Vicente Paolo B. Yu III
FOEI
3 December 2001

This memorandum attempts to clarify and interpret the meaning of Paragraph 19 the 2001 Doha WTO Ministerial Declaration relating to TRIPS, the Convention on Biological Diversity, and traditional knowledge and folklore.

Paragraph 19 of the Doha Ministerial Declaration states:

19. We instruct the Council for TRIPS, in pursuing its work programme including under the review of Article 27.3(b), the review of the implementation of the TRIPS Agreement under Article 71.1 and the work foreseen pursuant to paragraph 12 of this Declaration, to examine, inter alia, the relationship between the TRIPS Agreement and the Convention on Biological Diversity, the protection of traditional knowledge and folklore, and other relevant new developments raised by Members pursuant to Article 71.1. In undertaking this work, the TRIPS Council shall be guided by the objectives and principles set out in Articles 7 and 8 of the TRIPS Agreement and shall take fully into account the development dimension.

Para 19 above refers to various provisions of the TRIPS Agreements, as well as to Para 12 of the Doha Ministerial Declaration. They are as follows:

Read with the cited provisions above, Para 19 of the Doha Ministerial Declaration requires the TRIPS Council to include, in its review of the TRIPS Agreement and of TRIPS Art. 27.3(b), an examination -- i.e. non-binding clarificatory discussions -- on the following topics:

1. the relationship between the TRIPS Agreement and Convention on Biological Diversity;
2. the protection of traditional knowledge and folklore; and
3. other relevant new developments raised by Members.

How does Para 19’s instruction to the TRIPS Council to examine the relationship between the TRIPS Agreement and the CBD relate to Para 31(i) of the Doha Ministerial Declaration mandating negotiations on "the relationship between existing WTO rules and specific trade obligations set out in multilateral environmental agreements (MEAs)"? A close reading of both Paras 19 and 31(i) of the Doha Ministerial Declaration indicates that a division of tasks is contemplated.

The examination by the TRIPS Council under Para 19 of the relationship between the TRIPS Agreement and the CBD will -- in light of the references to TRIPS Art. 27.3(b), TRIPS Art. 71.1, and Para 12 of the Doha Ministerial Declaration relating to the treatment of outstanding implementation issues -- be focused on issues relating to the possible amendment of TRIPS Art. 27.3(b) in light of the provisions of the CBD with respect to the acquisition of patents and other intellectual property rights over lifeforms and other genetic resources. Para 31(i) of the Doha Ministerial Declaration, on the other hand, refers to the conduct of mandated negotiations regarding the relationship between WTO rules "and specific trade obligations set out in" MEAs. That is, Para 31(i) focuses negotiations on the issue of the relationship between the WTO and MEAs specifically on the relationship between WTO rules and specific provisions in MEAs that authorize the use of trade measures to meet the MEA’s objectives. This point will be discussed further below.

This division of tasks set out by Para 19 and 31(i) with respect to the CBD implies that notwithstanding the proposals of developing countries to undertake binding negotiations for the amendment of TRIPS Art. 27.3(b) to ensure that life forms (whether macro- or micro-organisms or -biological) cannot be patented, Para 19 clearly indicates that these proposals will only be the subject of further study, examination and non-binding discussions within the TRIPS Council. This effectively leaves the current text of TRIPS Art. 27.3(b) untouched, and excludes it from the scope of negotiations contemplated in Para 31(i) of the Doha Ministerial Declaration. This allows other Members, such as the United States and the EU, to continue their current practice of extending patents over lifeforms.

The examination to be conducted by the TRIPS Council with respect to the relationship between the TRIPS Agreement and the CBD, insofar as TRIPS Art. 27.3(b) is concerned, will have to deal with provisions of the CBD. This indicates that to a certain extent, the TRIPS Council will be discussing how particular provisions of a non-WTO annexed agreement (such as MEAs like the CBD) should interact with and relate to the rules contained in the WTO annexed agreements (such as the GATT, GATS, etc.).

In this discussion, it is clearly important and crucial that the CBD Secretariat be allowed to input and participate in the TRIPS Council discussions. However, the CBD Secretariat does not currently hold observer status with the WTO. It is not an accredited observer to the WTO General Council, and neither does it hold regular nor ad hoc observer status for the TRIPS Council. Absent such observer status, the CBD Secretariat cannot participate in the TRIPS Council discussions on the relationship between the TRIPS Agreement and the CBD. The TRIPS Council discussed the issue of granting ad hoc observer status to the CBD Secretariat in November 2000, but failed to reach a consensus decision on such grant.

The prospect, however, of the CBD being able to gain observer status within the TRIPS Council seems dim. Para 31(ii) of the Doha Ministerial Declaration has subjected the development of the criteria for the granting of observer status to MEAs to negotiations. This implies that pending the conclusion of such negotiations relating to such criteria, the TRIPS Council will not be able to grant observer status to the CBD Secretariat, and conditions the future grant of such observer status on whether the CBD Secretariat meets the criteria so negotiated for such grant.

It would seem that the earliest that the CBD Secretariat can expect to gain observer status within the TRIPS Council would be after the conclusion of the Doha Work Program of single undertaking negotiations -- i.e. after 1 January 2005. By that time, the examination of the relationship between the TRIPS Agreement and the CBD with respect to TRIPS Art. 27.3(b) mandated under Para 19 for the TRIPS Council will most likely have been concluded also -- without the input and participation of the CBD Secretariat.

Embarking on any discussion of the relationship between the TRIPS Agreement and the CBD without the active input and participation of the CBD Secretariat might lead to the effective emasculation and subordination of the CBD’s trade-related provisions in favor WTO rules. This is particularly crucial because the provisions of the CBD themselves are ambiguous in clearly delineating how CBD provisions relating to genetic resources inter-relate with WTO provisions.

The relationship between the CBD and the TRIPS Agreement, as far as the CBD is concerned, is governed by Article 22(1) of the CBD:

Article 22. Relationship with Other International Conventions

1. The provisions of this Convention shall not affect the rights and obligations of any Contracting Party deriving from any existing international agreement, except where the exercise of those rights and obligations would cause a serious damage or threat to biological diversity.

In light of Article 30(2) of the Vienna Convention on the Law of Treaties, which states that "when a treaty specifies that it is ... not to be considered as incompatible with, an earlier or later treaty, the provisions of that other treaty shall prevail", Article 22(1) of the CBD expressly indicates that it will be subordinate to other international agreements. This subordination, however, is qualified and balanced such that the provisions of the CBD will then prevail "where the exercise of those rights and obligations [in the other international agreement] would cause a serious damage or threat to biological diversity."

CBD Article 15(1) states that "the authority to determine access to genetic resources rests with the national governments and is subject to national legislation" while CBD Article 15(2) requires Parties to "endeavour to create conditions to facilitate access to genetic resources for environmentally sound uses by other Contracting Parties and not to impose restrictions that run counter to the objectives of this Convention." Hence under the CBD, Parties are free to determine the conditions under which access to their genetic resources may or may not occur, provided that they also do their best effort to provide for the conditions that would allow their genetic resources to be accessed by other Parties. This could, hence, conceivably include determining the conditions under which patents to innovations based on genetic resources obtained from them may or may not be granted. TRIPS Art. 27.2 and 3(b) allow WTO Members to exclude certain life forms from patentability, but requires Members to allow the acquisition of some form of intellectual property rights -- i.e. patents, a sui generis system, or a combination thereof -- for micro-organisms and microbiological processes. Any restriction by a State that is a WTO Member and a CBD Party on patenting of microorganisms, microbiological processes, and other genetic resources pursuant to its right under CBD Article 15 could hence, conceivably, be the subject of a WTO challenge.

CBD Article 16 provides for access to and transfers among Parties of technology "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." However, such technology access and transfers must be "provided and/or facilitated under fair and most favourable terms, including on concessional and preferential terms where mutually agreed." CBD Article 16(2), (3) and (5), however, require that where the technology is 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." Furthermore, such recognition and protection of patents and intellectual property rights, "subject to ... international law", must be "supportive of and do not run counter" to the CBD’s objectives. The reference to patents and intellectual property rights in CBD Article 16(2), (3) and (5) subjects biodiversity-related technology access and transfers to WTO rules such as those in the TRIPS Agreement.

Hence, in view of Article 22(1) of the CBD, any trade-related measures that a Party may undertake pursuant to their obligations under the CBD above would be subject to the WTO trade obligations of that Party. Biodiversity-related trade measures that would violate WTO rules may be adopted only in instances where the application of WTO rules "would cause a serious damage or threat to biological diversity."

The determination of what would constitute "a serious damage or threat to biological diversity" under the CBD for purposes of justifying a biodiversity-related but WTO-inconsistent trade measure would then be made solely by a WTO dispute resolution panel or the WTO Appellate Body, rather than through the dispute settlement processes under the CBD -- i.e. negotiation, mediation, arbitration, or a case before the International Court of Justice. This will have the effect of making the protection of biological diversity subordinate to trade concerns. This makes it all the more crucial to ensure that the CBD Secretariat should be allowed to participate effectively and fully in the TRIPS Council discussions relating to the CBD.

The protection of traditional knowledge and folklore is another issue in relation to TRIPS Art. 27.3(b) that many developing countries have raised as another outstanding implementation issue that should be addressed by the WTO. However, like the question of amending TRIPS Art. 27.3(b) to ensure that life forms cannot be the subject of patents, this issue has been once again given to the TRIPS Council to "examine" and discuss, rather than have TRIPS Art. 27.3(b) opened up for renegotiation and amendment.

The CBD is relevant to this issue because of Art. 8(j) thereof, which states that:

Article 8. In-situ Conservation

Each Contracting Party shall, as far as possible and as appropriate:

x x x

(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;

The TRIPS Agreement will also impinge directly on the CBD with respect to the application of, among other CBD provisions, Article 8(j) above -- recognition and protection of indigenous knowledge relating to biological diversity and resources. TRIPS Arts. 27.2 and 3(b) are most relevant in this regard because of Article 22(1) of the CBD.

TRIPS Article 27.2 allows WTO 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." TRIPS Article 27.3(b) allows WTO Members to exclude plants and animals from being patented, while at the same time prohibiting WTO Members from excluding microorganisms, nonbiological and microbiological processes from patenting. The language of these TRIPS provisions are, however, discretionary, such that WTO Members may decide not to provide for such exclusions from patentability. In the absence of a decision, the traditional knowledge, folklore, and indigenous knowledge systems referred to in Article 8(j) of the CBD would be made subject to patenting, and hence the application of WTO rules.

Most patents, and the financial and technical resources to undertake and develop scientific research leading to patentable inventions, are held by multinational corporations based in industrialized countries -- primarily the US, the EU, and Switzerland. Hence, the application of WTO rules via TRIPS on indigenous knowledge will mean that such multinational corporations will most likely continue to gain greater exclusive economic control, and the legal power to prevent others from enjoying their benefits or utilizing them, over products and technologies that may be derived from the indigenous knowledge and genetic resources of peoples and communities in the South.

The TRIPS Council discussions on this issue of the relationship between the TRIPS Agreement, in particular TRIPS Art. 27.3(b), and the protection of traditional knowledge and folklore should benefit from and be informed by the presence and active participation of the CBD Secretariat, as well as other international organizations that work on traditional knowledge issues such as the World Intellectual Property Organization (WIPO), the Food and Agriculture Organization (FAO), the International Labor Organization’s (ILO) Secretariat in relation to ILO Convention No. 169, and the UN High Commissioner for Human Rights (UNHCHR) through its Sub-Commission on the Protection and Promotion of Human Rights’ Working Group on Indigenous Populations. The TRIPS Council should also seek input and participation from non-governmental organizations that have gained expertise and experience, from the local to international arenas, in the area of indigenous peoples rights.

Absent such input from other international organizations and non-governmental organizations, the TRIPS Council discussions regarding the relationship between the TRIPS Agreement and the protection of traditional knowledge and folklore will most likely focus on how traditional knowledge and folklore can best be integrated into the TRIPS IPR system, rather than how the TRIPS IPR system should be changed and amended to ensure that traditional knowledge and folklore do not become the subject of patenting and other intellectual property rights. This means that the outstanding implementation issue in this regard that has long been raised by developing countries will be disregarded and marginalized once again within the WTO.

The instruction in Para 19 of the Doha Ministerial Declaration to the TRIPS Council to examine "other relevant new developments raised by Members pursuant to Article 71.1" is based on the last sentence of TRIPS Article 71.1, which authorizes the TRIPS Council to "undertake reviews in the light of any relevant new developments which might warrant modification or amendment" of the TRIPS Agreement.

The fact that such an open-ended mandate exists, not only in the Doha Ministerial Declaration but also in the TRIPS Agreement itself, should be viewed with concern, especially by developing countries and civil society. It can open the door towards further (albeit incremental) expansion of the scope and application of the TRIPS Agreement to areas of public and social policy and concern in which the introduction of a TRIPS-model intellectual property rights regime would not necessarily result in the most optimum social benefit.

* Legal Memorandum by Vicente Paolo B. Yu III, FOEI WTO Program Officer, Geneva, Switzerland, 3 December 2001. The statements in this paper do not necessarily reflect the opinions of Friends of the Earth International or its member organizations.