Biotechnology represents an opportunity to address competitiveness in various productive sectors. Its development requires an appropriate legal and regulatory framework to provide guidance and support. The applications of biotechnology and the massive use of recombinant DNA techniques (rDNA), which generally contributes to achieving a better quality of life, have alerted researchers, government officials and entrepreneurs as to the importance of properly regulating the development and use of Genetically Modified Organisms (GMOs).
Biosafety encompasses the rules necessary to minimize the risks arising from the use of techniques and materials employed by biotechnology. These rules are indispensable to any biotechnology development policy. In addition to protecting the public and private interests, they are intended to facilitate trade and technology transfer, setting internationally accepted standards and practices that protect people, animals, plants and the environment.
The release of GMOs into the environment is an important topic when considering the business impact resulting from certain products developed by modern biotechnology. Dozens of plants and microorganisms and, recently, animals and procedures for gene therapy in humans are emerging outside the realm of research and development laboratories, thus requiring that methods and procedures be formulated which encourage technological advances while also ensuring their safety.
The development of GMOs in the laboratory does not present difficulties, and there are methods and procedures that ensure adequate safety of the operators and their surroundings. Large-scale production of GMOs usually takes place in well-isolated physical environments, where minimum safety conditions – or in some cases, high safety standards – are ensured. The codes of good production practices (GPPs) and good manufacturing practices (GMPs) in Europe or the United States are sufficiently explicit and forceful with regard to biosafety for people and the environment.
The most serious problem is environmental release of GMOs, where a significant increase is expected in the future, in areas including human health and plant health and production. Use of these GMOs on a large scale requires extreme caution and a careful risk assessment prior to release. There are manuals with very detailed procedures and guidelines from international bodies such as the United Nations, the Organization of American States (OAS), the World Organization for Animal Health (OIE), the Pan American Health Organization (PAHO), which propose the rapid adoption of mechanisms to ensure safety at the international and regional levels.
The experience of developed countries has shown that the use of standards and regulations by governments is vital for the proper functioning of a modern economy. Developing countries need mechanisms, procedures and qualified human resources to build an effective and self-sufficient regulatory framework. Any lack in this area can become a major impediment to the development of biotechnology and the application of biotech know-how in numerous industry sectors.
The key issues that are the subject of regulation include biosafety, which, from the point of view of biotechnology, includes provisions to reduce the risks of using techniques and materials applied to health, food, productive systems and the environment. These standards seek to protect public and private interests and to facilitate trade and technology transfer, by establishing internationally accepted standards and practices in these areas.
Regulations establish practices oriented towards decreasing the likelihood of incidents, by minimizing any damage caused. In order to ensure good control, it is necessary to have regulations based on risk assessment and risk management.
Doing a risk assessment consists in systematically collecting the available information about potential hazards in order to form an opinion about them; that is, to identify hazards and assess the dose-response relationship based on exposure. Risk assessment is often a theoretical exercise, although it is based on empirical data.
Risk management is the process of selecting the appropriate policy and regulatory action, integrating the results of risk assessment, with social, economic and political decisions. In 1977, Helen Marquard showed that, when analyzing the main steps of risk assessment, it was convenient to divide the process into stages: one which includes a prior description, strictly detailed, of the GMO itself, and the other describing the purpose of its release. The quality of any risk assessment depends on the degree of knowledge about what will be carried out, and the expected effects.
Once the description of the release of GMOs has been established, the first procedure is to identify the hazard, i.e., the situation which, in certain circumstances, could produce damage. In general, the following situations of risk may occur:
The mere identification of a particular characteristic of a GMO as a hazard does not imply a risk situation. The manifestation of this hazard will depend on the specific situation of release, that is, where and how it is done and on what scale. These aspects should be taken into account in order to identify and estimate the consequences of hazards. It is convenient to consider the consequences which each hazard may cause, directly or indirectly, in a short period, such as:
In the United Kingdom, Marquard indicates that the applicant requesting authorization must examine the magnitude of the consequences, classifying them as severe, moderate, low or negligible. The ability to carry out this analysis requires extensive knowledge of the species in the receiving environment, as well as possible effects on those species. The risk assessment also involves estimating the probability of hazards: with magnitudes high, moderate, low or negligible. Appropriate measures must also be adopted during and after the release; i.e., it is necessary to monitor the effects of the release in regard to its impact on the environment.
Organization for Economic Cooperation and Development (OECD)
The OECD member countries distribute their biotechnology activities between the following groups: the Working Group for Harmonisation of Regulatory Oversight in Biotechnology and the Task Force for the Safety of Novel Foods and Feeds, tasked with developing harmonized regulations for biotechnology. The groups have developed consensus documents, which can be used as technical tools to assist in making regulatory decisions based on safety. The documents – focused on scientific methods of safety assessment – are common to all national agencies that regulate genetically improved plants.
To date, three documents have been published in the areas of biology of plant species (e.g., the environmental assessment of the plants) and general traits (e.g., resistance to viruses and insects and herbicide tolerance). Two documents are being prepared for specific crops of two plant species: rapeseed (canola) and soybeans.
The FAO’s International Undertaking on Plant Genetic Resources for Food and Agriculture
The FAO’s International Undertaking on Plant Genetic Resources for Food and Agriculture represents the first international effort regarding plant genetic resources for agriculture and food. Thus far, however, it has no legal status. It was approved by the FAO Conference in 1983 as an instrument for harmonizing activities related to access to plant genetic resources. Its goal is 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.”
The Undertaking has been reviewed and readjusted several times, and in 1993, it was decided to draw up the Global Plan of Action for the Conservation and Sustainable Utilization of Plant Genetic Resources for Food and Agriculture, to identify the technical and financial needs to ensure the conservation and sustainable use of plant genetic resources. This Plan of Action was adopted by 150 countries in the Leipzig Declaration in 1996. It is expected that negotiations for the undertaking will soon be finalized, which will provide an important international instrument on issues regarding access to plant genetic resources and the distribution of benefits derived therefrom. This document will also serve as a basis for regulating the sustainable use of plant genetic resources in agriculture and food.
Codex Alimentarius
The Codex Alimentarius Commission is the United Nations’ highest authority on food safety standards. In 1989, the Commission decided to evaluate applications of biotechnology to the Codex’s existing system, instead of establishing a committee for this purpose. Currently, biotechnological issues are discussed in the Codex Committees and in the Committees on Food Labelling, on Residues of Veterinary Drugs in Food, on Food Additives and on Contaminants in Foods. Safety assessments are performed jointly by the Codex Committees and by Joint FAO/WHO Expert Committee on Food Additives (JECFA) and also by the Joint FAO/WHO Meeting on Pesticide Residues (JMPR). An Ad Hoc Intergovernmental Task Force on Foods Derived from Biotechnology, chaired by Japan, has been created in order to establish guidelines about the safety of foods derived from biotechnology.
Another priority issue considered by the Codex is labelling of foods derived from biotechnology. Progress is slow. A proposed draft entitled Recommendations for the Labelling of Food Obtained Through Biotechnology did not achieve consensus in 1998, leading to the creation of the Codex Committee on Food Labelling (CCFL) to follow up on examining the text.
Convention on Biological Diversity (CBD)
At the Earth Summit held in 1992 in Rio de Janeiro, the Convention on Biological Diversity (CBD) was opened for signature, which has among its objectives the conservation of the planet’s biodiversity. Early research in biotechnology has been generating a series of important advances in obtaining transgenic organisms, with significant results in global production of food and raw materials. These may, however, constitute a potential threat to ecosystems and genetic resources, if they are not used and managed with adequate, systematic and permanent controls.
This agreement has been ratified by more than 178 countries, although it has not signed by the United States. The objectives of the agreement 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.”
Cartagena Protocol on Biosafety
The Protocol on Biosafety was set forth in Article 19, item 3, of the CBD, ratified by over 170 governments, out of the total of 188 UN member states. This article of the CBD states that “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.” The Protocol did not take into account the limited capacity of many countries, especially developing countries, to control the nature and magnitude of known and potential risks arising from GMOs.
After five years of negotiations, more than 130 countries adopted the Protocol in Montreal, Canada, at an event that took place between January 24-28, 2000. It was called the Cartagena Protocol on Biosafety in Biotechnology, named in recognition of the city in Columbia which was home of the first extraordinary meeting of the Conference of the Parties in 1999. Its specific objective was to ensure an adequate level of protection in the areas of safe transfer, handling and use of genetically modified organisms resulting from modern biotechnology (GMOs) which may have adverse effects on the conservation and sustainable use of biological diversity, also taking into consideration the risks to human health. The scope of its application is restricted to cross-border movements of GMOs.
The protocol was made available to states and regional economic integration organizations for signature at United Nations Office in Nairobi. It has been signed by over 100 governments and regional economic integration organizations. The Protocol will enter into force 90 days after ratification by the 50th party to the CBD. As of this writing, it had been ratified by more than 10 states. In Latin America and the Caribbean, the following countries have signed: Argentina, Chile, Colombia, Costa Rica, Cuba, Ecuador, El Salvador, Grenada, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Trinidad and Tobago, Uruguay and Venezuela.
On November 24, 2003, Brazil filed its ratification of the Cartagena Protocol on Biosafety with the Secretariat-General of the UN. The Protocol, which at that time had the signature of 103 countries, has been in force since September 11, 2003. According to regulations, the Protocol entered into force internally in the country 90 days after the date of Brazil filing its ratification with the UN, i.e., on February 22, 200430.
The purpose of regulatory framework for genetically modified organisms (GMOs) is to ensure balance between the protection of human health, the environment and biosafety issues in accordance with the needs consumers and industry, in a rational, scientific and efficient manner. If the general concepts are not accepted unanimously, then regulations would differ from country to country, which would tend to cause delays in business transactions as well as foreign exchange losses.
The introduction of plants modified by genetic engineering techniques induced changes in existing structures in Canada and the United States within the regulatory sphere, while in the European Union (EU), the changes were discussed and decided upon within the legislative sphere. These different treatments of the subject would result in different positions in the later discussion of these issues at international forums: the Cartagena Protocol on Biosafety, the Convention on Biological Diversity, the Codex Alimentarius, the International Organization for Standardization (ISO), the International Plant Protection Convention (IPPC), the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement), which, for example, gave rise to restrictions by the European market on the entry of GMOs into their territory.
Indeed, comparing the biosafety criteria between countries, there are fundamental differences in definitions – for example, in the definition of GMOs.
Canada (Directive 94-08) defines a GMO as a “plant with novel traits” (PNT): “a plant variety/genotype possessing characteristics that demonstrate neither familiarity nor substantial equivalence to those present in a distinct, stable population of a cultivated species of seed in Canada and that have been intentionally selected, created or introduced into a population of that species through a specific genetic change.”
This definition does not make direct reference to genetic engineering as a method of production, and therefore any specific genetic change (including plants obtained by conventional breeding, among other methods) satisfies the criterion used in Canada to define a PNT. Under the Canadian definition, biotechnology is “the application of science and engineering in the direct or indirect use of living organisms, or parts or products of living organisms, in their natural or modified forms.” This circumstance, which is unique to Canada, is not seen in the biosafety regulations in the US – where fact of the method used to obtain the new variety being via genetic engineering is a condition in order for the entire body of specific regulations to be applicable – nor in the European Union. In the case of the EU, for various reasons, including public perception, the method of obtaining new varieties of plants by recombinant DNA techniques is regarded as being at a different level of uniqueness, which is not considered in the case of the US, and thus the degree of precaution in the EU is higher, resulting in a much more restrictive regulation.
In the Canadian regulatory framework, the objects being regulated are denominated “plants with novel traits” (PNTs), while the regulatory frameworks of the US and EU make mention of “genetic engineering techniques” in their definitions of the objects being regulated. For clarity, this document will refer to GMOs in a way that includes both definitional criteria, that is, when referring to Canadian regulations the term GMO shall refer to products obtained by recombinant DNA technology – as done in the US and the EU – as well as products obtained by conventional breeding or other techniques not considered to be genetic engineering.
The conceptual differences regarding the objects to which the notion of biosafety is being applied, discussed above, cause impacts on the criteria of the regulatory framework. Nevertheless, the basic risk assessment criteria relating to environmental release and to food safety – in this case, with major differences in the EU – are similar, since they are based on the best available knowledge in science and technology. These basic criteria for assessing the risk of environmental release of a GMO, for preliminary assessment, include the following:
In the three cases analyzed, the framework governing biosafety was based from the outset on scientific and technical criteria. Although this continues to be a feature of the current regulations; there are perceptible differences between the countries’ positions in relation to the procedures applied, both in regards to authorization for experimental release into the environment, and in regards to authorization for marketing.
In the US, the agency responsible for authorizing field trials of transgenic plants under controlled conditions, isolated from other plants that may be affected, and ensuring compliance with the conditions listed above, is the Animal and Plant Health Inspection Service (APHIS) of the Department of Agriculture (USDA). This agency defines the “regulated items” as regulated plants in the experimental phase, living organisms, especially plants and microorganisms, and products obtained or modified through genetic engineering which could potentially become plant pests or present risks to plants.
As can be seen, the main issues guiding the decisions of APHIS pertain to the potential risk of the plant becoming a pest. As part of its evaluation, the agency requires an applicant to do a trial release of the GMO in the field, in accordance with the following requirements:
The analysis is performed on a case-by-case basis, taking into consideration factors including the following: the biology of the crop, the introduced traits, the environment in which it will be released, and the interaction of the plant with the environment.
Regarding the biology of the crop, the information required includes, for example, the form of reproduction, the type of pollination, and compatibility with wild relatives and/or related invasive plants. To give an idea of the level of detail required for evaluation, data is included for example on changes that could have been produced in the physical traits of pollen, such as weight, aroma, adhesion, etc.
Regarding the incorporated traits, the evaluation considers the donor organisms of introduced genes and the transformation method. Often some of the introduced genetic elements are derived from plant pathogens. It is important for these elements not to introduce unwanted traits in the genetically modified plant.
With respect to interactions with the environment, consideration is given to the possible flow of pollen to other individuals of the same species which have not been genetically modified, compatible wild relatives and/or related invasive plants which may be present, as well as the management practices of the crop in question. Familiarity and experience with these factors play a key role in assessments, providing a comparison between genetically modified plants and their unmodified counterparts. Thus, familiarity is an essential resource for the assessment of risks associated with GMOs.
An important conclusion to be drawn from applying the criteria described is that genetically modified plants can pose risks that are not unlike those presented by plants modified by classical plant breeding, derived from other genetic techniques which are considered “classic,” which have similar phenotypic traits and which are also grown in similar environments. This is a very different view from the one prevailing in the standards of the European Union, and is supported by groups opposed to GMOs.
In this respect it is interesting to observe the evolution of the standards applied to biosafety of GMOs in the US. The authorization requirements for trials, which were very complex in 1987, evolved in 1993 to become notification procedures, with further simplification of the requirements in 1997, when notification came to require compliance with a limited set of conditions or performance standards. This was the result of accumulated experience, which brought about a basic familiarity with GMOs: in 1988, more than 4,000 field trials had been conducted in more than 18,000 locations, authorized by APHIS. It is important to note that the simplification of procedures did not mean the relaxation of the risk assessment criteria. This can be confirmed by noting that an updated version soon became officially required for the data in applications for marketing authorization, referenced in the Molecular and Genetic Characterization in Environmental Risk Assessment. These documents show an extreme degree of rigor reflected in the large number of requirements drawn up in bilateral meetings of officials from the US and Canada, in order to validate, in both countries, the same request form.
This evolution in the procedures of the regulatory framework has been aided, no doubt, by a strong policy of promoting technology in these countries.
Growing familiarity had led to the realization that the risks of GMOs are not different from any other variety obtained by classical plant breeding, thus allowing the US regulatory framework to switch from a system with high information requirements (an authorization system) to a much simpler system, based on the applicant’s notification of their intention to conduct a trial (a notification system). The notification system, however, can only be used when certain conditions are met (Federal Register, vol. 62, No. 85, pg. 23,945 to 23,958), i.e., so-called performance standards. It is required that the regulatory agency have access to the trial, in writing, in the form of an “acknowledgment letter” and the ratification of the obligation to comply with the so-called performance standard, which remains subject to inspection and reporting of results. Since the notification system is limited to a certain number of crops and traits, the authorization to release arbitrary plants with arbitrary traits into the environment cannot be performed under such a system.
After several years of laboratory and field trials, the APHIS regulatory framework culminates with a determination of what is called “non-regulated status” which will mean a new botanical variety that does not pose significant risk to other plants of the environment and which can be used with the same safety as traditional varieties. This determination allows the new plant to be grown, tested or used to obtain harvest without any additional intervention from USDA-APHIS. Both the petition and the accompanying environmental assessment prepared by USDA-APHIS are published and made available for public comment. A deadline is set for the submission of objections, which are publicly addressed in the document communicating the decision to grant non-regulated status.
The marketing of a GMO also requires the intervention of two regulatory agencies: the Food and Drug Administration (FDA), which regulates the use of GMO food, and the Environmental Protection Agency (EPA), which authorizes the use of GMOs in which certain traits of pesticides have been incorporated, such as insect resistance or herbicide tolerance.
As discussed earlier, the Canadian regulatory framework encompasses plants with novel traits (PNTs), with this category including not only plants derived from recombinant DNA technology but also plants obtained by traditional plant breeding or techniques other than those mentioned. The Canadian regulatory agency for PNTs is the Canadian Food Inspection Agency (CFIA), which adopts as its regulatory criterion the idea that PNTs may have traits which could cause adverse effects – due to the presence of these traits in a particular species of plant and the way the plant is used. Some of these traits may be considered unfamiliar when compared with products already on the market, or may not be substantially equivalent to the types of similar familiar plants already used and considered safe.
As in the cases analyzed, Canada has established information requirements that must be considered in environmental risk assessment of PNTs to ensure appropriate biosafety, in the absence of conditions of confinement.
Canada defines a “confined field trial” as a trial performed in conditions of isolation, including reproductive isolation, inspection of the site and restrictions on future use of the land. Under these circumstances, trials are allowed for studying traits, such rate of pollen escape in species having that capability, invasive characteristics, persistence in the environment, impacts on other species, and other studies, all clearly associated with obtaining data for environmental risk assessment resulting from release (hence the “confined” classification).
Meanwhile, a “field trial” is defined as a trial involving:
It is particularly convenient to define the concept of “substantial equivalence,” a term widely used in the definition of PNTs. Substantial equivalence pertains to a new trait within a particular species of plant in terms of its specific use and its safety for the environment and for humans, compared to the same species that is already in use and is generally considered safe, with this comparison being based on valid scientific criteria. The Canadian definition allows a literal interpretation; i.e., a categorical statement as to whether two plants are or are not substantially equivalent. Other forums (such as the Codex Alimentarius, with criteria shared by the European Union) consider “substantial equivalence” as a guide for deciding on which analytical determinations and parameters should be studied in a GMO to evaluate its safety, compared to its non-genetically modified counterpart .
Canada calls “unconfined release” the use of a PNT under conditions not subject to reproductive or physical isolation of the natural environment or of the agroecosystem, nor inspections or post-harvest land use restrictions and/or restrictions on use of seed and progeny. To obtain the authorization for commercial use of the seed for food, involvement by another regulatory agency is required: Canada’s department of health (Health Canada), which assesses the suitability for human consumption. Meanwhile, the CFIA assesses suitability of food and biological products for animal use.
As stated, the information requirements for risk assessment have recently been standardized by the CFIA and APHIS, and involve a complete set of data. In fact, the standards of the US and Canada began to be harmonized in 1998. To date, this harmonization has resulted in the development of two regulatory documents, one for the data required to characterize the molecular genetics of the GMO, and the other with the necessary data for risk assessment of environmental releases. Both documents will be adopted by those countries, so that a single application is required for authorization of environmental release. Both countries have the intention to propose these documents for discussion in other forums, as models for other countries and international organizations.
The European Union (EU) began to regulate GMOs in 1990. The first Directive (90/220/EEC) was implemented in the period 1992-1995 in all member states. In 2000, members voted on a series of modifications, which resulted in a new Directive (2001/18/EC) from the European Parliament which entered into force on October 17, 2002. The original regulations were based on “process” (the method by which GMO is obtained, that is, by recombinant DNA technology), in contrast with the laws of the United States and Canada, which are based on the “product” (a genetically engineered plant in the US; or a PNT according to the Canadian nomenclature).
The new European standards are more specific, since, when defining GMOs, they do not include mutagenesis and cell fusion among the techniques considered for the regulated articles. Note that these techniques do define a PNT under Canadian standards.
The European standards distinguish between release for commercial and non-commercial purposes. For the first case, the party applying for release authorization must file a notification, which includes a technical report with the information necessary to carry out risk assessment for the environment, as well as their own risk assessment. The competent authority shall approve or reject the notification within 90 days after submission. A distinctive feature of European legislation is the existence of mechanisms for public consultation. In the case of release for commercial purposes, the notification must include:
From this information, it is possible to deduce that labelling is an important issue in European law, although within the regulatory framework of Canada and the USA it is not. In the context of labelling, for example, the European Union requires information on at least the following characteristics:
In cases where it is impossible to exclude the accidental or technically unavoidable presence of traces of GMOs authorized for commercial sale in other products derived from non-GMO raw materials, a threshold value will be established below which such products need not indicate the presence of GMOs on the label.
It may be inferred from these standards that, given the complexity of systems for storing, distributing and processing raw food, the mention of GMO content in food labels will be widespread in the European Union.
For various reasons, the regulatory approach adopted in Europe probably exaggerates its precautionary character. Although this does not imply that the standards of the US and Canada are neglectful or permissive – which they in no way are – it is possible to perceive an overly strict interpretation and undue caution in the European regulations. This is reflected, for example, in various parts of the text of the new Directive, transcribed below:
“... living organisms released into the environment in quantities large or small ... can (affect) ... other member states; the effects of such releases into the environment may be irreversible.”
These statements ignore at least the concept of agroecosystem, in which GMOs are usually cultivated.
“... an assessment of risk to the environment should be made ... such assessment should take into account the potential cumulative effects associated with long-term interaction with other GMOs and the environment.”
This statement does not take into consideration the fact that a risk assessment is precisely the element most appropriate for estimating possible long-term effects.
It is also possible to observe a significant difference in applying the precautionary principle with regard to the presence of antibiotic resistance genes present in GMOs. It is known that there is a low probability of an antibiotic resistance gene to be horizontally transferred from one plant to an organism, either in the soil, or in the gastrointestinal tract of mammals. As verified experimentally, this is based on the many barriers that the plant’s DNA must go through in order to finally be integrated and expressed in a microorganism. Moreover, officials from the Commission for the Environment in the EU indicated there is no scientific evidence that all GMOs containing antibiotic resistance genes have adverse effects on human health and the environment, suggesting that risk analysis should continue to be done on a case-by-case basis. Nevertheless, the standard establishes a deadline (2005) for exclusion from the market of products containing GMOs with antibiotic resistance genes.
In contrast to the European position, it is interesting to note that in 1998 the FDA produced a document on the subject called Guidance for Industry: Guide to Minimize Microbial Food Safety Hazards for Fresh Fruits and Vegetables. The document stated that: “the FDA acknowledges that the likelihood of transfer of an antibiotic resistance marker from plants to microorganisms in the gut or in the environment is remote and that, such transfer, if any, would likely be insignificant when compared to transfer between microorganisms, and in most cases, would not add to existing levels of resistance in bacterial populations in any meaningful way.” Despite the foregoing, the paper suggests that those involved in the development of GMOs should assess, with discretion and on a case-by-case basis, the use of marker genes for antibiotic resistance, by evaluating the following conditions: (1) whether it is an important medication; (2) whether it is frequently used; (3) whether it is administered orally; (4) whether it is unique; i.e., whether it is the only option for certain diseases; (5) whether there is a selective pressure that favors transformation, such as transfer of DNA to the inside of the organism and its expression; and (6) what level of antibiotic resistance is already present in the bacterial population.
This comparison is also an example of the features which have affected the regulatory frameworks for GMOs: (1) the different conceptions of the precautionary approach; and (2) the impact of public perception.
Farmers interested in introducing genetically modified crops have had to adapt to existing legislation pertaining to farmers’ rights. In this context, the relevant instruments are the Acts known as the International Convention for the Protection of New Varieties of Plants established by the International Union for the Protection of New Varieties of Plants (UPOV), drawn up in 1961 and revised in 1972, 1978 and 1991, in which the so-called “farmer’s privilege” appears implicitly. Under this agreement, the breeder must give prior authorization for production for commercial purposes, while also taking into consideration, however, that if the production of propagating material is not made for commercial purposes, then it is excluded from the scope of applicability of breeder’s rights. Therefore, if the seed is produced by the farmer for his own use and not for the purpose of being sold to third parties, it does not infringe on breeder’s rights. This is called the “farmer’s privilege or exception,” which is an exception to the exclusive rights of the breeder.
The topic concerning the farmer’s privilege was modified for several reasons, including assessing the development of new technologies and the costs of innovation, at the time of the Convention’s revision in 1991. The revision expanded breeder’s rights from “commercial production” to “all types of production.” However, given the great diversity of situations in UPOV member countries, such an obligation, requiring seeds intended for one’s own use to be submitted to the breeder for authorization, would have made it virtually impossible to be implemented by many states.
Thus, in order to get the widest possible consensus and the minimum acceptable level which would allow the accession of a large number of countries, the UPOV Convention accepted the possibility that each country could adapt its legislation to the national reality. Some countries, such as France, have chosen not to allow the “farmer’s privilege,” while in the Act of 1991, the exception remains within reasonable limits, always safeguarding the legitimate interests of the breeder.
In practice, the countries that have ratified the Act of 1991 were only able to do so by adapting it to national circumstances, while a large number of countries signatory to the Act of 1972 included provisions in their legislation which tend to strengthen the protection of breeder’s rights.
In the case of the US, for the varieties protected in titles of protection obtained prior to April 5, 1995, farmers could save seeds for future planting, with the condition that they not sell the seeds. Meanwhile, seeds of varieties protected after this time period could only be saved for planting on the same farm; that is, they could not be sold as propagating material without the authorization of the breeder. The seed industry grants such authorization only in specific situations such as emergencies and bankruptcies, among others. In that country, the Supreme Court established jurisdiction over the amount of seed to be saved, which states that a farmer can save the amount necessary to replant, and can sell it to third parties, provided that he retains some amount to actually be used in replanting.
It should be noted that this legislation considers the farmer’s privilege as an exception clause to an infraction, and not as a positive right. Therefore, in cases where a farmer who is obligated under contract not to save or reuse the seeds ends up dishonoring this obligation, it will constitute only a breach of contract and not a violation of breeder’s rights or the waiver of a right.
Canadian law recognizes similarly the farmer’s privilege as was the case in the US before April 5, 1995.
The situation in the EU is more complex because of its multinational nature. The majority of member states have protection regimes that are not harmonized at the Community level, but are subjected to the internal law of each state. Given this situation, in 1994 the EU Council adopted a regulation, amended in 1995, which creates, in addition to provisions at the national level, provisions at the Community level which are applicable to those plant varieties which have been granted titles of protection valid at the Community level. Thus, the Community system does not affect the rights of member states. While Community legislation is in line with the UPOV Act of 1991, several member states have not ratified it.
The EU Community standards allow farmers to use the product of their harvest for planting, under certain conditions, describing these as a restriction which is in the public interest. In its paragraphs, it adopts the phrase “farmer’s privilege” and applies it to certain species, on the condition that farmers who are not considered “small” – in accordance with Community regulations regarding size – be required to pay a fair remuneration to the breeder. Following this criterion, some EU countries have set limits on the farmer’s privilege, based on the volume of production or on the area being commercially exploited. As a counterpart to this protection, monitoring of compliance with the provisions relating to these rights is the responsibility of the rights holder.
In developed countries, companies are fully aware of regulatory matters, and use them as strategic input for management. In the biotechnology field, leading companies have a broad knowledge of biosafety standards and strictly comply with them, using formal structures for their enforcement. Compliance with quality and environmental protection standards, for example, is often used to support marketing and business reputation.
Countries and companies with regulatory frameworks have predominantly adopted, with adjustments, the models used in the United States by the United States Department of Agriculture (USDA) and Animal and Plant Health Inspection Service (APHIS) for plants, by the Food and Drug Administration (FDA) for biopharmaceuticals, and by the Centers for Disease Control and Prevention (CDC) and the National Institutes of Health (NIH) for research and development.
In developing countries, there are few specific regulatory bodies or up-to-date biosafety standards administered by government agencies concerned with research, development, pre-commercial trials, industrial-scale production and marketing of products derived from modern biotechnology.
During the past decade, some countries in Latin America have begun to incorporate measures to address the issue of biosafety, with emphasis on regulating the environmental release of transgenic organisms. In Argentina, the productive sector is incorporating regulations by enforcing them at different levels of their activities. The most dynamic companies interact with the public sector to develop and improve the regulatory framework and monitor its implementation.
The Argentine government is discussing, as a top priority, issues arising from environmental release of genetically modified organisms (GMOs), in the areas of agriculture and human health, having created the National Advisory Commission on Agricultural Biotechnology (CONABIA) [Comisión Nacional Asesora de Biotecnología Agropecuaria] and the National Commission on Biotechnology and Health (CONBYSA) [Comisión Nacional de Biotecnología y Salud]. These two commissions have advisory functions and are composed of representatives from government, research institutions and private companies in the biotechnology field, developing a comprehensive and effective program of work.
Legal systems of protection of intellectual property, using patents, grant a temporary legal monopoly, which is a stimulus for innovation. They have two goals: ensuring the inventor the ownership of their idea and the economic benefits arising therefrom, and allowing society to benefit from the invention in exchange for a fee to use it. However, the protection afforded to the patent is sometimes partial, and, therefore, companies do not consider it to be an effective method. In this case, the focus is on secrecy and the speed with which the product is brought to market, and on stimulating the learning process on the part of staff at an innovative company.
As soon as the innovation is patented and distributed, once it is applied by other companies which have bought the rights, an increase in productivity is achieved, reducing production costs and indirectly generating surpluses for the entire production system. In turn, this knowledge can also be appropriated by other firms, by the mobility of workers from one company to another, by reviewing the professional literature, by copying, by re-engineering and by industrial espionage.
Empirical studies by several authors (NEFFA, 2000) have concluded that the patenting of innovations is not effective to defend intellectual property and encourage its dissemination. For the innovator, it is preferable to accumulate production experience, keeping the trade secret, thus ensuring a considerable period of competitive advantages over competitors. Patenting is not always an incentive for innovators, since there are market imperfections such as uncertainty and risk due to information leaks.
Intellectual property is a means of securing ownership of innovative results. It provides a legal mechanism to prevent the use of protected material by unauthorized third parties. Securing the ownership of innovative results can occur through a variety of methods, whose relevance and effectiveness differ according to the productive sectors involved, which may or may not have to do with innovations in processes or products. In general, it is more effective for products, since process protection is not usually used to prevent alternative processes which achieve the same result (NEFFA, 2000).
Intellectual property is expressed by legal rules, as part of public law, which focuses on various aspects of creation and use of technology, and on distinctive symbols, depending on whether goods and/or services are involved. Intellectual property refers to intangible assets, but its effects extend to tangible goods or services that embody them.
“Scientific works” may include research reports, didactic works, models, and other works which are not categorized as art or fiction. But procedures or scientific methods, or scientific discoveries, are not considered as such. As a general principle, the protection provided does not cover ideas, methods, etc., contained in a work, but rather the way in which these are expressed. A “scientific work” does not deserve protection due to the scientific character of its contents, but rather due to the way in which it expresses this, in written or graphic form.
Finally it should be remembered that the publication of a work protected by copyright may inhibit the use of technical ideas contained therein for the purpose of protecting an invention via a patent application. Ignorance of this rule is often a source of great frustration for researchers. In some European and American universities, mechanisms have been established to prevent the disclosure information which could negate the absolute novelty required for patent applications.
This consists of all information which has industrial application and which is confidential in nature, which enables obtaining or maintaining a comparative advantage or cost advantage in relation to others in performing economic activities which use means or systems sufficient to preserve its confidentiality and restrict access to it32. When the secret is communicated to an employee, this must be done in the form of an explicit warning of its confidential nature; that is, it must appear with a special clause in the contract. The information which is subject to confidentiality must be anchored in a physical medium.
Parallel to the patent system, a concept has developed which is nowadays called know-how. On the theoretical side, know-how and confidential information correspond to the concepts of trade secrets, and can be defined as “unpatented technical knowledge, for which due precaution has been taken not to divulge it.” Unpatented technical knowledge is a mechanism by which certain technical information may appear in the margins of public knowledge. When reserved for the owner of the invention and put into practice along with the patent, it thus gains greater value.
While patent law is a property right, secrecy is not considered a property right under Continental (European) law, as conceived under Anglo-Saxon law. This theme has been the subject of intense debate, arising from conflicting interests on the matter, following the spectacular development of the application of trade secret protection as a methodology in the technology field, to the point where experts certify that core technology is covered by industrial secrecy and not by patent. Therefore, the decision to maintain secrecy, especially at the research development stage, has become a common practice. Simultaneously, a strong increase in industrial espionage has developed, encouraging debate about ways to protect industrial secrets.
At the Uruguay Round of GATT negotiations, protection of confidential information was included. At that meeting, TRIPS (Trade Related Aspects of Intellectual Property Rights) was added as an item on the agenda, regarding intellectual property rights applied to industry and commerce. Intellectual property rights have traditionally been the responsibility of the World Intellectual Property Organization (WIPO). However, developed countries have chosen to discuss international law under the GATT, considering that this international body can enforce sanctions against members who do not meet the agreed standards, something which does not occur within the framework of WIPO.
The topics which have been incorporated into the competence of the GATT are: patent law, trademarks, industrial designs, software and integrated circuits. In 1990, at the request of the United States, the “protection of confidential information” was included. The intention was to interpret this information as a property right. However, the other countries, particularly members of the European Union, argued that trade secret protection was based on unfair competition, and this argument won. The GATT, through TRIPS, then established a specific type of essentially international rules, which will be extended to countries that join, for a period not exceeding 10 years.
Securing ownership of innovative results can also be achieved through other mechanisms that affect the entry and performance of potential competitors, such as lead time, learning and improving technology, as well as systems of sales and publicity (NEFFA, 2000). Lead time is the amount of advantage that the innovator has in relation to others when introducing a new product or process. It is important both in high-tech industries and in consumer products, where product differentiation plays an important role.
Learning and improving one’s own technology performed by the innovator itself can also provide an advantage over the competitors; i.e., the innovator can offer new products. This means of securing ownership is particularly important in sectors where accumulated and tacit knowledge is important, such as occurs in the area of biotechnology. The system of sales and customer service is also a way to maintain a captive customer base and avoid the proliferation of imitators. This method is significant in areas of high, medium and low technology.
Standardization is another activity that contributes to the diffusion of innovations (NEFFA, 2000). The definition and establishment of technical standards helps to reduce uncertainty, broaden the market, lower unit costs, increase economies of scale and productivity and appropriately meet the needs of customers and users. Standards allow setting the boundaries of technological trajectories, contribute to homogenizing the product components and make products from different brands compatible, facilitating learning and improving maintenance and repairs. The establishment of a new product typically includes the participation of industry, consumers or users, experimentation and trials made in the scientific, technological and university realms and public sector involvement in the search for consensus to codify it. When a standard is adopted by manufacturers, this reduces the field of possibilities for innovation and delimits the scope of competition. In view of the speed of scientific and technological changes, standards should be reviewed periodically.
Users and consumers benefit from the adoption of appropriate standards, but this is not equally true for everyone. Some may not meet the standards and will be at a disadvantage, while others might be able to impose their standards on the country. Thus, barriers to entry and permanence are generated, sometimes driven by requirements arising from adapting to standards imposed by international trade. The increasing importance of ISO standards plays a decisive role for the ability of goods from developing countries to access the markets of industrialized countries.
The international marketing of modern biotechnology products has occurred at a much faster pace than the improvement of regulatory systems ensuring the benefits of biotechnology for the public and the safety of GMOs for human and animal health and for plants and the environment. These facts have resulted in barriers to trade for these products. In Europe, scientifically unsubstantiated concerns have politicized and practically paralyzed the approval process, thus hindering the trade of biotechnology products.
The Conference was opened for signature in June 1992 and the UN Convention on Biodiversity entered into force in December 1993, and had been ratified by 157 countries by August 1996. It proposed conservation of biological diversity, sustainable use of genetic resources and fair and free distribution of benefits from their use. In the past, genetic resources had been declared to be a common heritage of mankind. Article 15 recognizes the sovereign rights of states over their natural resources, their authority to determine access to them and the need for such access to be subject to prior informed consent. In exchange for providing access to their genetic resources, a donor country shall benefit by any of these three mechanisms: participation in research – Article 15(6); participation in the research results and benefits from commercial exploitation – Article 15(7); and access to and transfer of technology derived – Article 16(1). The Convention recognizes the legitimate role of intellectual property in achieving these goals.
The approval of the Cartagena Protocol on Biosafety under the Convention on Biological Diversity, which regulates the movement of agriculture-related GMOs across borders, implies the adoption of new regulations at the international level, along with advances in the regulatory environment in Europe. The ratification process is relatively slow, and apparently will not have an immediate impact on international trade in GMOs.
The Paris Convention for the Protection of Industrial Property of 1883, revised on several occasions, applies to patents, trademarks, geographical indications, industrial designs and unfair competition. Among other provisions, it includes a right of priority, where a patent applicant may apply for a patent in one country and then, within one year, apply in other countries of the Paris Union, and these later applications will be regarded as if they had been filed on the same date as the first application.
The International Union for the Protection of New Varieties of Plants (UPOV) sets minimum standards for the protection of vegetable varieties through “breeder’s rights.” It is an international union of countries with common or similar systems regarding breeder’s rights. There is a version of the agreement from 1978 (UPOV 78) and another from 1991 (UPOV 91), as explained in Table 2. Argentina has acceded to UPOV 78.
The Act of 1978 includes a breeder’s exemption, which allows using a protected variety to create a new variety. This addition was intended to allow new varieties by natural cross-breeding, performing the selection using the traditional system of cultivation. With the application of genetic engineering, biotechnology companies could take ownership of many existing plant varieties, by adding a gene that confers resistance to diseases, pests, and herbicides, etc., which could undermine much of traditional cross-breeding technology. UPOV has analyzed this situation, and the Convention of 1991 formulated a new concept, called the essentially derived variety.
The conditions for the protection of a new variety are the same under both the 1978 and 1991 Acts: it must be distinct, uniform and stable. Otherwise, it is considered an “essentially derived variety”, when most of the traits of the new variety are the same as the previous variety, which is called the “initial variety.” A variety may be deemed to be “essentially derived” (thus requiring prior authorization from the breeder of the initial variety) if it maintains most of the genetic traits and has only a small addition made by biotechnology techniques, or by classical techniques such as by selection of a natural mutant or by backcrossing. The concept of “essentially derived variety” aims to simultaneously discourage outright copying while encouraging innovation in plant breeding.
Table 2. Major differences between the UPOV 78 and UPOV 91 systems.
Use of propagating material which requires prior authorization of the breeder |
|
UPOV 78 (Art. 5(i)) |
UPOV 91 (Art. 14(i)) |
Production for commercial purposes |
Production or reproduction (multiplication) Preparation for the purpose of propagation |
Offer for sale |
Offer for sale |
Commercial sale |
Sale or other type of marketing Export / import Storage for any purpose mentioned |
Extension of protection to harvest products |
|
UPOV 78 (Art. 5(4)) |
UPOV 91 (Art. 14(2)) |
Optional |
Yes, when they are not obtained by the unauthorized use of propagating material and when the breeder does not have the opportunity to exercise its rights in relation to the propagating material |
Protection of essentially derived varieties |
|
UPOV 78 |
UPOV 91 |
No |
Yes: Art. 14 |
Duration of protection |
|
UPOV 78 |
UPOV 91 |
18 years for trees and vines |
25 years for trees and vines |
15 years for other species |
20 years for other species |
Source: Wendt and Izquierdo (2000).
The TRIPS Agreement (on Trade-Related Aspects of Intellectual Property Rights) is Annex 1C of the agreement establishing the World Trade Organization34. Under this agreement, any country that ratifies the GATT accepts the obligation to establish minimum standards of intellectual property in technology fields, except where exploitation of the invention interferes with public order, human animal or plant health, or to avoid serious damage to the environment. The TRIPS Agreement, while allowing members exclusions from patentability, suggests providing protection to plant varieties either by patents, by an effective sui generis system, or by a combination thereof35.
The TRIPS is the most far-reaching international instrument on intellectual property rights. It sets minimum standards for patents, copyrights, trademarks and trade names, industrial designs, geographical indications, integrated circuits and trade secrets. It incorporates additional obligations to the Paris, Berne, Rome and Washington Conventions in their respective fields, and harmonizes intellectual property rights standards, while leaving a margin of maneuver at the national level. The agreement introduced new regulations: patentability, especially of pharmaceuticals and biotechnology products and processes; elimination or limitation of requirements regarding local exploitation of inventions; extension of terms of protection; more precise definitions of the exclusive rights granted; and strengthening of mechanisms to ensure the observance of rights and penalties for violations (CORREA, 1996).
WTO members may exclude from the patent regime plants and animals other than microorganisms, as well as essentially biological processes for the production of plants or animals that do not constitute biological or microbiological processes. Members must take the necessary measures for the protection of plant varieties through patents, an effective sui generis system or by a combination thereof. This provision must be reviewed every four years after the World Trade Organization Agreement went into effect.
This exception reflects the unresolved differences between the industrialized countries about the patenting of plants and animals. In the absence of distinction, the exclusion involves, in general terms, actual animals and plants, animal breeds and species of plants and animals. The standards allow excluding traditional plant breeding procedures from protection, without affecting the possibility of obtaining protection, for example, for developments based on cell manipulation or by gene transfer (CORREA, 1996).
The minimum standards for protection of almost all aspects of intellectual property of the TRIPS Agreement must be instrumented by means of national laws, with a transitional period of 5 years for developing countries. Pharmaceutical and agrochemical products have a longer deadline, which extends from 10 to 11 years for less developed countries. Once the period of transition has expired, the agreement is binding and any dispute must be resolved through multilateral dispute resolution mechanisms.
The instrumentation of the provisions of TRIPS may be determined in accordance with the practice and the legal system of each country. Breeder’s rights and utility models fall outside the rules of this agreement. The UPOV Convention is the only international instrument which sets minimum standards of protection.
Article 27.3(b) of TRIPS requires that countries have the capacity to exclude from the patentability regime, plants and animals and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. Despite this, members must take all measures necessary to protect plant varieties through patents, an effective sui generis system or by a combination of both options (CORREA, 1996).
Under Article 27.3(b), the difference between European law and that of other countries which share this approach refers to “plants and animals” and not “varieties,” “races” or “species.” The distinction is important, because the prohibition of patenting a “variety” does not prevent, in European countries, a plant from being patented as such. “In the absence of any distinction, and as set forth in the second paragraph of the article presenting an exception to a particular classification (plant varieties), the exclusion should be interpreted to involve, in general, actual animals and plants, breeds of animals and species of plants and animals” (CORREA, 1996).
The mention of “essentially biological processes” (CORREA, 1996) is limited by the exclusion of “biological and microbiological” processes. The introduction of this concept makes it possible to exclude protection of traditional plant breeding procedures without affecting the possibility of obtaining protection for developments based on micropropagation or gene transfer. In most countries, it is possible to patent processes in which microorganisms are used, such as fermentation processes. The concept of “non-biological process” is more novel and complex. The origin and bases of this are unknown, and it is likely to cause more problems than it seeks to solve.
In industrialized countries, there is considerable agreement, though not unanimous, regarding the protection of biotechnology inventions through intellectual property rights. One accepted principle is that it is not possible to deny protection to an invention by the simple fact of its using or being composed of living matter. This understanding was taken from the decision of the Supreme Court of the United States in case of Diamond v. Chakrabarty, which ruled that genetically modified bacteria could be patented. Biotechnology patenting has expanded in three directions: substances extracted, isolated and purified from nature; subcellular particles (genes, plasmids, etc.); and more complex transgenic organisms, plants and animals (CORREA, 1998).
The TRIPS Agreement, in turn, encouraged more flexibility: countries may or may not grant patents to substances existing in nature and are not obliged to grant patents on plants and animals. The trend in industrialized countries is towards expansive patenting. The European Union is close to the US position, while maintaining the criterion of non-patentability of plant varieties. In other developed countries and also in Latin America, there are important differences in relation to the model adopted by industrialized countries.
The types of problems encountered have turned biotechnology into a highly contentious field. There are probably few areas in the field of patent law where disputes are so numerous, significant and costly. There is hardly a major biotechnology patent that has not been the subject of an administrative proceeding or hearing before the courts, by a competitor or third parties. The more important a biotechnology development is, the greater the possibility that the patent in question will be the subject of challenges by third parties37.
One of the potential limitations to the patenting of living matter is the difficulty of describing the material in order to satisfy disclosure and reproduction requirements. The deposit of materials related to the patent is the mechanism established to overcome the impossibility of describing biotechnology inventions, replacing the written description with access to deposited strains. The Budapest Treaty establishes the conditions for the deposit and maintenance of strains, but does not provide the option for the International Depositary Authority (IDA) to verify whether the microorganism being claimed corresponds strictly to the material deposited. The Treaty defers to national legislation to determine the conditions for access to samples deposited; i.e., it is up to the laws of each country to decide when and under what circumstances the samples may be obtained (CORREA, 1996).
Intellectual property in the field of biotechnology can be protected by patent systems and breeder’s rights. Breeders’ rights are an exclusive title for the exploitation of a plant. They protect the propagating material of a plant, that is, the seed. The requirements are: differentiation, homogeneity, stability and commercial novelty. The scope of protection is the production of material for commercial purposes, and the goal of protection is to prevent propagation by reproductive or vegetative methods.
Patents are a legal privilege granted by the state to a person or legal entity to exclusively exploit an invention for a certain period. The requirements of a patent are novelty, nonobviousness and utility.
Patent regimes and breeder’s rights protect plant materials, in different ways and to differing degrees. With the spread of GE crops, the interrelationship between these rights is gaining importance. The main differences between the object and scope of protection conferred by patents and breeder’s rights are:
Material to be protected: Under the regime of breeder’s rights, the material to be protected is a plant variety (or a cultivar), i.e., a type of plant within a cultivated species that is distinguished by one or more traits. Breeder’s rights are conferred in a specific way to plant varieties. The protection applies to the propagating material of a variety; i.e., those rights do not protect parts of plants, or particular genes, but the whole genome of a variety. They protect a population of plants which is uniform and stable, and which is distinct from other varieties already available by at least one important trait.
Protection requirements: The patent regime requires novelty, inventive step (non-obviousness) and capability of industrial application, while the plant variety protection regime requires novelty, distinctness, uniformity and stability. The patent system is based on universal (worldwide) novelty, while in the plant variety system, novelty requires only that the variety not have been sold or offered for sale for more than one year, with the consent of the owner in the country where protection is being applied for, or in any other country for more than four years, or for 6 years in the case of vines and forest trees, fruit trees and ornamental trees.
Embodiment: Under the UPOV regime, a variety is protected only when it physically exists, while under the patent regime, it is not necessary that the invention be embodied – it is sufficient that it be realizable, in accordance with the relevant description, by a person having ordinary skill in the art.
Exceptions to exclusive rights: The “breeder’s exemption” is one of the key differences between the system of breeders’ right and the patent system, allowing the use of a protected variety as a source for further development, which, once achieved, can generate an independent protection. This exemption applies when the material is subject to a registered property right, because in the absence of protection, there is no exclusive right which may be imposed on a third party. In the production of hybrids, for example, is common to keep parental lines a secret, but such protection does not confer any exclusive right, but only the right to take action against commercially dishonest acts, within the framework of unfair competition.
Duration: Patent rights expire 20 years after the application is filed, while breeder’s rights protection can extend to 25 years depending on the species.
Territoriality: Patent rights and breeder’s rights do not involve absolute ownership, in the sense that they can only be exercised in the countries where the respective title has been granted. In countries where the no claim has been registered, there is no protection, and thus the innovations are in the public domain.
Overlap: With the development of transgenic varieties, it is possible that, in relation to the same variety, there may be an overlap between a claim for breeder’s rights directed to the plant variety itself, and a claim for patent rights directed to a gene or genetic construct incorporated therein. Such claims may belong to the same or different holders; in the latter case, contractual arrangements are needed to establish the rights of each party. Since a patent prohibits the use of the material as a source of germplasm, such overlap may neutralize the “breeder’s exemption,” unless the gene or gene construction in question is not expressed in the new variety developed.
In July 1998, the European Union adopted Directive 98/44/EC on the legal protection of biotechnological inventions. Although the European Patent Organisation (EPOrg) has no formal obligation to enforce this Directive, this procedure was considered necessary to ensure the uniformity of the harmonized European legislation on this subject. Thus, this intricately worded Directive has been enforced by incorporating its essence into the Implementing Regulations of the European Patent Office (EPO). These Regulations must be complied with by the EPO, its boards of appeal and courts of the Contracting States. Since the new regulations came into force on September 1, 1999, the EPO has returned to granting patents for claims directed to transgenic plants and animals per se.
The question of patentability of transgenic plants and animals has been a sensitive issue for the EPO in recent years. The Organization had been granting patents that claimed transgenic plants and animals until 1995, when the EPO’s Technical Board of Appeal issued its ruling in Plant Genetic Systems, which made it impossible in practice to make claims directed to transgenic plants per se. The relevant issues were brought to the EPO’s Enlarged Board of Appeal in Novartis, which was ruled on in December 1999. The Enlarged Board of Appeal came to the conclusion that a correct interpretation of the European Patent Convention would allow the granting of patents for transgenic plants, even in cases where these might include plant varieties.
Directive 98/44/EC on the legal protection of so-called biotechnological inventions led to a legislative change in various areas in several countries. In this situation, members of the EU can make use of a safeguard clause under which they may exclude from patentability inventions whose commercial exploitation would be contrary to public policy or morality. In particular, processes for the following shall be considered unpatentable: cloning human beings, modifying the germ-line genetic identity of human beings, using human embryos for industrial or commercial purposes, or processes modifying the genetic identity of animals which are likely to cause them suffering without any substantial medical benefit to man or animal, and also animals resulting from such processes.
Member states were supposed to have adopted the necessary legal provisions to comply with the Directive by July 30, 2000, but this period was affected by the appeal lodged by the Netherlands, Italy and Norway before the Court of Justice in Luxembourg, requesting the Directive’s repeal. In its ruling dated October 9, 2001, the Court confirmed the validity of the Directive and left the way clear for national laws to adapt to its provisions.
The ruling stresses that the Directive respects the fundamental right to human dignity and integrity of the person by prohibiting the human body in different states of its constitution and development from constituting a patentable invention, by stating that the elements of the human body are not patentable per se and that their discovery cannot be subject to protection, and by limiting patentability to inventions which combine a natural element with a technical procedure which enables it to be isolated or produced in order for it to be industrially applied. The Court noted that it is possible for an element of the human body to be part of a product which may be patented, but the rights conferred by the patent do not extend to the human body and its elements in their natural environment. In short, the Directive limits patent law so that the human body stays effectively unavailable and inalienable.
Item (b) of Article 16 of Directive 98/44/EC concerning the “legal protection of biotechnological inventions” requires the Commission to draw up “within two years of entry into force of this Directive, a report assessing the implications for basic genetic engineering research of failure to publish, or late publication of, papers on subjects which could be patentable.”
The article reveals that there are no concrete figures which quantify the economic efforts that should be made by industry or which stipulate the period of time, in practical terms for academia publishers, which should be established before publication is to be deemed late. Member states of WIPO have developed distinct concepts of “grace period” that must be examined in detail for the balance they seek between the interests of academia and industry. It is considered that the American concept of “grace period” and the system of “first inventor” give rise to a higher level of “legal uncertainty,” which is why they should not be used as examples of “best practices.”
Given the growing internationalization of research, both public and private, its importance to innovation and the fact that the public research sector has become the most experienced and important user of the patent system, it is necessary to define and harmonize the concept the “grace period.” This concept, however, will only be valid at the global level if it provides legal certainty, which is the main concern of users of the patent system in the industrial sector.
The study concludes with a recommendation to WIPO’s Standing Committee on the Law of Patents which says that consideration should be given to everything that was mentioned here in the current debate on the possible introduction of a grace period. Conditions should be optimized to facilitate the use of the patent system in the academic world and among small and medium enterprises, including:
Genetic modification techniques allow introducing new traits into living organisms; however, there is still debate about which results of such a modification may be patentable. US law allows patenting all modified organisms: microorganisms, plants and animals other than humans. In Europe, there is a proposal from the European Commission for a Directive of the Council to support the availability of such rights in all countries of the Union.
Efforts are being undertaken to harmonize international law and practice relating to patents. For example, currently, the US grants a grace period of one year between the publication of the invention and the deadline for filing the application for a US patent. Meanwhile, public disclosure of an invention prior to filing the patent application is usually fatal in most European countries.
Another difference is that in American patent law, the term “invention” means invention or discovery. In European law, a “discovery” is distinguished from an “invention,” with the former not being considered patentable. This distinction is not easy to understand. A discovery implies new knowledge, while an invention is the practical application of knowledge. Example: the elucidation by Crick and Watson of the double helix structure of DNA was not a patentable discovery, while subsequent exploitation of this DNA to produce artificially produce DNA and to produce new forms of DNA has led to many patents.
The high costs of R&D, the nature and the relationship of the processes and products involved, and the intensity of competition for technological leadership explain the importance that innovative firms give to protecting intellectual property in biotechnology. An uncompromising position on patents can be crucial to commercial success and to maintain the trust and support of investors.
The importance attributed to a strong patent position, as well as the novelty and complexity of the subject, have given rise to numerous legal conflicts, creating considerable uncertainty. The legal controversy stems in large part from differences in legal interpretations, lack of specific and accepted standards for treating the subject as well as the delay in granting patents, which often are granted long after significant investments have been made by the company.
The determination of “inventive step” is especially complex in the field of biotechnology. The main reasons are the difficulty in proving the existence of an invention itself, coverage for claims of multiple supposed inventions and the insufficiency of the description to enable implementation of the invention by a person having ordinary skill in the art.
Claims are often defined in biotechnology terms, and the drafting of claims focuses on functional or informational aspects, thereby protecting inventions involving all possible ways to solve problems for entire species or varieties. There are also conflicts about products which may be obtained by a patented invention and by conventional means. The use of a patented product for experimental purposes is a violation of patent rights.
In addition to the “horizontal reach” of patents across plant varieties and species which may sweep public germplasm into privately protected property, the “vertical reach” of protection of improved traits is also problematic. Depending upon the patent claims and their scope, “protection may reach back to unimproved germplasm contained in relatives of a patented plant variety. This vertical reach across generations presents a difficult situation, since previously undescribed parts of the publicly held lines may unknowingly be swept into the category of private property” (STILES, 1989).
A conflict of rights can also arise in relation to a certain patented trait, such as herbicide resistance, which can be incorporated into plants by conventional breeding. Thus, there is no well-defined interface between the patent owner and breeder’s rights. WIPO recommends that “where the owner of a patent concerning a biotechnological invention cannot exploit it without infringing a prior plant variety right, he may apply for a compulsory license for non-exclusive use of the plant variety protected by that right, subject to payment of an appropriate royalty” (CORREA, 1996).
Experiments performed with a patented invention may constitute an infringement of the patent. In the United States, a bill was presented that aims to allow experimentation, even for commercial purposes, unless the primary purpose of the patented article is for research or experimentation. The scope of the exception for research is one of the problems that need to be solved.
These substances and complex mixtures of components of natural origin can, in principle, be patented if they are isolated from their natural environment, identified and made available for the first time in conjunction with the development of a process for producing them, and are thus used for specific and useful purposes. This affects inanimate substances as well as living matter. In certain circumstances, such substances are not regarded not as mere discoveries but rather as inventions by the EPO and other legal authorities.
Patents on microorganisms are routinely granted by the US, European and Japanese patent offices. In 1873, a US patent was granted for Louis Pasteur to a “yeast, free from organic germs of disease, as an article of manufacture.” In the Chakrabarty case in 1980 the US Supreme Court decided that a microorganism was not precluded from patentability solely because it was alive. Therefore a Pseudomonas bacterium manipulated to contain more than one plasmid and thus more effectively break down hydrocarbons was “a new bacterium with markedly different characteristics from any found in nature” and hence not nature’s handiwork but that of the inventor. The “product of nature” objection therefore failed and the modified organism was held patentable. This decision was influential in most other industrially developed countries and the issue is now settled law.
Plant patents are also obtainable in US, Europe and Japan. The US Plant Patent Act of 1930 is restricted to asexually propagated plants. Over 6,500 of such plant patents have been granted (mostly for rose and fruit trees). In the Hibberd case (1985), following the principle established in the Chakrabarty case, it was decided that normal US “utility” patents could be granted for other types of plant, e.g. genetically modified plants. In Europe, patent law was originally considered unsuitable for protecting new plant varieties developed by traditional breeding methods. Special national laws of Plant Breeder’s Rights (PBR), which are also called Plant Variety Rights (PVR), were therefore established in the 1960s in some countries as well as the International Union for the Protection of New Varieties of Plants (UPOV).
To avoid legal confusion, patent law in Europe subsequently excluded plant varieties from patentability: e.g. EPC Article 53(b) which excludes patents for “plant and animal varieties” as such and “essentially biological processes for the production” of plants and animals. The UPOV Convention was revised in 1991 and now does not prevent dual protection by PVR or patents. This revision awaits ratification by member states and is therefore not yet in force. Plant breeder’s rights have been highly successful in their own sphere. However, legal experts now generally recognize that patent law is better suited to the protection of recombinant methods for producing transgenic plants and the resulting products.
Animal breeds produced by traditional methods have no legal system for their protection comparable to plant breeder’s rights. Based on the microorganism and plant patent precedents, the US Commissioner of Patents declared in 1987 that US patents would be granted for “non-naturally occurring non-human multicellular living organisms including animals.” The first transgenic animal patent was issued in 1988 to Harvard University with claims covering the “oncomouse”, one in which an oncogene has been introduced to make the animal more susceptible to cancer and therefore more sensitive in testing possible carcinogens. After initial reluctance by the EPO to grant the corresponding European patent (and a successful appeal to the Appeal Board) the European patent was issued. This is now under formal opposition by anti-vivisection and animal rights groups. More than 300 patent applications for transgenic animals have been filed but so far few have been granted (3 in the EPO, 6 in the US Patent Office).
Gene patents are available in all fields of biotechnology. For recombinant DNA inventions, the patent will claim the nucleotide sequence coding for the protein expression product, vectors e.g. plasmids containing this sequence, microorganisms or higher organisms transformed with the sequence, and in appropriate cases the expression product itself (normally only if the product is new per se). Corresponding process technology will also be claimed. The patentability of DNA sequences of unknown function is dubious and controversial. The Human Genome Organisation accepts that patents should be granted for full length genes but is against patenting fragmentary cDNA sequences having no established utility.
The industries that utilize biotechnology are convinced that intellectual property protection should be obtainable for any inventions which stem from research and which have commercial potential. Biotechnology research workers in academic institutions increasingly share this view because of their need for research funding, which is in part conditional on patentability.
A serious challenge to this assumption has come from a number of interest groups concerned variously with matters of ecology, animal welfare and rights, moral issues and the interests of small farmers and the developing countries. Some of these groups have formally opposed specific European patents and demanded their revocation. For many such groups “patenting life” is considered unethical in principle. The opposition extends also to possible structural change in the agricultural industry which might stem from biotechnology and especially from the acquisition by the larger corporations of legal rights on the advances that are being made.
A legally permissible ground of objection is that genes are naturally occurring entities and that the methods for transferring them to plants or animals are well-known and straightforward. This is a challenge to the inventiveness content of the particular patent at issue; it is an argument that industrial competitors will sometimes use against each other’s patents but so far it has not achieved a high success rate. The argument also lies at the heart of the moral objections many with religious beliefs have to patenting genes. They regard claims of invention, instead of discovery, tantamount to claiming to be God. Some feel that patenting living things changes the relationship between humanity and the rest of nature. However, plants and animals are owned by the farmers who produce them and use them as agricultural commodities.
All such owners, whether of patented or unpatented organisms, are bound to respect animal welfare legislation. The opposers can raise the morality issue where the patent law allows, as in Europe under EPC Article 53(a) which forbids patents for inventions “the publication or exploitation of which is contrary to ‘ordre public’ (public order) or to morality”. The morality objection is being currently used against the European oncomouse patent. To program an animal genetically for certain death in laboratory experiments is morally repugnant to these opposing groups and they feel in conscience bound to protest. Animals have, however, long been used as disease models.
The objection to animal suffering may also apply to the genetic modification of farm animals. Animal welfare groups argue that patents will encourage more research on animal genetic modification, which they oppose on grounds of possible suffering and of principle. Intended to prevent undue suffering, legislation requires the granting of animal experimentation licenses and full disclosure of the experimentation.
Freedoms for breeders and farmers are seen by some groups as threatened by patents on transgenic plants and animals. Under PVR (Plant Variety Rights), breeders previously enjoyed the so-called “breeder’s exemption” or “farmer’s privilege” which gave them the freedom not only to use protected plant varieties in their breeding programs but also to commercialize the further varieties developed therefrom (often only “cosmetically” different from the original) without any royalty payment to the owner of the initial variety. The UPOV Convention as revised in 199l now expands the scope of the right of the initial variety breeder to include what are termed “essentially derived varieties” (both the terms “essentially derived” and “variety” are defined). This expansion of the right is not automatic but depends on member states amending their national PVR legislation in conformity with UPOV 1991.
The freedom to research is safeguarded equally under both patent law and PVR law. But the freedom to commercialize the resulting products of research depends on whether or not they infringe the patent claims or are “essentially derived” under PVR law. A strengthened UPOV-type protection would therefore go part of the way towards the strong protection given by patents. Neither system is a threat to the free use of germplasm.
In Latin America, the main forms of legal protection used are: (a) patents; (b) trade secrets; (c) rights on plant varieties; and (d) certificates of invention. In the case of biotechnology, there are specific problems of patenting living organisms and microorganisms, in a variety of situations.
Granting biotechnology patents requires specialized patent offices to have adequate staffing and infrastructure for handling registration, depositing microorganisms, performing novelty tests, arbitrating disputes and disseminating the information contained in patents. Most offices in Latin America have serious deficiencies regarding these aspects.
In most developing countries, there is no consensus about the possibility of patenting plants and animals. Positions taken within WIPO and the GATT indicate a general attitude of caution or rejection of this possibility. In most Latin American countries, there is no express prohibition on patenting animal breeds and the biological processes for obtaining them; the patentability of animals is the responsibility of patent offices and courts.
The emergence of a new research and production paradigm associated with biotechnology is creating tensions and uncertainties in the legal ownership of inventions. The fuzzy boundary between science and technology, in addition to the overlap between companies and government laboratories in the same research fields, favors the dissemination of knowledge and impedes private ownership of knowledge. It is also possible to observe a shortening of the life cycle of new products, which reduces the possibility of recovering R&D costs and financing new developments.
New biopharmaceutical products produce substances which exist in the human body. If one of these substances is patented, the monopoly power of its owner becomes huge, because it is a unique product. Meanwhile, it is possible to generate alternative molecules having equivalent properties, using traditional therapy. This characteristic of biotechnology-based products makes the act of obtaining the legal title crucially important: having legal title is a condition for entry into the market.
The importance of patents for the pharmaceutical industry explains the competitive struggle in the sector. Large companies seek to use the patent system to extend, to as long as possible, the benefits of drugs introduced in the last 20 years. As already discussed, the expiration of the patent releases a portion of the market from monopoly. Pharmaceutical companies holding patents have used a number of mechanisms to palliatively treat the effects of the expiration of these patents. The strategies adopted consist in strengthening brands and differentiating products, in addition to producing generics.
The birth of a new research paradigm and the emergence of a new wave of biopharmaceutical innovations characterize the current situation in the pharmaceutical industry. However, the promises of biotechnology outweigh its achievements: the pharmaceutical sector is one of the first to introduce new products on the market, where expectations are still considerable. The new emerging industrial profile is based on a strong R&D component, while the large investments needed continue to be an important barrier to entry for new competitors.
For developing countries, the issue of patents is much more complex and the benefits are less obvious than those mentioned. Several conclusions can be drawn from the numerous studies on the subject (CORREA, 1998):
An intense diplomatic battle has ensued: the arguments of developing countries are reflected in the World Health Assembly of the WHO which in May 1999 approved a resolution granting express mandate for the WHO to monitor and analyze the pharmaceutical and public health implications of relevant international agreements, including TRIPS. This concern was also addressed by the WTO, whose Fourth Ministerial Conference, held in Doha, Qatar on November 9-14, 2001, produced an interpretation of TRIPS which allows countries to produce generic drugs. It still remains to legalize, as a valid practice within the framework of the WTO, the free importation of generic drugs by countries which lack the economic or technological conditions to produce them.
Protection of breeder’s rights has been introduced in the Southern Cone countries. The explicit objectives have been to promote the activity of private plant breeding and increase access to high-quality foreign varieties. The introduction of breeder’s rights has been the result of a combination of national and foreign industry demands and direct action by some foreign governments. The initiative to provide protection for plant varieties has found opposition from researchers in the public sector and from non-governmental organizations, but not strong enough to prevent this practice.
The only type of protection of intellectual property rights for plant varieties that applies in the region are the laws for Plant Variety Rights or Plant Breeder’s Rights (WENDT; IZQUIERDO, 2000). At the time of this writing, ten countries had signed the UPOV 1978 Act and four were preparing their accession to UPOV 91, since the closing of accession to the 1978 Act. Despite the existence of national laws and regional legal frameworks, countries in the region face similar problems, including: