Thank you for the questions on behalf of the USA Nagoya Protocol Action Group (USANPAG) [#2089]. I will answer Questions #3-6 from the perspective of "Bounded Openness over Natural Information". I reproduce your questions below:
"3) If compliance with DSI ABS requirements is to be implemented by way of the IPR system (as proposed as a possibility under Option 2.2):
a. Why would the Patent and Trademark Office and international analogs agree to change their existing rules to take on this enforcement requirement?"
Answer: International law is above national law. In the modality "Bounded Openness over Natural Information", the additional burden is one row in the patent application indicating whether (biotic) natural information has been utilized Y/N. Only should a patent become commercially successful, will the patent-holder be obligated to disclose the identity of the species to the Global Multilateral Benefit-Sharing Mechanism.
"Further, if the PTO or their international analog agreed, would countries be able to implement the proposed option without passage of new laws?"
Answer: See above.
"In many countries, changes to processes associated with IPR systems require approval from the legislature, making this type of change difficult.
b. If countries that are leading producers of both DSI and patents are unable to implement these proposed requirements is this policy option feasible on a global scale?"
Answer: Should a non-Party not conform, then that non-Party would also not enjoy a share in the royalty income for natural information found within its jurisdiction, proportional to the geography of the species which contain it. Similarly, taxonomic institutions in the non-Party will not participate in benefits for species that are ubiquitous or were deposited before the ratification of the CBD. "Bounded Openness over Natural Information" is all about aligning incentives, not just between Users and Providers, but also between Parties and non-Parties. The COP may glean lessons from UNCLOS and the changes of heart that accompany pecuniary interests.
"c. How will non-monetary benefit sharing and/or use of DSI that does not result in patent applications be accounted for?"
Answer: The system rests on equal treatment of artificial and natural information. IPRs are a vehicle for limited-in-time monopoly rents. ABS would be a vehicle for limited-in-time oligopoly rents. However, if a User does not seek any such privilege, then he or she incurs no ABS obligation [#2071]. Equal treatment cuts both ways.
"4) How will any ABS mechanism address the sharing of pathogens and/or other genetic data that could be utilized to respond to public health and/or environmental crises be treated? Will the options under consideration enable emergency-use or provisions or other exemptions for scientific researchers? If so, what determines the requirements to meet 'emergency use' provisions and under which circumstances research would be given an exception? How would these be determined quickly and under what authority?"
Answer: My co-authors and I analyze the case of Ebola in our extensive Report titled "Fairness, Equity and Efficiency for the Convention on Biological Diversity and the Nagoya Protocol: Analysis of a Rodent, a Snail, a Sponge and a Virus". (2021, forthcoming). Sociedad Peruana de Derecho Ambiental / Peruvian Society of Environmental Law. Eschborn, Germany: The ABS Capacity Development Initiative. http://www.abs-initiative.info/about-us/
Below are key messages and a passage from the Report:
---"For pathogens, the first objective of the CBD can be interpreted as preservation in situ and the second, containment and development of diagnostics and vaccines. The third objective of ABS stands;
---Under bilateral ABS, the Provider holds leverage by withholding samples and linking access to the availability of diagnostics and vaccines [under "Bounded Openness" no reasonable justification exists for any such withholding, see following point];
---The public-good nature of the absence of communicable disease justifies that diagnostics and vaccines be free of charge to the populace, regardless of the economic status of the country;
---The best solution for access to samples is a flat-rate payment per sample. The recommendation is contingent on diagnostics and vaccines being free of charge universally;
---The second best solution may be modeled after the Data Access Agreements of GISAID or the standardized contracts of the PIP Framework.
---The facts of Ebola may be hung on the analytical skeleton of economics...
A paradox results should the benefits be royalties. Speedy submission facilitates epidemiology and containment, yet the future demand for the biotechnology products will be diminished because of such diligence. The years which usually lapse from submission of a pathogen sample to the rollout of a vaccine will also undercut royalties as the monetary benefit. Deductions emerge. The monetary benefit should be: (a) claimed by the first-to-submit the isolate and metadata, (b) invariant as to whether an epidemic ensues, viz. a flat rate, (c) earmarked for work on future submissions of viruses and (d) contingent on the Provider not having reduced its budget after similar payments for past submissions (the fungibility problem of Issue #19, in Table 2).
Deductions (a)-(d) are themselves contingent on a recognition that the absence of communicable diseases is a global public good of the first order. The social value and value in use of vaccination dwarf the total costs of vaccine development, which vary by disease."
Please also see “Human Pathogens as Capstone Application of the Economics of Information to Convention on Biological Diversity”, Joseph Henry Vogel, Claribel Fuentes-Rivera, Barbara A. Hocking, Omar Oduardo-Sierra, and Ana Zubiaurre, International Journal of Biology, Vol 5, No. 2: 121-134. April 2013. http://www.ccsenet.org/journal/index.php/ijb/article/view/22760
"5) It has been proposed that monetary benefits derived from access and utilisation of DSI should be subject to the payment of royalties or access fees, to be paid into a multilateral fund.
a. What is a conservative estimate of the anticipated monetary benefit under each of the proposed policy options? on.
Answer: Precision is not necessary. As I argue in the Foreword to "Genetic Resources as Natural Information" (Routledge, Ruiz Muller 2015): "The polymerase chain reaction (PCR) revolutionized biotechnology and its discoverers won the 1993 Nobel Prize in Chemistry. By 2005, the expired patent had earned $2 billion (Fore et al 2006). That fact provokes reflection: Just one piece of natural information, an enzyme, from one species, Thermus acquaticus, could have generated US$300 million for countries of origin at the royalty I suggested in 1992, a startling 15 percent. The sum is three times the six year budget of the International Barcode of Life", p. xiv (https://s3-us-west-2.amazonaws.com/tandfbis/rt-files/docs/9781138801943_foreword.pdf
"b. What are the anticipated costs to oversee and manage the fund, as well as the cost to implement and enforce each policy option?"
Answer. See above.
c. Since developed countries produce more DSI than developing countries, this would suggest that a large portion of monetary benefits contributed to the multilateral mechanism would ultimately be going to developed countries.
Answer: Yes, No and Maybe.
For ubiquitous natural information spread across taxa, the royalties go to taxonomy, where institutions are located mostly in the developed countries. I would think that this would please the USA Nagoya Protocol Action Group, but perhaps not. The frontier in my profession is Behavioral Economics which examines how agents make decisions inconsistent with their own self-interests, Adam Smith be dammed!
For species where the costs of determining geographic distribution is less than the royalty income, Provider countries will share the royalty income. Who benefits more, the Users or the Providers, is an empirical question once the modality is established. Nevertheless, as knowledge increases about species geographic distribution, Providers will be increasingly favored.
"6) Each of these options would have different impacts on different parts of the biological science community.
a. For museums and collections, would DSI generated by specimens from collections belong to the country from which the specimens originated or from the country where the museum is located and the specimens are stored (in other words where financial resources have already been committed to their long term preservation and accessibility of specimens and their associated data? Depending on implementation, collections could be effectively shut down.
b. Would there be a way to generate DSI from legacy collections (eg: from physical specimens collected prior to 2021)?"
Answer: In our aforementioned and forthcoming Report for the ABS Capacity Development Initiative, my co-authors and I address such issues in Box 5, titled "A Grand Bargain with Ex Situ Collections". I copy and paste the contents below:
"What is transferred in a Material Transfer Agreement (MTA) depends on the agreement negotiated. MTAs are bailments, which means that possession of the 'material' is transferred but not the title. 'Material' is legally interpreted as tangible; associated information falls under licensing provisions.[a] Hybrid contracts concerning matter and information characterize most MTAs.
A synthesis of economics and chemistry invites a thought experiment: denature the material transferred in an MTA and then perform R&D. By the First Law of Thermodynamics, the sample will have retained all of its matter, but by the Second, much of the associated information will be lost. One deduces that the 'material' in an MTA should not be interpreted as matter, though legally it is. The value lies in the information as the matter would still be there upon denaturation. A corollary exists: a sample returned in a pristine state to the property owner can also have lost all value in exchange, similar to denaturation, as the owner no longer has any leverage over granting access to the information therein.[b]
Ex situ collections with non-hybrid MTAs cannot engage in R&D without violating the safety of the valuable property, which is a criterion for the bailment: 'the personal property of one person is acquired by another and held under circumstances in which principles of justice require the recipient to keep the property safely and return it to the owner'.[c] However, legal uncertainty will most likely ensue for all MTAs negotiated before the ratification of the CBD in 1993. Few Users and Providers anticipated the meteoric rise of biotechnology; ambiguity is expected in the provisions.
Evaluation of MTAs will be, above all, time consuming. In 1992, E.O. Wilson wrote that three species were being lost each hour.[d] Mass extinction has only worsened since. Modality 3-II can only align incentives if the object of conservation exists. Users and Providers must settle the status of ex situ collections while there is still time. A grand bargain emerges which could leave both Users and Providers agreeably unhappy: Ex situ collections prior to the ratification of the CBD would participate as a group in ABS, where the percentage participation would be equivalent to the geographic area to support a “minimum viable population”.[e] The group would then split their share of royalty income among members with the same pre-1993 specimens.
[a]. B.A. Garner, ed., BAILMENT, Black's Law Dictionary. 11th ed. (2019); A.B. Bennett, W.D. Streitz and R.A. Gacel, "Specific Issues with Material Transfer Agreements", in A. Krattiger, R.T. Mahoney, L. Nelsen, et al. (eds), Intellectual Property Management in Health and Agricultural Innovation: A Handbook of Best Practices (Oxford, UK: MIHR, 2007).
[b]. Arrow's Information Paradox. Investopedia. Available at https://www.mbaskool.com/business-concepts/marketing-and-strategy-terms/12644-arrow-information-paradox.html
[c]. 8A Am. Jur. 2d Bailment § 1 (1997).
[d]. E.O. Wilson, The Diversity of Life (Washington D.C.: Island Press, 1992): 280.
[e]. Carey L. Vath, “Minimum Viable Population: ecology” Britannica. Available at https://www.britannica.com/science/minimum-viable-population
(cc) 2021. Joseph Henry Vogel.