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Insight & Intelligence™ : Aug 24, 2011

Nagoya Protocol’s Rules for Genetic Resources Pose Challenges for U.S. Drug Developers

Aim is to balance the need to stamp out biopiracy with the need to advance innovation.
  • Alex Philippidis

Most of the world’s nations—193 to be exact—agreed last October to setting up a legal framework governing access to and sharing of benefits from the earth’s genetic resources. The decision was made during the Nagoya Biodiversity Summit convened by the UN-created Convention on Biological Diversity (CBD).

“History will recall that it was here in Nagoya that a new era of living in harmony was born and new global alliance to protect life on earth was established,” declared Ahmed Djoghlaf, CBD’s executive secretary, at the time in a statement.

Since then, 41 nations have signed the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from Their Utilization. The most recent nation to do so was Antigua and its island of Barbuda, which on August 1 became the first Caribbean island country to signal its intent to ratify.

Once the 50th nation agrees to “ratification, acceptance, approval or accession,” the Nagoya Protocol takes effect 90 days later. “Once the protocol has entered into force, it will be legally binding for parties that have deposited their instruments of ratification, acceptance, or approval,” the CBD spokesman David Ainsworth told GEN.

The U.S. is not among the 41 Nagoya Protocol signatories and isn’t headed in that policy direction soon. Even if it were, the country cannot sign or ratify the Nagoya Protocol unless it ratifies the original CBD agreement, the product of the 1992 Rio Summit signed a year later by then-President Bill Clinton.

U.S. Stance

Yet the U.S. has long incorporated one of the protocol’s principles. NCI insists that before drug developers or researchers accept payment for genetic materials collected overseas, they must produce a statement declaring that they have permission to collect materials from there and export them.

“We’ve had sort of a baby Nagoya Protocol, but working from the other side, operating for many years,” David J. Newman, D.Phil., chief of NCI’s Natural Products Branch, told GEN. “You have to know who your point of contact is and what permission they have.

“There have been a number of visitors to me over the last 15 years or so, saying, ‘I want to set up a company because I have medicinal herbs or plants from country X,’ which will remain nameless. And they’ll come in with a suitable American lawyer in tow who wants to set this company up and is probably even bankrolling it, only to be told point blank, we want an export permit,” Dr. Newman noted.

During those visits, he recalled, lawyers will say they have import permits, only to hear NCI insist on an export permit. “Off they go, muttering all sorts of imprecations, and they never return.” Or, in cases where an importer insists on taking material back to the States without proper paperwork, “these raw materials are brought back by a postdoc in his or her baggage.”

Establishing National Contacts

The Nagoya Protocol specifies that access and benefit-sharing requirements apply not only to genetic resources but to benefits derived from the utilization of genetic resources, defined as “conducting research and development on the genetic and/or biochemical composition of genetic resources, including through the application of biotechnology.” The protocol uses CBD’s definition of biotechnology, which encompasses “any technological application that uses biological systems, living organisms, or derivatives thereof to make or modify products or processes for specific use.”

The protocol also requires signatories to designate a “national focal point” on access and benefit sharing as well as “one or more competent national authorities” who would be “responsible for granting access or, as applicable, issuing written evidence that access requirements have been met,” as well as for “advising on applicable procedures and requirements for obtaining prior informed consent and entering into mutually agreed terms.”

One entity could carry out both functions. And just what constitutes a focal point or national authority is not spelled out in the protocol. “We’ve had difficulty finding out whom to talk to in countries for many years, because a lot of countries do not have any such organization, even though in the CBD it was supposed to be set up. It wasn’t. Or if it is, it’s impenetrable,” Dr. Newman explained.

He noted that his agency’s Letter of Collection has served as a model agreement. It states that a country that allows collection of materials will receive something in return. That something cannot be a royalty, since the U.S. government is not permitted to sign a royalty statement unless it is for an invention being licensed, lest that royalty encumber a future invention. However, a federally funded academic institution can sign an agreement with a country, stating there will be recompense if there is an invention.

“Even though the money’s coming from the same pot in the end—the United States Treasury—I cannot write a statement as a government employee that says there is a royalty payment. But if I happen to be professor X in University Y, funded by the NCI, I can,” Dr. Newman said. “So as you can imagine, that causes great confusion in the minds of politicians in other countries or the bureaucrats who are responsible for signing an export permit.”

Defining Traditional Knowledge

Nations adopting the Nagoya Protocol also agreed to assess its implementation of traditional knowledge provisions in relation to the work of other bodies including the World Intellectual Property Organization (WIPO). At WIPO’s “Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore,” held February 28–March 4, the U.S. delegation resisted demands from some countries to enter into negotiations on changes to the global patent system relating to genetic resources and “traditional knowledge.”

According to CBD, genetic resources mean genetic material of actual or potential value. That differs from genetic material, which includes “any material of plant, animal, microbial, or other origin containing functional units of heredity.”

“Traditional knowledge” is defined by WIPO as “tradition-based literary, artistic, or scientific works; performances; inventions; scientific discoveries; designs; marks, names, and symbols; undisclosed information; and all other tradition-based innovations and creations resulting from intellectual activity in the industrial, scientific, literary, or artistic fields.”

Related to that are “tradition-based” knowledge systems, creations, innovations, and cultural expressions, which according to WIPO “have generally been transmitted from generation to generation; are generally regarded as pertaining to a particular people or its territory; and are constantly evolving in response to a changing environment.”

“The crucial element for the protection of any subject matter is the identification of some characteristics that it must meet as a condition for protection, such as novelty, inventiveness, and susceptibility of industrial application, for inventions, and distinctiveness, for trademarks. The same criterion could be applied to traditional knowledge as well,” WIPO added in a 2002 “Information Note” on traditional knowledge.

Conflict with U.S. Patent System

At issue is whether CBD and the Nagoya Protocol should be amended to require disclosure of the source from which any genetic resources were purchased and the country of origin for traditional knowledge upon which an invention is based. “Companies often do not have this information or know the upstream path through which resources were first accessed and then passed through many different hands,” Mark Grayson, a spokesman for the Pharmaceutical Research Manufacturers of America (PhRMA), told GEN.

Lila Feisee, vp for global intellectual property policy for the Biotechnology Industry Organization (BIO), pointed out to GEN that the amendments under discussion before the WIPO differ from U.S. patent law. While the U.S. requires “sufficient” disclosure so that someone of ordinary skill in an industry can make or practice the invention without undue experimentation, that disclosure need not include country of origin for genetic resources or traditional knowledge.

“With cell lines or plasmid vectors for cloning, there might be situations where you might deposit in a recognized depository your source material that you use to make the invention. But that’s very different from saying this material came from say the Amazon jungle or from Brazil,” Feisee explained.

BIO and PhRMA contend that the patent proposals contravene CBD and the protocol principles advocating access to genetic resources and a fair and equitable sharing of benefits from their use. “The proposals have many practical and conceptual flaws. Most fundamentally, they would introduce uncertainties in the patent system that would undermine entire patent portfolios for companies that use natural materials, particularly for those in the life sciences.

“In many cases, it will not be possible for a patent applicant to knowingly comply with such requirements, yet failure to comply could result in denial of a patent or render a granted patent invalid,” BIO president and CEO James C. Greenwood and his PhRMA counterpart, John J. Castellani, wrote in a May 13 letter to U.S. Commerce Secretary Gary Locke.

“No attempt has been made to show how the proposed disclosure requirements could actually remedy the concerns that motivate these proposals—i.e., the unauthorized collection and use of genetic resources. This is because it is not possible to meaningfully monitor or enforce conditions concerning the use of genetic resources through such proposed measures,” Greenwood and Castellani wrote.

Will the U.S. Sign On?

They also called for WIPO to embrace more “constructive” proposals such as a “one-stop-shop” database to improve the quality of patent examination as well as to model material transfer agreements with “enforceable” cross-border provisions and setting up guidelines for contractual practices relating to managing intellectual property in access and benefit-sharing agreements.

The commerce department had not responded at deadline, both Grayson and Feisee said. “Since the letter, we have talked to different agencies within the Department of Commerce informally,” Feisee remarked, including the USPTO, which represents U.S. interests in the WIPO.

The prospect of a global treaty and corresponding global patent law based on legal concepts outside of U.S. patent law is understandably rattling to U.S.-based biotech and pharma companies; the industry is already bracing for the most significant change in U.S. patent law in half a century.

Industry’s best bet would appear to be continuing dialogue with the USPTO and commerce department on initiatives all can support. The U.S. would be better able to advocate amendments to the protocol in ways that balance the need to stamp out biopiracy with the need to advance innovation.