Document(s) 11 of 16

Intellectual property regimes are changing and evolving rapidly. In the following pages Crucible briefly reviews new and recent developments concerning IP. Despite concerted efforts to achieve harmony and consistency across national and regional borders, IP as it applies to life forms remains steeped in a climate of controversy and uncertainty.
 

European Parliament approves patent directive

In an effort to harmonize rules in the European Union, the European Parliament gave final approval to a controversial biotechnology ‘patent directive’ in May 1998. The European Directive on the Legal Protection of Biotechnological Inventions aims to harmonize national legislation on the patenting of genetic material within the EU. The Directive creates, for the first time in European history, an explicit legal right to obtain patents for higher organisms, such as plants and animals.²¹³  However, it does not create a European-wide patent,²¹⁴  nor is it binding for the European Patent Office.²¹⁵  The new law came into force on 30 July 1998. Member states have two years to implement its provisions.

For one decade prior to its approval, the patent directive was a lightning rod for vigorous debate throughout Europe on the ethics and morality of biotechnology and life patenting. In 1995, European civil society organizations opposed to life patenting lobbied strenuously and effectively to defeat an earlier draft of the patent directive. Despite adoption of the EU patent directive, biotech patenting remains controversial in Europe,²¹⁶  and the EU patent directive now faces legal challenges.

In October 1998 the Dutch government filed a nullity suit at the European Court of Justice against the EU’s patent directive. The Italian government joined the Dutch government’s challenge in early 1999. The new German government has also expressed concerns about the directive, and suggested it may not be able to pass the necessary legislation to enact it into German law.²¹⁷

The EU patent directive clarifies the scope of patentability for biotech-related inventions within 15 EU member states. It allows for the patenting of transgenic plants and animals, provided that they meet standard criteria for patentability. In a nod to ethical concerns, the directive outlaws transgenic animal patents on inventions ‘likely to cause [animal] suffering without any substantial medical benefit to man or animal’. The Directive also says that plant and animal patent applications should specify the geographic origin of patented material. In the case of human materials, the person from whom the genetic material was taken must have had the opportunity of giving free and informed consent thereto ‘in accordance with national law’. However, the directive provides no sanction for breach of these requirements.²¹⁸

Humans and human embryos are excluded from patentability, but Article 5 of the directive recognizes that human genes ‘isolated from the human body or otherwise produced by means of a technical process’ can be patented, ‘even if the structure of that element is identical to that of a natural element’. The directive also clarifies the EU position on the patenting of partial gene sequences, by requiring that the function or industrial application of a gene sequence be disclosed in all patent applications.

The patent directive allows for the so-called farmers’ exemption. Small-scale farmers may freely use farm-saved seeds of specified plant varieties for propagation or multiplication on their own farm. Large-scale farmers are required to pay royalties on farm-saved seed. 

The Directive does not include a provision for breeders to freely use plant varieties including patented biotechnological inventions as the initial source for creating other new varieties — the so-called breeder’s exemption. As a result, breeders are left with uncertainty about whether or not and under what conditions they may use a plant variety containing patented traits for breeding purposes.²¹⁹

From the viewpoint of those opposed to the patenting of life forms, approval of the patent directive opened the floodgates to the ‘industrial commodification’ of all life forms, eliminating Europe’s last symbolic barrier to legal resistance. For proponents in government and industry, the patent directive offers much-needed clarification in a controversial area of law and provides a ‘sensible compromise’ between the views of the biotech industry and the ethical concerns that are surrounding the direction of genetic research.²²⁰

US legal challenge on validity of plant utility patents
In January 2000, a federal appeals court affirmed the patentability of plants and seeds in the United States. The ruling was a victory for Pioneer Hi-Bred (Dupont) because it affirms that the US Patent and Trademark Office has the authority to grant patents on sexually reproducing plants. The Federal circuit court ruled that plant breeders have their choice of intellectual property protection — either through utility patents or through the US Plant Variety Protection Act; and the court specifically held that the two acts were consistent with each other.²²¹

The case concerned Pioneer Hi-Bred suing a seed merchant for infringing a patent by buying and re-selling 600 bags of Pioneer Hi-Bred’s proprietary maize seed. The seed merchant argued that the case should be dismissed on the grounds that utility (industrial-type) patents on plant varieties are illegal in the first place. Ultimately, the court did not accept this argument.

Bilateral / unilateral action to protect IP
The establishment of the WTO is supposed to prevent members from unilaterally adopting trade measures to enforce trade goals. However, the US continues to initiate strong unilateral and bilateral measures, such as punitive sanctions against trading partners under the ‘Special 301’ annual review process.²²²  Under this process, the US government (in close consultation with industry groups) examines the record of intellectual property protection in more than 70 countries and publicizes annually the names of trading partners that it believes are failing to provide adequate and effective protection to intellectual property. The US government’s retaliatory actions fall into different categories, ranging from a warning to imposing trade sanctions. 

In some cases, the US is pressing developing countries to accept stronger IP protection than required under the WTO TRIPs Agreement. For example, the US complained that Argentina’s new patent law delayed extension of patents to pharmaceuticals until 2000. Under TRIPs, developing countries are not obligated to phase in patent protection of new product types until ten years after the Agreement entered into force — well beyond the year 2000.

Special 301 is considered by many, from different sides of the trade debate, to be counter to the aims of the WTO, and a breach of its rules which require that any trade sanctions should be preceded by a Dispute Settlement Panel decision and specific approval of retaliatory measures. 

Multilateral agreement on investment
The Multilateral Agreement on Investment (MAI) is an international economic agreement that was negotiated within the framework of the Organization for Economic Cooperation and Development (OECD) between 1995 and 1998. The MAI aims to reduce obstacles and inefficiencies to overseas investments, with the goal of making it easier for corporations to move their investments — both capital and production facilities — across international borders. Citing concerns about national sovereignty, lack of labor and environmental protections and issues of corporate accountability, some LDCs and CSOs vigorously protested the lack of transparency in MAI negotiations, arguing that governments would be abdicating regulatory power to multinational corporations. After France withdrew from the MAI negotiations, the OECD suspended negotiations in December 1998. However, similar agreements to liberalize the movement of foreign investment are currently being promoted by the Transatlantic Economic Partnership. Some parties predicted that similar issues would be included in the Millennium Round of trade negotiations. Obviously, the failure of the member states meeting in Seattle to launch a new trade round (for the time being at least) frustrated the efforts of those who would have liked to have seen them included.

Trilateral world patent system?
Patent offices in Japan, Europe and the United States handle approximately 80% of all patent applications worldwide. In November 1997 the heads of government patent offices from the US, the European Union and Japan met in Kyoto and agreed on steps to integrate their respective patent examination systems into a global network.²²³

The officials meeting in Kyoto agreed to establish a computerized ‘Trilateral Patent Network’ which will allow the patent offices to exchange technological and administrative data on technologies that are the subject of patent applications. The government officials attending the trilateral meeting said that efforts to integrate the three government patent offices may eventually lead to a patent being recognized and protected in all three areas simultaneously.

Document(s) 11 of 16