[Commons-Law] A Cautionary Tale

[prabhu ram]

>TCS
 

A Cautionary Tale 
 
Sally Satel  
 
GENEVA -- What do the national costumes of Yunan Province in China and
the microbes of Panamanian rainforests have in common? Both are
subjects of ongoing meetings of The World Intellectual Property
Organization (WIPO) and the World Trade Organization/TRIPS. From June
6 to 15, delegates are gathering in Geneva to debate the best methods
for protecting so-called traditional knowledge, cultural expressions
and biological materials from misappropriation.

At issue are claims by indigenous and local communities that foreign
interests are exploiting their cultural and biological bounties. These
interlopers are accused of violations ranging from withholding
commercial benefits that flow from products made from the communities'
resources (or their traditions) to eroding their cultural identities.

Among those charging cultural infringement are the Indigenous Peoples
of the Former Soviet Union. Nursing an historical grievance that dates
to 1783, their delegate told of the Tsar's appropriation of sacred
Crimean springs, medieval mountain monasteries and even the local
herding dog (now called the Russian Shepherd Dog). The Crimean
annexation tale evoked sympathy, but it was hard to know exactly what
was at stake for the indigenous constituents today.

Contrast the Crimean plight -- more a symbolic bid for reparations, it
seemed -- with the proposal to change international patent law to
protect genetic resources. In that case, the implications are more
palpable.

In fact, a new report released at the WIPO meeting last week says that
weighting down the patent process with new mandates is bad for medical
progress: it risks suppressing production of new drugs. Economists
Timothy Wolfe and Benjamin Zycher, both with the Pacific Research
Institute in San Francisco, have estimated that 150-200 new drugs
would be lost over the next 20 years.

Before examining the results of the Wolfe-Zycher study, let's review
recent history of intellectual property and genetic resources. The
backdrop was set in 1992 with the introduction of modern efforts to
protect biodiversity in the face of so-called biopiracy, the stealing
of local genetic material. That year, the Convention on Biodiversity
(CBD) was ratified, properly affirming the rights of countries over
their biological resources in much the same way that they owned other
natural resources such as timber or fishing rights.

At the most recent session of the CBD in February 2005 in Bangkok, a
subgroup of 17 of the CBD countries calling themselves the Like-Minded
Group of Mega-Diverse Countries -- mega because together they comprise
almost three quarters of all plant and animal varieties on earth
--proposed a mandatory amendment to international patent law whereby
inventors would be required to list the place of origin of the genetic
material used in products they make as well as any traditional
knowledge held by native people that might have attracted interest in
the material in the first place.

An alternative to undermining the patent system approach is a
contractual one. There are numerous examples of private arrangements
between drug companies and local communities that have worked well --
from the standpoint of benefiting the community, if not generating new
drugs. The classic case is the relationship between Costa Rica and
Merck. During the 1990's the drug company invested over $2 million in
the country's National Institute for Biodiversity. Known as INBio, the
project continues (though Merck's participation ended after a decade)
and it is so successful that InBio scientists regularly engage with
scientists elsewhere. Despite the success of the InBio-Merck project
in terms of building local scientific infrastructure, none of the
compounds studied by the institute went on to yield any profit.

Until now, bioprospecting has proceeded largely by private contractual
arrangement. Starting three years ago, in 2002, the Convention
introduced the idea of voluntary patent guidelines (the Bonn
Guidelines) for what is known as Access and Benefit Sharing. The
guidelines contained a provision for the "fair and equitable sharing
of benefits arising out of the utilization of genetic resources."
According to the CBD Secretariat, however, very few countries have
implemented the voluntary regime. This may only increase the pressure
for CBD members to vote for a mandatory Access and Benefit Sharing
system at the next meeting of the CBD in 2006.

The prospect of alteration in patent law creates ambiguities that
undermine the incentive of companies to pursue natural molecules and
genetic resources. While the chilling effect on searching for new
plants and molecules may not impose a major obstacle to drug
development the implications for genetic information is likely to be
meaningful. In particular, scientists are increasingly interested in
gene sequencing information for use in medicine or crop enhancement.

But depending upon the nature of Access and Benefit Sharing (ABS)
regime to be voted upon in 2006, biotech and pharmaceutical companies
may be inhibited from gene hunting and genetic resource development.
Consider the Brazilian delegation's proposal. Under the CBD, this plan
would permit revocation of the patent and partial or full transfer of
patent ownership and even financial penalties if the patent
application lacked complete disclosure of origin and traditional
knowledge. But how complete is complete? For example, what if Tribe A
was taught by the ancestors of Tribe B how to cultivate a particular
plant -- who is the true "owner" of this traditional knowledge?

Granted, the Brazilian proposal may be excessively punitive.
Nonetheless, opportunities for uncertainty -- and hence litigation --
abound. How to calculate the contribution of genetic material to the
value of the product when a company invests millions to bring it to
market? What if the use of genetic resources or traditional knowledge
was incidental, rather than directly connected, to the invention? And
how to deal with India's new patent law, a Catch-22 that requires that
the application include specific information about the benefits of
"any invention based on any research or information on a biological
resource obtained from India." Can the applicant be expected to know
in advance what the benefits of his research will be, or if there will
be a useable product?

With WIPO estimating that there are 3000 representatives of
traditional knowledge holding communities in 60 locations around the
world, the potential for disclosure irregularities and hence
litigation is staggering.

And this brings us back to Wolfe and Zycher. Their study suggests that
an ABS system that concentrates on the forfeiture of intellectual
property creates a vast disincentive to invest in biotechnology that
could somehow be traced to a country's genetic resource or related
cultural knowledge. The spectre of patent revocation, Wolfe and Zycher
have found, would reduce the value of biotech and pharmaceutical
capital stock by $144 billion over 20 years across 27 countries. This
represents a 27 percent decline in what the stock would otherwise be
valued at.

In terms of actual medicines, as mentioned earlier, the authors
estimate that 150-200 fewer drugs would be realized over the next 20
years should an anti-patent regime be accepted by CBD members.
Considering that 38 new drugs became available in 2004 in the U.S.,
this is the equivalent of 4 to 5 dormant years for the pharmaceutical
industry with no new treatments for the patients who are its
beneficiaries.

To appreciate the impact on patients -- just focusing, for argument's
sake on HIV/AIDS and cancer -- simply look at a tiny sample of the
drugs that emerged in the last 4-5 years … and then imagine they never
were developed.

In October 2001, the FDA approved Viread (Gilead) for HIV. It belongs
to a new class of drugs called Nucleotide Reverse Transcriptase
Inhibitors. The body converts Viread into a chemical that prevents HIV
from reproducing in uninfected cells, thus making it the first drug to
prevent HIV. Then in March 2003, Fuzeon (Roche) was approved. It was
the first drug in the long awaited new class of HIV medications called
entry, or fusion, inhibitors. While other HIV medications work after
HIV has entered the cell, entry inhibitors prevent HIV from entering
the cell at all. Experts believe that this represents a major
breakthrough in the treatment of HIV and AIDS. Fuzeon blocks HIV's
ability to infect healthy immune system cells.

On the cancer front, Avastin (Genentech) was approved last year. It is
used in combination with chemotherapy and is first-line treatment of
patients with metastatic carcinoma of the colon or rectum. It works by
preventing the proliferation of blood vessels within a tumor. By
literally cutting the life line to the tumor, Avastin is the first
anti-angiogenic therapy proven to help people with metastatic
colorectal cancer live longer.

Many other HIV-AIDS and cancer drugs are in development. Sadly, these
diseases will be with us always but as the demographics are shifting
to longer lifespans, another disease -- Alzheimer's -- is expected to
grow dramatically in the coming decades. For mild Alzheimer's disease,
two drugs are showing promise -- Flurizan (Myriad Genetics) and
Alzhemed (Neurochem) These two therapies would work by interfering
with the production of beta-amyloid (the protein plaques that build up
in the brain causing inflammation that disrupts and then destroys
nerve cells). Currently available medications treat only disease
symptoms.

Wolfe and Zycher made the rounds at the WIPO and WTO meetings,
presenting their data as a momentously cautionary tale. India and
Africa, one hopes, took special note. These countries are two of the
most vocal anti-patent members of the Convention on Biodiversity; at
the same time they are overwhelmed with new HIV-AIDS cases and stand
to lose resoundingly if development of new anti-retrovirals or HIV
vaccines is suppressed.

At the close of the meetings on June 15, a vision of the ABS proposal
should come into greater focus. Delegates heeding the economists'
findings will surely think twice before overturning a contractual
system and supplanting it with a patent-encumbering regime. If not,
pharmaceutical innovation will be at stake.


- www.techcentralstation.com


-- 
Prabhu Ram,
Max-Planck-Institut for Intellectual Property, Competition and Tax Law,
MarstallPlatz 1, 
80539 Munich
GERMANY

Tel: + 49 89 24246226
Mob: + 49 17629830521
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