January 28, 2004
Translation: FTAA Secretariat
COMMITTEE OF GOVERNMENT REPRESENTATIVES ON THE PARTICIPATION OF
CONTRIBUTION IN RESPONSE TO THE OPEN AND ONGOING INVITATION
Andrés Anselmo Aguayo Díaz
covers the following country(ies) or region(s):
FTAA ENTITIES (Please check the FTAA
Entity(ies) addressed in the contribution)
|Negotiating Group on
||Committee of Government
Representatives on the Participation of Civil Society
|Negotiating Group on
||Consultative Group on Smaller
|Negotiating Group on
||Technical Committee on Institutional
Issues (general and institutional aspects of the FTAA Agreement)
|Negotiation Group on
||FTAA Process (check if the
contribution is of relevance to all the entities)
|Negotiating Group on
|Negotiating Group on
|Negotiating Group on
|Negotiating Group on
|Negotiating Group on
Subsidies, Antidumping and Countervailing Rights
THE NON-PATENTABILITY OF GENETIC INFORMATION (GI)
Do we want the FTAA to be a “Community of Values” that will transcend
and give meaning to economic concerns? Or will we accept that economic
concerns prevail as the absolute value? There are no two possible
answers to these questions. Our societies’ socioeconomic and political
evolution, the extent of this agreement, and its long-term consequences
dictate that the FTAA cannot be approached from a reductionist
In Chapter XX on Industrial Property (IP), this “Community of Values”
materializes in Section A on general aspects. In this section, the
following are acknowledged as basic principles of IP: socioeconomic
and technological development (article 1.1); the preeminence of
promoting public health and access to medicines (article 1.4); the
contribution of IP rights to promoting the social and economic
welfare of members, through innovation, dissemination, and technology
transfer among members, to the mutual advantage of technology producers
and users, striking a balance between members’ rights and
obligations (article 2.1). Furthermore, recognition is given to the
freedom of members to protect the population’s health and nutrition,
as well as the freedom to promote public interest1
in sectors significant to socioeconomic and technological development
For those who aspire to creating a “Community of Values” in the Americas
that is based on liberty, equality, mutual respect, and responsibility,
whose ultimate objective is none other than achieving the socioeconomic
welfare of its members, Section A on general aspects is of the utmost
importance and positions must be firmly protected from purely economic
The topic we wish to address in light of a “Community of Values” is a
specific patent law issue, to wit: the non-patentability of genetic
information (GI). Before engaging in our subject, we must place it
within the proper context, bearing in mind the tenets of patent law.
Patent law emerges as a means to foster the creation of technological
information. In fact, when considered in light of its economic
dimension, technological information is a “public good”2,
and, as such, technological information is subject to the problem of its
“impossibility of appropriation”. This means that, in a market with no
patent law, there is no incentive to produce technological information.
Patent law corrects this flaw, creating the incentive necessary to
generate information so that it may become a tradable object of
property. In other words, patent law responds to a public need (market
imperfections, lack of creation of technological information) and uses
the creation of a specific type of property, i.e. IP, as a corrective
Thus, traditionally, it has been pointed out that patent law is built
upon a social agreement that balances collective interests with private
interests. Society pursues welfare at large by fostering technological
development. On the other hand, private individuals are motivated by the
expectation of the economic rewards to be derived from patented
This social agreement materializes through mutual obligations and
rights. Thus, the State will grant a patent on an invention, which is an
exclusive, temporary right of use in its territory. Conversely, the
private individual must publicize the invention (TRIPS, Article 29) from
the onset of the patenting process, which allows third parties to use
this new knowledge in other research. Once the patent expires, the
invention itself may be used by third parties.
In the past, patent systems provided for the obligation to exploit the
patent industrially within the territory of the country that granted the
patent. Beginning in the nineties, however, this obligation began to
disappear from national legislations due to heavy pressure from several
technology-producing countries 3
The obligation's coup de grace came from Article 28 of the TRIPS
Agreement. Eliminating this obligation changed the very nature of the
patent system, turning what had been an industrial monopoly into a
commercial monopoly. There being no effective exploitation in the
territory of the country granting the patent, how can there be any
transfer of technology? In other words, big enterprises were granted
more prerogatives and guarantees, to the detriment of effective
technology transfers and direct investment.
Undoubtedly, the patent system lost a significant pillar in the TRIPS
Agreement and its very nature was altered intrinsically. We could think,
however, that if this concession was made to technology-producing
countries in exchange for mutual concessions, technology-importing
countries would have had a neutral balance of power in the negotiations.
Yet, the obstacle that stalks almost ten years of THE TRIPS Agreement is
that, apparently, there were no mutual concessions or, if there were any
at all, they were merely a siren song.
Finally, patent law, as part of a global system, should be in harmony
with other values legally recognized by society, such as the protection
of health, free competition, the environment and development policies
for various sectors.
In summary, patent law emerges with the public purpose of promoting
social welfare by fostering technological creation, and is subject to
public interests, both those inherent to patent law and to law in
general. This characteristic of patent law must not only be preserved in
the FTAA; it must be reinforced. In other words, patent law must be
included in a “Community of Values” that remains in tune with our
societies’ evolutionary process.
The prohibition of patenting GI is contained in Article 1.5, letter (c)
of the Patents Subsection of the draft Chapter. Both its final
establishment and scope are under negotiation.
This prohibition is significant for the following three reasons:
(a) From a strictly legal standpoint, it is imperative that the
non-patentability of GI be reinforced so that the patent system is not
undermined and to avoid it becoming an instrument of abuse rather than
(b) From a political standpoint, the non-patentability of GI entails
both the affirmation of a governmental power to implement different
public policies for the development of technology and certain economic
sectors, such as the affirmation of a citizen's freedom to engage in
certain economic activities, a power and freedom that would otherwise be
(c) Finally, this prohibition is a very useful instrument to structure a
healthy competition policy, which ultimately benefits the consumer. In
other words, the non-patentability of GI limits the ability of large
enterprises to abuse IP rights in prejudice of competition.
The fact that we support this prohibition does not mean that we reject
patents on inventions based on GI. In fact, we absolutely favor the
development of biotechnologies and, in particular, the use of GI in
developing new products and processes. We feel, however, that patents
should only protect “a concrete application” of a specific GI, but not
the GI itself, which should remain in the public domain so that it may
be used by the entire community.
This principle of the non-patentability of GI is shared by the great
majority of experts, scientists, and politicians. The danger lies,
however, in establishing it incorrectly or incompletely, which would
allow for ambiguous interpretations. A notable example of this danger is
European directive 98/44 regarding the legal protection of
biotechnological inventions. This document was the result of 10 years of
intense public debates,4
, which are still being pursued.
Article 5 of the directive refers to the patentability of the human
genome and is, perhaps, its most criticized provision. The article reads
“1. The human body, at the
various stages of its formation and development, and the simple
discovery of one of its elements, including the sequence or
partial sequence of a gene, cannot constitute patentable inventions.”
“2. An element isolated from the human body or otherwise
produced by means of a technical process, including the sequence
or partial sequence of a gene, may constitute a patentable invention,
even if the structure of that element is identical to that of a
“3. The industrial application of a
sequence or a partial sequence of a gene must be disclosed in the
Unfortunately, there isn’t enough space here to analyze the article in
depth, but suffice it to say that subparagraph one, which affirms the
principle of non-patentability, contradicts subparagraph two, which
allows patentability on the condition that the gene or partial sequence
be isolated from the human body or otherwise obtained through a
This determination, the fruit of intense lobbying by biotechnology
enterprises, cannot be the final result. In the next section we will
further examine the tenets of the non-patentability of GI.
1. The prohibition's significance to patent law.
The prohibition we are studying is an application of a broader
principle: the non-patentability of discoveries. In fact, invention (not
discovery) is a condition for the application of patent law. Thus, only
inventions are patentable. Furthermore, an invention legitimizes patent
law, wherefore there is no justification for awarding an exclusive right
of exploitation to a private individual for a non-inventive activity.
Consequently, any ambiguity on the matter is an attempt against the very
tenets of patent law.
As indicated above, GI is not an invention; it preexists in nature.
Thus, it is merely the discovery of information already present in
We should point out, however, that the distinction between an invention
and a discovery in the biotechnology sector is complex. This matter will
be addressed very superficially for the sake of brevity, due to the
confines of this work.
1.1. Distinction between Discovery and Invention
The concept of invention embodies several elements that make it a rather
complex topic. Notwithstanding, it can be said that an invention is a rule or set of technical rules that make it possible to solve an
industrial problem. The similarities between a discovery and an
invention are many: both are human activities that increase man's
knowledge. However, a discovery is generally a contemplative action that
verifies causal relationships and has no immediate
industrial application. On the other hand, an invention is an
essentially productive action that creates relationships based on a
purpose (because it aims to determine "how" to solve an industrial problem) and has a direct industrial application.
In the biotechnology sector, discovery and invention can be confused as
part of one single action. This fusion is produced, once upon discovering a causal relationship, e.g. the production of a
particular protein with a partial genetic sequence) a relationship of
finality is established that resolves an industrial problem (e.g.
the creation of a new test to detect some form of cancer). In other
words, the industrial problem for which a solution is being sought
(improve or invent a test) is the result of a discovered causal
relationship) (the synthesis of protein from a partial sequence) having
been used, in an industrial context. This example shows that a discovery
can be made and an invention created in a single act.
But even in such complex cases it is possible to make a distinction
between both categories. The distinction is teleological in nature. In
other words, the distinction lies in the intention behind the act. If
this act is performed within the context of pure research, it will be a
discovery. However, if the act is performed within a technical context,
the objective being to find a solution to an industrial problem, it will
be both a discovery and an invention.
This conclusion leads us to ponder the following question: in those
cases where the distinction between discovery and invention is not
clear, does the invention patent protect the discovery itself? Or,
rather, does the discovery remain in the realm of the inappropriable,
for use by the public at large.
There is no ambiguous response to this question. The discovery can never
again be the object of appropriation; this is the non plus ultra
of intellectual property rights. Any other alternative leads to
“madness”. For example, if the discovery patent is accepted, the law of
gravity or mathematics could well prove to be the object of private
appropriation as well. What is serious is the fact that this is not a
rhetorical resource; rather, it corresponds directly to the reality. To
allow the appropriation of the GI would be tantamount to allowing the
appropriation of the force of gravity. Imagine the absolute power that
anyone endowed with a discovery patent would enjoy.
2. The importance of prohibition for competition policies and
industrial development policies and for preserving the freedom of
In order to grasp the significance of this problem, the fact that every
gene or partial sequence has multiple industrial applications and,
furthermore, that the vast majority of these genes are still unknown,
must be borne in mind.
The problem posed by the patentability of GI can be summarized as
follows: the patent owner holding a patent of any specific GI will have
a monopoly on information that has multiple applications, most of which
are unknown. A patent on a specific GI, therefore creates a monopoly on
all the existing and potential industrial applications originating from
the patented GI.
Clearly, a patent of this nature creates an obstacle for third parties
wishing to work with patented GI, in view of the fact that the results
will depend on the patent holder’s wishes. This is clearly a
disincentive to the research and development of applications in the area
This result, which runs counter to the logic of economic efficiency, has
three harmful consequences: the State loses its authority to set
development and promotion policies in the biotechnology sector, citizens
lose the freedom to pursue an economic activity, and finally,
unjustified monopolies are established, laying the foundations for all
kinds of abuses.
provides an illustrative example19956
of the impact that patents have on GI. In 1995, the British Institute of
Cancer Research (ICR) discovered a mutation in one of the breast cancer
families that could be associated with the BRCA1 and BRCA2 genes.
Subsequently, Myriad, a US company, requested a patent on both genes and
created a medical analysis process based on this discovery. When it was
awarded the patent, Myriad threatened to take legal action against those
companies that used these genes to track breast cancer. The research on
these genes by ICR and other research centers was halted as a result of
this threat. In sum, the usefulness of this genetic information was
reduced to a cancer detection test, and any incentive to develop much
more valuable treatment therapies disappeared.
Unless GI patentability is clearly established in the FTAA, thousands of
cases like the one Sulston describes will crop up across the Americas.
For example, it would be disastrous for Chile if a person, either a
national or a foreigner, were to patent the genes of the grape vine or
salmon since this would bring any biotechnological development by other
companies to a halt, not to mention the fact that overwhelming
royalties, the amount and quantity of which we are not even able to
predict, would be charged. The State would lose its authority to
implement research development policies in the affected sectors.
Individuals’ freedom of enterprise would be curtailed. And finally, it
is not difficult to imagine the wide variety of abuses that would result
from these patents, which would, in turn, have serious consequences for
free competition and harm companies and consumers.
As indicated earlier, we firmly support the development of
biotechnologies, and we believe that the development of GI-based
industrial applications will create an unprecedented level of social
wellbeing for humanity. We are convinced of the role that a healthy
patent system plays in the development of biotechnology. We agree with
the contents of the FTAA draft agreement in that the liberalization of
international trade is a value at the service of other more important
goods, thereby establishing a "Community of Values", among which we make
special mention of the preeminence of the promotion of public health
and access to medicines, the promotion of social and economic wellbeing
of the members, the reciprocal benefit of producers and users of
technology, and the balance of rights and obligations among members.
In addition, we must emphasize that the transformation of the TRIPS
patent system did not benefit the technology-importing countries.
Finally, in this regard, we reiterate that GI is inappropriable, but
that industrial applications are appropriable. In this way, an incentive
to develop and advance these applications is created, and the negative
consequences resulting from the appropriation of pre-existing
information in nature are avoided.
1 The current draft language talks of
“sectors of vital importance.” That is, public interest could not be
promoted in domestically significant sectors, but rather only in sectors
of “vital” importance. We hope that the final language will be devoid of
the adjective “vital”.
2 We refer here to the economic concept of a
public good, which bears no resemblance to the legal notion of public
3 For example, the enforcement of Section
301 of the Trade Act of the United States of America.
4 One of the most interesting discussions
is on the patentability of the human genome.
5 Nobel Prize for Medicine 2002, researcher
in biology and founder of the Sanger Institute, Cambridge, United
6 Article published in Le Monde, 22 December