Genetic resources, IP and benefits sharing: what changes are ahead internationally?

As the use of genetic resources for innovation becomes more prevalent, the wider field of engineering biology offers a way to tackle societal pressures – such as the development of fossil fuel replacements, new vaccines and alternative proteins – while also driving economic growth.

These international opportunities are consequently driving a significant increase in the focus globally on the interplay between the use of genetic resources, intellectual property (IP) and equitable benefits sharing.

Global regulatory focus

A new World Intellectual Property Organisation (WIPO) treaty on IP, genetic resources and associated traditional knowledge has recently been adopted, which, when in force, will establish a new international disclosure requirement for patent applicants whose inventions are based on genetic resources or associated traditional knowledge. This would be a separate requirement to those in the Nagoya Protocol.

In addition, there has also been the adoption of a decision under the United Nation's Convention on Biology Diversity (CBD) that paves the way for benefits sharing, albeit voluntarily at this stage, from the use of digital sequence information (DSI) of genetic resources.

Although both the agreed treaty and the decision are watered down versions of the proposals originally made and are said to lack "teeth", they do signal a greater global focus on the issues surrounding the use of genetic resources.

Both the treaty and the decision will have to be implemented nationally to take effect. In the UK, the Regulatory Horizons Council has recently called on the government to ensure that implementation reflects the needs of the engineering biology sector and has maximum impact without hindering science, research and innovation. Businesses involved in this sector should follow carefully how these developments unfold.

New disclosure requirement

Under the WIPO treaty, there are new disclosure requirements when a patent application is based on either genetic resources or traditional knowledge associated with genetic resources. Patent applicants in contracting states will be required to disclose either the country of origin of the genetic resources or the indigenous people – or local community – of the traditional knowledge. If these are unknown, the applicant must provide the source of the information or make a declaration that the source is unknown.

In the treaty, the definition of genetic resources is consistent with the approach taken in the CBD and, therefore, relates to material from plants, animals, microbes or other origins that is of actual or potential value – crucially, it does not include human genetic resources. Traditional knowledge is not defined in the treaty.

The disclosure requirement applies where the genetic resources were or the traditional knowledge was necessary for the claimed invention – and the claimed invention depends on the specific properties of the genetic resources and traditional knowledge.

This disclosure requirement would be separate to and go further than the requirements of the Nagoya Protocol, which deals with access and benefits sharing relating to the use of genetic resources. Under the Nagoya Protocol, patent applicants (and other users of genetic resources and associated traditional knowledge) must make a due diligence declaration, stating that they have complied with any requirements in the country of origin to obtain prior informed consent or enter into mutually agreed terms.

For businesses or institutions that are already complying with the Nagoya Protocol, this information could be reused to meet the WIPO treaty obligations.

However, the Regulatory Horizons Council has recently reported that the implementation of the Nagoya Protocol in the UK has been "heavy handed" and had a chilling effect on research falling within its scope. If the UK were to adopt the WIPO treaty, it would need to ensure that a similar approach to implementation is avoided.

Limited applicability and enforcement

Despite this additional requirement on patent applicants, patent offices would have no obligation to verify any disclosures made. However, they would be expected to provide guidance on how to meet the disclosure requirement. Additionally, the treaty is non-retroactive, so would only apply to patents filed after it enters into force in contracting states.

The sanctions for failing to make a disclosure in the treaty have been watered down from earlier proposals. There are no consequences for the validity of a patent if there has been a failure to disclose the origin of the genetic resources or the traditional knowledge. Applicants must also be given opportunities to rectify failures to disclose or incorrect disclosures.

However, provision is made for possible post-grant sanctions or remedies where there has been "fraudulent intent in regard to the disclosure requirement". The nature of any sanctions or remedies would be for each contracting member state but it does mean that revocation could be possible (if fraudulent intent can be shown).

The treaty will only enter into force three months after it has been ratified by 15 states – currently, Malawi is the only state to have ratified. None of the UK, the US or the EU and its member states are among the 38 signatories to the treaty (which indicates an intention to ratify). However, the US Patent and Trademark Office is currently seeking public comments on whether Washington should sign and implement the treaty. As the consultation was published just before the change of administration, it remains to be seen whether it is a priority for the new incumbents.

Digital sequence information

Agreement was also reached at the end of last year on a mechanism for sharing benefits from genetic DSI under the CBD. This decision established a voluntary fund – called the Cali Fund – in order to promote access and benefit-sharing in the use of genetic resources.

Businesses benefiting from DSI from nature can contribute to the fund, which will be used to support further use of DSI, and the conservation and sustainable use of nature. A significant proportion of the fund will go to indigenous peoples and local communities. Although this paves the way for a compulsory access and benefits-sharing regime for genetic DSI akin to the Nagoya Protocol (which covers tangible genetic materials rather than digital genetic data), at this stage, contributions to the Cali Fund are entirely voluntary. Proposals to make contributions compulsory were abandoned during the negotiation process.

As this decision has been reached under the CBD framework, it will be applicable to the UK and the EU, both of which will have to develop legislation to implement the mechanism. However, the US is not a signatory to the CBD and therefore it is not applicable there.

In the UK, the government has said that it will work with industry to develop a voluntary mechanism and the Regulatory Horizons Council has suggested working with the government to ensure implementation supports its proposed changes to the regulatory landscape for the engineering biology sector. The timeframe for implementation is not yet clear.

Osborne Clarke comment

Although these developments add nothing mandatory to the current framework, either in the UK or elsewhere, they highlight the increased global focus on the use of genetic resources and genetic DSI in the innovation process, and IP rights and benefits associated with that innovation.

It is a particular focus of debate in the UK, with calls on the government to "turbocharge" the engineering biology sector, a sector for which access to and use of genetic resources and genetic DSI is crucial. It is likely that the regulation of this sector, including the implementation of the Nagoya Protocol, whether to implement the WIPO treaty and the implementation of the benefits sharing mechanism for DSI, will receive government attention at some point. Development of the sector could be crucial to the current government's pro-innovation agenda and pro-growth ambitions; however, it remains to be seen how quickly these issues will be addressed.

Laura Henderson, a trainee solicitor with Osborne Clarke, contributed to this Insight.