CONSULTATIVE OPINION: EAS - OC 8/2003
REPORTER: H.M.C. MICHAEL BOTHE
SECRETARY: H.M.C. DEMETRIO LOPERENA ROTA

CONSULTATIVE OPINION

INTERNATIONAL COURT OF ENVIRONMENTAL ARBITRATION
AND CONCILIATION

***

CHAMBER OF CONSULTS

REPORTER:
Michael Bothe

MEMBERS:
Ricardo Cronembold
Vassili Th. Costopoulos
Dina L. Shelton
Andrew Waite

CONSULTATIVE OPINION ON THE COMPATIBILITY BETWEEN CERTAIN PROVISIONS OF THE CONVENTION ON BIOLOGICAL DIVERSITY AND THE AGREEMENT ON TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS AS TO THE PROTECTION OF TRADITIONAL KNOWLEDGE
(EAS - OC 8/2003)

1. THE REQUEST FOR A CONSULTATIVE OPINION

By a communication received on February 23, 2000, a non-governmental organisation by the name of Ecologistas en Acción submitted to the ICEAC the request for a Consultative Opinion claiming that certain requirements of Art. 27 TRIPs violated Art. 8(j) of the Convention on Biological Diversity (CBD). This request was endorsed by several other organisations, such as Plataforma Rural (Madrid), Comitato Scientifico Antivivisezionista (apparently an Italian organisation) and ECOROPA (European Network for Ecological Action) (apparently a Swiss organisation).

After a request for clarification, a panel consisting of Michael Bothe (Chair), V. Costopoulos and R. Valenzuela (Members) held the request to be admissible.

2. THE MEANING OF THE QUESTION: NOTION OF INCOMPATIBILITY

The basic claim of the request is formulated in the following terms:

The Agreement on Trade-related Aspects of Intellectual Property Rights,
"in particular Art. 27. 3 (b) contravenes the spirit and contents of the Convention on Biological Diversity (CBD)…"

The request goes on to mention a number of points where the compatibility between the two treaties is put into question.

The request seems to presuppose that in the case of a contradiction between CBD on the one hand, and TRIPs, on the other, it is CBD which prevails. While this might be considered as desirable from the point of view of environmental protection, it is by no means certain as a matter of law. Thus, the Chamber is of the view that the relationship between the two treaty regimes, i.e. the CBD on the one hand, and TRIPs, which forms part of the WTO treaty system, on the other has to be analysed without any preconceived judgement as to the primacy or of one or the other regime.

Thus, the basic issues to be analysed by the panel are as follows.

- Are there situations where the CBD and TRIPs impose contradicting obligations upon the parties to them?

- To the extent that this is the case, how has this conflict to be solved?

An answer to the first question needs some further clarification as to what might constitute contradicting obligations. Contradicting obligations only exist where it is impossible for a state to fulfil the obligations imposed on it by the two treaties simultaneously, i.e. where the fulfilment of the obligations existing under one treaty necessarily entails a violation of the other. In other words, where a state has different options in fulfilling the obligations under one treaty regime, the first one violating the other treaty, the second one not, it remains possible to fulfil both treaties simultaneously as the state can choose the second option which is in compliance with both treaty regimes.

This distinction is basic and will serve the Chamber as a point of departure of its reasoning. In the real world, however, that distinction, clear and cogent as it is on an abstract level, may be difficult to draw. There is always the possibility that in the development of a treaty regime, the freedom of states to adopt different options in the implementation of a treaty is restricted. Thus, the situation where there is a danger that incompatible treaty interpretation may prevail, will also have to be considered by the panel.

In order to give an answer to the questions thus elaborated, the Chamber has, first, to proceed to an analysis of the relevant obligations existing under the CBD and under the TRIPS agreement. On that basis, possible conflicts, if any, have to be analysed.

In proceeding to this analysis, the Chamber notes that these issues are under discussion within four different treaty regimes, namely the WTO, the CBD, WIPO and FAO. By para. 19 of the Doha Declaration, the WTO Ministerial Conference instructed the TRIPs Council to continue the review of Art. 27.3(b) of the TRIPs Agreement and to examine the relationship between this agreement and the CBD. In 2002, the Conference of the Parties of CBD adopted the "Bonn Guidelines on Access to Genetic Resources and Benefit-sharing" which contain important principles for the protection of TK. WIPO has established an Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore, which considers, inter alia, operational principles for intellectual property clauses of contractual agreements concerning access to genetic resources and benefit-sharing. Finally, the FAO has adopted, in 2001, an International Treaty on Plant Genetic Resources for Food and Agriculture which provides, inter alia, for the fair and equitable sharing of the benefits of plant genetic resources and for the protection of TK in this field..

3. THE SCOPE AND MEANING OF THE OBLIGATIONS IMPOSED BY THE CBD

The CBD is concerned with the conservation of biological diversity. It deals with "traditional knowledge" as an element of in situ-conservation. The relevant text (Art. 8) reads as follows:

"Each Contracting Party shall, as far as possible and appropriate:
…
(j) subject to its national legislation, respect, preserve and maintain knowledge, innovations and practices of indigenous and local communities embodying traditional lifestyles relevant for the conservation and sustainable use of biological diversity and promote their wider application with the approval and involvement of the holders of such knowledge, innovations and practices and encourage the equitable sharing of the benefits arising from the utilisation of such knowledge, innovations and practices;"

There are thus, three different types of obligations relating to the protection of traditional knowledge (TK).

· "to respect, preserve and maintain";
· "to promote their wider application";
· "to encourage the equitable sharing of benefits".

The obligation to "respect, preserve and maintain" excludes prohibitions of the use of TK. It includes, on the other hand, the preservation of spaces where such TK can be practiced. Regulations which make it impossible for TK holders to derive benefits from it would also be a violation. The obligation contains, in addition, a strong promotional element. In other words, positive measures to promote TK are required.

These obligations are "softened" by two different elements. First of all, the chapeau of the provision renders the obligations less stringent by adding the words "as far as possible and appropriate". This gives considerable freedom to the states parties to refrain from measures of respect, preservation and protection by relying either on the impossibility of protection or on countervailing interests which may render the measures of protection inappropriate. Thus, it could be argued that the duty to respect the obligations arising under a different treaty may render measures of protection under Art. 8 of CBD "inappropriate". Although some regard for obligations existing under different treaty regimes may be considered as an "appropriate" restraint on measures of protection under Art. 8 CBD, that formula certainly cannot be understood as giving a general primacy or precedence to other regimes. That would imply a weakness of the CBD which cannot be considered to correspond to the common intention of the parties.

It may be recalled that a similar problem has arisen also in other respects, in particular in relation to the Cartagena Protocol on Biosafety of 29 January 2001, a treaty adopted under the umbrella of the CBD. Without going into details of that matter, it must be emphasized that in this case, the wording chosen leaves many questions open, but it does not state a primacy of other treaty regimes over the CBD and its Additional Protocol on Biosafety. The relevant parts of the Preamble read:

"Recognizing that trade and environment agreements should be mutually supportive with a view to achieving sustainable development;
Emphasizing that this Protocol shall not be interpreted as implying a change in the rights and obligations of a Party under existing international agreements;
Understanding that the above recital is not intended to subordinate this Protocol to other international agreements;"

This means that there must be some kind of accommodation between the various regimes. In the case of Art. 8 (j) CBD, this can be achieved, as far as the CBD is concerned, by relying on the "appropriate"-clause. But the essential objectives of the CBD may not be jeopardised in this way.

A different "softener" of the obligation imposed by Art. 8(j) is found in that subparagraph itself. In contradistinction to the other subparagraphs, (j) contains the phrase "subject to its national legislation". This excludes, as a minimum, any direct application of that provision in the internal sphere of the States parties. Internally, those obligations can only be effective where, and to the extent that, there is national legislation. The second question, which is less easy to answer, is whether this formula also gives states some freedom to restrict or limit the duties of protection formulated in the provision. Even if that question is to be answered in the affirmative, there must be limits to this freedom. An obligation which is subject to national legislation cannot possibly give the national legislator a complete freedom to do away with that obligation. Thus, the essential content of the obligation must be maintained regardless of the national legislation.

It is in the light of these possible modifications that the true scope of the requirements of Art. 8(j) CBD has to be assessed. As already mentioned, a prohibition to use practices based on TK would constitute a violation. Traditional practices regarding treatment of illnesses, however, might endanger patients who could be saved by modern medicine. In this case, there is a human rights aspect involved which might require some restraint on the respect for TK. It, thus, might be the case where non-respect is "appropriate" within the meaning of the chapeau of Art. 8. Another violation might consist in state measures providing for taking TK from its holders against their will. This, it is submitted, would be incompatible with the duty to "respect" TK and related practices.

The true scope of Art. 8(j) CBD can, thus, only be clarified by developing a number of different scenarios where a violation might appear possible. With that recognition in mind, we can now turn to the next question, namely the content of the TRIPs Agreement.

4. THE SCOPE AND MEANING OF THE OBLIGATIONS IMPOSED BY THE TRIPS AGREEMENT

The TRIPs Agreement is concerned with purposes entirely different from that of the CBD: It is concerned with the threat to which intellectual property rights are exposed where goods are traded in relation to which such rights exist. It is designed to ensure the benefits of an intellectual effort to the person having made that effort, and to promote, thus, innovation. But the fact that this rationale is entirely different from that of the CBD does not mean that the obligations existing under the two treaty regimes contradict each other. It is not excluded that both treaty regimes can be complied with simultaneously.

The relevant provision of the TRIPs Agreement which is by many commentators considered as problematic in the light of the obligations existing under the CBD is Art. 27 para. 3(b). It reads as follows:

"Members may also exclude from patentability:
…
b. plants and animals other than micro-organisms, and essentially biological processes for the production of plants and animals other than non-biological and micro-biological processes. However, members shall provide for the protection of plant variety either by patent or by an effective sui generis system or by any combination thereof."

That provision has given raise to much controversy and it is much debated during the current review process of TRIPs. It is inspired by the wish of the parties to the TRIPs Agreement to provide an incentive for innovation by reserving the economic gains deriving from that innovation to the person whose intellectual effort has rendered this innovation possible. A traditional means to achieve this purpose is the patent. But states differ in their law concerning those processes which may be considered as "invention" and thus capable of being patented. Thus, the provision gives states a freedom to exclude plants, animals and biological processes from patentability. If they do so, however, they must nevertheless provide an effective protection to plant varieties, i.e. to the intellectual effort made in order to develop new plant variety.

Before going into the question whether and to what extent this obligation might conflict with the CBD, it must be recalled that this protection only applies to "inventions", i.e. some type of innovation or new development. Some processes, species or varieties which exist since a long time are not "inventions" and therefore not capable of being patented or protected under the Art. 27 para. 3b.

If and to the extent that there is a protected plant variety the protection means that this variety cannot be used by anybody without a licence or other permission from the person entitled to the protection, e.g. the patent holder. The question whether and to what extent this protection has to be recognized in other jurisdictions is a different matter.

5. THE POSSIBILITIES OF INCOMPATIBILITY

On the basis of the preceding analysis, it is now necessary to examine a number of scenarios where a possible conflict of the two treaty regimes has to be considered and examined.

5.1 THE CO-EXISTENCE OF THE TWO REGIMES

As a matter of principle, the TRIPs Agreement does not prohibit any national measure required by the CBD. It is simply concerned with the different matter.

As already shown, the CBD requires states to protect the holders of TK. The first question to be asked, thus, simply is whether TRIPs requires member states violate that obligation by granting a patent or special right to use TK to somebody who is not a holder of that TK. The answer clearly is negative. For traditional knowledge cannot be patented or protected under Art. 27 of the TRIPs Agreement, because it does not constitute an "invention", quite to the contrary. Where it is not known to outsiders, it may be "discovered". But that discovery does not constitute an invention. Thus, the use of traditional knowledge by outsiders cannot be protected as an intellectual property right under Art. 27 of the TRIPs Agreement. This means, on the other hand, that the TRIPs Agreement cannot possibly require a state party to grant, by a patent or equivalent protection, an exclusive right relating to TK. Thus, no violation of any protection of TK is required by Art. 27 (3)(b) of the TRIPs Agreement.

The protection of TK is, first of all, in the hands of the state where this knowledge is situated. It may and must adopt legislation for this purpose. One of the most important aspects of such legislation, in conformity with Art. 8 (j) CBD, should be to make access by third parties conditional upon just compensation and benefit sharing. There is nothing in the TRIPs Agreement which prevents or prohibits such protective measures. If another state, on the basis of Art. 27 (3)(b) TRIPs Agreement, later grants a patent or sui generis protection to an invention made on the basis of this TK, this does not free the inventor from any obligation to honour the terms of the conditions of access. In this perspective, too, there is nothing in the TRIPs Agreement which diminishes the protection, including the equitable sharing of benefits, due to TK under Art. 8 (j) CBD.

Thus, we conclude that the TRIPs Agreement and the CBD do not contain conflicting obligations as far as the protection of traditional knowledge is concerned.

5.2 CONFLICT ON THE LEVEL OF IMPLEMENTATION

Scenarios are discussed, however, where the relationship between CBD and TRIPs is not as harmonious as it may appear on a first glance.

The basic problem, as it is discussed in current negotiations, is created by the fact that there have been cases where a patent or equivalent protection was granted to a product claimed to be an invention, but which was in reality based on TK obtained at conditions which did not correspond to the condition of equitable sharing of benefits. Documents, in this connection, speak of "bio-piracy".

The legality of such practices has to be analysed in different respects. First of all, they usually constitute a violation of national patent law, as TK is not an invention and the product in question would thus not be patentable under national law. Indeed, such patents were successfully challenged. The practices just described are not required by TRIPs. It is, thus, not a violation of TRIPs to abstain from, or to discontinue such practices.

Whether the grant of a patent under the circumstances just described constitutes a violation of CBD depends on the scope of obligations which the state of the patent may have in relation to the protection of TK from which the invention is derived. Art. 8 (j) imposes obligations only on the state where the TK is situated. The duties of the state where a genetic resource is used for scientific or commercial purposes are contained, in particular, in Art. 15. The relevant part of this provision reads as follows:

"(7) Each Contracting Party shall take legislative, administrative or policy measures, as appropriate … with a way of sharing in a fair and equitable way the results of research and development and the benefits arising from the commercial and other utilization of genetic resources with the Contracting Party providing such resources. Such sharing shall be on mutually agreed terms."

The question is whether this duty of the importing country includes an obligation to design the patenting procedure for the eventual results of such research and development in a way as to enforce the conditions associated with the preceding access to a genetic resource in the country of origin. The Court of Justice of the European Communities, in a judgment dated 9 October 2001, held that the CBD does not contain any such obligation. The Chamber tends to disagree with that conclusion. The states parties to the CBD are bound by a duty of cooperation (Art. 5) to promote the objectives of the Convention (Art. 1), among which there is the equitable sharing of benefits. This implies, in the view of the Chamber, at least an obligation not to disregard this objective when designing legislative schemes which are obviously relevant for achieving this objective. But be that as it may, this not a question of any divergence between TRIPs and CBD, it is purely a matter of interpreting CBD.

5.3 SYNERGIES CBD AND TRIPS OR OTHER TREATY REGIMES

The scenarios which have been discussed so far open up a perspective which is somewhat different from the one which has inspired the request for the present Consultative Opinion, but which nevertheless corresponds to the basic motives behind the request. The demand has been laid on the table to use the TRIPs Agreement, in particular the current review process, to enhance and enforce obligations existing under the CBD, in other words to create synergies between these treaty regimes. This is, inter alia, formulated, albeit in a somewhat cautious, even tortuous way, in the Plan of Implementation adopted by the WSSD:

"42.(r) With a view to enhancing synergy and mutual supportiveness, taking into account the decisions under the relevant agreements, promote discussions, without prejudging their outcome, with regard to the relationships between the Convention and agreements related to international trade and intellectual property rights, as outlined in the Doha Ministerial Declaration;"

The goal of enhancing the protection of TK could be achieved by a further elaboration and possibly international harmonisation of the conditions of access to genetic resources, by measures facilitating the transparency of the further use of these resources once taken from the country of origin, and, as already pointed out, by international guidelines for national intellectual property law which make sure that the no such rights are granted to inventions or varieties where the conditions of equitable sharing of benefits are not met. Whether the current review process of Art. 27 TRIPs or other fora, such as WIPO, are best suited for that purpose, is beyond the scope of the present Consultative Opinion.

6. CONCLUSIONS

The results of the present Advisory Opinion may, thus, be summarized as follows:

1. The CBD and the TRIPs Agreement serving different purposes, there is no inherent contradiction between them.

2. Nothing in Art. 27 (3)(b) of the TRIPs Agreement requires any party to that agreement to violate any obligation resulting from Art. 8(j) or any other provision of the CBD.

3. An effort must be made, however, that national patent laws and other laws relating to intellectual property are designed and applied in a way which takes duly into account the objectives of CBD, in particular the principle of equitable benefit sharing.

At the request of the Secretariat of the International Court of Environmental Arbitration and Conciliation we have the honour to propose this Consultative Opinion, the HH. MM. CC. Michael Bothe (Reporter), Ricardo Cronembold, Vassili Th. Costopoulos, Dina Shelton and Andrew Waite, all of them Members of the Chamber of Consults therefore appointed.

ENQUIRY of the Secretary General Assistant to certify that this document with its fourteen pages is given in witness whereof the aforementioned and joined Opinion of the Chamber of Consults.

San Sebastian, 19th November 2003.

Demetrio Loperena Rota
Secretary General Assistant