Doing Business in Brazil

4.7. Genetic resources, traditional knowledge and biotechnology

07/03/18

4.7.1. Biodiversity and Genetic Resources

With regard to the legal protection of biodiversity and genetic resources the Convention on Biological Diversity (CBD)1  is an international document of critical importance, as it introduced important concepts and established minimum parameters to be observed by the member countries in the regulation of the matter.

The CBD, which was drafted in the so-called “ECO92” (meeting held between Chiefs of State in Rio de Janeiro, Brazil) was characterized by the concern with sustainable development, which consists of the development that meets the current needs without jeopardizing future generations.

According to the CBD “biological diversity” means “the variety of live organisms of all origins, covering, among others, the terrestrial, marine ecosystems and other aquatic ecosystems and the ecological complexes to which they are integral parts, covering, further, the diversity within the species, among species and of ecosystems” and the “genetic resources” mean the “genetic material of real or potential value.”

Among the targeted purposes, the following may be cited:
1) The conservation of the biological diversity and traditional knowledge;
2) The sustainable use of the components thereof, respecting traditional cultural practices; and
3) The fair and equitable sharing of the benefits that result from the use of the genetic resources.

Brazil is one of the fifteen “megadiverse” countries, with approximately 22% of the entire biodiversity of the planet and an immense cultural diversity (parties, traditions, arts and rituals). Having evolved into a major agricultural producer in the foreign market, it is now a Party to the main agreements on environmental protections and sustainable development, such as the Kyoto Protocol, approved on the Global Leading Countries Meeting on Sustainable Development (the so-called RIO+10).

Internally, a set of laws, agendas and programs are creating more efficient instruments to enable the transition to the desired model of sustainable development.

Estimates of the value of Brazil’s biodiversity range from billion to trillion dollars. Irrespective of whether these estimates reflect the reality, what is known is that the global social-economical interests converge over biodiversity, as it constitutes a source for the feeding of the world’s population and of the active ingredients in the production of medicines.

4.7.2. Traditional Knowledge and Access to Genetic Resources

It is important to stress that in the study of this matter the stereotypes of traditional meaning “old”, “ancient” must be dismantled as this word in no regard invokes such meanings. Here, traditional concerns the cultural particulars of each community, which derive from practices adopted by the community to solve a certain problem and which solutions are transmitted from generation to the next generation.

In referring to Traditional Knowledge (TK), the first vision that comes to mind is that of Indians, huts and settlements. Without discrediting the Indian community and although they hold slightly over 10% of Brazilian lands, with communities of approximately 350,000 individuals, the other traditional and non-traditional communities that contributed to the growth of the Brazilian Traditional Knowledge should not be forgotten.

Thus, the traditional communities are comprised by Indians, natives, Azoreans, backwoods inhabitants, palm-tree area natives, jangada-type rafters, swampland natives, pastors, quilombo fugitive slaves, Amazon area cross-bred natives, non-Amazon cross-bred races, ranchers/cowboys, small fisherman and producers, while the non-traditional communities are comprised by farmers, vacationers, salespersons, government workers, entrepreneurs, employees, owners of palm processing companies or of other resources, lumberjacks.

Given that the Brazilian communities are more closely akin to the contents of this article, it is important to mention their main features:

– Dependency and consequential in-depth knowledge of nature and nature’s cycles, generating a better use of the natural resources and consequential improvement of the subsistence activities;
– Notion of territory where the social group reproduces economically and socially;
– Reduced accumulation of capital;
– Importance of the family and of the relations of relatives;
– Importance of symbols, myths and rituals (associated with hunting, fishing and mining activities);
– Use of simple technologies, with a low environmental impact; and
– Minimum political power.

What, then, would be Traditional Knowledge? The Worldwide Intellectual Property Organization (WIPO) finds that: “Traditional Knowledge consists of the innovations and creations of traditional basis that result from the intellectual activity in the industrial, scientific, literary or arts fields.”

It should be highlighted that there are a number of different definitions of Traditional Knowledge in the literature but none of them is widely accepted presently.

Regardless of the lack of a precise and widely accepted definition of Traditional Knowledge, it should be noted that TK is built up collectively, cumulatively and in response to different causes. It relies upon tradition, the observation and the use of biological processes and resources. Examples of possible manifestations are myths, rituals, oral narratives, and other practices.

The search for instruments more efficient than those that currently exist in Brazilian law is merely beginning. The possibility of adopting a sui generis protection system is an on-going debate in society at large. According to international organizations such as WIPO and UNESCO (United Nations Educational, Scientific and Cultural Organization), the use of the existing protection mechanisms is not feasible, as they would solve only a part of the problem, leaving other aspects unprotected.

The studies conducted by WIPO led to the conclusion that the literary and art work may be protected under copyright Law; the technical creations by the Principle of Repression of Unfair Competition and by patents; the aesthetic and functional creations are afforded protection under Copyright and Industrial Design law, and, finally, the communities’ identification signs would be protected as trademarks and geographical indications of origin, all of which mechanisms already exist in Intellectual Property law.

In his statements made in meetings held in Manaus, Maranhão and in Rio de Janeiro, Nuno Pires de Carvalho, a WIPO consultant, listed the main elements of Traditional Knowledge, which are not included in the foregoing protection mechanisms. This is why a sui generis protection system should be sought. Such elements are four, namely:

1) Holistic element, pursuing from the culture, spirituality and practice of this Knowledge;
2) Adaptable element, in view of its ongoing evolution;
3) Complementary element, since they are cultural identifiers and have an economical function; and
4) Pragmatic element, as its production is no systematic.

In this regard, the aforesaid WIPO consultant mentioned the main questions in the attempt to fit the TK into the mechanisms currently adopted to protect Intellectual Property: Is there novelty in the subject matter of the right?; Who would be the author and owner of such right?; What would be the period of protection; How would the right be acquired, enforced and cancelled? Stress should be laid on the fact that answers to these questions are yet to be come up with.

In addition to a sui generis protection system, WIPO recommends the creation of modern data bases, such as those already implemented by Venezuela, China and India, which position is being defended by Brazil.

Brazilian laws:

For several decades, the Brazilian government is expressing concern with the protection of the cultural patrimony of Brazil and has taken important legislative initiatives. The most recent are quoted below:

LegislationSubject Matter
State Law no1,235/97 of the State of AcreProvides on the instruments of control of the access to the genetic resources of the State of Acre.
State Law no388/97 of the State of AmapáProvides on the instruments of control of the access to the biodiversity of the State of Amapá.
Law no 6,001/73Sets out the Indians Statute.
The Federal Constitution of Brazil of 1998Specific provisions on article 215, paragraph 1 (protection of popular, indigenous and afro-Brazilian culture manifestations, besides those of other groups that participate in the national civilizing process); article 225, paragraph 1, clause II (the Public Sector must preserve the diversity of the genetic heritage of the country and surveil the entities streamlined into the research and manipulation of genetic material); and article 213, caput (acknowledgement of the social organization, costumes, language, beliefs and traditions of the Indians, which will be protected by the Federal Government).
Decree no1,355/94Promulgates the Final Act that incorporates the results of the Uruguay Round of multilateral commercial negotiations of GATT – TRIPs.
Law no 9,279/96Provides on the Industrial Property rights and obligations.
Decree no2,519/98Promulgates the Convention on Biological Diversity, signed in Rio de Janeiro on June 5, 1992.
Decree no3,551/00Establishes that the registration of cultural assets of immaterial natural that constitute Brazilian cultural patrimony operates through a specific system of books, always quoting the historical context of the asset and its national relevance for the memory, identity and formation of Brazilian society. Accordingly, at the initiative of the Ministry of Culture, the National Program of Immaterial Patrimony was created and contains 4 books: Book of Registration of Knowledge (for the knowledge and form of doing rooted in the daily activities of the communities), Book of Registration of Festivities (for the rituals and parties), Book of Registration of the Forms of Expression (for the literary, musical, plastic arts, scenery and amusement arts) and Book of Registration of Sites (for the places where collective cultural practices are reproduced). As regards the Traditional Knowledge, Folklore and Handcraft, it would be possible to catalogue it in the aforementioned books, eternalizing the description of celebrations, religious or non-religious ceremonies, rituals, musical, literary and art work.
Law no13,123/2015Regulates item II of § 1 and § 4 of Article 225 of the FederalConstitution, Article 1, item j, of Article 8, item c of Article 10, Article 15 and §§ 3 and 4 of Article 16 of the Convention on Biological Diversity, promulgated by Decree nº2,519, of March 16, 1998. It provides on the access to the genetic heritage, protection and access toassociated traditional knowledge and sharing of benefits for conservation and sustainable use of biodiversity.It revokes the Provisional Measure nº 2186-16 of August 23, 2001.
Decree nº 8,722/2016Regulates Law nº 13,123, of May 20, 2015, which sets out about the access to genetic heritage, access to and protection of associated traditional knowledge and sharing of benefits for conservation and sustainable use of biodiversity.

Law n° 13,123/2015 replaces the Provisional Ruling (PR) No. 2186-16 and intends to be a clearer legal framework with regard to access to genetic resources and associated traditional knowledge, and to implement greater legal certainty and reduce bureaucracy of the access process.

An important change introduced by the approval of law n° 13,123/2015 is the extinction of prior authorization by the Genetic Heritage Management Council (CGEN), one of the main problems faced when MP No. 2186-16 was in force, for being slow, bureaucratic and time consuming.

According to the new law, access and remittance of genetic heritage material, or associated traditional knowledge will require a simple declaratory registration before CGEN.

After a long period of debate and public consultation, Law nº 13,123/2015 was regulated by Decree nº 8,722/2016, of May 11, 2016.

Amid the several new rules brought by the Decree nº 8,772/16, the following should be highlighted:

– Definition of which kind of microorganisms and creole species are considered to be part of Brazilian genetic heritage;

– Establishment of rules to regularize the access to genetic resources and traditional knowledge performed before the enactment of Law nº 13,123/2015;

– Establishment of the National System of Management of Genetic Resources and Traditional Knowledge (SisGen, in the Portuguese acronym) an electronic system implemented, maintained and managed by the Executive Secretariat of CGEN (Council Management of Genetic Resources);

– Definition of aggregated value (articles 43, §§ 1º, 2º, 4º and 5º);

– Clear definition of what is not an access of genetic resources (article 107).

In this sense, article 3 grants an official pardon to the access of genetic resources and traditional knowledge performed without prior consent before June 30, 2000. In order to benefit from the official pardon, the user must prove that the access ended before June 30, 2000. In case that the access resulted in the development of a product or technology, the end of the access may be proved by means of a copy of patent applications, certificate of plant variety or certificate of marketing approval.

Articles 103 and 104 provide rules on regularization of access performed between June 30, 2000 (when Provisional Measure #2.186-16 entered into force) and the enactment of Law nº 13,123/2015. This regularization must be done within one year counting from the implementation of the registration system before CGEN (Council Management of Genetic Resources), that is, up to November 6, 2018. The same deadline applies to those who applied for any IP right or merchandized finished products and reproductive materials after Law nº 13,123/2015 entered into force (November 17, 2015) and before the implementation of the registration system.

The registration system is foreseen by article 20 and will allow CGEN to track and monitor all the steps of the production, since the benefit sharing only applies to the finished product. With regard to benefit sharing, article 54, item II of the Decree establishes that the activities of licensing, assignment and authorization of use of any IP rights on the finished product or reproductive materials are exempted from benefit sharing.

At last, articles 70 to 91 foresee penalties for failing to comply with the duties established by the Decree. Among those provisions, we highlight articles 80 and 81, which are related to the filing of IP rights applications and the release of information without the proper registration before CGEN. These provisions establish heavy fines for the lack of registration.

4.7.3. Biotechnology and Protection of the Associated Creations

Biotechnology congregates techniques that enable the use of live organisms or parts of live organisms, modified or not, to generate new products with specific purposes.

The impact of biotechnology has been felt mainly in the fields of agriculture and health, of both humans and animals. New vegetable varieties, drugs and vaccines and also research in the field of embryology and reproduction of animals have brought a new dimension to the field of biotechnology.

The analysis of genomes has been used to isolate and characterize genes apparently involved in biological processes controlling features of great commercial importance in plants, animals and microorganisms. Accordingly, plants that are genetically modified resistant to plagues and that have the capacity to produce drugs and biopolymers may be obtained.

The social-economic importance of biotechnology may be demonstrated by the value associated with its global market, estimated at more than US$ 50 billion per year. According to data collected by Brazilian Agricultural/Livestock Breeding Research Institute (EMBRAPA) in agriculture alone there is a potential market of US$ 30 billion per annum.

The biotechnological inventions rely upon high investments, specialized infrastructure and detailed regulatory approval. Therefore, in order to foster such inventions there must be an adequate protection system that compensates the time and money spent with research and development (R&D).

In this regard, Brazil protects biotechnological creations broadly: biotechnology inventions are patentable before the Brazilian Patent Office (BPO), provided that specific requirements are met and new plant varieties may be registered, for the purposes of protection of intellectual property rights, before the National Protection of Plant Variety Service (SNPC). It should further be emphasized that patent applications directed to pharmaceutical products or processes require prior consent from the National Sanitary Surveillance Agency (ANVISA), pursuant to article 229-C of Law no 9,279/96.

Brazilian legislation:

In Brazil, the protection of inventions began in 1809 and patent protection was afforded to the inventors of an industrial invention or discovery in 1882. Since then, the law has been continuously amended (with a total of five Bills and an Industrial Property Code).

Currently, Law no 9,279/96 regulates patent protection. Two specific articles (Article 10, clause IX and Article 18, clause III) outline the protection for biotechnological inventions and/or those derived from access to genetic resources:

“Article 10 – The following are not considered an invention or utility model:
IX – the whole or part of living, natural beings and biological material found in the natural environment or isolated there from, including the genome or germ plasma of any natural living being and the natural biological processes.

Article 18 – The following cannot be protected by a patent:
III – the whole or part of living beings, except genetically modified microorganisms that fulfill the three requirements of patentability – novelty, inventive function and industrial application – established in article 8 that do not consist of a plain discovery.
Sole Paragraph – For the purposes of this law, genetically modified microorganisms are organisms that, except the whole or part of plants or animals, that express through direct human interference in its genetic structure, a feature that is normally not attained by the species under normal conditions.”

As regards new plant varieties, Brazilian law provides protection since 1945, as mentioned in Article 3, clause I of Decree-law no 7,903 of Aug. 27, 1945 (as amended by Decree-law no 8,481 of Dec. 27, 1945):

“Article 3 – The protection of industrial property is provided through:
(a) the grant of a patent privilege to inventions, utility models, industrial designs or models, new plant varieties;”

In 1997 the so-called “Plant Variety Law” was introduced to protect new plant varieties, in a fashion similar to UPOV (abbreviation in French for “International Convention for the Protection of Plant Varieties”), more specifically the version of 1978 of the UPOV convention, but also containing some provisions of the 1991 UPOV version. It should be emphasized that Brazil became a member of UPOV in March 1999 (adhering to the 1978 version of this Convention), and its adherence was confirmed by Legislative Decree no. 28 of 1999.

The regulation of the aspects related to biosafety, such as the use of genetic engineering and release into the environment of genetically modified organisms must abide by the so-called “Biosafety Law” (Law no 11,105/05).

In this connection, it should be highlighted that article 6, VII, of the Biosafety Law, introduced a further prohibition, excluding from patentability genetic use restriction technologies (GURTs). According to the sole paragraph of that article, these technologies may be defined as any process by which human intervention generates or multiplies genetically-modified plants to produce sterile reproductive structures, as well as any manner of genetic manipulation that aims at activating or deactivating fertility-related plant genes by using external chemical inducers.

The following table indicates the current legislation:

LegislationSubject matter
Law no 9,279/96Regulates industrial property-related rights and obligations.
Law no 9,456/97Institutes the right to Plant Variety Protection, according to the provisions established therein.
Decree no2,366/97Regulates Law no 9,456/97, which institutes the right to Plant Variety Protection, provides on the National Service of Plant Variety Protection – SNPC, and other dispositions.
Law no 10,196/01Amends and adds provisions to Law no 9.279 of May 14, 1996 which regulates industrial property-related rights and obligations, among other provisions.
Law no 10,688/03Sets out rules for the sale of the production of soybean harvested in 2003, among other provisions.
Law no 10,711/03Provides on the National System of Seeds and Seedlings, among other provisions.
Law no 10,814/03Sets out rules for the planting and sale of the production of the genetically modified soybean harvested in 2004, among other provisions.
Law no 11,092/05Sets out rules for the planting and sale of the production of the genetically modified soybean harvested in 2005, amends Law no10,814/03, among other provisions.
Law no 11,105 of March 24, 2005Regulates clauses II, IV and V of Paragraph 1 of Article 225 of the Federal Constitution, provides for safety norms and inspection mechanisms for activities that involve genetically modified organisms – – GMOs and their by-products, implements the National Biosafety Council (CNBS), re-structures the National Biosafety Technical Commission (CTNBio), provides for the National Biosafety Policy (PNB), revokes Law no 8.974, of 5 January 1995, and Provisional Measure no 2.191-9, of 23 August 2001, and arts. 5, 6, 7, 8, 9, 10 and 16 of Law no 10.814, of 15 December 2003, among other provisions.

The Brazilian background and international treaties on biotechnology scenario:

The Brazilian laws currently in force do not object to the protection, by industrial property law mechanisms, of inventions in the biotechnology field, as previously stated. A comparison between Brazilian law and TRIPS (abbreviation for Trade Related Aspects of Intellectual Property Rights Agreement, introduced by the World Trade Organization – WTO) does not reveal any inconsistency between the two texts, more specifically the comparison of articles 10 and 18 of Law no 9,279/96 and the corresponding provisions of the TRIPS agreement.

The TRIPS agreement sets out that patents will be available without discrimination as to the field of technology, exceptions existing in a few specific cases. As far as biotechnology is concerned, the exclusion of patent protection by the member countries may apply to inventions (as established in section 5, Article 27 of TRIPS) that:

a)conflict with public order or morality, inclusively to protect the life and health of humans, animals or plants, or to prevent major damage to the environment;

b)diagnosis, treatment and surgery of animals or humans methods;

c)animals or plants that are not microorganisms;

d)essentially biological processes for the production of animals and plants, except non-biological or microbiological processes.

Another very important issue regarding patent protection in the biotechnology area concerns the patents of inventions that derive from the access to genetic resources and associated traditional knowledge. This matter is addressed in Law n° 13,123/2015, which currently sets forth that the granting of intellectual property rights to finished products or reproductive material obtained from accessing the genetic heritage and associated traditional knowledge is conditional upon registration or authorization. If the patent application has been filed during the term of Provisional Measure n° 2,186-16/01 and the object thereof is derived from accessing the genetic heritage, Applicant will be required, for regularization purposes, to submit said registration or authorization receipt mentioned in the law.

4.7.4. Practical Recommendations for the Corporate Use of Biotechnology

4.7.4.1. Genetic resources and Associated Traditional Knowledge:

– Monitoring of discussions still to be developed with respect to Law No. 13,123/2015 and Decree nº 8,722/2016.

– Abidance by the patentability requirements:

According to Law no 9,279/96, the following requirements should be met for the grant of a patent application: 1) novelty; 2) inventive activity; 3) industrial application; and 4) sufficiency of disclosure.

– Abidance by the exclusions from patentability established in Articles 10, clause IX and 18, clause III of Law no 9,279/96:

Materials found in nature, even if isolated therefrom, are not patentable. However, new, inventive and industrially applicable formulations and/or compositions, containing such materials may be patented.

Another very important aspect in the patent protection of biotechnology concerns the exclusion of parts of living beings, according to Article 18, Clause III. Animal or plant cells, even if transformed and functioning as microorganisms are considered by the BPO as parts of living beings and, therefore, are not patentable. Thus, in inventions that include cells that operate as microorganisms and the processes for obtaining products associated therewith, only such processes and products are in principle patentable. Hybridomas, provided that they are sufficiently disclosed (and, if necessary, accompanied with the filing of the cell line before an international depositary institution recognized by the Budapest Treaty), inventive, new and industrially applicable, could be patented, falling outside the prohibition of Article 18, III, of Law no 9,279/96.

Besides that, it is suggested that Resolution nº 144/2015, published by the BPO and which establishes the Guidelines for Examination of Patent Applications in the Biotechnology field is evaluated to verify the understanding given by the BPO to subject matters in the biotechnology field that are of particular interest.

– Abidance by the exclusion from patentability of genetic use restriction technologies (GURTs), set out in article 6, VII, of Law no 11,105/05.

– Abidance by the exclusions from patentability of plants established in Law no 9,279/96 and the protection of new plant varieties according to Law no 9,456 (Plant Variety Law):

Still with regard to the exclusion of plant protection (the whole or parts of living beings), it is important to point out that the plant varieties that have not yet been included in the list of protection of the Plant Variety Law are left without protection.

Presently, by means of official acts of the Brazilian Government, there are more than 100 plant species included in the plant variety protection regime. However, not all possible plant species have been contemplated yet. This fact prevents any interested to seek protection for these other species, since they are not protected by the patent system either, as provided in the legal provisions above discussed.

– Abidance by the necessary requirements to obtain plant variety protection and which is the object of protection:

The requirements set out in the Plant Variety Protection Law are: 1) capacity to distinguish; 2) homogeneity; 3) stability; 4) novelty (in trade); and 5) adequate denomination.

With regard to the object of the protection, it should be pointed out that the same is the breeding or vegetative propagation material of the plant. In other words, the scope of protection encompasses from the seed (in the case of sexual reproduction) or seedlings, shoots or even the whole plant, in the case of vegetative propagation (asexual reproduction).

(1) Signed in Rio de Janeiro on June 5, 1992 and internally adopted in Brazil through Decree no. 2,519 of March 16, 1998.

(2) Concerning the Exploratory Missions on Intellectual Property and Traditional Knowledge of April 2001 (www.wipo.org).

Author: Edson Paula de Souza
Revised by: Priscila Mayumi Kashiwabara

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