SEEDS OF CONFLICT

By MICHAEL D. LEMONICK

To hear its critics talk, W.R. Grace & Co., based in Boca Raton, Florida, is nothing less than a den of international pirates. Its crime: patenting a pesticide made from seeds of the Indian neem tree. "Genetic colonialism," thunders the self-proclaimed scientific watchdog Jeremy Rifkin, president of the Foundation on Economic Trends, who is leading a coalition of 200 scientific, academic and farm organizations from 37 countries that filed a petition last week to have the patent revoked. Not only is Grace's pesticide based on an ancient and widely known extraction process, the coalition claims, but it will force Indian farmers to pay top rupee for a substance that used to be nearly free. Says Rifkin: "This is the opening wedge in the global debate on whether native knowledge can be usurped and a company can claim an invention of something that developed over the years."

Well, yes and no. The truth is that Grace's U.S. patent has no effect in India, whose laws prohibit the patenting of agricultural products; Indian farmers are free to use neem seeds as they always have. Beyond that, Grace's patent may be upheld. The company found a way to treat traditional neem-seed extract to increase shelf life from weeks to years--just the sort of innovation patent laws cover. Even an environmentalist like Walt Reid of the World Resources Institute, based in Washington, admits, "I won't be surprised if the challenge doesn't win."

But as is the case with most of Rifkin's campaigns, there is a real issue hidden underneath the overheated rhetoric: Who should profit from a country's indigenous genetic resources? A parallel question was solved for material resources years ago. Countries with oil or minerals simply kicked out foreign exploiters or forced them into fair profit-sharing agreements.

The issue of biological resources is far more complicated, largely because it doesn't involve huge exports. Just a few seeds--or, in the age of biotechnology, a few cells--can give a foreign company the raw materials to mass-produce a profitable medicine or fertilizer or pesticide. The question has become more urgent over the past couple of decades because the richest sources of such natural products are tropical rain forests, which are generally found in impoverished Third World countries.

Goaded partly by moral arguments and partly by a desire to stay on good terms with the governments of these countries, several companies have signed agreements to share any profits they make from local biological resources. Merck, for example, worked out a deal with Costa Rica that lets its investigators screen that nation's flora and fauna for potential new drugs, and Shaman Pharmaceuticals has similar agreements with a dozen countries.

Such contracts are still the exception, though, which is why the issue of biological resources was on the agenda at the United Nations' 1992 Earth Summit. Statements from the biodiversity convention that resulted declared that countries have a sovereign right to their resources and that benefits deriving from them should be shared fairly. The Bush Administration refused to sign the treaty; President Clinton did sign it, but the Senate has yet to ratify.

Even if the treaty eventually goes into effect, the neem-seed case will remain a murky one. The neem tree is indeed part of India's historic pharmacopoeia; it is known in Sanskrit as sarva roga nivarini, "the curer of all ailments." Its branches, leaves and seeds are used to treat, among other things, leprosy, diabetes, ulcers, skin disorders and constipation. The seeds' pesticidal powers, exploited by farmers for centuries, have been studied by scientists for at least 50 years.

Labeling Grace's actions a rip-off, though, requires something of a stretch. The company didn't steal away with the seeds and market them; it built a plant in Tumkur, near Bangalore, to process them, providing jobs for 60 Indians and contributing to the local economy. Some critics charge that demand from Grace's plant is the cause of a recent jump in neem-seed prices that has driven some small farmers out of business, but that is difficult to prove. And while India will eventually have to change its patent laws as a member of the World Trade Organization under the General Agreement on Tariffs and Trade, that still wouldn't keep farmers from using neem seeds in traditional ways.

In short, the coalition's petition will probably go nowhere. But, says intellectual-property attorney Michael Gollin, it does "go to the higher question of what should we be doing on a societal level to share benefits. Is there a way to create some kind of compensation, not as blackmail or to stop products from being developed, but to promote development of biological resources in a sustainable way?"

The answer, Gollin and many others believe, is to create an international organization to provide guidance on these issues--probably under the auspices of the biodiversity treaty. If the petition does nothing but encourage some such solution, that may excuse a lot of hot air.

--Reported by Hannah Bloch/Washington and Dick Thompson/New Delhi

With reporting by HANNAH BLOCH/WASHINGTON AND DICK THOMPSON/NEW DELHI