Institutional Arrangements for Conserving and Promoting Medicinal Plants Diversity and Augmenting Contemporary and Traditional Knowledge: Perspectives on Intellectual Property Rights and Sui Generis Systems

Introduction

India, with approximately eight percent of world’s biodiversity, has the potential of becoming a major global player in screening and developing herb-based formulations, medicines and products. About 4300 plant species are said to exist in India of which 7500 plant species find mention in the recorded folklore of India. Of these only 1700 have been documented in Ayurveda and classical healing treatise. This reflects the yawning gap that exists between the recorded and the unrecorded knowledge about plant species. There is still a good deal of knowledge that exists with local healers, herbalists and other practitioners of herbal knowledge which remains to be documented. An urgent need to inventory knowledge of the plant species and their uses is felt at the regional and national level. What is often not appreciated is the need for incentive for local communities and healers to disclose their knowledge.

The shift in demand of consumers towards herbal and natural product in the international markets has prompted a widespread research to develop medicine and health care products from medicinal plants. According to an EXIM Bank report (Occasional paper no. 54) the international market of medicinal plant related trade is about $60 billion per year. The Indian market is estimated at Rs. 550 crores per year ($140 million). The exports of essential oils and herbal products in 1995-96 were valued at about Rs.200 crores ($50 million).

This market- propelled demand for medicinal plants is mostly met from natural ecosystems. In India, out of approximately 4000 species of plants that have been identified to have medicinal properties, approximately 150 species of them have been commercially exploited. The collection of these species is mostly done from the forest or other natural ecosystem and only 20 species are under commercial cultivation. This reflects the urgent need for ex-situ conservation and cultivation and or multiplication of medicinal plants through tissue culture or other biotechnological technique. India has also concentrated on exporting the raw material in the form of plant and plant parts/extracts. In order to be a major player it is important that we concentrate on exporting value added products rather then the raw material. However, the absence of proper quality control measures or techniques has resulted in our products losing out to better equipped competitors in the international markets.

The task of being globally competitive can be accomplished by identifying institutional arrangements in the form of board foundation corporation that would oversee the management issue involved in the medicinal plant sector. The emergence of such a body may help address all the facets of perceived problems and would enhance the opportunity of individuals, grassroots innovators, and enterprises to act as global players.

The Global Scenario of Medicinal Plant Trade

The worldwide trade in medicinal plants and its products is estimated to be around $60 billion annually. The annual growth of the market is expected to be around 7 percent (EXIM Bank Report Occasional paper no. 54).

The major importers of medicinal plants are the European Union, Russia and the USA while the major exporters of medicinal plants or its value added products are China, Japan and Russia. These countries also show strong intellectual property protection. It is noteworthy that active Intellectual Property Right protection has helped countries like China to establish supremacy in the world trade. Forty five percent of all patents on herb or herbal based or related medicine are with China closely followed by Japan with 28 percent share (Gupta, 1998).

Appendix I provides interesting information about the top twenty patent holder in the world. Most of the inventors are individuals and only a few are corporate houses and institutions. This fact indicates that in herbal patent system it is still possible for individual researcher or groups to make the mark and add value in tribal and local community knowledge system. We recognize the huge transaction cost involved in filing and obtaining the patents. However, if a petty patent system and registration mechanism can be developed to make it easier for protecting IPR’s of local communities and individuals, it will certainly help the cause. INSTAR (International Network for Sustainable Technology Applications and Registration) which has been proposed as a model petty patent and registration system for India has been discussed later in the text.

The Indian Scenario

India, as described earlier is a virtual treasure trove of plant species. Despite substantial pace of growth in the medicinal plant and product market, India’s share in world market of medicinal plant and products is a mere 2.5 percent. The export market is growing faster than the domestic market. However, the export is being carried out in form of plants, or their parts and not as value added products. Countries that import plant and plant parts are invariably less biodiverse but are technologically advanced which show a higher capability to develop value added products from the imports.

The Indian exporters face major constraints while exporting medicinal plants. The cyclical nature of medicinal plant market makes it difficult for them to determine supply and demand in the markets. Also, competition from synthetic substitutes, non-compliance with rules and regulation of the importing countries, hoarding and manipulation by large importers, poor quality control, inadequate information on market trends, use of obsolete technology and lack of established methods for cultivation of large number of plants, etc. compound the problem of export of medicinal plants or their products from India.

It is interesting to note that India has negligible patents on plant based formulations, extracts and products. The reason is not far to seek. The existing Patent Act provides only process protection and therefore only the method for preparing a formulation can be protected and not the formulation itself. The process patents are therefore less effective in cases where variations are possible without significantly changing the effectiveness. Product patent permit protection against developing the same formulation by any method. Traditional knowledge held by communities, in the classical sense, can not be patented. Much of the traditional knowledge that is not catalogued, is not part of the prior art. Thus knowledge of the tribal and indigenous communities has novelty, non-obviousness and industrial application which are the basic requirements for acquiring protection under Trade Related Intellectual Property Rights agreement of the World Trade Organization (for examples see appendix II).

TRIPS has provided the signatory countries the freedom to choose intellectual property protection either under a patent regime or a sui generis system or a combination thereof. An urgent shift in policy is required, if India expects to be a global player in plant based medicine and formulations. It is important to develop a sui generis system to provide grassroots innovators an incentive to disclose knowledge.

There are interrelated technological, institutional, socio-economic and ecological issues affecting the medicinal plant sector that have impeded its growth resulting in the depletion of plant diversity and resource bases, and the erosion of international market share. We discuss the key challenges in developing medicinal plant sector to understand the basic nature of the problem.

Technological Issues

  • Absence of national and regional level databases of plant diversity and resource abundance has made it difficult to understand the realistic estimate of the quality and quantity (affected by time, space and social processes of conservation, extraction and processing) the resource we have.
  • Inadequate infrastructure and appreciation of the sampling method evolved by local conservators for accessing medicinal plant diversity; (which plant part is collected in which season, for which location and which part of the lunar cycle seems) affect the ability of concerned firm and communities to derive fullest potential from the resource.
  • Inadequate technology to extract and analyze bioactive material and products from the plant wealth. Few firms have the advantage in combinational chemistry so as to synthesize the active components found in effective drug from the cultivated plants and thus reducing the need for extracting raw samples. Most of the extraction of medicinal plants takes place from the natural ecosystem. The harvest constitutes mainly of plant parts such as trunk, roots and bark which destroys the plant all together. Barring few exceptions[1], we do not have many examples of research where technological improvements have led to a shift from destructive harvesting to the harvesting of regenerative part.
  • Taxonomy is a dying discipline and there is no corporate investment in the chairs a long term research on taxonomy. The lack of trained taxonomist with BSI and ZSI has prevented undertaking an exhaustive inventory of the plant diversity. It is reported that India has only 500 taxonomists (Dr. A.K.Ghosh, pers.comm.) to study and document the biodiversity of the country. In a recent study by OECD, strengthening taxonomic competence was recognized as the first priority (September, 1997).
  • Lack of technical infrastructure with little coordination among the concerned agencies for extraction, processing and storage of medicinal plant products.
  • It is generally believed that a naturally occurring plants have different chemical and genetic properties compared to a cultivated type. Despite the rise in demand for medicinal plants and plant products, there are only 20 plants that have been commercially grown. Methods need to be developed to understand relationship between soil mineral and other properties and their effect on the plants so that cultivation of larger number of species can be taken up without any quality deterioration.
  • There is a lack of concerted effort to strategize technology development for value addition through multiplication, quality control, processing and packaging.

Economic challenges

  • Lack of product patent protection has been responsible for very little investment on the part of Indian companies for developing new formulations or extracts.
  • Inability of the small innovators, herbal practitioners and herbal healers to generate resources, links and avenues for commercializing their knowledge.
  • Lack of funds to develop new high quality medicinal plant varieties through the introduction of biotechnology or develop cheap propagation methods.
  • Availability of cheap alternative from the wild with intrinsic good quality acts as an incentive to overexploit natural resources rather than encouraging cultivation or sustainable management of the resource.
  • Poor returns to the grassroots collectors and institutions because of long distribution channels and unfair prices.
  • Inability to mobilize budgetary and non-budgetary resources from national and international sources for conservation, sustainable extraction, value addition and marketing by both the organized and the unorganized (informal) institutions.

Ecological Problems

  • Lack of understanding of medicinal plants and ecosystem interactions; studies should be carried out to assess the impact of excessive extraction of one species and it affects the growth and distribution of other desirable and undesirable species.
  • Lack of understanding of sustainable harvesting/extraction leading to degradation of natural resource, disturbance of habitat, loss of diversity, reduced abundance and local extinction of plant species.
  • Monoculture propagation of cultivated species results in genetic loss. Chemical inputs in the cultivation of medicinal plants may affect their therapeutic value adversely besides affecting the environment.
Social Issues
  • Inability to develop partnership between formal and informal knowledge systems due to lack of mutual trust respect and asymmetry in the incentives.
  • This has not only affected our approach to conserve the knowledge but also has prevented us from properly appreciate contemporary innovation. The result is total lack of policy initiatives for rewarding contemporary individual innovations.
  • The absence of proper incentive has led younger people not to acquire, learn or mater the contemporary or even the traditional knowledge systems that have been improved over generations. The erosion of knowledge systems is as serious a threat as is the erosion of diversity. The scattered and isolated contemporary knowledge systems with individual healer and communities has also suffered setback due to lack of incentives.
  • Failure to understand and recognize the fact that much of the contemporary knowledge in the traditional domain evolved during stress period when there are spurts of experiments by individuals and communities to combat these stresses.
  • Conform to the international norms of Benefit Sharing defined under the Convention on Biological Diversity (1992)[2] and International Convention to Combat Desertification (1992)[3]

Institutional Arrangements

  • Institutional support to the medicinal plant sector has been weak. There are large number of institute in India that support R&D in use of medicinal plants for drugs manufacturing. None of these institutes (eg., CIMAP, CDRI, NCMA) have a comprehensive mandate for addressing various issues relating to policy, trade, sustainable extraction, etc.

Objectives

The objective of the workshop:

  1. To identify institutional arrangement with agencies such as Medicinal Plant Boards/Corporations/Foundations or any other authorities to provide strategic support and leadership for conservation, capacity building. Conservation and augmentation of biodiversity.
  • To explore and develop low transaction cost systems for cataloguing and protecting the IPR of individuals and communities through modification in standard patent systems as well as by developing a registration and petty patent system.

The workshop will also discuss contentious issues such as:

  1. Application of Intellectual Property Rights to traditional and contemporary knowledge.
  • Petty patents and its significance in promoting grassroots creativity.
  • Intellectual Property Rights and its potential to promote innovations.
  • Kind of incentive to be shared with herbalists who do not charge money for sharing knowledge.
  • Developing Institutional arrangements that encourage the grassroots level institutions and link them to technical and marketing bodies.
  • Role of Venture Capital Funds in financing and scouting local innovations and translating them into commercial ventures, conforming to the benefit sharing agreements as those prescribed by the CBD and the International Convention for Combating of Desertification.

Output:

The institutional framework for expanding policy and implementation framework of institution for providing leadership to the conservators of medicinal plants and innovators developing new uses of the existing diversity. The workshop will also discuss and arrive at a consensus for developing a system of incentives for conservation, breeding and sustainable uses of medicinal plant varieties in the form of petty patents, sui generis system or a combination thereof.

Venue and Date:

                        Venue:            RJMCEI Auditorium

                                                Indian Institute of Management, Vastrapur

                                                Ahmedabad.

                        Date:               27th January 1998 at 0930

Appendix I

Ownership of patents that mentions the word “herb # or herbal # or herbal medicine or herbalism or (traditional and (medicine or remedy)”
Rank #PATS % Pats Patent Assignee
1 28 0.65 Tsumura & Co.
2 24 0.55 Wang Z
3 22 0.51 Int. Flavors & Flour Milling C.
4 20 0.46 Li Y
5 20 0.46 Nisshin Flour Milling Co.
6 20 0.46 Tsumura Juntendo KK
7 16 0.37 Uniler NV
8 16 0.37 WangY
9 15 0.35 Chen J
10 15 0.35 Unilever
11 14 0.32 Wang J
12 14 0.32 Zhang Z
13 13 0.30 Hasegawa Co. Ltd
14 13 0.30 Kanebo Ltd
15 13 0.30 Kao Corp
16 13 0.30 Liu Y
17 12 0.28 BASF AG
18 12 0.28 Firmenich SA
19 12 0.28 Lion Corp
20 12 0.28 Nitto Electric Ind Co.

This data was generated, thanks to Keith Richardson, of Derwent Information Limited.

Appendix II

Indigenous Knowledge and Industrial Applicability of Plant Genetic Resource

Company Collection Kind of use of indigenous knowledge/indigenous people or territory.
American Cyanamid Arid lands plants for crop protection agents and pharmaceuticals development Priority given to plants with rich Ethno botanical background
AMRAD Corporation Australian Aboriginal bush medicines, microbial and soil sample from Bathhurst and Melville islands (Australia) Targets plant medicines used by Australian indigenous people, specifically anti viral, immunodulatory, and anti cancer compounds.
Arya Vaidyshala Herbs and shrubs from Kerala Knowledge of Kani Tribe to screen and develop therapeutic equivalent from herbal formulation of the tribal community through TBGRI.
Bristol Myers Squibb Rain forest plants with medicinal properties, especially Ancistrociadus (Source of Anti-HIV agent) and anti-malaria. Ethno botanical uses of plants by indigenous communities to be documented. Terms of benefit sharing agreement not public.
Merck & Co. Fungi, microbes, marine organisms, plants Indigenous knowledge from Urueu-wau-wau tribe of Brazil. Merck holds a patent on anti-coagulant derived from the plant material based on their knowledge.
New York Botanical Garden Collects all kind of plant material Leading center for ethno pharmacology and ethno botany research.

Appendix III

Practitioner

  Individual Collective
Knowledge Source   Traditional The traditional knowledge is available in a common domain but is practices, improved, and reproduced by specific individuals. The herbal practitioners in the villages practice and augment the traditional knowledge by continuously adding and innovating to the already existing knowledge base. The knowledge despite being traditional is dynamic and continues to evolve due to the effort of these individuals practicing it. Traditional knowledge is known to the community as a whole and is available as common knowledge within the community. The common knowledge about therapeutic values of plants in Kani tribe is one such example. Most villages will have such knowledge. In some case the knowledge is even more widely distributed such as those dealing with more widely abundant and used plants like Sacred Basil, turmeric and ginger etc.
Contemporary The knowledge has evolved due to the efforts put in by an individual or specific formal and informal institutions. The knowledge my be in form of an innovative step in enhancing the efficiency or applicability of the traditional knowledge system or a completely new innovation such as the development of a new plant variety or a new formulation, or new use of an existing formulation. The development of innovation where the contribution from the community as a whole supersedes any individual contribution. These knowledge systems evolve mostly in the stress period whence human adaptive instinct are operating at maximum efficiency. The innovations developed by individuals or group are in public domain and are different among groups.

Appendix IV

INSTAR as an alternative petty patent system

Need for Intellectual Property  Rights protection to Traditional knowledge

  • The traditional and contemporary knowledge available with the indigenous people and local communities has been used with impunity without recognizing the rights of these communities over the benefits that have accrued to the user directly or indirectly.
  • These knowledge system are eroding due to lack of incentive for practicing, augmenting or due to lesser opportunities to add value to them.
  • Innovation in technological, cultural or institutional subsets often remain isolated and unconnected despite an otherwise robust informal knowledge system.
  • People need to have incentives for disclosing their knowledge. The IPR protection will enthuse people to disclose more such knowledge that exists with in the system.
  • The IPR protection for individuals as well as collective innovators will help strengthen the people to people learning as more of the traditional and indigenous knowledge will be available to the people for reference and building upon.
  • The enforce the select guidelines of International Conventions such as CBD and ICCD on conserving the knowledge system available with the indigenous communities.
  • The registration system and patent system may help in enforcing principle of prior informed consent if patent office require evidence for consideration of patent.
  • The IPR regime will provide the legal tool to communities for negotiating agreements on mutually agreed terms and in the process ensure benefit sharing.
  • The local knowledge should qualify to be considered new for the purposes of prior art since outside communities/companies may not have had access otherwise. The norms regarding exhaustion of the rights due to publication of local knowledge should be reconsidered and modified so that incentives to share the knowledge by local communities with outsiders are not affected adversely. In this case, publication in the last five years may be considered relevant for applications of petty patents provided, of course, the publication is in vernacular language or in non-catalogue newsletter and paper. This is a contentious issue and may appear difficult. Only publications within one year prior to application are considered eligible for patent.
  • The argument that all the knowledge should be treated as common property is not tenable because large number of local experts we have met so far are extremely knowledgeable though very poor. They know far more than any body else in the village and have expertise to solve various problems. Others may know about it but they may not have contributed to it except by giving an opportunity for testing. To that extent they should have a small share in the entitlements. But the entitlements of an expert could not be at par with the rest of the community. Local communities have not provided them any significant incentives such that either their children or other younger people should try to learn their skill.

Expectations of the indigenous biodiversity/traditional knowledge provider from an IPR regime

  • Protection regime sans rigour of formal patent acquiring procedure.
  • The protection should be made available within a short span of time as many small or basic innovation may get obsolete faster.
  • The protection requirement for shorter period say 5-8 years (if the innovator has extraordinary commercial potential, prospective investor might apply for standard patent).
  • The system should be cost efficient or economical and within the reach of small communities/individuals with minimal transaction costs.
  • The documentation and dissemination of innovations must take place in local languages and through easily accessible institutions.

INSTAR as a solution

INSTAR has been developed as a registration system for innovation which can also provide petty patent protection. Like petty patents INSTAR provides the benefits of less rigorous examination and lower costs. INSTAR will provide the innovator with certain safeguards immediately on registration. After the completion of examination INSTAR can help provide protection for innovation for 5-8 years depending upon the nature of innovation.

The examination primarily will focus on disclosure rather on novelty. In any case, if an innovation is not new, it is unlikely to get commercialized. The system of appeal in the case of dispute entitlements will be simple and efficient. It will generally be inclusive in the case of community claims unless herbalists concerned with the claim specifies improvements not known to the community.

Structure of INSTAR

INSTAR is expected to be an autonomous agency with large scale internet and other nodes.

 Procedure of Registry
  • On development of a new innovation, an innovator may contact INSTAR to register his/her innovation- the process will require a sample declaration of the discovery. The act of registration will give the owner right to move the court in case the use of his innovation has been made by a non-contracting party without prior permission.
  • All registration at INSTAR will be coded according to an universal system like ISBN. The postal pin code of the habitat of the community or individuals registering innovations will be incorporated in the indexation system so that geo-referencing of innovations can be done. In due course the contextual information of innovations can also be incorporated in the system so that GIS systems of innovations can help cross connect the communities having similar ecological situations or facing similar challenge.
  • Innovations that are found to be novel, non-obvious and having industrial application will be considered appropriate for award of inventors certificate or a kind of petty patent which is a limited purpose and limited duration protection. Other innovations will remain in the registration system, even if these are not granted petty patent systems.

GOALS OF INSTAR

  • Acknowledgement of individual and collective creativity.
  • Grant entitlements to grassroots innovators for claiming a share of any returns that may arise from commercial applications of their knowledge, innovations or practices with or without value addition
  • Linking the golden triangle of entrepreneurship by linking investments, enterprise and innovations. The register will help small scale investors and/or entrepreneurs seek opportunities of communication with communities and individual innovators and explore opportunities of communication with communities and individual innovators and explore opportunities of investment. The competition among the investors tempered by competition among potential suppliers of various kinds of knowledge as well as diversity may moderate expectations on both the sides.

Supportive Institutional Arrangements for INSTAR

  • An autonomous authority of which local community representatives are majority members could be entrusted with the responsibility of having access to all the contracts. These contracts will also be scrutinized to see whether management plans have been developed for sustainable extraction of diversity by domestic as well as external extractors.
  • The award of certificate will also increase entitlement of innovators/s for access to credit and risk cover so that transition from status and role as collector, or producer of herbs to developer and marketer of value added products can take place in cases where innovators deem that fit.
  • The registration system will also be part of Knowledge Network linking problem solving people across the world at grassroots level. This will promote people to people learning and serve as a multi-language, multi-level, multi-media (Oral, textual, electronic) clearing house for local and indigenous communities. Wherever necessary and possible, formal scientific institutions will be linked up in the network.
  • The registration system will help of Venture Capital Fund like GIAN that help in augmenting the capacity of innovators themselves to do research, take risks, and generate new enterprises themselves or through partnership with other entrepreneurs. These Venture Capital Funds will scout the data base of INSTAR for innovation and enable entrepreneurs to set up commercial ventures. This will not only reduce the transaction cost to access innovations but help bring innovators, entrepreneur and investor from different part of the world together which otherwise could never have been possible.

Apart from the registration system a large number of specific incentives would need to be developed for different categories of knowledge, innovations and practices. Similarly the incentives for preservation of sustainable lifestyles of indigenous communities would also be differently evolved.


anilg

Visiting Faculty, IIM Ahmedabad & IIT Bombay and an independent thinker, activist for the cause of creative communities and individuals at grassroots, tech institutions and any other walk of life committed to make this world a more creative, compassionate and collaborative place