Monsanto and Intellectual Property in South America

F. Filomeno

• Publisher: Palgrave Macmillan
• Year: 2014
• Print ISBN: 9781137356680
• eBook ISBN: 9781137356697
• Topic: Politics & International Relations
• Subtopic: Law Theory & Practice
• Index: Politics & International Relations

Intellectual property is one of the most valuable forms of property in the modern world. From the perspective of companies producing knowledge-intensive goods, it encourages technological innovations for the benefit of humanity. For consumers of technology, it can be seen as a restriction on access to knowledge that inflates corporate rents. When genetic material crucial for human life is isolated from the commons, engineered and turned into private intellectual property, dissent is likely to emerge. Felipe Filomeno uses the case of Monsanto in South American soybean agriculture to theorize about the emergence and change of intellectual property regimes. Based on official documents, interviews, journalistic material, and academic literature, the study shows not only the relations of competition, coercion, and alliances that lie behind the post-1980 global upward ratchet of intellectual property protection but also the strategies that have the potential to reverse it.

1

Introduction

For most of human history, knowledge created by man was treated either as communal property or as pertaining to the public domain. As communal property, it is understood as traditional knowledge passed over through generations of a regional, indigenous or local community distinct from the state and from private actors. When in the public domain, human knowledge is embedded in activities, assets and institutions that are not objects of property rights and, therefore, belong to the public as a whole. Increasingly, however, the creation, use and distribution of human knowledge have been governed by private intellectual property (IP) rights established by the state. These are legal rights that assign individual actors with some degree of exclusivity over creations of the mind. Since the establishment of private IP, knowledge that is communal or is in the public domain has been encroached by the price mechanism of the market and/or by the regulatory power of the state.¹ The implications are enormous because the creation, use and distribution of knowledge are pervasive aspects of human life. Private IP rights can encourage the production and disclosure of new knowledge but they also set limits on its diffusion throughout society, affecting how people have access to knowledge-intensive goods such as medicines, seeds and books.

The origins of private IP can be traced back at least to the 6th century BCE, when the government of the Greek city-state of Sybaris instituted patents of one year for those who discovered new refinements in luxury. Nevertheless, it was only in Venice during the 15th century CE that a formal system of IP resembling contemporary models was established. From Venice, IP regulations were exported to other European countries and their colonies. In the late 19th century, the first international treaties about IP – the Berne and Paris conventions – were signed. In 1967, these and other treaties started to be administered by the World Intellectual Property Organization (WIPO), a multilateral institution created to promote a global IP system. The result is a patchwork of national and international IP regimes that today governs the creation and flow of knowledge within and across countries with all the implications for technological development, poverty reduction, food security and public health.²

The subject of IP started to draw more attention from scholars, policy-makers and civil society in the early 1980s, when the US government and its allies launched a global upward ratchet of IP protection. An international coalition led by the US demanded from other countries legislative reforms and enforcement practices that increased the scope and strength of private IP rights.³ This culminated with the Treaty on Trade-Related Aspects of Intellectual Property Rights (TRIPS) signed in 1994 by the members of the World Trade Organization (WTO), then under creation. TRIPS is the most encompassing IP treaty in world history. With a membership of 159 countries as of August 2013, it covers virtually all forms of IP (copyrights, patents, trademarks, plant varieties and so on) and specifies enforcement procedures. By referring to norms of previous IP treaties and by having a dispute settlement mechanism under the WTO, TRIPS constitutes a global IP regime.

Despite the diffusion of IP across the globe and its crowning with TRIPS, today there are still wide variations from country to country in the scope and strength of IP rights (Deere 2009). However, as pointed out by Shadlen and Haunss (2009: 2),

most [of the studies about IP] focus on national and international IP laws. But while laws are the solidified results of social struggles and political conflicts, understanding the law itself tells us little about the social processes that lay behind laws and even less about the social dynamics that will eventually challenge and often change them …. It is time, therefore, to reorient analysis of the politics of IP to the processes by which conflicts over ownership, use, and control of information are manifest and resolved in regional, national and sub-national settings. (emphases added)

This is precisely the task I proposed myself when writing this book. Here, I use the case of Monsanto in South American soybean agriculture to theorize about the emergence and change of IP in ways that challenge major theoretical perspectives on the theme.

In the words of The Economist,

Few companies excite such extreme emotions as Monsanto. To its critics, the agricultural giant is a corporate hybrid of Victor Frankenstein and Ebenezer Scrooge, using science to create foods that threaten the health of both people and the planet, and intellectual-property laws to squeeze every last penny out of the world’s poor …. To its admirers, the innovations in seeds pioneered by Monsanto are the world’s best hope of tackling a looming global food crisis. (19 November 2009)

One of the most important markets for Monsanto is soybean agriculture, a major world industry. Soybeans are used for a wide range of applications, from feeding livestock and producing biofuels to textile fibers and plastics. According to the Food and Agriculture Organization of the United Nations (FAO), in 2011 soybeans were the third main crop in the world in value of production, placed only after rice and wheat. Monsanto provides soy growers around the world with the herbicide glyphosate – sold under the trademark ‘Roundup’ – and with soybean seeds that were genetically modified (GM) to resist glyphosate – ‘Roundup Ready’ (RR) soybeans.⁴ RR soybeans are the most largely cultivated transgenic crop in the world and around half of world soybean production comes from Argentina, Brazil and Paraguay. The dramatic expansion of the crop that took place in these countries since the 1990s was fostered by the adoption of the ‘Roundup’ technological package, including both the herbicide and the GM seeds developed by Monsanto (Robinson 2008: 84–94).

Monsanto’s actions to control the RR technology in Argentina, Brazil and Paraguay through IP were very contentious. After failing to obtain a patent on RR soybeans in Argentina, Monsanto suspended research and development (R&D) programs in the country, sued exporters of Argentine soybean products in Europe, lobbied for changes to Argentine legislation and refused to release new technology in the country. In Paraguay, in the absence of a patent, Monsanto implemented a private system of royalty collection that virtually eliminated the right of rural producers to save seeds from their own fields for future cultivation. In Brazil, the enforcement of a similar system prompted a series of legal battles between the company and rural producers, who argued that Monsanto was charging royalties based on expired patents and under a mechanism that contradicted Brazilian and international law.⁵

These conflicts are the historical reality I use to develop a theory about transnational and country-specific processes that shape IP regimes. For Latin America, much is at stake when we speak of IP. Historically, the region has suffered from technological dependence on the Global North and IP regimes set the terms and costs with which foreign technology is accessed and used by local actors. IP rules also affect how the region’s biodiversity – from native varieties of maize in Mexico to indigenous fruits in the Amazon – is managed and how its economic benefits are shared between local communities, researchers and consumers. After neoliberal reforms in the 1990s and a boom in commodity prices in the 2000s, export-oriented agriculture proved to be a key industry for Latin American development. IP regimes can encourage private and foreign investment in the R&D of new plant varieties but they can also make this technology expensive and hard to develop locally, allowing export revenues to be syphoned out from the region through royalty payments.

In times of a global food crisis, it is vital that we understand how genes and seeds are enclosed from the commons, excluded from the public domain and constructed as private property. This will help us build IP regimes that not only encourage the development of agricultural biotechnology but also assure that this technology will be affordable and widely disseminated. This will require balancing control and exclusion with dissemination and collaboration in the production, distribution and use of knowledge.

Three perspectives on intellectual property

In one of the most comprehensive historiographies of IP, May and Sell (2006: 28–31) developed a useful classification for theories of institutional change in IP. It consists of three categories: realist, functionalist and critical perspectives.

In international relations theory, realism is a school of thought that conceives of world politics as driven primarily by the actions of unitary, competitive and self-interested states. From a realist perspective, IP regimes are a product of intentional design and enforcement by states guided by their national interest. This perspective is particularly pronounced in the study of international IP regimes because states are the major players in the creation of international treaties and organizations that are concerned with IP. The state-centric orientation of realist perspectives obstructs the analysis of IP for two main reasons. First, actors other than the state (such as business agencies and social movements) have ‘frequently prompted changes in intellectual property protection’ (May and Sell 2001: 470). Second, the formulation and enforcement of IP rights by the state has not been the simple materialization of a national interest in IP but a result of pressures from different actors within and outside the state.

Functionalism is an approach in the social sciences that conceives of society as an organism with needs that must be satisfied for its existence and reproduction. The behavior patterns of individuals, groups and organizations – as well as the institutions that result from their interaction – are explained by the function they perform in satisfying social needs. From a functionalist perspective, the institution of private IP emerges to satisfy the social need for innovations and for coordination in transactions involving knowledge-goods.

Once creations of the mind are disclosed to the public, they can often be emulated and reproduced by ‘free riders’ without the investment originally necessary for their development. Under such conditions, profit-oriented individuals would not be willing to bear the costs of developing knowledge-goods and society would therefore suffer from technological underdevelopment. With private IP rights, innovators can ban others from using the knowledge-goods they create or they can charge some economic compensation for the use of such products by others. Private IP rights would thus approximate the inventor’s individual rate of return to the social rate of return on the investment in innovations, thereby stimulating the influx of technology needed for social progress (North 1981: 164–6). Private IP rights would also perform the social function of coordinating economic transactions that involve knowledge-goods. Markets are not efficient if actors have to constantly renegotiate bilateral transactions. Shared rules about IP allow actors buying and selling knowledge-goods to dispense those renegotiation efforts, reducing the costs of transactions and making them more predictable (May and Sell 2001: 471).

Functionalist accounts of IP are problematic because they do not recognize that, historically, IP regimes have reflected the ‘ability of powerful actors and groups to enhance their interest at the expense of others …. history is not linear but driven by contestation’ (May and Sell 2001: 470). In addition, explaining the creation of private IP based on the incentives it gives to socially needed innovations ‘predicts very little about the structure of intellectual property rights, except for the implication that intellectual property rights need to be as strong as possible in order to maximize the incentives’ (Ghosh 2006: 97). On a more basic level, the markets assumed in functionalist accounts of IP are themselves historically specific institutions created by social actors. Much of human knowledge is still not produced for profit and has not been commodified. Instead, it is either communal property or in the public domain.

In the case of plant genetic resources, the relationship between private property, communal property and the public domain can be understood in terms of two seed systems conceptualized by De Schutter (2009). First, the traditional seed system: farmers locally and informally develop and trade new varieties of plants relying on a common or public pool of genetic resources. A fundamental practice for the operation of this system is the millenary tradition of farmers of saving seeds from their fields for future cultivation. For rural social movements, the right to save seeds derives from the fact that rural communities have contributed to the creation, conservation and improvement of genetic resources in agriculture. From this perspective, the knowledge embodied in seeds is, at least in part, communal property. Second, the commercial seed system: new plant varieties are developed separately from farming by private companies that rely on private IP rights to market seeds and extract rents from their use by farmers. Through IP rules and enforcement practices, states can protect, foster, restrict or link each of the two systems. In fact, it can not only regulate but also directly participate in those systems through public agricultural R&D, whose products can either be treated as private IP property (in the commercial seed system) or be released in the public domain. Consistently with the global strengthening of private IP, the history of plant breeding since the last quarter of the 20th century has been characterized by an expansion of the commercial seed system to the detriment of the traditional seed system.

Realist and functionalist perspectives are often merged in mainstream discourse about IP. Duffy (2004: 32), for instance, states that ‘The policy reasons for allowing private rights in [IP] … [are that the] rights encourage the development of the property in the first place. If too few rights are conferred, the investment necessary to create the property … will not be made’. In this approach, IP is presented as product of intentional design by a policy-maker and as a result of the social need for investment in knowledge-goods. In the Handbook of Intellectual Property (2004) published by the WIPO, the creation of the Paris convention in 1883 is explained as a consequence of ‘the development of a more internationally oriented flow of technology and the increase in international trade’, which ‘made harmonization of industrial property laws urgent in both the patent and the trademark field’ (WIPO 2004: 241). In this account, states intentionally convened to design rules with the goal of making international transactions with knowledge-goods more efficient.

In contrast, critical approaches to IP consider its emergence and change a product of conflicts between ideas, material capabilities and institutions (May and Sell 2001: 473–4). Social power relations and institutions are not taken for granted; they are called into question as ‘the creation and protection of intellectual property’ is seen as ‘a complex web of social relations, one in which the participants have duties as well as rights, privileges and liabilities as well as powers’ (Marlin-Bennett 1995: 119). Critical approaches overcome the limits of realism by taking into account the role of non-state actors in IP rule-making while still seeing IP regimes as partly shaped by interest-driven behavior and competition. They also avoid the pitfalls of functionalism by putting the agency of individual actors and conflicts of interests in the core of the explanation. However, unlike functionalist and realist theories that offer a clear rationale behind the evolution of IP regimes, the critical approach to IP has so far provided only an empirically informed assortment of conditions affecting institutional change in IP.⁶ Political institutions, ideology of state elites, interstate relations and levels of economic development are eclectically presented as variables explaining IP regimes on the national and international levels. In studies about the contemporary period, the story is generally of a strengthening of IP regimes in developing countries in response to coercion from the US government, with a few countries being able to resist because of the strong capacity of their states.

These three perspectives on IP can be traced back to (and subsumed under) two broad schools of thought defined according to their different approaches to social institutions (Knight 1992: 5). The first school emphasizes the development of institutions as a process of coordination of interests toward the collective benefit. The seminal ideas of this approach can be found in the works of Thomas Hobbes, David Hume, Adam Smith and Herbert Spencer. Realist perspectives that focus on national IP law as the result of intentional design by the state are inscribed in this school. Functionalist accounts that conceive of IP regimes as evolving functionally to meet the needs of market economies also fall in this category. By contrast, the second school of thought explains social institutions ‘in terms of their beneficial effects on particular segments of the community. It suggests a central focus on the conflict of interests inherent in distributional questions’ (Knight 1992: 8, emphasis added). The classical references for this school are the works of Karl Marx and Max Weber. Critical approaches to IP follow this tradition.

In the following section, I show how the case of IP in South American soybean agriculture challenges fundamental assumptions of realist and functionalist perspectives while presenting puzzles that invite an elaboration of critical approaches to IP regimes.⁷

The puzzle of intellectual property in South American soybean agriculture

By the 1970s, the US had lost its economic superiority in the world economy. The country was facing competition not only from Western Europe and Japan but also from countries that had applied ‘developmentalist’ policies with some success (Wallerstein 2002). To prevent further erosion of their economic power, in the 1980s the US government and transnational corporations launched a global upward ratchet of IP protection (Chang 2001: 4). They demanded from other countries international treaties, reforms to national legislation and enforcement measures that increased the scope and strength of private IP rights. Through the use of ‘soft power’, commercial sanctions and non-democratic international negotiations, their goal was achieved with the signature of TRIPS in 1994 (Drahos 2002).

TRIPS substantially raised the standards of protection to private IP. Its main beneficiaries were knowledge-intensive industries from the Global North, which became able to extract higher rents from the economic use of their proprietary technology worldwide. In contrast, the treaty failed ‘to offer any protection to the traditional knowledge, genetic resources and folklore that ...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Tables and Figures
• Acknowledgments
• List of Abbreviations and Acronyms
• 1. Introduction
• 2. Argentina: The Old Developmental Model
• 3. Brazil: The Neodevelopmental Model
• 4. Paraguay: The Dependent Model
• 5. Conclusion: Seeds of the Future
• Appendix – List of interviews
• Notes
• References
• Index