it’s patently absurd — beneﬁt sharing genetic … · resources from the sea under unclos, the...

Journal of International Wildlife Law and Policy, 5: 211–233 (2002) 2002 Kluwer Law International. Printed in the United States.

It’s Patently Absurd — Benefit Sharing GeneticResources from the Sea Under UNCLOS,the CBD and TRIPs

CHARLES LAWSON and SUSAN DOWNINGCentre for Intellectual Property Research, Griffith Law School, Nathan, Queensland, 4111, Australia andAustralian Centre for Intellectual Property in Agriculture, Australian National University, Canberra, ACT 0200,Australia

Abstract

The United Nations Convention on the Law of the Sea (UNCLOS) establishes a scheme of sovereignty overparts of the seas. The resources of the seas within state jurisdiction covered by UNCLOS are then accessed andshared according to the scheme set out in the Convention on Biological Diversity (CBD), which relies, in part,on patenting according to the Trade Related Aspects of Intellectual Property Rights Agreement (TRIPs). The keyfindings of this paper are that patents compliant with TRIPs are unlikely to achieve the objects of sharing thebenefits from exploiting the genetic resources of the seas because of the significant gaps in UNCLOS and thefailure to take into account broad patent claims by non-residents in benefit sharing arrangements. Consequently,the reliance by the international community on UNCLOS and the CBD for the regulation of benefit sharing,undermines the internationally agreed mandate that the genetic resources of the seas are to be shared and used forthe benefit of all.

1. Introduction

Since at least 1609, when Grotius declared the seas to be free from sovereignty and avail-able to all,1 international law has emphasised the sharing, usually equitably, of the re-sources making up the wealth of the seas. These sentiments have now been included ina number of instruments and have been widely adopted by states.2 This paper sets out toexamine the scheme applying to the exploitation of the sea’s genetic resources3 throughpatenting in the context of the internationally agreed access and benefit sharing frame-work.

1 Hugo Grotius (1583–1645), a Dutch scholar, in his book MARE LIBERUM.2 For examples, see Resolution 1112 (XL) of the Economic and Social Council of the United Nations, 7 March

1966; New Dimensions for the United Nations, 17th Report of the Commission to Study the Organization ofPeace (New York: UN Plaza) pp. 44–46; the Maltese Ambassador Pardo’s Proposal of 1967 to the UNGAat 22nd Session; GA Res 2749, UNGAOR, 25th Session, 1970 declared the ocean floor to be beyond naturaljurisdiction and to be the common heritage of mankind; para 6 of the Preamble and Arts 136 and 137 ofUNCLOS.

3 In this paper “genetic resources” means genetic material of actual or potential value and “genetic material”means any material of plant, animal, microbial or other origin containing functional units of heredity; seeConvention on Biological Diversity, Art 2.

212 LAWSON AND DOWNING

The United Nations Convention on the Law of the Sea (UNCLOS)4 and the Conven-tion on Biological Diversity (CBD)5 propose rules for the access and benefit sharing ofthe seas’ resources, while the Trade Related Aspects of Intellectual Property Rights Agree-ment (TRIPs) imposes minimum patent standards on member states of the World TradeOrganisation.6 These conventions are linked in a way that is not immediately apparent.The consensus of parties to the CBD was that states own the genetic resources withintheir jurisdiction and that the benefit sharing of these genetic resources between states wasbest achieved through the creation of private property rights including intellectual propertyrights and in particular patents.7 While UNCLOS does not mention genetic resources, itdoes accord sovereignty over the living resources in the adjacent marine areas to the coastalstate. The interaction of UNCLOS and the CBD means that the access regime of the CBDextends to all genetic resources (both terrestrial and marine) within the coastal state’s ju-risdiction. However, because the Conference of the Parties (COP) to the CBD favoursaccess to genetic resources regulated through contracts and the use of patents as a meansto distribute wealth, the net result is that the minimum patent standards required by TRIPshave relevance to the exploitation of all genetic resources within the coastal state’s juris-diction. The conventionally accepted theory is that these patents may be exploited throughcommercialisation, thus allocating the resources and value most appropriately to both theaccess giver and the exploiter.8 Our analysis challenges this view and suggests that the ac-cess and benefit sharing scheme proposed by UNCLOS and the CBD is being undermined,at least for World Trade Organisation Members, by patents compliant with TRIPs. Thisconclusion questions the view that patenting operates to share the benefits from exploitinggenetic resources and, in particular, the valuable genetic resources of mega-diverse states.

This paper is structured as follows:

• Section 2 provides an outline of the economic value of genetic diversity that makes up astate’s valuable genetic resources, distinguishing between the composition of the geneticmaterial and the applications of that composition. The significance of this outline is thatit establishes that it is the subtle differences between genetic materials that make thegenetic resources valuable;

• Section 3 outlines the basic schemes for access to genetic resources under UNCLOSand the CBD and the minimum standard patenting requirements imposed by TRIPs.This part demonstrates that the CBD’s regime of access and benefit sharing for geneticresources applies within the maritime boundaries established by UNCLOS. However,genetic resources in the high seas and the unclaimed parts of the continental shelf beyond200 nautical miles are left out of the access and benefit sharing scheme. Section 3

4 United Nations, Convention on the Law of the Sea, October 10, 1982, 21 I.L.M. 1261 (1982).5 United Nations Convention on Biological Diversity, Jan. 5, 1992, 31 I.L.M. 818, 824 (1992).6 The World Trade Organisation had 144 Member countries as of 1 Jan. 2002.7 Conference of Parties to the Convention on Biological Diversity, The Convention on Biological Diver-

sity and the Agreement on Trade Related Intellectual Property Rights: Relationships and Synergies,UNEP/CBD/COP/3/23, 5 October 1996, para 13 (and the references therein); World Trade Organisation, Tradeand Environment Bulletin, TE/01, 8 Nov. 1999, Item 8.

8 This view has been variously expressed, see, for example, J. Vogel, GENES FOR SALE: PRIVATISATION AS A

CONSERVATION POLICY (1992).

SHARING GENETIC RESOURCES FROM THE SEA 213

also gives an overview of Australia’s TRIPs compliant patent scheme. We examine thescope of the “exclusive rights” over patented compositions of genetic materials and theirapplications to show that the genetic materials which make up the genetic resources areamenable to commodification by patenting;

• Section 4 reviews both the interaction between UNCLOS and the CBD and the linksbetween access to genetic resources under the CBD and patents under TRIPs. Our find-ings are that the interaction between access and patenting is poorly understood and thatthe term “genetic resource” is ambiguous, even though the practice of many states is toapply access regimes that are broader in scope. We review the access and benefit sharingregime proposed in Australia, where patent rights are to be included as an element of anegotiated contractual arrangement between the holder or owner of the genetic resourceand the bioprospector. Our conclusions are that patents required by TRIPs are unlikelyto achieve the intention of sharing the benefits of exploiting the genetic resources of theseas for two reasons. Firstly, there are significant gaps in UNCLOS and secondly, thefailure to take into account the broad patent claims to genetic materials by non-residents(that is, patent holders from other sovereign states); and

• Section 5 sets out the conclusion that the reliance by the international community onUNCLOS and the CBD for the regulation of benefit sharing undermines the interna-tionally agreed mandate that the resources of the seas are to be shared and used for thebenefit of all. A related finding is that the existing regime does not guarantee a benefitto those sovereign states from which the valuable genetic resources originate.

2. The value of genetic diversity

The diversity of genetic materials that make up genetic resources is reflected in the DNA,RNA and amino acid sequences. This diversity is found in the genetic composition of in-dividuals, communities, populations, species, and so on, as well as the molecular geneticcomposition that occurs as ploidy, single genes, multi-gene families, multiple genes, hy-pervariable (minisatellite and microsatellite) sequences and organellar (mitochondria andchloroplast) genomes. The subtle differences between genetic materials that make up thediversity are introduced by degeneracy (of bases and sequences), redundancy and the otherresults of mutation and evolution. Although significantly, the genetic compositions of anindividual may not give any indication of the levels of diversity among the communities,populations, species, and so on. It is nevertheless possible, even common, to patent thegenetic composition of an individual in such a way as to claim related, but not geneticallyidentical, genetic compositions, including the compositions of genetic materials in othercommunities, populations, species, and so on.9

9 Patents are a commercial instrument that creates enforceable property-like rights over inventions within asovereign jurisdiction. Their essential features are that they “claim” an invention and it is the “claimed”invention that sets the limits of their enforceable rights. Significantly, the patent only needs to disclose howto make and use a single embodiment of the invention, while claiming broadly other embodiments withouthaving to actually disclose how to make and use these other embodiments. One disadvantage of broadlyclaimed patents is that they will cover embodiments that may not have been foreseen by the inventor at thetime that the patent was first claimed (or invented). This can lead to a situation where subsequent research


In terms of economic exploitation, these genetic materials are useful as:

(a) Compositions — sequences of desired traits, parts of sequences (including regulatorysequences), analogs, variants, substitutions, marker sequences, genomes (especiallyviruses and prions), vectors, RNA sequences expressed from the DNA sequences,amino acids sequence expressed from the RNA sequence, DNA derived from the RNAor amino acid sequences, glycosylation patterns, methylation patterns, tissue sources,the sequence based tools of molecular biology (such as transformation systems) andso on; and

(b) Applications of compositions — diagnostic systems, transformation systems, antibod-ies, vectors, expression systems, methods for using the DNA, RNA and amino acidsequences, methods for treatment, cell cultures, tissue specific expression, organisms(including higher plants and animals) carrying the sequence or able to be transformedand so on.

The diversity of genetic materials is considerable, with estimates of species diversityranging from 13 to 14 million species10 up to 100 million species.11 These genetic materi-als are related through evolution and may be grouped according to similarity, function andthe other broad classifications relied on to group related genetic materials. However, it isthe subtle differences found in the genetic composition of individuals, communities, pop-ulations, species, and so on, which make genetic resources economically valuable. Thesedifferences hold the potential for new economically valuable applications in medicine,agriculture, industry and society.

3. The conventions

3.1. The Convention on the Law of the Sea

During the decade-long negotiations for UNCLOS, the parties focussed on the seeminglyirreconcilable objectives of maintaining the freedom of navigation of the seas and manag-ing the claims to extended jurisdiction by coastal states.12 To resolve these issues, UNC-LOS preserved freedom of navigation and divided the seas into a number of zones, givingcoastal states and others13 particular rights in particular zones.14 These rights range from

or new technologies are caught by the terms of the existing patent. For an analysis of the broad claim to theP450 gene compositions, see C. Lawson, Patenting Genetic Diversity — Old Rules May Be Restricting theExploitation of a New Technology, 6 J.L. & MEDICINE 373 (1999).

10 United Nations Environment Program, Global Biodiversity Assessment: Summary for Policy-Makers 3 (1995).11 P. Erhlich and E. Wilson, Biodiversity Studies: Science and Policy, 253 SCI. 758 (1991).12 UNCLOS is primarily concerned with maintaining the freedom of navigation and equitably sharing the re-

sources of the sea, providing rules on coastal state jurisdiction and the extent of that jurisdiction, preventingmarine pollution from sea-dumping and spills and the prevention of over-fishing.

13 Including landlocked and disadvantaged states.14 See also C. Lacey, Post Traumatic Convention Disorder: Conserving High Seas Biodiversity in the Wake of

the United Nations Convention on Biological Diversity, 7 AUSTRALIAN J. NATURAL RES. L. & POL’Y 47(2000).


full sovereign rights to the right of ships to transit the area in innocent passage. UNCLOSdoes not deal expressly with the issue of access to genetic resources or bioprospecting andmakes no reference to either term, although UNCLOS does refer to “living resources,”which is not defined. In our view, the term “living resources” would include genetic re-sources.15 For example, that term is defined in the CBD as “material of plant, animal,microbial or other origin containing functional units of heredity”16 and therefore “livingresources” satisfies the definitional scope of the CBD for “genetic resources” and “geneticmaterial.”17

The zones established by UNCLOS give the coastal state full sovereignty over all re-sources, living and non-living, in internal waters,18 territorial waters,19 and where applica-ble, archipelagic waters.20 In the exclusive economic zone (EEZ),21 the coastal state has“sovereign rights for the purpose of exploring and exploiting, conserving and managingthe natural resources, whether living of non-living, of the waters superjacent to the sea-bedand of the sea-bed and its subsoil . . . ,”22 but subject to various obligations to share anysurplus fisheries resources with landlocked and disadvantaged states.23

For the living resources on any part of the continental shelf up to 200 nautical milesor in an area beyond 200 nautical miles lawfully claimed by coastal states,24 the coastalstate has sovereign rights to explore and exploit the natural resources to the exclusion ofothers.25 This includes the “living organisms belonging to sedentary species, that is to say,organisms which, at the harvestable stage, either are immobile on or under the sea-bed or

15 Although this is perhaps not free from doubt. In the absence of any reference to genetic resources in UNCLOSit is unclear how it might apply to genetic resources: see Subsidiary Body on Scientific, Technical and Tech-nological Advice, Bioprospecting of Genetic Resources of the Deep Sea-Bed, UNEP/CBD/SBSTTA/2/15, 24July 1996, para 11.

16 Convention on Biological Diversity, supra note 5, at Art 2.17 Id.18 Internal waters include all waters landward of the straight baselines drawn in accordance with Art 7, and bays

of certain proportions. In addition, if the coastline is deeply indented or surrounded by a fringe of islands, thenstraight baselines may enclose those waters as internal waters. Art 50 allows archipelagic states to delimittheir internal waters in the same way.

19 Art 3 entitles every coastal state to claim a territorial sea up to 12 nautical miles from the baselines.20 Art 2; this generally includes the waters within the baselines drawn around the archipelago, but subject to the

technical rules found in Art 47.21 Art 56(1)(a); the EEZ extends 200 nautical miles from the boundary of the territorial sea.22 Art 56(1)(a); note that sedentary species are not covered by Part V Exclusive Economic Zone (see Arts 68 and

77(4)) although there is no gap here as these would be caught by the continental shelf regime in Part VI.23 Under Art 62(1) coastal states are obliged to promote the optimum utilisation of the living resources of the

EEZ. This is to be done by determining a total allowable catch for the sustainable use of fisheries resourceswithin the EEZ (Art 61(1)). If the coastal state does not have the capacity to harvest the entire allowable catchthen Art 62(2) encourages them to give landlocked or disadvantaged states access to that surplus. The aim ofthis regime is to maximise the use of fisheries resources whilst preventing the over-exploitation of valuablestocks. Part V makes no reference to other potential resources.

24 See UNCLOS, supra note 4, at Art 76; this has been estimated at approximately 85% of the world’s continentalmargin: C. Beeby, The United Nations Conference on the Law of the Sea: A New Zealand View 12 (Ministryof Foreign Affairs, Wellington, 1975).

25 Id. at Art 77.


are unable to move except in constant physical contact with the sea-bed or the subsoil.”26

For resources on that part of the continental shelf lawfully claimed by a coastal state beyond200 nautical miles,27

UNCLOS provides that, when exploiting the non-living resources, the coastal state mustmake payments at a specified rate to the International Sea-bed Authority. These paymentsare then distributed equitably between states that are parties to UNCLOS.28 However, byrestricting this benefit sharing scheme to non-living resources,29 the living resources in theclaimed continental shelf beyond 200 nautical miles are essentially a windfall to the coastalstate where they are claimed.

The remaining zone is known as the high seas.30 The resources of the high seas are, ingeneral, reserved for the common heritage of humankind, although there is a freedom tofish in the high seas area.31 Therefore, only those living resources that are on or in the highseas, or are on that part of the continental shelf that is not lawfully claimed by any coastalstate, are available to all states.32 Significantly, while a regime has been established forsharing the benefits of the non-living resources of the high seas,33 there is no correspondingregime for sharing the benefits of the living resources.34

The dispute settlement provisions of UNCLOS35 allow any party to a dispute36 aboutthe application of, or interpretation of, UNCLOS to submit the dispute to a court or tribunal

26 Id. at Art 77(4).27 Id. at Art 76 allows a coastal state to claim an extended continental shelf beyond 200 nautical miles where

that continental shelf is the submerged natural prolongation of the land territory. Arts 76(8) and (9) requirecoastal states making a claim to the continental shelf beyond 200 nautical miles to submit the claim, within10 years of the entry into force of UNCLOS for that state, to the Commission on the Limits of the ContinentalShelf and deposit relevant charts and geodetic data with the Secretary-General of the United Nations. On 20December 2001, the Russian Federation became the first state to have lodged its extended continental shelfclaim with the Commission on the Limits of the Continental Shelf.

28 Id. at Art 82; these payments are then distributed by the Authority among the parties to UNCLOS.29 Id. at Art 133(a) defines resources as “all solid, liquid or gaseous mineral resources in situ in the Area at or

beneath the sea-bed, including polymetallic nodules.” The “Area” is defined in Art 1(1) as “the sea-bed andocean floor and subsoil thereof, beyond the limits of national jurisdiction.”

30 In addition, there is a separate regime for Antarctica, which is beyond the scope of this paper.31 UNCLOS provides that all states have the freedom to fish on the high seas but imposes a corresponding duty

to co-operate with each other in the conservation and management of the living resources of the high seas.Art 87(1)(e) mentions the freedom of fishing — subject to the constraint in Art 87(2) that this freedom beexercised “with due regard for the interests of other states in their exercise of the freedom of the high seas andalso with due regard for the rights under this Convention with respect to activities in the Area.” Art 116 alsoallows states to fish on the high seas subject to their treaty obligations and the particular provisions relatingto straddling stock, highly migratory species, marine mammals and anadromous and catadromous species inArts 63–67.

32 Arts 117–119.33 Part XI.34 Other than the obligations described above regarding any surplus fish stocks within the EEZ.35 Part XV.36 Art 297 provides a number of limitations and exceptions to the general applicability of the compulsory dispute

settlement mechanism. In addition, states may themselves limit the compulsory dispute settlement mechanismpursuant to Art 298, which allows them either to declare that they do not accept any one or more of theprocedures in section 2 of Part XV, or to exclude certain categories of disputes altogether.


having jurisdiction.37 This may include, depending on the circumstances, the InternationalTribunal for the Law of the Sea, the International Court of Justice, an arbitral tribunal or aspecial arbitral tribunal.38 The decision of the court or tribunal is final and binding uponthe parties to the dispute.39

To facilitate the implementation of UNCLOS, the states that are parties to the Conven-tion meet regularly and discuss issues arising out of implementation of the treaty. Therehave been eleven meetings of the States Parties to UNCLOS to date, the first meeting beingheld in November 1994.40 These meetings have primarily dealt with budgetary and admin-istrative matters, such as the elections of the members of the International Tribunal for theLaw of the Sea and members of the Commission on the Limits of the Continental Shelf.Access to genetic resources has not been discussed at any of these meetings.41 This isexplainable, in part, by the exclusion of living resources from the definition of resources.42

However, preliminary consideration of genetic resources covered by UNCLOS has beenmade by the CBD Conference of the Parties.43

3.2. The Convention on Biological Diversity

The primary objectives of the CBD are “the conservation of biological diversity, the sus-tainable use of its components and the fair and equitable sharing of the benefits arising outof the utilisation of genetic resources.”44 The term “biological diversity” means “the vari-ability among living organisms from all sources, including, inter alia, terrestrial, marineand other aquatic ecosystems and the ecological complexes of which they are a part; thisincludes diversity within species, between species and of ecosystems.”45

Access to genetic resources has been identified by the COP as one of the primary meansof fairly and equitably sharing the benefits arising out of the use of genetic resources.46 TheCBD proposes a scheme to achieve this objective, such that, “[e]ach Contracting Party shallendeavour to create conditions to facilitate access to genetic resources for environmentallysound uses by other Contracting Parties and not impose restrictions that run counter to the

37 Art 286, provided that an attempt has been made to settle the dispute by negotiation or conciliation.38 Art 287.39 Art 296.40 The meetings are convened as necessary by the Secretary-General of the United Nations in accordance with

Article 319.41 The Secretary-General of the International Sea-Bed Authority convened a workshop on resources of the sea

other than hydrothermal polymetallic nodules. The resources considered included polymetallic sulphides,methane hydrates and cobalt-bearing crusts but genetic resources (which would fall outside the Part XI regimedue to Art 133(a)) were not considered.

42 Art 133(a).43 See Conference of Parties to the Convention on Biological Diversity, Access to Genetic Resources and Benefit

Sharing: Legislation, Administrative and Policy Information, UNEP/CBD/COP/2/13, 6 Oct. 1995, para 111.44 Art 1.45 Art 2.46 Conference of Parties to the Convention on Biological Diversity, Review of National, Regional and Sectoral

Measures and Guidelines for Implementation of Article 15, UNEP/CBD/COP/4/23, 19 Feb. 1998, para 1.


objectives of the [CBD].”47 However, the CBD recognises the “sovereign rights of statesover their natural resources”48 so that “access to genetic resources rests with the stategovernments and is subject to state legislation.”49 The term “genetic resources” is broadlydefined to mean “genetic material of actual or potential value,” and “genetic material” tomean “any material of plant, animal, microbial or other origin containing functional unitsof heredity.”50 This broad definition was an attempt by the international community toestablish principles for the uses of genetic resources from all sources. This involved arecognition that “biological materials containing genetic resources have significant valuefor applications such as pharmaceuticals, biotechnological processes, mining, fisheries andforestry.”51 The term “biological resources” includes “genetic resources, organisms orparts thereof, populations, or any biotic component of ecosystems with actual or potentialuse or value to humanity.”52

The CBD sets out the broad framework within which access to genetic resources maytake place. The CBD distinguishes between two types of access. The first being the pro-viding state’s genetic resources53 and the second being the provision by the receiving stateof access to the transfer of technology to conserve and sustainably use genetic resources.54

As a generalisation, there must be access on mutually agreed terms,55 there must be priorinformed consent unless the providing state determines otherwise,56 the receiving statemust share the resulting benefits fairly and equitably57 and, where possible, the providingstate should participate in developments and scientific research based on those genetic re-sources.58 The interpretation of this scheme is developing through the experience of statesin granting access and sharing benefits. This includes the oversight by the COP of the im-plementation of work programs to monitor developments59 and the compilation of relevantinformation.60

47 Art 15(2).48 Art 15(1).49 Art 15(1).50 Art 2.51 See generally UNEP/CBD/COP/2/13, supra note 43, para 4.52 Art 2.53 Art 15.54 Arts 16, 19, 20 and 21.55 Arts 15(2), 15(4) and 19(2).56 Arts 15(5) and 19(3).57 Arts 15(7) and 16(4).58 Arts 15(6) and 19(1).59 See, for example, Conference of Parties to the Convention on Biological Diversity, Report of the Ad Hoc

Open-Ended Working Group on Access and Benefit Sharing, UNEP/CBD/COP/6/6, 31 October 2001; Inter-governmental Committee for the Convention on Biological Diversity, Conference of Parties to the Conventionon Biological Diversity, Report of the Intergovernmental Committee for the Convention on Biological Diver-sity, UNEP/CBD/COP/1/3, 21 September 1994, para 43(d).

60 See, for example, Conference of Parties to the Convention on Biological Diversity, Access and Benefit Sharingas Related to Genetic Resources, UNEP/COP/6/19, 9 January 2002; Conference of Parties to the Conventionon Biological Diversity, Intellectual Property Rights and Transfer of Technologies Which Make Use of GeneticResources, UNEP/CBD/COP/2/17, 6 October 1995, paras 58–67; UNEP/CBD/COP/2/13, above note 43.


The objectives of access to technology, transfer of technology and financial mechanismsin exchange for access to genetic resources by developed states highlights the tension be-tween intellectual property rights and the implementation of the CBD. The CBD states that“Contracting Parties . . . shall cooperate . . . to ensure that such [intellectual property] rightsare supportive of and do not run counter to its objectives.”61 The CBD also provides forthe exchange of information and technical and scientific cooperation respectively.62 Fur-ther, “[e]ach Contracting Party shall take all practicable measures to promote and advancepriority access on a fair and equitable basis by Contracting Parties, especially developingcountries, to the results and benefits arising from biotechnologies based upon genetic re-sources provided by those Contracting Parties. Such access shall be on mutually agreedterms.”63

However, the CBD also provides that the rights and obligations of Contracting Parties“shall not affect the rights and obligations of any Contracting Party deriving from anyexisting international agreement, except where the exercise of those rights and obligationswould cause serious damage or threat to biological diversity [and] . . . Contracting Partiesshall implement [the CBD] with respect to the marine environment consistently with therights and obligations of states under the law of the sea.”64 The term “serious damage orthreat” is not defined.

The dispute settlement provisions of the CBD are weak in that it is possible for statesto eschew the use of compulsory dispute settlement mechanisms. Where there is a disputeabout the interpretation or application of the CBD, the disputing parties are obliged to seekresolution by negotiation.65 If jointly requested, the parties can go to mediation, althoughthe result of the mediation, if any, is not binding upon the parties.66 In addition to thesemechanisms, there is an “opt-in” compulsory dispute settlement either by arbitration or bythe International Court of Justice.67 However, there is no compulsory dispute settlementoption available to an aggrieved state if the other party or parties to the dispute do notco-operate and have not previously made a declaration68 accepting a compulsory disputesettlement mechanism. In addition, there are no provisions for sanctions, such as the pay-ment of compensation or trade retaliation. This is in stark contrast to the effective disputesettlement provisions of TRIPs (which are outlined below). Should any dispute arise con-cerning the interpretation or application of the CBD with respect to the patenting of geneticresources, the difference in the enforcement provisions might be expected to influence thechoice of the forum for dispute resolution. An aggrieved party able to bring their disputewithin TRIPs, is more likely to obtain a binding outcome to the dispute in that forum thanunder CBD.

61 Art 16; see also UNEP/CBD/COP/2/13, above note 43, paras 44–46.62 Arts 17 and 18.63 Art 19.64 Art 22.65 Art 27(1).66 Art 27(2).67 Art 27(3).68 Under Art 27(3).


3.3. The Trade Related Intellectual Property Rights Agreement

TRIPs is an annexure to the Final Act of the 1986–1994 Uruguay Round of MultilateralTrade Negotiations which created the World Trade Organisation (WTO).69 TRIPs pro-vides, in part, that “patents shall be available for any inventions, whether products orprocesses, in all fields of technology, provided that they are new, involve an inventivestep and are capable of industrial application70 . . . patents shall be available and patentrights enjoyable without discrimination as to the place of invention, the field of technol-ogy and whether products are imported or locally produced.”71 The exclusive rights of apatent are “to prevent third parties not having the owner’s consent from the acts of: mak-ing, using, offering for sale, selling, or importing for these purposes” the patented productor process.72

The only direct exceptions permitted from this general scheme are inventions that are“necessary to protect ordre public or morality, including to protect human, animal or plantlife or health or to avoid serious prejudice to the environment, provided that such exclu-sion is not made merely because the exploitation is prohibited by their law,” “diagnos-tic, therapeutic and surgical methods for the treatment of humans or animals” and “plantsand animals other than micro-organisms, and essentially biological processes for the pro-duction of plants or animals other than non-biological and microbiological processes.”73

Other indirect exceptions are a three pronged and cumulative exception: (a) there mustbe a “limited exception,” (b) the exception must not “unreasonably conflict with normalexploitation of the patent,” and (c) the exception must not “unreasonably prejudice the le-gitimate interests of the patent owner, taking account of the legitimate interests of thirdparties.”74 Additonally, a patent holder’s exclusive rights may be diminished by an au-thorising law after judicial or administrative process have determined the patent to beanti-competitive, although each authorisation must be considered on its individual mer-its.75

In domestic laws “Members shall ensure that enforcement procedures . . . are availableunder their law so as to permit effective action against any act of infringement of intel-lectual property rights . . . , including expeditious remedies to prevent infringements andremedies which constitute a deterrent to further infringements.”76 For disputes betweenMember States, “[t]he provisions of Arts XXII and XXIII of GATT 1994 as elaborated and

69 Marrakech Agreement Establishing the WTO, 1994, Annex 1C.70 The terms “inventive step” and “capable of industrial application” are synonymous with the concepts of “non-

obviousness” and “usefulness;” for patenting genetic materials these words have been interpreted in manycountries, including Australia, in such a way that the composition of genetic materials can be claimed asan “invention” once they are removed from “nature” with an industrial “use;” see, for example, IP AustraliaPamphlet, Australian Patents for: Microorganisms, Cell Lines, Hybridomas, Related Biological Materials andTheir Use, Genetically Manipulated Organisms (IP Australia, Canberra, February 1998) p. 2.

71 Art 27(1).72 Art 28.73 Art 27(2) and (3).74 Art 30.75 Art 31.76 Art 41.


applied by the Dispute Settlement Understanding shall apply to consultations and the settle-ment of disputes under this Agreement except as otherwise specifically provided herein.”77

TRIPs may also be interpreted by the Ministerial Conference or General Council acting onthe recommendations of the TRIPs Council.78

In Australia, the Patents Act 1990 (Cth) implements the minimum TRIPs standards,79

deeming products and processes as patentable so long as the invention “involves a technicalintervention of a technologist applying their inventive ingenuity to produce something dis-tinguishable from the natural source,” “is new in the sense of not previously being publiclyavailable,” “fully described in the sense that sufficient information is provided to allowthe technologist to make the product or perform the process without having to resort tointervention” and “has a demonstrated industrial use.”80 These minimum standards arealso applied and complemented by agreed standards and protocols that seek to harmonisepatenting among states.81 Among genetic materials, patents may be granted for inven-tions involving non-human organisms, plants, bacteria, fungi, algae, viruses, nucleic acids,amino acids, cell organelles, enzymes, and so on.82

Once granted, the patent confers the “exclusive rights, during the term of the patent,to exploit the invention and to authorise another person to exploit the invention,”83 whichare “personal property and are capable of assignment and devolution by law.”84 The term“exploit” is defined in relation to the product invention to include “make, hire, sell orotherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, useor import it, or keep it for the purpose of doing any of these things”85 and the process

77 Art 64; this is the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU)which makes provision for compensation and trade retaliation if complying laws are not implemented or notchanged: Marrakech Agreement Establishing the WTO, 1994, Annex 2.

78 Marrakech Agreement Establishing the WTO, 1994, Art IX.79 The Patents (World Trade Organisation Amendment) Act 1994 (Cth) amended the Patents Act 1990 (Cth) to be

consistent with TRIPs by extending the patent term from 15 to 20 years, amending the onus requirements forinfringement proceedings, modifying the compulsory license provisions and clarifying Commonwealth andState use of a patent.

80 IP Australia Pamphlet, Australian Patents for Plants (IP Australia, Canberra, February 1998) p. 1; IP AustraliaPamphlet, above note 70, p. 2.

81 For example, the World Intellectual Property Organisation’s mandate is “the promotion of the protection of in-tellectual property throughout the world through cooperation among member states and, where appropriate, incollaboration with any other international organisation”: World Trade Organisation, Committee on Trade andEnvironment of the Council for Trade Related Aspects of Intellectual Property Rights, Statement by the WorldIntellectual Property Organisation (WIPO) on Intellectual Property, Biodiversity and Traditional Knowledge,WT/CTE/W/182, 6 February 2001, para 1.

82 IP Australia Pamphlet, supra note 70, at pp. 1–2; the only potential limitation is the patenting of “[h]umanbeings, and the biological processes for their generation” (Patents Act 1990 (Cth) s 18(2)), although thisappears to have little practical significance as applications for patents for human genes genetic materials whichhave been separated from the human body and manufactured synthetically for re-introduction into the humanbody for therapeutic purposes are acceptable.

83 Patents Act 1990 (Cth) s 13(1).84 Id. at sec. 13(2).85 Id. at Sch 1.


invention to include “use the method or process or do any act mentioned [for the productinvention] in respect of a product resulting from such use.”86

The significance of state patent laws, in the context of genetic resources, is that thepatent commodifies all potential uses of both the composition and the applications of thegenetic material for the patent holder (and their licensees or assignees) to the extent of theclaimed product or process.87 In the case of genetic resources, this includes claims to thecomposition of the genetic materials disclosed in the patent application and a considerablerange of broadly related compositions88 and their applications.89 The “exclusive rights”granted by the patent effectively prevents others from commercially using, manufacturingor importing the patented product or process into the jurisdiction, for the term of the patent.For patented genetic materials, this means preventing everyone, except the patent holder(and their licensees or assignees), from commercially using, manufacturing or importingthe patented genetic material for the term of the patent.

4. UNCLOS, CBD and benefit sharing through patents

4.1. UNCLOS and CBD — access and benefit sharing scheme

The CBD was opened for signature in 1992 and immediately received widespread support.Within eighteen months, the required number of ratifications were obtained and so it en-tered into force on 29 December 1993. By contrast, although the final text of UNCLOShad been agreed to in 1982 when it was opened for signature, it did not achieve sufficientratifications to enter into force until 16 November 1994. The general rule in internationallaw for interpreting two or more treaties that deal with the same subject matter but havediffering provisions is that, unless there are express provisions indicating the contrary, theterms of the most recent treaty will prevail.90 The CBD does include an express provi-sion in relation to the marine environment, providing that the CBD shall be implemented“consistently with the rights and obligations of states under the law of the sea.”91 There-fore, to the extent that CBD and UNCLOS deal with the same subject matter but conflict,UNCLOS will prevail and in the absence of conflict UNCLOS and the CBD will co-exist.

86 Id.87 Thus, “[a] patent on a composition gives exclusive rights to the composition for a limited time, even if the

inventor discloses only a single use for the composition. Thus, a patent granted for an isolated and purifiedDNA composition confers the right to exclude others from any method of using the DNA composition, for upto 20 years from the filing date. . . When the utility requirement and other requirements are satisfied by theapplication, a patent granted provides a patentee with the right to exclude others from. . . “using” the patentedcomposition of matter. . . Where a new use is discovered for a patented DNA composition, that new use mayqualify for its own process patent, notwithstanding that the DNA composition itself is patented”: United StatesPatent and Trademark Office, “Utility Examination Guidelines” 66 FR 1092, 1095 (2001).

88 See, for example, Lawson, supra note 9, at 381–384.89 See, for example, C. Lawson and C. Pickering, Patenting Genetic Materials — Failing to Reflect the Value of

Variation in DNA, RNA and Amino Acids, 11 AUSTRALIAN INTELLECTUAL PROPERTY J. 69, 78–79 (2000).90 Vienna Convention on the Law of Treaties, Art 30.91 Id. at Art 22(2).


The UNCLOS regime for benefit sharing applies only to non-living resources,92 andconfers sovereignty on coastal states for living resources in internal waters, territorial wa-ters, archipelagic waters, the EEZ, and those areas of the continental shelf beyond 200nautical miles lawfully claimed by the adjacent coastal state. The CBD’s regime of accessand benefit sharing will also apply to these zones.93

The access provision of the CBD makes no reference to patents,94 although ContractingParties are required to take “legislative, administrative and policy measures . . . with theaim of sharing in a fair and equitable way the results of research and development andthe benefits arising from the commercialisation and other utilisation of genetic resources. . . upon mutually agreed terms.”95 Further, developing countries are to be provided with“special consideration” with respect to technology transfer, participation on biotechnologyresearch and the sharing of the results and benefits of biotechnology.96 Apart from thesemeasures, the Contracting Parties are left to develop and initiate transactions between thegenetic resource providers (either the country of origin of the genetic resource or the ac-quirer in accordance with the CBD) and the user of the genetic resource.97

The COP has considered the issue of patents and has accepted a link between patents andthe access to genetic resources on the grounds that access to genetic resources controlledby a Contracting Party is a basis for negotiating benefit sharing98 and, at the same time,recognising that patents need to be supportive of, and not run counter to, the objectivesof the CBD.99 The CBD Secretariat’s early review of the impact of patents (and otherintellectual property rights) on the CBD’s objectives reinforced the view that patents area favoured mechanism for achieving access and the equitable sharing of the benefits ofgenetic resources.100 Due to the interaction of the CBD and the UNCLOS, the COP’sdecision has the practical effect of endorsing the CBD’s “benefit sharing” regime for thatlarge portion of the seas within states’ jurisdiction.

The COP Secretariat has also considered the relationship between the CBD and TRIPs.The Secretariat has concluded that there is a significant relationship between trade and bio-logical diversity and the interaction between the CBD and TRIPs.101 However, the partic-ulars of this relationship and the interaction between the schemes remain to be consideredin detail. More recently, the COP established a Panel of Experts on Access and Benefit

92 For example, Part XI provides for benefit sharing of non-living resources on the high seas.93 UNEP/CBD/COP/2/13, supra note 43, paras 62 and 111.94 See Art 15.95 Art 15(7); see also UNEP/CBD/COP/2/17, supra note 60, paras 23–30.96 See Conference of Parties to the Convention on Biological Diversity, Addressing the Fair and Eq-

uitable Sharing of the Benefits Arising Out of Genetic Resources: Options on Biological Diversity,UNEP/CBD/COP/4/21, 9 February 1998.

97 See UNEP/CBD/COP/4/23, supra note 46, para 14.98 UNEP/CBD/COP/2/17, supra note 60, para 5.99 UNEP/CBD/COP/4/23, supra note 46, paras 15–16.

100 Convention on Biological Diversity, The Impact of Intellectual Property Rights Systems on the Conserva-tion and Sustainable Use of Biological Diversity and on the Equitable Sharing of Benefits from Its Use,UNEP/CBD/COP/3/22, 22 September 1996, para 9.

101 UNEP/CBD/COP/3/23, supra note 7, paras 7 and 9.


Sharing that considered, among other issues, patents.102 The Panel concluded that patentsinfluenced the access and benefit sharing arrangements contemplated by the COP underthe CBD, but the Panel was otherwise unable to reach any conclusions and merely iden-tified areas requiring further inquiry.103 This same indecision is reflected in subsequentworks104 and COP decisions.105 The COP has recently decided to establish an ongoingworking group to consider access and benefit issues that will include a more detailed con-sideration of patents.106 This impasse probably reflects the negotiating positions of thevarious member states.107 Developing states argued that strong patents hindered technol-ogy transfer and disregarded the contributions of family farmers. Therefore, these statesgenerally favoured restricting patents.108 Conversely, developed states argued that strongpatents created incentives to conserve biodiversity by encouraging technology transfer, in-vestment and development.109

In our view, the likely interaction between the CBD and TRIPs will be that the statesproviding access to their genetic resources in the expectation of an exchange for accessto, and transfer of, technology as part of the benefit sharing arrangements contemplatedby the CBD, will need to adopt, at least, the minimum TRIPs patenting standards andthe patents associated with the accessed benefits, such as the transferred technology. Thisview is supported by the recognition in the CBD that part of the sharing of the benefitsfrom the use of genetic resources made available by resource providers to resource usersin the “appropriate transfer of relevant technologies, taking into account all rights . . . totechnologies,”110 includes the intellectual property rights that are “a significant aspect ofthe technology transfer.”111 This is reinforced in the CBD, which provides further, “[i]nthe case of technology [including biotechnology] subject to patents and other intellectual

102 See generally Convention on Biological Diversity, Report of the Panel of Experts on Access and BenefitSharing, UNEP/CBD/COP/5/8, 2 November 1999.

103 UNEP/CBD/COP/5/8, id., paras 127–138 and 155; see also Convention on Biological Diversity, Access togenetic resources, UNEP/CBD/COP/5/21, 1 March 2000, para 16.

104 See, for example, UNEP/CBD/COP/6/6, supra note 59; UNEP/CBD/COP/6/19, supra note 60; Ad HocOpen Ended Working Group on Access and Benefit Sharing, Report on the Role of Intellectual PropertyRights in the Implementation of Access and Benefit Sharing Arrangements, UNEP/CBD/WG-ABS/1/4, 10August 2001.

105 See, for example, Decision III/17, IV/15 and V/26.106 See Convention on Biological Diversity, Report of the Fifth Meeting of the Conference of Parties,

UNEP/CBD/COP/5/23, 22 June 2000, para 11; note UNEP/CBD/COP/6/19, supra note 60, Part IIIC.107 See generally UNEP/CBD/COP/3/22, supra note 100.108 UNEP/CBD/COP/3/23, supra note 7, para 13; for example, Malaysia declared: “My delegation wishes to

state that the terms of transfer of technology referred to in Art 16(2) do not fully reflect the position of mycountry which requires that such transfer should be specifically on concessional and preferential terms”:World Trade Organisation, Committee on Trade and Environment, Environment and TRIPs, WT/CTE/W/8,8 June 1995, Annex 5.

109 UNEP/CBD/COP/3/23, supra note 7, para 13; for example, the United States declared: “It is deeply re-grettable to us that . . . a number of issues of serious concern to the United States have not been adequatelyaddressed in the course of this negotiation. As a result, in our view, the test is seriously flawed in a numberof important aspects”: WT/CTE/W/8, id., Annex 5.

110 Convention on Biological Diversity, Art 1.111 UNEP/CBD/COP/3/23, supra note 7, para 12.


property rights, such access and transfer shall be provided on terms which recognise andare consistent with the adequate and effective protection of intellectual property rights.”112

In other words, developing states with valuable genetic resources seeking to exploit thosegenetic resources by providing access in exchange for benefits will most probably needto implement the TRIPs patenting standards and recognise the patents associated with theaccessed benefits.

An analysis of the patenting practices among mega-diverse states and those states thatdominate patenting provides further insight. The analysis of patent applications and grantsin Tables 1 and 2 illustrates the predominance of patenting among the developed states andthe very low levels of patenting among the mega-diverse states. For example, in 1999 inAustralia, a mega-diverse state, of the 63,355 patent applications made, 53,818, or 85%,were made by non-residents, and of the 13,528 patent grants made, 12,289, or 91%, weremade to non-residents. While these data in Tables 1 and 2 represent all patent applicationsand grants, they arguably reflect the patenting practices for genetic resources. For exam-ple, in 1998, “of the 2000 or so patent applications filed in the biotechnology category inAustralia, only around 2% originate in Australia,”113 which in real terms was 46 appli-cations.114 This suggests that the majority of patent applications and grants over geneticresources are made to non-residents and mostly made according to the Patent Co-operationTreaty.115

The analysis in Table 2 also illustrates the vast discrepancy in the rate of patenting, withthe most developed states patenting at rates significantly greater than the mega-diversestates. For example, in 1999 in Australia, 63,355 patent applications were recorded whilethe United States recorded 294,607.116

Thus, the data in Tables 1 and 2 indicate the predominant patenters are the developedstates. As these states tend to argue for strong patents,117 then successful benefit shar-ing under UNCLOS and the CBD for mega-diverse and predominantly developing statesprobably means adopting at least the TRIPs patenting standards. Without adopting theseminimum standards, developed states are unlikely to provide access to, and transfer of,technology to developing states as part of the benefit sharing arrangements contemplatedby the CBD. These conclusions suggest there is an important link between the CBD ac-cess regime and patenting according to TRIPs with respect to benefit sharing. Adopt-ing the TRIPs patenting standards may well be a necessary first step in implementing theUNCLOS and CBD’s benefit sharing scheme.

112 Convention on Biological Diversity, supra note 5, at Art 16(2).113 D. Nicol and J. Nielsen, The Australian Medical Biotechnology Industry and Access to Intellectual Property:

Issues for Patent Law Development, 23 SYDNEY L. REV. 347, 361 (2001).114 Id.115 IP Australia, Industrial Property: IP Activity in Australia and the Asia Pacific Region (IP Australia, Canberra,

1998), Appendix B.116 These same trends are reflected in the patent grants with Australia granting 13,528 patents in 1999 compared

to the United States granting 153,487 patents: World Intellectual Property Organisation, Intellectual PropertyStatistics for 1999, IP/STAT/1999/A.

117 See, for example, UNEP/CBD/COP/3/23, supra note 7, para 13.


Table 1. Number of patent applications filed and patents granted during 1999 in the 12 most mega-diversestates118

Mega-diverse state Resident Non-resident

Applications Grants Applications Grants

Number % Number % Number % Number %

Australia 9, 537 15.1 1, 239 9.1 53, 818 84.9 12, 289 90.8Brazil 1, 957 3.7 424 13.1 50, 338 96.3 2, 795 86.8China 146 0.3 ∗ – 52, 202 99.7 ∗ –(Hong Kong)a (42) (0.01) (24) (0.9) (5, 998) (99.99) (2, 478) (99.1)

Colombiab 68 4.1 20 3.39 1, 615 95.9 570 96.6Ecuadorc 15 3.0 4 475 96.9 138 97.1India 14 0.04 ∗ – 38, 348 99.96 ∗ –Indonesia ∗ – ∗ – 42, 503 – ∗ –Madagascar 9 0.02 6 17.2 41, 237 99.98 29 82.8Malaysia ∗ – ∗ – ∗ – ∗ –Mexico 468 0.9 120 3.1 49, 532 99.1 3, 779 96.9Perud 48 4.8 5 1.8 944 95.2 266 98.2Zairee ∗ – ∗ – ∗ – ∗ –

Data compiled from the World Intellectual Property Organisation, Intellectual Property Statistics for 1999(IP/STAT/1999/A). Except where noted, all countries are WTO members and have ratified both UNCLOS andthe CBD.∗ No data provided.a Hong Kong is a WTO member but has not signed either UNCLOS or the CBD.b Colombia has signed but not yet ratified UNCLOS.c Ecuador has not signed UNCLOS.d Peru has not signed UNCLOS.e Zaire (Democratic Republic of Congo) is not a WTO member and has not signed either UNCLOS or the CBD.

4.2. What are “genetic resources”?

The meaning of the term “genetic resources” as defined in the CBD119 is not entirely clear,other than that the genetic resources over which access is being controlled are either fromthe state of origin of the resource or acquired by a Party in accordance with the CBD.120

The meaning of this term is essential to developing effective measures to implement an ac-cess regime and to share the ensuing benefits fairly and equitably.121 The CBD’s intentionwas to cover a broader range of materials than the earlier FAO International Undertakingon Plant Genetic Resources “plant genetic resources” and certainly include genetic ma-

118 Source for the 12 mega-diverse states: Global Biodiversity Strategy, Guidelines for Action to Save, Studyand Use Earth’s Biotic Wealth, Sustainably and Equitably, World Resource Institute (WRI), the World Con-servation Union (IUCN), United Nations Environment Programme (UNEP), 1992.

119 See Art 2.120 Art 15(3).121 Conference of Parties to the Convention on Biological Diversity, Access to Genetic Resources,

UNEP/CBD/COP/3/20, 5 October 1996, para 32.


Table 2. Comparison of number of patent applications filed for (A) mega-diverse, and (B) developed states, in descending order

A. Mega-diverse states

Mega-diverse states — descending order of thetotal number of patent applications filed

State Patent applications

Resident Non-resident Total

Australia 9, 537 53, 818 63, 355China 146 52, 202 52, 348(Hong Kong) (42) (5, 998) (6, 040)

Brazil 1, 957 50, 338 52, 295Mexico 468 49, 532 50, 000Indonesia ∗ 42, 503 42, 503Madagascar 9 41, 237 41, 246India 14 38, 348 38, 362Colombia 68 1, 615 1, 683Peru 48 944 992Ecuador 15 475 490Malaysia ∗ ∗ ∗Zaire ∗ ∗ ∗

B. Developed states

Developed states — descending order of thetotal number of patent applications filed

State Patent applications

Resident Non-resident Total

Japan 361, 094 81, 151 442, 245United States 156, 393 138, 313 294, 706Germany 74, 232 146, 529 220, 761United Kingdom 31, 326 161, 549 192, 875Sweden 9, 122 155, 929 165, 051Spain 3, 394 159, 696 163, 090Switzerland 6, 412 155, 991 162, 403Austria 3, 075 159, 046 162, 121Denmark 3, 339 158, 225 161, 564Portugal 133 159, 533 159, 666Luxembourg 227 159, 374 159, 601Finland 2, 644 156, 389 159, 033

Data compiled from the World Intellectual Property Organisation, IntellectualProperty Statistics for 1999 (IP/STAT/1999/A).∗ No data provided.

terials from animals, plants and micro-organisms, whether terrestrial or marine.122 TheCOP noted that, in practice, the CBD definition had difficulties with respect to leaving out

122 UNEP/CBD/COP/2/13, supra note 43, paras 49–50.


biochemicals,123 as well as ex-situ holdings acquired before December 1993,124 includinghuman genetic materials,125 and applying only to some marine resources:126 “[t]he con-cern here was that, as these resources represent important and valuable manifestations ofgenetic diversity, leaving them outside the [CBD] would undermine the extent to whichthe [CBD] would be able to ensure the distribution of the full benefits of utilisation; a fun-damental requirement of the equitable sharing of benefits.”127 Unfortunately neither theCOP nor the CBD’s Secretariat have provided a definitive explanation of what the term“genetic resource” might mean, while noting that in practice a number of Contracting Par-ties have adopted access regimes with a broader scope than the CBD’s definition and whichinclude “genetic resources and derivatives.”128 Thus, the Secretariat opines that a statemight choose to apply the same rules to both genetic resources and their derivatives (suchas biochemicals), which would be consistent with that state’s sovereignty over their naturalresources.129 Our concern with this approach is that the access regimes adopted by statesmay be better suited to the “derivatives” rather than the “genetic resources.” The followingdiscussion about Australia’s proposed access scheme illustrates this concern and questionsthe benefits that may be derived from access to genetic resources through patenting.

4.3. Australia’s approach to access

Australia has adopted the view that “it is in Australia’s interests to control access to our ge-netic resources and obtain an appropriate return for any permitted access,” with an accessregime that ensures Australia’s participation in research and development and the benefitsflowing from the commercial utilisation of Australia’s genetic resources.130 This view alsoconsiders patent legislation (and plant variety rights legislation)131 as a means of satisfy-ing the objective of ensuring “that the social and economic benefits of the use of geneticmaterial and products derived from Australia’s biological diversity accrue to Australia.”132

Section 301 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth)

123 “[C]hemicals found in diverse species of living things” which may be closely associated with and analogousto genetic resources, even though they, like genetic resources, “contain information within its structure thathuman technologies can adapt or reproduce for human use” and may involve “the use of samples that containgenetic material”: UNEP/CBD/COP/2/13, id., para 51.

124 See UNEP/CBD/COP/2/13, id., para 54.125 UNEP/CBD/COP/2/13, id., paras 64–65.126 UNEP/CBD/COP/2/13, id., paras 61–63.127 UNEP/CBD/COP/3/20, supra note 121, para 33.128 UNEP/CBD/COP/3/20, id., para 34; UNEP/CBD/COP/4/23, supra note 46, paras 30–34.129 UNEP/CBD/COP/2/13, supra note 43, para 52.130 Department of the Environment, Sport and Territories, National Strategy for the Conservation of Australia’s

Biological Diversity (Commonwealth of Australia, Canberra, June 1996) Objective 2.8.131 National Strategy, id., Action 2.8.5; see also Department of Prime Minister and Cabinet, Access to Australia’s

Biological Resources 36 (AGPS, Canberra, 1994).132 National Strategy, id., Objective 2.8; for other similar statements, see Environment Australia, Discussion

Paper: Managing Access to Australia’s Biological Resources (Environment Australia, Canberra 1996) p. 23;Department of Prime Minister and Cabinet, Access to Australia’s Biological Resources, id., at 36.


(EPBC Act) makes provision for Regulations to establish a scheme to control access togenetic resources in “Commonwealth areas.”133 This includes the equitable sharing of thebenefits arising from the use of biological resources in Commonwealth areas, the facilita-tion of access to such resources, the right to deny access to such resources and the grantingof access to such resources and the terms and conditions of such access.134 A governmen-tal review of the means by which access might best be controlled has been completed135

and Regulations have now been proposed to implement a regime of access.136

The concept of access adopted by the draft Regulations was intended to refer to “theprocess whereby samples from individual organisms are gathered, their genetic and bio-chemical make-up and other attributes determined and their potential use assessed.”137 Forthe purposes of the EPBC Act and Regulations scheme, it is proposed that “access to bi-ological resources” will mean “the taking of biological resources of native species for:(a) conservation, commercial application or industrial application, or (b) research on, anygenetic resources, or biochemical compounds, comprising or contained in the biologicalresources.”138 “Examples of access to biological resources are: collecting living material,analysing and sampling stored material, and exporting material for purposes such as taxo-nomic research, conservation, research and potential commercial product development.”139

The preferred method of benefit sharing under the EPBC Act and Regulations are con-tracts between the holder or owner of the biological resource and the bioprospector, withsome oversight through the development of model contracts and access permits.140 Thisis a compromise solution taking into account jurisdictional arrangements,141 the existingproperty rights scheme in Australia that could be regulated by the EPBC Act,142 the broadremit to regulate access to “biological resources” that include “genetic resources” together

133 Environment Protection and Biodiversity Conservation Act 1999 (Cth) s 525 defines “Commonwealth areas”to include Commonwealth lands, airspace over that land and the marine environment under Commonwealthcontrol. This restriction reflects the limits of the Commonwealth’s Constitutional powers. It is notable thatthis proposed scheme to regulate access will apply to very limited areas in Australia, the remaining areasbeing covered by State/Territory, indigenous and private right holders.

134 Note Parliamentary review: Senate Environment, Communications, Information Technology and the ArtsLegislation Committee, Environment Protection and Biodiversity Conservation Bill 1998 & EnvironmentalReform (Consequential Provisions) Bill 1998 (Senate, Canberra, 1999) paras 9.105–9.111.

135 Department of Environment and Heritage, Access to Biological Resources in Commonwealth Areas —Voumard Committee (Department of Environment and Heritage, Canberra, 2000).

136 Draft Environment Protection and Biodiversity Conservation Amendment Regulations 2001 (Cth) were re-leased for public comment on 7 September 2001; see R. Hill, Bioprospecting Regulations Released for PublicComment, Press Release, Parliament House, Canberra, 7 September 2001.

137 Voumard Committee, supra note 135, para 1.43.138 Draft Regulation 8A.02(1) Environment Protection and Biodiversity Conservation Amendment Regulations

2001 (Cth); the terms “biological resources,” “genetic resources” and “species” are defined in EnvironmentProtection and Biodiversity Conservation Act 1999 (Cth) s 528.

139 Draft Regulation 8A.02(1) id.; similar words were used in Explanatory Memorandum, Environment Protec-tion and Biodiversity Conservation Bill 1998 (Cth) p. 86.

140 Voumard Committee, supra note 135, at 1–3.141 A federal arrangement with overlapping Commonwealth and State jurisdictions.142 Thus the access scheme is confined to “Commonwealth areas”: Voumard Committee, supra note 135, at

41–49.


with other non-genetic resources (such as biochemicals),143 and the limited claims by theCommonwealth to ownership over biological resources within its powers (particularly overthe seas).144 Significantly, this access scheme deals with patents by leaving the holder orowner of the biological resource to negotiate access with the bioprospector subject to con-ditions that the patents vest in certain ways (such as “jointly in the inventor, the Common-wealth and a representative of the traditional owners”).145

Our concerns about regulating access through contracts that include clauses dealing withpatents rights and benefit sharing are that contracts fail to address either the gaps in theexisting UNCLOS regime or the commodifying effect of broad patent claims over geneticresources.

4.4. Gaps in the UNCLOS scheme

UNCLOS and the CBD applied together, create a benefit sharing scheme for genetic re-sources with significant gaps. State sovereignty under UNCLOS does not extend to livingresources in the high seas and to those regions of the continental shelf beyond 200 nauticalmiles that have not been lawfully claimed by a coastal state. While UNCLOS and the CBDmight consider that these genetic resources fall to the common heritage of humankind, wesuggest that the preferable view is that these genetic resources are available to the firstto commodify them. For example, in order to regulate access through contracts, as Aus-tralia proposes, both sovereignty and jurisdiction over the genetic resource are required.Without these, it is not possible to establish a lawful contractual relationship. In the ab-sence of either sovereignty or jurisdiction, a contractual approach to regulating access willfail, as there is no basis upon which multiple parties may form the necessary contractualrelationship.

Patent laws compliant with TRIPs, however, are likely to be a significant means of com-modifying the genetic resources in the UNCLOS and CBD gap. As patent laws only requireunilateral action by the applicant making the application within the jurisdiction of a state,it is open to an applicant to claim a genetic composition and its applications from mate-rials collected in the gap. Further, such a claim is unlikely to be invalid as an applicationwithin the jurisdiction of a state does not conflict with the benefit sharing scheme set outin UNCLOS and the CBD.

While the gap in the UNCLOS and CBD scheme has been recognised in part,146 theredo not appear to have been further steps taken to address the problem and to ensure that thebenefits of exploiting the genetic resources of the high seas and continental shelf outsidecoastal state jurisdiction are shared equitably. In our view, this is a significant oversight,as there is no other international law governing the access to, and exploitation of, thosegenetic resources, or reserving those resources as part of the global commons.

143 Voumard Committee, id. 9–11.144 Voumard Committee, id. 43–46.145 Voumard Committee, id. 48; this approach is consistent with the approach espoused by the COP, see for a

recent summary, UNEP/CBD/COP/6/19, supra note 60.146 UNEP/CBD/COP/2/13, supra note 43, para 111.


4.5. The commodifying effects of broad patents

In the ongoing review of Art 27.3(b), the TRIPs Council is considering the relationshipbetween TRIPs and the conservation and sustainable use of genetic materials.147 As partof this review, the patenting of Member State’s biological resources and traditional knowl-edge outside their territory has been reported (such as patent claims over turmeric, kerela,basmati and neem trees).148 Our concern is related, but different. We are concerned that bylimiting the access scheme to contracts between the holder or owner of the biological re-source and the bioprospector, there is a failure to recognise the impact of broadly claimedpatents over compositions made without any form or requirement for access to all theclaimed genetic resource. Broad claims, such as “DNA sequences which hybridise understringent conditions,”149 “low, medium and high stringency hybridization,”150 65% ho-mology151 and “substantially similar,”152 that describe very wide ranging classes of com-positions (and their applications) will extend to cover the unique genetic resources of themega-diverse states without reference to the origin of the genetic resource or the contract.In other words, and using an analogy, by claiming the word “bow,” the different meaningsof the word “bow,”153 and related words, such as “bow-tie,” “bowling,” “elbow,” “bowl”and “bower” are also commodified. To continue the analogy, if a claim to 65 per centhomology were allowed, then words like “boy,” “box,” “blow,” “womb,” “owl” and “sow”would also be included. Our concern is that these broad patent claims in effect expro-priate the genetic resources of mega-diverse states by covering the range of economicallyexploitable diversity unique to those sovereign states without reference to those nations asthe source of the diversity. Significantly, these broad claims will also expropriate the ge-netic resources of the UNCLOS and CBD gap in the high seas area and upon the unclaimedcontinental shelf beyond 200 nautical miles.

Table 1 shows that in the twelve mega-diverse states, where figures were available, inexcess of 84% of all patent grants were made to non-residents. While this does not providedirect evidence of the patenting of genetic resources by non-residents, the finding that only2% of biotechnology category inventions in Australia, which will include most genetic re-source patents, originated in Australia,154 suggests there is such a correlation. Therefore,

147 Council for Trade Related Aspects of Intellectual Property Rights, Minutes of Meeting — 21 March 2000IP/C/M26, 24 May 2000, para 54.

148 See, for example, Committee on Trade and Environment Council for Trade-Related Aspects of Intellec-tual Property Rights, Protection of Biodiversity and Traditional Knowledge — The Indian Experience,WT/CTE/W/156, 14 July 2000.

149 Genetics Institute Inc v Kirin-Amgen Inc (No3), 156 ALR 30, 38 (1998).150 Australian Patent Application No 19530/92, Genetic Sequences Encoding Flavonoid Pathway Enzymes and

Uses Therefor (International Flower Developments Pty Ltd.) p. 7.151 Synaptic Pharmaceutical Corporation v Astra Aktiebolag [1998] APO 49 (9 September 1998).152 Australian Patent Application No AU199178798C, DNA Encoding Human 5-HT1D Receptors and Uses

Thereof (Synaptic Pharmaceutical Corporation) p. 62.153 For example, “bow” means a curved shape (like a rainbow), a weapon for shooting arrows, a rod for playing

stringed instruments, the side piece of spectacles, to submit by bending or kneeling and the fore end of aboat, ship or submarine.

154 Nicol and Nielsen, supra note 114, at 361.


by extrapolating these figures, our concern is that, for mega-diverse nations like Australia,non-residents undertake the majority of patenting of genetic resources and these broadlyclaimed patents will include genetic compositions monopolising the diversity that makesthe genetic resources economically valuable. This will be able to be done with no involve-ment in the access contracts contemplated by UNCLOS and the CBD. If this does proveto be the case, then mega-diverse countries, including Australia, are not obtaining the fulleconomic value of their genetic resource wealth.

A scheme of access based on contracts between the holder or owner of the biologicalresource and the bioprospector, such as that proposed in Australia, may have a limitedoperation in some cases. For example, it might apply where a patent claim was made afteraccess to the genetic resource (on Commonwealth land) had been given and that accesswas subject to any subsequent patent rights being vested in an agreed way. In addition,in some very limited circumstances, the source of the genetic materials may prevent orinvalidate a patent claim under a state law.155 However, these are likely to be insignificantexceptions to our concerns given the extent of present genetic material patenting and thebacklog of lodged claims yet to be considered by patent offices.

5. Conclusions

The storehouse of genetic materials among the organisms of the seas holds the potential forgreat wealth through their economic exploitation by humans.156 In these terms, the geneticmaterials of biodiversity rich states are another resource to be exploited in the same wayhumans have exploited agriculture and minerals. With the development of new technolo-gies to “liberate” the economic value from these genetic resources, in the form of tradeablecommodities and products, new rules are being developed to regulate the access to, andownership of, these genetic resources. The developments in international conventions fromthe delineation of state rights over the seas in the UNCLOS and the sovereign rights overgenetic resources in the CBD have now crystallised as personal property rights in the formof patents over inventions in TRIPs. However, the underlying basis of both UNCLOS andthe CBD perpetuates the concept of benefit sharing to be achieved through the theoreticalexchange of access to genetic resources for access to, and transfer of, technology and theother benefit sharing arrangements under the CBD. Our concern is that the benefit sharingfrom genetic resources contemplated by both UNCLOS and the CBD is being underminedby broad patent claims to genetic resources under TRIPs. This appears to have occurred byoversight rather than by design and appears to be at odds with the expressed wishes of theinternational community.157 The COP of the UNCLOS appears not to have considered theissue of the potential wealth of genetic resources,158 instead relying on the access scheme

155 For example, where the genetic composition was illegally obtained.156 For analyses of the value of genetic materials and their diversity, see N. Myers, A WEALTH OF WILD

SPECIES: STOREHOUSE FOR HUMAN WELFARE (1983); Yvonne Baskin, THE WORK OF NATURE (IslandPress, Washington DC, 1997).

157 Supra note 4.158 See UNEP/CBD/COP/2/13, supra note 43, para 111.


set out in the CBD.159 The CBD COP has briefly considered the issue in the context ofaccess to, and transfer of technology,160 but in our view, has misconstrued how patent-ing according to the minimum standards set by TRIPs, has the potential to undermine thebenefit sharing provisions of the CBD.161 Our analysis of the proposed access scheme inAustralia, relying on negotiated contracts including patenting clauses, illustrates the likelyfailings.

We are also concerned that significant gaps exist in the UNCLOS and CBD scheme forbenefit sharing by failing to deal with genetic resources on the high seas and those regionsof the continental shelf beyond 200 nautical miles that have not been claimed by a coastalstate. Patents operate on a first-come first-served basis and our concern is that unlessthe international community tightens international law to close the existing gaps and toimplement the benefit sharing provisions of the common heritage doctrine, particularlyfor genetic resources in the areas of seas beyond national jurisdiction, the value of theseresources will be lost to the international community as a whole.

159 See, for example, UNEP/CBD/COP/2/13, id., para 62.160 For example, in negotiating the CBD patents were considered only in the context of access to, and transfer

of technology in Art 16: WT/CTE/W/8, supra note 108, para 7.161 For example, “[t]hese [intellectual property rights] systems were not designed to address the concerns of the

[CBD] for conservation, sustainable use and equitable benefit-sharing. Parties must, therefore, consider howto implement the [CBD] and the intellectual property rights agreements to which they are a party, so theyfulfil their obligations under each”: UNEP/CBD/COP/2/13, supra note 43, para 44.

it’s patently absurd — beneﬁt sharing genetic … · resources from the sea under unclos, the...

Documents