Intellectual Property Rights, Development and the State

The call for a Development Agenda within the World Intellectual Property Organisation (WIPO) is one of the latest efforts of countries of the global South to curb the sweeping advance of intellectual property rights into all fields of knowledge production. Brazil and Argentina filed a proposal for integrating the development dimension more fully into WIPO’s mandate at the organisation’s 31st General Assembly in September 2004. In this document these countries demand more flexibility for developing countries to address public interest, for example in public health issues, and to allow for policy space in regulating intellectual property. Particularly the Substantive Patent Law Treaty (SPLT) currently under negotiation in WIPO - and possibly taking intellectual property rights beyond anything existing today - is of concern to the two countries and the coalition of twelve so-called Friends of Development that endorsed the original proposal.

It was the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) of the World Trade Organisation (WTO), however, that complicated the global scenery of innovation, creativity and access to knowledge ten years earlier. Entering into force on 1 January 1995, it considerably shaped the conditions under which policy debates regarding genetic resources, the protection of traditional knowledge as well as access to medicines are taking place today. The TRIPS-Agreement obliges all member states of the WTO to provide in their national legislation for the patentability of products and processes in all fields of technology (Art. 27.1). That is to say that the 148 WTO-members must grant patents on inventions in biotechnology, including patents on life forms such as micro-organisms, as well as on pharmaceutical inventions. Both kinds of patents have had serious effects, particularly in or for developing countries.

Take the case of South Africa for example. In 1998 the South African Pharmaceutical Manufacturers Association (PMA) and 41 pharmaceutical companies, launched a lawsuit against the South African Government over its Medicines and Related Substance Control Amendment Act of 1997. The Act was aimed at making medicines more affordable through the generic substitution of off-patent medicines and medicines produced under compulsory licenses as well as through the parallel importation of patented drugs from countries where these are sold at a lower price. In a country where in 2003 5.3 million people or almost a quarter of the population were estimated to be living with HIV/AIDS and 40% of the population are considered poor, lowering prices for anti-retroviral and other medicines is essential. The amended Medicines Act foresees, for example, that pharmacies would be obliged to sell a generic version instead of the branded drug if available. When patents have expired producers of generic medicines, i.e. medicines that are made of the same substances as branded drugs, can legally produce cheaper versions of the same drug. Equally, under the TRIPS-Agreement, governments are permitted to issue compulsory licenses to local generics’ producers for the production of generic versions of patented drugs “in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use” (Art. 31 (b)). Thus the Medicines Act in no way violates the TRIPS-Agreement since the AIDS-pandemic constitutes a circumstance of extreme urgency. However, the PMA claimed that the Medicines Act violated their constitutional rights to property. Interestingly, the Treatment Action Campaign, which is fighting for affordable medicines for people with HIV and joined the litigation as amicus curiae of the Government of South Africa, could appropriate the constitution for its own case against the pharmaceutical giants. It argued that proprietary rights in medicines question the constitutional right to access to health care services (Section 27.1(a)).

The case received enormous international recognition, and public pressure from activists all over the world led the pharmaceutical complainants to withdraw their court application against the South African Government in April 2001. But the case also revealed some loopholes in the TRIPS-Agreement itself. For the production of generic drugs under a compulsory license “shall be authorized predominantly for the supply of the domestic market of the Member authorizing such use” (Art. 31(f)). That poses a difficult problem for many, predominantly small developing countries that do not have their own production capacities for medicines because the possibility of granting compulsory licenses evades their policy scope. At the Fourth Ministerial Meeting of the WTO in Doha, Qatar, in November 2001, developing countries and NGOs therefore pushed for recognition of the problem and an amendment of the TRIPS-Agreement in order to allow generics’ producers to export their products to poor developing countries. The subsequent Declaration on the TRIPS-Agreement and Public Health and its paragraph 6 instructed the TRIPS-Council to find an “expeditious solution” for countries without manufacturing capacities in the pharmaceutical sector. A 2002 deadline passed and blatant power-plays occurred until an agreement was struck in August 2003. While developing countries managed to keep a limitation of applicable diseases out of the agreement, international health advocates have criticised the Public Health deal as too bureaucratic because countries wanting to make use of it have to file very detailed applications with the WTO for each and every drug and the quantities they wish to purchase. The medicines shall, for example, be specifically labelled as having been produced under the compulsory licensing scheme. The decision implementing the Declaration on TRIPS and Public Health also requires an amendment of the TRIPS-Agreement itself so that the exportation of generic drugs becomes legally possible. However, the deadline of 31 March 2005 once again passed due to resistance from OECD-countries.

It is precisely these kinds of flexibilities that developing countries have had to fight for, even though the TRIPS-Agreement allows for compulsory licensing. Another flexibility provided in the agreement is the non-patentability of plants which members can inscribe in their national laws. However, Art. 27.3(b) states that “Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof”. The patenting of life forms such as micro-organisms dates back to 1980 when the US Supreme Court decided that the patenting of life forms is legal if they have been modified from their natural state, can be technically mass-produced and if they are used in technical applications. In 1985 followed a patent on a genetically modified plant and in 1988 one on the so-called cancer mouse. Patented seeds will in time effectively stop farmers from pursuing their century long practice of sharing, developing and saving seeds from their own harvest. This is because the privatisation of the basic ingredient of agriculture ties in with an enormous advance of monocultural, commercial seeds through the so-called Green Revolution. With the spread of these seeds, more and more farmers worldwide have become dependent on seeds sold by global agro-chemical giants such as Monsanto.

If developing countries wish to exclude plants from patentability in order to prevent their farmers from facing such lawsuits they are required to implement an “effective sui generis system” for the protection of new plant varieties. But once again developed states push them to implement the International Convention for the Protection of new Plant Varieties (UPOV); an agreement developed in the North that in its latest version from 1991 hinders plant breeding on the basis of protected varieties and saving seed. The implementation of UPOV is often pushed through bilateral trade agreements between the US or European Union and developing countries. Only few countries have attempted to draft a legislation of its own kind (sui generis) for the protection of plant varieties.

Because developing countries were lured into the TRIPS-Agreement by promises of market access for agricultural products and textiles and were faced with threats of trade sanctions, it is only fair that they fight for the maintenance of flexibilities both in TRIPS and recently the Substantive Patent Law Treaty in WIPO. The case of South Africa shows that to a degree governments can protect basic rights to health care and food security if they use the flexibilities of TRIPS. However, it has to be cautioned that developing countries in the end agreed to the TRIPS-Agreement because another discourse has - under the structural adjustment programmes of the IMF and World Bank - become hegemonic: The idea that free trade generates welfare is inextricably interlinked with a discourse of modernisation and economic development. It is this development along an allegedly predetermined route that echoes in the demands of developing countries when technology transfer and recognition of their rights over natural resources are stipulated. While the countries’ right to determine their own economic strategies cannot be denied there has however been a process of commercialisation in the name of development. Beside the TRIPS-Agreement allowing the patenting of life, the Convention on Biological Diversity, signed in Rio de Janeiro in 1992, codified this process of enclosure in that it transferred the sovereignty over genetic resources to the states. Previously, seeds and other natural resources had been considered the heritage of humankind. With the majority of genetic resources existent in countries of the South, however, developing states came to perceive their genetic resources as tradable goods. The result of the state controlling access to these resources is that the peoples that over centuries developed seeds and discovered medicinal remedies in the natural world are often deprived of their right to say no to the privatisation of biological resources that they have used for up to centuries.

While calls for recognising the health and food needs of the South in the IP-system are absolutely justified in the face of poverty and appropriate from a perspective of sovereignty over livelihoods, caution needs to be exercised regarding the role of the state in the enclosure of the commons and with respect to the kinds of technology transferred. The advance of intellectual property into all spheres of human subsistence will most likely continue but the resistance of local peoples and farmers can make the TRIP towards an all-enclosing intellectual property regime one with an uncertain end.

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