Transcript Bio-innovation and International Trade

Bio-innovation and International Trade
Professor Michael Blakeney
University of Western Australia
[email protected]
Outline
• International Trade Regime (WTO)
• IP case study-Climate change and bio-innovation
(GM agriculture)
• GM patenting and international trade
• Bio-innovation, labelling and international trade
• International trade and the SPS Agreement
International Trade Regime -The World
Trade Organization
• Agreement establishing the WTO
Annexes
• 1A - GATT 1994 , related agreements (e.g. Agreements on
Agriculture, Subsidies, Technical Barriers to Trade (TBT)
Agreement, Sanitary and Phytosanitary (SPS) Agreement
1B- General Agreement on Trade in Services (GATS) and
Annexes
1C- Agreement on Trade Related Aspects of Intellectual
Property Rights (TRIPS)
• Annex 2 Understanding on the Rules and Procedures
Governing the Settlement of Disputes (aka Dispute Settlement
Understanding /DSU)
• Annex 3 Trade Policy Review Mechanism
• Annex 4 Plurilateral Agreements (e.g. Agreement on Trade in
Civil Aircraft)
IP and Bio-innovation
Climate Change: a case study
Climate stresses and agriculture:
– Elevated carbon dioxide
– Rainfall and associated water resource availability
– Temperature – (evaporation)
– Extreme weather events (wind, flood damage)
interact to affect agricultural productivity, pests
and diseases.
The International IP System
• Encourages innovation by:
– Conferring a period of exclusivity for
exploiting inventions (20 years), new plant
varieties (trees and vines -25 years, others
20 years)
– publishing and making known technical
information (during application process)
Climate change and patenting
Somvanshi identified 30 patents relating to drought
tolerant genes.
V. S. Somvanshi ‘Patenting Drought Tolerance in
Organisms’ (2009) 3 Recent Patents on DNA & Gene
Sequences , 16-25, accessed at
http://www.benthamscience.com/dnag/samples/d
nag3-1/0003DNAG.pdf, at Table 2.
Somvanshi Study
These included:
(i) patents related to Proline biosynthesis;
(ii) patented dehydration responsive element binding
factors (DREB) and C-repeat sequences binding
factors (CBF);
(iii) patents related to Protein Kinases;
(iv) various patents awarded for transcription factors
involved in improving drought stress tolerance in
plants, and
(v) patents related to miscellaneous drought tolerance
genes.
ETC Group, ‘Patenting the “Climate Genes”…and
Capturing the Climate Agenda’ Communiqué,
no.99, May/June 2008, Available at
http://www.etcgroup.org/upload/publication/687/
03/etcgroupclimategenesfinal05_08.pdf
• identified 55 patent “families” (a total of 532 patent
documents) that were applied for and/or granted to
a number of biotechnology companies on so-called
“climate-ready” genes at patent offices around the
world.
• ETC Group, ‘Gene Giants Stockpile Patents on “Climate-ready” Crops
in Bid to become “Biomassters” Patent Grab Threatens Biodiversity,
Food Sovereignty’ Issue no. 106, October 2010, Available at
http://www.etcgroup.org/upload/publication/pdf_file/FINAL_climate
-readyComm_106_2010.pdf
• noted “a dramatic upsurge in the number of patents
published (both applications and issued patents) related to
‘climate-ready’ genetically engineered crops from June 30,
2008 to June 30, 2010, identifying 262 patent families and
1663 patent documents.
International Trade Impacts of IPRs
• Infringement actions in markets where bioinnovations are protected by IPRs
– Patents
– Trade secrets
– Plant variety rights
– Trademarks
Patents and Bio-innovation
EU Directive on the Legal Protection of Biotechnology
Inventions, 1998
Art 5(2). An element isolated from the human body or
otherwise produced by means of a technical
process, including the sequence or partial sequence
of a gene, may constitute a patentable invention,
even if the structure of that element is identical to
that of a natural element.
Patent infringement and GMOs
• Infringement depends upon patentability of
genetic material
• Note: decision of the US Supreme Court in
Association for Molecular Pathology et al. v.
Myriad Genetics, Inc. (delivered 13 June 2013)
that isolated DNA is not patentable if it retains
the chemical composition of DNA in situ.
• [Cf creation of a cDNA sequence from mRNA
results in an exons-only molecule that is not
naturally occurring and therefore patentable]
Australia- Patent Amendment (Human
Genes and Biological Materials) Bill 2010
A Bill for an Act to amend the Patents Act 1990 to prevent
the patenting of human genes and biological
materials existing in nature, and for related purposes
• HoR - Mr Dutton, Mr Oakeshott, Mr Forrest and Mr
Turnbull
Patent Amendment (Human Genes and Biological
Materials) Bill 2010 [No. 2]
• Date introduced: 24 November 2010
• Senate - Senators Coonan, Heffernan, Siewert and
Xenophon
Patent Amendment (Human Genes and
Biological Materials) Bill 2010
Repeal subsection 18(2) of the Patents Act substitute:
(2) The following are not patentable inventions: (a) human
beings, and the biological processes for their generation;
and
(b) biological materials including their components and
derivatives, whether isolated or purified or not and
however made, which are identical or substantially
identical to such materials as they exist in nature.
After subsection 18(4) Insert: (5) In this section: biological
materials includes DNA, RNA, proteins, cells and fluids.
Patent Amendment (Human Genes
And Biological Materials) Bill 2010
Second Reading Speech, Sen Heffernan 24 Nov. 2010
It was a little over two years ago, on 16 October 2008, that I
first rose to bring this important matter to the Senate’s
attention. At the time I questioned the legality of a practice
which had allowed Myriad Genetics and its exclusive
Australian licensee, Genetic Technologies Limited, to
monopolise human genes BRCA 1 and BRCA 2 – genes
linked to breast and ovarian cancers. No one invented
these genes. Yet, relying on four patents granted by IP
Australia, on 8 July 2008, Genetic Technologies attempted
to close down all public laboratory genetic breast and
ovarian cancer gene testing when it sent a letter
threatening to sue each of them for patent infringement. I
said then and I say now that this “is a disgrace”.
Trading in Patented Products
• Infringement where importation of patented
DNA by an unauthorised person
• provided that DNA continues to perform its
function (see Monsanto Technology LLC v.
Cefetra BV, Case C-428/08 ECJ concerning
importation into Europe of soy meal made
from GM soy)
Trade secrets
• Pioneer Hi-Bred International v. Holden
Foundation Seeds 35 F.3d 1226 (8th Cir. 1994)
United States Court of Appeals for the Eighth
Circuit held that the genetic composition of
proprietary seed was protectable as a trade secret
• Similarly see Franklin v Giddings [1977] Qd. R 72
in which the Supreme Court of Queensland held
that the genetic information contained within the
budwood of early ripening nectarine trees was
protectable confidential information.
Plant variety rights
8 Dec 2006, the customs
office at AmsterdamSchiphol airport (the
Netherlands) blocked a
batch of gerbera cut
flowers from Israel, as
requested by the
gerbera breeder.
Trademarks
Infringement by wrongful
appropriation of a registered
trademark or registered plant
variety designation
Bio-innovation, labelling and international
tradeThe WTO/SPS Agreement
these must not
constitute
WTO members have
unjustifiable
the right to adopt
discrimination between
measures to protect
but
Members or a
human, animal or
disguised restriction
plant life or health
on international
Art 2.1
Trade
Art 2.2
Risk assessment
• SPS measures to be based on
 assessment of risks to human, animal or plant life or
health, taking into account risk assessment techniques
developed by international organizations.
 available scientific evidences; process and production
methods; inspection & sampling methods; prevalence of
specified disease or pests; existence of pests/disease-free
areas,etc
 relevant economic factors & cost effectiveness of
alternate approaches
• Avoid arbitrary/unjustifiable distinctions in the levels in
different situations if these result in disguised restrictions
Non-discrimination
Non-discrimination
Article 2.3
No unjustifiable discrimination
– between Members with similar conditions
– between own territory and other Members
SPS Disputes
• Food safety:
– US/Canada vs. EC - Hormones (WT/DS26, 48)
– US/Canada/Argentina vs. EC - Biotech (WT/DS291, 292, 293)
– EC vs. US/ Canada - Retaliation on Hormones (WT/DS320, 321)
• Animal health:
– Canada / US vs. Australia - Salmon (WT/DS18, 21)
• Plant Protection:
– US vs Japan - Variety Testing (WT/DS76)
– US vs. Japan – Fire blight (WT/DS245)
– Philippines vs. Australia - Tropical Fruit (WT/DS270)
– New Zealand vs. Australia - Apples (WT/DS367)
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SPS Disputes and Bio-innovation
• Most SPS disputes have involved concerns
with innovative technologies
• Irrespective of the result in the WTO, the
negative publicity generated by the dispute
has had a negative impact upon consumer
acceptance
Eg EU – US Beef Hormone Dispute
 1981 EU adopted restrictions on the use of
hormones in beef
1989 EU fully implemented ban on imports of meats
treated with hormones
 Loss of $100 million annually for the US
Hormones in Question
Naturally Occurring
• Oestradiol
• Progesterone
• Testosterone
Artificially Produced
• Zeranol
• Melengestrol
• Trenbolon
EU Bans – political influences
• “mad cow” crisis; Italian “hormone scandals”; discovery in
1980 of presence of diethylstilbestrol (DES), a synthetic
hormone, in veal-based baby foods
• European Consumers' Organisation lobbied for a total ban
upon growth hormones
• 1981 resolution of European Parliament passing by a
majority of 177:1 in favour of a general ban. MEPs having
been directly elected for the first time in 1979, were said to
be taking the opportunity of public attention on the issue
to strengthen the Parliament's rôle.
WTO Appellate Body decision Feb. 13, 1998.
• [W]e find that the European Communities did not actually proceed to
an assessment, within the meaning of Articles 5.1 and 5.2, of the risks
arising from the failure of observance of good veterinary practice
combined with problems of control of the use of hormones for
growth promotion purposes.
• The absence of such risk assessment, when considered in conjunction
with the conclusions of the scientific studies ... leads us to the
conclusion that no risk assessment that reasonably supports or
warrants the import prohibition embodied in the EC Directives was
furnished to the Panel.
• ...the EC import prohibition is not based on a risk assessment within
the meaning of Articles 5.1 and 5.2 of the SPS Agreement and is,
therefore, inconsistent with the requirements of Article 5.1.
EU claims of new evidence in 2004
• New evidence was released by the EC in 2003 that
the hormones used in treating cattle remain in
the tissue
• The EC claimed that high amounts of hormones in
areas where there are dense cattle lots affected
waterways and nearby wild fish.
• The WTO upheld the earlier decision as
contamination of North American waterways by
hormones would not, however, have any direct
impact on European consumers or their health.
Effects of the dispute in the US
• Consumer Federation of America and the Center for
Science in the Public Interest pressed for an adoption of a
ban within the U.S. similar to that within the EU.
• A 2002 study of US consumers reported that 85% of
respondents wanted mandatory labelling on beef
produced with growth hormones
• Jayson Lusk and John Fox, ‘Consumer Demand for Mandatory
Labeling of Beef from Cattle Administered Growth Hormones or
Fed Genetically Modified Corn.’ Journal of Agriculture and Applied
Economics. Apr 2002.
TBT Agreement, Article 2.1
• [WTO] “Members shall ensure that in respect
of technical regulations, products imported
from the territory of any Member shall be
accorded treatment no less favourable than
that accorded to like products of national
origin and to like products originating in any
other country.”
Article 2.2 (TBT)
“Members shall ensure that technical regulations
are not prepared, adopted or applied with a view to
or with the effect of creating unnecessary obstacles
to international trade. For this purpose, technical
regulations shall not be more trade-restrictive than
necessary to fulfill a legitimate objective, taking
account of the risks non-fulfillment would create…”
United States – Measures Concerning the Importation,
Marketing and Sale of Tuna and Tuna Products (Tuna
Dolphin) WT/DS381/R, 15 September 2011.
This WTO dispute concerned two measures adopted by the
US concerning the importation, marketing and sale of
tuna and tuna products.
Regulations promulgated under the US Dolphin Protection
Consumer Information Act regulated the use of the term
"dolphin-safe" when it appeared on tuna products,
requiring the expression “dolphin-safe” to be used for
tuna harvested in the Eastern Tropical Pacific Ocean by
large purse seine vessels.
Tuna Dolphin
• The panel determined that "less favourable treatment"
would be afforded to Mexican tuna products in respect of
the measures if they were placed at a disadvantage
compared to US and/or other imported products with
respect to the preparation, adoption or application of the
US dolphin-safe measures.
Tuna-Dolphin
• Mexico submitted that the US dolphin-safe provisions were
inconsistent with Article 2.2 of the TBT Agreement because
they did not fulfil a legitimate objective or that those
objectives could be fulfilled using less trade-restrictive
measures.
• The Appeal Body ruled against the US as it had not
demonstrated that the difference in labelling conditions for
tuna products was "calibrated" to the risks to dolphins
arising from different fishing methods in different areas of
the ocean. As a consequence, nations such as Mexico
which used fishing methods outside those permitted in the
legislation were discriminatorily affected.
Summary
• Bio-innovations in international trade have to
negotiate the potential obstacles of IP laws
and the SPS and TBT agreements.
• National bio-safety legislation may also attract
international sanctions, eg Australian tobacco
product laws
TPCPI Regulations
• A package in which tobacco is sold at retail ("a retail
package") and which is manufactured in Australia, or
imported into Australia, must be labelled in accordance
with Pt 3 or Pt 4 of the TPCPI Regulations.
• Warning and explanatory messages and photographs
taking up 75% of the front surface of each package and
90% of the back are mandatory from 1 December 2012.
TPCPI Regulations, Scheds 1 and 2.
The Australian cigarette pack from 2012
Ukraine-Australia Tobacco Trade
“tobacco trade between Ukraine and Oz is zero”
http://johnquiggin.com/2012/08/18/maintenanceand-champerty/
Ukraine has a long and complex history with Big
Tobacco. As recently as 2008, Philip Morris
International, Japan Tobacco International, Imperial
Tobacco and BAT produced 30% more cigarettes in
Ukraine than were consumed domestically.
On 13 March 2012, the Government of Ukraine ("Ukraine")
requested consultations with the Government of Australia
("Australia") pursuant to:
• Art. 4, Understanding on Rules and Procedures Governing
the Settlement of Disputes
• Art. 64.1, Agreement on Trade-Related Aspects of
Intellectual Property Rights (the "TRIPS Agreement")
• Art. 14.1, Agreement on Technical Barriers to Trade (the
"TBT Agreement")
• Art. XXII of the General Agreement on Tariffs and Trade
1994 (the "GATT 1994")
• concerning certain Australian laws and regulations that
impose trademark restrictions and other plain packaging
requirements on tobacco products and packaging (the
"measures").
http://www.dfat.gov.au/geo/ukraine/ukraine_
brief.html
Bilateral economic and trade relationship
Australia's trade relationship with Ukraine is modest.
Merchandise exports from Australia were valued
at A$69.82 million in 2009 and consisted mainly of
manganese ores and concentrates. In the same
period, Australia imported A$35.25 million worth
of products from Ukraine, mainly fertilisers and
electrical circuits equipment.
http://business-ethics.com/2012/11/29/10445tobacco-industry-uses-trade-agreements-tochallenge-anti-smoking-measures/
• Cigarette makers are paying for heavyweight lawyers to
represent Ukraine, Honduras and the Dominican Republic and
press ahead with the challenges.
• As company representatives have told FairWarning, Philip
Morris International is paying the firm of Sidley Austin to
represent the Dominican Republic, while British American is
picking up legal expenses for Ukraine and Honduras.
• “We are happy to support countries who, like us, feel plain
packaging could adversely affect trade,” said British American
spokesman Jem Maidment.
• Tobacco exports from Ukraine to Australia are nonexistent, according
to figures from Australia’s Department of Foreign Affairs and Trade.
During the last three years, tobacco exports from Honduras and
Dominican Republic have averaged $60,000 (U.S.) and $806,000,
respectively.
Conclusions
• Bio-innovations in international trade have to
navigate the restrictions imposed by:
– IP Laws (implementing the WTO TRIPS Agreement)
– WTO SPS Agreement
– WTO TBT Agreement
• Note also the trade impacts of laws based upon
– international bio-safety agreements (eg Cartagena
Protocol)
– Access and benefit-sharing laws eg based on the Nagoya
Protocol.