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The Norwegian Statement at the Oral Hearing on 13 February 2001 before the Court of Justice of the European Communities in Case C-377/98; the Kingdom of the Netherlands against European Parliament and Council of the European Union Concerning the Directive

The Norwegian Statement at the Oral Hearing on 13 February 2001 before the Court of Justice of the European Communities in Case C-377/98; the Kingdom of the Netherlands against European Parliament and Council of the European Union Concerning the Directive on the Legal Protection of Biotechnological Inventions

I. Introduction

In support of the action for annulment of Directive 98/44 EC on the legal protection of biotechnological inventions (which I will hereafter refer to as "the Directive") brought by the Dutch Government, I will, on behalf of the Norwegian Government, like to make the following statement:

Norway, as a Party to the Agreement on the European Economic Area, has a very clear interest in the outcome of this important case. The Norwegian Government fully supports the Dutch Government in its action for annulment of the Patent Directive.

The Dutch Government has presented six grounds for annulment of the Directive. Norway has in its intervention focused on the relationship between the Directive and the Convention on Biological Diversity (hereinafter referred to as the "Convention" or the "CBD"). We have also focused on the principle of legal certainty and the legal basis for the Directive. I will not repeat the arguments presented in our written observations, but concentrate on certain elements demonstrating the incompatibility of the Directive with the object and purpose of the Convention on Biological Diversity; and the consequences of such incompatibility.

I would however firstly note that the Norwegian Government, as elaborated in our written submission, submits that the Directive breaches the principle of legal certainty, because it lacks the clarity necessary for the Member States to determine how to accurately implement the directive. This has been further proved in the time that has past since the adoption of the directive. The ambiguity of the provisions of the Directive has led to a number of questions being raised to the Commission regarding the proper interpretation of the directive. The fact also mentioned by the Dutch government that the directive has yet to be implemented in the majority of the Member States of the European Union, despite the fact that the time-limit for implementation expired on the 30th of July 2000, is also a clear proof of this. In this respect we also associate ourselves with the argument presented by the Dutch government here today, and the conclusion that the directive be annulled because of lack of legal certainty.

I would also note that Norway, in relation to the first ground of annulment submitted by the Dutch Government, supports the arguments put forth by the Netherlands to the effect that the Directive goes beyond an approximation of laws which have as their object the establishment and functioning of the internal market.

II. Convention on biological diversity

The Norwegian Government has chosen to concentrate on the Fourth ground for annulment submitted by the Dutch Government - that by adopting the Directive, the Parliament and the Council failed to take proper account of the existing international legal obligations of the Community and its Member States, and this in a way which must have bearing on its validity under the former Article 228 (7) of the EC Treaty, now – after amendment – Article 300 (7) EC. More specifically the Norwegian Government has presented arguments related to the relationship between the Directive and the Convention on Biological Diversity. Norway submits that several important aspects of the Directive are incompatible with the object and purpose of the Convention.

The objectives of the CBD are, according to its Article 1;

"…the conservation of biological diversity, the sustainable use of its components and the fair and equitable sharing of the benefits arising out of the utilization of genetic resources, including by appropriate access to genetic resources and by appropriate transfer of relevant technologies,…"

According to general principles of public international law as set out in Article 26 of the Vienna Convention on the Law of Treaties, all treaty obligations must be "performed in good faith". The Contracting Parties must, therefore, not pursue policies that may defeat the object and purpose of the treaty in question. This applies to an even larger extent when it comes to Multilateral Environmental Agreements such as the CBD. The Community is obliged according article 174 EC (formerly Article 130r of the EC treaty) to aim at a high level of protection of the environment, as well as the prudent and rational utilisation of natural resources. It should be noted that these objectives also are part of the object and purpose of the Convention.

The convention is based on three main principles: national sovereignty over genetic resources, access to these resources by others, balanced with conditions of benefit sharing between the user and provider of genetic resources.

The Norwegian Government has identified several areas in which the Directive is incompatible with the object and purpose of the Convention. Most important of these are the provisions of the Convention related to the sharing of benefits related to the utilisation of genetic resources.

(Benefit Sharing.)

According to Article 3 of the Directive, Member States must accept patentability of biotechnological inventions solely on the grounds that the invention is new, involve an inventive step and is susceptible to industrial application. This patent protection leads to a time-limited privatisation and monopolisation of benefits deriving from genetic resources.

This is not compatible with the Convention’s basic aim of benefit sharing between those providing access to genetic resources, and those who make use of it. Several provisions of the Convention, especially Articles 8 and 15, oblige the Contracting Parties to allocate benefits to those providing access to genetic resources. The Directive contains no provisions to ensure the fulfilment of CBD obligations in relation to the patenting of inventions based on such material. To the contrary, by denying Member States the option to make compliance with the Convention’s obligations on benefit-sharing a condition for patentability; and by denying Member States even the possibility to request information related to the geographic origin of the genetic material a condition for patentability, the Directive may force countries to disregard important aspects of the object and purpose of the convention. In many cases there is no other practical, effective and lawful way for the Member States to obtain information about where the genetic material originates or if the CBD has been complied with by the private party, than by the use of additional requirements for patentability.

The Directive forces the Member States to grant patent protection even if the genetic material is obtained in violation of the Convention, and even if the possibility to provide for benefit sharing through other means is blocked. In this regard it should be noted that rules governing international trade may prohibit inter alia the use of other means to achieve the objectives of the CBD such as requirements for placing products on the market, and import restrictions.

The creation of patent rights without simultaneously providing for, or allowing for, a system of benefit sharing, implies that countries will not be able to set up an effective system to ensure compliance with the requirements of the Convention for benefit sharing.

(Access to genetic resources)

Furthermore, the broad rights given to the patent holder under the Directive is in fundamental conflict with another basic object and purpose of the Convention, which is to broaden the access to genetic resources, for the benefit of all mankind. Article 15(2) of the Convention obliges Contracting Parties to:

"…endeavour to create conditions to facilitate access to genetic resources for environmentally sound uses by other Contracting Parties and not to impose restrictions that run counter to the objectives of this Convention."

The Directive provides for the patenting of plants, and such patent protection can include what would in fact constitute new plant varieties if the invention is not restricted to only one such variety. In contrast to traditional plant variety protection, patent protection does not provide for unlimited access to the protected material for other breeders. The implementation of the directive could therefore result in decreased access to genetic resources for plant breeders. The "Green revolution" of the past thirty years, that has sustained food production for the billions of people we now are, would probably not have been possible under the system established in the Directive.

The Directive expands the minimum level of what shall be eligible for Intellectual Property Rights protection. The imbalance thus created between users and providers of genetic resources undermines initiatives for co-operation in order to establish rules and co-operative procedures to conserve biological diversity. This in contrast to Article 16(5) of the Convention that require that

"The Contracting Parties ... shall co-operate ... subject to national legislation and international law in order to ensure that [IPRs] are supportive of and do not run counter to its [the Conventions] objectives".

III. The consequences of incompatibility between international agreements and the Directive.

What should then be the consequences of incompatibility between international agreements and the Directive ?

It is established jurisprudence of this Court relating to paragraph 7 of Article 300 EC that international agreements take precedence over secondary EC legislation. As stated by this Court in the International Dairy Arrangement case, the " primacy of international agreements concluded by the Community over provisions of secondary Community legislation means that such provisions must, so far as is possible, be interpreted in a manner that is consistent with those agreements."

In our view, there is enough ambiguity in the relationship between the Patent Directive and the international legal obligations of the EU and its Member States under the Convention on Biological Diversity for this Court to declare the Directive incompatible with its object and purpose.

The Government of Norway would further submit that the Directive cannot be interpreted in such a way as to render it compatible with the Convention. As two contradictory set of rules co-exist within Community law, the principle of legal certainty is also in this respect infringed.

Contrary to what is stated in the written submissions of the European Parliament and the Council, we believe that the provisions of the CBD are precise enough to present clear obligations on the European Community and its Member States. The CBD is not like the GATT characterized by the great flexibility of its provisions. It does not have the possibility for derogation, not even in exceptional difficulties, and the rules are unconditional. Negotiated non-compliance, as under the WTO dispute settlement system, is never an option. Furthermore, the CBD is specifically referred to in the directive itself, making observance of the obligations of the CBD a requirement for lawfulness under Community law.

We therefore submit that this Court should declare the Directive, or specific provisions contained therein, null and void as being contrary to the object and purpose of the CBD.

Alternatively, should this Court decide that it is not necessary to declare the Directive null and void to overcome its inconsistencies with the CBD, this Court should declare that Article 1(2) of the Directive must be interpreted to imply that measures by the Member States to implement the CBD into their national legislation take precedence over the provisions of the Directive, and may be applied even when they contradict other provisions of the Directive.

Thank You