Patent law represents the balance that society has struck between the principle of rewarding inventiveness in a competitive commercial culture and the principle of knowledge gained from research being freely available. However, as a result of increasing privatization, scientific research seems to be shifting away from its traditional values of openness and discussion toward confidentiality and secrecy. As a result, there are concerns that with the growing power of the corporate sector, the extension of patents to life forms will tip an already unequal balance and strengthen the power of corporate interests while further marginalizing questions of human welfare and social justice. Some groups advocate a complete rethinking of the way innovation is promoted in agriculture and the life sciences. As Donald Bruce has argued, there is a growing democratic deficit that is developing in our increasingly globalized society where momentous decisions that could alter the whole future course of humanity are taken in forums that are outside democratic control.

Intellectual Challenges

There is considerable debate about the economic impact of IPRs in general, and determining the benefits and costs of changes catalyzed by new IPR regimes is a complex economic problem. What does seem clear is that the immediate costs will be relatively high, especially for small developing countries, and the benefits are largely speculative and more long-term. Two areas of particular concern here, given that the objectives of TRIPS include promotion and dissemination of technology, are technology transfer and R&D in the agricultural sector.

There is little empirical evidence about the impact of patents and Plant Variety Protection (PVP) on agricultural investment or of their effects on the rate of technology transfer to developing countries. The effects of patents on technology transfer are disputed. One view is that they assist the technology-transfer process in two ways. First, the published patent title discloses information to the benefit of other researchers. Second, the ability to retain control over their technologies allows companies to transfer complementary skills to other countries, either through licensing agreements or through foreign direct investment.

Another view, however, is that patents may nowadays restrict the free flow of new knowledge and scientific information and so inhibit scientific creativity and technological change through imitation. Since importation fulfills working requirements related to patents under TRIPS, companies may be less inclined to transfer their skills to other countries. Although Article 31 of the TRIPS Agreement permits compulsory licensing agreements, legal interpretations differ over the extent to which compulsory licenses can be used for technology transfer purposes. This issue has already caused a storm of controversy over medicines for HIV and AIDS.

The importance of patents and PVP is increasing in part due to changes in the funding of R&D for agriculture. Until relatively recently, agricultural R&D was largely publicly funded. Research results were given to farmers through extension services. The financial returns for publicly financed R&D into improved farming productivity are high for both developing and developed countries. The US economy, for example, benefited from its investment of US$134 million in international wheat and rice research aimed at developing countries by up to US$14.7 billion, according to research by the International Food Policy Research Institute in Washington, DC.

In OECD countries, private spending now accounts for about half of R&D. In many cases governments have moved away from near-market research, which has immediate applicability on farms, to focus spending on basic research that underpins future private R&D efforts. In some countries resources have shifted into areas supporting agribusiness and food processing that “may have reduced rather than increased the rate of return to public sector research,” according to researchers.

The private sector, naturally, invests in areas where it can hope for a return, such as in agrochemicals. Today, former agrochemical companies have expanded to become biotechnology and seed companies or life-science companies, including pharmaceuticals. Huge investments have gone into this area—over US$8 billion per year in the United States alone. But there are concerns that this private proprietary science will focus on crops and innovations that will find rich markets and ignore those of interest to poor, small farmers.

The degree to which stronger IPRs in low-income developing countries would stimulate local research focusing on the needs of domestic farmers is unclear. Large developing countries such as India have an extensive pool of qualified scientists who could form their own research-based agricultural enterprises once they are assured their research outputs will be protected.

Stronger IPRs may open the door to new types of research alliances. Driven by the biotechnology revolution, researchers from developed countries increasingly rely on starting materials taken out of the bio-rich developing world. Although this raises concerns of adequate compensation for developing countries, such research could benefit both developed and developing countries, with initial screening of biological material performed by developing-country enterprises collaborating with large Western research-based agrochemical companies.

The environmental effects of patenting genetically engineered agricultural products also raise concerns. There is a wide range of views within the scientific community and the general public—in Europe if not in the United States—about the wisdom of the rapid, widespread adoption of genetically engineered organisms in the food system. The issues raised by patenting concern the level of responsibility and liability patent holders and licensees will have for any adverse consequences of their inventions on the environment and on human well-being. These may affect other fields of law—such as corporate governance and limited liability. Logically, countries first need to establish appropriate biosafety rules and control systems before considering the enactment of patent regimes that could encourage the development and release of genetically engineered plants. The Biosafety Protocol of the CBD provides the international framework for these systems, but the issue of liability has been left for further negotiation.

If patents and PVP contribute to R&D focused on the needs of small farmers and locally important food crops, then they could have a favorable impact on local farming systems, helping to improve their productivity without producing massive structural change. There are fears, however, that patents and PVP will facilitate the commercialization of farming as has happened in the industrialized countries and so rapidly undermine the whole base of small-scale mixed subsistence and local market-based production systems. If R&D produces varieties and methods most suitable for medium and large-scale farmers, many small farmers will be squeezed out. Such a result would probably greatly increase population movements to urban centers. For most small-scale farmers, access to land, water, seeds, and tools are the basis of their food security. For many, complete dependence on the market for their inputs or food supply is simply too risky and is likely to be so for the foreseeable future. Any new technical opportunities have to be seen within the broader socio-cultural context that will affect whether or not they present real possibilities for the poorest.