A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
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Bertrand Munier

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Note on intellectual property in the field of agriculture

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Although no concrete agreement was made in Hong Kong in the field of agricultural trade, there will nevertheless be negotiation on property rights.  This note aims to highlight how unrealistic it would be not to believe that the two are linked.

ADPIC multilateral agreements, negotiated at the WTO, concerning intellectual property related to trade, date back to 1994.  In article 27/3/b of the text containing the legal international basis for this type of agreement, there is provision for a system of minimal intellectual property right to protect plant varieties, either by a patent, a PVC2, or another specific system.  These measures provide a certain “flexibility” for each country to choose the intellectual property system they would like to see respected, according to the terms of the agreement (the same goes for other sectors, notably in the pharmaceutical sector).  In addition, some sections constitute a kind of safeguard for serious cases such as malnutrition (regarding protection granted to plant innovations) or for situations of distress in public health (here it is protection granted to pharmaceutical innovations, with cases of AIDS being the most frequent).

This system has been set up to give both minimum protection to innovations (often coming from rich countries, but not always) and at the same time to find possible ways, at least temporarily, of overcoming obstacles in favour of developing countries which find themselves in difficult situations.  The main means to do this is the “compulsory licence” given - in a way “automatically” - by the developing country to companies within its territory, to enable them to develop certain innovative products which are urgently needed.

The difficulty arises from the fact that it is a minimal system.  Consequently, many resolutions made in bilateral agreements, called “ADPIC+ agreements”, with developing countries by the United States in particular, but also by other countries, have come to nothing, and – this time – to the exclusive advantage of the rich countries in question.  For example, the agreement (ADPIC+) between the United States and Morocco in 2004, states that Morocco must protect pharmaceutical monopolies by demanding that any firm wishing to produce a generic medicine must obtain authorisation to put it on the market.  This requires the same innocuity and efficiency tests to be done on products similar to those carried out by companies which hold patents, and these tests must be approved by the company holding the patent.  In practice, at worst this stops the production of all generic medicines, and at best delays the obtaining of a “compulsory licence” by 5 years, as the “exclusive protection” accepted by Morocco lasts for 5 years according to the terms of the text.  However, this protection can be prolonged if the initial authorisation procedure takes longer than usual.  Morocco has also prohibited all parallel imports of equivalent patented products (a procedure called “reimportation” in the United States , where it is prohibited at the moment, but could soon be authorised).  In other words, any American pharmaceutical company, which obtains authorisation to put a product on the market in Morocco, will have an absolute monopoly for at least five years (and maybe more), which is of course contrary to the intentions of the multilateral ADPIC agreement.  This also ruins the aim of the ADPIC agreements, which is to improve well-being in the world (at least in terms of optimising the chances of second level possibilities).

What is happening today and what happened yesterday as in the example above, will happen tomorrow at the request of any agri-food multinational or cartel of this type concerning seeds and varieties of agricultural or agri-food products. It can only be to the detriment of countries signing contracts like this with the United States, and also to the detriment of competitors of American companies protected in this way, among which there are no doubt some European seed producers.

What is more serious is that these monopolies can be established on the basis of a patent or a PVC.  If, for example, we introduce a gene whose sequence is patented in one variety, this variety becomes transgenic and cannot be confused, of course, with the original variety, but above all this new variety is protected, which benefits only the holder of the patent.   The American patent therefore sometimes allows American companies to shamelessly violate intellectual property rights which could belong to the European Union, not mentioning developing countries, for which it could be even worse..

It is therefore very clear why the United States is not particularly concerned about a non-agreement on the trading of products, and will be satisfied with an agreement on intellectual property.  The agreement could in fact give them an absolute monopoly on a large part of product innovations in any country with which an agreement is signed (all product innovations into which a patented gene can be introduced or which can be obtained by a patented technique), but also of inputs such as seeds, over a series of time-spans (of five years as in the example above of USA/Morocco, or longer).  And clearly we can see, because of the flexibility of the US “patent”, how these temporary monopolies could be renewed over long periods of time, maybe even indefinitely, without the EU having effective legal protection, even from the WTO, to defend itself. 

Of course, a company holding a patent could always authorise access to genetic resources through a system of “crossed licences” (company 'A' authorises company 'B' to use gene X for which it has a patent, in exchange for company 'B' authorising company 'A' access to the variety it has “innovated” to allow it to obtain a transgenic variety of this variety).  But it is not difficult to see that very few company 'A's will sign their own death warrants, where the same market is concerned (or a closely competitive market) during one and the same period…  It may be seen in markets which are geographically different or in ones where products are unlikely to be a substitute for company 'A's products, but in other cases, it is extremely rare.   

We must therefore be extremely cautious about the type of agreements we reach and retro-optimize concessions according to information we have about the partners (in this case the USA ), either in terms of probabilities of possible concessions, or in terms of ordinal preferences 3 .

Bertrand Munier

1 I would like to thank Michel Trommetter for our discussion on Tuesday 12th November, which led me to new research resulting in this note.
2 PVC: Plant Variety Certificate. The PVC protects the variety “innovated” by the holder, but not the industrial technique necessary to produce it (this is covered by a patent).  Europe prohibits any protection of plants by a patent, but the United States accept it, which is much less beneficial for open competition in a perfect market.
3 PVC: Plant Variety Certificate. The PVC protects the variety “innovated” by the holder, but not the industrial technique necessary to produce it (this is covered by a patent).  Europe prohibits any protection of plants by a patent, but the United States accept it, which is much less beneficial for open competition in a perfect market.

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Paris, 10 December 2018