ABS Policies in Canada

2) Improve Canada's Economic Competitiveness
     in the Bio-based Economy

Biodiversity [is a fundamental component of] markets that last year moved more than 90 billion dollars, including sales of medicines (including vaccines) for humans and livestock, for around 41 billion dollars, but also of cosmetics and personal care products, especially for the skin. On top of this are the burgeoning markets for herbal medicines and functional foods (for specific ends), which mobilized around 20 billion dollars in 2004; agricultural biotech (from seeds to biopesticides), with four billion dollars; and at lesser volumes, industrial enzymes, biogenetics (databases and software on genetics), and electronic bioconductors, a sector that is growing by 40 percent annually.5

Biological resources are the basis of many major economic sectors. The "biobased economy" is as a key strategy for achieving sustainable development and the use of biological processes instead of traditional oil- or chemicalbased ones has been shown to reduce energy use, pollution and contribute to other sustainability criteria.6 Pharmaceuticals, agriculture, forestry, aquaculture, and "natural products" are key sectors that stand to gain from the "bio based economy" because they all rely on genetic resources and are all changing with the application of biotechnology.

The skilful use and development of genetic resources through biotechnology is the central technological enabler of the bio-based economy. Canada is wellpositioned world-wide in biotechnology, and the bio-based economy is an opportunity for enhancing its global competitiveness. Currently, Canada is third in the world in the export of genetically modified products, and its biotechnology revenues, though a small contributor to the overall domestic economy, rival those of all of South East Asia7. There is also public support behind the development of the sector, although this support is dependent on the government enacting proper regulatory oversight8.

As a global initiative, however, the bio-based economy is going through growing pains. There are a number of issues, most related to either the question of ownership of real or intellectual property in areas that had previously been considered global commons, or challenges related to the conservation and sustainable use of genetic resources, such as a lack of clear ownership or the loss of genetic resources and traditional knowledge.

a) A role for patent policy in advancing ABS

Patent practices have reduced access to genetic resources, and are thought by some to present barriers to widespread market entry because of the "IP thicket" of multiple patents on technology platforms and routine processes. Current practices around the granting of patents for genetic resources have generated concerns, particularly on the part of developing countries.

Developing countries, which have sovereignty over most of the world's in-situ genetic resources, have reacted to the patent-based control of genetic resources by developed countries by restricting access to their in situ genetic resources. As mentioned earlier, the Convention on Biological Diversity (CBD) has enshrined nation States' control over their genetic resources, and it has become more difficult for firms to gain access to many nations' genetic resources.

The patent system is a key tool for encouraging economic growth by promoting innovation and the advancement of scientific and technical knowledge. Policy initiatives in this area aim to create a business climate that encourages research and development, the commercialization of new technologies, and the promotion of trade and investment9.

The current discussions under ABS that relate to patent policy arise from the fact that patents have become a preferred method for protecting biotechnological inventions, and thus control access to valuable genetic resources. These inventions are often based on the use and modification of genetic material (by definition, derived from genetic resources). Modification of the IP system should be explored to determine the extent to which it can contribute to ABS objectives.

The main change under discussion is the inclusion of "disclosure of origin/source of genetic resources and associated traditional knowledge" in patent applications. This concept, proposed by developing countries and supported by some developed countries, would use the patent system to track the origin of a genetic resource used in a patented innovation so that benefits arising out of the commercialization of the invention would flow back to the countries from where the resources have originated.

The Canadian Patent Act does not require the disclosure of the origin of genetic resources in patent applications. Technical and administrative solutions arising from the concept of disclosure of origin/source will have to be fully explored before any determination can be made as to the feasibility, costs, and real impact of a disclosure requirement included in the Canadian Patent Act.

Possible reforms to patent policy would be one of the most significant policy and legal challenges in Canada and elsewhere. At the genetic level, questions remain about the patentability of genetic material and ownership of intellectual property rights over genetically-based inventions. The matter is under discussion in a number of international fora, including the Convention on Biological Diversity, several committees of the World Intellectual Property Organization, and at meetings of the Council on Trade-Related Aspects of Intellectual Property Rights at the World Trade Organization. Canada continues to participate in these fora mindful of ways that ABS may necessitate changes to international and national patent policy to ensure that the system continues to operate to the public's benefit.

b) Loss of genetic resources and traditional knowledge

Another pressure is that the "source material" for biotechnological innovations, biodiversity, is being lost rapidly to habitat destruction. Loss of genetic resources is also happening through insufficient maintenance the specimens of public collections like those found in universities or museums.

As well, the role of traditional knowledge holders in the context of ABS is not established. Though they have specialized knowledge of local biodiversity, especially the medicinal properties of plants, many are hesitant to share, for fear of exploitation by companies. Many traditional cultures are at threat of extinction, which means that the traditional knowledge of biodiversity and its sustainable use in supporting human health and well-being is also at risk.

c) Lack of clear ownership over genetic resources
    or regulations to govern access

The ownership of genetic resource located in "global commons," such as the deep sea bed where many robust enzymes are likely to be found, is not clear. A legal lacuna exists.

In absence of legal certainty over ownership or appropriate processes for consultation, biotechnology firms are at risk of generating negative publicity for "pirating" genetic resources that they subsequently develop. They are therefore hesitant to use and develop genetic resources derived from biodiversity.

What is clear in this situation is that for developers, there is a problem of access to genetic resource, and for providers, there is a problem of the fair sharing of the benefits derived from the use of genetic resource. A well designed and balanced ABS policy would address these problems by providing clear, transparent and simple procedures to access genetic resources, while encouraging flexible benefit-sharing agreements between users of genetic resources and the countries, communities and/or institutions that provide them.

5 Márquez, Humberto. (2005, Friday, July 11). Colombia, Peru and Venezuela are the Andean vanguard in exploiting biodiversity for biotechnology, a global market that moves more than 90 billion dollars annually. Originally published on July 2nd by a Latin American newspaper that is part of the Tierramérica network. Tierramérica is a specialised news service produced by IPS with the backing of the United Nations Development Programme and the United Nations Environment Programme http://tierramerica.net/english/2005/0716/index.shtml.

6Biotechnology for Sustainable growth and Development, found at: http://www.oecd.org/dataoecd/43/2/33784888.PDF, accessed July 2005.

7 3rd largest producer: see http://w01.international.gc.ca/minpub/Publication.asp?FileSpec=/Min_Pub_Docs/106146.htm&Language=E, accessed September 27, 2005; Canada's global revenue, Ernst & Young, (2003) "Beyond Borders".

8From: Summary of Public Opinion Research into Biotechnology Issues in Canada http://www.biostrategy.gc.ca/english/view.asp&x=543&all=true, accessed July 18, 2005.

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