 117 See Graham Dutfield, supra note 33, at 8. 118 Suchman, M.C., Invention and ritual: Notes on the interrelation of magic and intellectual property in preliterate societies, 89 Colum. L. Rev. 1261, 1264-94 (1989). 119 See WIPO, supra note 5, at 25. 120 See Mark J. Plotkin, Tales of a Shaman’s Apprentice — An Ethnobotanist Searches for New Medicines in the Amazon Rain Forest, (Mark J. Plotkin ed., Penguin Books, 1993). 121 See Richard Evans Schultes & Robert F. Raffaut, Vine of the Soul — Medicine Men, Their Plants and Rituals in the Colombian Amazonia, ( Richard Evans Schultes & Robert F. Raffaut eds., Synergetic Press and Conservation Int’l, 1992). 122 The Berne Convention, Article 15(4)(a), also provides for the protection of unpublished works of unknown authorship. 123 And the shaman would have a right of consent to the fixation of the performance, under the provisions of the WIPO Performances and Phonograms Treaty, Article 6(2) 124 WIPO/GRTKF/IC/3/8, of 29 March, 2002, Elements of a Sui Generis System for the Protection of Traditional Knowledge paragraph 23, available at http://www.wipo.int/edocs/mdocs/tk/en/wipo_grtkf_ic_3/wipo_grtkf_ic_3_8.pdf 125 See Chapter II. 126 Id. 127 See Nuno Pires de Carvalho, supra note 6, at 260. 128 Id.

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129 “The forms of protection of traditional knowledge is another issue that calls for clarification. One possibility to ensure such protection could be the establishment of databases at the national or international levels, and the enforceability of rights in the data against their use by unauthorized parties.” Statement of the Delegation of Brazil at the WIPO Meeting on Intellectual Property and Genetic Resources, Geneva, April 17 and 18, 2000 (on file with the WIPO Secretariat); “System of sui generis databases: among the positions taken by legal writers, [citation omitted] there are some that tend to claim that the best way of protecting traditional knowledge, given its characteristics, variety and sheer scale, would be through the introduction of sui generis databases. Apart from the standard rights in databases that are original in terms of the selection or arrangement of their contents, these would be characterized by the following additional features: Protection of undisclosed information: protection of the arrangement of the information within the database would not be sufficient; there would have to be rights in the knowledge actually recorded. Without protection of the subject matter, there would be no incentive to pass it on in the case of innovations, or to organize it and refine it in the case of traditional knowledge. Right of exclusion applicable not only to reproduction of the information, but also to the use of registered information. No need for prior fixing of the information as a condition of the grant of protection.” Traditional Knowledge and the Need to Give It Adequate Intellectual Property Protection — WIPO Committee on the Relationship Between Intellectual Property, Genetic Resources and Traditional Knowledge — Documents submitted by the Group of Countries of Latin America and the Caribbean (GRULAC), WIPO document WIPO/GRTKF/1/5, of March 16, 2001, Annex I, page 9; “The Delegation concluded that the only manner to adequately address the concerns of traditional knowledge holders would be to develop a positive protection system by means of a sui generis system for the intellectual property protection of the contents of indigenous knowledge databases.” Statement of the Delegation of Venezuela, speaking on behalf of Cuba, Ecuador and Venezuela, See Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore, Second Session, Report, adopted by the Committee, WIPO document WIPO/GRTKF/IC/2/16, of December 14, 2001, at paragraph 122. 130 See Nuno Pires de Carvalho, supra note 6, at 260. 131 J.H. Reichman, Legal Hybrids Between the Patents and Copyright Paradigms, 94 Colum. L. Rev. 2432, 2496 (1994). 132 See Charles McManis, supra note 14, at 475. 133 Id. at 476. 134 See WIPO, supra note 124, at paragraphs 30,31,32. 135 See Nuno Pires de Carvalho, supra note 6, at 248. 136 WIPO Copyright Treaty, Article 5, available at http://www.wipo.int/treaties/en/ip/wct/trtdocs_wo033.html#P59_6206 137 Stanford Zent &Eglee L. Zent, On Biocultural Diversity from a Venezuelan Perspective: Tracing the Interrelationships among Biodiversity, Culture Change and Legal Reforms, in Intellectual Property and Biological Resources 106, (Burton Ong ed., Marshall Cavendish, Singapore, 2004). 138 See Charles McManis, supra note 14, at 474. 139 Id. at 475. 140 See Chapeter I and II. 141 The analysis of the CBD and the TRIPS Agreement can be found at Chapter IV.

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142 Ley de Propiedad Intelectual, Articulo 377, Coorporacion de Estudios y Publicaciones, 2009. 143 See Chapter I and II. 144 Ecuadorian Constitution, Article 57. 12 145 See WIPO, supra note 2, at 16. 146 In these cases political consensus is really difficult to achieve because of the diverse number of stakeholders and their positions. Usually, the final result only reflects the interests of the most powerful stakeholder(s).

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CONCLUSION

The protection and management of biodiversity, genetic resources, and traditional

knowledge is a crucial issue for biodiversity-rich countries in general and Ecuador in

particular. These countries are characterized as the world’s reserve of biodiversity;

therefore, it is fundamental for these countries to develop an efficient method to protect

and make use of these resources. This dissertation has identified the dimensions of

traditional knowledge and genetic resources protection. Consequently, it is crucial to

consider the elements that interact in this field in order to develop regulatory mechanisms

that facilitate access to genetic resources and traditional knowledge protection.

In their search for an efficient system of protection for traditional knowledge and

genetic resources, biodiverse countries should consider intellectual property rights to be

the backbone of their strategy and public policy. Intellectual property rights play a

crucial role within this field because traditional knowledge constitutes a subject matter of

protection under intellectual property rights. In addition, the products directly or

indirectly derived from genetic resources are also protectable subject matter. In this

respect, biodiverse countries should better understand traditional knowledge,

biodiversity, and intellectual property rights in order to eliminate any existing

misconception and identify how these three concepts can work together efficiently. Thus,

intellectual property rights should be seen as tools that can promote innovation, introduce

an aggregate value into the market (IPR helps to differentiate products), and improve

research and development. Conceiving the intellectual property right system as a tool of

progress and development, biodiverse countries should analyze their national realities and

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apply these rights according to their needs, in a way that will bring positive results and

will not interfere with economic, social, and technological growth.

This dissertation has shown us how the international community has developed

important treaties – such as the CBD, the TRIPS, and the ITPGRFA – that have an

undeniable impact on the management of genetic resources and traditional knowledge. It

has been stated that these legal instruments (especially the CBD and the TRIPS) are

inconsistent and contradictory in their objectives. Nonetheless, as we have demonstrated

in this study, these treaties do not present incompatibilities; therefore they are consistent

which each other and are able to interact in this field. It is true that these treaties are the

responses of different interests (North and South debate); however, that does not mean

that they cannot work together. Regarding the management of genetic resources and

traditional knowledge protection, these treaties provide a legal umbrella for the legal

protection of these resources that allows WTO members to adopt efficient regulations in

this field. We have to recognize that the provisions contained in these treaties are still

vague in many areas. However, it is still possible to use the flexibilities contained in the

treaties to adapt provisions according to the needs of the country and the field (genetic

resources and traditional knowledge protection).

This dissertation provides a complete guideline to the management of genetic

resources and traditional knowledge protection. In this respect, it shows the different

aspects that must be considered for an efficient administration of these resources. In

addition, the main purpose of this dissertation is to demonstrate that currently the best

way to protect traditional knowledge and genetic resources is through the efficient

application of existing intellectual property rights. One of the major arguments to

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disqualify existing intellectual property rights for the protection of traditional knowledge

was the holistic nature of traditional knowledge that cannot be embraced by the current

regime of IPRs. However, if it is true that the existing IPRs cannot protect the whole

spiritual essence of traditional knowledge, then it is also true that the best way to respect

the sacred value of traditional knowledge is to give indigenous people timely and

effective regulations that can efficiently protect their rights.

We are not opposed to the creation of a sui generis system for the protection of

traditional knowledge and genetic resources. However, we consider that existing

intellectual property rights can be easily modified and adapted to provide adequate

protection to these resources. In addition, we believe that the nature of traditional

knowledge and genetic resources makes it difficult to develop a single mechanism of

protection. On the contrary, the diverse nature of these resources makes it necessary to

use different existing legal figures in order to develop a system that can be adapted to the

different types of traditional knowledge and the diverse interests of traditional knowledge

holders. Therefore, using the existing intellectual property right systems (such as patents,

copyrights, and undisclosed information), contractual instruments (such as PIC

Agreements and MTA), and other mechanisms (such as databases) will provide an

immediate solution for the treatment of this topic. If it is true that the major advantage of

a sui generis system is that it provides tailored regulations for the protection of TK and

genetic resources, then it is also true that this mechanism can still fail or that the politics

of intellectual property would undermine the public interest, reflecting only the interests

of defined stakeholders.

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Moreover, one of the pillars of the legal regulation of traditional knowledge and

genetic resources is to make operable the principles of access and benefit-sharing.

Nowadays, the use of genetic resources and traditional knowledge can make a difference

for an entire society because these resources can efficiently solve health and food

problems. Therefore, the management of these resources can be considered a common

interest of mankind. However, in order to maximize the use of genetic resources and

traditional knowledge, it is necessary to allow researchers, bioprospectors, and

technology developers to have access to these resources. One of the objectives of the

CBD is to “facilitate” access to genetic resources and traditional knowledge and to give a

fair and equitable share of the benefits obtained from the use of these resources to the

traditional knowledge holders and the genetic resource providers.

Nevertheless, the fears created by episodes of biopiracy and the historical debate

between the North and South have caused biodiverse countries to misunderstand the

objectives and principles contained in the CBD. Consequently, the sovereignty right that

states have over genetic resources has become an instrument of protectionism. In this

respect, the different legal initiatives developed to apply the access and benefit-sharing

principles constitute legal barriers for accessing to these resources. The complex

mechanisms created to manage access to genetic resources and traditional knowledge not

only discourage researchers and bioprospectors, but they also fail to correspond with the

national reality of their countries.1 In addition, biodiverse countries are charging a non-

discriminatory ticket price to everybody who wants to obtain access to genetic resources

and traditional knowledge. This policy only injures the country’s interests and

technological development. Therefore, biodiverse countries should change their strategy,

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especially in respect to universities, academia, and bioprospectors, because these groups

should be seen as strategic partners that can help the country and the indigenous

community to develop their capabilities.

Finally, in order to efficiently incorporate the existing intellectual property rights

and other existing legal mechanisms for the protection of traditional knowledge and

genetic resources, biodiverse countries should develop national policies. These policies

should contain indicators of biodiversity, indicators of traditional knowledge, and

indicators of capacity building in biotechnology and technology in general. These

indicators would provide the status of the art of the country and would define how rigid

or flexible their intellectual property regime would be. In addition, this strategy should

involve different stakeholders such as universities, researchers, bioprospectors,

indigenous communities, civil society, the public sector, and the private sector. This is

the only way to obtain the opinion of the most relevant stakeholders, so at least the

authorities will be able to conciliate some positions and identify the interests of each

sector.

1 The mechanisms are extremely complex and require the interaction of different levels of the administration and local/indigenous communities. These methods are inconsistent with the reality of developing biodiverse countries in which the authorities and the communities do not have enough knowledge and expertise to deal with these matters. As a result, both sides of the negotiation are frustrated because the probabilities to reach an agreement are very low.

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