See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/247675365

Bioprospecting or Biopiracy?: Intellectual Property and

Traditional Knowledge in Biotechnology Innovation

Article  in  The Journal of World Intellectual Property · November 2005

DOI: 10.1111/j.1747-1796.2004.tb00257.x

CITATIONS READS

13 1,315

2 authors, including:

William A. Kerr
University of Saskatchewan
376 PUBLICATIONS   2,461 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Transformation and Reform in the Russian Energy Sector View project

Book- Economic Development Through Regional Trade: A role for the new East African Community? View project

All content following this page was uploaded by William A. Kerr on 15 June 2016.

The user has requested enhancement of the downloaded file.

 Bioprospecting or Biopiracy?
Intellectual Property and Traditional Knowledge in
Biotechnology Innovation

Grant E. ISAAC*and W
illiam A. f(Em**

“ W e instruct the Council for TRIPS, in pursuing its work programme . . . to examine . . , the relationship
between the TRIPS Agreement and the Convention on Biological Diversity, the protection oftraditional
knowledge andfolklore and other relevant new developments ... In undertaking this work, the TRIPS
Council . . . shall take fully into account the development dimension.”
Paragraph 19, Doha Ministerial Declaration.’

I. INTRODUCTION
In the period between the 1994 conclusion of the negotiation for the Agreement
on Trade-Related Aspects of Intellectual Property (TRIPS)during the Uruguay
Round and the convening of the Doha Ministerial Meeting in 2001, the question of
assigning property rights to traditional knowledge and folklore had become a
sufficiently contentious international issue that it was included in the work
programme of the Doha Development Round. The reason for the increase in the
profile of these issues lies, to a considerable degree, in the progress made in the
research, development and commercialization of biotechnology-based products.2
Essentially, the enhanced commercial value of genetic material made possible by the
techniques and procedures of modern biotechnology can only be captured through
either legal controls, such as intellectual property rights, or through biologcal
controls, such as gene suppression techniques (Gaisford et al., 2OOl).3 The former
controls have come to dominate genetic research for two reasons. First, there has been
a significant lack of support for using gene suppression techniques to control
commercial value because of concerns about “corporate control” over living

* Associate Professor of Biotechnology Management, University of Saskatchewan; Associate, Estey Centre

for Law and Economics in International Trade, Saskatoon, Canada.
** Van Vliet Professor, University of Saskatchewan; Senior Associate, Estey Centre for Law and Economics
in International Trade, Saskatoon, Canada.
The authors may be contacted at: uwilliam.kerr@usask.cau and uisaac@usask.car, respectively.
1 See World Trade Organization, 2001.
2 For accessible discussions of the techniques and procedures of modem biotechnologysee McHughen, 2000,
and Ho, 2000.
See Isaac, 2002, for a discussion of the so-called “terminator” and “traitor” technologies currently owned by
multinational life sciences companies which suppress an organism’s ability to successfully reproduce, thus allowing
the innovator to control excludability of the innovation.
36 THE JOURNAL OF WORLD INTELLECTUAL PROPERTY

organisms. As a result, none of these techniques are currently in use and the prospects
for their future use at present look bleak.
Second, the advent of modern biotechnology coincided with many governments
retreating from public research due to rising public-sector deficits and debt servicing
loads (Boyd et al., 2003). As governments reduced their expenditures, private
researchers were willing to fd the void only if they could appropriate the commercial
value of their research through intellectual property rights (Klein and Kerr, 1995). To
achieve this, the previously limited ability to claim intellectual property rights in living
organisms was extended (Gaisford et at., 2001).
Of course, this increased use of intellectual property rights in genetic research was
a major departure from how genetic material was managed prior to the advent of
modern biotechnology. Due in part to the non-excludable nature of living organisms,
genetic material was traditionally considered as global common property derived from
generations of accumulated traditional knowledge such that no single innovator could
be easily identified. As a result, much genetic research was undertaken in the public
sector and distributed as a public good.
Genetic research involving the techniques and procedures of modern
biotechnology departed from this historical trajectory because it was now much easier
to identify the innovator, the one employing the new techniques and procedures. The
broadening of intellectual property rights in modern biotechnology followed the
norms of intellectual property rights protection concentrating on novelty and
incentives for innovation. No account, however, was taken of traditional knowledge,
despite the fact that traditional knowledge often has an essential part to play in the
progress of modern biotechnology by, for example, pointing the way to plants with
desirable properties.
In practical terms, as a global common good, traditional knowledge is deemed
ineligible for intellectual property protection, while contemporary and sophisticated
scientific knowledge is deemed a novel, inventive step eligible for intellectual property
protection. As a result, the techniques and procedures of modern biotechnology are
often applied to traditional knowledge in order to isolate and extract the beneficial
characteristics useful in the development of nutraceutical (functional foods and
supplements with enhanced nutritional composition) or plant-based pharmaceutical
products that are then eligible for intellectual property protection and the monopoly
rents that accrue.
Some view this activity as “bioprospecting”-a necessary component of
innovation. For example, biotechnology firms consider bioprospecting to be a search
for organisms with commercially desirable traits in order to bring human health benefits
to all and not just those fortunate enough to benefit from the traditional knowledge
because they live in a particular geographic or cultural zone.
 BIOPROSPECTING OR BIOPIRACY? 37

Others view this activity as “biopiracy”-essentially a theft of valuable resources for

the commercial gain of developed countries and multinational corporations. To those
with this view, biopiracy represents a &singenuous repackaging of traditional
knowledge in order to secure monopoly rents for the biopirate while excluding the
original innovator from a claim to these rents. The fact that the potential returns from
investing in modern biotechnology accrue only to those who hold intellectual property
rights biased in favour of modern biotechnology and against tradtional knowledge raises
sig.ruficant inequity concerns. After all, much of the world’s traditional knowledge of
biodiversity is held by those among the world’s poorest (Ken and Yampoin, 2000).
With these two very different perspectives, it should come as no surprise that the
debates around genetic resources, intellectual property rights and traditional knowledge
have become quite polarized; proponents of bioprospecting generally argue that all
genetic material should be subject to intellectual property protection while critics of
biopiracy generally argue that no genetic material should be subject to intellectual
property protection.
The objective of this article is to examine the bioprospecting-biopiracy debate
with a view to providmg a structure for the international protection of intellectual
property rights that maximizes the potential for both traditional knowledge and modern
scientific innovation to contribute to economic progress. The conclusion suggests that
neither polar position-complete protection versus no protection for traditional
knowledge-is optimal. Instead, there exist conditional circumstances for extending
protection to traditional knowledge that have the advantage of simultaneously
enhancing the contribution of both traditional and modem sources of knowledge.

TRADITIONAL
11. BIOTECHNOLOGY, KNOWLEDGE AND INTELLECTUAL PROPERTY

One of the major uses of modern biotechnology is in genetic modification

whereby modern techniques of genetic enhancement are used to alter biological
organisms beyond that which is attainable using natural selection and controlled
breedmg. Gene mapping creates a base of knowledge that can be used in the
identification of genetic material that has attributes with potential commercial value;
genetic modification makes it possible to realize that potential commercial value
through the creation of products with desirable traits. Thus, biotechnology is one of the
main pillars of the knowledge economy that most developed countries see as the key to
their future relative prosperity and has become the focus of many national industrial
policies (Isaac, 2002).
In its first decade of commercialization, the biotechnology industry has been
dominated by products whose benefits lie primarily in attributes that enhance the
agronomic performance of plants-meaning that direct benefits accrue primarily to
agricultural producers and, of course, the commercial crop developers. The dominance
38 THE JOURNAL OF WORLD INTELLECTUAL PROPERTY

of these production-trait genetically modified (GM) crops is expected to decline,

however, as plant developers increasingly focus on output-trait GM crops that exhibit
characteristics of value to the end consumer (Isaac, 2002). The targets include
nutraceuticals and plant-made pharmaceuticals (PMPS)that use plant photosynthesis
instead of the current methods of chemical synthesis. The global market for
nutraceuticals has been valued at US$ 140 bdion with an expected annual growth rate
of between 5 and 10 percent for the next decade, driven by an increased demand for
“alternative” and “natural” products (Nutrition Business Journal, 2001). The global
market for pharmaceuticals has been valued at US$410 bilhon with an expected growth
rate of between 7 and 8 percent over the next five years.
Tradtional knowledge plays an important role in identifying genetic material with
beneficial characteristics that can be isolated and extracted from the original organism
and used in the development of novel products such as nutraceuticals or
pharmaceuticals. At first glance, there appears to be a real economic development
opportunity for traditional knowledge holders to link with functional food and drug
companies in order to access the large and growing global markets for nutraceuticals and
pharmaceuticals. However, this opportunity is limited by the rules pertaining to
intellectual property rights embodied in the World Trade Organization (WTO)TRIPS
Agreement. For the most part, these rules promote knowledge-creation and innovation
on a global scale where knowledge and innovation are defined in terms of sophisticated
scientific procedures and techniques rather than traditional knowledge. Consequently,
the holders of traditional knowledge are effectively shut out of the knowledge economy.
Further, a sub-optimal rate of innovation in nutraceuticals and pharmaceuticals will be
observed, and biotechnology will not live up to its full potential.

111. CASESTUDY:PLANTGENETIC
RESOURCES

Beyond the substantial commercial potential of biotechnology, plant genetic

resources have been chosen as an illustrative example of the complicated relationship
between intellectual property rights and traditional knowledge because they embody a
panoply of concerns about the scientific modification of nature (and the human, animal
and biodiversity impacts of such modifications) and about the control over natural
resources (for both food and pharmaceutical use) by multinational corporations (Low,
2001; Shiva, 1999; van Wijk et al., 1993). That is, examining the relationship between
intellectual property rights and traditional knowledge with respect to plant genetic
resources provides a broad-based assessment of these sensitive topics.
“Land races” of plants refers to the staple crops, such as wheat, rice and maize,
modified over thousands of years through the inter-generational accumulation of
traditional knowledge (and which now may have been moddied over perhaps a
hundred years through the use of scientific knowledge) in order to express quantity and
 BIOPROSPECTING OR BIOPIRACY? 39

quahty characteristics valuable for human use. Much has also been learned about the
medicinal properties of naturally occurring plants. Despite the accumulated knowledge,
it has been estimated that less than 0.1 percent of all plants have been assessed for their
beneficial properties. Given the enhanced abhty to identitjr and isolate economically
useful genetic material that underlies biotechnology, there is currently an aggressive
search for these plants and the new benefits they may yield.
As discussed above, traditionally plants-and, consequently, their genetic
material-have been considered as “global common goods” provided by nature for the
benefit of all such that ownership could not be assigned to any individual or group,
implying that no one could secure intellectual property rights over the plants. This
designation has facrlitated their international movement, which has taken place since the
dawn of commerce &err and Yampoin, 2000; Gokn, 1998).Increasingly, however, the
definition of plants as global common goods has been blurred in order to promote
innovation in plant development. That is, naturally occurring plants themselves are still
considered global common goods, but identifying the genetic sequences coding for the
particular proteins that provide the desired benefit is considered to be an intellectual
endeavour eligible for intellectual property protection. Understandmg this distinction
requires specification of knowledge and of intellectual property rights, which are
examined in what follows.
At the heart of the conflict between intellectual property rights and traditional
knowledge are differing definitions of what constitutes knowledge eligble for
protection. To capture the range of these differing definitions, three classifications might
be considered
A. the source of the knowledge;
B. the type of knowledge; and
C. the furnisher of the knowledge.
These classifications are, however, inexorably linked in the process of defining
what is eligible for protection as intellectual property.

A. The Source ofthe Knowledge

The source of the knowledge can be either Western scientific procedures and
techniques or tradltional knowledge. In the case of plant genetic resources, traditional
knowledge would refer to the accumulated learning-ften across many generations-
that has enabled certain peoples to know, for instance, that a particular plant, harvested
under particular conditions and processed in a particular way, provides a remedy for a
particular ailment. Due to the accumulated inter-generational nature of the learning
process, ownership of the knowledge and the benefits that it brings are not given to any
one individual but instead are shared as ‘‘common goods”. Scientific k n o w l e d g e
40 THE JOURNAL OF WORLD INTELLECTUAL PROPERTY

which emerges from the foundation of the accumulated, inter-generational tradtional

knowledge-nevertheless differs from traditional knowledge in a key respect. Scientific
knowledge tends to explore beyond the serenchpity of the traditional knowledge to
understand both why and how a particular plant provides a remedy for a particular
ailment. The sophisticated techniques and procedures that comprise modern genetic
sciences play an increasingly important role in this investigation.

B. The Type ofKnowledge

The distinction between traditional and scientific knowledge gives rise to the
second important classification-the type of knowledge. In this case, two distinct types
arise: discoveries and inventions. The former are outcomes of nature that do not require
a human intervention while the latter are those outcomes that are not possible without
a human intervention. For example, it can be argued that the traditional knowledge of
the benefits of a particular plant is a discovery because there was no real human
intervention required to extract the benefit from the plant; the benefit was always there
and the human intervention only maximized the beneficial characteristic. O n the other
hand, the scientific knowledge of how and why the plant provides the benefit that it
does is not possible without a human intervention in the form of highly sophisticated
scientific procedures and techniques. Moreover, extracting the beneficial aspects and
incorporating them into a product certainly requires human intervention.
Hence, under these definitions, traditional knowledge is considered a discovery,
while a product emerging from scientific knowledge is an invention.

C . T h e Furnisher oftke Knowledge

In the third classification, it is important to identify who furnishes the knowledge.

In the example above, the primary/original innovators are the indigenous societies that
accumulated the knowledge inter-generationally. Certainly, it is undeniable that some
innovation has occurred in the form of identifjing the plant and the conditions under
which the plant has beneficial properties for particular ailments. Assigning “ownership”
to the primary/original innovator is, however, very difficult. Of course, this problem
disappears if the traditional knowledge is considered to be common property. O n the
other hand, the secondary innovator-extending and refining the traditional knowledge
through the use of sophisticated scientific techniques and procedures in order to develop
a product-is much easier to identify. Moreover, if the use of modern science is
considered to be a human intervention, then the secondary innovator is the one actually
providing an invention-beyond simply being a discovery.
The reason why intellectual property rights are not typically extended to
chscoveries in property rights legislation lies in the particular hnction the rights serve in
 BIOPROSPECTING OR BIOPIRACY? 41

the economy. In modem market economies, intellectual property rights are granted for
one primary purpose: to encourage investments or activity in that particular area of
economic endeavour, whether that is creative activities in the arts or letters, the pursuit
of products of high and identifiable quality, or investment in trend-breaking industrial
designs. In the case of biotechnology, innovation is the objective and patents are the
instrument used to extend protection to intellectual property. Patents are meant to
correct a market failure. The market failure leads to sub-optimal levels of investment in
innovative activities and arises because producers that can use an innovation without
incurring research and development costs will always have a competitive advantage over
firms that innovate and incur those costs. As a result, there wdI be no incentive to
innovate.
Patents reward innovators with a temporary monopoly on the intellectual property
that they have created. In modern market economies it is well understood that the
granting of a monopoly creates a market failure of its own-higher prices and lower
quantity of output.4 There is an implicit belief that the temporary inefficiency loss from
the granting of the monopoly is outweighed, on average, by the benefits arising from
innovation. Thus, one can see the innovation focus of the granting of intellectual
property rights. Further, the patent holder is required to disclose the scientific
knowledge that underlies the innovation to the public in order to promote knowledge
dissemination. Malung the scientific information available instead of allowing it to
remain proprietary has the objective of reducing information costs for other innovators.5
The underlying cause of the market failure lies in the public-good nature of
knowledge whereby once created it is impossible-or very costly-to exclude others
from its use in the private market and that its “consumption” by one user does not
preclude its consumption by another. According to this view of the protection of
intellectual property rights, knowledge, including discoveries, should be a public good.
It is only when the market failure associated with under-investment in innovation is
manifest that the extension of intellectual property rights is justified. There is no
“equity” justification for granting intellectual property rights.

Iv. CONTROVERSY IN INTERNATIONAL INSTITUTIONS

Under international intellectual property conventions, intellectual property rights

for plant genetic resources have typically been gven for Western science inventions by
a secondary innovator rather than for traditional discoveries by the primary/original
innovator. This is consistent with the innovation focus of intellectual property rights.
This has given rise to bioprospecting whereby scientists can extract plant genetic
resources from the primary innovators/traditional users because land races and natural

This yields a “dead weight loss”, in economists’ terms.

4
The economic arguments pertaining to intellectual property rights and innovation can be found in Machlup,
5
1958; Nordhaus, 1969; Gallini, 1992; Comelli and Schankennan, 1999.
42 THE JOURNAL OF WORLD INTELLECTUAL PROPERTY

plants are considered global common goods, and subsequently extend and refine the
traditional knowledge using modem science, and claim an invention which is eligible
for intellectual property protection. Moreover, supporters of these rules argue that all
genetic material to which the inventive step of scientific knowledge has been added
should be eligible for protection.
Yet, critics of the current relationship between intellectual property rights and plant
genetic resources argue that this is simply biopiracy, where the role of human
intervention in determining that a particular plant, harvested at a particular time and
processed in a particular manner, has desirable characteristics is discounted as an
innovation and simply labelled as a discovery. It is argued that the role of modern science
is elevated such that identifying a gene sequence using procedures and techniques of
modern biotechnology is patentable because of the human intervention required to
identify the sequence despite the fact that, in the most pragmatic sense, identifying this
sequence is not an invention; it is only a discovery of a genetic resource that has always
existed, albeit at a more micro-level than previously observed. The result is the argument
that intellectual property rights should not be allowed for plant genetic resources at all-
regardless of whether the source of the knowledge is traditional or scientific.
Given the contentious nature of the issues surroundmg intellectual property
protection for plant genetic resources, it is useful to attempt to disentangle the
complicated arguments for and against their use. The arguments are summarized in
Table I-the Tableau of Alternatives-which may be read vertically down the five
columns, and are specified with respect to the rationale of the argument and an
assessment of the benefits and costs of the various positions.

A, Three Distinct Market Failures

The arguments for and against extending intellectual property rights for plant
genetic resources fundamentally represent a clash between economic-efficiency-based
and social-equity-based arguments. The former posit that innovative activities that
create knowledge face important classic market fdures that hinder allocative efficiency.
Intellectual property rights target innovative activities (where the priority is often
established by governments) and are structured to overcome market failures and inject
greater allocative efficiency into the market system. In fact, while the classic market
failure arguments previously discussed are present, the issue of plant innovation gives rise
to two more market failure arguments: geographic insularity and cultural excludability.
The former is the fdure that occurs when a plant with beneficial human health
characteristics is only made available within a geographic proximity that shares the
traditional knowledge. The market failure is that global human health cannot benefit.
The market failure associated with cultural excludability occurs when the benefits
accrue only to those who share a cultural proximity. The knowledge cannot be used

IPRS Not Granted
Rationale
Plant genetic resources
considered discoveries of
‘‘common good”, not
true inventions.
Intellectual property rights
create an economic
distortion in the form of
a “Western” science hurdle
to innovation that cannot
be achieved by many
tradxional innovators.
Benefits
Equity-based Prevents
predatory “rent-seeking’’
by those with scientific
capacity for innovation.
costs
Efficiency-based: Fails
to address both:
- classic market failures;
- specific market failures.
Note: IPRS = intellectual property rights.
Source: Compiled by the authors.
TABLE OF ALTERNATIVES
1: TABLEAU
IPRS Granted
Qualified
Existing Crops Uncultivated Plants
With Known
Beneficial Properties
Rationale Rationale
Quantity and/or quality Extending traditional
improvements to knowledge of beneficial
established food crops attributes through a
beyond the “common Western scientific
good” variety developed intervention.
by the “primary/origd
innovator”. Typically, a “primary/
original innovator” can
Improvement linked to a be identified.
Western scientific
intervention.
Benefits Benefits
Efficiency-based Promotes Efficiency-based Promotes
innovative improvements innovation beyond what
to food crops already part the primary/original
of the agricultural system, innovator is willing to do
correcting both. or capable of by correcting
- classic market failures; both:
- specific market failures. - classic market failures;
- specific market fdures.
costs costs
Equity-based: Scientific Equity-based Biopiracy
hurdle excludes “primary/ arguments.
original innovator”.
Secondary innovators
securing intellectual
property rights due to some
Western scientific steo.
With Unknown
Beneficial Properties
Rationale
True bioprospecting:
Discovering new organisms
with potential benefits:
- immediate benefits;
- derivative: requiring
an inventive step
either traditional or
Western science.
No “primary/original
innovator”.
Benefits
Efficiency and equity-based:
Promoting the d x o v e r y of
new beneficial processes
and products by
overcoming:
- classic market failures;
- specific market failures.
costs
Unconstrained
Rationale
Intellectual property rights
to all innovaton where
innovation connotes both:
- discovery; and
- invention.
Innovation may be either:
- tradltional knowledge;
or
- Western science.
Benefits
Efficiency and equity-based
Promoting the discovery of
new beneficial processes
and products by
overcoming:
- classic market failures;
- specific market failures.
COZts
Equity-based Rejects global
common good arguments.
Eficiency-based:
“Primary/original
innovator” may lack
capacity to innovate to
the next level.
44 THE JOURNAL OF WORLD INTELLECTUAL PROPERTY

globally to improve human health. Therefore, intellectual property rights are granted
for plant genetic resources not simply to correct classic market failure but also the
failures that arise from geographic insularity and cultural excludability. This argument is
predicated on the notion that without an assurance of protection, firms w d have no
incentive to innovate to create market-oriented products that overcome the “classic”
( i t . free-rider problem) and the “specific” (i.e. geographic insularity and cultural
excludability) market failures.

B. Social Equity

The market-efficiency-based arguments are generally seen to be in contrast to the

social-equity-based arguments, which tend to view intellectual property rights as being
predatory instruments of scientifically advanced countries that, in fact, create exclusions
themselves. Namely, they exclude traditional knowledge, the primary innovator and the
role of discovery from the monopoly economic rents. In the extreme, these arguments
reject the granting of intellectual property rights on plant genetic resources entirely.
These arguments will be examined first.

C. Intellectual Property Rightsfor Plant Genetic Resources Disallowed

The left-hand column of Table 1 provides an assessment of the argument for

disallowing any intellectual property rights for plant genetic resources. The rationale for
this argument is that identifying the beneficial properties of a plant-either at the
holistic, traditional-knowledge level or at the more precise genetic level of scientific
knowledge-remains only a discovery of a global common good, not an invention
worthy of intellectual property. That is, neither the primary innovator nor the
secondary innovator should be granted monopoly rights over the exclusive commercial
marketing of the benefits. Further, from t h s perspective, it is argued that intellectual
property rights create an economic distortion in the form of a “Western” scientific
hurdle to innovation that cannot be overcome by many traditional innovators because
they lack the technical capacity to engage in the activities of modern science.
It is argued that the benefit of denying intellectual property to plant genetic
resources is equity-based; that plant genetic resources remain global common goods
available to all and cannot be exclusively controlled. Without an ability to secure
monopoly rights, it is argued that the incentive for predatory, rent-seeking behaviour
by those with the capacity to overcome the scientific hurdle will be eliminated.
The costs associated with denying intellectual property rights are rooted in the
efficiency paradigm. Disallowing the possibility of securing intellectual property rights
over plant genetic resources inhibits innovation by not overcoming the classic market
failure associated with free-riding and the specific market failures of geographic
 BIOPROSPECTING OR BIOPIRACY? 45

insularity and cultural excludability. It is argued that the primary innovator often does
not have the capacity to transform the beneficial plant into a commercial product
available on a global scale. Yet, without the assurance of protection over their
intellectual investment in this transformation, secondary innovators would be reluctant
to dedicate the resources required. The cost is the failure to bring to market products
that may have considerable social benefit, even accounting for the costs of the
monopoly distortion. Further, it would seem that the size of the market failures
associated with the failure to make the benefits available on a global basis arising from
either geographic insularity or cultural excludability would far outweigh losses arising
from the inefficiency associated with monopoly.

D. Intellectual Property Rights for Plant Genetic Resources Allowed

While the arguments against allowing intellectual property rights over plant genetic
resources tend to be very straightfonvard, the arguments supporting the extension of
intellectual property rights to plant genetic resources are much more complicated.
There are two broad categories, “qualified protection” and “unconstrained protection”,
where the former is itself sub-divided into three categories (see Table 1).
It should be noted that in each case the arguments share a focus on efficiency-based
benefits through correcting both the classic market failures pertaining to sub-optimal
rates of innovation and the market failures specific to plant-based innovation,
e.g. geographic insularity and cultural excludability. Here the notion is that intellectual
property rights over plant genetic resources promote the maximum innovation of
plants, beyond what the primary innovator is willing or capable of doing.
The arguments for only allowing quahfied intellectual property rights over plant
genetic resources are all rooted in the premise that maximizing innovation is the ultimate
goal. To accomplish this means that only some types of knowledge qualify for protection.
Consider first the second column from the left in Table 1, entitled “existing crops” or
land races. As previously mentioned, land races refers to plants already modified for use
as agricultural crops where innovations to these plants target improvements to quantity
and/or quahty characteristics beyond the modifications of the primary innovator.
Indeed, with most varieties of staple agricultural crops it is extremely difficult to identify
a sole primary innovator. Therefore, some type of hurdle must be established to identify
innovations that are worthy of protection as well as the innovators responsible for the
innovation. The hurdle that has emerged is one of scientific definition, where an
innovative improvement to a crop must arise from a sophisticated scientific technique or
procedure. That is, the quWication upon which intellectual property protection is
granted to plant genetic resources is that the innovation be scientfiic in nature. The
rationale is that the use of advanced science results in crop innovations more like
inventions that are eligible for protection. The benefits, according to this argument, are
46 THE JOURNAL OF WORLD INTELLECTUAL PROPERTY

that it promotes innovative improvements to crops already part of the agriculturalsystem,

and that the protection corrects both the classic market failure and the specific market
fdures of cultural excludabdity and geographic insularity.
The cost of this argument is that it essentially excludes the primary innovator from
intellectual property protection if a satisfactory level of science is required to shift the
innovation from a discovery to an invention. The primary innovator will also be subject
to the prices associated with the monopoly distortion along with all other consumers.
Of course, the primary innovator would only choose to purchase and employ the
products of the scientific innovation if they were sufficiently superior to existing land
races to offset the cost.
Arguments for allowing intellectual property rights over plant genetic resources on
a qualified basis involve not only existing crops but uncultivated plants; plant varieties
with either known or unknown beneficial properties that have not been systematically
modified for human use. Consider first unimproved plants with known beneficial
properties. This argument is very similar to the previous conditional argument on the
protection of existing traditional crops. The rationale is that intellectual property rights
are necessary to promote innovation extending the traditional knowledge of the
beneficial attributes to others who may not have access to the traditional knowledge due
to cultural excludabihty or geographc insularity. To qualify for protection, the
secondary innovator must demonstrate an inventive step beyond the primary dxovery.
Again, the inventive step is best demonstrated through the use of modern scientific
techniques and procedures. The benefits are that intellectual property protection
promotes innovation thereby extendmg the access to the beneficial properties of these
plants beyond what the primary innovator is capable or wiUlng to do.
In terms of costs, thls argument for intellectual property protection differs fiom the
examination of existing traditional crops because in many cases the primary innovator can
be identified, or at least the primary innovators may be identifed. This raises the spectre
of biopiracy, whereby representatives of scientifically advanced secondary innovators use
the trahtional knowledge of primary innovators to identify plants in the natural
environment with beneficial properties, extract the plants as global common goods, apply
modern scienhfic techniques to identify why and how the plants work to alleviate ailments,
patent this scientific knowledge and thus have monopoly rights over the commercial use
of t h s knowledge. Those who support the protection of intellectualproperty in these cases
respond that as long as the secondary innovator does not use the courts to prevent the
primary innovator &om using the traditional knowledge in the tradtional way, then there
is no harm to allowing protection, particularly given the benefits associated with removing
the constraints of geographc insularity and cultural excludabihty.
Now, consider plants found in nature with unknown beneficial properties. This is
the classic case of bioprospecting and is motivated by the estimate that less than
 BIOPROSPECTINGOR BIOPIRACY? 47

0.1 percent of all plants have been assessed for their beneficial potential. The rationale
for extending intellectual property rights is that in order to encourage innovators to
discover plants with immediate benefits and to invent the subsequent large-scale
derivative products, assurances that intellectual property investments will be protected
are required. In this sense, to q u m for intellectual property protection, the discovery
and/or invention must be novel. The benefits of this argument are that intellectual
property rights promote frontier exploration for new products and processes and
prevent classic and specific market failures. Furthermore, there seems to be very little
cost to this argument. Given that the exploration is for plants with yet unknown
beneficial properties, there is no predation of the traditional knowledge of a primary
innovator by a secondary innovator who has the capacity to overcome a scientific
hurdle and secure monopoly rights over the commercial use of the knowledge.
Finally, consider the argument for allowing unqualified-”unconstrained”-
intellectual property rights over plant genetic resources (summarized in the right-hand
column of Table 1). Ths argument differs from the arguments for the qualified
extension of intellectual property rights because there is no distinction made between
the types of knowledge that quah@ for protection. Essentially, all discoveries and
inventions, whether of trahtional knowledge or scientific knowledge, are eligible for
intellectual property protection. The rationale is that uncondtional intellectual property
protection over plant genetic resources does not &scriminate between traditional and
scientific knowledge, treating both equally and providing the opportunity for the
primary innovator to profit from the traditional knowledge if desired. Essentially, it
allows all innovators to protect their knowledge and does not establish any arbitrary or
exclusionary hurdles to legitimate protection. Simdar to the other arguments for
allowing intellectual property rights over plant genetic resources, the efficiency-based
benefit of this argument is that it promotes innovation by correcting the classic market
failure and it overcomes the specific market failures of geographic insularity and cultural
excludability. There is also an equity-based benefit with this argument: the eligbility of
traditional knowledge discoveries under intellectual property protection.
There are, however, three crucial costs to allowing the unconstrained protection
of plant genetic resources. The first cost arises because this approach to the protection
of intellectual property rights differs significantly from the spirit and intent of the
contemporary intellectual property rules and would require considerable and costly
restructuring of national legislation and revamping of national institutions as well as
re-negotiation of international conventions and agreements. The second cost is that
this argument rejects the notion of global common goods and instead accepts that
ownership can be assigned to everything-discovery or invention. The third cost is
that simply granting ownership to the primary innovator does not imply that further
innovation will occur. Indeed, the primary innovator may simply lack the capacity to
develop a global scale product, yet a secondary innovator may not be interested in
48 THE JOURNAL OF WORLD INTELLECTUAL PROPERTY

investing in this transformation when the intellectual property resides elsewhere.

Alternatively, the secondary innovator may pay the primary innovator for the use of
his intellectual property, raising the cost of secondary innovation and, hence, reducing
the incentive for innovation (Kerr and Yampoin, 2000). Given that intellectual
property rights are artificial constructs of government put in place solely to induce
innovation, granting intellectual property rights to discovery appears
counterproductive.

v. SOME SUGGESTIONS FOR RESOLVING THE BIOPROSPECTING-BIOPIRACY

DEBATE

The arguments surrounding the extension of intellectual property rights to plant

genetic resources are complex. The question is often approached from very polarized
positions, but as Table 2 reveals, there are several important distinctions in the arguments
for allowing protection.
The position on the extension of intellectual property rights to plant genetic
resources that tends to be favoured by international intellectual property agreements is
found in the middle three columns of Table 1. That is, international trade rules tend to
impose a hurdle of protection eligibihty that supports scientific knowledge as creating
inventions and discounts traditional knowledge by suggesting that this knowledge is
essentially in the discovery category. From the examination of the benefits and costs, it
is clear that these arguments for allowing protection reflect a clash between efficiency-
based arguments of promoting innovation and correcting market failures and equity-
based arguments of allowing monopoly protection to true innovators even if they are
not consistent with the scientific knowledge definition.
Given the approach of current international intellectual property agreements, some
important questions are raised regarding what can be done to more appropriately deal
with traditional knowledge within the international regime. The benefit that arises &om
granting intellectual property rights is innovation. The reward for innovating is the
opportunity to collect, for a time, the monopoly rents available from devising a
successful innovation. There should be no grant of intellectual property rights without
the promise of additional innovations. In particular, the granting of intellectual property
rights to dxoveries can only act to reduce innovations. Granting intellectual property
rights to discoveries will not induce additional discoveries and adds to the cost of
innovation. Thus, the international intellectual property regime should act, in the first
instance, to ensure that there is the widest possible access to the products of innovation
through low trade barriers and strong competition policy disciplines on the private
restraint of trade in those industries that produce and &stribUte innovations derived
from genetic material. In other words, strong efforts should be made to ensure that firms
are not able to use the monopoly granted as a reward for innovation to generate
additional opportunities for monopoly rents through practices such as tied sales, input
 BIOPROSPECTING OR BIOPIRACY? 49

bundling, failure to disclose crucial information to patent authorities, etc. Having the
TRIPS within the general WTOstructure should facilitate the former, while the TRIPS
could be strengthened to make it easier for developing countries to obtain recourse if
uncompetitive practices are observed among transnational biotechnology firms.
There also needs to be a clear distinction in internationalpatent law between those
scientific innovations that enhance the process of discovery and those that use the
information derived from discovery to innovate. Given that the information that arises
from discovery has strong public-good characteristics they are non-rivalrous, because
the use of a gene with identified commercial potential in one innovation does not
restrict its use in another and exclusion is not possible due to the ease of reverse
engineering (Kerr and Yampoin, 2000). The development of gene isolating technology
should have been publicly fbnded and made fieely avdable. This would have increased
the rate of innovation. In the absence of the foresight to publicly fund this research,
property rights have been extended to the technologies that facditate discovery and/or
the discoveries arising from these processes. The United States, the European Union
and Japan all have legislation granting intellectual property rights to gene isolating
technology and the genetic material discovered. Given the potential size of the
distortion relative to the costs of isolating genetic material, granting intellectual property
rights in this area may not have been wise.
One suspects that if no property rights were granted to gene isolating processes
and/or the genetic material subsequently discovered, firms interested in innovating
using discovered genes with commercial potential would have sugcient incentive to
directly search for those genes so that they could reap the benefits fiom owning
intellectual property rights in the final products. Their techniques and discoveries would
not receive intellectual property protection. This would preserve the public-good aspect
of discovery by allowing others access to the technology/discovered genetic material. If
the costs of developing genetic isolating technologies are large, one would expect open-
access gene isolating technologes to be developed by private sector consoaiums so that
the cost of development could be shared. If governments think that the private sector is
providing too little genetic isolating technology and/or genetic discoveries, then they
could encourage this activity through offering prizes. Prizes would both remove the
distortions associated with granting intellectual property rights and reduce the incentive
to keep discovery-enhancing innovations secret. For similar reasons, prizes could be
used to induce those who have traditional knowledge regarding the value of natural
organisms to share that knowledge. Encouraging the sharing of traditional knowledge
through prizes would thus provide a solution to the problem of biopiracy.
If the international conventions on intellectual property continue to extend
intellectual property rights to technologies that enhance discovery or the discoveries
themselves, then they should also extend intellectual property rights to tradtional
knowledge. It does not matter whether a discovery has arisen as a result ofexperience-based
50 THE JOURNAL O F WORLD INTELLECTUAL PROPERTY

trahtional methods or through the use of modem scientific methods. The innovation
inhibiting distortion is the same in each case, and to endow one with intellectual property
rights while excludmg the other cannot be jusdied on grounds of equity. If societies with
a high degree of sciendic capabdity are d n g to “live with” the distortions associated
with extending intellectual property rights to scienhfically enhanced discoveries then they
should not be able to deny societies with little scientific capacity but large amounts of
trahtional knowledge to extend intellectual property rights to that knowledge. Clearly,
both inhibit innovation and are counter-productive to the original intent of the adicial
creation of rights in intellectual property by governments. Both should be public goods,
but if intellectual property rights can be extended to one method of discovery,it would not
be equitable to exclude the other.
Countries with a high degree of scientific capacity and enforceable intellectual
property rights systems should also ensure that their domestic patent laws do not allow
the granting of intellectual property rights to what are traditional discoveries that have
been acquired through biopiracy. There have been a number of high-profile cases in the
United States and Japan (e.g. Mexican beans, bitter gourd, plao-noi (Kerr and Yampoin,
2000)) where the Patent Office has granted a patent to an unaltered land race or natural
plant. The problem appears to lie within Patent Offices that have either too few
resources to deal effectively with questions relating to living organisms or the technical
capacity to make an informed judgment regardng them. As a result, the courts are left
to sort out disputes. Of course, using the court system is not without cost. As those who
have discovered traditional knowledge are either no longer identifiable or tend to have
limited resources, recourse to the courts is inequitable. If societies that have a high
degree of scientlfic capacity want co-operation from developing countries in protecting
their intellectual property through TRIPS,then they need to ensure that their own
patent institutions provide good models.
The central question of equity, however, relates to relative scientific capacity. The
major (but by no means the only) reason why the protection of intellectual property
rights is contentious is that the capacity to use science for the development of
innovations is not distributed evenly among societies. Trahtional societies typically
have little scientific capacity and, therefore, have no opportunity to participate in the
rents that arise fiom innovation. Hence, the solution to inequity lies in increasing the
scientlfic capacity of members of those societies. Raising scientkic capacity is a complex
and resource-intensive activity and how it can be accomplished is not transparent.
However, until the capacity of traditional societies to undertake scientific innovation is
increased considerably, they will not be able to share equally in the benefits associated
with the “knowledge economy”. No amount of tinkering with property rights can
remove this fundamental cause of inequity.
Attempts to redress the fundamental inequity arising from differences in the
capacity of societies to undertake scientific innovation through either the blanket denial
 BIOPROSPECTING OR BIOPIRACY? 51

of intellectual property rights in plant genetic resources or their wholesale extension to

all forms of knowledge, includmg traditional knowledge, seems counter-productive.
Both wdl result in innovation being inhibited. Further, the preoccupation with the costs
of monopoly distortion by developing countries and their supporters in segments of the
non-governmental organization community should not be allowed to overshadow the
very large market failures associated with geographic insularity and cultural
excludabihty. In particular, denying intellectual property protection of any form to plant
genetic resources will perpetuate these market failures to the considerable detriment of
mankind.
Neither of these market failures, which are unique to plant genetic resources, are
recognized in the TRIPSAgreement and should be explicitly considered by the TRIPS
Council in its work arising from Paragraph 19 of the Doha Ministerial Declaration.

References
Boyd, S.L., W.A. Kerr and N. Perdikis, 2003: Agricultural Biotechnolgy Innovations versus Intellectual
Property Rights-Are Developing Countries at the Mercy of MU~h’flAtiOnak?Journal of World
Intellectual Property, Vol. 6, No. 2, March, 21 1-232.
Cornelli, F., and M. Schankerman, 1999: Patent Renewals and RGD Incentives, Rand Journal of
Economics, 30(2), 197-213.
Drahos, P. (ed.), 1999: Intellectual Property, Aldershot, Ashgate.
Evenson, R.E., D. Gollin and V. Santaniello (eds.), 1998: Agricufturai Values of Plant Genetic Resources,
CABIPublishing Inc., Wahngford, Oxon.
Gaisford, J.D., J.E. Hobbs, W.A. Kerr, N. Perdikis and M.D. Plunkett, 2001: The Economics of
Biotechnology, Edward Elgar, Cheltenham.
Gallini, N., 1992: Patent Policy and Costly Imitation, Rand Journal ofEconomics, 23(1), 52-63.
Gollin, D., 1998: Valuing Fawners’ Rights, in Evenson, Gollin and Santaniello (eds.) op. cit., 233-245.
Ho, M.-W., 2000 Genetic Engineering: Dream or Nightmare? Continuum Press, New York.
Isaac, G.E., 2002: Agricultural Biotechnology and Transatlantic Trade: Regulatory Barriers to GM Crops, CAB]
Publishing Inc., Walhngford, Oxon.
Kerr, W.A., and R. Yampoin, 2000: Adoption of Biotechnology in Thailand and the Threat oflntellectual
Property Piracy, Canadian Journal of Agricultural Economics, 48(4), 597-566.
Klein, K.K., and W.A. Kerr, 1995: The Globalization of Agriculture: A View From The FAWGate,
Canadian Journal of Agncultural Economics, 43(4), 551-563.
 52 THE JOURNAL OF WORLD INTELLECTUAL PROPERTY

Low, A., 2001: The Third Revolution: Plant Genetic Resources in Developing Countries and C h i n e G l o b a l
Village or Global Pillage? International Trade and Business Law Annual.
Machlup, F., 1958: An Economic Review ofthe Patent System, Study of the Subcommittee on Patents,
Trademarks and Copyrights of the Committee on the judiciary, United States Senate,
Eighty-Fifth Congress, Second Session, Study No. 15, U.S. Government Printing Office,
Washington, D.C.
McHughen, A,, 2000: Pandora’s Picnic Basket, Oxford University Press, Oxford.
Nordhaus, D.W., 1969: Invention, Growth and Weqare:A Theoretical Treatment of Technological Change,
The MIT Press, Cambridge, Mass.
Nutrition Business journal, Anonymous, 2001: Nutrition Business Journal, 5 (10-1 l), 3.
Shiva, V., 1999: Appropriation oflndigenous Knowledge and Culture, in Drahos (ed.), op. cit.
van Wijk, J., J.I. Cohen and J. Komen, 1993: Intellectual Property Rights for Agricultural Biotechnology:
Options and Implications for Developing Countries, International Service for National Agricultural
Research (ISNAR) Research Report No. 3, The Hague, Netherlands, available at:
cchttp://www.isnar.cgar.orgw.
World Trade Organization, 2001: Ministerial Declaration, Ministerial Conference Fourth Session,
14 November 2001, Doha, World Trade Organization, Geneva, WT/MIN(O~)/DEC/W/~.

View publication stats