Summary

Recent years have seen rising interest in the commercial exploitation of indigenous knowledge (IK). This in turn has raised a wide set of issues about who is entitled to use such knowledge and on what terms, and how individuals and groups who 'own' it can share in the financial benefits resulting from its commercial use. These concerns are likely to become increasingly controversial in the years ahead because much of the discussion revolves around the potentially conflicting interests of the two primary players – developing countries with IK, and industrialised nations that want it.

On the one hand, developing countries – most often the primary guardians and 'suppliers' of IK – are worried that they may fail to be adequately rewarded when it is exploited. Many of them, in fact, are currently pushing for a legally binding international treaty that recognises the rights of communities over such knowledge, and provides them with a legal entitlement to a share of profits from its commercialisation.

Any such treaty, however, remains largely opposed by industrialised countries, which tend to be the key 'users' of IK, at least in its commercial form. These countries argue that the profits they make from exploiting IK are a legitimate reward for their efforts in obtaining it and turning it into marketable products, for example in the agricultural, biotechnology and pharmaceutical industries. They are therefore largely content with the present situation, under which they are free to compensate the communities generating the IK if they wish, but are not legally bound to do so. The stakes are high. According to some estimates, annual global sales of products derived from genetic resources may be worth as much as US$800 billion annually. [1] Additionally, as their current patents on profitable drugs expire, pharmaceutical companies are under pressure to find replacements. One way to do this is to develop and patent new products based on genetic resources and IK (although the big drug firms still profess to be sceptical about the worth of IK).

Excessively onerous restrictions could limit the enthusiasm of these companies to pursue this path, by significantly reducing the financial rewards of developing new products. Yet in the absence of a global, legally binding agreement on sharing potential profits with the original IK providers, many feel there is a danger that indigenous communities in the developing world will be excluded from enjoying the benefits of the global knowledge economy to which they are contributing.

IK in international agreements

The conflict between the 'suppliers' and 'users' of IK has occupied much time and attention in international forums for at least a decade. It first emerged during negotiations for the UN Convention on Biological Diversity (CBD), signed at the 1992 Earth Summit.

As a result of pressure from developing countries, the CBD became the first legally binding instrument to recognise community rights to genetic resources and related IK, although it only "encourages" the sharing of benefits and leaves it to national legislation to determine how such a commitment should be put into practice (see policy brief on national and regional laws). In particular, the Convention calls on signatories to respect the knowledge, innovations and practices of indigenous communities, and encourage the equitable sharing of benefits from their commercialisation.

Tensions surrounding these issues increased in 1994, with the adoption of the Trade-Related Intellectual Property Rights agreement (TRIPS) of the World Trade Organisation (WTO). The TRIPS agreement requires all WTO member states to offer strong patent protection to modern, 'formal' inventions, the rights to which can be 'owned' by individuals and corporations. But it contains no provisions for protecting 'informal' community-owned IK.

In general, there are a number of reasons why IK does not meet the criteria listed by TRIPS for granting patent protection. In particular, it is seldom possible to prove the 'novelty', 'non-obviousness', or even 'usefulness' of IK, as required for patentable inventions. Conversely, TRIPS does not include measures that many consider to be essential for protecting IK, such as requiring proof that the individual or organisation seeking such legal protection has obtained the prior consent of countries or communities whose knowledge is being used. Nor does it ensure that communities benefit when their genetic resources or IK are commercialised (although it does not expressly rule out such

Recent developments

The differences between the principles outlined in the CBD, and the legal entitlements to intellectual property as defined (or ignored) in TRIPS, remain unresolved. These differences have been discussed in the TRIPS Council – responsible for monitoring the operation of the agreement – since 1999 in the context of reviewing article 27.3b. This defines the types of inventions that are eligible for patent protection and those that can be exempt. The article covers biotechnological inventions, and some countries have broadened the discussion to cover biodiversity and traditional knowledge.

While little progress has been made in these discussions, the 2001 WTO ministerial meeting in Doha, Qatar, formally asked the TRIPS Council to examine the relationship between the agreement, CBD and the protection of IK. In response, several African, Asian and South American countries submitted a paper to the TRIPS Council, suggesting how the conflict might be resolved. They proposed that TRIPS be amended to ensure that patent applicants disclose the source of any genetic resource and IK used in an invention, and prove that they have the prior informed consent (PIC) of the communities concerned. Applicants would also need to give evidence of the fair and equitable sharing of benefits under the national regime of their country of origin.

No significant progress, however, has yet been made on this issue within the WTO. Moreover, many representatives of indigenous communities are wary of the discussions on IK protection that are currently taking place. They feel that it is too focused on trying to align IK protection with existing regimes for intellectual property rights (IPR) protection, and as a result is likely to rule out options that they consider to be more appropriate.

Meanwhile, the CBD – which is generally perceived to be more sympathetic to the concerns of indigenous communities – appears to be moving slowly towards a stronger and more binding agreement. At its sixth conference of parties (COP-6), held in May 2002, the signatories to the CBD adopted the Bonn Guidelines on Access to Genetic Resources and Fair and Equitable Sharing of the Benefits Arising out of their Utilisation. These guidelines still only "encourage" the disclosure of the country of origin of genetic resources and IK in patent applications, and are not legally binding. But this could change in the future, as political pressure for such an outcome appears to be growing.

At the conclusion of the 2002 World Summit on Sustainable Development (WSSD), for example, it was agreed by the governments represented there that an international regime to promote and safeguard fair and equitable sharing of benefits from the use of genetic resources should be negotiated under CBD. This was followed up at CBD COP-7 in February 2004, held in Kuala Lumpur, Malaysia, where a working group was asked to elaborate the nature and elements of this regime before the next meeting in Brazil in 2006. However, it has not yet been decided whether this regime will be legally binding.

IK and agriculture

One of the central issues in the debate about IK is the fear that farmers could be prevented from using seeds derived from traditional varieties, and patented by seed corporations. Nevertheless, the CBD makes no special reference to farmers' rights and plant genetic resources for food and agriculture. More progress has been made at the Food and Agriculture Organisation (FAO), where discussions have included the harmonisation of the CBD and its provisions relating to sovereignty, and access and benefit sharing, while ensuring that genetic resources are available to farmers and breeders without undue restrictions.

After seven years of negotiations, FAO adopted an International Treaty on Plant Genetic Resources for Food and Agriculture (PGRFA) in November 2001. The treaty establishes a multilateral system that so far protects 64 major food and forage crops. It also calls for national measures to protect IK relevant to PGRFA, and the right of farmers to equitably participate in sharing benefits arising from the utilisation of these genetic resources.

Once it comes into effect, signatories to the treaty will decide on the terms and conditions of access to the crops protected by the multilateral system in the form of a standard material transfer agreement. Individuals or companies that create commercially viable products from the plants under the multilateral system will have to pay into a trust account from which funds will be used both to "facilitate" benefit sharing for farmers in developing countries, and to help conserve genetic resources.

The FAO treaty is seen as a success by developing countries, in that it acknowledges the value of genetic resources developed through centuries of farmer innovation. At the same time, however, these countries point out that the treaty does not replace the need for a regime that gives farmers rights over seed varieties that they have preserved and improved through natural breeding. Rather, it is seen primarily as a way of ensuring that seed varieties remain available for use by farmers.

Also, farmers do not benefit directly from the commercialisation of crops and forages listed under the multilateral system. And although the details of how much users will have to pay and how the trust fund will be shared are still to be decided, the sums of money involved are not expected to be significant. Furthermore, although the United States has signed the treaty, it has already announced that its decision on whether to proceed on ratification will depend on a "satisfactory resolution" of outstanding issues related to benefit sharing and financial responsibilities. This is significant because the main companies that are interested in exploiting new seed varieties are likely to be US-based corporations.

Reform or re-negotiate?

Discussions on global protection for IK have progressed furthest at the World Intellectual Property Organisation (WIPO), a specialised agency of the United Nations that administers international treaties dealing with different aspects of intellectual property protection. These discussions began in 1999, when Colombia tabled a proposal to introduce elements in the Patent Law Treaty that was then under negotiation, to ensure that patents relating to genetic resources are given only when these resources have been legally acquired from the country of origin.

Although the proposal was not accepted as a provision of the proposed treaty, it sparked a discussion on IK that led to the creation in 2000 of an Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore. [2] This committee has closely examined issues ranging from how IK can be defined to national laws and possible global mechanisms to protect it. The policy options being examined by this committee fall into three broad categories: more effective use of existing IPR laws; reforms to these IPR laws; and the creation of alternative or sui generis (literally, of its own kind) systems.

Possible reforms to the IPR system include requiring patent applicants to disclose the country of origin of IK used in an invention, and including proof that PIC of the involved communities (or their legal representatives) has been obtained. Such measures, taken to prevent misappropriation of IK through IPRs and the existing patent system, are also termed 'defensive' protection. The European Commission cautiously supports this approach, but the United States strongly opposes it, arguing that it would conflict with TRIPS by creating further hurdles to patentability that the latter agreement disallows.

Many options but no concrete answers

Defensive measures could include developing databases of IK, which would enable patent examiners to ensure that patents are not granted for what is already known. India, for example, a strong proponent of such databases, has developed a Traditional Knowledge Digital Library that focuses on ayurvedic medicine, and intends to make the contents available to patent offices around the world. In contrast, 'positive' measures aim to enable IK holders to benefit actively from their resources and knowledge.

It has been suggested that IK databases could also provide positive protection if they were given legal protection under existing TRIPS provisions that deal with the protection of undisclosed data and information. However, these provisions apply to the database as a whole, and it is questionable whether they offer protection to separate items included in the database. [3]

Ultimately, the most effective policy options will need a mix of various defensive and positive measures. But many questions persist. How useful, for instance, are databases at protecting IK, particularly given that patent applicants could easily dodge them by naming materials derived from the ingredients specified by the databases, rather than the ingredients themselves? How can disclosure of origin and PIC requirements be enforced, given that it is unlikely that industrialised countries will accept a clause under which patent applications are denied if these requirements are not met (as mentioned before, this is already viewed as a hurdle to a product's patentability)? Moreover, how and by whom will the origin of a particular traditional use or idea be proven or certified?

Sui generis alternatives pose a different set of problems. If they give IK holders the right to refuse the use of their knowledge, or to determine conditions under which it may be used, how will such a right be enforced? How can IK holders claim compensation for IK that is already widely used? And how will compensation payments be collected and distributed equitably among those who originally held this knowledge?

A global agreement

Such questions will not be easy to answer. What is already clear, however, is that some sort of global agreement that offers positive protection of this knowledge is likely to be required for communities to benefit from the commercial exploitation of their IK. While many countries have already instituted sui generis national and regional laws that include positive measures to benefit communities, their overall effectiveness is doubtful. After all, many cases of misappropriation involve individuals or institutions from other countries, where these laws are unlikely to be recognised.

Furthermore, although some countries have already entered into bilateral agreements to offer positive protection to IK, such agreements also have limitations. For example, they are expensive to negotiate compared to a single multilateral system, which could restrict the number of agreements, or dilute benefit-sharing terms when agreements do take place. Moreover, given the uneven distribution of negotiating power and capacity between many 'users' in developed countries and 'suppliers' in developing countries, the latter may find it more difficult to protect their interests through bilateral agreements.

Negotiations on a possible global agreement could integrate discussions on IK protection that are currently distributed among several international organisations, and as a result lack a clear overall focus. So far, the CBD, WTO, FAO and WIPO have been the organisations most heavily involved in these discussions. But the issues raised are likely to affect the work of many other institutions as they recognise the need to address the protection of IK to achieve their own goals. These include the United Nations Conference on Trade and Development [4], the United Nations Educational, Scientific and Cultural Organisation (UNESCO) [5], the UN Convention to Combat Desertification, the World Health Organisation [6], and the UN High Commission on Human Rights.

The eventual outcome of all these discussions remains highly uncertain, primarily because it is already clear that industrialised countries will not easily accept the need for such an agreement. When the possibility of negotiating an international treaty for IK protection came up at WIPO in October 2003, for example, it ended in a compromise decision to "intensify work" on IK protection. But participants did not commit to a treaty – wording that reflected the reservations of countries such as the United States. Negotiations are likely to drag on in this vein for the time being, making for slow progress through political compromises rather than major breakthroughs.

If, however, the political will can be generated to endorse a single global treaty, this would represent a significant step forward that would have several positive consequences. It might, for example, help to ensure the protection of IK that might otherwise die out in competition with modern knowledge, as well as the protection of biological diversity. More broadly, success in negotiating a global treaty could help achieve several other global goals, such as increasing global equity, and eradicating poverty through the generation of sustainable livelihoods. The path ahead may be a bumpy one. But that does not mean that it is not worth taking.