Response to Swedish Questionnaire
Response to a Swedish questionnaire regarding genetic source origin disclosure requirements in patent applications</p>
Dear Mr. Simon:
I write on behalf of the Biotechnology Industry Organization (BIO) in response to your request for views of European industry on proposed requirements to indicate the origin of material in patent applications. BIO is a trade association representing more than 1100 members in over 33 countries including Sweden and other Member States of the European Union. BIO members, many of whom are small and medium sized enterprises, depend on effective intellectual property systems to obtain capital and to recoup their investments in research and development.
The biotechnology industry is a dynamic, research intensive industry. In 2003, biotechnology produced more than 370 biotech drug products and vaccines currently in late stage clinical trials that target more than 200 diseases. Some biotechnology products – such as EPO, Herceptin® and Xigris® – have revolutionized the way society deals with cancer and other chronic diseases. Biotechnology is responsible for hundreds of medical diagnostic tests, which encompass everything from keeping the blood supply safe from AIDS to home pregnancy tests. Industrial biotechnology
applications have led to cleaner processes that produce less waste and use less energy and water.
Increased crop yields and decreased reliance on herbicides and pesticides benefit consumers through less expensive, safer foods. The biotechnology industry operates in an environment that requires sufficient funding from public and private sources of basic and applied research, effective intellectual property protection standards (particularly patent law), efficient and secure technology transfer, measures that promote collaboration among diverse entities, and, critically, strong incentives for private investments for financing. Patent protection, which stimulates not only inventive activity but is essential to delivering new products and services to the market based on these inventions, is critically important to biotechnology. Investors recognize patents as important benchmarks of
progress in developing product lines and revenues. Investment provides the life blood of a research-intensive industry, and intellectual property protection serves as the enticement for private financing. The promise of a return on investment, rooted in patents on biotechnology inventions, helps to attract capital in these high-risk biotechnology products.
Indeed, many start-up biotechnology companies have been created based solely on the promise of their patent portfolios. The vast majority of biotechnology companies do not have products on the market; rather they have only patents or patent applications on what may eventually become a commercially viable product or technology. Patents protect the assets that entice investment, facilitate licensing, encourage collaborations and joint ventures, and promote technology transfer for
further development of a promising technology or product. The capital generated as a result of this intellectual property supports companies as they invest the hundreds of millions of dollars and the decades necessary to develop successfully a commercial biotechnology product.
Confidence in the patent system by the innovation sector, the investment community and the consuming public is especially important. Consequently, we appreciate your efforts to obtain the views of industry on aspects of these important and controversial requirements for patent systems.
As a general matter, we note that our members have found it difficult to form definitive views on the topics presented in the invitation for comment. One reason for this is that so few of our members engage in bioprospecting activities. A second, more significant reason is that most of the questions posed concerning disclosure of the geographical origin of genetic materials are vague in several key respects (e.g., what would trigger an obligation, what is the specific nature of the obligation, what
must be disclosed). As a result, the enclosed response represents the best efforts of our members to reply to your general inquiries.
We can observe that our members generally oppose proposals that would require the identification and disclosure of the origin of genetic materials in patent applications. The general basis for this view is that our members do not believe it appropriate to use the patent system to enforce obligations unrelated to substantive patent standards. Instead, our members believe that measures that directly regulate the activities in question should be employed, if such regulation is considered necessary.
Our members also believe that use of the patent system to indirectly regulate activities under the Convention on Biological Diversity will further discourage use or development of genetic resources, which would undermine one of the objectives of that Convention (i.e., the creation of “benefits” that can then be shared with a country that provides access to the resource). Moreover, based on our review of various “disclosure” proposals, we believe it likely that such requirements and associated
sanctions would be structured in ways that would create unjustified risks to ongoing business enterprises, and several of these proposals appear to be inconsistent with both the spirit and letter of obligations in the TRIPS Agreement and other international agreements. As such, BIO members believe that any specific proposals would have to be carefully and independently evaluated.
We would be pleased to answer any additional questions that you may have.
Stephan E. Lawton
Vice President and General Counsel
Biotechnology Industry Organization
Response of the BIOTECHNOLOGY INDUSTRY ORGANIZATION
to the request for views from the KOMMERSKOLLEGIUM
a. What are the advantages and disadvantages from your perspective of a
requirement to indicate geographical origin?
(i) General Observations
Before addressing the question of special patent disclosure requirements, BIO
and its members wish to reiterate their support for appropriate, transparent
mechanisms to ensure that countries and private entities adhere to obligations they
undertake under the Convention on Biological Diversity (CBD). As the CBD
emphasizes, entities that wish to obtain access to and then to use genetic resources
may do so only by reaching “mutually agreed” terms with the country providing
access to the resource, both as to prior informed consent (PIC) and as to benefit
sharing. BIO members have consistently expressed support for mechanisms that
would permit them to readily comply with these requirements for prior informed
consent and benefit sharing, and look forward to working with you and other
governments to develop and implement such regimes.
As a general matter, it is premature to express a view as to whether a
requirement to indicate the “geographical origin” of genetic materials in patent
applications will have advantages or disadvantages without first resolving several
- First, what is the objective that is to be served by the requirement?
- Second, what is the specific nature of the requirement to disclose the
“geographical origin” and when would it be implicated?
As to the first question, to the best of our knowledge, the sole justification for
a requirement to indicate the geographical origin of a genetic material associated with
an invention would be to implement obligations of the Convention on Biological
Diversity (CBD). We note that special disclosure requirements, by definition, are not
designed to, and will not, facilitate the examination of patent applications or advance
the objectives of the patent system. The information that could be collected by such a
requirement will not assist patent office officials, applicants, or the public in
determining whether inventions meet the criteria for patentability, i.e., novelty,
inventive step, and industrial application. Nor do they provide any disclosure beyond
that already required in patent applications that would be beneficial for patent
1 We note that a number of these questions were raised in the invitation for public comment
(e.g., what is the consequence of not complying with the requirement), and we provide
our views on those questions below.
purposes (e.g., to enable others to make the patented invention). As such, these
requirements appear to serve only one function – to “facilitate” disclosure of uses of
genetic resources that could implicate obligations to share benefits or to comply with
prior informed consent requirements under the CBD. Whether a special new patent
disclosure requirement would provide advantages or disadvantages, thus, must be
measured with reference to its relationship to the activities governed by the CBD, and
with respect to its ability to promote the objectives of the CBD.
The CBD has as one of its primary objectives the preservation of biological
diversity. It sets forth several mechanisms to encourage countries to preserve
biodiversity. One is the right of each country to “share” in the “benefits” that derive
from use of its genetic resources to which the country has granted access. It is
important to appreciate that under the Convention’s model, private entities, such as
companies or universities, are to play a critically important role – namely, collecting
the resources, and performing research and development on them that might yield
commercial or non-commercial “benefits.”2 This significant role cannot be
discounted in discussions regarding the “merits” of a possible patent disclosure
requirement. Indeed, without the voluntary participation of the private sector,
particularly industry, the “benefits” envisioned under the Convention’s benefitsharing
provisions will never materialize. Clearly, then, measures of any form that
are designed to promote the objectives of the CBD – including “benefit sharing” –
must be evaluated as to whether they will encourage or discourage the private sector
to seek access to “genetic resources” and to undertake efforts to develop those
resources into “benefits.” Measures that discourage use of genetic resources–
particularly those that make successful commercialization riskier or more likely to fail
– would create serious disadvantages.
Answers to the second question (i.e., the nature of a possible new disclosure
requirement and when such requirements would apply) invariably will influence our
view as to whether a geographical origin disclosure requirement would offer
advantages or would create disadvantages. In this regard, the only points of reference
we have are proposals advanced by certain countries in international discussions or
laws adopted in certain developing countries. Most of those proposals and laws
would make the requirement applicable to any use of any genetic resource –
regardless of its nature, the manner of its use by the patent applicant, or its
relationship or contribution to a claimed invention – and would impose severe
sanctions, such as refusal of the patent grant or revocation of the patent once issued.
As a general matter, we do not believe that a requirement to disclose the
geographical origin of a genetic resource in patent applications will promote
2 Under the Convention, benefits can range from early sharing of research results,
compensation for access to or based on successful commercial development of an
invention derived from use of the resource, or even licensing of intellectual property
rights. Under the explicit structure of the CBD, all of these arrangements regarding
“benefit sharing” are to be worked out in advance between the involved parties (i.e.,
before access is granted). Indeed, the mutual agreement requirement found throughout
the Convention is designed to reinforce that the process of collecting, evaluating and
developing genetic resources is a cooperative effort that can yield mutual advantages to
all parties. achievement of any of the objectives of the CBD, and thus, such a requirement would
not offer any actual advantages to governments or to the public. We also believe that
special patent disclosure requirements present numerous disadvantages, as set forth
(ii) Measures that could create risks to securing enforceable patent rights
will discourage companies from seeking access to or using genetic
Most disclosure requirements we have evaluated to date impose some form of
a penalty for failing to disclose the “source” or “origin” of a genetic resource. Many
of these disclosure requirements would permit a country to refuse to grant a patent or
would permit third parties to invalidate the patent, where the patent applicant/owner
did not comply with the disclosure requirement. The measures thus create the
possibility that an entity that develops an invention that meets all patentability
requirements could nonetheless have its patent refused or invalidated. If this were to
occur, the innovator would not be able to enjoy patent exclusivity for the commercial
embodiments of its invention. The consequence of loss of patent exclusivity is that
third parties will be able to freely copy the technology and to “free ride” on the
substantial investments that must be made by the innovator to develop and bring the
new products and services based on the patented technology to market. Such an
environment has been shown to strongly discourage innovators from undertaking the
necessary research and development activities to create these new products and
We believe that special disclosure requirements will seriously diminish, and
most likely eliminate interest from the private sector in bioprospecting for “genetic
resources.” We note that few companies presently conduct research programs based
on screening of samples of “genetic resources” collected by bioprospecting (i.e.,
samples of naturally occurring plants, microorganisms and non-human animals
collected by the entity from a country that is asserting sovereignty over its genetic
resources). For example, the focus of most biotechnology companies is on discovery
of the mechanisms of action of various human biological systems, and the design of
agents and methods for treating disorders and disease linked to those mechanisms.
Those investigations do not start with or depend in any way on use of a collected
sample of a “genetic resource.” Similarly, research in the agricultural biotechnology
sector rarely is focused on collection and evaluation of samples of “genetic
resources.” Rather, it often is focused on use of sophisticated analytical tools (e.g.,
computer-based genomic analysis) using information generated by the company or
obtained from the public domain. Alternatively, many agriculturally-focused
companies use their own private collections of improved plant varieties and breeding
lines that existed prior to the CBD, or were derived from those lines.
One common aspect of the disclosure requirements that we have reviewed is
that they will invariably increase the cost and complexity of preparing and
successfully obtaining patents. And, as noted above, most of these proposals impose
the severe sanction of refusal of the patent or its revocation. Providing a new basis
for competitors of a patent owner to attack patents that fully comply with patentability
requirements (i.e., novelty, inventive step and sufficient disclosure) will create
significant new risks for innovators, particularly where the patent is essential to the
successful commercialization of the technology. This will cause companies to avoid
activities, such as bioprospecting or uses of genetic resources covered by the CBD,
that could endanger potential patent rights, and to devote their limited resources
toward other projects.
As such, we believe that a genetic resource disclosure requirement,
particularly one that would create risks to obtaining or enforcing patents, will cause
most companies to avoid use of resources that would trigger the disclosure obligation.
This will, in our view, undermine the objectives of the CBD, which depend on the
private sector having an incentive to use genetic resources in a way that will result in
“benefits” that can be shared with countries of origin.
(iii) Current proposals impose obligations far broader than those that
could be possibly justified under the CBD
As noted, BIO supports the objectives of the CBD and requirements
reasonably designed to fulfill these objectives. Obligations for prior informed consent
and for “benefit sharing” under the Convention can arise, however, only in welldefined
circumstances. These are:
- that an entity, such as an individual or a company, seeks access to a
sample of a “genetic resource” in a country that is a party to the CBD;
- that the sample is of a “genetic resource” of non-human origin3;
- that the entity subsequently makes some use of the material in some
manner, such as by conducting research on it or making use of it in
other respects4; and
- that the sample is collected on or after the date that the Convention
entered into force in the country from which the materials are collected
(1992 for most countries).5
None of the proposals for a special patent disclosure requirement that we have
reviewed to date reflect these fundamental conditions of the CBD. Instead, they
would require disclosures to be made in applications regardless of whether the
materials referenced in the application were human or non-human, or whether the
materials were collected from a CBD party or not. Moreover, the obligations in these
proposals would require disclosures with regard to materials collected at any point in
time – despite the limitations in the Convention as to when PIC and benefit sharing
prepared by the CBD Secretariat, 2001, p. 157.
obligations could theoretically apply.6 These proposals also generally do not require
that the use of the genetic resource result in the claimed invention. Indeed, the
connection between the resource and the “invention” that is being claimed is often
ignored, despite the fact that this connection must be clear in order for CBD
obligations to be implicated in any way.
We consider it a serious disadvantage of these proposals that disclosure
requirements would be imposed in applications that have no relationship to the
genetic resources and activities governed by the CBD. Such proposals would impose
serious burdens and risks for patent owners and patent applicants without any
conceivable justification. For example, the large number of applications directed to
nucleic acids, proteins and pharmaceutical compositions derived from human sources
are per se outside the scope of the CBD. Yet, patent applicants would be required to
comply with disclosure requirements for such applications and patents. Similarly,
under many proposals, disclosures would have to be made even if the invention that is
the subject of the patent application (and the patent claims in particular) does not
actually use or derive from use of a genetic resource that has been collected through
bioprospecting activities. Mandating disclosure of origin in such applications plainly
cannot be justified under the CBD or any other rationale of which we are aware.
Indeed, it will be a significant challenge in any type of regime to define when
disclosures would have to be made. A direct and clearly identifiable relationship
between a “genetic resource” and an invention that is claimed in a patent application
is a relatively rare occurrence. There will be significant uncertainty under any type of
disclosure regime for patent applicants to know when a disclosure obligation arises.
This uncertainty – because it could result in the denial or revocation of a patent– will
strongly discourage biotechnology companies from conducting research on genetic
(iv) Current proposals will prove ineffective in fulfilling the objectives of
the Convention and the goals of advocates of a patent disclosure
Some have suggested that patent disclosure obligations will facilitate the
discovery of unauthorized uses of genetic resources, and will enable countries of
origin to enforce benefit sharing and prior informed consent provisions arising under
the CBD. Geographical origin disclosure requirements thus appear to be a substitute
for access and benefit-sharing national laws.7 In our view, this is a very inefficient
and undesirable approach to obtaining information that could be readily identified by
measures that directly regulate bioprospecting activities. Indeed, BIO and its
members firmly believe that the only effective way to manage access and use of
genetic resources is to create national mechanisms that directly regulate
bioprospecting activities. Several countries have established such regimes, and others
are presently developing their regimes. We have no reason to doubt the effectiveness
of these regimes, which usually require entities to work through designated contact
points prior to engaging in bioprospecting activities, and to agree to appropriate
contractual terms governing prior informed consent and benefit sharing.
We also do not believe that patent disclosure obligations will actually help
countries “enforce” obligations arising under the CBD. For example, very few uses
of genetic resources will ever result in an “invention” that can be protected by a
patent. Typically, many thousands or even hundreds of thousands of samples must be
screened to identify potential leads for investigation. Once identified, those leads
rarely yield compounds that merit serious investigation, and fewer still yield
compounds that possess attributes that could merit the filing of a patent application.
As such, very few patent applications are likely to be filed that concern inventions
derived from uses of genetic resources governed by the CBD. Almost by design,
then, a patent disclosure requirement will reveal only a small fraction of the possible
“uses” of genetic resources that could occur that would be governed by the CBD.
We also note that not all “uses” of a genetic resource are driven by a
commercial motivation. As such, many researchers never intend to use accessed
genetic resources to develop commercial products and will not file patent
applications. In such of situations, uses of genetic resources could occur that would
yield “benefits”– including scientific knowledge – that could theoretically be shared
with the country of origin. Yet, the uses will not be linked in any way to a patent
application. A patent disclosure requirement thus will do nothing to identify such
uses or to promote the sharing of benefits in any of these situations.
We also note that there typically is a period of several years between the date
that a researcher might collect a sample of a genetic resource, and the date that an
“invention” that could form the basis of a patent application could be identified.
Furthermore, patent applications remain confidential for a fixed period following their
filing date – typically 18 months. This means that patent applications – even were
they to include information regarding the geographical origin of genetic resources –
would not disclose “uses” of resources until many years after a sample of a genetic
resource had been collected.
In view of these factors, we believe a patent disclosure obligation would be a
highly ineffective tool for countries to use to assist their efforts in identifying uses of
genetic resources or in regulating access to their genetic resources. In contrast,
effective national laws that govern access and benefit-sharing can require benefits
immediately and can require them whether or not commercial products or processes
are ever developed using the genetic resources. Also, the level of benefits can be
established to reflect the level of commercial success of any resulting products or
process, if any.
(v) Current proposals inflict unjustifiable burdens on patent applicants.
Disclosure requirement proposals we have reviewed would apply to all patent
applications in which products or processes derived from any use of any “genetic
resource.” Yet the vast majority of patent applications filed by BIO members claim
inventions identified through research on human genetic resources or on genetic
resources that are not governed by the Convention (e.g., either because the resource
was not collected from a country of origin under the CBD, or because it was collected
prior to the entry into force of the CBD). We believe that it is inappropriate and
impossible to justify imposing a patent disclosure requirement on patent applications
that concern inventions entirely unrelated to any activity governed by the CBD.
b. What are the advantages and disadvantages from your perspective of
having some form of sanctions in cases where applicants fail to live up to such a
BIO and its members do not believe the patent system should be used as a
mechanism to enforce obligations arising under the CBD. As noted, our members
support measures that would directly regulate bioprospecting activities. We believe
sanctions, should they be deemed necessary, should relate to the activity that is being
regulated, rather than the inclusion or non-inclusion of information in patent
As mentioned, BIO members do not believe that any substantial advantages
will arise from the imposition of requirements to indicate the geographical source of
genetic resources. Instead, because these proposed requirements invariably will
increase the risk of a patent being denied or revoked, these measures will create
serious disincentives to explore research on genetic resources. If the measures are
applied generally, the disadvantages are even more severe.
As noted earlier, the vast majority of BIO members are small businesses, often
with only a handful of employees. Most of the companies are many years away from
having a product that will generate revenue. Virtually the only commercial asset that
these companies have is their collection of patents and patent applications. These
patents must provide secure exclusivity over the technology that the companies have
developed. If a biotechnology company’s patents can be denied or revoked, the
company is left with virtually no commercial assets to use to attract capital needed for
bringing products and services based on the technology to market. And, ultimately,
the consequences of discouraging research and development by these companies are
far more severe than the failure of the company. These companies are conducting
research and development that could yield solutions to meet unmet medical needs,
improve agriculture, and deliver important industrial solutions to the market.
As noted above, we see no advantages to requirements that are difficult to
meet and could work to block issuance or cause revocation of patents. Our members
also see numerous disadvantages – particularly a strongly negative impact of such
requirements on research and development and commercial viability of biotechnology
companies. For these reasons, our members generally are opposed to use of patent
sanctions. Finally, our members take issue with the presumption that sanctions of any
type are necessary or would be helpful. Since the conclusion of the CBD, BIO and its
members have consistently supported the principles articulated in the CBD for
bioprospecting activities. BIO and its members, for example, supported the
conclusion of the FAO International Treaty on Plant Genetic Resources, including
measures in that treaty that call for benefit sharing when resources governed by the
Undertaking are used. We are not aware of any situations governed by the CBD
where any BIO member has not complied with requirements for prior informed
consent or benefit sharing, or for that matter, has opposed inclusion of such
requirements as a condition of being granted access. Thus, while we are grateful for
the opportunity to provide our views on this issue, we request that the Government of
Sweden further investigate the necessity for sanctions of any form.
c. There are a number of different sanctions being discussed. What are
your views with regard to the following types of sanctions?
i. Sanctions outside of the patent law – for example in the form of
fines or administrative fees,
ii. Procedural sanctions – for example a patent application would not
be handled until sufficient information has been provided (if the
information provided turns out to be incorrect this would not, at a
later stage, affect the patent as such),
iii. A combination of i. and ii. above,
iv. A situation where the failure to provide accurate information
could affect the validity of a patent if incorrect information was
provided with fraudulent intent.
As mentioned in response to Inquiry b, we do not believe a requirement to
indicate geographical origin in patent applications would give rise to any significant
advantages. Consequently, we do not believe that any sanctions for non-compliance
of this type of requirement are warranted or advisable. That said, BIO members
believe that some sanctions would give rise to more disadvantages than other
i. Sanctions outside of the patent law.
Of the four stated “options”, sanctions outside the patent law are the least
objectionable in principle. They are more “fitting” than the other options, given that
the purpose of such sanctions would be to ensure compliance with the underlying
obligations of the Convention on Biological Diversity, when those obligations have
arisen. As we do not believe requirements to indicate geographical origin in patent
applications are related to furthering objectives of the patent system or the CBD, we
do not believe sanctions associated with such requirements are advisable.
In practice, however, it is impossible to evaluate the merits of fines or fees
absent detailed proposals. For example, fines or fees for failure to indicate
geographical source could be set at 10,000,000 € per patent application. This would
be tantamount to denying access to the patent or refusing to grant a patent for most
inventors even those employed by multinational enterprises. As such, BIO members
would find such proposals objectionable.
ii. Procedural sanctions – for example a patent application would not
be handled until sufficient information has been provided (if the
information provided turns out to be incorrect this would not, at a
later stage, affect the patent as such),
BIO members do not believe that procedural sanctions within the patent
system are appropriate. In practice, procedural sanctions tend to have the same effect
as substantive sanctions as demonstrated by the example provided in the
Questionnaire. If an application is not examined because an applicant has not
indicated the geographical origin of certain genetic resources, the lack of examination
is tantamount to a rejection of the claims or an objection to the specification, both of
which are grounds for refusing to grant a patent. This is the same result as if there
was a substantive ground for refusing to issue a patent for failure to indicate
It should be noted that most patent applicants operating in good faith will not
know the geographical origin of every “genetic resource” referenced in a patent
application. Those applicants would still be penalized for not submitting information
that could not be obtained other than by conducting extensive research. Since the
measures are being proposed as a means of “enforcing” perceived obligations under
the CBD, our members believe that even proper disclosures, believed to be true at the
time the patent application was filed, will give rise to significant and practical risks.
In particular, because most proposals contain no time limitations, many countries will
allow inaccurate disclosures to be a basis for attacking the patent. Competitors of our
members, desiring to exploit the patented technology, will use these types of
requirements to attack the patent, thereby increasing substantially the risks to our
members’ commercial viability.
It is possible that there may be some procedural sanctions that may not be
tantamount to substantive sanctions, but we are not aware of any.
iii. A combination of i. and ii.
We object to this Option because it would contain Option ii, which we do not
believe is appropriate.
iv. A situation where failure to provide accurate information could
affect the validity of the patent.
BIO members are firmly opposed to measures that could affect the validity or
enforceability of a patent. As noted earlier, our members see numerous disadvantages
and no advantages of putting the validity or enforceability of a patent at risk for noncompliance
procedural requirements unrelated to the patentability of the invention,
including a requirement to disclose the origin of genetic resources. Moreover, as the
loss of the patent will terminate the commercial viability of efforts to develop a
genetic resource into a viable commercial product or service, such a sanction would
fundamentally conflict with the objectives and goals of the CBD to develop such
For these and other reasons identified above, BIO members do not believe
sanctions that could affect the validity of a patent are appropriate or desirable.
Instead, as noted above, should sanctions be deemed necessary to ensure compliance
with obligations under the Convention, those sanctions should be structured to work
outside the patent system, and should be based on the actual obligations in the