02/18/94
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STANFORD -- Protecting and improving the world's food supply could become more difficult if plant-rich countries and agricultural gene banks can't work out a compromise on property rights to the germplasm of plants, according to John Barton, the George E. Osborne Professor of International Law at Stanford University, and Wolfgang Siebeck, a former World Bank staff member and now a legal adviser to the international agricultural community.
Operators of more than a dozen international agricultural research centers have assumed that the plant genes they collect and store belong to humanity in general. The governments of countries, however, are beginning to assert that they own living organisms collected within their boundaries, Barton and Siebeck told an afternoon session of the American Association for the Advancement of Science on Wednesday, Feb. 23, in San Francisco. They are reporting on work done for the International Plant Genetic Resources Institute in Rome.
Countries often can assert their rights to compensation or access to technology developed from genetic material collected after Dec. 29, 1993, Barton said, under terms of the international Convention on Biological Diversity signed by more than 150 countries in Rio de Janeiro in 1992.
The biodiversity treaty seeks to provide incentives to countries to preserve the earth's diverse plant and animal life. Its provisions include recognition of sovereign rights to genetic resources in order to give less-developed countries an opportunity to share in profits from any products derived from them, usually by companies located in more industrialized nations.
At least one country, Turkey, already has taken action to require recipients of genetic material to reserve the right to patents on the material for the national government.
"The crucial question is how to safeguard the interests of source countries without narrowing the exchange of genetic material," Barton and Siebeck wrote, because the exchanges lead to improved plant strains and medicines of benefit to all nations.
The international agriculture centers - funded by the United Nations Development Program, the World Bank, the Food and Agricultural Organization and other donors - have freely distributed germplasm from rice, wheat and other major food crops since the 1970s to researchers in government, academic and industrial laboratories. They should continue to do so, Barton and Siebeck said, but they should also start helping countries lay some groundwork for collecting royalties or other benefits from products that may be engineered from the germplasm.
Barton and Siebeck suggest that the gene banks introduce a legal agreement, known as a "material transfer agreement," to make recipients aware of national claims on the intellectual property rights to the living organisms they obtain from the centers. The centers also should report periodically the names of recipients and breeding information to the source countries, they said. This would allow the source countries to take action to negotiate for monetary compensation, training assistance or domestic access to the technology.
Currently, the centers only provide passport data on the material to the recipient. The data tell where the material originated but do not warn that a product derived from it may be subject to royalties or licensing fees.
Material transfer agreements are already used for transfers in the private biotechnology industry and by some nonprofit gene banks set up for the purpose of finding new medicines, Barton and Siebeck said. The National Cancer Institute of the United States, for example, which annually procures 6,000 samples of plants, marine organisms and microbes from developing countries, "recognizes the need to compensate source countries and peoples in the event of commercialization of a drug developed from an organism collected." The institute regularly files for patents on active agents isolated, licenses them to pharmaceutical companies and requires the licensee to enter into an agreement with the source country for compensation.
Such compensation agreements and the biodiversity treaty provisions work better for medical research, however, than they will for agricultural research, Barton and Siebeck said.
One reason is that valuable medicines are generally bioengineered from a single plant resource, allowing pharmaceutical companies to negotiate with a single country.
Agricultural research most often leads to new varieties of seeds derived from multiple genetic resources.
Pharmaceutical companies also have begun to negotiate agreements on the front end with countries to collect material. Merck & Co., the largest U.S. pharmaceutical producer, for example, signed a two-year agreement with Costa Rica in 1991 to provide an unspecified number of plants, insects and microbes of the company's choice. Merck has the right to patent inventions it makes from the material and will pay Costa Rica an undisclosed percentage of its earnings.
Pharmaceutical companies and nonprofit medical gene banks have to deal with a much smaller volume of material than the agricultural centers, Barton and Siebeck said, so monitoring material transfer agreements is not as big a burden for them.
"They screen plant materials once for potential beneficial properties, but agricultural banks, such as the International Rice Research Institute, must maintain a large inventory of material that is grown out occasionally to provide breeding material for national agricultural research centers and others."
The profits on such products are much smaller than with pharmaceuticals, and most of the development work is done by government-funded plant breeders rather than by private industry.
The centers currently think of their beneficiaries as the global research community that uses the germplasm primarily to the benefit of developing countries, they said. "Some might question whether it is appropriate for a center to support interests of individual source countries."
The centers distribute more than 100,000 samples of germplasm annually to those who hope to develop new higher- yielding or more disease- and pest-resistant varieties of food crops, Siebeck said.
"Arrangements that require [the centers] to control the flow of material into and out of their collections will divert resources from agricultural research into administrative tasks, and on balance will represent a cost, rather than a benefit, to the developing nations," he said.
Much of the germplasm goes to national agricultural research programs, which, in turn, provide new seed varieties directly to their farmers or to seed companies within their borders that provide it to farmers.
The centers could resist national demands for rights over the material by accepting only new material from countries or other sources that make it available without restriction.
"Their support to genetic resources conservation, agricultural breeding and technology transfer should be seen as fulfilling the rights of developing countries under the Biodiversity Convention," Barton said, but it is not likely to be seen that way by all developing countries.
The "political realities" dictate, however, that the gene banks place some new restrictions on their distribution or risk losing access to germplasm, he said.
Supplier countries have a "short-term incentive to want to get paid for the material they supply to research," Barton and Siebeck wrote, even if the process involved eventually hampers their own farmers' access to genetic material from the existing breeding system.
Alternatively, the centers could "help maximize profits for developing nations" by distributing resources only under material transfer agreements that require profit sharing with the originating countries when successful commercial products develop. The centers could even agree to collect payments and place them in individual or collective funds for the source nations.
This would, however, saddle the nonprofit centers with an enormous administrative and legal responsibility that would interfere with their primary function of agricultural research, they said.
Barton and Siebeck recommend the centers take a middle ground by developing material transfer agreements and a reporting system that help developing countries collect benefits if profitable products are developed but that do not make the centers responsible for arranging compensation to source nations.
"In no case should the centers agree to collect royalties" from national agriculture research programs," they wrote.
Barton and Siebeck recommend that a cover letter with a transfer should include any available genetic information that would benefit both the recipient and the source if a dispute develops later over whether the material was actually used in a marketed product.
They further recommend that the centers obligate themselves to notify the recipients of the interests of all nations that have contributed at least one-eighth of a particular material provided, request the recipient to report back evaluation results and request that any third-party recipient also notify the center of its receipt and evaluation results on the material.
Periodic checks could be made for compliance, and future access could be denied to parties that don't honor their commitments, they said, but the centers should not try to restrict or monitor third-party transfers. Although restrictions on third-party transfers work in the medical sector, they said, refusal to allow them in agriculture - where it is typical for a new seed variety to include parents from many sources - would "seriously disrupt the exchange of plant germplasm among scientists."
Barton and Siebeck said they would prefer to see the system remain as it is but "this is an effect of the evolution of international understanding of trusteeship of genetic resources and therefore a task whose costs the centers will have to bear in conducting their mission in a changing environment."
The proposed agreements and policies, they said, "may not go far enough for some developing countries that want to present a stronger claim for compensation."
"For the user industry, the proposed rules will be arguably too burdensome, and they well may plead that they cannot use material with the proposed strings attached."
Both sides should realize, they said, that "this compromise, imperfect as it is, offers benefits to both."
"It offers the breeding industry continued access to the international collection effort, while for the source countries, it does level the playing field by providing them access to information on users and breeding results they previously did not have, as well as a possibility for compensation."
Ultimately, they said, all nations are dependent on exchange and development of germplasm. Material transfer agreements "can lay out the basis" for "mutual understanding, collaboration and fair play, but replace them they cannot."
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