72. The representative of the European Communities said that economic growth, social welfare and public health in the world benefitted from innovations. Access to knowledge and effective protection of intellectual property rights were key ingredients to stimulate research and development leading to economic expansion. The use of genetic resources, such as plants, animals and micro-organisms played an important role in this process, because they constituted the raw material for future innovative developments in a wide range of industrial sectors. While the agricultural sector appeared to rely exclusively on the use of genetic resources, large industries, such as the pharmaceutical sector, also depended quite considerably on genetic resources. The process of reviewing Article 27.3(b) of the TRIPS Agreement should be seen in this context. The discussions at the last Council meeting showed that beyond issues covered by the scope of Article 27.3(b) of TRIPS, several other issues had been addressed. He wished to comment on these matters, while emphasising that many of the issues raised by WTO Members in this discussion fell outside the scope of the review. Several Members had raised the issue of the link between environmental concerns and patent protection, in particular by referring to a possible conflict between the provisions of the Convention of Biological Diversity ("CBD") and the TRIPS Agreement. The CBD aimed to enhance biological diversity and the sustainable use of its components, and provided a multilateral legal framework relating to the sovereign right of states to regulate the access to and transfer of their genetic resources. His delegation was of the opinion that the CBD and the TRIPS Agreement were mutually supportive and that neither of them ran counter to the objectives of the other. Having said so, he also wished to state that his delegation was of the view that this matter did not fall within the scope of the review of Article 27.3(b). An important objective of the TRIPS Agreement was to promote effective and adequate protection of intellectual property rights, including by providing incentives to inventors through the provision of exclusive rights on a temporary basis. Intellectual property rights were instruments to ensure an adequate level of transparency and openness regarding all kinds of inventions, including those using genetic material. Without transparency, economic operators, research and development institutions and inventors could not benefit from the knowledge which could be derived from the use of genetic material in the innovative processes and activities. Innovative creations would be kept secret and non-available to the public because there would be no economic incentive to disclose them. This might lead to increased business secrecy and thereby develop an anti-competitive contractual environment. Furthermore, intellectual property rights were instruments, but not the only ones, used by providers of genetic material to obtain a commercial return from commercial operators depending on genetic material to develop new products. Some countries regulated the contractual relationship between providers and users of genetic material (access and benefit-sharing agreements). Patents could be used as an instrument between the parties to these agreements to secure remuneration to the provider country for the use of genetic resources on a long term basis. With the advent of modern technology the commercial use of genetic resources had become a fact of life. However, it had to be taken into account that genetic resources used in these products came from many sources: synthetic production, existing collections and natural origins from both developed and developing countries. In fact, the majority of genetic resources used to develop new innovations did not come directly from a "natural source provider", e.g. a developing country. There appeared to be no common understanding of the amount of genetic resources which were provided directly from nature and used by commercial operators. The same applied for the commercial value of these resources. If a country provided for easy access to its genetic resources and a high level of intellectual property rights for new inventions, it might attract foreign investors preferring to use natural genetic material instead of synthetic production. Intellectual property rights did not aim to regulate the production and distribution of, or access to, genetic resources. Neither did they regulate the terms and conditions for bioprospecting. These were matters for regulation by national legislation. The illegal use of genetic resources (biopiracy) could best be tackled through effective national legislation such as criminal and civil laws and enforcement systems. The establishment of easily accessible and transparent application systems for access to genetic resources were equally important to control the transfer of genetic material, and thus to counter illegal exploitation. Many Members at different levels of development had already established or were in the process of elaborating transfer and access legislation. He highlighted the importance of co-operation on mutually agreed terms between providers of genetic material and the research-based industry. This would enable both parties, through monetary compensation and other means (knowledge sharing, education programmes, etc.) to benefit from the sustainable exploitation of a country's resources. Many companies from the industrialised world were already engaged in such co-operation and had committed themselves, on a long-term basis, to provide training, know-how and common sharing of benefits, in return for access to resources.
73. Continuing, he said that biodiversity in the process of creating new inventions did not raise only commercial aspects. Ethical and moral concerns might also be addressed and considered carefully, and different societal values might be taken into account. A fair balance should be reached between these concerns and the need to provide for a sound protection of intellectual property rights. Intellectual property rights helped to promote new innovations which contributed to combat diseases, hunger and other miseries. To find a fair balance, Article 27.2 of the TRIPS Agreement provided for exclusions from patentability. In addition, Article 27.3(b) gave Members the right to decide, on a national level, whether or not plants, animals and essentially biological processes should be excluded from patentability. However, Article 27.3(b) only dealt with specific exclusions from patentability. General exclusions were covered by Article 27.2. The synoptic tables prepared by the Secretariat (informal document Job No. 2689) showed the balance reached by the majority of Members providing information in the review. They had provided for patent protection of plants and animals as well as for plant variety protection schemes under the UPOV provisions, with limited exceptions. While the European Communities and their member States, following very extensive debates, had established the scope for the legal protection for biological inventions in Europe, it was up to other WTO Members to implement the provision as they saw fit. They should find a balance between legal protection and their ethical, moral and other societal values. Several WTO Members had asked the question whether or not the existing intellectual property rights regime was effective to protect traditional knowledge. His delegation considered that there was a need to refine and develop a common understanding of the concept of traditional knowledge and its link to the existing intellectual property rights regime, for instance by clarifying the definition of protectable subject matter, ownership relations and rights conferred. In respect of these issues, the WTO should benefit from the work that was already underway in WIPO. However, he stressed that this was not an issue which should be dealt with in relation to Article 27.3(b).
74. Continuing, he said that Article 27.3(b) obliged WTO Members to provide for a sui generis protection system and/or patent protection for plant varieties. His delegation was of the view that the 1991 Act of UPOV created the most effective and complete protection scheme for new plant variety innovations. Not only big international companies, but also traditional breeders could, for a relatively small sum, register their new creations and thus ensure the economic benefits derived therefrom. The 1991 Act of UPOV also made it utterly clear that farmers had a privilege to freely use propagated seed the following season on their own holdings without having to pay licence fees. The information-gathering exercise carried out by the Council had shown that implementation of a sui generis protection system similar to the UPOV system was preferred by those Members responding to the review. His delegation considered such UPOV-like systems "effective" in accordance with Article 27.3(b) and would urge Members who did not already adhere to this Convention to do so. Some WTO Members had raised concerns regarding the deadline for implementation for setting up sui generis protection for plant varieties. This should be done before 1 January 2000. His delegation recognised the difficulties in creating sui generis protection systems and the administrative system for handling these rights, and considered that the most efficient and rapid way to implement Article 27.3(b) would be to rely on existing harmonised plant variety systems with possible adaptations to ensure special national needs. In his delegation's view, regarding the issues which were directly covered by the review of Article 27.3(b), the following conclusions could be drawn. First, there appeared to be a large degree of similarity among developed country Members on the way they implemented the provisions of Article 27.3(b) in their patent laws; he recalled that the European Communities provided for the exclusion of plant varieties and animal varieties and a number of exceptions to patentability related to life forms, but provided for the patent protection of plants and animals if they fulfilled the normal requirements for patentability. Second, Members responding to the information-gathering exercise seemed to agree to a large extent that the UPOV system for the protection of plant varieties established an effective sui generis protection for plant varieties as required by Article 27.3(b); protection for plant varieties could also be provided by patents. Third, his delegation drew the conclusion that Article 27.3(b), as it stood, provided the necessary flexibility for Members in implementation; the review of Article 27.3(b) could be closed. Fourth, with regard to the specific protection of plant varieties, in his delegation's view, in the future it could be considered appropriate to clarify the phrase "effective sui generis system" by including a reference to the UPOV Convention. With regard to the implementation of Article 27.3(b) by developing countries, his delegation looked forward to receiving and examining the relevant legislation as of the beginning of 2000 at the latest.
