Journal of Intellectual Property Rights Vol 6 November 2001 pp 472-478

Fighting Patent Wars on Bioresources: The Indian Response

Utkarsh Ghate • Foundation for Revitalisation of Local Health Traditions (FRLHT)

50, MSH Layout, 2nd Stage, Anand Nagar, Bangalore 560 024

(Received 15 ] u ne 2001)

Indian government has piloted three revolutionary legislations to protect the national intellectual properly rights OPR), viz. Patenls {Second) Amendment Bill, Biological Diversity Bill and Plant Variety Protection and Fanners' Rights (PVPFR) Act. While necessitated by unfavourable commitments to the World Trade Organization (WTO) . these legislations attempt to benefit from the Convention on Biological Diversity (CBD). The pioneering provisions in these legislations include disclosure of source of material and knowledge, and grounds for opposition or revocation based on availability of indicative traditional knowledge. The biological diversity legislation would necessitate registration of public knowledge throughout the country, Prior Informed Consent (PIC) of the owners of the resources and knowledge as well as the government, for access to resources contingent to benefit sharing. It also charges government with monitoring and opposing IPR infringement of Indian resources and knowledge. Efforts of several NGOs and the government sponsored National Innova­tions Foundation (NIF) provide the platform to build the registration and benefit sharing system at the grassroots. Encouraging such measures internationally through the World Inte llectual Property Organization (WIPO) is advisable.

Having over-exploited India's bulk resources like timber, spices, silk, cotton, etc. as raw matelials for centUlies, the developed coun­tlies are now set to capitalise on our genetic resources and wisdom 1. No dou bt, future wars

Email: g.u tkarsh@frlht-india.org;utkarshgv@yahoo.com

would be fought more with intellectual am­munition than the physical or nuclear. India has prutially won these costly battles, but the impending war needs innovative strategies that are discussed here.

GHATE: FIGHTING PATENT WARS ON BIORESOURCES .. ... 473

Intellectual Property Rights (lPR) protection implies the authority provided by the gov­ernment to the first registered innovator for solely manufacturing and marketing the in­novation2

. Other parties cannot commercial­ize the protected invention unless licensed by the IPR holder, against fees or royalty. Patent is the most relevant form of IPR pro­tection to industrial innovations including pharmaceuticals and agrochemicals. A pat­ent holder enjoys the exclusive rights to profits up to 20 years, depending upon the country. Thereaft er, anyone can freely com­mercialize the innovation. Copyrights are used to protect artistic expressions. Trade secrets protect the undisclosed information like recipes. Plant Breeders' Rights (PBR) , trademarks, geographical indications, inte­grated circuits, industrial designs, database protection are some other recent forms of IPR protection3.

Patents are granted on novel, non-obvious and useful innovations. Public knowledge (e.g. Ayurvedic formulations) is not consid­ered novel and hence, not patentable. Mere discovery (e.g. new species) which does not involve an inventive step, it is not patent­able2. Further, just ;he knowledge of using a plant or a mixture of herbal extracts to cure a disease is not patentable in India. Patent­able biological invention requires biochemi­calor genetic screening, isolation of active ingredients and demonstrable market po­tential.

A patent application must specify sufficient details of the method of invention so that any­one skilled in that art must be able to repeat the same independently. The disclosure state­ment must also adequately specify existing public knowledge. Such specifications help the patent authOlities to scrutinize the novelty and inventiveness claims. In some countries such as India, the patent application summary

is also publicized (e.g. through gazette noti­fication) to invite oppositions until a few months, prior to grant of the patent.

In the turmeric patent case, two American scientists of Indian origin had sought a US patent on the use of turmeric powder for wound healing, something considered novel in the US. Indian government challenged it with extensive evidence that such knowl­edge is not novel but is common in India since ages!. Then the US court revoked the patent. The US patent on basmati rice grown in the US is more difficult. The patent could prevent Indian farmers from selling their basmati in the US. later, the patent may go global and even knock Indian basmati of the European market, its traditional stronghold. Currently, the European traders, under con­sumer pressure, do not pennit for sale any basmati from outside the Indian subconti­nent, even as Textmati or Kasmati, as at­tempted by some US based companies. While such consumer choice for basmati grown in India-Pakistan may protect an eli te market segment. US grown basmati may soon capture significant market share, like Indian Pusa-basmati had been doing slowly over the last decade.

Patenting Life Form through TRIPS

The northern industries argue that develop­ing a new drug takes 10 to 12 years and nearly US $400 million4

•5. They complain that the drug manufacturing technology is pirated and proliferated in southern coun­tries to produce counterfeit drugs, some­times sold even in northern markets, often outsmarting even the original drug! To pre­vent such piracy, original producer needs to apply and obtain IPRprotection separately in each market country. For, the scope, proce­dure and the period of IPR protection differ across countries. This causes enormous de-

474 J INTELLEC PROP RIGHTS, NOVEMBER 2001

lay, costs and losses to northern industries who earlier tried, through the elite Patent Cooperation Treaty, etc. to globalize the IPR regime so that their goods could derive uni­form protection worldwide simultaneousli. UPOV Gnternational Union for Protection of Plant Varieties, 1978, 1991) convention agreed mostly by the northern countries, was an attempt of globalizing the protection to the seeds l

. However, these early attempts of globalizing IPR remained confined to the stagnant developed world markets, bypass­ing the growing markets of the developing world.

Developed countries thus celebrated the eve of the last millennium by forcing most of the developing countries like India to agree to GAIT (General Agreement on Trade and Tariff, 1994) convention. TRIPS (Trade-Re­lated Intellectual Property Rights) is an im­portant component of GAlT. It obliges member countries of the GAlT to provide patent-like protection to innovations from all areas of technology3.6. This includes phar­maceutical and agricultural sectors, which were traditionally kept outside the preview of full or paltial IPR in developing countries like India so as to facilitate competition and consequently avail the food and drugs at low prices to the poor. Further, TRIPS enforces IPR protection to the domestic and foreign innovations alike3. Thus, importing a pat­ented product and its sale is possible, though the Indian law earlier compelled domestic manufacturing of the patented innovation, to boost the domestic industrialization. In the new IPR regime, Indian industry may gradu­ally lose out in the area of new, value-added products like drugs and crop varieties, which will be patented abroad and sold at exorbitant prices in India.

TRIPS requires patents to be granted for 20 years and on products also, not just proc-

esses. India so far permitted only process patents lasting seven years and no product patents in the pharmaceutical secto~·3.6. Thus, Indian drug companies vigorously manufactured many imported drugs by slightly modifying the patented process and sold it at much lower prices. However, as India and other developing countries are oblig·ed to provide product patents soon, do­mestic industry is threatened and new life­saving drugs are turning very costly. The voracious markets may soon flush out the option of the older, cheaper drugs.

Biopiracy

The world history exposes the hollow justi­fication by the north for a stronger ?lobal IPR regime against southern piracy 4, . The northern industries have alone cornered huge profits from the resultant new drugs, crops, cosmetics, etc. be it anti-cancer vin­blastiin from Vinca rosea or anti-hypeltensive serpentine from Rauvolfia_serpentina. How­ever, the drugs got patented and sold very costly even to the countries that contributed the biodiversity and knowledge as raw mate­rials; without any concession, leave apart any profit sharing. Fortunately, as IPR pro­tect only commercial inventions, ongoing domestic uses of bioresources are not pre­vented. Thus, grandmothers can freely use tulsi or turmeric for domestic health care or Ayurvedic vaidyas or pharmacies can con­tinue to sell their powder and syrup un­abated. Unfortunately, none of these can today oppose or claim a share in the exclu­sive profits generated by an industry from a drug based on their knowledge, which will probably be patented and sold abroad. Such cases of unjust benefit sharing from biodi­versity and traditional knowledge during the past several decades triggered a debate, eventually leading to global consensus crys-

GHATE: FIGHTING PATENT WARS ON BIORESOURCES ... .. 475

tallized as the Convention on Biological Di­versity (CBD) in 1992, the political weapon of the developing countries.

CBD, Genetic Resources and Traditional Knowledge

CBD, signed by 170 countries, reaffirms the sovereign rights of the nations8. Article 15 requires member countries to transfer ge­netic resources on the basis of prior consent and mutually agreed terms. These condi­tions, however, do not apply to genetic re­sources obtained prior to the convention, i. e. 1992. For instance, Kew garden and herbar­ium in UK houses the most exhaustive col­lection of Indian plants. These specimens can be easily used to extract genetic material without India's consent just as the US devel­oped its controversial variety from basmati rice strains procured in the last decade. Thus, biodiversity rich southern countries can only set terms of benefit sharing in fu­ture transactions, if any. Further, a biodiver­sity rich country can bargain only if the genetic resource is endemic, i.e. exclusive to it. Otherwise, its neighbours can offer the shared resources on more competitive terms.

Article 8th j requires member nations to re­spect and preserve the knowledge of local people and seek and apply it only with their approval, involvement and equitable sharing of benefits. Article 10c requires member na­tions to protect customary usage of biologi­cal resources. Article 16(5) mandates nations to ensure that IPR are supportive of and do not run counter to the CBD objec­tives. However noble, these provisions can­not be operationalized without enacting corresponding national legislations in the concerned member countries8

. Unfortu­nately, the prior approval provision relates only to undisclosed information. Much of

the traditional knowledge is already in the public domain, e.g. classical texts like Ayur­veda or the ethnobotany literature. Most of this information is readily available in the form of computerized database with quick search facilities, often housed in developed countries Oike NAPRALERT in Chicago, US) 1. Industries access this information without any consultation or benefit sharing with the original contributors. Multi-national Corporations (MNCs) are also actively en­gaged in tapping th e folk knowl edge through local agents1

.

Taking a clue from the CBD, IPR regime is being strongly opposed especially by envi­ronmental and social activists who alto­gether reject patenting of IifeS

,g. They allege that monopolies are socially unjust as they lead to exorbitant prices; monopolies often also lead to monocultures, which are unsus­tainable; and monopolies over life are unethi­cal, as humans have not created life. However, most governments including de­veloping countries in the world have ignored these views and have signed GAIT, includ­ing China, nearing to membership. Even a strong biodiversity legislation such as in Costa Rica does not disqualify all IPR on life, except on innovations similar to traditional knowledge1,8. Such IPR trimming invited no strong reaction in the north, as Costa Rican market is small, easy to ignore. Even if India had prohibited life patenting, it would have continued worldwide, even using Indian ge­netic resources and knowledge but without any consent or benefit sharing.

Patent Wars?

Besides revocation application for turmeric and basmati patents, Indian government, particularly the Council of Scientific and In­dustrial Research (CSIR) , joined the patent war by filing many patents in India and the

476 J INTELLEC PROP RIGHTS, NOVEMBER 2001

US such as relating neem applications6.

However, CSIR's success in marketing its invention is limited and CSIR lacks the com­mercial capital itself. Unfortunately, cost of filing and maintaining patents abroad is also prohibitively high. Private sector is in no better shape, barely few Indian companies like Ranbaxy or Dr. Reddy's Lab have some capability for R& D to generate patentable innovations. No wonder, of the 500 and odd patent claims fil ed in India last year more than two third were by the foreign agencies, especially MNCs. Only MNCs may apply more vigorously for IPR in India in the ensu­ing product patent era. Thus, the Indian sci­entific communi ty can in isolation hardly protect much of the innovations, likely from the enormous diversity of traditional formu­lations, estimated at about 10,000 in case of Ayurveda alone l

.

Further, the motivation behind the patent­ing spurt by the public sector institutions seems to be to flood the market with cheap products before the foreigners can monopo­lize those. However, beyond serving this public good, CSIR can also make profits, if it can successfully commercialize its inven­tions abroad. CSIR must thus start a culture of sharing such benefits, if any, with the Ayurvedic community or folk medical prac­titioners, beginning with CSIR patent relat­ing to use of piperene for treati ng tuberculosis, based on Ayurvedic formula­tion Trikatu .

Indian Legal Initiatives

Patenting spree may benefit only a few inno­vators, primarily individuals. To protect peo­ple's rights in relation to vast store of public knowledge requires its broader recognition. The Indian government has attempted this by amending the patent law to require man­datory disclosure of all the available public

knowledge, written or oral, regarding the claimed innovation lO. It has also added to the grounds for opposition and revocation, the non-disclosure or wrongful disclosure of source of biological material or prior local or indigenous knowledge in any country. Such disclosures will also facilitate the public, be­sides IPR authorities; to challenge incom­plete or misleading claims. Furthermore, it has tabled in the parliament the Biological Diversity BiIIl1, proposing the following benefits from such rights: (i) sharing profits, (ii) favourable terms for transfer of technol­ogyincluding those protected by IPR, (iii) nurturinglocaIR&D,anrl (iv) protecting the customary usage of biological resources in­cluding the local trade.

To establish such prior ali evidence exten­sively, the Biological Diversity Bill proposes nationwide village level documentation of bioresources and knowledge through the local government committees l1. It would also oblige the government authority to op­pose unjust IPR applications in India or abroad. The authority must also ensure ac­cess to foreigners to Indian bioresources and knowledge with prior informed consent and equitable benefit sharing provisions, in­cluding development of indigenous R &D capacity, etc. These provisions will have to be implemented after the enactment of the Bill to safeguard India's IPR interests in tra­ditional medicine.

TRIlPS obliges us to protect new plant varie­ties through patents or any other effective system (hinting at UPOV i.e. International Union for Protection of Plant Varieties, 1978, 1991) or any sui generis, i.e. independent system1,3. The Plant Variety Protection and Fanners' Rights (pVPFR) Actl2 accordingly partly protects breeders' rights to the new seed but not atthe cost of the farmers' rights to any of their cultivars that may have been used in breeding the new variety. Thus, the PVPFR Act facilitates farmers to stake their

GHATE: FIGHTING PATENT WARS ON BIORESOURCES ..... 477

claim in case they feel that their traditional, local varieties are appropriated in the evolu­tion of the new, protected variety. If proved so, the breeder must share the royalty with the fa rmers. Besides, a general gene fund sourced from the tax on the sale of the pro­tected seeds, will be used to reward farmers for co nservation of agro-biodiversity . Though some concerns have been raised about the likely efficacy of the Act, it is still a globally pioneering model seeking to bal­ance the breeders' rights as envisaged in UPOV on one hand and farmers' rewards enshrined in CBD, on the otherl3.14. Fur­ther, India needs to also enact a geographi­cal indications legislation, to prevent any unauthorized use of Indian geographical in­dications abroad, as in the case of basmati.

Challenges Ahead

To fully tap the benefits of these progressive legislations, we must first put in place com­puterized databases of our biodiversity such as folk varieties and the traditional knowl­edge. Secondly, rules for implementing the biological diversity and PVPFR legislations must mandate a specified prior informed consent (PIC) of the biodiversity /knowl­edge donor/so This will necessitate submis­sion of Information or Material Transfer Agreement (ITA/ MTA) along with the IPR application, as mandated in the CBD for benefi t sharing.

The village level registration and chroni­cling envisaged in the Biodiversity Bill may encompass use and conservation knowl­edge, practices and perceptions of individu­als and groups. Local schools and colleges can prepare such registers with the help of the knowledgeable villagers, in pilot projects such as through lISe and FRLHT through­out India I . These registers could be main­tained at the local panchayat offices. Urban R&D institutions can integrate this informa-

tion and material with the existing public domain resources through databases. Such databases must be at least linked to commercial benefits through national, state and local biodiversity fund and rewards as envisaged in the Biodiversity BilI l1

. The fund could support meetings and felicitation of folk medical practitioners, traditional farmers, etc. Venture capital fund may be provided to grassroots innovators to experi­ment putting their ideas into practicel4. At the national level, such a database can be linked to WlPO database on international patent applications, to verify any likely in­fringements abroad on Indian bioresour­ces/knowledgel5. This seems possible given the recent support by the Indian gov­ernment to build databases of farmers' inno­vation s und e r the aegis of Nat ion al Foundation for Innovationsl. This may bank on network of established NGOs such as SRISTI, MSSRF, FRLHT, KSSP, etc. that are actively encouraging documentation and protection of public knowledge through widely accessible information kiosksl. Even grassroot NGOs and people's science move­ments from Karnataka, Andhra Pradesh and West Bengal are volunteering such registra­tion in many villages. Internationally, India must advocate to SAARC and United Nations for creation of such public biodiversity platforms and to fund them internationally using the CBD provisions. Fortunately, TRIPS or overall GAlT does not prevent such recognition to traditional knowledge, taxation measures and environment friendly incentives. World Intellectual Property Organization (WlPO) , a TRIPS affected older body; governing the global IPR regime through the United Na­tions, has proposed measures to safeguard the traditional knowledge l5. India must sup­port such political developments and lobby with other developing countries to eventu-

478 J INTELLEC PROP RIGHTS, NOVEMBER 2001

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