RESTRICTEDWORLD TRADE
ORGANIZATIONIP/C/W/209
3 October 2000
(00-4026)
Original:  English
REVIEW OF THE PROVISIONS OF ARTICLE 27.3(b)
FURTHER VIEWS OF THE UNITED STATES
Communication from the United States
The following communication, dated 20 September 2000, has been received from the
Permanent Mission of the United States with the request that it be circulated to Members.
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During the TRIPS Council's discussions under this agenda item, Members raised a number of
issues related, both directly and peripherally, to Article 27.3(b).  This paper provides the views of the
United States regarding these issues.
1. Micro-organisms
Some Members have asked about the meaning of the term "micro-organisms", expressing
uncertainty regarding what Article 27.3(b) requires to be patentable and what can be excluded from
patentability.  The Budapest Treaty on the International Recognition of the Deposit of
Microorganisms for the Purposes of Patent Pr ocedure, done at Budapest on 28 April 1977, does not
include a definition of the term micro-organism, although it does define other, seemingly
unambiguous terms such as "patent procedure", "intergovernmental industrial property organization",
and "industrial property office".  The Treaty's regulations also do not define "micro-organism".  The
WIPO Committee of Experts on Biotechnological Inventions and Industrial Property, which met
between 1984 and 1988, also did not define the term "micro-organism", although the term was used
frequently in the discussions, as is reflected in the reports of the meetings of that Committee.  The
reason for the lack of definition is reflected in the Comparative Study of Patent Practices in the Field
of Biotechnology Related Mainly to Microbiological Inventions , dated 20 January 1988, prepared
jointly by the European Patent Office, the Japanese Patent Office and the US Patent and TrademarkOffice.  Page 3 of that document contains the following, under the heading "Definition of
Microorganism, If Any":
"None of the laws administered by any of the Offices contains a formal definition of
the term 'microorganism'.  Where definitions are used in either classification
definitions or administrative guidelines, the term is defined as a non-exclusive list oforganisms which are included within the scope of that term.  As noted by the EPO, it
does not seem expedient to introduce such a definition as the rapid evolution in the
field of microbiology would necessitate its frequent updating."
The principles of international law regarding the interpretation of treaties and international
agreements should be used in determining what is meant by the term micro-organism inArticle 27.3(b) of the TRIPS Agreement.  Articles 31 and 32 of the Vienna Convention on the Law of
Treaties require, inter alia, that treaties be interpreted "in good faith in accordance with the ordinary
meaning to be given to the terms of the treaty in th eir context and in light of its object and purpose".IP/C/W/209
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The Concise Oxford Dictionary of Current English  defines "micro-organism" as "an organism not
visible to the naked eye, e.g., bacterium or virus".  That definition should be sufficient to distinguish
plants and animals generally from micro-organisms for purposes of the discussion in the TRIPS
Council.
To be patentable, a micro-organism cannot be as it exists in nature.  The patent granted by the
US Patent and Trademark Office, to which I ndia refers in its paper (IP/C/W/161, page 3,
paragraph 8), claims a biologically pure culture of streptomyces violaceus which is capable of
producing the antibiotic BU-3839T in a recoverable quantity upon cultivation in a culture medium
containing assimilable sources of carbon and nitrogen under submerged aerobic conditions.  The
claim and the specification, when compared to available prior art, make it clear that the invention is
new, involves an inventive step, and is capable of industrial application, as required under Article 27.1
of the TRIPS Agreement.  What is claimed does not exist naturally.  The patent, therefore, is grantedfor an invention, not merely a discovery.  The key to what should be patentable as a micro-organism
is not what name is given the biological material on which the invention is based, but is the subject
matter claimed; is that subject-matter new, does it involve an inventive step, and is it capable of
industrial application.  If the subject-matter meets those criteria, Article 27.3(b) requires that it be
patentable.
2. Sui Generis Protection for Plant Varieties
Article 27.3(b) requires that Members protect plant varieties through patents or an effective
sui generis  system or both.  Some Members have asked what would comprise an effective sui generis
system for plant varieties.
Any law establishing rights in property, whether of real, tangible or intangible property,
including the various forms of intellectual property, must have certain characteristics if it is to be
effective.  First, the nature of the subject-matter must be identified in the law clearly enough to enable
those concerned to distinguish what falls within th e scope of the law from what is beyond that scope.
For example, Section 101 of the US Patent Law establishes rights in "any new and useful process,
machine, manufacture, or composition of matter, or any new and useful improvement thereof".  Aneffective law also must define the characteristics or qualities that particular subject-matter must
possess to qualify for protection.  Using the US Patent Law again as an example, the standards for
determining whether an invention is new and whet her the invention is "non-obvious" are spelled out
in Sections 102 and 103.  An effective law must also  establish who is entitled to obtain property rights
in particular subject-matter.  If particular procedur es must be followed to obtain rights in particular
subject-matter and fees, if any, must be paid, the nature of these procedures and fees and the legal
authority for establishing them must be set out in the law.  An effective law must define the rightswith respect to particular subject-matter that are acquired by an entitled party.  If any limitations are to
apply to these legal rights, the law must spell out those limitations and the circumstances under which
they will apply.  The law must establish the period during which the rights are in force and the
circumstances, if any, under which the rights expire early or under which they can be extended.
Finally, the legal actions available to the right hold er to enforce its rights and the circumstances in
which those actions may be taken must also be spelled out, along with the remedies available, unless
these are provided for in other laws, such as a code of civil procedure.  Any administrative actions or
remedies, criminal actions and remedies, or border enforcement provisions can be included in the law
or in other laws as appropriate under a country's legal regime.
In the case of sui generis  plant variety protection, the United States believes that an effective
system of protection would apply to plant varieties throughout the plant kingdom.  Because the
territories of existing and future Members of the WTO cover a substantial portion of the globe, it is in
those Members' interests to include as many variet ies as possible, since this will encourage investment
in developing new plant varieties from among the wi dest possible range of genera and species.  To be
entitled to protection, the United States believes that, generally speaking, the variety in questionIP/C/W/209
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should be new, i.e., the variety's propagating or harvested material has not been sold or otherwise
made available for purposes of exploitation of the variety.  The variety should be clearly
distinguishable from other known varieties.  The variety should also be uniform in that it does not
vary beyond what would normally be expected.  Finally, the characteristics of the variety should not
change through repeated propagation.
An effective sui generis  system of protection should ensure that protection for plant varieties
is granted only to breeders or others specifically entitled either through contract or law of succession.
By rewarding those who invest time and resources in development of plant varieties, WTO Members
encourage increased investment in plant variety development, which, in turn, ensures an increase in
investment in development of varieties suitable for different climates, soil conditions, growing
conditions, nutritional needs, cultural preferences, etc.  Obviously, to be effective, the procedures to
be followed by potential right holders to obtain ri ghts, and any fees that are involved, should be
provided for in a comprehensive and transparent way and should apply to foreign nationals on a
national treatment basis, as required by Article 3 of  the TRIPS Agreement, with a provision, similar to
those provided for patents in the Paris Convention, for claiming a priority filing date based on filing in
the right holder's own country.
The rights provided should enable the right holder, for a period of at least 20 years from the
date rights are granted, to prevent others from commercializing or taking steps to commercialize the
protected variety without the authorization of the right holder.  Because the development of new
varieties of trees and vines understandably requires a longer period of time, and the development of a
commercial market likewise requires a longer period than plant varieties that mature quickly, we
believe that the period of protection for rights in new varieties of trees and vines should extend for atleast 25 years, if breeders are to be encouraged to invest resources in development of such varieties.
The United States believes that certain implied limitations on the rights in plant varieties may
be included expressly in an effective sui generis  system for plant variety protection.  If the rights
extend only to activities related to commercialization or to commercialization itself, then
non-commercial acts, such as those done privately fo r non-commercial use, experimental use, and use
of a variety for the purpose of breeding other varieties would not infringe on the rights of the right
holder.  Stating that expressly in the law would help to prevent unnecessary litigation.  The United
States also would not consider as a problem a provision in a sui generis system for plant variety
protection that makes it clear that farmers may save seed from the harvest of a protected variety for
purposes of reseeding their own holdings the following year.  Such a provision might alleviate
concerns that farmers will be subject to infringement suits if they use seed harvested from this year's
crop to seed their fields the following year.
Rights in plant varieties should be subject to nullification only if the variety is shown not to
meet the standards required for protection or if the right holder, in fact, was not qualified to receive
rights.  Cancellation should be possible only if a right holder fails to fulfill its responsibilities, laid out
thoroughly and transparently under the law, for maintaining rights.
The TRIPS Agreement spells out the legal actions that must be available to the right holder to
enforce its rights and identifies the remedies that judicial and administrative authorities with
jurisdiction over infringement actions must be able to impose on infringers.  Those might be provided
in the specific law providing plant variety protection or might be included in other laws such as a code
of civil procedure.
3. Ethical Considerations
Several Members have referred to ethical concerns regarding the extent to which private ownership
should apply to life forms.  Many of these concerns result from a misunderstanding regarding the
nature of the rights provided by a patent.  As we have noted previously and Article 28 makes clear, aIP/C/W/209
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patent claiming a plant or animal does not represent private ownership of life forms.  A patent gives
its owner, for a limited period of time, the right to prevent others from taking certain actions in
relation to a protected invention.  The patent does not give its owner the right to take those actions
itself.
In light of some of the interventions made during previous meetings of the TRIPS Council, a
point we stressed in our previous paper bears repeating.  Holding a patent on an isolated, identified
and modified gene does not amount to ownership of the gene itself.  A patent claiming an isolated,
identified and modified gene taken from a human being certainly would not provide any property
rights with regard to the source from which the original gene was obtained.
Excluding particular subject-matter from patentability will not prevent research in particular
fields.  Research will go forward in any area in which individual scientists and institutions have aninterest.  The patent system plays a significant, often critical, role in determining whether the broad
results of research that promise benefits to mankind are developed into products and processes that
will realize those benefits.  It is no accident that countries with strong patent systems, where
exclusions from patentability are few, are also countries with strong private industries covering the
broad range of technology, providing jobs and contributing to the creation of capital that can beinvested further.  Similar kinds of encouragement can be observed in relation to the development of
industries related to other forms of intellectual property as well.
4. Patents Related to Knowledge and Practices of Indigenous People
Some have criticized the patent system because such systems are formal and require that
protected inventions be described in writing, thereby failing to protect knowledge passed along byoral tradition, rather than written text.  The Constit ution of the United States makes it clear that the
purpose of the US patent system is to promote the progress of the useful arts.  The US patent law
implements that purpose by rewarding inventors with the exclusive rights specified in Article 28 of
the TRIPS Agreement, for the limited time specified in Article 33, in exchange for the inventors'
disclosure of their inventions in the manner specified in Article 29.1.  Every patent issued by theUS Patent and Trademark Office and by other pate nt offices around the world is published, as are
most patent applications, making available to the public an enormous body of scientific and technical
information of a practical nature.  With the advent of the Internet, much of that scientific and technical
information is available worldwide with a few clicks  of a mouse, thereby providing an extraordinary
means for transfer of technology.
Informal systems of knowledge often depend upon face-to-face communication, thereby
limiting access to the information to persons in direct contact with one another.  The public at largedoes not benefit from the knowledge nor can the knowledge be built upon.  In addition, if information
is not written down, that information is completely inaccessible to patent examiners everywhere as
prior art when they are examining patent applications .  It is possible, therefore, for a patent to be
issued claiming as an invention technology that is known to a particular indigenous community.  The
fault lies not with the patent system, however, but with the inaccessibility of the knowledge involvedbeyond the indigenous community.  The US patent granted for a method of using turmeric to heal
wounds, referred to during India's intervention in June 1999 and again in October 1999, is an example
of a patent issued because prior art references were not available to the examiner.  In that instance,
however, the patent system worked as it should.  The patent claim was cancelled based on prior art
presented by a party that requested re-examination.
Much traditional knowledge is already recorded  in databases and print media and it will be
important to ensure that patent examiners are made  familiar with these resources.  The delegation of
Switzerland has suggested establishment of a single database in which information regarding
knowledge and practices of indigenous communities could be recorded to provide patent examiners
around the world with a source of information organized so that it could be searched easily toIP/C/W/209
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determine, in appropriate cases, whether a claimed invention is new and non-obvious.  It is our
understanding that the Government of India is working to establish a domestic database of traditional
knowledge.  It will be important to make such information accessible to patent examiners around the
world in order to be certain the information can be considered during examinations in appropriate
cases.
5. The Compatibility of the Provisions of the CBD and the TRIPS Agreement
Some delegations continue to assert that there is a conflict between the provisions of the
Convention on Biological Diversity (CBD) and th e TRIPS Agreement but, to date, no examples of
such a conflict have been provided.  It is difficult to imagine such a conflict in part because
Article 22.1 of the CBD, states :
"The provisions of this Convention shall not affect the rights and obligations of any
Contracting Party deriving from any existing international agreement, except wherethe exercise of those rights and obligations would cause a serious damage or threat to
biological diversity."
It is a principle of international law that countries that are members of various multilateral and
bilateral agreements will implement their obligations in a manner that is consistent with the rights and
obligations of each of those agreements.  Another principle of international law is that, when theprovisions of two agreements are mutually exclusive, the provision of the later in time agreement
prevails to the extent of the incompatibility.  The purposes of the CBD and the TRIPS Agreement are
widely disparate, however, and most of the provisions of the two agreements are unrelated in any
way.  Where there might be a relationship in provisions, the agreements are sufficiently flexible to
enable a country that is a member of both to implement the provisions of each in good faith in anon-conflicting and, in some cases, mutually supportive way.  There is, therefore, no need to consider
amending the provisions of either agreement to a ccommodate the implementation of the other.  In this
regard, we note that suggestions that amendment is necessary are always made in the context of the
TRIPS Agreement, never in the alternative.  We suggest , therefore, that, if a particular country that is
a member of both agreements has a question regarding the compatibility with the TRIPS Agreementof a particular method for implementing a provision of the CBD, that country might wish to present
its question in writing to this Council so that all WTO Members might benefit from an expression of
views on the matter.
6. Access to Genetic Resources and Benefit Sharing
Suggestions have been made in several fora that, as a means of ensuring benefit sharing,
patent applicants be required to identify in their applications the source of any genetic materials or
traditional knowledge used in developing their clai med inventions.  Such a system would be a legal
and administrative nightmare for all involved and would not ensure that those contributing such
resources or knowledge would share in any benefits  that might flow from commercialization of any
product or process that might be developed from the resource or knowledge.
It is the view of the United States that, to be effective in ensuring a sharing of benefits from
providing access to genetic resources or traditional knowledge, obligations must arise at the beginningof the process, not at the point of commercialization.  The Preamble of the CBD reaffirms that states
have sovereign rights over the biological resource s within their territorie s, including the right to
exploit those resources.  Exploitation may include granting to others access to those resources on
terms and for purposes a sovereign government determines appropriate.  The government of a
sovereign state, however, needs a legal framework in order to oversee the exploitation of resources sothat that exploitation comports with the country's international obligations, is effectively and
transparently administered, and ensures that benef its flow to the holders of traditional knowledge
where appropriate.IP/C/W/209
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Where access to genetic resources or traditional knowledge is concerned, it is in the interest
of the sovereign entity or the indigenous community and the party granted access to make clear from
the start the resources or the knowledge to which access is being given and the rights and obligations
of both sides in relation to that access, including any provisions for benefit sharing.  Such an
arrangement is best established by contract prior to the access being granted and an inventory of anygenetic resources actually collected or any traditional knowledge acquired.  It is the contract giving
access that should contain any obligation to identify the source of genetic resources in patent
applications claiming an invention based on those genetic resources.  It is the contract giving access
that should require reference to the agreement establishing prior informed consent for use of the
traditional knowledge involved in the development of a claimed invention.  As we noted before,
questions of court jurisdiction, in the event of disp utes, and conditions to be included in any third
party contracts authorizing use of acquired resources or knowledge, should also be included in accesscontracts.  Such contracts should, in addition, define terms that are not clear on their face.  Provision
for such contracts should be included in any sovereign nation's framework for overseeing access to
and exploitation of its genetic resources and the traditional knowledge of its indigenous communities.
7. Conclusion
This paper represents the views of the United States on a number of the issues that have been
raised in the TRIPS Council's discussions to date.  We believe that, if discussion of Article 27.3(b)
continues, it will only be productive if other delegations submit papers giving their views of issues
they regard as relevant so that those views might be considered in depth.  In addition, for discussions
of the provisions of Article 27.3(b) to be meaningful, those delegations that have not already done so
should provide information regarding their implementation of the provisions of Article 27.3(b), so thata clearer picture can be developed of the operation of the provisions worldwide.
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