Friday, November 04, 2005


It is interesting to see how traditional knowledge and bio-resources are becoming increasingly prominent in international intellectual property and trade negotiations.

A recent note in MIP (Managing Intellectual Property) states:

The Indian ambassador to the WTO, Ujal Singh Bhatia, has proposed to the WTO Council that the TRIPs Agreement be amended to force patent applicants to disclose the source of biological material used in their inventions. The Indian delegation wants any declaration issued at the WTO ministerial meeting in Hong Kong in December to include a commitment to negotiate amendments to the TRIPs Agreement forcing member states to change their domestic laws to require the disclosure.”

(An ICTSD newsletter discusses this in greater detail).

The Indian Patent Act was amended in 2002 to include such a provision. The noteworthy provisions are:

”(i) section 10 (4) (d) (ii) (D) which mandates that every patent specification which mentions 'biological material' shall "disclose the source and origin of the biological material in the specification" AND

(ii) section 25 (j) which states that a patent can be opposed on the ground " that the complete specification does not disclose or wrongly mentions the source or geographical origin of biological material used for the invention"

As evident, this provision is aimed (in a very broad way) at regulating what is commonly termed “bio-prospecting. As a wired magazine article sensationally puts it:

“Bioprospectors head into the deepest parts of the jungle, scale the highest mountains and, generally, brave extreme conditions in their quest for "green gold" -- plants and animals with commercially valuable properties. With the Amazon alone harboring medicinal plants capable of treating anything from parasite infections to malaria, toothaches to diabetes, the potential rewards are astronomical. But who will reap them?”

India witnessed a rather interesting case of this nature in the form of a tribal group (the “Kanis”) and an energy laden berry “Arogyapacha”(translates from Malayalam [the language of the state of Kerala and perhaps the longest palindrome] to “evergreen health”). It was found that the Kanis could walk for miles without the slightest hint of fatigue, thanks to these anti-fatigue berries that they kept popping in (god knows I could do with some of this!!) Anil K Gupta, the grass-roots innovation guru and founder of Honeybee network notes that:

The knowledge was divulged by three Kani tribal members to Indian scientists Tropical Botanic Gardens and Research Institute (TBGRI), an autonomous body under the Kerala Government, who isolated 12 active compounds from arogyapaacha, developed the drug “Jevaani”, and filed two patent applications on the drug (and another patent based on the same plant but for different use). The technology was then licensed to the Arya Vaidya Pharmacy, Ltd., an Indian pharmaceutical manufacturer pursuing the commercialization of Ayurvedic herbal formulations. A Trust Fund was established to share the benefits arising from the commercialization of the TK-based drug “Jevaani”.The operations of the Fund with the involvement of all relevant stakeholders, as well as the sustainable harvesting of the arogyapaacha plant, have posed certain problems which offer lessons on the role of intellectual property rights in benefit-sharing over medicinal plant genetic resources and traditional medicinal knowledge.

(Incidentally, I hail from Kerala, often touted as God’s own country. And would you believe it, Palode, where the TBGRI is based, is about an hour’s drive away from Kulathupuzha, a small town where I was born—perhaps I ought to get down there on a fact finding mission. A senior of mine from the National law school (Bangalore, India), RV Anuraddha, did such fact finding and came up with some brilliant write ups in this regard).

Last year, there were some reports of a patent/trademark conflict with a US company that was selling "Jeevani". Again, with the media constantly conflating issues of patent/trademark and copyright infringement, it is difficult to get a sense of the precise legal issues involved. According to a report in The Telegraph, a Calcutta based Indian newspaper, this appears to be more of a trademark issue.

"A US firm has raised a storm by acquiring a trademark on a patented herbal product of the indigenous Kani tribe of Kerala.

Jeevani, known as the ginseng of the Kani people, is a herbal formulation famed for its anti-fatigue, immunity-enhancing and liver-protecting qualities. Widely used as a wonder drug by the tribe, it strengthens the body’s natural defences by activating the cellular immune system and enhances a host of other innate faculties.

Reacting to the row, Jacob Pallathra, the president of NutriScience Innovations, Connecticut, claimed in an e-mail message that the product being marketed was purchased from Kerala and made in association with TBGRI. “A layperson tends to believe that the trademark registration means it is a patent. We do not have any patents on Jeevani and we respect the patent in Kerala and we are selling the same Jeevani made in Kerala,” he said. Pallathra stated that his company has been importing Jeevani through a proper and legal channel and promoting it overseas to benefit both the Kani tribe and the institute.

While criticising the step taken by NutriScience, Chronicle Pharmabiz, a journal, raised questions about the role of the institute and the Coimbatore pharmacy.“What is surprising here is that NutriScience has been sourcing Jeevani in bulk quantities from Arya Vaidya Pharmacy until two years ago. How is that both Arya Vaidya Pharmacy and TBGRI did not suspect any foul play in such imports is something not very clear…. (Another) lapse on the part of TBGRI is that it failed to register Jeevani as a trademark in the US and European markets” .

I'm not entirely sure that is a pure trademark issue. Assuming a patent over the product was procured by TBGRI in both India and the US, they should be able to prevent any imports of the product into US markets (i.e. a patent grants the exclusive right to import as well). Anyway, as most responsible lawyers do, let me clearly state that the "above is not intended to be legal advise of any sort", more so--since we don't have all the facts.

I cite the Jeevani example to show why a country like India is keen on having a greater say in the commercialisation of bio-resources. Little wonder then that India is also keen on mandating a similar patent provision (mandating disclosure of the source of biological material in a patent application) at the international level--merely having such a provision in the Indian patent act will not in any way affect the incentives of someone filing a similar application in the US, EU or Japan.

Understandably, there is a distinct divide here between the bio-resource rich countries (that happen to also be developing countries with relatively weaker patent systems such as India, Brazil, China, Thailand, Peru etc) and the developed nations such as the US, EU and Japan (with relatively stronger patent systems but less bio-diversity), who are keen on having a lesser number of bottlenecks in the patent system. These developed countries fear that provisions such as this in a patent regime would unduly delay and complicate the patent process, which already suffers from significant backlogs.I wonder whether the above situation (that the bio-resource rich countries happen to be developing countries with weaker patent systems?) is sheer co-incidence or reflects broader development imperatives?. There are some who argue that natural resources really don’t matter to economic development, as much as well-developed “institutions” that guarantee property rights. However, there are others who caution that this focus on “institutions” is a dangerously misleading one.

The question that I want to therefore pose in this context is: Assuming that it is in India’s interest to generate more market place innovations and wealth from bio-resources, what should its focus be re: property structures and institutional mechanisms? The question of conservation of bio-resources is another major issue here and some would argue that forms of proprietary control impact incentives here as well—but let’s leave that discussion for another day.

Padmashree Gehl Sampath, another senior of mine from the National Law School and now a researcher at the Institute for New Technologies (UNU-INTECH, Netherlands) delves into this very issue in her wonderful book titled “Regulating Bioprospecting: Institutions for Drug Research, Access and Benefit-Sharing (UNU Press, 2005)”.Padma examines optimal property rights structures and institutional mechanisms for regulating bioprospecting for drug research. Focusing on the economics of the contracting process, she argues that potential investors have been put off by the poor regulatory environment in source countries, and the limitations of international processes governing this process (the most important being the Convention on Biodiversity (CBD) and TRIPS).

A UN press release notes:

“Ms. Gehl Sampath’s analysis reveals the market imperfections that shape current international trade in valuable genetic resources, and points out the dangers of a simplistic view of bioprospecting as a “one shot” contract between the pharmaceutical firm, the national access authority, and the local and indigenous communities. In reality, the drug research and development process within which both traditional medicinal knowledge and tangible genetic resources play a role, is defined by a unique set of economic properties and limitations. The high levels of risk and uncertainty, and huge up-front investments, impose transaction costs on the parties at each stage of the contracting process, which can serve to stall or hinder the bargaining procedures.”

The Wired ran an interview with her:

"One of the major reasons why companies have been discouraged from investing in the past is the legal uncertainty caused by lack of regulatory frameworks on bioprospecting at the national levels, or frameworks that recognize rights on traditional medicinal knowledge and (give) access in an extremely bureaucratic way," said Gehl Sampath.Of course, it's important to sort out the bioprospecting frameworks for the sake of fairness, but also because it gives a hard financial incentive to conserve the environment. With some governments, that's the only argument that holds water."Bioprospecting can offer market incentives for the protection of biodiversity if laws are well-designed," said Gehl Sampath. "A caveat, though, is that this may be true only for those ecosystems which host species that have non-marginal inputs to the drug R&D process."

Indeed, one can easily see why transaction costs (a favourite term of law and economic scholars) would play a significant role here. Thus for example, who is the owner of knowledge derived from or based on a bio-resource? Unless a Merck or a Pfizer or even a Ranbaxy knows who to negotiate with, they will desist from any innovative activity involving the appropriation of such knowledge (unless they find a way of exploit it without taking anyone’s permission—which as some say, is often the case). If this is community based knowledge, then how exactly is the “community” that would share in any proceeds that come out of the commercialisation of such knowledge? Will Pushpangadan (fondly known as “Push” to his friends in the US) a Kani who immigrated to the United States in the 1990’s, have a stake in the proceeds?

My colleague, Dev Gangjee (who will soon be posting on SPICY IP), spoke to me sometime back of an early Geographical Indications (GI) case, where the government delimitation of the “Champagne” boundaries caused riots, since a number of wine growers were left out and couldn’t call their wine “Champagne” anymore. (GI’s are another form of IP of high relevance to India. Dev is now doing his Phd thesis on this and will soon post on these and other trademark aspects here).In short, while

Padma’s broader argument that a more definite institutional structure needs to be put in place to ease transactions and inspire investor confidence, how do we go about designing such a system in India? Will we trust the government to take charge and administer a collective rights based system in an optimal way¾and/or will be happy with bio-resource based knowledge being nationalized (so that a commercial entity has only to negotiate with the government now and any administrative costs of disbursing royalties etc are borne by the government)?

In a brilliant award winning essay, my colleague Sudhir Krishnaswamy queries:

"Is the threat of biopiracy merely one that comes from without? Would we be content if it were established that Indian pharmaceutical companies exploited this knowledge? The nationalist lens which frames this view prompts a regulatory response which transfers control over traditional knowledge resources to a select cabal of state bureaucrats in a move which would rival the 19th – 20th century transfers of natural resources like forests to the hands of the colonial forest department. In ‘This Fissured Land’ Madhav Gadgil and Ramachandra Guha, explore the scale and perversion of the expropriation whereby state bureaucrats developed into a breed of rent seekers over forest lands to the exclusion of tribal communities. There is little evidence to suggest that the state bureaucracies constituted by the recently enacted Biological Diversity Act 2002 will conduct themselves in any different fashion. Our recent history teaches us that ‘nationalizing’ resources in the name of ‘our’ common heritage has a troubled legacy, and notwithstanding the emotive appeal of the biopiracy debate we must resist such an option with traditional knowledge."
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