The Philippine Fall into the IPR Bilateral Trap
On September of 2006, President Gloria Macapagal-Arroyo signed the Japan-Philippines Economic Partnership Agreement (JPEPA) with then Japanese Prime Minister Junichiro Koizumi, the Philippines' first bilateral free trade and investment agreement since the Parity Rights Agreement with the United States in 1946. A comprehensive bilateral treaty covering various major areas which include: (1) trade in goods, (2) trade in services, (3) investments, (4) movement of natural persons, (5) intellectual property, (6) government procurement, (7) competition, and (8) cooperation, the JPEPA aims at strengthening the economic partnership between Japan and the Philippines beyond the minimum stipulated in the WTO.
The JPEPA already presents very serious issues concerning the grave consequences it may have on domestic livelihoods and enterprises, as well as the environment and natural resources. Particularly on the aspect of Intellectual Property Rights (IPR), the JPEPA effectively restricts and stifles the recognized flexibilities under the TRIPS (WTO Agreement on Trade-Related Aspects of Intellectual Property Rights) that the Philippines was railroaded to accept in 1994.
The agreement is premised on the false assumption that stringent IPR standards lead to increased innovation. Studies however show that these do not necessarily lead to increased innovation in developing countries, as they have been found as capable of harming public health, and as never appropriate to countries of lower levels of economic development.
The JPEPA poses serious questionable intellectual property provisions which ultimately undermine the rights of Filipino farmers, communities and the public in general. As experienced by developing countries, by endeavoring to open and strengthen intellectual property law, this leads to a monopoly control over technology development by transnational corporations. The JPEPA seeks to uphold Japanese corporate and governmental interests above and beyond the interests of the Filipino people.
JPEPA, in the guise of economic cooperation, expands the TRIPS flexibility on patenting.
The JPEPA expressly recognizes the Japan-Philippine relationship on the matter of the development and strengthening of Intellectual Property Rights as one of cooperation. The areas and forms of cooperation, as enumerated under the agreement, are not an exclusive list of activities. This does not safely assure the Philippines that the cooperation between the two countries concerning the development of IPR will simply be limited and restricted among the areas and forms enumerated under the Treaty, and will not go beyond the flexibilities recognized under the TRIPS concerning exclusions from patentability, i.e. plants, animals, and essentially biological processes.
The agreement also does not expressly recognize the exclusions and flexibilities provided under the TRIPS. The obligations of the countries with respect to IPR thus extend beyond what the TRIPS envisioned. The JPEPA opens the Philippines into providing intellectual property protection and patenting on biotechnology, plants and/or animals, which Japan recognizes as inventions under its patent law, under the guise of “cooperation” to develop and strengthen IPRs of both countries.
The task of detailing the implementation and enforcement of the IPR Chapter of the agreement is delegated by the JPEPA to a Sub-Committee on Intellectual Property , with its composition and the process by which it shall act not being clearly laid down by the agreement. Without acknowledging and affirming the flexibilities already recognized under the TRIPS, or providing sufficient restrictions to the scope of IPR, the Philippines is not assured of the actions that the Sub-Committee will undertake which is granted enough leeway by the JPEPA to implement and enforce the agreement on IPR beyond the recognized limitations of TRIPS. Hence, the JPEPA expands the Philippines' scope of intellectual property protection beyond the TRIPS like patenting on plants, animals, and/or essentially biological processes, subject to the determination of a Sub-Committee in implementing the IPR Chapter of the agreement. Such patenting will only yield benefits to industrialized countries like Japan, and not the Philippines.
JPEPA does not assure protection of Farmers' Rights to Seeds.
Farmers' rights to seeds is embodied in the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA) which the Philippines acceded to already on September 28, 2006, but awaiting concrete implementation at the national level. The JPEPA, however, does not recognize the inherent rights of farmers to save, use, exchange and sell farm-saved seeds and/or propagating materials by either providing a limitation on its IPR provisions or sufficient safeguards acknowledging and protecting it.
The JPEPA in fact seeks to increase the number of plant genera and species that can be protected under laws and regulations. The Philippines has not even endeavored yet to exclude a list of food and staple crops from the coverage of the Plant Variety Protection Act of 2002 (PVP) in ensuring that the nation's food security will not be threatened, and that the rights of small farmers to get access to local natural resources are sufficiently recognized and protected. The PVP itself already sufficiently limits the inherent rights of farmers over plant genetic resources.
Strengthening and increasing the scope of plant variety protection will only promote further monopoly control over seeds by transnational corporations. It should be observed that almost all applications for plant variety patents in the Philippines have been filed by corporations. Thus, with JPEPA, access and control to seeds by small farmers will continue to diminish in favor of Japanese corporations.
JPEPA promotes the intellectual property interests of Japanese corporations and investors.
The JPEPA classifies IPRs as investment assets which entitles IPRs to an additional and separate treatment beyond what the TRIPS provides. Hence, IPRs of Japanese investors in the Philippines will be given treatment not only as an IPR subject to protection by national IPR laws and the JPEPA Chapter on IPR. Additionally, the JPEPA provides separate and stricter rules to govern IPRs as investments, in favor of Japan as a developed country from where majority of investors in the Philippines originate. As a country governed to be dependent on foreign investments to sustain its economy, Japanese investors become entitled to a preferential protection under the agreement in contrast to the possible few Filipino investors in Japan. This is another important area of concern as there is clearly a lack of protection accorded to the Philippines under the agreement.
JPEPA does not provide restrictions in the scope of IPRs forming investments.
The JPEPA does not provide limitations on the intellectual property that should form investment assets, such as patenting on plants, animals and essentially biological processes which the TRIPS excludes from patentability. In fact, the JPEPA in defining IPRs as investments is a broad and non-exclusive list. This means that even though Philippine law does not provide protection for IPRs of a Japanese investor protected under Japanese law, the JPEPA will compel the Philippines to grant similar protection to such IPR.
Should for example an investor of Japan with a patent on a rice gene under Japanese Law want to invest in the Philippines by selling the seeds containing the rice gene in the Philippines which does not provide a similar patent protection on genes, must the Philippines provide the same level of patent protection on the rice gene to the Japanese investor that he enjoys in Japan? Does this mean that the Philippines has to rewrite its patent laws to provide for gene patenting to comply with its obligations under the JPEPA to give protection and security to Japanese investments? The Philippines in this case may be compelled to relax its legislations protecting national investments or worse amend its laws to remove nationalized legislations to provide for Japanese investors.
Even through the Nationality Treatment Clause where Japanese investors should be granted equal treatment with Filipinos as concerns their acquisition and use of IPRs as investment assets in the Philippines, the JPEPA effectively caters to Japanese investors which are more technologically advanced and financially capable over Filipino investors. The JPEPA fails to provide exceptions or even to recognize possible exceptions in national laws that may be needed to protect the Filipino people. For instance, in case the Philippines enacts a legislation recognizing rights of Filipino small farmers to save and re-use seeds even beyond the limitations provided under the Plant Variety Protection Act (PVP) as a possible compliance to the ITPGRFA, or should the Philippines provide for benefits to local seed companies and small farmers incentives in the development of local varieties, the all-encompassing national treatment principle under the JPEPA can provide a Japanese seed corporation a successful claim that such legislations are a denial of national treatment and discriminates the Japanese as a foreign investor.
JPEPA imposes separate and higher standards on government measures aimed at protecting the public interest.
With the JPEPA, the Philippines is additionally required to accord to the investments of Japanese investors fair and equitable treatment and full protection and security. In a suit by a Malaysian firm against the Chile government based on the failure of the government to protect its investment through its urban development and environmental policies, the International Center for Settlement of Investment Disputes (ICSID) had adopted the interpretation of the fair and equitable standard as: (1) the “manner most conducive to fulfill the objective of the bilateral investment treaty to protect investments and create conditions favorable to investments”, (2) the “treatment in an even-handed and just manner, conducive to fostering the promotion of foreign investment”, and (3) requiring states “to provide to international investments treatment that does not affect the basic expectations that were taken into account by the foreign investor to make the investment.” Based on this investor-friendly standard, the JPEPA provides for an ambiguous rule that Japanese investors can use to question Philippine policies and laws, and sue the government in cases of frustrated expectations in their investments in the Philippines even on the basis of government measures intended to protect the public interest.
The JPEPA also requires the Philippines not to impair Japanese investments by unreasonable and discriminatory measures which can include policies nationalizing investments tantamount to expropriation. With the JPEPA, the Philippine government is further restricted in implementing certain public interest measures like compulsory licensing of IPRs of Japanese investors which is recognized by the TRIPS and allowed under the present Intellectual Property Code of the Philippines. The JPEPA also restricts the right of the Philippine government in future legislations to allow parallel importations and lower IPR standards on medicines. Compulsory licensing and parallel importations have the effect of limiting the economic benefits of Japanese investors in their investments, and would qualify as government attempt at expropriating their investments. The Philippine government is thus required to strictly fulfill additional investment requirements like public purpose, non-discriminatory basis, due process of law, and payment of prompt, adequate and effective compensation, before it can undertake to implement its public interest measures.
It is important to note that recently, Pfizer, a big pharmaceutical company, sued the Philippine International Trade Corporation before the Makati Regional Trial Court for violating the company's IPR when the government agency started importing its Norvasc anti-hypertension drug while the company's patent was still in effect. Doubts as to the legality of PITC's importation is expected to be resolved by the enactment into law of the Roxas bill which would expressly allow parallel importations of cheaper medicines in the Philippines. Should for example the Roxas bill be enacted into law, Japanese pharmaceutical companies or licensees in the Philippines can claim that the law frustrates their expected profits from their investments considering that the effect of the law is to produce in the market same products at cheaper prices. Even a law that allows farmers to save and re-use seeds can be challenged by Japanese investors in that the law discriminates Japanese investments on seeds in favor of Filipino farmers and frustrates expected profits from these investments.
JPEPA allows direct investor suits against the Philippine government. It effectively undermines Philippine sovereignty to promote appropriate policies.
The dispute settlement mechanism in the JPEPA is still subject to further negotiations between Japan and the Philippines but it is clear that Japanese investors are entitled to sue the Philippine government through investment arbitration tribunals based on rules and standards that is “most conducive to fulfill the objective of the bilateral investment treaty to protect investments and create conditions favorable to investments”. Japanese investors can sue the Philippine government when its present laws have the effect of restricting Japanese investments in the Philippines. Even future legislations by the Philippines may be subjected to future suit should they affect Japanese investments. The enactment of a law allowing farmers' rights, for example, can be the basis of a suit by a Japanese seed company against the Philippine government because the said law jeopardizes its investment and IPR on its seeds that are being re-used and shared by the farming communities.
With the JPEPA, Philippines will confront claims of substantial damages from Japanese investors. The JPEPA does not even recognize the availability of an appellate process for review. In the case of the government of the Czech Republic, it was required by an investment tribunal in Stockholm to pay a foreign company, Central European Media, US$350 million for its violation of a bilateral investment treaty that deprived the company of a stake in an English-language television station in Prague. In the case of Chile which was sued by a Malaysian firm for the government's failure to re-zone a property subject of the Malaysian firm's investment for being contrary to Chile's urban development and environmental policies, the investment tribunal awarded US$5.8 million in favor of the Malaysian firm.
Meanwhile, with possible large investment suits and liabilities, the JPEPA effectively allows Japanese investors to control Philippine national policies. This will entail administrative and legislative costs on the Philippines in acceding its policies and laws to cater to Japanese investments. This is fundamentally an indirect disenfranchisement of the Philippines' sovereignty over its political processes.
JPEPA fails to provide sufficient safeguards for the protection of national biological resources and provisions on access and benefit-sharing.
The JPEPA provides in weak language that Japan and the Philippines must strive to ensure that it does not waive or derogate from its environmental standards. It does not provide or acknowledge other sufficient protections based on internationally recognized standards. The JPEPA also fails to provide additional protection from potential bioprospecting and biopiracy activities by Japanese investors in the Philippines. The loosely-crafted anti-biopiracy law in the Philippines is not sufficient enough as it was not able to prevent U.S. companies to obtain patent over Philippine biological resources like: the Philippine sea snail (conus magus) which the U.S. company Neurex, Inc. had already obtained three patents on; and Ampalaya (memordica charantia) which is now privately-owned by the US National Institute of Health, the US Army and the New York University.
With JPEPA, Japanese companies can all the more utilize biological resources in the Philippines and seek patent protection under an investors' status. Should the government provide additional measures concerning acquisition of rights over Philippine biological resources, Japanese investors may raise complaints under the JPEPA on the basis of the government's acts frustrating Japanese investments. The JPEPA does not recognize the Philippines' sovereignty over its national biological resources. It does not even expressly provide, as an exception, restriction, or additional requirements to its investment provisions, obtaining permissions for any activity to get access to and utilize national biological resources and traditional knowledge, specifying origins of related biological resources and traditional knowledge and benefit-sharing.
A Japanese collector of biological materials investing in research of biological resources, upon obtaining legitimate possession of biological samples under an access permit, can claim protection as an investor with respect to the collected materials. If the government were to request him to return the samples to the Philippines or share benefits with the local communities, claims of violation of investor's rights might arise.
Call not to Ratify but Junk JPEPA
Investment agreements are complex instruments that require assiduous review. With JPEPA, the Philippines must reconsider adopting the agreement as it presents substantial implications on the development of the country concerning the environment, trade, agriculture, and intellectual property, among others. The JPEPA represents a repressive agreement that sacrifices the public interest, the rights of farmers and communities, national biological resources, and the future of Philippine legislation in favor of monopolistic corporate interests of Japanese investors. It represents a policy environment which encourages foreign and corporate interests that do not necessarily aim for the welfare of small farmers, local communities and the national interest.
Moreover, the JPEPA is surrounded by aberrant circumstances which deprive the Filipinos of a meaningful participation, either through public consultation, transparency, access to information, or a meaningful discourse on policies which affect national development.
Rightfully, the JPEPA should not be ratified. The Senate is called to junk the proposed agreement that deprives the Filipino people of their rights and national sovereignty.
Tuesday, April 24, 2007
TRIPS and the Philippine Experience
Whose intellectual innovations, whose properties and whose rights?
This year commemorates the 10th year of our country’s accession to the World Trade Organization (WTO). It is timely that the Third World Studies Center (TWSC) is organizing a series of lectures assessing the impact of the WTO on the Philippines. In the life of a nation, ten years may be too short a span of time to fully comprehend the historical impact of a single event. In the life of an ordinary person, ten years may be too long a time to experience and endure the consequences of any event for that matter.
Since our joining the WTO, there have been a million and one analysis, opinions and critique regarding the impacts and implications of the Treaty on our national life. Most of these however have dwelt upon the more high profile political economic effects of the WTO brought about by trade liberalization and consequent policies of State sector privatization and market deregulation. One less discussed issue however, but which has major implications to all of us here, but especially to Filipino farmers, is the WTO provision on Trade Related Aspects of Intellectual Property Rights (TRIPs). TRIPs is the governing provision with regard to IPR issues for all WTO member States. TRIPs itself covers several sectors of the economy, such as industry and manufacturing, pharmaceuticals and living organisms. This paper however will focus on the aspect of TRIPs that deals with IPRs on living organisms, namely Article 27.3(b). The paper will first look at the key elements of said article and then look into its legal translation in the Philippines and compare it with similar legislation adopted by Thailand.
The TRIPs provision
Article 27.3(b) states that:
“Members may also exclude from patentability:
plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system nor by any combination thereof.”
What this essentially means is that a WTO member country may or may not adopt a system of patent for plants and animals, but for plant varieties it is obliged to adopt either a patent system or a sui generis system. Prior to the WTO, hardly any system of IPR laws have been mostly in place in the form of patents or plant breeders rights, or so-called plant variety protection laws.
As early as the 1960’s, developed countries established an international treaty called the Union for the Protection of New Plant Varieties (UPOV), which harmonized plant variety protection systems in member countries. The UPOV itself has undergone a number of versions, the last of which was adopted in 1991. It is important to note that UPOV had been pushing for its own model as the “effective sui generis system” that can be adopted by developing countries in compliance to Article 27.3(b). However, UPOV has been criticized for being mainly a protection system for plant breeders’ rights that consequently restricted the rights of farmers over the use of seeds. While UPOV may be applicable in industrialized countries with predominantly corporate agriculture, it is not necessarily so in developing dominated by small-holder cultivators who largely depend on farm-saved seeds and traditional modes of seed exchanges.
PVP Act of 2002
Pres. Gloria Macapagal Arroyo signed into law Republic Act No. 9168, otherwise known as the Philippine Plant Variety Act (PVPA) on 7 June 2002. The signing of the law did not elicit much public attention but the process on how the law was formulated and its substance became embroiled in some controversy later on. It was learned that one of the key influences in the passage of the law had been a program of the US Agency for International Development (USAID) called Accelerating Growth, Investment and Liberalization with Equity (AGILE). AGILE was aimed at providing ‘technical assistance’ to Philippine departments and agencies in the formulation of policies, especially in line with the thrust of economic liberalization. Through a consultancy firm called Development Alternatives, Inc. (DAI), AGILE was reportedly involved in the crafting of several policies adopted by the government, the PVP law being one of them. Seeing this as “US meddling in Philippine affairs,” the Senate conducted investigations into AGILE-DAI’s activities in the country. Unfortunately, nothing seemed to have come out of those investigations though and the AGILE issue quietly slipped out of the public mind.
Nevertheless, it is instructive to take note of the US government’s role in the formulation of the country’s PVP law. The US government had never hidden its agenda of pushing for the adoption of higher IPR standards that conformed to its own system. At the beginning of the official negotiations leading to the WTO, the US already formed an Intellectual Property Committee (IPC), composed mainly of big business groups that helped the US to lobby for adoption of higher IPR standards in the treaty. The US had pushed for adoption of patents or at the very least UPOV-modelled system. Thus, in the case of the Philippines, with AGILE’s “technical assistance,” we adopted a PVP law that conformed largely to the UPOV. On the other hand, Thailand, which did not receive the same US assistance, came up with a much different PVP law, as we shall see later.
Moreover, the crafting of the PVP law did not undergo broad consultations with stakeholders that could have brought out the opinions and perspectives of different sectors, especially farmers and civil society groups. Public hearings were indeed conducted but they took place in Metro Manila, and most of the participants came from government agencies, academe and public research institutions, and from the seed industry. There were very few representatives from civil society and farmers’ groups, who later on complained that their recommendations were never taken on board in the final version of the law.
PVPA Salient Features
The PVPA defines breeder as the “person who bred, or discovered and developed a new plant variety.” It is possible to interpret this definition broadly to include farmers who have been breeding, discovering and developing varieties for generations, thus allowing them to likewise apply for plant variety protection under the law. However, a narrower interpretation of the definition will confine the term to institutional and commercial plant breeders who use more scientific methods of breeding, discovering and developing varieties that conform to the standards set by the law. Indeed, if one takes into consideration the other provisions of the law it becomes clear that it is not the “farmer as breeder” that the law has in mind but the institutional and commercial breeders who have the capacity and resources to comply with the stringent requirements and standards of the law.
Overall, we note other features of the law that stack the odds against farmers and restrict their rights to seeds. Among them:
• First to file rule: The law favors the person who is the first to file for a PVP application and places the burden of proof on those who wish to challenge the claim. In this case, farmers would be at a disadvantage when one of their varieties is misappropriated and filed for PVP protection by another person on the basis of having been “discovered” by the latter. As we know, farmers lack access to information with regard to government laws and procedures and simply do not have the resources to assert their claims under the existing legal framework. We all know about cases of so-called biopiracy in which biological resources were claimed, patented and commercialized by the persons or companies to the detriment of source communities and countries. Without any protection for farmers’ varieties, the PVP law makes it possible for farmers’ varieties and genetic resources to be legally mis-appropriated from them.
• Filing and varietal testing requirements: The requirements and standards for filing a PVP application are complicated and tedious enough that no ordinary farmer would contemplate availing of the protection under the law. The filing fees and other expenses to meet the law’s requirements are certainly way beyond what farmers can afford. Only institutions and seed companies have the capacity to do so.
• Essentially derived varieties: The protection provided under the PVPA extends to varieties considered essentially derived form the protected variety. Essentially derived varieties refer to varieties that have been developed from an original material and expresses many of the same traits from the latter. This type of protection in effect discourages further breeding and improvement of varieties, which is a common practice among farmers when they use a new variety. Farmers would either do selection from an existing population or use the variety for breeding in order to develop more adapted varieties. Under the PVPA, this is a prohibited act and criminalizes farmers who do improvement and breeding on protected varieties. So rather than spur innovation and improvement in plant breeding, the PVPA restricts this important aspect of agricultural development, and not only in the case of farmers but also for scientists who may want to create new varieties out of protected varieties but are burdened with the prohibition against essentially derived varieties.
• Restrictions on farmers’ rights to seeds: The PVPA supposedly recognizes the traditional rights of farmers to save, use and exchange seeds. At the same time however, it places several conditions and restrictions on these rights when it comes to protected varieties. In general, the law provides that farmers may save, use, exchange, share and sell seeds of protected conditions only under the following conditions:
a. the sale is not for the purpose of reproduction under a commercial marketing agreement
b. the exchange or sale of seeds among and between farmers is for reproduction and replanting in their own land; and,
c. The sale does not involve the trade name or trademark.
Prior to the PVP, a farmer would not have any problems using a plant variety in whatever way he or she does. With PVP however, the farmer is forced to walk a narrow line between what is allowed and what is prohibited by law, therefore placing a virtual “Damocles sword” over him or her. It is farmers’ practice, and part of his or her means of livelihood, to exchange and sell seeds to other farmers. The PVP however restricts such a practice and therefore potentially deducts from the income generating activities of our already impoverished farmers. More importantly, the law goes against farmers’ rights, which is essentially a recognition of the important historical role of farmers in the conservation and development of plant genetic resources over generations. On the other hand, it protects the rights of plant breeders, who in the first place have made use of farmers’ indigenous varieties for their breeding activities without any restrictions whatsoever from the source communities or farmers. The Philippine law in fact does not provide for any benefit-sharing mechanisms to farmers in cases where a protected variety is derived from materials originating from farmers or local communities.
The Thai PVP Law
In essence, the PVPA is patterned after the UPOV system which protects and strengthens plant breeders’ rights while restricting the traditional rights of farmers to the seeds. How this came about had much to do with the role of USAID-AGILE that greatly influenced the drafting and legislative process contrary to what would have been a genuine sui generis process that considered the realities and conditions of Philippine agriculture especially our farmers. On the other hand, Thailand did not experience the same external intervention and came up with PVP legislation that took into account Thailand’s agricultural conditions and veered away in several aspects from the UPOV model. Among the important differences with our PVP law are the following:
• Protection for locally-developed varieties: The Thai law allows a community to seek protection for varieties that have been conserved or developed exclusively by the said community. The variety also does not have to confirm with the stringent standards set by UPOV for new plant varieties although the guidelines for the criteria have still to be developed. Nevertheless, this is an important provision that recognizes the need to protect local and farmers’ varieties. The Philippine PVP law does not provide for the same kind of protection.
• Benefit sharing: The Thai law provides for benefit sharing in cases where a variety applied for protection for commercial purposes is derived from local varieties. The benefit sharing agreement will be entered into by the breeder and the community from which the protected variety is sourced from. The Philippine law does not have that mechanism, which makes it possible for plant breeders to exploit the genetic resources of local communities without the need to share the benefits derived from commercialization.
• Scope of plant varieties: The Thai law provides that the Minister of Agriculture and Cooperatives can designate any particular type of plant as a new plant to which protection if to be afforded. Thus, Thailand opted not to automatically provide protection for all plant species except those designated by government from time to time as eligible for protection. This approach to protection of plant varieties is a far better option as it allows authorities to designate only those species that need to be protected taking into consideration the priorities and needs of the country. No such provision is in the Philippines thus placing all plant species, including seaweeds, as subject to PVP coverage. We do not have the flexibility of exempting certain plant species from PVP protection even when the national interest dictates so.
Clearly, Thailand went through a different process of crafting and passing its PVP legislation where there was broader participation of different stakeholders and without foreign policy interference as in the case of the Philippines. Although the Thai law leaves much to be desired in terms of recognizing and protecting farmers’ rights, it offers much greater flexibility and is more attuned to their domestic agricultural realities than the Philippine PVP law. It is much more sui generis than our own law can claim to be, which is essentially patterned after the UPOV upon the “technical assistance” of USAID-AGILE. We may add as well that India was able to pass an IRR law that explicitly provides for protection of farmers’ rights and varieties, something that the Philippine law falls tragically short of.
Conclusions
The Philippines had the opportunity to craft an independent and truly sui generis IPR system that would have recognized Philippine agricultural realities and provided adequate protection for small farmers, who remain the mass base of our agriculture. When we adopted the UPOV model of protection instead, we therefore lost that historic opportunity and placed our farmers under the threat of criminalization for exercising their traditional rights. Right now, there are more than 30 plant varieties that are being applied for PVP protection, including shallots (sibuyas), eggplant (talong), watermelon, coconut (niyog), yardlong bean (sitaw), tomatoes (kamatis), corn (mais), rice (palay), among others. Most of these applications have been filed by seed companies, and we expect more PVP applications to be made in the future. The consequences of these applications would be to establish monopoly control by plant breeders and companies over these plant varieties, restrict farmers’ use and control over seeds as basic means of production, and adversely affect household and domestic food production and security.
A growing concern right now as well, not only in the Philippines, but in other developing countries is that into IPRs are not only obligated by the WTO but are also being pushed and incorporated into bilateral trade agreements with developed countries, with industrial countries, such as the US, lobbying for higher standards of IPR protection, developing countries entering into these BTAs might end up enacting even more stringent IPR laws, such as patents, on top of or in addition to their PVP laws. The Philippines is right now negotiating a BTA with Japan and plans to enter into one with the US soon. We need to be vigilant and look into the IPR provisions of these agreements to make sure that they do not further endanger our domestic agricultural interests and the rights and livelihoods of our farmers.
What then are the options for our country’s farmers? For us and for our farmer-partners, the PVP and IPRs are definitely not an option, but a threat to their rights and livelihood. For farmers, it is now a matter of exercising and asserting their rights despite the PVP law. On the other hand, a number of farming communities are exploring local models of recognizing and protecting their rights to seeds and their plant varieties, using the power of local governments and the protection afforded by the principle of “prior art,” that is by declaring their plant genetic resources in the public domain. Different models of public declaration or protection of genetic resources are being developed by farmers and supporting legislative measures are being worked out and lobbied with local governments.
There is in fact a pro vision in the Intellectual Property Code (IPC) that mandates Congress to enact a community intellectual rights protection act meant to recognize and protect community and indigenous innovations and knowledge, including over biological resources. However, such a law has yet to be enacted although proposed bills had been submitted in the previous Congress. If government is seriously looking at the interests of our local farmers, and not only the breeders and seed companies, this is an avenue worth pursuing and farmers’ groups and civil society organizations might be wiling to invest their time and resources in a process that in the end will provide a means to recognize and protect their long-held rights, traditions and practices.
This year commemorates the 10th year of our country’s accession to the World Trade Organization (WTO). It is timely that the Third World Studies Center (TWSC) is organizing a series of lectures assessing the impact of the WTO on the Philippines. In the life of a nation, ten years may be too short a span of time to fully comprehend the historical impact of a single event. In the life of an ordinary person, ten years may be too long a time to experience and endure the consequences of any event for that matter.
Since our joining the WTO, there have been a million and one analysis, opinions and critique regarding the impacts and implications of the Treaty on our national life. Most of these however have dwelt upon the more high profile political economic effects of the WTO brought about by trade liberalization and consequent policies of State sector privatization and market deregulation. One less discussed issue however, but which has major implications to all of us here, but especially to Filipino farmers, is the WTO provision on Trade Related Aspects of Intellectual Property Rights (TRIPs). TRIPs is the governing provision with regard to IPR issues for all WTO member States. TRIPs itself covers several sectors of the economy, such as industry and manufacturing, pharmaceuticals and living organisms. This paper however will focus on the aspect of TRIPs that deals with IPRs on living organisms, namely Article 27.3(b). The paper will first look at the key elements of said article and then look into its legal translation in the Philippines and compare it with similar legislation adopted by Thailand.
The TRIPs provision
Article 27.3(b) states that:
“Members may also exclude from patentability:
plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system nor by any combination thereof.”
What this essentially means is that a WTO member country may or may not adopt a system of patent for plants and animals, but for plant varieties it is obliged to adopt either a patent system or a sui generis system. Prior to the WTO, hardly any system of IPR laws have been mostly in place in the form of patents or plant breeders rights, or so-called plant variety protection laws.
As early as the 1960’s, developed countries established an international treaty called the Union for the Protection of New Plant Varieties (UPOV), which harmonized plant variety protection systems in member countries. The UPOV itself has undergone a number of versions, the last of which was adopted in 1991. It is important to note that UPOV had been pushing for its own model as the “effective sui generis system” that can be adopted by developing countries in compliance to Article 27.3(b). However, UPOV has been criticized for being mainly a protection system for plant breeders’ rights that consequently restricted the rights of farmers over the use of seeds. While UPOV may be applicable in industrialized countries with predominantly corporate agriculture, it is not necessarily so in developing dominated by small-holder cultivators who largely depend on farm-saved seeds and traditional modes of seed exchanges.
PVP Act of 2002
Pres. Gloria Macapagal Arroyo signed into law Republic Act No. 9168, otherwise known as the Philippine Plant Variety Act (PVPA) on 7 June 2002. The signing of the law did not elicit much public attention but the process on how the law was formulated and its substance became embroiled in some controversy later on. It was learned that one of the key influences in the passage of the law had been a program of the US Agency for International Development (USAID) called Accelerating Growth, Investment and Liberalization with Equity (AGILE). AGILE was aimed at providing ‘technical assistance’ to Philippine departments and agencies in the formulation of policies, especially in line with the thrust of economic liberalization. Through a consultancy firm called Development Alternatives, Inc. (DAI), AGILE was reportedly involved in the crafting of several policies adopted by the government, the PVP law being one of them. Seeing this as “US meddling in Philippine affairs,” the Senate conducted investigations into AGILE-DAI’s activities in the country. Unfortunately, nothing seemed to have come out of those investigations though and the AGILE issue quietly slipped out of the public mind.
Nevertheless, it is instructive to take note of the US government’s role in the formulation of the country’s PVP law. The US government had never hidden its agenda of pushing for the adoption of higher IPR standards that conformed to its own system. At the beginning of the official negotiations leading to the WTO, the US already formed an Intellectual Property Committee (IPC), composed mainly of big business groups that helped the US to lobby for adoption of higher IPR standards in the treaty. The US had pushed for adoption of patents or at the very least UPOV-modelled system. Thus, in the case of the Philippines, with AGILE’s “technical assistance,” we adopted a PVP law that conformed largely to the UPOV. On the other hand, Thailand, which did not receive the same US assistance, came up with a much different PVP law, as we shall see later.
Moreover, the crafting of the PVP law did not undergo broad consultations with stakeholders that could have brought out the opinions and perspectives of different sectors, especially farmers and civil society groups. Public hearings were indeed conducted but they took place in Metro Manila, and most of the participants came from government agencies, academe and public research institutions, and from the seed industry. There were very few representatives from civil society and farmers’ groups, who later on complained that their recommendations were never taken on board in the final version of the law.
PVPA Salient Features
The PVPA defines breeder as the “person who bred, or discovered and developed a new plant variety.” It is possible to interpret this definition broadly to include farmers who have been breeding, discovering and developing varieties for generations, thus allowing them to likewise apply for plant variety protection under the law. However, a narrower interpretation of the definition will confine the term to institutional and commercial plant breeders who use more scientific methods of breeding, discovering and developing varieties that conform to the standards set by the law. Indeed, if one takes into consideration the other provisions of the law it becomes clear that it is not the “farmer as breeder” that the law has in mind but the institutional and commercial breeders who have the capacity and resources to comply with the stringent requirements and standards of the law.
Overall, we note other features of the law that stack the odds against farmers and restrict their rights to seeds. Among them:
• First to file rule: The law favors the person who is the first to file for a PVP application and places the burden of proof on those who wish to challenge the claim. In this case, farmers would be at a disadvantage when one of their varieties is misappropriated and filed for PVP protection by another person on the basis of having been “discovered” by the latter. As we know, farmers lack access to information with regard to government laws and procedures and simply do not have the resources to assert their claims under the existing legal framework. We all know about cases of so-called biopiracy in which biological resources were claimed, patented and commercialized by the persons or companies to the detriment of source communities and countries. Without any protection for farmers’ varieties, the PVP law makes it possible for farmers’ varieties and genetic resources to be legally mis-appropriated from them.
• Filing and varietal testing requirements: The requirements and standards for filing a PVP application are complicated and tedious enough that no ordinary farmer would contemplate availing of the protection under the law. The filing fees and other expenses to meet the law’s requirements are certainly way beyond what farmers can afford. Only institutions and seed companies have the capacity to do so.
• Essentially derived varieties: The protection provided under the PVPA extends to varieties considered essentially derived form the protected variety. Essentially derived varieties refer to varieties that have been developed from an original material and expresses many of the same traits from the latter. This type of protection in effect discourages further breeding and improvement of varieties, which is a common practice among farmers when they use a new variety. Farmers would either do selection from an existing population or use the variety for breeding in order to develop more adapted varieties. Under the PVPA, this is a prohibited act and criminalizes farmers who do improvement and breeding on protected varieties. So rather than spur innovation and improvement in plant breeding, the PVPA restricts this important aspect of agricultural development, and not only in the case of farmers but also for scientists who may want to create new varieties out of protected varieties but are burdened with the prohibition against essentially derived varieties.
• Restrictions on farmers’ rights to seeds: The PVPA supposedly recognizes the traditional rights of farmers to save, use and exchange seeds. At the same time however, it places several conditions and restrictions on these rights when it comes to protected varieties. In general, the law provides that farmers may save, use, exchange, share and sell seeds of protected conditions only under the following conditions:
a. the sale is not for the purpose of reproduction under a commercial marketing agreement
b. the exchange or sale of seeds among and between farmers is for reproduction and replanting in their own land; and,
c. The sale does not involve the trade name or trademark.
Prior to the PVP, a farmer would not have any problems using a plant variety in whatever way he or she does. With PVP however, the farmer is forced to walk a narrow line between what is allowed and what is prohibited by law, therefore placing a virtual “Damocles sword” over him or her. It is farmers’ practice, and part of his or her means of livelihood, to exchange and sell seeds to other farmers. The PVP however restricts such a practice and therefore potentially deducts from the income generating activities of our already impoverished farmers. More importantly, the law goes against farmers’ rights, which is essentially a recognition of the important historical role of farmers in the conservation and development of plant genetic resources over generations. On the other hand, it protects the rights of plant breeders, who in the first place have made use of farmers’ indigenous varieties for their breeding activities without any restrictions whatsoever from the source communities or farmers. The Philippine law in fact does not provide for any benefit-sharing mechanisms to farmers in cases where a protected variety is derived from materials originating from farmers or local communities.
The Thai PVP Law
In essence, the PVPA is patterned after the UPOV system which protects and strengthens plant breeders’ rights while restricting the traditional rights of farmers to the seeds. How this came about had much to do with the role of USAID-AGILE that greatly influenced the drafting and legislative process contrary to what would have been a genuine sui generis process that considered the realities and conditions of Philippine agriculture especially our farmers. On the other hand, Thailand did not experience the same external intervention and came up with PVP legislation that took into account Thailand’s agricultural conditions and veered away in several aspects from the UPOV model. Among the important differences with our PVP law are the following:
• Protection for locally-developed varieties: The Thai law allows a community to seek protection for varieties that have been conserved or developed exclusively by the said community. The variety also does not have to confirm with the stringent standards set by UPOV for new plant varieties although the guidelines for the criteria have still to be developed. Nevertheless, this is an important provision that recognizes the need to protect local and farmers’ varieties. The Philippine PVP law does not provide for the same kind of protection.
• Benefit sharing: The Thai law provides for benefit sharing in cases where a variety applied for protection for commercial purposes is derived from local varieties. The benefit sharing agreement will be entered into by the breeder and the community from which the protected variety is sourced from. The Philippine law does not have that mechanism, which makes it possible for plant breeders to exploit the genetic resources of local communities without the need to share the benefits derived from commercialization.
• Scope of plant varieties: The Thai law provides that the Minister of Agriculture and Cooperatives can designate any particular type of plant as a new plant to which protection if to be afforded. Thus, Thailand opted not to automatically provide protection for all plant species except those designated by government from time to time as eligible for protection. This approach to protection of plant varieties is a far better option as it allows authorities to designate only those species that need to be protected taking into consideration the priorities and needs of the country. No such provision is in the Philippines thus placing all plant species, including seaweeds, as subject to PVP coverage. We do not have the flexibility of exempting certain plant species from PVP protection even when the national interest dictates so.
Clearly, Thailand went through a different process of crafting and passing its PVP legislation where there was broader participation of different stakeholders and without foreign policy interference as in the case of the Philippines. Although the Thai law leaves much to be desired in terms of recognizing and protecting farmers’ rights, it offers much greater flexibility and is more attuned to their domestic agricultural realities than the Philippine PVP law. It is much more sui generis than our own law can claim to be, which is essentially patterned after the UPOV upon the “technical assistance” of USAID-AGILE. We may add as well that India was able to pass an IRR law that explicitly provides for protection of farmers’ rights and varieties, something that the Philippine law falls tragically short of.
Conclusions
The Philippines had the opportunity to craft an independent and truly sui generis IPR system that would have recognized Philippine agricultural realities and provided adequate protection for small farmers, who remain the mass base of our agriculture. When we adopted the UPOV model of protection instead, we therefore lost that historic opportunity and placed our farmers under the threat of criminalization for exercising their traditional rights. Right now, there are more than 30 plant varieties that are being applied for PVP protection, including shallots (sibuyas), eggplant (talong), watermelon, coconut (niyog), yardlong bean (sitaw), tomatoes (kamatis), corn (mais), rice (palay), among others. Most of these applications have been filed by seed companies, and we expect more PVP applications to be made in the future. The consequences of these applications would be to establish monopoly control by plant breeders and companies over these plant varieties, restrict farmers’ use and control over seeds as basic means of production, and adversely affect household and domestic food production and security.
A growing concern right now as well, not only in the Philippines, but in other developing countries is that into IPRs are not only obligated by the WTO but are also being pushed and incorporated into bilateral trade agreements with developed countries, with industrial countries, such as the US, lobbying for higher standards of IPR protection, developing countries entering into these BTAs might end up enacting even more stringent IPR laws, such as patents, on top of or in addition to their PVP laws. The Philippines is right now negotiating a BTA with Japan and plans to enter into one with the US soon. We need to be vigilant and look into the IPR provisions of these agreements to make sure that they do not further endanger our domestic agricultural interests and the rights and livelihoods of our farmers.
What then are the options for our country’s farmers? For us and for our farmer-partners, the PVP and IPRs are definitely not an option, but a threat to their rights and livelihood. For farmers, it is now a matter of exercising and asserting their rights despite the PVP law. On the other hand, a number of farming communities are exploring local models of recognizing and protecting their rights to seeds and their plant varieties, using the power of local governments and the protection afforded by the principle of “prior art,” that is by declaring their plant genetic resources in the public domain. Different models of public declaration or protection of genetic resources are being developed by farmers and supporting legislative measures are being worked out and lobbied with local governments.
There is in fact a pro vision in the Intellectual Property Code (IPC) that mandates Congress to enact a community intellectual rights protection act meant to recognize and protect community and indigenous innovations and knowledge, including over biological resources. However, such a law has yet to be enacted although proposed bills had been submitted in the previous Congress. If government is seriously looking at the interests of our local farmers, and not only the breeders and seed companies, this is an avenue worth pursuing and farmers’ groups and civil society organizations might be wiling to invest their time and resources in a process that in the end will provide a means to recognize and protect their long-held rights, traditions and practices.
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