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Article 27.3(b) of the TRIPS Agreement: Review options for the South

What are the options open to developing countries when Article 27.3(b) comes up for review this year? Cecilia Oh proposes some strategies which could be considered .


Article 27.3(b) of TRIPS

IT has been said that the TRIPS Agreement is the most far-reaching international instrument ever negotiated on intellectual property rights (IPRs). TRIPS details a comprehensive set of new rules and standards for IPRs, which must be adopted by all WTO member states from 1996 onwards, depending on the status of development of the individual member state1. Section 5 of TRIPS obliges member states to provide patent protection for all inventions, both products and processes. The prerequisites for such protection are that inventions must be new, involve an inventive step and be capable of industrial application.

Commercial interests in the new developments in biotechnology led to pressure being exerted on WTO member states to provide better patent protection in this area. The text of Article 27.3(b) is the result of the attempt by certain Northern countries and the biotechnology lobby to impose private, monopolistic rights over biological resources. Article 27.3(b) represents a major new development in IPR law; since it blurs the distinction between "inventions", which are patentable under traditional patent law, and "discoveries", which are not2. The majority of the developing countries, during the TRIPS negotiations, objected to the notion of the patentability of biological resources. The tension between the two opposing views regarding patents on life and the eventual compromise resulted in the following provision:

3. Members may also exclude from patentability:...
(b) plants and animals other than microorganisms, 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 paragraph shall be reviewed four years after the date of entry into force of the WTO Agreement.

Developing countries are concerned that the control of the nature and distribution of new life forms by transnational corporations (TNCs) may affect their food security and development prospects. It had previously been thought that private monopolistic rights could not and should not be imposed over biological resources, the source from which the basic food and medicine requirements of human life are derived. There are major economic, environmental and ethical concerns about life patenting, such as its negative impact on consumer rights, biodiversity conservation, environmental protection, indigenous rights, scientific and academic freedom, and ultimately, economic development of many developing countries dependent on new technologies3. For these reasons, many WTO member states still prohibit the granting of life patents under national laws, although the present trend in countries such as the US and the EU has been to accord patent protection for biotechnological inventions.

TRIPS is the first international instrument to require IPR protection for life forms. The obligation at present is limited to microorganisms and plant varieties, that is to say that WTO member states now have a discretion not to allow for IPR protection of plants and animals, save for microorganisms, plant varieties, non-biological and microbiological processes. The obligations under Article 27.3(b) can be broken down into three components4, viz:

  • A country MAY exclude from patentability plants, animals and essentially biological processes for the production of plants and animals;

  • A country MUST allow patents for microorganisms and non-biological and microbiological processes for the production of plants or animals; and

  • A country MUST provide protection for plant varieties, either by patents or by an effective sui generis system or a combination thereof.

TRIPS review, 1999

As already mentioned, Article 27.3(b) is to be reviewed in 1999. However, the scope of this review is not clearly defined within the provision, and the discussions on the scope and procedure of the review are still ongoing.

During a TRIPS Council meeting in December 1998, it was agreed that an information-gathering exercise be initiated as a first step of the review process. On this basis: 1) WTO members already under obligation to apply Article 27.3(b) are invited to provide information on how they have done so under national law; 2) other members would be invited to do the same on a best-endeavour basis; and 3) the WTO Secretariat will request relevant information from the Food and Agriculture Organisation (FAO), the Secretariat of the Convention on Biological Diversity (CBD) and the International Union for the Protection of New Varieties of Plants (UPOV)5.

There are still disagreements as to the scope of the review. Most developed countries favour a narrow focus of reviewing the implementation process of Article 27.3(b), whilst most developing countries are for a broader approach which would examine the scope and rationale of the provision itself. The argument against a narrow focus on implementation is that the review is taking place at a time when many developing countries have not had to comply with Article 27.3(b), and thus, little analysis or evidence of the effects of the provisions is available. Some concern has also been expressed that if the information-gathering exercise is narrowly focused on implementation and extended to countries which do not need to comply until 2000, it will provide the ammunition needed for other countries to take them to the WTO dispute settlement procedure as soon as the year 2000 deadline is over6.

It is suggested that developing countries should use this opportunity to challenge the premise of Article 27.3(b). A broader scope for the review would avail the developing countries a unique opportunity of negotiating on a single issue, that is, the issue of patenting of life within the subparagraph. In this instance, there would be no trade-offs to be made with other sectors under the WTO ambit, giving developing countries an important opportunity to stand firm during the negotiating process. This strategy should also be considered in light of the increasing political momentum and public pressure in many countries to critically re-examine the so-called benefits of biotechnology and the granting of patents on life and biodiversity. A stand-alone review of Article 27.3(b) would allow for such concerns to be brought into better focus. In addition, there are serious concerns, expressed by developing countries, that the implementation of the TRIPS Agreement will result in conflicts with the CBD obligations. A resolution of these issues must be sought which should be done within the context of the review process.

No time frame for the completion of the review is specified in the TRIPS Agreement. The slow progress of the information-gathering exercise and the actions of the developed countries, particularly the US, suggest that delaying tactics may be used to prolong the review process. This may be so that the review process will carry on to the WTO Third Ministerial Conference in November-December 1999, and then extend into the proposed new Round of WTO trade negotiations in 2000. This may well be the strategy for some countries, proponents of IPRs and patents on life, which view the proposed new Round as an opportunity to force trade-offs from developing countries on a number of different issues, including patents on life.

In light of the above, developing-country governments must press for a substantive review of Article 27.3(b), as a stand-alone process which is not done in conjunction with negotiations on other issues wherein concessions in one area can be traded off for others. In the interim, developing countries should push for a decision to suspend the implementation of Article 27.3(b), until a substantive review - the terms of which must be openly and transparently determined, and agreed upon by the developing countries - is carried out.

Options for TRIPS review

Several options for a review on the scope of Article 27.3(b) are discussed below. The maximum position would be to revise Article 27.3(b) so as to exclude life forms altogether from the ambit of the TRIPS Agreement. The minimum position should seek to preserve the status quo, that is, the existing text, so that the IPR protection is not strengthened any further, and that the present textual ambiguities may be exploited in the implementation process. The various options and their implications are discussed below.

Option I - "No patents on life"

Option I reflects the maximum position, one which seeks to exclude life forms from the ambit of the TRIPS Agreement altogether. The phrase "may exclude" in Article 27.3(b) implies the possibility of countries allowing the patenting of plants, animals and essentially biological processes. It is well established in principles of patent law that substances which exist in nature are simply a "discovery" and not an invention7. On this basis, plants, animals, genes, cells and, for that matter, any other biological matter found in nature, should be deemed non-patentable. Thus, Article 27.3(b) should be revised so as to prohibit the patenting of plants and animals, including their parts, and the processes which make use of, or are related to, plants, animals and their parts. The prohibition against patenting parts of plants and animals must include genes, gene sequence, cells, seeds, etc. which are very much part of the particular plant or animal. To give effect to this option, the text of Article 27.3(b) should be reworded as a separate paragraph to read as follows:

Option IA
Countries must exclude from patentability plants, animals, microorganisms and parts thereof, and any processes making use thereof, or relating thereto.

A variation of this approach is one which would allow countries the discretion to provide for the protection of plant varieties by a sui generis system. The formulation for this approach is as follows:

Option IB
Countries must exclude from patentability plants, animals, microorganisms and parts thereof, and any processes making use thereof, or relating thereto. However, countries may provide for the protection of plant varieties by a sui generis system.

It is to be expected that the approaches embodied in Options IA and IB - effectively overturning Article 27.3(b) - will be strongly challenged. It would have to contend with the commercial biotechnology and seed lobbies demanding complete patentability of biological resources. It will require, at the very least, a strong and united stand of all the developing countries within the WTO. There is also the danger that the negotiating process may be thrown wide open, which may allow for a concerted bloc of developed countries to take control of the rewording of the provision. A worst-case scenario could be the removal of exceptions to patenting of biological resources; then even the status quo, of maintaining the existing text, will be at risk.

Option II - Full discretion to exclude patenting of life

Short of excluding altogether life forms from the ambit of the TRIPS Agreement, the second option is to recapture the full and unconditional discretion for countries to exclude patents on life. In this instance, the words "may exclude" are used to denote the discretion available to national governments to determine on the issue of patenting of life. This option can be formulated as a separate paragraph, as follows:

Option II
Countries may exclude from patentability plants, animals, microorganisms and parts thereof, and any processes making use thereof or relating thereto.

The effect of this formulation is that WTO members will retain the right to exclude patentability of plants and animals, without the condition of providing protection for microorganisms, microbiological processes, non-biological processes and also plant varieties. On this point, it has been suggested that since Article 27.3(b) refers to "plants and animals" and not to any particular class thereof (such as "varieties", "races" or "species"), this reference should be read to include both naturally occurring plants and animals and parts thereof, as well as those which have been genetically modified (i.e., transgenic)8.

Whilst this option does not disallow patents on life, it maintains a measure of national sovereignty over patent law and biological resources. The attractiveness of this option lies in the fact that it will be a logical position to defend, since many developing countries have legislation which does not allow for patenting of plants and animals9. The strategic advantage of this option is that it would provide the developing countries with a convenient fall-back position, that is, no change to the Article 27.3(b) text.

Option III - Status quo maintained

This option reflects the minimum or fall-back position, where the text of Article 27.3(b) is unchanged. This option may be part of the strategy of the developing countries, wherein the 1999 review is used as an opportunity to amend Article 27.3(b) in order to limit the possibilities for patenting of life, but where it does not succeed the unchanged text is kept as the minimum fall-back position. In the context of implementing Article 27.3(b), the current ambiguities in the text may allow developing countries a certain degree of freedom to legislate in a way which is more appropriate to, and consistent with, their interests.

Conclusion

The 1999 review of Article 27.3(b) could well be an important opportunity for developing countries to reverse some of the inequities of the TRIPS Agreement. The IPR system propagated by TRIPS universalises the standards of protection that are suitable for developed countries, and ignores the differences in economic and technological capabilities between the North and the South. Article 27.3(b) represents the gradual control by the WTO and the developed countries over the biological resources of the South. The review allows the developing countries a second chance of redressing the asymmetries of the TRIPS Agreement negotiations. - (Third World Resurgence No. 106, June 1999)

Endnotes

1. All WTO members have one year after the date of entry into force of the Agreement establishing the WTO to apply obligations relating to intellectual property protection. Developing countries have an additional period of four years, except for obligations concerning national treatment and most-favoured-nation treatment, which will become applicable after the expiry of the aforementioned one-year period. Least-developed countries will not be required to apply the Agreement's provisions for a period of 11 years from its date of entry into force. Extensions for this period may be granted by the Council for TRIPS.

2. C. Correa, "TRIPS and the Protection of Community Rights", in Signposts to Sui Generis Rights - Resource Materials from the International Seminar on Sui Generis Rights, December 1997.

3. D. Downes (1998), "The 1999 Review of Life Patenting under TRIPS", CIEL Revised Discussion Paper 1998.

4. B. L. Das (1998), Proposals for Improvements in the Agreement on TRIPS.

5. BRIDGES Weekly Trade News Digest, Vol 2, No 47, December 1998, International Centre for Trade and Sustainable Development; and Annual Report (1998) of the TRIPS Council

6. G. Tansey (1999), Trade, Intellectual Property, Food and Biodiversity: Key issues and options for the 1999 review of Article 27.3(b) of the TRIPS Agreement,Quaker Peace and Service.

7. The South Centre (1997), The TRIPS Agreement: A Guide for the South.

8. ibid.

9. GRAIN, "Strategy Ideas for the 1999 TRIPS Review and Beyond", in Signposts to Sui Generis Rights - Resource Materials from the International Seminar on Sui Generis Rights, December 1997.

Cecilia Oh is a researcher with Third World Network.

 


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