The Greening of Technology Transfer:
Protection of the Environment and
of Intellectual Property

WILLIAM HENNESSEY

Let me begin by spending a moment to illustrate one aspect of what we're trying to do here. I hope this conference will deal with many issues in addition to patent law, and that members of the environmental community and the intellectual property community here today will be able to learn from one another about the full range of their respective activities. And one of the things which we, as counsel for intellectual property clients, attempt to do is to emphasize that intellectual property rights are multi-faceted and that there are many ways in addition to patents for innovators and entrepreneurs to strategize to increase the benefits that flow from a wise use of all the many tools that intellectual property law brings to bear.

Before you is a short paper explaining how rights in certification marks and collective marks are acquired and used in the United States under the trademark statute known familiarly as the Lanham Act. In theory, collective marks and certification marks are birds of a different feather under the federal trademark law, the Lanham Act of 1946. They are created by the statute and are defined separately, and separately from trademarks and service marks, in Section 45 of the statute. Certification marks cannot be used on goods or services by the party which owns the mark. Rather, the owner of a certification mark certifies the use of the mark by others as to regional origin, material, mode of manufacture, quality, accuracy, or "other characteristics." Under Section 14(5) of the Lanham Act, if the registrant fails to control use of the mark, engages in production or marketing of any goods or services to which the certification mark is applied, permits the use of the mark for purposes other than certification, or discriminately refuses to certify goods or services of any party who maintains the standards or conditions of certification, the registration may be cancelled. The registrant must maintain control over use of the certification mark and must certify "all comers." Applicants for certification marks must make publicly available the standards for receiving certification. One cannot get a certification mark registration for offering the service of certification. Most authorities agree that the standards for maintenance of a valid certification mark are quite stringent.

Collective marks are marks used by members of an association, group or organization which owns the mark. They include collective trademarks, collective service marks, and collective membership marks. Collective trademarks and service marks indicate that the goods or services come from a member of an organization which controls use of the mark. A collective mark registration may be cancelled under Section 14(3), in cases where a collective mark was registered by or assigned to a member rather than the collective, or where the registrant permits others to use the mark in such a way as to misrepresent the source of the goods or services. The "legitimate control" element means that, for practical purposes, a collective trademark or service mark is treated like a certification mark by the courts. But unlike certification marks, there is no requirement to allow "all comers" to use the mark. An individual member (including a corporate member) of an organization cannot at one and the same time own a collective mark and use it on its own goods or services. In the case of "collective membership" marks, both an organization and its members may make use of the mark -- but only to indicate membership in the organization. Thus, a collective membership mark registrant can sell goods which function to indicate membership in the organization -- primarily to members of the organization -- but cannot be primarily in the business of selling goods and services. From the perspective of the court decisions, as long as the public assumes that any goods or services bearing the collective membership mark are licensed or approved by the organization, the collective mark remains valid. If the organization does not control others -- including members of the organization -- using the collective mark or "insignia" on goods and services, so that the public loses the perception that the organization and its members alone are the only source or sponsor of such goods, the organization will be found to have "abandoned" its rights in the collective mark. The right comes not from registration, but from what the public perceives. As in politics, appearance is reality in the world of trademarks.

Both certification and collective marks have been used by a number of environmental NGOs to help them achieve their goals. I scanned registrations and applications in the United States Patent and Trademark Office for collective and certification marks over the last few years by groups who are interested in some area of environmental protection or environmental activity. There are many profit and non-profit organizations engaged in environmental activities who have already availed themselves of trademark, collective mark, and certification mark protection under the Lanham Act. There is room for many more. I also talked to Charles Zerner last night about the marks that the Rainforest Alliance is working on. You will see that number thirteen on the scan -- the "Smart Wood Program" -- is a certification program of the Rainforest Alliance.

I hope that we will explore today some of the other facets of intellectual property protection which could be used to advantage by environmental groups as well. With that as a preface, now I would like to ask Jeff Kushan of the U.S. Patent and Trademark Office to give his perspective on the issues before us.

JEFFREY KUSHAN:

Thank you. Maybe I should begin by giving a little background how I, as part of the Patent and Trademark Office, got exposed to the environmental community and a lot of environmental activities. About two and a half years ago, we saw in the context of the Convention on Biological Diversity some negotiations developing that tried to address intellectual property concerns. And what we saw was that the topic was not being addressed in a way that was appreciative of intellectual property systems function and how people actually use intellectual property rights, but more from a perspective of intellectual property rights serving as a barrier and causing problems. At that point we joined in the negotiations, and I had the pleasure of spending two weeks in Nairobi in the final session of negotiations trying to weed through a lot of very different concepts that were being injected into the treaty.

Since then I have been fairly active in general technology transfer policy development, not only in the biodiversity context, but also in other treaties as we've seen them develop. These treaties include technology transfer concepts as part of a "quid pro quo" in the process of developing agreements related to conservation. One fairly recent example is the Treaty on Desertification, which contains an even larger section on technology transfer than what you saw in the Biodiversity Convention.

My general inclinations have been shaped by what people have said in these fora about the role of intellectual property in technology transfer. I think the most important thing that needs to be done, and this is a perfect forum for doing this, is to gain a better understanding of, first, what are the technology transfer objectives that we have in these conventions, and then second, what are intellectual property rights and how do they function in this context.

Now, on the latter point, I have some fairly strong views. I see a lot of people looking at intellectual property systems, particularly basic definitional questions of what should be protected and what rights should be given, as the issue for debate. Many feel this should be the focus of agendas for change to improve the process of technology transfer. What we found, and I'll restrict my comments first to the patent system, is that the patent system works well for evaluating inventions. Injecting additional goals that aren't really tied to that evaluation process tends to complicate the patent granting process and the enforcement process to the point that you invariably alter the basic character of the intellectual property right. That, in turn, has the effect of weakening the protection, changing it's character and making it harder to predict how that right will function. In a perfect world, you would have a fairly clear framework of intellectual property laws that are consistent across countries. Understanding and gaining rights should be a process that everybody knows and can be relied upon. Then with that framework in place, you can look at how you can promote technology transfer. Technology transfer, obviously, there's two kinds that we see; one is transfer of knowledge and information. The other one is kind of the more mechanistic concept which is based on licensing of rights. And one is more or less subsumed by the other. The licensing of rights, the mechanistic process of technology transfer, requires legal instruments like intellectual property rights to function. The larger goals of technology transfer, including training, improving information flow, and sharing research results, needs that foundational process to base relationships because really, that is the essence of the second, larger technology transfer goal. It's really cooperation between entities in different countries. Facilitating their cooperation through clear definitional systems for awarding and defining rights can only help that cooperation. Measures we can take to advance consistency in the systems that people are going to use to define rights will enhance cooperation. Once you've established that, more cooperative systems will be in place and then you can press for the goals which are more aptly tied to technology transfer as opposed to simply intellectual property.

ALAN MILLER:

What I wanted to do is describe the objectives from an environmental viewpoint, based on my experience, primarily involved with two international conventions. The Montreal Protocol, which regulates the use of ozone-depleting substances, and the more recently concluded Framework Convention on Climate Change which is in a much earlier stage of implementation. In both agreements, there are obligations for the transfer of technology in order to assist developing countries meet the objectives of those conventions. They are very broadly worded. I realized that it would have probably been useful maybe, Suzanne, to have a compendium just of all the relevant sections from some of these environmental agreements and the language that they use. If I had been clever enough, I'd have done that before I came. But in addition and significantly and perhaps since I'm not as familiar with the Biological Diversity Agreement to be discussed this afternoon, there is, at least in these two agreements, an equal emphasis on provision of financing. So not only is there no implication of technology being provided for free, there is an explicit indication of the recognition that financing has to be provided. And indeed an interim financial mechanism has been created for the Climate Convention and Biological Diversity Convention, in the form of the global environmental facility, which in itself is an interesting topic that I suspect may come up during the course of the day. It is a three-year program that was administered by the World Bank, UN Development Programme, and UN Environment Programme that has recently been evaluated and restructured and given a new governing system. The Ozone Convention, which was originally adopted in 1987, has already been accelerated so as to require the complete phase out of chlorofluorocarbons, halogens and a range of other chemicals identified as damaging the ozone layer.

It incorporates two strategies to assist developing countries in complying with this Convention. First, the Convention included a ten-year grace period for developing countries, allowing them additional time to achieve the implementation of the necessary new technology. It is turning out that many developing countries have recognized that they're better off instead asking for the money and technology to meet the same time-table as the industrialized countries. They appreciate that it is no great benefit to be allowed extra time to be a polluter using chemicals that are being phased out everywhere else in the world, so that your entire technological infrastructure is by definition obsolete when it goes in. I think that is a very significant lesson that a number of developing countries have recognized. The last point about the Ozone Agreement I wanted to address is the experience with an organization called the Industry Cooperative on Ozone Layer Protection, which is comprised of the major electronics and aerospace companies in Japan, the United States, and Europe. With the help of the USEPA, these companies organized to facilitate their elimination of the use of ozone-depleting chemicals. It is important to note that these chemicals were being used for very sophisticated applications, as solvents, in foam blowing, for fire fighting and a range of refrigeration and air conditioning equipment. At the time of the agreement, there were no known substitutes for many of these applications. So there was enormous pressure in about a five year period to come up with substitutes, and these companies, as distinct from the chemical companies who manufactured the offending chemicals, had a strong interest in exchanging information to their mutual benefit. In other words, rather than try to capture the possible proprietary benefits of each individual discovery, they agreed as an organization that they were all better off in meeting their mutual needs by sharing information, which they have done exceedingly effectively. In about a three-year period, most major electronics companies went from not knowing what they were going to do, to in many cases completely eliminating their use of these chemicals - truly a remarkable achievement. Within the last couple of years, they have moved into a very interes ting strategy of attempting to pass along their knowledge to developing countries on a non-proprietary basis. They have done this particularly in East Asia, where they've made agreements with Thailand and Singapore, to provide technical information to those countries, and hopefully we'll get a chance to come back to it.

KARL JORDA:

Thank you. I'd like to come back to intellectual property and licensing and technology transfer and tie it in with what Jeff Kushan has alluded to. In this context and almost in any context nowadays we have to keep in mind that we live in a golden age for patents and intellectual property. In fact, we have a new world order when it comes to intellectual property and transfer of technology.

By way of contrast, let me point out that not too long ago one kept it a secret that one was a patent lawyer, the Supreme Court said only a patent that hasn't reached us yet is valid, and famous economics professors, namely Melman and Machlup, said it would be irresponsible to institute a patent system if we didn't have one, but having one, let's let it ride out, since it has no future. Things have changed dramatically and drastically as I mentioned, not only in this country but worldwide. In this country we have the Court of Appeals for the Federal Circuit, and they have harmonized our patent laws and are considered pro-patent. Congress has enacted a considerable amount of pro-patent and pro- intellectual property legislation. The Justice Department, and that may change now a bit, had simply gone to sleep when it came to ferreting out intellectual property misuse and anti-trust violation in the intellectual property field. And internationally, countries that didn't have any patent systems certainly have them now and they are very modern, very strong ones, and countries that had weak patent systems have improved them and now have very, very strong patent systems. This is the trend. Patents that were, not too long ago, not worth the paper written on, are now so valuable and so enforceable that this has tremendous impact on licensing practices, which if I don't run out of time I'm going to mention. Remember one could disregard patents not too long ago and other intellectual property rights and wait to be sued, because there was a very good chance the infringer would prevail. Even in the unlikely event the infringer lost, his only exposure was a damage award amounting to what a reasonable royalty would have been. So it paid to infringe, rather than acquire a license. But now with astronomical damage awards, the latest being the biggest one of $1.2 billion, in the Litton case for patent infringement, and of course everybody remembers the Polaroid/Kodak situation with almost $1 billion awarded as damages. It's an entirely different ball game.

Now what effect does that have on licensing and technology transfer practices? Let me just say as an aside, there are many thoughtful people who now think the pendulum is swinging too far in many respects, and I don't have the time to go into that right now. The practice of patent blackmail is one reason they say that the pendulum has swung too far. Now when it comes to licensing and transfer of technology, Jeff Kushan has already indicated that technology transfer, licensing and investments are ever so much easier to carry out and accomplish, indeed, if you have patents and intellectual property rights as vehicles or as bases. And on another level, it's my distinct impression, and my colleagues who are here from the Licensing Executive Society can confirm that, or perhaps disagree, that the days are gone when technology transferees in developing countries were taken advantage of. Now there is a realization that has really taken hold, that the only viable license and technology transfer agreement is one that results from a win-win approach and passes the fairness test. And the Licensing Executive Society has had a lot to do with it. It has over 8,000 members, chapters in all countries, and, as we know, it is much easier to negotiate technology transfer agreements with people who are also members of the Licensing Executive Society and most of them nowadays are.

MICHAEL GOLLIN:

I agree with Jeff that the intellectual property system is tricky and delicate and complicated enough, and the environmental protection system is likewise quite a complicated system, subject to its own pressures. And I think they are two separate systems with separate goals. We must keep in mind that intellectual property laws are directed to promoting innovation without much concern as to the social effects of that technology innovation. The people involved in the two areas are generally different, the expertise is different and this is a historical fact that we deal with. Circumstances have now brought these two disciplines together and the question before us is how to harmonize them, preserving the important structures of each, maintaining the ways in which they can achieve their separate goals, and developing ways in which all of the people involved in the two areas can work together. So that's my first point, and I hope that's something that we talk about here.

My second point is that the environmental regulatory structure in this country, and in most countries around the world, is directed quite fundamentally towards promoting environmentally beneficial technology. For over twenty years, we have been passing and amending the statutes such as the Clean Water Act, the Clean Air Act and the National Environmental Policy Act. The technology-forcing aspects of that legislation and regulations under them have been central and fundamental. Serious questions have been raised as to how effectively those technology- forcing provisions have worked. And I don't think there has ever really been a comprehensive study of that issue. I took a stab at it from the patent side a couple of years ago. One of the papers by Mansfield provided to us in the preparation materials, addressed the issue of whether patent data, and patent activity is a valid measure of innovation. I proposed a few years ago looking at patent activity as a measure of innovation that resulted from important environmental legislation, and there was an initial look by the EPA. Attached to the outline I handed out are a couple of graphs showing the very crude number of patents issued in particular classifications of technology. If you look on the second page at the bottom you'll see a classification dealing with prevention of ground water fouling at landfills. It should come as no surprise, I suppose, that the number of patents issued went up dramatically after the passage of the Super Fund Act (CERCLA) in 1980, and the Resource Conservation and Recovery Act in 1976, and the amendments in 1984. This data is very crude, but I think it's an approach that is worth much further study by those who are best able to do it, which may be others then practicing attorneys.

The third point I wanted to make in the few minutes remaining is that intellectual property has come into the environmental technology arena in a big way in the last few years. For example, there is a major enforcement action that the Justice Department is pursuing against a company called Marine Shale. This company has the technology for vitrifying or treating solid waste to stabilize it. The waste can then be used as aggregate in fill and so on. One of the defenses that they've made is that the patenting of the technology has somehow given the technology a government imprimatur. I think most of us would agree that it doesn't.

WILLIAM HENNESSEY:

Thank you Mike, we'll come back to that I'm sure. Now for those who wish to speak, if you would just raise your hand and we will attempt to recognize that we have you on our list of speakers. We'd like to open up the floor for any of you who have views on the issues -- either views in response to what has been expressed, or equally importantly, your own thoughts on the what are the issues,. We'll be happy to recognize you.

THOMAS FIELD:

I'm curious. Compulsory licensing hasn't been very popular in this country, but in the Clean Air Act there's a compulsory licensing provision to force technology transfer. Does anyone here know anything about experience with this?

MICHAEL GOLLIN:

It's my understanding that that provision in the Clean Air Act has never been applied and that there are many people who would just as soon that nobody knew about it.

KATE MURASHIGE:

I want just to make some comments about what many see as the strict separation between environmental protection and intellectual property law. In general, I can certainly see that they've come from different directions and originate in response to different problems and that perhaps there isn't any logical convergence. On the other hand, there have been many instances in which putatively different governmental activities have been used for converging purposes. The instance that immediately comes to mind, of course, relates to the use of the tax laws to promote insulated governmental policies. Presumably the sole purpose of taxation is to raise funds for government operations. But certainly no one would deny that tax laws are also used as an instrument of promoting certain policies. A clear example is in the ongoing controversy over the capital gains tax and whether lowering it would encourage certain types of investment. Another example relates to "sin taxes" such as those on cigarettes to discourage smoking. Therefore, I wonder if some more thought shouldn't be give n to using the patent system in this way to promote conservation. Now admittedly the patent system is limited in the kind of rewards it offers and if the targeted individual or entity can't benefit from the monopoly conferred then such a system isn't going to work at all. However many systems do have provisions for denying patent protection for inventions that are contrary to the public morals or welfare. And the provisions of GATT permit such withholding of patents on subject matter that is contrary to public order and morality. I can't think of too much that's more contrary to public order and morality than destroying the place. So I believe we should give more thought to using that kind of nexus.

JOAN CLARK:

Yes, I have three points I'd like to make. The last speaker said something that I don't agree with, that is that there is no logical convergence here, so it would appear, between intellectual property or patents on the one hand and environmental matters. I was always taught when I went to law school, that a patent was a contract between the inventor and the state in return for the monopoly which was given to the inventor. The state got the advantage of the knowledge of what the invention was, it wasn't kept secret and also there were prescribed limits, and after the patent expired the rest of the world, rest of the people in that particular country would know how to operate and exploit the invention. So it was a contract, and the purpose of it, I always thought was for the common good. So I would say since a patent's, I believe, a basic premise is that it is something that was created for the common good, it's not to benefit the inventor only, and it's not to benefit corporations only, but it's to benefit everyone and that of course is the objective of our environmental pursuits, so I would say there is very definitely a common link and I think that should be pursued. Now the second point I'd like to make, reference was made to the GATT, and there is a provision in the NAFTA also to the same effect, that anything which is detrimental to among other things the environment, could be the subject of a prohibition by any country which is a member of the NAFTA. So that is a very interesting recognition, and incidentally as some European lawyers, with whom I've been involved recently on questions of the environment, were absolutely amazed that the United States had signed that provision. Of course it's not necessarily law in the United States but I'm very pleased they did. And the third matter I'd like to touch on is compulsory licensing. I made a suggestion to a number of international groups that different countries, that compulsory licensing might be, well it's a course of measure, but it might be something that could be considered in order to promote patents that benefit the environment. I mentioned that as an addition to the possibilities of incentives. Well, the reaction to compulsory licensing was as if I had attacked motherhood, and with the exception of one or two countries, which were represented by individuals who, I think, were progressive in their thinking, they thought that was absolutely terrible. And it has been said that for a hundred years there have been attempts to promote the patent system and to prevent any restriction on it, such as by compulsory licensing. So I think it will be difficult to get countries, especially in Europe, to agree to compulsory licensing.

H. WALTER HAEUSSLER:

Kate raised the issue of using the patent system for social legislation and I think Jeff made the comment before her that he thought that the goal of the patent system should be to keep it lean and mean and avoid social legislation, because it was important to quickly determine what "rights" were with some sort of certainty. I think we see in the United States that when we try to use the patent system for social legislation, when we got down to patenting animals, the legislature, the Congress, were afraid to address the issue directly, so they hid behind the patent laws, and they said 'we simply will not issue patents for a year.' I think the patent system is not amenable to social legislation, and Kate, I would disagree with you, holding up IRS as a model of virtue...

KATE MURASHIGE:

No one said it was a model of virtue.

H. WALTER HAUESSLER:

The very problem with the American tax system is that it has been used for social legislation, again instead of the politicians dealing with the social issues directly. I think to burden the intellectual property system with social goals would be a great mistake. I think geomorphs in the United States is an example of a social issue, genetically engineered plants in the food chain, and if you don't deal with those issues directly, but you try to bury them somehow in t he intellectual property system because you're trying to avoid having the politicians deal with real tough issues, that is a great mistake.

JAMES BUCHANAN:

Just to follow up on a point that Michael, Kate and Joan all alluded to which is that the two great visions of the future that have been formed in recent years, are the UNCED documents that came out of Rio, which is one vision for the 21st Century, and in which IPR plays a major role. And the other is the GATT documents, and it seems to me that IPR has very different status in these two visions of the future and I think that they need to be looked at and compared and it addresses Michael's problem of whether IPR, the patent system and environmental protection go together. Clearly with the UNCED documents there's the mandate that they be considered together, in the GATT documents, NAFTA aside, in the GATT documents there in no such mandate. And I think that it needs to be addressed in terms of what kind of values we want to place or to drive the systems and the considerations of IPR. And I think there are very different subtextual and textual values motivating those two visions of the future.

LEONARD MACKEY:

I'd like to address my comment to an initial premise and my approach to this. I do not see that the intellectual property systems throughout the world have been shown to block environmental efforts. To the extent there has been an effort in U.S. litigation to enforce a patent which would have a broad negative social impact, the patent has not been enforced. In effect, compulsory licensing has been called for by the courts. I do believe that you can have environmental efforts going forward without changing the patent system. And that's the major issue I would like to leave with this group. I seriously question there is a need to change the system. To the extent relief is needed, it has been treated in the GATT text, and it has been dealt with in U.S. legislation. I can't speak about legislation in other parts of the world. Thank you.

ANIL GUPTA:

I would like to respond to this question of whether IPR regimes have a bearing on technology that is environmentally safe. In the last few years with better enforcement of environmental standards in Europe, a lot of demand for leather goods has been transferred to India. Leather tanning, which is one of the most polluting activities, has almost been stopped in Europe. In turn, the demand for leather from India has increased at about ten percent per annum. It is one of the fastest growing sectors, and it is obvious therefore, that in the absence of safer technology to process leather, this increase in demand goes contrary to environmental laws in the country from where the export is taking place. Possibility now arises whether a stricter patent regime in India would have invited better technologies, which would have helped in processing leather in an environmentally safe manner. And in the process help the consumer in the west who is importing leather goods from India get safer goods. Germany has recently stopped import of such leather goods which are prepared using a particular chemical which is supposed to be carcinogenic in nature. So I do not know whether the stricter patent regimes would encourage transfer of such technologies which will improve the quality of exports from developing countries, whether it is meat, leather or any other product. One small question that I have still with me is that in India the recognition of the installation of pollution control equipment happened rather fast. Many industries will install but not use the equipment. I have done a survey of industries which were doing this and it was very difficult to find some industries which will install pollution control equipment achieving standards higher than required by law. Surely, therefore, IPR by itself can only help in transferring technologies which are safer, but whether they will be utilized, I am not so sure that we should expect the IPR regimes to achieve that. One would need a separate instrument in these matters to encourage that kind of accomplishment.

WILLIAM KEEFAUVER:

I wanted first to try to separate the two rather metaphysically-related concepts of granting of intellectual property rights, such as patents and the use of those patents. As to the first, whether or not the granting of patents should become a tool of social legislation, I think the answer was clearly given, they should not be. I think the patent office's job is to issue patents based on whether or not invention is present.

But on the second level, which I think is the more important one, how do we use those intellectual property rights once they are granted, then clearly social policy does become an important ingredient. And the most obvious c ase is pharmaceuticals. We grant patents on pharmaceuticals but we don't market them until they pass various safety and other tests. Secondly, somewhat related, my former employer at one time acquired some patents solely because they achieved recognition for inventors, which is a perfectly valid use of the patent system. But as competition got fiercer and resources scarcer, that was no longer sufficient justification. The intellectual property rights were useful and important to the company only to the extent that they helped achieve business objectives. I truly believe that there are many ways in which patents can help achieve social objectives and certainly technology transfer is one of them. And I think here we have no difficulty, at least I don't, in understanding what the overall global environmental objectives are and certainly there are a lot of them are spelled out in the biodiversity agreement, the ozone agreement and many others. And I think that the first level of importance is to define what those social and broad political objectives are and then understand how intellectual property rights can help achieve them. As one of the papers very correctly pointed out, patents are a really part of the overall issue, but they become a controversial part of the issue when they are perceived by some, I think incorrectly, as pursuing inconsistent objectives. And I think the usefulness of this conference is to create this dialogue and carry it forward so that we can understand better what the overall objectives are and how intellectual property rights can help achieve them.

And finally, just a few words on compulsory licensing, which is a red flag to many of us, particularly here in the United States. The issue is not whether national governments have the sovereign right to do what they want with patents, they clearly do. The only reason those provisions are in the GATT is in recognition that all countries have the right to take steps to protect their national security, health and so forth. And clearly the environment is part of that. So I see no inconsistency in the standard U.S. view that compulsory licenses typically do not help achieve the objectives they're intended to and recognition, on the other hand, of the right of governments to invoke them - in our view as a last resort - should social policy make it necessary.

HOWARD STANLEY:

I have two points to make. First, I'm bothered by the general propensity of people, I think here at this group meeting as well as in many other documents I've read, to make synonymous patents with intellectual property. And I think in fact we should distinguish and make clear to people who are looking at intellectual property systems that we're talking about a number of different types of legal rights. Patents happen to be one of those rights. It happens to be one that protects particular new inventions, but there are a number of other intellectual property rights that are completely different in the way that they're obtained and effect that they have. For instance, we're talking about proprietary information, commonly referred to in many corners as trade secrets, we're talking about copyrights and we're also talking about trademarks. Those are probably the principal ones that we're talking about, but I think it should be made clear, particularly to people who are not intimately familiar with intellectual property rights in general, that there are a number of different types of laws that are affected here and the impact and the way in which they're used and the advantages to the people who may have them are substantially different from, for instance, what you may get when you have a patent. So could we use that language, when we're talking about patents could we talk about patents and when we're talking about other types of systems, could we talk about those. First point. Second point, in regards to environmental laws which have been passed in this country, I think it's quite clear that a large number of industries, and I happen to be from the chemical industry, have moved in the direction with the urging of these laws to create new inventions which they then look to the patent system for protection on and these new inventions often are, for instance, in the area that I would say in environmental protection, but the way in which you get to the environmental protection is you create entirely new processes, which don't make the pollutant in the first place. Very key and substantial difference. In my opinion without the pressure that has been applied by the political will in order to require these companies, these individuals, to work in those areas, you would never have had those inventions. However, many industries are now finding that this is in fact a better way to operate, often with a more ec onomical system than they had previously, and they certainly now don't have the waste and the attendant problems that come with the waste.

GEORGE PRIMAK:

I will follow up on Howard's presentation and indicate from a practical standpoint what happens; I was involved with a mining company for a long time. Why would a company patent something? First of all patenting in itself is a fairly costly proposition. If you want to patent in 10 or 15 countries, it will easily cost you 50 thousand dollars or more. But if a company has spent, let's say, a few million dollars on developing a new process, which will be significant in either improving the environment or producing a new system which will eliminate the pollution of something, there is a feeling that it should get something for it, when its competitors will be using such technology, and therefore that's why it's being patented. Just like in the area of pharmaceuticals, if someone invented a cure for cancer, he would be quickly a millionaire, and in the environmental area if a company invented replacement of CFCs by a better product there is no reason why that company should not reap a benefit from that invention. Also, generally speaking, just like Howard mentioned, in the area of environment, unlike pharmaceuticals which are very easily reproduced by competitors, very often there is a great deal of know-how and trade secrets involved. What's important is to actually apply this technology properly. If you wish, for example, to remove mercury from acid, there is an enormous amount of know-how, and this know-

how cannot be patented. It has to be transmitted in a free manner, and therefore there is an absolute requirement of cooperation, and really, compulsory licensing won't work. You have to entice the patentee, the owner of that technology to transfer it to you and there must be a win-win situation where both parties agree on the issue. So basically in my view, from a practical standpoint this is the approach. I mean, we must expect that those who spend money and effort to develop something should reap some benefit from it and those who wish to use it should be willing to pay something, whether directly or indirectly. If it's a developing country or something similar maybe it (the benefit) should be paid by us, namely our governments. But essentially that is the practical situation.

THOMAS MAYS:

I just have two quick points. But before I get to the two quick points, I just want to correct George and he said that if someone invented a cure for cancer, he could be a millionaire. Well that's true unless he works at the National Cancer Institute as a federal employee.

GEORGE PRIMAK:

I'll never believe that.

THOMAS MAYS:

My two quick points are basically, I'm not convinced that IPR is contrary or adverse to environmental rights. I would like to use the Taxolreg. drug as an example. Taxol,reg. as many of you know, has been found very efficacious in ovarian and breast cancer and some other forms of cancer as well. And the drug was isolated in the seventies from the bark of a yew tree which grew in the environment of the spotted owl and created an unemployment concern in the north west of the United States. And it was a wonderful mix of policy concerns. But through IPR, I believe that Taxolreg. will no longer be extractable from trees but will either be synthesized by tissue culture or strictly chemically synthesized. So I think IPR can foster environmental concerns, provided that the marketplace, or public policy, places a value on environmental concerns, which I think we are beginning to do and rightfully so. And if that value is there, I think that IPR can be the tool by which environmental concerns can be addressed.

The second quick point is that I think it's important to recognize that the current IPR is predicated upon inventorship motivation. Inventorship traditionally tends to be individual, or small group, as opposed to a community. And what NCI is trying to do is to provide, not necessarily IPR, but some sense of equity or benefit-

sharing in technology transfer through discoverer's rights, or contractual obligations with the communities from which new products are coming, so that in some form of equity we're able to cooperate and continue our drug discovery effort.

The analogy that I have is when two elephants fight or dance, it doesn't really matter because it's the spectators that get hurt. And from my point of view I see a wonderful clash, or at least an interaction between environmental concerns and biodiversity concerns versus commercial development, vis a vis IPR. And I think what's really important is that we, the spectators in a fashion, look to see that these values do work in a meshing. And again, as you pointed out, that tends to be the part of our public policy makers.

JOHN BARNES:

Thank you. The point that I wanted to make is that it would be ideal to have uniform environmental laws to protect the environment in all of the countries, developing or developed countries. A multinational company, actually, will look to the most strict law, probably, and if it is going to move technology to some undeveloped country because it is not prohibited, but it is in some developed country with some environmental laws that restrict that kind of activity, it just won't do it on account of the potential liability it might suffer later. As they had with that disaster once in India, or some of the other countries, where social pressure makes it such that you wouldn't even try to do that. On the other hand, you don't take technology that's brand new to some country that does not have intellectual property laws that will protect the patents on the technology or the trade secrets that are related to that technology for fear that it just falls into the hands of your competitors. So you need to strive to develop, world-wide, these uniform intellectual property laws so that we can all work under the same laws, play on a level field and people are going to take technology to these other countries. One of the problems with doing it in a lot of countries is you take it in there, you profit from it, but you can never take the capital out of that country. You can't bring your profits home where the technology was developed to offset some of the expenses of that development. You have to leave the money in Brazil or you have to leave it in one of these other countries and a lot of businesses do not want to be part of a company in India, or a company in some other country where you're there just because you can't take your capital out, you can't take the profit out. You can export, you can give jobs to the people, but you can never take your money back home.

So there are a lot of issues that are involved in the whole area, and not just intellectual property and the environmental protection.

STEPHEN BRUSH:

I want to pose a quandary or a concern. I don't have an answer for it but it returns to what Alan Miller started out with. There are some very important incidences of collective invention; Tom Mays referred to this. We're often dazzled by the power of individual invention but overlook some of the very important contributions that collective invention has made, including industrial processes. The quandary I want to pose is this: in seeking to reward through patents the power of individual invention, what harm do we do to collective invention? Is there a way to come up with an award to collective invention? I don't have an answer but we need to be cognizant of the continuing importance of collective invention.

DAVID DOWNES:

I have a few related points that I would like to bring out. Alan Miller described a very interesting case in which industry apparently concluded that intellectual property was not useful as a stimulus to innovation, and was perhaps even an obstacle. And some companies chose to share information among themselves and with others as a way of stimulating fast, technological change in a direction that society had agreed overwhelmingly was a good one, towards replacing ozone-

depleting substances. I would be really interested in hearing from Alan or others about similar cases, because I think it would be useful for us to explore what the factors are that make industries decide that intellectual property is not a useful way to stimulate innovation.

My second point is somewhat related. I think that the CFC replacement case illustrates that there may be circumstances in which we should treat intellectual property differently as a way of accomplishing a social goal. In that case the private sector decided not to use intellectual property in the way it might in other situations. In fact some firms chose not to use it at all, as I understand it, to accomplish the social goal of developing a new technology. So I think we should be clear that it may in certain circumstances be appropriate to achieve certain social goals - including technological innovation - by changing intellectual property laws, perhaps in some cases by reducing the level of protection. So the question becomes not whether we should do that but when and how.

Let me just say one more thing. I think there are two ways that you might want to vary intellectual property in order to achieve social and environmental goals. In some cases a society might decide that intellectual property doesn't stimulate innovation or diffusion of a technology the way we want it to, as a number of companies apparently decided in the case of CFC replacements. But there may also be cases in which society d ecides that conferring intellectual property rights over a certain technology is inherently wrong, whether or not it stimulates innovation. I am thinking in particular of some critics of biotechnology who suggest that there is something inherently wrong about conferring property rights over bundles of information that are in large part natural, although artificially manipulated. That is a legitimate social concern, and a distinct one.

ALAN MILLER:

There are a couple of points about the ICOLP experience. It's the Industry Cooperative on Ozone Layer Protection, the acronym is ICOLP. It's a membership organization comprised primarily of electronics and aerospace multinationals from the OECD countries, Japan, North America and Europe, including AT&T, IBM, several major Japanese electronics companies and British Aerospace. They agreed that the value to them in addressing the common problem of getting rid of their dependence on CFCs was greater than the potential individual value of maintaining their ownership of specific developments and production process methods.

There's an interesting distinction to be made here between those companies and the chemical companies, because the chemical companies who developed substitutes for chlorofluorocarbons have an interest in continuing to sell chemicals and in the proprietary value of that knowledge. The chemical companies are not part of ICOLP and indeed maintain a very different set of issues in their dealing with developing countries, e.g., the standard questions about joint ventures, the repatriation of profits issues, etc., that have already been alluded to. In contrast, the electronics/aerospace industries, etc., have taken the view that they are not in the business of making chemicals. Their primary objective is not to profit from the knowledge associated with the use of CFC's as solvents and cleansing agents. They are rather more concerned with finding a solution to an environmental problem that could significantly affect their business, because these are very critical applications. That common objective brought them together in a very successful collaboration.

I think one other reference that I would add to David's point, and perhaps others are again more familiar with the history of the experience, there have been some efforts to bring the automobile companies together with government cooperation to jointly develop solutions to environmental problems of the automobile. I've never seriously examined that experience but my impression is that it's been largely unsuccessful. It would be an interesting comparison to understand the reasons for that.

WILLIAM HENNESSEY:

Bill, you had a response?

WILLIAM KEEFAUVER:

No, just a slight augmentation. Alan's quite correct in the reason behind that type of enterprise between the electronics companies which I will point out have had a tradition of fairly broad cross-licensing to begin with. So, unlike many of the chemical companies which like to keep everything proprietary for their own perfectly legitimate reasons, electronics companies have traditionally shared information through one mechanism or another.

But I just want to point out the obvious. It's amazing we haven't mentioned it yet; and that is there is something called the Justice Department which takes a keen interest on industries sharing information. And I hope you all recall the safety match issue of many years ago in which they held that it would be an antitrust violation if the two match companies got together and shared information to lead either one of them more quickly to achieve a safety match. And I believe it has been Justice Department concerns that have interfered with the automotive industries attempts to cooperate on safety issues. I think they have issued letters, I am not positive of this, somebody perhaps can clarify, saying that the Justice Department would look very closely at any industry agreement to share information even if related solely to either safety matters or to environmental matters - believing that the engine of innovation would work better and we'd achieve these things sooner if we put each institution on its own. That's debatable. I think voluntary cooperation by industry is the way to do it and let them decide, as Alan pointed out, when the importance of acquiring exclusive rights overrides their broader business concerns. In the case that he cited, broader business concerns were better served by sharing. But perhaps next time we should have somebody from the Justice Department here.

CHARLES ZERNER:

I wanted to address the issue of collective authorship again and to return to the arguments against the marriage of an environmental agenda with a patent regime. The argument was previously made that in fact there sho uld be a strict separation between these two bodies of law and the public policies which underlie them. The operative notion there was maintenance of a kind of doctrinal purity which should be maintained. I wanted to remind us that the history of legal doctrine is the history of social policy. And in fact, twenty or thirty-five years of legal scholarship, beginning with the legal realists, stands for the proposition that every statute and legal doctrine constitutes or embodies a social policy about distributive justice, about which bodies corporate or individual, male or female, are enfranchised or disenfranchised. So the notion that a patent regime or a copyright regime is a neutral, legal doctrine that doesn't entail social implications is simply an inadequate account of what the law is and how it works. It is a legal fiction.

The second fiction I wanted to address is the issue of the split between individual authorship and collective authorship, and to remind us all of the history of the idea of authorship and invention. Legal concepts of authorship, beginning with trademarks and copyrights, are relatively recent historical creations, beginning in the late 18th century. Protection of the works of poets and literary craftspersons privileged the idea of an inspired individual imagination, as if the individual mind were separate from the social contexts and conversations in which literary works were created. The legal protection of the works of a sole, solitary creator was linked to the interests of book sellers, via copyright doctrine, and later was transposed to patent doctrine. The point here is that scientific and artisitic creations are scarcely the work of solitary, grand minds. Rather they are the result of collaborations, conversations and flows of information which are tacitly and often explicitly collaborative. Corporations are bodies corporate and collective, and they are protected under patent regimes. We should consider the many other kinds of bodies corporate and collective, for example, those that Stephen Brush has studied, peasant societies in Peru or Turkestan, who are capable of creating, collaboratively, enormously significant genetic varieties as well as technologies, and yet who have no protection under patent regimes. Do peasant societies need to incorporate before their contributions to world agriculture are recognized?

WILLIAM HENNESSEY:

I'm not sure whether it is that they don't have rights or they don't fully understand the rights they may have. We certainly have under the US patent law provisions for joint inventorship, and I guess the question that I'd like to pose, and I realize that neither one of you is a patent lawyer or an intellectual property person, but what's the difference between collective inventorship and joint inventorship, which is perfectly acceptable under the law? Would you like to address that Karl?

KARL JORDA:

Yes, and I'd like to preface this by saying that this issue is being addressed by WIPO. The question of collective authorship or collective invention is an issue that is very topical now and is currently being addressed by them because they are especially intent on assisting developing countries in the area of intellectual property. The biggest problem that exists is that of joint inventorship and collective inventorship. Normally, joint inventors, as you know, have to be designated by name, but when you talk about collective inventorship, when you talk about a community, say in India, or you talk about the whole region, it is diffused. There has been a development that has gone on for decades and perhaps for centuries, and there are generations of authors, creators, originators, who cannot be identified so one cannot fit that sort of thing into classical patent systems, unless you revise them. And by the way our patent system is, figuratively and literally, a horse-and-

buggy system going back two hundred years, and if and when it is finally brought into the modern age of the 21st century, maybe that issue can then be addressed, too. But I think that WIPO is thinking about a certification system, a sui generis system where the inventorship in terms of individuals would not matter, it would be just a community, a region, a clan or what have you, that would be the owners, the authors or inventors or whatever you want to call them.

STEPHEN BRUSH:

One of the better studies of collective invention is development of the blast furnace in England in the mid-19th century. The development of the blast furnace was pushed ahead by an industrial consortium. Even though patenting was possible, consortium members decided that they could proceed more rapidly through collective invention without patents. As I understand it, one of the reason that they chose not to seek patents is that e ach addition to the process was so incremental that it would be unlikely to achieve a patent. Attempting to achieve patents would actually slow down the process of invention and collective benefit. One of the differences between collective and individual intellectual property or patents, as Howard would have us insist on, is that collective invention denies the ability of individual authorship in recognition of the fact that sources of information are multi-faceted and very difficult to identify. While any single community could indeed file for individual intellectual property rights, most of the communities that are generating biodiversity and genetic resources are divorced from legal systems that would provide this kind of protection, and they're ignorant of them. A community's ability to define its specific contribution to biodiversity would be, I think, probably not very fruitful, because it cannot define its unique contribution. This might also set up a series of competitions between communities.

JANET McGOWAN:

I'd like to take the discussion back a little bit, maybe put Tom Mays on the spot or at least give him a chance to explain the NCI program, because the lawyer in me likes the facts and so I'd like to ask Tom a few questions to explain the program they have at NCI, to describe some of the contracts they've entered into, a few examples, and then explain why NCI decided to do this.

THOMAS MAYS:

Well, in the questioning and answering am I under oath is the first concern I want to express...

JANET McGOWAN:

You're being recorded.

THOMAS MAYS:

I'm being recorded. Well, the NCI is an agency of the U.S. government, and because of that we're faced with balancing many statutory missions, but our primary mission is research. Another mission of course, is technology transfer, and many of you know this. Over 26 years ago when NCI started its natural products collections program for anti-cancer activity agents, and for the last five years has been testing for anti-HIV activities, we realized about four years ago that for us to be successful we needed to be sure that our collection was in a fashion that benefited those from whom we collected materials. So we began with a Letter of Intent, it was basically a Material Transfers Agreement, with non-governmental organizations or indigenous peoples, or those governments. That agreement has been modified to what we're calling our Letter of Collection contract. The facts I am able to give you are that we have right now, and in two weeks will conclude licensing on, one of three current possible anti-HIV agents. They're in the early stages of preclinical testing. These agents have been developed from material collected under these contracts. The contracts include a requirement, the keystone of the contract, that our licensee for that agent, the pharmaceutical company, enter into an agreement directly with the source country or NGO or the agency with whom we are dealing. We feel that if we set forth specific terms we will not provide the flexibility that is needed and will be consider patronizing, so we will require the direct negotiation so the values are met. We also have put an obligation on ourselves to provide tech transfer and we're doing that. In this fashion, we're hoping that, and again it's a new program, but we're hoping that this will meet the concerns of the specific NGO and countries. I can address more specifics but that's it in a nutshell.

JEFFREY KUSHAN:

What Tom's program is doing is really the start of the vehicle through which you're going to see some type of benefit-sharing, flowing of benefits back to entities that provide access to their information, the cultural knowledge, the collections, the diffuse knowledge that doesn't really fit into any system. And I would like to stress that the contracts that people might be reaching now are really the best course to follow. For example, I know a number of pharmaceutical companies are going directly to either foreign governments or indigenous populations and saying 'we'll arrange a deal with you, as a conservation organization or a local population, we will participate over an extended period of time, you'll give us samples, we'll provide training, we'll provide royalty streams, we'll provide all these other things, which you want as a way to benefit you for participating in this process'. This kind of arrangement seems to be a much more tangible vehicle for recognizing the rights of indigenous populations and the knowledge they've cultivated, it can be done now, it can be done under existing contract law, and it can be done under direct relationships. One point that was raised was whether, if you create a formalized legal system that people can register their rights, will they take advantage of it, and your suggestion, Stephen, was that possibly no, you're not going to see a wave of people going in to register their indigenous intellectual property rights, simply because they don't go that route, they are not familiar with that system. A better question is, do you need to set up that kind of system or can you use the vehicle that's being developed now, the contracts, the agreements that are being reached to provide benefits back and also to define relationships, between a company that might want to use the knowledge in a commercial sense and the population that's giving the knowledge and wants to be rewarded for their role. I think that using the contract process as a vehicle for licensing rights and defining relationships is something you can take advantage of now and kind of take a step toward that larger goal of remuneration and reward.

WILLIAM HENNESSEY:

I'd just like to make a quick comment on that, from the standpoint of a practicing intellectual property attorney, going back to my opening comments and what Howard Stanley was talking about, there are many, many different kinds of mechanisms to be included in what intellectual property rights are -- we're not just talking about patents. Creative intellectual property arrangements including but not limited to patents are what an intellectual property attorney advises clients about -- how to protect entrepreneurship and innovation on a daily basis. While patent protection is not the only vehicle, it is perhaps the most conspicuous vehicle; and because of the exclusivity provision against independent third parties provided by the state, it perhaps has even a higher level of conspicuousness, But within the package of intellectual property rights, patents are just the tip of the iceberg in terms of how intellectual property protection allows economic benefits to flow to those who provide the resources which make those benefits possible.

H. WALTER HAEUSSLER:

To follow up on that point, the question of contracts, there's a huge transfer of biological material throughout the world based upon what's called a biological materials contract. These materials may or may not be patented but they're exchanged under contractual terms as to who can use them, and whether for research or for commercial development. So the contract can't be overlooked and that perhaps, as was pointed out, is the most innovative and most rapid way of transferring technology. Intellectual property rights, at the end of the day, tell you who stills owns what. But, who has the right to use what is governed by contract, and not by law; and that's the best mechanism. I was involved in the original Merck/INBIO agreement, and that's a contract. The fact that intellectual property laws exist has very little relevance to the fact that it happened, and it happened through a contract and no other way. There's one other thing separate from that, that I'd like to say at this point, and that's the question of social need in technology transfer. Throughout this morning and this afternoon we'll talk about technology, certain technology that should be freely available for whatever social reason. Freely available, however, should not mean necessarily free, and therefore the person who has developed the right may need compensation. So I think we have to separate freely available from free, economically free. The discussion that we had earlier on the CFCs, the electronics companies, all they wanted to do was to get the world and the legislators off their backs so they could do their business, because their business wasn't the chemicals. But the chemicals industry didn't share that largesse because that was their livelihood. So you have to create a system where the technology owners are not disincentivized from investing and yet where the technology is freely available to the world.

MARTHA TRAYLOR:

I'd like to go back to Bill Hennessey's comment about the practicing intellectual property lawyer. Now that I'm back in practice again, I am appalled at how little environmental lawyers understand what intellectual property is. Now maybe this goes even farther back into the law professor, the law school teaching but environmental lawyers come to the environment with the idea that everything that industry does is bad, and we're going to fight against industry, and when I say but they have a patent, well that's just industry. On the other hand, the intellectual property people that I'm dealing with say 'what is this environment stuff?' Now I'm talking about the lowest level of practice here, the people that are out there laboring in the vineyards, I'm not talking about the top level executives of the. . . even the governmental agencies or the industrial agencies, but there is a really basic lack of understanding by the envi ronmental lawyers of what a patent is, they don't understand, that patent can mean open and that it's an incentive to bring more information, knowledge into the society. That's a totally different concept that they don't understand, and that a patent will expire in 17 years. It will? You know I've had environmental lawyers say that to me, well why aren't we using the expired patents, well why aren't we? There's a whole, tremendous wealth of information that's valuable to the environmental people in expired patents, which they're not working on at all. I don't know how we're going to educate on these two, it's like the two cultures, it's now, of course again I'm from New Jersey, maybe this is just New Jersey. I'd be interested if anybody else has seen this..

SUSAN BASS:

Thank you. First I'd like to comment that I'm speaking as an environmentalist first and an environmental lawyer second. I'm greatly concerned about the comments I've heard this morning, about the division or distinction between environmental law and intellectual property rights law. At the Environmental Law Institute we seek to look at all areas of law as tools for environmental protection, and I hope that the purpose of this conference is to look at all areas of environmental law, intellectual property law, contract law and whatever areas of law are relevant. Which brings me to some questions that I think were raised in the handout that we received that I'm interested in since I am not that familiar with intellectual property right law. I wanted to ask some of the experts here, whether there are special intellectual property right provisions that could be created as incentives for the creation of environmentally friendly technology or disincentives for environmental unfriendly technology. Some of the people this morning have talked about how environmental laws and other market mechanisms have created incentives for the development of this technology, but I really haven't heard anything about how adjustments in the IPR system could achieve these objectives and I would welcome any comments on those topics. Thank you.

THOMAS FIELD:

Although that's not why I wanted to speak, I'll try to answer that. The first thing you have to keep in mind is: who is the patent examiner? An examiner is a scientist or an engineer asked to consider, e.g., whether an invention is new given what was known before. It is one thing to ask this engineer or scientist to consider advancement in the art and quite another to consider environmental benefits or environmental harms of a technology. The latter would lure them into dealing with things that patent examiners are ill-equipped to address. That's one answer.

Another answer is that we already have something in place. You can ask for accelerated prosecution of catalytic converters or things of that kind. While there is nothing to keep an inventor from lying about environmental advantages, liars will end up with patents which are invalid. Also, other kind of nasty things can happen. Does that answer your question?

SUSAN BASS:

Somewhat.

THOMAS FIELD:

I asked to speak earlier to try to answer Anil's question about transferring technology concerning leather production. You can't transfer technology until the technology exists. If you've got a process like leather production that is not terribly environmentally sound, or not good for the people who make or use leather, somehow you've got to create a market for better technology. For example, you can prohibit the use of certain chemicals. If the leather market still exists, people will try to make leather without using them. But if the market for leather is not strong enough to support the cost of innovation, then leather is probably just going to disappear altogether. Certainly, the mere existence of patents will not create a technology and will not transfer it. If there is no market demand, you're not going to get private capital, but that will not stop the Indian, U.S., or any other government from developing that technology and making it freely available to people who are making leather. Intellectual property's only a device for recouping investments. Private parties won't make an investment unless the market will allow them to recoup it. Patents don't make inventors rich, the market does.

ANIL GUPTA:

It is good that you make this remark at just this moment because I think what is happening is that we are probably not seeing this enough from an interlocked perspective. In other words, if you could see the consequences of action in one sector or other sectors, and then look at law as a mechanism which provides that integrated perspective, then perhaps my point will become clearer. All the discussion has been so far on the assumption that environ mentally safe technologies are likely to be produced in the West and need to be transferred to the South. The South has weak patent regimes. They insist on compulsory licensing when the cost at which the patentee would like to transfer is very high. This doesn't provide enough rewards for the patentee and thus the technology transfer may not take place, and therefore, the environmentally unsafe practices in the South will continue. Now let me give you a another scenario. I have been documenting with my colleagues in India sustainable technologies in the field such as herbal pesticides, soil and water conservation, farm implements, veterinary medicines, growth regulators, anti- oxidant compounds and so on, developed by individuals as well as collectives. I'm talking about sustainable technologies which have been developed by people in India or other developing countries and are unlikely to develop in the North. Not because scientific ability is less here in the West, but because the biodiversity on which the knowledge is based is not available. So the situation is like this, assume that biodiversity is like libraries. It contains books and provides opportunity for someone to go and read a book and write a paper. It is possible that in many cases, people who can read these books may not be very many, and therefore, one might see collaborations in reading these books and adding value to the knowledge in these books and thereby transferring the knowledge. But the library is there in the South, the library is not here in the West. My contention is that when we are talking about technology transfer, why do I support individual property right regime as an incentive for environmentally safe technologies? Because I see a possibility for these grassroots innovators in the South to reach global markets in the West where consumer demand for environmentally safe technology is higher than in the South.

In India, consumers do not value as much environmentally safe technology and products as possibly in Europe and America. Therefore,an innovator may not get a great advantage in patenting such innovations only in India, because nobody may license it. Cost may be higher and nobody may buy it. Here in the West the demand is high. We should also focus on the framework which will facilitate the transfer of these technologies from South to North. And here comes a question which Stephen Brush raised earlier as to whether in doing that we will keep one hundred fifty years legacy of U.S. patent law as a stumbling block or shall we use this challenge as a opportunity to deal with the issue of collective and individual patents. And I just want to distinguish the point that Stephen raised into three components. There are collective innovations of the following kind: 1) developed by an individual at one point of time but carried forward by collectives, 2) innovations developed by some individuals and improved by other individuals, and others, and others, in a chain, 3) where one individual develops it, but community provides support for its experimentation and its recognition and reward, some kind of incentive - a local patent system - some kind of incentive for the individual to continue to make efforts. All the three in some sense have an element of collective, to varying degree. It is not true, as Karl was saying, that collective innovations necessarily implies something which was developed centuries ago and has been carried forward in a fossilized form. Very little of the knowledge gets transferred in the fossilized form. Much of it needs re-production. And re-production requires experimentation. And experimentation requires innovation. So much of the knowledge which is transferred over the years is actually being renewed through improvement in the climatic and ecological context. My suggestion would be let us not dump the issue of collective innovations as something that we can not deal with because it is not familiar to us. No. We have to deal with it simply because that is the only window through which these innovations will become available to the West.

Just a small point before I conclude that there is a lot of discussion in India on the fact that the North has made enormous contribution to the environmental damage in the past. And that now it is asking developing countries to pay for the technologies which will help control this damage. There's a tremendous social consciousness on this issue. And no matter what we will say here, developing countries are unlikely to cooperate in the control of globally damaging environmental hazardous substances unless framework for transfer of technology at a cost that people can afford is worked out. Whether IPR is a means to that or not is not my concern. Thank you.

JAMES BUCHANAN:

I want to raise a question, and it really comes out of David's comments and Stephen's comments and even comments that were even just made by the last speaker. And it has to do with the issue of biotechnology, genetic engineering and how that impacts patent regimes. Whether or not patent to patent mechanisms are adequate mechanisms for something like the patenting of life forms. I don't see how we can avoid the social policy, or social value issues which are backgrounded issues when it comes to something like filing for the patent on the genetic structure of a microbe, a plant, an animal, and recently human genetic structure with the Human Genome Project, with the Human Genome Diversity Project, with the recent filing of a patent by the Secretary of Commerce on the genetic structure of the Quayami Indians of Panama, and so forth. Value questions are there. It may meet the criteria of innovation utility which are always the debatable things here. Utility is quite speculative in many of these cases, but how do you avoid those value questions? The other comment that was made by John Barnes about the level playing field; when it comes to genetic engineering, how do we have a level playing field? How do we take a traditional knowledge, the kind of collectives that had been referred to here, of plant breeders and so forth, that have come through generations that are not patentable, but a research scientist from Florida State can take a cow pea from West Africa, identify the genetic structure and he then can patent it and have monopoly rights on that? Whereas it is not patentable in any other form. How do we guarantee some kind of level playing field when it comes to this radically new technology? So I just want to throw that up as an issue here that I really believe that genetic engineering changes the whole problem that we are dealing with when it comes to patents. And that maybe we need to think of different kinds of mechanisms to talk about this radically new kind of property that is raised by this new technology.

LILIANA OBREGON:

Thank you. Well actually I wanted to go back to the example of contracts that are being used to foster indigenous knowledge and to use as an instrument to identify plants for pharmaceutical use. In the case of Conservation International, we actually began a new contract that is experimental let's say, in this sense, which as Kurt Fish negotiated most of it most of it so he knows more of the technical details and he helped identify a mechanism of compensation through an indigenous fund that will, in the end look to compensate indigenous knowledge used to identify plants for pharmaceutical use. Many issues came up in the negotiations of how to compensate indigenous peoples, how to provide a mechanism that was just and that would compensate the country of origin as well, how to transfer technology to the country. So any questions on this Kurt Fish could answer. We also have an article that refers to this contract. So if anybody is interested in an actual application of these issues, that is in a experimental process, as I say, can talk to us later.

BOB SHAW:

We in the intellectual property area are quite aware of the fact that most businesses that start in any part of the technical area, or otherwise, they see the light of day, but they don't see it for too long. And if you're going to get into anything that is going to be a development, you have to think in terms as to whether or not you're going to be able to make money. Maybe ten percent of new businesses survive, maybe fifteen, twenty percent, it varies from here to there. I sort of get the underlying feeling from some of the discussion here that some people think that you're going to be able to develop a particular field of technology without having some sort of exclusivity involved in there somewhere. And that is just not true. That is why the patent system is here. It was alluded to just before: we're dealing here in the law, we're dealing in equity all the time in intellectual property. And the patent law says that you may get an injunction in certain circumstances. It doesn't say you shall have an injunction in certain circumstances. And there is at least one decision out there in which the court refused an injunction in a situation where it rightly should have refused an injunction because without the technology, the city of Milwaukee was in deep trouble because their sewer system wasn't working. And so I think that talking about a compulsory license is fine, but if a compulsory license is necessary, it will be granted. And the government can not be enjoined, you have to go into the Court of Claims. That's why that law is like that, so the government can't be stopped from doing such things. What I wonder is how can somebody pay for a hundred million dollar F.D.A.- t ype situation if they don't have some mechanism in the business world for recovering the money that they have to pay just to stay in business. Just looking at this, I wonder if the environmental folks really think in those terms. It seems to me that they do not. Without some mechanism for recovering costs, people are not going to invent.

Another thing that you have to know is that invention is not made between nine and five. Inventors work all day long, all night long and all week long. And if you don't have some sort of incentive for them to do that, they are not going to do it.

MICHAEL GOLLIN:

One thing that's striking about the discussions going on around the table is the overwhelming level of literacy that one needs in many different areas to be able to really address the basic concerns, and even to identify what are the basic concerns in terms of beneficial technology advance, or beneficial technology. This is something which I have felt quite frequently in the five years or so that I have been looking at the interactions between intellectual property law and environmental law. How can we begin to identify the important questions without knowing something about the various forces that bear on bringing about beneficial technology advance. Like Susan, I am an environmentalist first, an intellectual property lawyer second and an environmental lawyer third, at least chronologically, I consider myself to a certain extent, jack of many disciplines and a master of none. But in a sense, we have to do that, and step out of our areas of expertise to resolve some of these issues. And I'd like to look at some of the topics that were raised in the materials that we had. What criteria are to be used and who is competent to decide what technology is environmentally superior or seriously prejudicial? That's a very important question. I don't think that most of the people here would say that the inventors or intellectual property lawyers alone should decide what's environmentally superior and what kind of technology advance there should be. I think by the same token environmentalists and environmental specialists would not presume to dictate what kind of technology we should have either. When you get down to it, the question is what kinds of technology is human ingenuity capable of coming up with to deal with the problems that face us. And how do we stimulate that and how do we screen it? I think that it takes a collective effort of many people in different disciplines. That's why although I've said that the intellectual property law and environmental law are separate and need to be separate, they do need to be harmonized and there is a convergence between them in the sense that the technology that we come up with. And when you look at specific examples of environmental technology, biotechnology and biodiversity conservation; industrial processes which minimize resource consumption and waste production; consumer products which are environmentally benign throughout their lifecycles; recycling equipment and processes;waste management technology for dealing with solid and hazardous waste; pollution control devices; and products and methods for cleaning up pollution; and the list can go on. Really what we're talking about is the entire range of technology and an approach of sustainability. One way to define sustainable development is economic development without environmental destruction. Economic development activities are innately human activity. As Karl Jorda said this is perhaps the golden era of intellectual property. It's also, I think, a new world order for markets and we can reexamine what kinds of markets we're talking about, they aren't necessarily only the kinds of market we're used to in the North, in the OECD countries. I think we have an opportunity to look at other kinds of approaches to markets as well. But there is a convergence between the market demand for new technologies and the need for innovation. Going back to the level of literacy that's needed, I hope that all of us as we go back to our special areas of expertise can try to develop that cross-literacy.

GLORIA ISLA:

I fully agree with Michael that the answer to the environmental issues cannot be left only to one party. Environmental issues are of paramount importance and are a matter of worldwide concern involving a number of considerations that would affect not only our generation but future generations. It canot be left only to the environmentalists or the politicians or business people or to the intellectual property experts to decide. Each of the players have different views and motivations. For instance, the environmentalists may think that we have to do something now to leave a better world for the generations to come, while at the same time business people, having economic reasons, would not invest in safe technologies unless they could foresee a profit, and also would give much consideration to the costs involved in implementing environmentally superior technologies. As you may see, the leit motif varies from each of the parties' concern. The environmentalists have a broader and global perspective of the problem, while the intellectual property experts have a narrower and limited one.

HORACIO RANGEL-ORTIZ:

Gloria just spoke about the costs of implementing environmentally safe technologies, which brings me to another subject related to intellectual property that has not been mentioned in these meetings. It was mentioned earlier, intellectual property comprises not only patents but other institutions and includes unfair competition. It is known that the party failing to comply with environmentally safe technologies to implement such technologies and to comply with the corresponding regulations is generally subjective to the imposition of sanctions including fines which maybe high in many cases. Nevertheless representatives of competitors, who do comply with environmental regulations believe that imposing a fine should not be, is not sufficient, is not enough. To have their competitor complying with environmental regulations, these issues were discussed recently by experts in competition law, in a meeting that took place in Budapest in October of last year on the occasion of the study days of the International League of Competition Law. As a result of this discussion a resolution was adopted, including two basic aspects, one was that companies which are victims, or alleged victims of this type of acts should be, should be acknowledged their right to sue their competitors for unfair competition. As for my part I could only add to this aspect of the resolution that in evaluating the right of a competitor to sue his competitor for unfair competition for having violated the environmental rules, one should be very careful in order to avoid that the environment be used as an excuse to implicate monopolistic activities.

WILLIAM HENNESSEY:

I think it would be interesting to hear from someone who practices environmental law, what they would think of a private right of action by a competitor against a party not in compliance with environmental standards.

GEORGE PRIMAK:

Thank you. I would like to comment or follow up Alan's comments regarding the existence of industry consortia that may share technology and information particular to the environmental area. He mentioned this done in the electronics field, but this is also quite common in the mining industry for example. In Canada we have MITEC, which stands for Mining Industry Technology, in Australia there is AMIRA, which is Australian Mining Industry Research Association, and so on. In these organizations companies jointly develop technologies which are either non-competitive or pre-competitive, such as for example, effluent treatment. All mining companies have effluents which contain pollutants and so on, and they jointly learn how to treat them to remove such pollutants. This is done on a regular basis, but these particular industry organizations, like the electronic which are trying to eliminate CFCs, they're not chemical companies and therefore they will not invent a replacement, a safe replacement for CFCs. And there is a need obviously for such a safe and efficient replacement for a coolant of that nature, and only chemical companies who are involved in these areas will eventually be able to invent it and to bring it to the world, and we need that sort of thing. There is a competitive situation here and they must depend on intellectual property protection.

On another small point, there are many inventions, including patented inventions, which actually bring environmental standards forward. For example, our company once invented something which reduced a pollutant to a level of let's say 10 ppb (parts per billion), and very quickly afterwards the environmental law required that all such pollutants be reduced to a 10 ppb level, which is something like 100 times less than was previously required. So, you see that it's not merely that companies follow what's needed or what's required by the government, but very often they invent something which does become a standard and which lowers the environmental pollutants or problems in that manner. So from this standpoint it's something that's quite important I think. Thank you.

KATE MURASHIGE:

I was hoping that perhaps we could focus efforts to resolve any dichotomy between intellectual property rights and environmental concerns. Do intellectual property rights as they now stand encourage protection of the environment or do they discourage it? I think that what ought to be a legitimate concern. As Howard points out, patents are just one aspect of currently established intellectual property protection schemes. I'd also have to agree with Karl that we probably have a lot of baggage associated with the patent system that we could clean up. But that's an easier issue than whether, creatively, additional aspects of intellectual property protection could be framed that do more directly serve environmental or other social purposes. You know that the suggestion that a private unfair competition cause of action against polluters is a suggestion for an alternate form of intellectual property protection that can be used directly for this purpose. The contractual arrangements that were described for reaping of genetic resources is another device. I think that these are only incremental improvements (improvements or detriments, depending on your point of view), of an intellectual property regime. What I'd like to emphasize is that it's becoming evident that in order to move forward in a society that's going to be sustainable, there has to be some kind of a recognition, which there is, that rights in oil and rights in silver and gold are not what's going to drive the progress of humanity. What's going to drive it is what people can create in terms of how they interact with each other and how the environment is used. We do not live lightly on the Earth, in this society. I'm sitting here drinking out of paper cups and flew here using up tons of jet fuel. This is not a sustainable environment. It's very comfortable for me, but it's going to come to an end if we don't do something about it. What I'd like to encourage people to do is try to figure out how we can supplement the intellectual property regime in a way that will encourage people to turn development in a sustainable direction.

WILLIAM HENNESSEY:

I just want to pick up on one thing you said Kate, from the standpoint of unfair competition law in another arena. In the United States, the enforcement of false advertising claims has moved very much from the public sector to the private sector over the last 15 years or so. When a party makes a claim that certain tests show that their product is superior, assertions that those claims are false are most effectively brought by the parties which have most interest in seeing those brought, which are the competitors.

LEONARD MACKEY:

Thank you. The discussion this morning has left me a bit disappointed so far, in that there seem to be one or two speakers on either side of the table engaged in a discussion that may not be taking us too far. I for one would suggest that the United States patent system, and other patent systems where they exist, certainly encourage the development of technologies that are environmentally beneficial. The issue then is how do those technologies get put to use and for this you need a series of incentives; incentives spelled out in money or other benefits. That brings us to the issue of technology transfer. A conclusion that I drew from an UNCTAD conference in Geneva I participated in about a week or so ago, was that the technology will follow a benefit. There has to be a realized benefit to have effective technology transfer. I have not heard any facts or suggestion of facts this morning that say that the existing intellectual property regimes, not the lack of funding, that the regimes themselves have inhibited the flow of beneficial technologies throughout the world. Quite possibly situations exist. Would it not be worthwhile as we move into the box lunch session of our continuing conference, to see if we can develop some examples of beneficial technology which has not been put to use or is not flowing as it could have or should have. Then with that example or examples explore possible alternatives. Thank you.

JOHN BARNES:

James and I maybe have a discussion going but it seems irrational to me that so many countries for so many years never allowed the patenting of pharmaceuticals. Next it was software. These are things that maybe are created in the west or in the developed countries but the other countries that learn and know this technology certainly should have laws within their country that promote people getting involved in the development of additional pharmaceuticals, software, plants whether asexually reproduced or sexually reproduced which is changing. We have to. We've made some major changes. Other countries should jump in and say well okay, unless it's patented here you can't protect it, but we will develop laws that will protect it if that kind of thing is going to develop. I'm kind of like Len though, I think that this would be beneficial. If we could focus on maybe either solving the leather problem in India, how we would change either the laws of India, or the environmental laws of the rest of the world, so that we could continue to wear shoes with leather out of India into the next triennium. If we don't solve this problem in India and all of our laws say you can't use shoes that are processed where the leather is processed with that archaic process in India, we're not going to have shoes. Maybe we need to focus on something that we can try to solve and it will bring up a lot of other issues that maybe will be beneficial.

JANET McGOWAN:

My question is can intellectual property rights regimes be extended to protect innovation by indigenous peoples, to give them control over the use of their information, their seeds, their traditional medicines and also to make sure that benefits go back to them when that information or those properties are used by others. In terms of genetic engineering, in upland Burma they found over 1100 varies of rice growing in one small area, in Liberia traditional peoples were using over 700 types of upland rice varieties. (Upland rice is different from the normal paddy rice.) The question is how do you protect that information, how do the local communities benefit from that and control the use of it. The current IPR regime in the United States has a lot of barriers and some of those barriers are simply financial. Publication is a problem. A lot of this information has been published by outsiders already, years before, with the community having no control over that or understanding the effect of that publication on their rights. There are questions of timing: when were these rice varieties developed, with slight innovations over time. The question of inventorship, when farmers are freely sharing information for a collective benefit. These are societies that do not have access to lawyers like many Americans in our country, they do not have money, they often do not have legal status as an entity under their national laws. To support what Stephen Brush was talking about earlier, a lot of these societies do not encourage individual benefit at the expense of the group, so the idea of saying one farmer has developed a new rice variety, let's give the benefit to him, is actually very divisive, and may not fit the property regime of the social and legal systems within that group. So indigenous people may just not be interested in IPR protection for that reason. I know in the Zuni people in New Mexico, there is sort of a push against individuals standing out because the group benefit is often seen as greater than the individual benefits. In the United States we have one patent system, we have one intellectual property system that has given benefits to certain groups of people, to certain types of innovation, while many innovations are excluded. There are millions of different ideas and creations by human beings that are not protected under our system, it... we limit its benefits by time. My question is can we extend this type of patent, trademark, copyright regime to include collective knowledge that is created over time by traditional peoples to give them some benefit and control over its use? By way of another example, and our group may want to focus on (and which would help me in my own consulting work right now), is that I'm working with a project with the Center for People, Food and the Environment, who are working with the Zuni people on ways to control outsiders' access to their folk varieties, their different crops, including blue corn, squash, beans and peaches, some of which were brought over by the Spanish.

WILLIAM HENNESSEY:

Sounds like a trade secret issue.

JANET McGOWAN:

Well it's a trade secret that in many ways is out, when you sell corn seed you've sold a trade secret in a way, because that genetic information which has been developed over 1500 years is inside it. For the Zuni people their corn is, and all of their crops are, sacred gifts from the Creator. The idea of outsider commercializing that is very offensive to them and they would like to control the outsiders' use. But if you sell a peach, how do you stop the peach pit from being used? Is there an option for legally controlling their own genetic resources, their own genetic engineering?

A final point I just want to make which is really not on the IPR point, but most of the blue corn that we eat in our tortilla and corn chips is not blue corn, it's a combination of white corn and blue corn which has been bred, because blue corn doesn't harvest at the same period of time. So a lot of blue corn is being marketed in this country as sort of native American gifts from the Creator, this kind of wonderful special corn, in fact is not, it's a hybrid variety, and this has been very offensive to a lot of Native Americans. This is a sacred crop, which loses a lot of its nutrition al aspects by the cross-breed. So this is one of the issues that I'm dealing with today, and IPR doesn't really help me that much, in my own work.

CHARLES ZERNER:

Thank you. I hope these coments will be appropriate for our lunch conference continuation. I would like to do a little conjuring up, if I may, and conduct some cross-disciplinary hopping between the patent lawyers and the major corporations represented here and the comments by James Buchanan. I would like to address a concrete problem, the "shoes in India problem". Is it possible that the use of archaic technologies, such as leather curing, which have environmentally negative effects in developing countries, although they are very serious concerns now, may not be the issue in five or ten years? The image that I would like to conjure up is the notion of a hypernature or a supernature. What I mean by this idea is the idea of a synthetic nature or simulacrum. To the degree the technologies are creating the capacity to use naturally-occurring materials, genes and molecules, and to reshape them, what we're effectively doing is severing the nexus between culture and nature. At a certain point the seeds, the germplasm, the molecules, the alkaloids that are now being sought, analyzed and simulated or synthesized, will be entered into electronic memories, as they are now being recreated at NCI/NIH as well as in the private sector. Corporations as well as developed-country governments may not in the near future be scouring the tropical world for its biological diversity at all. The biodiversity may well have been thoroughly scanned, analyzed and simulated as electronic forest. This may be a private electronic forest, a national, or a global forest of data. It may be a forest without borders to which one has access through the information superhighway. And once that happens, the notion that corporate activity and practice is intricately linked as a progressive agenda with environmental conservation or with equitable returns to host countries may be effectively severed.

ANIL GUPTA:

I think the issues which have been raised concern the questions basically whether (a) I fear a stricter IPR regime prevents the acquisition of technology which will produce environmentally safe products, and (b) permanent transfer of these technologies would take place. I fully understand that the basic purpose of IPR is to provide incentive for people to innovate. If there is not incentive people will not innovate, and if people don't the problem will continue to exist. That is perfectly understandable. What is not so easy to appreciate many times is that the time- frame in which we want people to license these technologies sometimes may be shorter, from the point of view of global concern, than the timeframe in which needy buyers can accumulate capital to buy these technologies. So let us say we want in the next three years all the countries to use an environmentally safe technology developed by a particular company here in the U.S. In the next three years a lot of companies in developing countries would not have the capital to invest into enterprises or to buy the technology at the price at which the concerned U.S. company would like to sell it. And it is here that the dilemma arises, as to how do we make it possible for society at large to benefit from the desirable technology in the shortest period of time, when the capital doesn't exist within the developing countries to license it at the asking price. And that is where new global instruments for facilitating technology transfer are required. To indicate one condition in which compulsory licensing may be justified, consider the new Plant Variety Act. Under this Act several provisions are available which say that if government feels that people at large are not able to get the seed of a particular variety which will improve their productivity at a price they can afford, or if the company concerned is not willing to invest in producing seed at a scale at which it is required or that the seeds are being produced but not in the manner that people can use them, etc., then compulsory licensing will be insisted upon. So I suppose that we must view the issue of compulsory licensing in a broader perspective.

WILLIAM HENNESSEY:

Why shouldn't the government pay for it?

ANIL GUPTA:

Quite possibly the government would like to pay for it or government may insist that the price at which one is proposing the transfer of the technology may not be the price at which a country can afford to buy. So we got you the other way, which means environmentally unsafe ways of using natural resources. Developing countries may not have resources to use that technology at the price at which you you want to sel l it, because they don't have resources for this. Most countries are going through such an economic problem at this moment. Their currencies are devalued, their reserves are very low, and their exports are not increasing. Under such conditions for them to be able to borrow or to invest from their savings in such technologies which are very costly may not be possible. I don't think we would question the right for an inventor to be compensated. I thinkthe corresponding ability of a buyer in a developing country to compensate the inventor has to be considered. Maybe the governments in the North provide funds for buyers of such technologies, or anybody else for that matter. I think the question is whether funding by international institutions or by consortia of industries will be available in the larger social good to ensure that these technologies won't sit on the table or the shelf of some company just because countries don't have resources to use them. That is to me the greatest challenge.

JAMES BUCHANAN:

I really didn't raise my hand but I do have a question that has been on everybody's mind. What are these?

WILLIAM HENNESSEY:

That's a computer diskette box.

JAMES BUCHANAN:

Ahh, okay, we've settled one question at least today.

WILLIAM HENNESSEY:

You'll notice on the back it's made of one hundred percent recycled polypropylene. It also can serve as a seed box, I think, as well.

JEFF KUSHAN:

One topic I was going to address was just raised by Anil. One consideration in terms of the functional process of selling products and setting prices and things like that: if you have protected technology, that does not mean that you're going to be able to set your price at some unrealistic level and expect someone to buy it. What you're going to strive to do is price the product at a level that is sufficiently high so you're getting a reward of exclusivity but also saleable, people can afford it. And a lot of times in the debates people have focussed on this completely illogical concept of a corporation that's going to go in and price its products at a level that's so unattainable that no one would be able to purchase it, and that just doesn't make any business sense. One of the problems companies have in setting prices is this concept of differential treatment of intellectual property, exhaustion of intellectual property rights and how that relates to the ability to target a price to a market. If you go in and you want to sell a product, let's say you want to sell a patented technology, and the price is really matched to that market, but in doing so, and putting that product on the market, somebody can actually purchase it in volume, come back and horde it into another richer country where you would like to sell it at a higher price, you just created arbitrage, you've just created a situation where that's not feasible, is a big factor in the business decision of whether you're going to be able to set the price appropriately. So you'd have to integrate that into your global design process or intellectual property, are you going to be able to give the intellectual property owner the right to control prices within a market, that's actually not accurate, but you give the intellectual property owner the discretion to set price differentials in different markets and in doing so, if you overlook the exhaustion question, all of a sudden you have a problem where they can't take away that discretion. Now having gone through that, I was going to actually speak to one of the questions that was on the paper, my last futile attempt to do so. And it was really a simple question that was being asked: should you try to create some type of intellectual property that is special or unique that will particularly incite development of environmentally sound technologies? And I would suggest that that's not really possible to do. And there's two reasons for my conclusion, one the patent system has been designed as a general stimulus for innovative activity, it is a positive pressure for developing new things that were not known before and it functions best when irrespective of the class of technology you will have that incentive. You know, you can't sit now today and predict what technologies are going to be hot ten years from now, five years from now, and to do so would be a waste of time. If you devise a system that says whatever the technology is we should encourage its development, that's probably the most efficiently functioning system. The second one is more practical and part of it goes to what Tom Field said about the capabilities of patent examiners. I don't want to impugn that but the patent examiner's going to look at information known before and going to make a determination of whether somebody gets a patent on this innovatio n based on what is known before. They can't predict what the technology's going to do. And typically just from the life cycle of the patent application, you know, this is happening a year and half after something has been invented and someone has filed for protection. So you're stuck in a timeframe that's at least a year behind where you are now, more importantly, technology at the point where you patent, file a patent application is not refined it to a commercial product, it's not a functioning system, it's got a lot of things that have to be worked out, and this is true for the vast majority of inventions. File early, when you conceive the invention, you develop it, your subsequent efforts to take it out and put it on the market as a commercial product happened later, and if you try to slow down or change the process to allow the patent examiner to evaluate commercialized product you more or less freeze the patent system and make it unworkable in its current concepts. So I got that out and I hope that's helpful.

ANIL GUPTA:

Just one small question. Do you think that as complexity increases for producing technology which is environmentally safe the incentive for essentially derived technology can be increased by the patent laws so that more people would like to make small improvements and make them more safe in times to come? This without infringing the patent laws.

JEFFREY KUSHAN:

Some systems have tried to capture that very small level of innovation through things called petty patents or utility model oriented patents. These are not expansive rights and depending on the system they work well or they aren't really useful. One misperception about the patent system is that many people fail to realize that the vast majority of patents cover incremental improvements. For example, I figured that by running the reaction in this solution it works ten times faster then the other one did. That kind of innovation is derivative, it's incremental. But it's still valuable. Whether you can or can not patent an invention is a decision that must be based on the merits of the incremental improvement. To the extent that those incremental improvements would fall short of something which we might consider patentable, you can look at it and explore things which other systems have developed like petty patents.

KARL JORDA:

Okay, just a couple of quick footnotes. One about Kate's and Dave's point about using the patent system for social engineering. I have the distinct impression that, whether you like it or not, that debate is all but over. Remember our Supreme Court, in the Chakrabarty decision [571 F2 40, 197 USPQ 72 (CCPA) cert. dismissed USLW 3129 Aug 25, 1978] on the question of patentability of microorganism, said that "everything under the sun made by man is patentable" and maybe that's the way it should be from a patent system point of view. Congress of course could overturn this decision, but that's not likely. And looking at the scene internationally, Finland just very recently and one other country - I forget now which - passed legislation, in fact, two pieces of legislation. One piece of legislation broadened the possibility or the scope of patent protection for biotechnological inventions. More biotechnological inventions are now patentable that previously had not been. On the other hand and simultaneously, they passed legislation narrowing the conduct of research in the field and increasing approval requirements as in the case of our Food and Drug Administration: you can get a patent on a pharmaceutical but you can not sell it until you have proven its safety and efficacy. So this is the way it's shaping up nationally, internationally, and the debate may be over.

One other quick note with respect to Martha's point that while there's a tremendous amount of patent literature that can be studied that has variable information in the context for developing countries, the WIPO, which is of course the World Intellectual Property Organization in Geneva, the UN agency has a document entitled, this was delivered by somebody in a program I ran for them in Geneva last October, "Affording Developing Countries Access to Environmentally Sound Technologies Including Biotechnology Through the Use of Patent Information", and of course as Martha pointed out, correctly, once a patent is expired it does indeed contain valuable information that is available in the public domain. The problem is that often what's in the patent is not enough to practice the invention, you need additional know-how or trade secret information.

But that reminds me of a notorious example of the case in Egypt and you may have heard about it. A baking concern of the Egyptian government was interested in acquiring technology for bakeries. But they did no t want advanced technology, they wanted labor-intensive technology, even though it was technological not safe and not sound. They wanted to put people to work. That is what is happening in many cases, advanced environmentally sound and safe technology doesn't serve their purpose in terms of employment.

WILLIAM HENNESSEY:

I'd like to make just one observation, before we go to Michael Gollin, in terms of the question about patentability of certain subject matter, Tom Field and Kate Murashige were participants in a conference held last summer here at the Law Center, which was sponsored I believe by the Department of Energy. The issue was the patenting of the human genome; and the transcript of that conference is in a recent issue of Tom's journal which is called "Risk: Issues in Health and Safety" If you would like to see what the contents are you can talk to Tom over the break.

MICHAEL GOLLIN:

Picking up on Jeff's point about the difficulty of tuning the intellectual property system to screen out bad technologies and support good technologies, I think from a conceptual point of view, it is impossible and I'll tell you why. Let's pick three technologies today which we consider bad and are trying to clean up: the legacy of PCBs, CFCs, and overuse of fertilizers and pesticides. In each of those three examples, the technologies have conclusively been shown to be causing harm and we're trying to innovate around and come up with alternatives. However, at the time they were introduced they were revolutionary, they saved lives and were wonderful inventions. PCBs reduced the incidence of fires in transformers and countless work places, and saved probably hundreds of lives. CFCs replaced ammonia in cooling systems to make them less noxious and dangerous, and saved lives. The green revolution with the intense agriculture, narrow range of breeds, intensive use of fertilizers and pesticides has boosted world agricultural food production tremendously, at the time it was hailed as, and all of these technologies were hailed as, wonderful, good technologies. So by extension history teaches us that those things that we consider good today may turn out to be bad tomorrow. The point is that invention is a very messy process and we don't know today what's going to be good tomorrow and what's going to be bad tomorrow. There are certain things that we do know. We know that certain processes that reduce consumption of resources are better than those which increase consumption and there are ways we can fine tune the intellectual property systems to promote that. One way is to make sure that we get good patents out. I know in the environmental technology area there are a whole slew of patents coming out which are affecting environmental contractor and cleanup operations. Some of those patents are lousy, they shouldn't have been issued, perhaps because of poor understanding by examiners. As is especially true in a new area, we need to focus on having quality patents which are neither too broad nor too narrow. There are several other approaches which I've pointed out in articles I've written on the subject and I won't go into that in detail. I do want to go back to the basic point. There needs to be an interplay between intellectual property and environmental law and the convergence is at the point of the particular technologies. In a number of cases such as the example of the Marine Shale case, the patent portfolio and patent activity has been quite relevant, for example in determining the company's ability to pay and also the economic benefit that they've obtained from using a particular technology. Interestingly, FDA Chief David Kessler in recent testimony about the cigarette industry cited patent data as evidence that the companies have considered nicotine removal technologies and the technologies of combining ingredients in cigarettes and so on. He cited to show the intent of the companies towards these devices. So there is a real blooming of creative thinking about patents and other intellectual property rights and I encourage all of us to continue in that quest.

WILLIAM HENNESSEY:

We're going to break for lunch, I think we'll take up these comments after lunch if possible. I hope you will have an opportunity to get out of the building and perhaps enjoy some of the weather we have here, four seasons, unlike Palo Alto, California, right Kate? But we're going to take a break we will start on the dot, at 1:30 and I hope we have some interesting discussion over lunch. Thank you. The lunch will be served right here.

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