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close this bookBiotechnology and the Future of World Agriculture (GRAIN, 1991)
close this folderControlling the profit
View the document(introduction...)
View the documentAn historical appraisal
View the documentThe great reversal
View the documentTightening the grip: the push for patents on life
View the documentBox: Twelve Reasons to say no to life patents
View the documentThe implications

(introduction...)

'Patents are a paradise for parasites.'
'Patents protection forms a stumbling block for the development of trade and industry.'
'The patent system is a playground for plundering patent agents and lawyers.'
(J. Geigy-Merian, Geigy Firm - later Ciba-Geigy, 1883) (1)

'It is Ciba-Geigy's position that legal protection of intellectual property serves the public interest by stimulating continuing investment in technological innovation.'
(John H. Duesing, Ciba-Geigy, 1989) (2)

One century might seem a long time. It was certainly long enough for companies like Ciba-Geigy to change their minds about what to think of intellectual property systems. From describing patent systems as a paradise for parasites to considering them to be serving the public interest is quite a leap indeed. In the 19th century, Geigy and colleagues from other Swiss firms were in a vehement battle against any form of patent protection and had managed five times to reject calls for a national referendum on the matter. When two referenda on patent protection were finally held in 1882 and 1886, they were successfully defeated, largely due to the intense lobbying activities of Geigy and friends.

Now, over one hundred years later, Ciba-Geigy sends company representatives all over the globe to promote stronger patent protection for everything that can be made in its laboratories; and that includes life forms. With almost emotional arguments, companies now try to convince the world that there is no progress, no development and no happiness without strong intellectual property systems. Those countries which do not have them are charged with 'theft' and 'piracy', and accused of putting national interest above 'internationally accepted principles of fair trade'. (3)

An historical appraisal

If the only question then is to be fair, why this 180 degree shift in position within the same company over one century? The answer to this question is complex and can be answered only in its historical context. A hundred years ago, those in favour of free trade battled against those who pleaded for the granting of patent monopolies. Today, the lobby for stronger patent protection worldwide is aggressively waving the banner of free trade and bemoans the lack of intellectual property systems as a non-tariff barrier.

What is clear if one looks at the history of the patent debate is that the assumption that patent protection stimulates innovation is not as sound as today's promoters of the patent system would have us believe. The very reason for opposing strong patent protection a century ago by many Europeans and today by most Third World countries, lies in the conviction that the patent system does, in fact, exactly the opposite: blocking innovation and creating dependence. The crux underlying the different positions is whether you import or export technology. A hundred years ago, many European countries were technology importers, the NICs (Newly Industrializing Countries) of the late 19th century. Their nationally oriented industries vehemently opposed the idea of having to pay royalties for the products and processes they were using. The quotes from Geigy and friends at the beginning of this chapter speak for themselves.

The Third World NICs of today find themselves in a similar position. Of the 3.5 million patents in existence worldwide in the 1970s, only about 200,000 were granted by developing countries. The vast majority of these, some 84%, were owned by foreigners, especially by TNCs from the five richest countries. (4) Graph 7.1 looks at the situation in Asia and Latin America and confirms this biased functioning of the patent system, at least for developing countries. Most significant is that less than five per cent of these foreign-owned patents were actually used in production processes in the developing countries. (5) In a recent report ( 1988), the Inter-American Development Bank pointed out with concern that most foreign-owned patents in Latin American countries are never used there, but rather function to secure, protect or monopolize import flows. (6) A decade earlier, two United Nations Agencies - the World Intellectual Property Organization (WIPO) and the UN Conference on Trade and Development (UNCTAD) - had reached the same conclusion. In a joint study they affirmed:

Instead of being used in production, an overwhelming majority of patents granted to foreigners through national laws of developing countries have been used to secure import monopolies. (7)


Third world patents - Most patents granted to non-residents

In the 1960s it gradually became clear that prevailing intellectual property systems, rather than stimulating transfer of technology, were really functioning to transfer income from technology importers to exporters. The Third World started to react, and after a decade of negotiations in UNCTAD, strong and precise recommendations to revise the global intellectual property system resulted. Developing and developed countries agreed that such a revision should meet the special needs of the Third World in order to 'become more satisfactory instruments for aiding developing countries in the transfer end development of technology.' (8) Meanwhile, developing countries began to change their national laws, excluding certain products from patent protection, strengthening provisions for compulsory licensing, and limiting the duration of patents. (9) In 1975, WIPO member states began negotiating the revision at the Paris Convention which governs patent law at the international level.

The great reversal

But then came what Surendra Patel, former UNCTAD official deeply involved in the patent debate, calls 'The Great Reversal'. (10) While in the 1960s and beginning of the 1970s calls for a New International Economic Order echoed loudly in the corridors and meeting rooms of the United Nations, the late 1970s and 1980s witnessed a mounting economic crisis and the rise of 'no-nonsense' and protectionist attitudes in the North. In 1974, the OECD Council still warned member states, in unusually strong language, against 'abusive practices in which patentee and their licensees may engage'. (11) One decade later, the same OECD countries pushed the discussions to the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) where the dissident voices of the Third World are hardly heard. After having effectively blocked the UNCTAD and WIPO negotiations, the North is now ruthlessly pushing ahead for universal patent protection, based on their own laws and traditions. In the discussions on Trade Related Aspects of Intellectual Property Rights (TRIPS) of GATT, even the initial ministerial declaration of the GATT Uruguay Round, in which the industrialized countries explicitly promised not to push for measures that might be inconsistent with the need of developing ones, (12) seems to have been forgotten.

Discussions on the special needs of developing countries and about the importance of using the patent system as an instrument for national development and technology transfer, have been substituted by simple arguments that the North is losing huge amounts of money because the South does not have strong patent protection. The US Chemical Manufacturers Association (CMA) reports US chemical industry losses of up to $6 billion annually due to intellectual property infringements. PMA, the* pharmaceutical counterpart, claims they are losing $4 billion a year to 'intellectual property piracy'. (13) The US International Trade Commission (US-ITC) circulates estimates from a low $43 billion to a high$102billion for American business alone, (14) while the International Chamber of Commerce puts the losses at $70 billion worldwide. (15) These extravagant claims by industry, though mostly unsubstantiated, are repeated by the US government to increase the patent pressure on developing and other countries. (16)

The figures are completely out of touch with reality. If the US-ITC claims were to be extrapolated to other OECD countries, we would be talking about anything between $100 and $300 billion in 'lost' income from the South. This compares with total Third World exports of some $500 billion in 1987. (17) In practice, this means that industrialized countries, through strengthened patent systems in the South, are requesting enormous amounts of additional revenue to be transferred from the South to the North. It would make the net South-North transfer of funds, currently in the order of $50 billion a year, crippling as it already is, seem insignificant. This 'scare-the-hell-outof-you'strategy is absurd and constrasts sharply with the more serious attempts to analyse and revise the patent system also to benefit Third World development, undertaken at UNCTAD a decade earlier.

The USA is not waiting for the outcome of the GATT Uruguay Round to settle its grievances. Bilaterally, it has already started to sanction those developing countries without strong patent regimes. In 1988, the Reagan administration passed a new Trade Act, which includes the setting-up of a watch list of infringing countries. A study has already been drawn up on 36 countries, including Brazil, China, India, Korea, Mexico, Taiwan and Thailand, all of which are now under strong pressure to amend their patent laws. If the countries fail to respond in a way that pleases the USA, trade sanctions will follow. Several countries can already explain what that means. In late 1988, the Reagan administration increased import tariffs on $165 million worth of goods from Thailand because of lax enforcements of intellectual property laws in that country. (18) Also in 1988, Brazil faced similar retaliations, when the US imposed punitive tariffs, valued at $39 million, on Brazilian imports to the US because that country does not allow for patents on pharmaceutical products. (19) Some countries have started giving in to the pressure by changing their laws, but many are resisting. The stakes are simply too high.

The bitter irony of this bully-strategy lies in its double standards. On the one hand, the OECD is requesting Third World countries to strengthen their patent laws in order to allow TNCs from the North to monopolize markets in the South. But on the other hand, the same OECD countries carefully protect their own markets from imports from the South with a whole arsenal of measures including subsidies, quotas and tariffs. It is estimated that in the United States alone this protection covered 25% of all US imports in 1986, compared to 8% in 1975. (20) The situation in Europe and Japan is hardly different. At the same time, since 1980 the US Congress has quietly passed 13 laws on intellectual property protection to make the American bully-strategy more operational. Even basic science suffers. In 1987 the Reagan administration ordered that US agencies sign scientific research agreements only with those countries that respect US patents. According to the magazine Trends in Biotechnology, the new laws considerably favour US nationals in the application for patents. (21) One of these laws, for example, rules that US patents are granted to residents from other countries only if those countries have brought their patent protection in line with US standards. (22) This 'patent rationalism' is exactly the basis on which the US accuses other countries of unfair practices.

The second irony lies in the patent history of countries such as Japan and the USA. Japan has joined the USA in the current GATT negotiations in trying to push stronger patent protection into the Third World. Until not so long ago, Japan itself was a newly industrializing country that, according to many observers, developed on the basis of imitation. Now Japan is among the countries that want to close this route for others. In the 19th century the USA itself was attacked by Britain, then world leader in technology, for not providing strong patent protection. The Washington Post reported that these complaints had little effect; American companies wanted the freedom to capitalize quickly on British innovations. (23)

The battle over whether pharmaceutical products should be patented is a good example of the biased arguments of the North. Many Third World countries do not allow patenting on drugs because they regard secure indigenous capacities in this field as vital for national development. Some, like Brazil, have already been punished for that. But major OECD countries themselves started allowing for product patents on drugs only after their pharmaceutical industries had become firmly established: France in 1958, West Germany in 1968, and Switzerland in 1977. The Japanese only allowed for pharmaceutical product patents in 1976 when their country already ranked second in world production in drugs, and controlled 80% of its home market. (24) These figures might lead to the conclusion that the national pharmaceutical sector in many OECD countries was able to grow precisely because of the convenient absence of strong domestic patent protection for drugs. Only when export interests began to dominate did patent protection appear more desirable. The North, through its demands in GATT, is now seeking to deny the Third World that same route to development. This new technological protectionism would result in the perpetuation of current comparative advantages of the industrialized countries in world production and trade. (25) It would also further warp the existing international division of labour, already heavily biased towards the interest of the North.

In discussions on development, experts from the North often quickly point to the Asian NICs, such as Singapore, Hong Kong and the Republic of Korea, as extremely successful development models that should also be followed by other Third World countries. Yet, again, much of the economic success there was based on freely using and building upon knowledge and technology from the North. Korea and others are now on the US patent watch list. Ultimately, the issue boils down to the question of whether or not sovereign nations, especially those from the Third World, have the right to choose the policy instruments that most suit their national development needs. Perhaps the time has come to start arguing for the Right to Imitate, rather than the Right to Intellectual Property. Historical evidence might show that much of the economic and industrial advancement of OECD countries has been based on exactly that.

Tightening the grip: the push for patents on life

Imitation is precisely one of the main problems for the emerging biotechnology industries. The raw material of biotechnology - genetic resources - tends to imitate itself continuously, and without human intervention. During the heated discussions on intellectual property protection towards the end of the last century, the question of how to apply such protection to living matter was hardly considered. The reproductive forces of life were considered too unpredictable even to start trying to make money on them. But that began to change as the big-sciences developed to a stage where, through systematic research, life forms could be changed and brought to the market place. After the work of Gregor Mendel and the rediscovery of his laws of inheritance at the beginning of this century, systematic plant-breeding started to take off. With plant-breeding maturing into an industrial activity, pressure to protect the ownership of the resulting products grew. But 'life' never fitted comfortably into the rigid industrial patent schemes. Seeds change, mutate and reproduce - all too difficult for patent systems, which were designed for inanimate products of manufacture.

The political problems are, however, even greater than the technical ones. As late as the 1960s, when preparing the European Patent Convention, the Europeans were still involved in a heated debate on whether food, chemicals, plants and animals should be included in the patent regime. The debate was not so much on technicalities, but much more on the question as to whether society should grant monopoly rights in these fundamental sectors. They decided that plants and animals should stay outside the industrial patent system and adopted a special protection regime for plants: the Plant Breeders' Rights system (PBR). In 1961 the Union for the Protection of New Varieties of Plants (UPOV) was formed, and the UPOV Convention was signed by a number of - mainly European - industrialized states.

In the 1970s the USA and several other industrialized countries joined the UPOV Convention, but the growth of UPOV came to a halt by the end of the 1970s when several industrial states did not ratify the Convention and efforts to persuade the developing countries to join the club backfired. A major reason for this setback was increased recognition of the negative impact of PBR for plant breeding. Evidence began to appear that because of PBR, multinational companies started to take control of the breeding sector. It was also argued that the PBR system, because of its requirements of uniformity, promotes a further impoverishment of genetic diversity and that it hardly contributes to the development of new qualitatively distinct varieties. Developing countries recognized that PBR would not favour the build-up of strong national agricultural systems, but on the contrary would jeopardize efforts to establish an independent national breeding sector. (26) The UPOV Convention has attracted only 19 member states up to now, and with the industrial patent system moving in its future looks bleak.

A major difference between the Plant Breeders' Rights and industrial patent systems lies in the scope of protection granted. PBR gives the breeder, for a certain period of time, exclusive monopoly control on the reproduction of a plant variety for commercial purposes, its marketing and sale. Under the current UPOV Convention, the protected plant variety can be freely used by others for further breeding and by farmers for repeated planting. PBR does not provide ownership over the germplasm in the seed, it gives only a monopoly right for the selling and marketing of a specific variety.

The monopoly rights of industrial patents go much further. With the PBR system, the protection is always limited to a specific plant variety. A patent, however, can be claimed on virtually anything: from a specific DNA sequence to a whole set of plants and animals, and everything in between. The only conditions are that what you claim must be new, it must involve an 'inventive' (non-obvious) step, and it must be useful for something. It is up to the patent office to decide whether these rules of the patent game have been met.

The extension of the industrial patent system to living matter carried an incredible number of problems. Some of these lie in the characteristics of the patent system itself. One of the requirements for a valid patent is that the item to be protected must be a new invention, not a discovery, and it must be non-obvious. But where is the borderline in biology? 'Who will have the guts to declare a gene novel and non-obvious? Would anyone know enough of genetics and nature to claim such arrogance?' cried a desperate plant-breeder at a recent conference on life patents." His frustration is quite understandable. Plant-breeders have, through cross-breeding, moved genetic material around for many years. Farmers have done it for thousands of years. Nature has done it from the very beginning! Now biotechnologists are claiming intellectual property on isolated and cloned genes, cells and entire living beings. Who, then, decides what is new, what is nonobvious?

Another problem is linked to the 'exhaustion principle' of current patent laws. It holds that the monopoly ends once the product is brought to the market. No patent law prevents me from buying a television set and then using it as a fish tank; or from selling it to someone else. But the exhaustion principle makes life difficult for those who want to patent engineered living matter, as this tends to reproduce itself, making unlimited free copies of the patented material. They do not want to see their patent exhausted at the moment the farmer puts seed in the soil.

The patent system, then, would have to be reconstructed to cope with life forms. In practice, however, patent lawyers are doing just the opposite: redefining biology to fit patent law. This is when the most eloquent arguments start. Several centuries ago, Linneaus came up with classifications to create some order in the human mind with respect to the natural 'chaos' out there. Patent examiners today need different classifications to decide on what is patentable. The results are often outrageous as a recent EEC biotechnology patent proposal shows. This text defines a cell as a microorganism,28 which prompted members of the European Parliament to joke about elephants consisting of an immense heap of microbes. For the European patent lawyers the logic is simple: micro-organisms are patentable, and if individual cells are included in the same group, they become patentable as well. On the other hand, the European Patent Office points out that the new definition of a plant variety proposed by UPOV, (29) would include items such as individual cells, protoplasts, DNA itself and even 'all greenplants'. (30) According to the European Commission, a cell is a microorganism; according to UPOV, a cell is a plant variety. Are we to conclude then that a plant variety is a micro-organism?!

Debate in the international community on the patenting of plants, animals, genes and processes has only just begun. The push for strong patents comes, of course, from the major corporations that are now investing heavily in biotechnology. The problem for the proponents is that existing legal conventions would have to be changed to make all their wishes come true. This is especially the case in Europe. The European Patent Convention (EPC), signed by 13 European countries and adopted as late as 1973, specifically excludes 'plant or animal varieties or essentially biological processes for the production of plants and animals' from patentability. (31) As was made abundantly clear in the documents of the Council of Europe when member states were laying the groundwork for this Convention in the 1960s, these exclusions were meant to apply to animals and plants in general, and were incorporated because 'they derive largely from considerations of public interest'. (32) For the same reasons, pharmaceuticals and food products were put forward for exclusion but these exceptions were scrapped during the negotiations despite strong opposition, especially from Austria. (33)

Policy makers are known to be short of historical memory. For the officials at the European Commission, 'the public interest' must be something that mutates rapidly and depends largely on the interests of the industry. In 1988, only 15 years after the adoption of the EPC, the European Commission published a draft law proposal ('directive') on the patenting of biotechnological inventions. (34) At this time of writing, the directive is under heated negotiation at different levels. If adopted, it would make everything from a gene to entire classes of living beings patentable in the European Community. To avoid open clashes with the European Patent and the UPOV Conventions, the directive excludes plant and animal varieties and essentially biological processes from patentability, but redefines those terms in such a way that virtually the entire plant and animal kingdoms are up for intellectual property protection. In the EEC proposal, everything is patentable, as long as you do not call it a 'variety'. Even human beings are not specifically excluded. Rather than going through the long and tedious process of renegotiating international conventions such as the EPC, the Commission is proposing simply to redefine their basic assumptions. The European Patent Office itself is not very happy with such manoeuvres. It has publicly stated to the European Commission that if the aim is to make plants and animals patentable, then 'tine right approach would be to revise the EPC itself'. (35)

The legal situation in the United States is more open to plant and animal patenting due to the historical particularity of this country. After two important legal decisions, one by the US Supreme Court in the Chakrabarty case (1980) and one by the US Board of Patent Appeals in the Hibberd

case ( 1985), industrial patent protection can now be granted to plants. It is expected that a major shift will now take place in the US from PBR to industrial patents. (36) Once seeds were eligible for industrial patents in the US, it was not long before the first animal patent was granted. On 12 April 1988, this dubious honour fell to a little mouse into which a human cancer gene was grafted. The applicant was Harvard University, but the monopoly went to Du Pont, the multinational company who paid for the research.

Box: Twelve Reasons to say no to life patents

If the patenting of life forms is accepted . . .

1. FARMERS will be obliged to pay royalties on every generation of plants and livestock they buy and reproduce for production purposes. Prices for patented genetically engineered ├║miracle' seeds and breeds will be far higher than traditional strains and it will be illegal for farmers and herders to biologically renew their stock without permission or payment. Thus, the rural community will lose its last thread of control over the first link in the food chain and become totally dependent on multinational corporations.

2. BREEDERS will no longer have free access to germplasm for developing new varieties of plants and animals. Genetic resources, including genes, cell lines, protoplasts and even characteristics (like 'high yield'), will become the exclusive property of top biotechnology firms. Licences will have to be obtained and royalties paid for, in order for breeders to be able to incorporate patented genes and characteristics into new crop and animal varieties. Most independent breeders will simply go out of business. As a result, the only innovation in the breeding sector will be found in the legal departments of large corporations where patent lawyers will dictate the direction of biological research.

3. CONSUMERS are likely to end up paying higher prices for food, medicine and other products of biotechnology. In buying patented genetically engineered products, consumers will be unwittingly subsidising industry as royalty charges will be passed on to the end product. For example, a new brand of biotechnologically produced beer could be patented first for the strain of barley used, secondly for the fermentation procedure and thirdly for its processing technique! Additionally, the type of new foods the consumer can choose from will be determined more by the patentability of its components than by its quality.

4. PUBLIC RESEARCH will be undermined and effectively privatised. The public sector is paid for by all of us, but the extension of the patent system will ensure that only private industry benefits. Universities and public research institutes will be obliged to keep secret their research results funded by the private sector, while the corporations apply for their patents. This means that the public exposure and circulation of scientific information will be restricted drastically, to the detriment of reaming and innovation.
5. MARKET STRUCTURES will undergo a dramatic wave of increased concentration. Fewer firms will be able to compete on the market place and many will be bought out by the strongest multinational corporations. Stronger monopoly structures in the agribusiness, pharmaceutical and chemical sectors will emerge, with their consequences on prices and quality, leaving us few choices in our needs for food, health and a cleaner environment.

6. GENETIC DIVERSITY will suffer tremendous erosion as monopoly control over genetic resources severely restricts their circulation and destroys their status as The Common Heritage of Mankind. Without our wealth of genetic resources, food and medicinal production systems cannot cope with constantly evolving social and ecological pressures. If those resources become the exclusive property of a few corporations, genetic uniformity will increase substantially and society will have to pay the bill.

7. FOOD SUPPLY will be threatened by monopoly control over genetic resources, farmers' harvests and the processed results. Patent holders will have more power to decide what we eat. Such excessive control over the food supply is extremely dangerous as just a few integrated firms will dominate the sector. Also, public measures to control and direct agricultural production will be jeopardised, as patent priorities take over from common sense. Life patents will move research in biotechnology further away from public institutions and thus from public influence over whether, how and for whom it should be developed.

8. THE THIRD WORLD will increasingly lose access to scientific information and technology transfer, and will see their freely donated biological resources privatised by the North. Patenting life would also mean a total denial of farmers' rights in the South to compensation for all the work they do in providing the world economy with rich and useful genetic diversity. With the current proposal, the only forms of human innovation that will not be patentable will be those of farmers and communities in the Third World. The developing countries will also have to pay higher prices for patented inventions, thus aggravating debt burdens and the marginalisation of the poor.

9. The whole concept of HUMAN RIGHTS will be undermined, as human beings and parts of their body can become the exclusive property of patent holders. That corporations can own your organs, physical traits or intimate genetic information is a total denial of the individual's right to an independent existence and to control over his/her very body. It will also exacerbate organ-trafficking and eugenic tendencies in medicine.

10. ANIMAL WELFARE will become a nostalgic notion of the past, as patenting stimulates the genetic engineering of animals to suffer as they serve industrial systems for the production of food and medicine. Patented farm animals will be victims of severe stress, their bodies designed to produce leaner meat, higher milk yield and an assortment of pharmaceutical products. The 'Harvard mouse', which was patented in the USA to produce breast cancer, is the very first of a whole range of animals that will be genetically transformed and patented for the sole purpose of suffering as models of human diseases.

11. SOCIETY'S RELATIONSHIP TO NATURE will be reduced to a commercial enterprise based on exploitation and profit. Patenting life means that some people can intellectually own the very foundations of living matter and life cycles, thereby undermining any last thread of respect for nature in our already artificialised world. Biotechnology 'inventors' do not create nature, they simply cut it into pieces and claim ownership over it. Such arrogance towards the world around us has already done tremendous damage and is a suicidal attitude towards the system that sustains us.

12. ETHICAL & RELIGIOUS VALUES based on respect for life, creation and reproduction will be thoroughly subverted. The patenting of genetic materials forces upon us a reductionistic and materialistic concept of life as a mere collection of chemical substances that happen to be able to reproduce and can be manipulated and owned.

Source: This box was adapted from '12 reasons for 12 EEC member states to say: no to patents on life', GRAIN, Barcelona, 1990.

The implications

When experts squabble over legal mechanisms, the real implications of life patents are often muddled and lost. A patent is, after all, a concession by society to a private inventor. A monopoly is granted in return for perceived advantages to society. So what does society get in return? 'Innovation!'some point out quickly. 'Technological progress!' others cry. The assumptions are plentiful and bold, but the hard empirical data supporting them difficult to find. In a press release presenting the EEC patent directive, the Commission points with a sense of panic to the position of biotech competitors in the United States and Japan, and warns that Europe should not stay behind. (37) On the other side of the Atlantic Ocean, North American citizens are told that the Europeans and Japanese are closing in quickly in the field of biotechnology, and that the US needs further to strengthen its patent laws. It seems that the 'biotech-race' itself forms sufficient justification to extend monopoly patents to life. But when one goes beyond the logic of such blind, competitive rhetorics, and takes a closer look at what life patents really mean for society, the emerging picture is not as positive as the patent-pushers might want us to believe. In Box 7.1 an overview of possible implications is reproduced. Without trying to be complete or exhaustive, the 'twelve reasons' do give considerable food for thought.

In late 1987, top officials of the US biotechnology company Genetics Institute Inc. gathered at their headquarters to settle an important issue: which version of a new clot-dissolving drug to invest in. With money to develop just one of the four potential products, the company's scientists argued for the one that had the most positive research results. Then the attorneys weighed in. They pushed a drug that had not tested as well, but would command the broadest patent. And they won hands down. 'Researchers used to be up in arms if such crass decisions were made', says the company's patent counsel Bruce M. Eisen. But now 'tine strength of the potential patent position is a leading factor in what research to pursue'. (38)

This ominous example from the pharmaceutical sector could have been taken from any other. Rather than simply stimulating innovation, the patent system applied to living matter redirects attention towards those products that provide for the broadest and easiest patent protection. Rather than promoting competition in research and development, it limits the involvement to those who can afford to pay for the royalties or have other patents to offer in exchange.

In the field of agriculture, the patenting of plants and animals and their genetic materials would make it impossible for breeders freely to use each others' breeding material. Using a plant or animal with something patented in it to breed something better would then require permission from and payment to the patentee. In plant and animal breeding, the unrestricted use of existing varieties and races for further improvement forms the very backbone of the whole sector. Abolishing this practice by the introduction of industrial patent systems would mean quite simply the destruction of what is left of the independent plant-breeding industry. It would also effectively bring animal-breeding, currently in many countries still under control of farmers or the state, under control of large TNCs.

Jack Kloppenburg, in his study on the transformation of the seeds industry, gives a striking example of the early patenting days in the United States. (39) By the end of the 1950s, hybrid maize had been available to US farmers for more than two decades. A major problem for the breeders offering hybrid maize was the fact that the inbred lines used for the production of the hybrids had to be de-tasselled manually to avoid self-pollination. This delicate manual operation involved the training, organizing, supervising and paying of some 125,000 labourers each summer, costing the seed companies an estimated $ 10 million annually. D. F. Jones, a plantbreeder working in the public sector, had been pioneering the production of hybrid maize. He developed a technique to produce 'cytoplasmic male sterility' (CMS), which eliminated this painstaking and costly manual process. This technique incorporates genetic factors in the maize that make the male parent lines sterile, thus avoiding self-pollination and the need for de-tasselling.

Jones, unusually for public sector breeders at the time, took out a patent on this revolutionary technique and assigned it to the public institution he was working with. The private seed industry did not take long to adopt this technology, but refused to pay royalties to the public sector. Only after being forced by litigation several years later, in 1969, did the companies start paying royalties. Although the use of CMS lines reduced the de-tasselling cost for seed companies by as much as a factor of 25, the price of hybrid maize seed increased by over six per cent from 1958, when companies started using the male sterility process commercially, to 1965, when the process was ubiquitous. DeKalb, now a giant in the US maizebreeding industry, promised that, 'If everyone stops detasseling, and passes all the benefit on to the consumer by lower prices, then the farmer is the only one who gains.' The opposite proved to be true.

The male sterility story would probably have developed quite differently had it taken place in the 1990s. Firstly, it is most likely that the technique would have been developed by the private sector itself. The bulk of current hybrid maize technology in North America is staunchly controlled by a few multinational companies. Pioneer, DeKalb/Pfizer, Ciba-Geigy, Sandoz and Upjohn together govern over two-thirds of the US maize seed market. (40) Even if it had been developed at a US university, it is likely that it would have used funds from private industry with the corporation retaining the property rights. Secondly, the company in question would not only have patented the process, as Jones did, but also the genes involved, the cells and all maize plants and products derived from it. Thirdly, it is likely that the company would not have limited its patent claim to maize only, but to any plant into which the new process and genes could be incorporated. And lastly, and perhaps most importantly, the company might choose not to license the technology to other breeders, but to retain exclusive use for its own varieties. With such a crucial technique as male sterility, which has been incorporated into virtually every maize plant, this would extend one company's control to dominate the entire maize seed market.

Another feature of the patent system is that it allows for multiple patents as well as for multiple claims within a patent to be made on a single product. In the end we will be in a situation where a single plant, animal or microbe contains many different patented parts. What this can mean for an average plant-breeder might be illustrated with the following example:

Sometime in the near future Dr Smith, a well-respected plant breeder, wants to cross an existing widely used variety of maize, 'Higrow', with another,'Reliant', in order to produce a new variety that incorporates a useful resistance from 'Reliant' into 'Higrow'. First he has to find out whether there are any patented genes, cells or other genetic information in the two varieties. He discovers that 'Higrow' contains patented materials from six different chemical companies, while 'Reliant' has three patented genes in it. Further, he finds out that three special techniques he planned to use for the crossing are also patented. Before Dr Smith used to doing his work without restrictions - can get his new variety to the market, he has to seek permission from nine companies and pay them royalties, and additionally negotiate with three other companies to use the breeding techniques. Dr Smith, along with many of his colleagues, will probably decide to drop out of business and look for another job. If, however, he manages to get the required permissions and pay all the royalties involved, he will have to raise the price of his new variety considerably in order to recoup some of the costs. So not only Dr Smith, but also the farmers - and in the end the consumers - lose out. (41)

Before deciding to sell out, Dr Smith might encounter a few other problems resulting from life patents. A carefully drawn-up patent can claim intellectual property on characteristics independent from the genetic maserial itself. US Patent No. 4,581,847 is for cereals with a high content of a specific protein: tryptophane. The patent document explains that' . . . mutant plants have an endogenous free tryptophane content of at least ten times the amount of corresponding non mutant . . . plants' fall within the scope of the invention, (42) irrespective of the genes that code for it. If Dr Smith happens to be in the business of breeding cereals with a high content of this protein, he is well advised to ask the patentee in question to continue; this whole field of work might already be the property of the patentee. As UPOV pointed out in one of its documents,43 such broadly defined patents could cover a whole range of already existing or still to be produced crop varieties, and can block entire fields of work in the breeding sector. This reportedly has already happened to sun-flower breeders in the USA, who received notice from one company, Sungene, that they had better stop working on sun-flower varieties with high oleic acid content. Sungene had obtained a US patent for this characteristic, and considered anyone else working on it as infringing the patent. (44) In 1990, the patent was revoked, but not before haying 'affectively slopped' research on high oleic acid content in sun-flowers anywhere outside the company's laboratory. (45)

Apart from increasing the cost of the seed, the patent system extended to life forms penalizes the farmer in other ways. When using seed containing patented genetic material, it would be illegal for farmers freely to use part of the harvest for next year's sowing, as the germplasm in the seeds would continue to be owned by the patentee. The farmer would thus have to return to the market each year to purchase seed, as is now the case with hybrid crops. This would virtually eliminate a farming practice that is widespread in developing and developed countries - that of using saved seed for planting the following season. According to industry analysts, over a third of all seeds planted worldwide are supplied in this way, (46) and other estimates give much higher percentages of home-grown seed. Graph 7.2 shows the extent to which European farmers use certified seed for small grains. Most of the non-certified seed is home-grown. Graph 7.3 shows the extent to which US farmers use home-grown seed for specific crops. While use of such seed in the US and Europe is substantial, especially for nonhybrid crops, the use of home-grown seeds in developing countries is far greater.

The elimination of the use of home-grown seed would dramatically increase the farming community's dependence on the plant-breeding and biotechnology industries. It would also mean a prodigious loss of genetic diversity that is maintained in the field by farmers through the selection and use of their own seed. Finally, the costs to the farmer would be considerably increased. William Lesser, professor at Cornell University, estimated that a complete prohibition of farmer-saved seeds would cost American farmers over $500 million annually for soybean, wheat and cotton alone. (47) The same expert calculates that for British wheat and barley growers these costs would be up to $80 million, (48) a figure that would be considerably higher for other European countries where home-grown seed is more commonly used. In the hypothetical case that home-grown seeds would be eliminated worldwide, farmers would end up paying an extra $6 billion annually! (49) But Lesser's message is simple enough: 'Farmers, though, must overcome a psychological resistance to having the uses of their crops dictated by the legal system.' (50)


The use of certified cereal seed EEC, Selected countries


Home grown seeds in the USA - In % of all seeds sown for each crop

While the implications for crop growers are tremendous, those involved in raising animals might be even more seriously affected. In many countries genetic improvement of cattle is largely dominated by farmers and their co-operatives, and supported by public institutions. On many dairy farms, artificial insemination is combined with on-farm breeding using outstanding bulls raised by the farmers themselves. This practice has resulted in immense increases in the production of meat and milk, to the extent that most industrialized countries now produce surpluses. The biotechnology industry is now throwing its weight behind this system and will end up patenting the results. Dairy farmers will have to be careful when they inseminate their cattle with sperm containing patented genes. If a bull, resulting from such an insemination, runs around doing his biological duty, the farmer might find himself in court.

There are people who argue that life patents will especially help small breeding and biotech companies to survive. But a look at who applies for biotech patents might put such claims in context. A survey of patent applications to the European Patent Office up to April 1989 revealed 147 applications for plant-related patents.(51) Graph 7.4 shows the result if the applications are ordered by company. A full one-third of all applications come from just three large corporations: Lubrizol, Monsanto and Ciba-Geigy. All TNCs together are responsible for 56% of the applications. The TNCs, together with five major biotech companies, most of them heavily involved in contract research for TNCs, control almost three-quarters of all applications. The picture overall is that the patent system is by and large biased towards large corporations.

Ordered by country, the same data undermine one of the main arguments of the European Commission in pushing for strong patent protection. The Commission claims that life patents are the key to Europe's competitive advantage over the US industry. The US industry itself is, however, by far the largest applicant for European plant biotech patents. A strong European patent system is by no means a guarantee that the Europeans will profit most from it. It might just as well be the other way around.

If society allows for the industrial patent system to be applied to life forms, a turbulent 100 year history will have come to an unfortunate end. In 1883, a handful of industrialized countries, bringing along a few of their colonies, signed the Paris Convention in the midst of a debate in which many industrialists considered the patent system as a paradise for parasites.


European plant patent applications - EPO, by applicant

Those afraid of parasites were tranquillized with a whole series of concessions. Compulsory licensing would form a guarantee against abuse, and vital sectors such as food, chemicals and pharmaceuticals would be excluded. Living matter was not even under discussion. A century later, the roles are reversed. The parasites are now those who fail to provide for patent protection on everything. Plants, animals and humans are, with exceptions, the last survivors outside the monopoly system. Once they have been included, the circle will be complete.

Notes and references

1. J. Geigy-Merian et al., Ein Beitragzur Frage der Einf hrng des Patentsch tzes in der Schweitz, Switzerland, 1883. (Geigy-Merian co authored this publication with 10 other Swiss industrialists.)

2. J. Duesing, 'Patent Protection for Inventions from Agricultural Biotechnology, in 'Patenting Life Forms in Europe', Conference Proceedings, ICDA Seeds Campaign, Barcelona, 1989.

3. W. H. Duffey, 'Intellectual Property Needs of Multinationals', in 'equitable Patent Protection for the Developing World', Cornell University Staff Paper 89-36, Ithaca, USA, November 1989.

4. UNCTAD/WIPO, The Role of the Patent System in the Transfer of Technology to Developing Countries, UN, New York, 1975.

5. Ibid

6. Banco Interamericano de Desarrollo, Progreso Economico y Social en America Latina. lnforme 1988, BID, Washington DC, 1988,p.329.

7. UNCTAD/WIPO, 1975, op. cit.

8. Resolution adopted by Committee of Transfer of Technology of UNCTAD. 14th Meeting, 5 December 1975, UNCTAD, Geneva.

9. John Barton, 'Legal Trends and Agricultural Biotechnology: Effects on Developing Countries', in Trends in Biotechnology,Vol. 7, October 1989.

10. Surendra Patel, 'Intellectual Property Rights in the Uruguay Round', in Economic and Political Weekly, New Delhi, 6 May 1989, pp.978-93.

11. OECD Council, 22 January 1974, quoted in Patel, 1989, op. cit.

12. Ministerial declaration on the Uruguay Round, Paragraph (v) of section B, as quoted in Patel, 1989, op. cit.

13. W. H. Duffey, 1989, op. cit.

14. US-ITC Report. Figures published in Bioteknologi Patenter: Et Internasjonalt Perspective, Newsletter No. l/2,1989. Norwegian NIEO Group, Oslo, 1989.

15. Quoted in Patel, 1989, op. cit.

16. The US-ITC figures, for example, were given to the Norwegian embassy in Washington by US government officials. The USA considers Norwegian patent laws too weak, especially on pharmaceuticals.

17. UNCTAD, Commodity Yeorbook 1989, UN, New York, 1989.

18. 'The Battle Raging over Intellectual Property', in Business Week, 22 May 1989.

19. 'Brazil says US Sanctions Breach Standstill Deal', in Financial Times, 28 October 1988.

20. P. R. De Almeida, 'The New Intellectual Property Regime', paper presented to the conference 'The Uruguay Round of GATT ', Bergamo, 21-23 September 1989.

21. Arthur G. Cook, 'Patents as non-tariff trade barriers', in Trends in Biotechnology, Vol. 7, October 1989.

22. 'Fighting Trespassing on Intellectual Property', Washington Post, 6 December 1987. Quoted in Bioteknologi, Patenter, Internasjonalt Perspectiv, 1989, op. cit.

23. 'Fighting Trespassing on Intellectual Property', op. cit.

24. Sistema Economico Latinoamericano, 'Capitulos de SELA', SELA, Caracas, October/ December,Caracas,1988.

25. P. R. De Almeida, 1989, op. cit.

26. See, for example, Pat Mooney, 'The Law of the Seed', in Development Dialogue, No. 1-2, Uppsala, 1983.

27. J. G. Boonman, 'Plant Patenting as seen by a Plant Breeding Professional' in 'Patenting Life forms in Europe', Conference Proceedings, ICDA Seeds Campaign, Barcelona 1989.

28. Draft EEC Council Directive on the legal protection of Biotechnological inventions. EEC Doc. Com (88)-496, Brussels 1988.

29. 'Any plant or part of plant or any grouping of plants or parts of plants, which, by reason of its characteristics, is regarded as an independent unit for the purposes of cultivation or any other form of use'.

30. EPO, Standing Advisory Committee before the European Patent Office, l7th Meeting,Munich29-30November 1989. EPO Doc. SACEPO/XVII/5,pp.5-6.

31. European Patent Convention, Article 53-b.

32. Council of Europe, Committee of Experts on Patents, 'Memorandum on the Unification of legislation', The Hague, 28 November 1960. (Doe. EXP/Brev (60) 7.)

33. Council of Europe, Committee of Experts on Patents, 'Unification of Laws Convention, Amendment suggested by the Austrian Delegation', Strasbourg, 10 May 1963 (Doe. EXP/Brev. (63) 7).

34. EEC Doc. COM (88)-496, op. cit.

35. EPO, Doc. SACEPO/XVII/5, op. cit., p.11.

36. W. Lesser,'Patenting Seeds: What to expect', Dept. of Agricultural Economics, Cornell University, USA, January 1986.

37. EEC Commission,'A European patent law for Biotechnology', Information Memo, Brussels, October 1988.

38.'The Battle Raging over lntellectual Property', 1989, op. cit.,p.80.

39. Jack Kloppenburg, 'First The Seed', Cambridge University Press, New York, 1988, pp.113-116.

40. J. Kloppenburg, 1988, op. cit., p.298.

41. Example from 'Information Release: Patenting Life to become Legal in the EEC', ICDA Seeds Campaign, Barcelona, 1988.

42. United States Patent Nr.4,581,847, Hibbert et al., April 15,1986.

43. UPOV, 'Industrial Patents and Plant Breeders' Rights', Records of a Symposium, UPOV Publication Nr.342(E), p.80.

44. C. Fowler et al., 'The Laws of Life ', in Development Dialogue, Dag Hammarskjold Foundation, No.1988: 1-2, Uppsala, 1988, p. 244.

45. Agbiotechnology News, January/February 1990.

46. James W. Kent,'The driving force behind the restructuring of the global seeds industry', in Seed World, Vol.124, No.7, June 1986.

47. W. Lesser, 1986, op. cit.

48. W. Lesser,'Anticipation UK Plant Variety Patents',6,EIPR,1987,pp.174-176.

49. Assuming 37% of seed worldwide is home grown and with current total commercial seed market valued at US$ 17 billion.

50. W. Lesser, 1986, op. cit.

51. Agnes Vertier, 'Biotechnologies et Brevets: Report d'Etappe'. CNRS/INRA/MRES, France, February 1989. Unpublished. Survey was done by scanning the database 'EPAT'.