As of October 1, 2009, China’s Patent Law will require disclosure of the origin of any genetic resources used in an invention for which patent protection is sought in China. With the entry into force of these changes to its Patent Law, China joins a growing number of countries that impose similar requirements on patent applicants. Companies in the chemical and biotechnological industries should takes steps to ensure that their sourcing and research and development operations are aware of these developments and have policies in place to ensure compliance.
For innovative companies in the chemical and biotechnological industries, much of the source material they use in product development comes from nature, often from foreign countries. Chemicals obtained from plants and genetic material harvested from microbes often provide unusual properties, and many chemical and biotechnology companies seek to design products that take advantage of these properties. But companies that search for such source material in foreign countries should take heed: if the source material was obtained from any of an increasing number of countries, such practices may endanger patents covering inventions related to the source material.
These consequences come about because more and more countries are requiring patent applicants to disclose the origin of genetic resources or traditional knowledge used in the development of their inventions. These laws, commonly referred to as Disclosure of Origin (DOO) laws, may also impose penalties for failure to comply, up to and including imprisonment.
This movement toward the enactment of DOO laws was prompted by the Convention on Biological Diversity (CBD). Adopted in 1992, the CBD is a broad treaty focused generally on fostering conservation and sustainable use of biological diversity, but it also recognizes that national intellectual property policies can impact whether biological diversity is sustainably used. For example, CBD Article 15 provides that countries have sovereign rights over their natural resources, including genetic resources found within their borders, and that access to such resources is to be granted under mutually agreed terms and subject to the prior informed consent of the country providing the resources. One goal of these provisions is to ensure that the providing country obtains some of the benefits, including commercial benefits, from products developed using resources obtained within its borders. As a step toward achieving this goal, the Bonn Guidelines were issued in 2002 by the Secretariat of the CBD. The Bonn Guidelines encouraged countries to require disclosure of the origin of genetic resources and traditional knowledge in patent applications as a means to encourage compliance with the CBD.
Following the lead of the Bonn Guidelines, at least 15 countries have enacted DOO laws and several more countries are in the process of developing them. Countries with DOO laws currently in force include the Andean Community (which includes Bolivia, Colombia, Ecuador and Peru), Belgium, Brazil, Costa Rica, Denmark, Egypt, India, Norway, South Africa, Sweden, Switzerland and, as of October 1, 2009, China. New Zealand and Turkey are also in the process of developing DOO laws.
The disclosure requirements in national DOO laws, and penalties for failure to comply, vary widely. At the lenient end of the spectrum is Sweden, whose law states that patent applicants should, but are not required to, provide information on the geographical origin of the material, but that failure to comply will not affect the examination of applications or the validity of an issued patent. At the strict end of the spectrum, India requires disclosure of the source and geographical origin of biological material used in the invention, and provides that it is a criminal act, punishable by imprisonment, to apply for IP rights in any country for an invention based on a biological resource originating in India without prior approval from India’s National Biodiversity Authority. More commonly, however, national laws require disclosure of the source or origin of the materials, and failure to comply may result in invalidity or unenforceability of the patent at issue (see, e.g., South Africa).
Because of the wide variety in the requirements of DOO laws, and the ever-increasing number of countries that have enacted them, it is becoming more important for companies who engage in sourcing of materials from foreign countries to institute a biodiversity IP compliance program. Such a program would include policies to ensure compliance with these laws at all levels of the organization, from prospectors in the field to researchers to IP management professionals, as well as a system to keep abreast of developments in this area.