The Stockholm Network is delighted to announce a new policy briefing note, which explores the debate around standards, competition and innovation. As well as providing background on the relationship between intellectual property rights and open standards, the Polybrief also explores the debate between open and proprietary-based standards, as well as identifying and outlining new governmental approaches to standards.
Stockholm Network Polybriefs provide concise summaries of pressing issues and policy debate throughout Europe.
To view this Polybrief, please visit : http://www.stockholm-network.org/downloads/publications/Standards_Polybrief.pdf
We hope you will find this of interest and we look forward to hearing from you,
Stockholm Network
This year’s World Intellectual Property Day on April 26 focused on promoting green innovation as a key element in meeting the challenges of climate change In his message to mark the day, WIPO Director General Francis Gurry highlighted the contribution that a balanced intellectual property (IP) system can make in enabling the development of technology-based solutions to mitigate the impact of climate change.
The first to convert the discussion to action was the UK Intellectual Property Office when it announced that green inventions will be fast tracked through the patent process.David Lammy, Minister for Intellectual Property, announced the launch an initiative which will enable inventions with an environmental benefit to be given priority within the patent system.
There is speculation that companies in countries like India and China will take the lead in terms of green innovation. As per an Economic Times article a project by the Center for Scientific and Industrial Research (CSIR), an Indian organization, has resulted in a solar powered rickshaw with a top speed of 15 km an hour and a range of 50-70 km. The rickshaw runs on a 36-volt battery that can be replaced at a local solar-power charging station. The vehicle is now being tested in Delhi with the aim of replacing some of the city’s 500 000 rickshaws. If successful, the soleckshaw as it is called, will provide a clean and relatively speedy option for moving around crowded Indian streets.
Another innovation in China produced an inexpensive solar powered car. The car has a sticker price of just over $5000 with a range of up to 150 km. The tiny Chery QQ clone has been fitted with roof mounted solar panels that absorb 95% of the solar energy coming in. Although not luxurious, the vehicle may still be attractive to the rising middle class population in China
The concept behind this speculation is simple – companies in emerging economies innovate in the face of price sensitivity, although their consumers have lower expectations. In the green sector emerging economy players have an additional motivation in the fact that they are often based in countries that are much more polluted than developed nations. There is market demand as well as government impetus to come up with inexpensive ways to clean up the air and water.
The WIPO initiative and a trend following the developments of green inventions being fast tracked through the patent process in the United Kingdom by other nations can kick start a movement where IP will have a definite role to play in mitigate the impact of climate change.
As the World Health Organization has raised its pandemic alert for swine flu to “phase 5” the second highest level, meaning that it believes a global outbreak of the disease is imminent, the relationship between patent rights and access to essential medicines has elicited again. As per WHO the phase 5 alert means there is sustained human to human spread in at least two countries. It also signals that efforts to produce a vaccine will be ramped up.
As it turns out that there is no vaccine available as yet and Tamiflu (Oseltamivir), a drug patented by Gilead and exclusively licensed to Roche is considered as one of the best drugs available today to cater to this kind of flu. Even at the time of the bird flu, it was known that Tamiflu was not the optimal drug to cater to such viruses– but only that of all the possible alternatives, it was the best.
In India, Deputy Controller of Patents, in a decision on the 23rd of March 2009, struck down Gilead’s patent application covering Oseltamavir compositions on the grounds of lack of inventive step, failure to comply with section 3(d) and failure to sufficiently disclose the invention claimed.
Since Gilead hasn’t patented this drug in all countries and has recently lost the Indian patent battle over “Tamiflu” just about a month back, these governments may turn to generic manufacturers for a cheaper priced alternative. And even if a patent exists , if Roche can’t meet the demands in terms of quantity and price some of these governments may decide to override the patent and grant compulsory licenses (treating it a case of national emergency) to enable cheaper alternatives.
It is interesting to note that the US does not have any compulsory licensing clauses within its patent regime that can be invoked. But there is a possible alternative that the situations can be worked into the ‘takings clause’ in 28 USC §1498 and perhaps the fifth amendment to the US constitution that contains ‘eminent domain’ principle. Under these principles, the government could use the patent without the permission of the patentee, subject only to payment of some reasonable compensation. The US had threatened to do something similar with Bayer’s patent during the Anthrax crisis.
But the bigger issue that was pointed out by Dr. Anatole Krattiger in a recent discussion with me is that “Back then, with Bayer’s Cipro, the US back-peddaled quickly so as not to undermine private patent rights. And now, most Western governments have stockpiled Tamiflu. But who will supply Tamiflu now to the low-income countries that have not had the currency reserves to stockpile Tamiflu?”
Further Reading:
Shamnad Basheer and Tahir Amin,Taming of the Flu: Working through the Tamiflu Patents in India , Journal of Intellectual Property Rights, Vol. 2, p. 113, March 2006
A recent article details Ug99, a stem rust of wheat, one of the most significant threats to global food security at present. Ug99 is a new variety of wheat rust fungus that has potential to spread throughout the major wheat growing regions of the world. Currently it is making its way east from Kenya through Ethiopia and Yemen after damaging crops in Kenya and Ethiopia. Once the fungus attaches to the above-ground wheat plant 50-100% crop loss can occur resulting in a substantial financial hit for farmers as well as decreased global wheat supplies, which in turn leads to increased costs for the consumer. Additionally, famines could occur if supplies are reduced in particular regions such as north Africa, as well as west and central Asia.
First discovered in Uganda in 1999, Ug99 is likely to infect wheat fields to catastrophic proportions, especially in some developing countries where wheat is a staple crop. According to Rick Ward of Cornell University, wheat rust “will translate into widespread food insecurity and civil unrest.” Some fields in east Africa, Kenya particularly, have experienced up to 80% losses.
In a normal setting, scientists’ ability to counter widespread plant diseases including fungi could be achieved by use of pesticides, by traditional plant breeding, and by genetic engineering. Unfortunately, however, Ug99 is highly infectious and thus has the ability to spread quickly through the movement of seeds and by normal weather (primarily wind) and thus remains difficult to contain; the use of fungicides, besides having limited effectiveness, is too expensive for most developing countries; also, traditional breeding takes many years of crossing and selecting; and genetic engineering requires the availability of effective resistance genes and of effective biosafety regulations. But there is hope because plant resistances have been found to be somewhat effective against Ug99 and have already been successfully bred into certain wheat varieties for certain regions. These varieties are currently acceptable to farmers in some regions, but they are not resistant to all rust strains, and some are still susceptible to Ug99 under certain local climatic conditions.
Due to the relatively rapid pace at which the fungus is spreading throughout the world, short-term solutions must be implemented until the time when durable resistance genes can be successfully transferred to wheat and distributed to farmers. Long-term solutions are irrelevant if Ug99 spreads quicker than anticipated, as suggested by Dr. Norman Borlaug of the Borlaug Global Rust Initiative (“BGRI”). Unfortunately, once disease-resistance is bred into modern wheat varieties, it will take years to grow enough seed and subsequently distribute it to farmers in need. And Dr. Borlaug, winner of the Nobel Prize for his wheat breeding work since the late 1940s in Mexico that ultimately led to the Green Revolution, should know. It was Dr. Borlaug who was instrumental in raising alarm some 7-8 years ago, not least of all because his early success in wheat breeding focused on rust resistance. His work and that of many colleagues at CIMMYT and Indian and Pakistani breeders, among others, led to a 50 year period during which stem rust was a minor problem.
There appear to be very few short-term solutions to this problem despite scientists’ confidence that long-term solutions can be had. Whether rust-resistant seeds will arrive soon enough remains but a hope, but given the severity of Ug99 that prospect seems unlikely. In the short term, expensive fungicides are one option for farmers who can afford to purchase them, who are equipped to apply them safely, and who are farming in a relatively well developed area with well trained agricultural extension systems. Many farmers in developing countries, especially in the poorer areas which are on the likely Ug99 path are unlikely to be capable of purchasing and using the fungicides effectively, so funding agencies should consider allocating increased funds for this purpose; concurrently, agricultural chemical companies should consider more targeted tiered pricing of fungicides, thus significantly reducing the cost to lower income countries.
Although fungicides represent a mere temporary solution as part of a more comprehensive approach to a lasting problem, they have potential to increase marketable yields quickly thus increasing farmers’ incomes and keeping food supplies steady. If wheat farmers continue to experience low yields they will be less capable of turning a profit and sustaining their farms into the future thus rendering efforts to engineer rust-resistant seeds an increasingly futile effort if there will be fewer farms left to supply. Farmers experiencing severe crop damage would surely be willing to try fungicides if money were granted for its purchase in developing countries.
If fungicides can be provided to farmers in developing countries some level of education may be necessary. Farmers must be aware of the optimal times to spray upon consideration of the particular variety of wheat they grow. Optimal wheat yields can be achieved by ensuring fungicides are utilized early before Ug99 or other rusts have an opportunity to infiltrate farmers’ fields. Improper application of fungicides in the past has led to yield losses and health risks for farmers, so education is key. This can be accomplished by routine field inspections by qualified individuals and by ensuring farmers’ access to necessary information.
Of course fungicides are merely one component of a short-term solution to threats posed by wheat rust, but if funding agencies realize the seriousness of Ug99 they may be on board with allocating emergency funds for certain regions that have been hit hardest. Currently billions of fungus spores continue to blow east which threatens global food supplies as well as the livelihoods of wheat farmers. Something must be done now to prevent the aforementioned problems until successful Ug99-resistant wheat varieties can be deployed and marketed to farmers throughout the world.
BGRI and its partners are currently attempting to transfer resistance genes from rice to wheat, but this component of the project will take 10 years or more, even if government regulations for the field testing of genetically modified wheat (biosafety regulations) become more science-based and permissible. One presumed reason why the BGRI is not focusing on genetically modified wheat, which could lead to the faster development of Ug99 resistant wheat, is due to the tremendous regulatory roadblocks and resistance to adopt genetically modified crops in general and wheat in particular. Onerous biosafety regulations already increase the development cost of genetically modified crops by millions of dollars and delay the delivery of many crops, including that of Golden Rice by 5 years or more. More efficient, science-based regulations are therefore necessary to combat Ug99 as quickly as possible.
My post of 14 March entitled “Shortsighted Sustainability Efforts in Africa,” below, may have been a bit shortsighted itself in light of new information brought to my attention. The primary critique in that post was that despite significant funding from the Gates Foundation which purported to connect increased funding of agriculture markets in developing countries and increasing educational opportunities (thus lifting them out of poverty) failed to recognize the substantial amount of time it would take to benefit education systems directly. However, a recent report by the International Food Policy Research Institute (IFPRI) indicates that the connection between increased funding and benefits to education are not quite so tenuous, and indeed, direct benefits to education are quick once agriculture markets are stimulated. The relationship of agriculture markets to increases in education is an important one that must be furthered because of the future benefits education provides. According to IFPRI, increases in a developing country’s agriculture market leads directly to increased educational opportunities because the world’s poor are very likely to invest in their children’s education when they have disposable income.
On a related matter, a March 26 article in Business Daily Africa indicates that agribusiness leaders in Kenya are beginning to back a number of technologies (including nanotechnologies, oddly) which could stimulate growth of agriculture markets in Kenya. However, the article fails to define the true scope of the benefits which could result because it focuses on food production as the sole benefit and ignores offshoot benefits. As above, education can be stimulated by increases in the strength of a country’s agriculture market. Of course having an ample stock of food is important, but Kenya’s Biosafety Bill 2008 will arguably provide many benefits in additional areas. In order for Kenya to achieve its full potential, the Biosafety Bill must be utilized to the greatest extent possible.
As a result of the Biosafety Bill, there is hope that many semi-arid areas (which includes half or more of Kenya’s total land mass) can soon host genetically modified crops under development; more specifically, the Biosafety Bill allows for such technologies and crops to finally be tested in Kenya. The ability to grow where very little water exists, and in times of drought, is increasingly important (especially in Kenya) now that global warming has begun to alter rain patterns. William Ruto, Kenya’s Minister for Agriculture, believes there is “no excuse to ignore the technology that can increase our food output.” An important element of the Bill may be that it does not require farmers to label their crops as products of genetic engineering. This will allow for an acceptance of the benefits of GM by default, because consumers will purchase these products and realize that they are safe.
In addition to the potential benefits to food production and education (which would lead to great economic advances far into the future), an increased focus on GM agriculture in Kenya’s struggling economy may foster an increase in scientific activity in Kenya. Once scientists in Kenya recognize that their efforts in genetic engineering of crops will be welcome (at least by government), the likelihood of their desire to develop strains specifically suited to Kenya’s needs may increase. A growing biotechnology industry could therefore emerge in Africa as a result of the Biosafety Bill. All areas of biotechnology would benefit – everything from medicine to genetics research, as well as pharmaceuticals and generics.
Predictably, detractors still exist thus casting the Biosafety Bill under a wave of dissent from civil society groups. An open letter to Kenyan president Mwai Kibaki and Prime Minister Raila Odinga, signed by 53 different organizations, cautions that the nation’s precautionary principles have been compromised. Specifically, the letter cites a number of perceived risks such as contamination of non-GM crops and greater risks of toxicity, allergenicity, and cancer in humans. Relevant scientific data indicates that the likelihood of these concerns coming to fruition are unsupported by fact. Also, the letter indicates that “Kenya has the opportunity not to repeat the mistakes made by the US and South Africa,” which again indicates an unfounded fear. The US did experience some setbacks in the initial development of GMOs, but they were necessary parts of the scientific process.
In sum, Kenya’s Biosafety Bill will prove to be an important part of the country’s development throughout the 21st century. However, the Bill should be utilized to its greatest potential. Increases in education could potentially result from increases in agriculture yields because when farmers have more expendable income they are likely to provide educational opportunities for their children. Children who receive increased educational opportunities have the potential to become leaders in their communities and add to the economic development of their nation. This cycle of beneficial growth must be perpetuated throughout the developing world if we are to fare well amidst increased populations and diminishing natural resources.
At least one prominent EU science advisor is looking to a rather unusual source for inspiration regarding the future of global science and health policy: President Obama’s newly appointed panel of science advisors. Professor John Beddington, science advisor to Prime Minister Gordon Brown, urges EU member states to look to the U.S. as an example of how science policy should be made. Changes in policy-making are necessary, Beddington argues, because a global food, water, and energy shortage will culminate by 2030. Recognition of the benefits of GM crops and other sustainable technologies by top UK policy-makers is an important step in the right direction because this recognition within a historically resistant nation indicates a potential for a shift in policy away from prior restraints on growing and selling useful GM foods. If UK officials are beginning to speak out against inappropriate prior restraints on science and technology, all EU member states have similar potential. Currently, the UK and Ireland are the only EU member states with a designated science advisor.
Acceptance of GM crops (both in government and public spheres) as a viable, safe technology is essential to the survival of millions because demand for food, feed and fiber is predicted to increase by 50% by 2030, at which time the world population will exceed 8.3 billion. As previously discussed on this website and elsewhere, we will face a serious global crisis if food and water shortages are not remedied quickly and efficiently. Many countries are doing their part to alleviate the problems posed by vast increases in global population and shortages of many vital natural resources by utilizing sustainable technologies and increasing agricultural yields. Although the EU has failed to take advantage of certain technologies (e.g., biotech crops) capable of alleviating, at least in part, the food shortages, (see below: “Rethinking the Precautionary Principle at Upcoming Biotech Conferences” by J. Kasting & V. Lancaster) there are respected EU scientists, such as Professor Beddington, who recognize the benefits of implementing such technologies. However, in order for sustainable technologies to take hold in the EU, a greater majority of senior government officials and legislative bodies must be willing to adopt such technologies.
Food shortages must be prevented because when supply becomes scarce prices will begin to increase throughout the world. Having top scientists advise policy-makers will lead to relatively quick increases in acceptance of GM crops which could eliminate the risk of dwindling food supplies. Food prices are currently low, but we must not forget that they will rise someday soon resulting in various ancillary problems (such as a decrease in access to education in developing countries). Although the food, water, and energy shortage is not expected to culminate until the distant future, the time is now to stimulate a debate that can lead to real change. The world’s fresh water supply is dwindling, and now more crops are lost to drought than ever before. Acceptance of GM crops in the EU will aid the food crisis, so we must act fast.
Promoting scientists like Professor Beddington to top advisory positions will be one important means of countering the negative effects of the precautionary principle in the EU. Member states can and should provide policy-makers with the same high quality scientific advice President Obama receives. To do so increases the potential to reshape the global regulatory landscape thus facilitating increased food supplies and delaying or eliminating a global crisis. A significant step that can be taken to remedy a future global crisis is to install informed advisors in top government posts throughout the EU because this will facilitate an informed debate among citizens and their government leaders. Also, for the sake of argument, any country (not just the EU) currently lacking a prominent science advisor would do well to have one as science and technology continue to impact the global economy now more than ever.
In 2004 the World Health Organization (WHO) and the Joint United Nations Programme on HIV/AIDS (UNAIDS) released a report entitled, “Case study on estimating HIV infection in a concentrated epidemic: Lessons from Indonesia”. The report described a study done over a three week period in May of 2001 in Indonesia. The study used “second generation surveillance” which focuses on the populations most at risk of contracting HIV from those persons already infected. The study also took a “de-centralized” approach to gathering this information by using field reports from suburban and rural areas as well as statistics gathered from major urban populations. WHO and UNAIDS emphasized the report’s ability to produce a more concise number of the individuals and their specific behaviors that are most likely to contribute to the further spread of HIV in Indonesia. This information armed advocates lobbying for HIV resources with national government generated data as opposed to estimates using limited data produced at the headquarters of international organizations. This does not seem to be the best use of our resources however as we already know what drives the spread of HIV. Rather resources should be put into prevention and treatment programs as opposed to studies that produce numbers.
The WHO/UNAIDS report has some value in the immediacy of the information it provides about the HIV/AIDS epidemic at the time of the study as applied to Indonesia and in the aforementioned advantage given to advocates lobbying for resources. However, the study came to the same conclusion as that of previous studies done in other countries including the United States. Namely that high risk groups comprised of sex trade workers, IV drug users and men who have sex with men (MSM) are the main population sources for the potential spread of HIV/AIDS.
Flash forward to a February 2, 2009 BBC article entitled “Tackling Indonesia’s HIV Spread” or a March 11, 2009 YOUANDAIDS (UNAIDS) article entitled ‘HIV and Indonesia: Nation sits on a volcano”. Both articles state that the highest rates of infection and the main sources for the potential spread of HIV are concentrated in the marginalized groups of IV drug users, sex trade workers and MSM. A noted irony here is that the Indonesian government endorsed the 2004 WHO/UNAIDS report but the BBC article states that “Those groups have not always been well-targeted in the past. In fact, most people here - even in government - would prefer not to see or talk about them.” (Emphasis added.) The arguably poor choice of placing limited resources into funding studies rather than creating prevention and treatment programs is made tragically worse when the very government endorsing the study refuses to acknowledge the results!
Given the world-wide economic woes, it will be more difficult for developing countries to attract HIV/AIDS resources from the developed world. Indonesia is fortunate that it is an emerging young democracy, it occupies a position as an important ally in the “war on terror” and it straddles the Strait of Malacca, a thoroughfare for oil and natural gas pipelines. All these facts have attracted the attention of countries with the resources to assist in the fight to stem the spread of HIV/AIDS. Indonesia was one of the first stops for newly appointed US Secretary of State Hillary Clinton. The Australian government and the Clinton Foundation are combining monetary forces to “increase the availability of affordable HIV treatment and diagnostic testing in Indonesia”. Unfortunately, there are other developing nations that are not in this same fortunate political and economic position.
The Center for Disease Control and Prevention (CDC) guidelines state that early treatment of HIV infection “may reduce HIV transmission.” Although not the only factor to be considered, when deciding how to allocate resources organizations need to balance the costs and benefits of a given course of action against the goal (namely to reduce the transmission of HIV). To do otherwise during the current global economic crisis could have dire consequences on those whose lives are affected by these decisions.
Posted by Anatole Krattiger on March 24, 2009 at 8:44 pm
We all have friends or colleagues who appear to inhabit a “parallel universe,” false, divorced from reality, leading to disastrous personal and business decisions. All the more serious is it when an entire organization, in this case the World Trade Organization (WTO), attempts to base negotiations on such “parallel” realities, as it has with the CDB/TRIPS issue.
CBD/TRIPS refers to the relationship between the Convention on Biological Diversity and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Throughout the 1990s, development “experts” asserted that WTO/TRIPS obligations conflicted with the CBD, the latter seeking to amend TRIPS patent obligations for genetic resources (GR) and related traditional knowledge (TK). In the current Doha round of trade negotiations, this belief has fueled demands to make disclosure of course and origin of GR (and possibly of TK) a requirement for patent applications and a new trigger for possible patent revocation. It is further being stated that this would be in the interest of developing countries.
Interestingly, thinking has advanced among CBD negotiators who have focused increasingly on how developing countries can create enabling environments to promote sustainable utilization of GR- and TK-related assets for the creation of meaningful benefits. (They realized that benefits can only be shared once benefits are created). Major developing countries recognize their responsibility for—and opportunities in—implementing regimes that facilitate access and promote the sharing of benefits from sustainable commercialization of natural products. At the most recent CBD ministerial meeting, for example, India’s minister for environment and forestry identified a lack of meaningful domestic implementation of CBD disciplines as the single most important barrier to benefit sharing.
Indeed, small- and medium-size enterprises (SMEs) in developing countries share key qualities with large companies, including multinationals: they are risk takers, they are entrepreneurs, they are innovators, and they need reasonable intellectual property protection for their inventions to bring products to market that serve society. They are the new “bio-preneurs.” Particularly in the area of natural products, SME entrepreneurs in developing countries already work much harder than their U.S. or European counterparts in their efforts to protect patents needed to bring their innovative ideas to the market. Their results are impressive in more than one aspect. The progress is undoubtedly best epitomized by the large delegations of Brazil, India, Malaysia, and Thailand, among many other countries, that visit the annual meetings of the Biotechnology Industry Organization (BIO) where they network, meet collaborators and investors and all over the world.
Similarly, at the most recent CBD general meeting, negotiators agreed on a comprehensive road map for work over the next two years to elaborate and negotiate key measures to help states gain meaningful benefits from the sustainable development of biodiversity resources. Appropriately, amending patent regimes were not considered during these discussions.
Surprizingly, none of these positive developments under CDB percolated into the “Geneva environment”, where WTO negotiators are working overtime to dilute and weaken the very patents needed by developing country scientists and bio-preneurs. At latest report, more than 80 WTO members supported amending TRIPS to require new, mandatory disclosure obligations that would reduce the certain title to patents—the same title needed by bio-preneurs all over the world to raise capital and to survive the famous “valley of death” that leads to the demise of most start-up companies.
Any amendment to TRIPS would require changing patent law in most countries, weakening the protections needed by life-sciences companies, large or small, anywhere in the world. Additional disclosure obligations also would further increase costs as well as the risks of “gaming” the patent system, whereby unscrupulous competitors may initiate spurious litigation on the basis of incentives relating to disclosure of source/origin of genetic resources.
Creation of additional, new hurdles to biotechnology patents would increase uncertainty, would discourage commercial activities related to genetic resources, and would not expand or redistribute benefits. New mandatory patent disclosure obligations also adds additional responsibilities to overburdened patent offices that already face increasing backlogs to their effective operations, including those offices in most developing countries and even the U.S. and European offices. Although patent regime reform is urgently needed, any changes will take up to a decade to negotiate and another decade to implement.
At the time of this writing, there seems to be a near consensus that renegotiating TRIPS and weakening the patent regimes is the cost that may lead to a successful conclusion to the Doha round. TRIPS is by no means perfect but the decade since its implementation has shown that developing countries in particular can gain much when they develop national laws, build transparent court systems, and strengthen enabling environments for bio-preneurs. And much more can be done in these areas.
Would it not be cynical to weaken life-science patents at a time when innovative and forward-looking enterprises in developing countries are taking off, in part thanks to the (imperfect though workable) patent regime? This is not to excuse any inappropriate access to germplasm (the so-called biopiracy) or unduly issued patents. It is simply a pragmatic idea. And it echoes the recent Commentary on www.Forbes.com by Susan Finston.
The pause in negotiations may be an ideal opportunity for Geneva negotiators to escape their seemingly parallel universe and pay the real world a visit. WTO negotiators, for example, could travel to Thailand’s BIOTec or Malaysia’s Sarawak Biodiversity Center or Brazil’s Sao Paulo area or Costa Rica’s INBio, to name but a few, and see how their own scientists and SMEs rely on appropriate patent protection for biodiversity resources. And, without wanting to ask too much, they could even bring WTO talks into conformity with those of the CBD—the international organization responsible for the development of international rules for access and benefit sharing (ABS).
As discussed in “The Perfidy of the Precautionary Principle” (see blog by B. Harel and V. Lancaster), the EU’s adherence to the precautionary principle is stifling efforts to improve global sustainability in the realm of agriculture, thus inhibiting efforts to improve and expand health initiatives across the globe. Two upcoming conferences will afford members of the biotech community the opportunity to discuss the implications of current regulatory policy through the lens of the global financial crisis.
First, sponsored by Syngenta and the European Landowner’s Association (ELO), the 2nd annual Forum for the Future of Agriculture (FFA) will take place March 18 in Brussels. The goal of the conference is to address food and environmental security against the backdrop of the global economic crisis. Among Syngenta’s stated objectives is to determine Europe’s role in governing agricultural and environmental security (see Source 3). This objective suggests a growing unease with the de facto moratorium the EU has placed on the sale and production of GM crops, especially now that the global community must utilize biotechnology more than ever to aid developing countries.
Despite the global economic crisis, our global population continues to increase. GM crops and general applications of biotechnology can assist in abating problems stemming from inadequate food supplies due to overpopulation as well as insufficiently nourishing foods which can be altered to have more nutrients. No genuine data exists to suggest that GM crops are unfit for human consumption, however the EU has taken a “better safe than sorry” stance for far too long, and they continue to do so because aversion to all GMOs is deeply rooted in long-standing treaties and legislation. Perhaps extreme precaution would have been appropriate at the beginning of the agriculture biotechnology revolution when Monsanto released its first batch of Roundup-Ready seeds, or when the Flavr Savr tomato arrived because risks of GM crops were unknown, but now such risk-adversity is a detriment to efforts aimed at increasing sustainability in light of the complete lack of data suggesting GM is harmful. Of course ethical concerns (such as arguments that GM crops open the door to widespread use of GMOs in other disciplines) still come into play because they do not require scientific data to sound forceful.
The EU must rethink its risk-management strategy. There are other more effective methods of regulation, such as cost/benefit analysis and acceptable risk. The FFA conference, therefore, will be a tremendous step in the right direction because it will provide biotech scholars and policy makers the opportunity to discuss the merits of the precautionary principle in light of the current global crisis and compare it to the merits of other methods of regulation. Syngenta and ELO have invited representatives of the EU and US; because of this mixed group the precautionary principle should be discussed in the context of agriculture biotechnology in order to promote an international debate over whether the EU’s aversion is both appropriate and relevant. By doing so now and in the future, the precautionary principle will likely fade away gradually and be replaced by a regulatory scheme that will allow biotechnology to provide increased crop yields and sustainable practices for all.
Similar to the FFA conference, the Bio International Convention (BIC) will take place beginning on May 18, 2009, in Atlanta, Georgia. Whereas FFA will focus solely on agriculture, BIC will feature discussion of all facets of biotechnology – everything from health care to energy, as well as agriculture and fuel. According to Vertex Pharmaceuticals CEO Joshua Boger, the goal of the convention is for members of the biotech community to “pull up a seat and join the conversation” regarding the future of biotechnology, particularly in light of the global economic crisis.
The sheer scope of BIC will be important to help curb the negative effects of the precautionary principle by promoting roundtable discussions of other more appropriate regulatory models. As noted above, agriculture is not the only area being stifled, and indeed, the EU remains opposed to many other types of biotechnology – virtually anything involving GMOs. Those attending both conferences are likely to be cognizant of the global economic crisis, and they will be searching for sustainable solutions that can be achieved without increased funding, which has become increasingly scarce. By urging representatives from EU countries to part with anticipatory prior restraints on biotechnology, GM technologies can be furthered to benefit developing countries and promote food security.
Conferences such as FFA and BIC represent a small step in a very lengthy process of reforming an established regulatory system. Unfortunately the damage has already been done because EU citizens have been told for many years that biotechnology is so egregious that it should be banned outright. Citizens may continue to be resistant appreciating the benefits of GM crops and sustainable technologies because their government officials have opposed them publicly for a long time. One promising solution is to urge proponents of the precautionary principle to slowly accept GMOs as a viable method of relieving some of the stresses of the current global crisis. The global population will not stop growing, and with increased populations comes increased need for sustainable solutions. The precautionary principle lacks a viable foundation so proponents of biotechnology must urge their EU colleagues to act for the benefit of the whole sooner rather than later.
Jason Kasting and Vanessa Lancaster
Sources:
Marchant, G.E. and Mossman, K. L. Arbitrary and Capricious: The Precautionary Principle in the European Union Courts. Washington, DC: The AEI Press; 2004.
Fernando Kreutz, president of FK Biotecnologia in Brazil said “[w]hat you call neglected diseases, I call a business opportunity.” Funding for neglected disease research and product development from nonprofit organizations like the Bill and Melinda Gates Foundation are making what once was a sluggish field lacking in commitment from the deep pockets of pharmaceutical companies into a viable business opportunity that is increasingly garnering support from the private sector. In the past, strategic alliances between industry and universities, governments, or nonprofit organizations have utilized partnership agreements with “reservation of rights” clauses that would allow the use of the resulting technology at a low cost or royalty free for humanitarian purposes. However, as the opportunity for funding and sales to developing countries increases, industries may balk at allowing partners with less bargaining power to reserve such rights to the technology (see Source 2 for an example in Brazil). The future effects of an upswing in interest by pharmaceutical companies in neglected research is a mix of potential benefits and disadvantages to developing countries.
Contractual agreements, including licensing agreements, should contain reservation of rights clauses for the humanitarian use of a technology for establishing strategic alliances such as product development partnerships (PDP’s). These clauses allow for the use of the technology specifically for aiding public health in developing countries, leaving the pharmaceutical company to reap the benefits of the technology in developed countries. Krattiger et al., urges that “universities and public sector institutions …ensure that they preserve the right to use licensed technologies for …humanitarian goals – including distribution rights in developing countries.” Of course, successfully negotiating any term in a PDP agreement depends upon the needs and negotiating power of each party.
Pharmaceutical companies that supply a large portion of the funding for research and development or regulatory approval in strategic alliances may no longer be willing to acquiesce to reservation of rights clauses since the use of the technology for neglected disease research can be profitable. These companies could begin to use their bargaining power to take a more active role in the distribution of products in developing countries, denying the university or nonprofit partner to take charge of this use of the technology. Additionally, the smaller partner may be forced to offer additional incentives to the pharmaceutical company such as royalties and various equity shares including equity options, a grant of shares, or convertible notes.
The effect of increasing resistance to reservation of rights clauses for humanitarian purposes due to growing economic opportunity in this field is mixed. On one hand, more involvement by pharmaceutical companies in manufacturing and distribution of neglected disease products could result in faster, more efficient production of those products. Pharmaceutical companies have the resources and expertise to improve the quality and reliability of manufacturing and distribution of products, which would benefit developing countries. On the other hand, negotiating more extensive royalties and other economic incentives for large pharmaceutical companies could increase the cost of the resulting products. However, as nonprofit organizations and government owned innovative institutions are increasingly able to shoulder the financial burden of developing new treatments, these institutions may be able to equalize their bargaining power with pharmaceutical companies. For example, Brazil’s biotechnology infrastructure has been built with the purpose of serving local public health needs and is seeking partnerships with the private sector to promote new innovative technology. Perhaps in Brazil and elsewhere the governmental institutions and nonprofit organizations would eventually have the larger bargaining power in negotiating partnership and licensing agreements.
2. R. Rezaie, et. al., Brazilian Health Biotech – Fostering Crosstalk Between Public and Private Sectors, 26 Nature Biotechnology 627 (2008).
3. A. Krattiger et. al., Specific Strategies and Mechanisms for Facilitating Access to Innovation, in Intellectual Property Management in Health and Agricultural Innovation 36, 35 (Paula Douglass et. al., eds., 2007) (available at www.ipHandbook.org )
4. Alan B. Bennett, Reservation of Rights for Humanitarian Uses, in Intellectual Property Management in Health and Agricultural Innovation 41-45 (A Krattiger et. al., eds., 2007) (available at www.ipHandbook.org)
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