EUROPEAN-SEED.COM I EUROPEAN SEED I 37 Article 2(e) of the Nagoya Protocol defines a derivative as “a naturally occurring biochemical compound resulting from the genetic expression or metabolism of biological or genetic resources, even if it does not contain functional units of heredity.” The Nagoya Protocol Article 2(e) definition of derivatives clearly excludes compounds which do not occur naturally as a result of the genetic expression or metabolism of biological or genetic resources, as well as compounds which result from the modification of derivatives (e.g. through human intervention) as these cannot be said to occur naturally as a result of the genetic expression or metabolism of biological or genetic resources. If the product of a modification of a derivative would be itself considered to be a derivative, this would have huge implications for the future of the bio-based economy. Studies are regularly made on many everyday products, e.g. coffee, milk, cheese, beer, bread, furniture (wood), or cellulose. If such products are con- sidered to be derivatives and become subject to ABS obligations, it would bring within the scope of ABS regulations whole new sectors and fields of research which have not been considered so far in the discussions. Since it is a necessary condition for utilisation that one con- ducts research and development “on the genetic and/or biochem- ical composition of genetic resource”, a derivative should only be covered if there is an ascertainable level of continuity between the production of the derivative from the genetic resource and the research and development activities conducted on the deriv- ative so obtained. The Conference of the Parties to the Convention on Biological Diversity decided on 17 December 2017 that any poten- tial implications of the use of digital sequence information on genetic resources should be considered. It needs to be stressed that the question of whether digital sequence information obtained from a genetic resource should be considered to be part of the definition of genetic resources was already extensively discussed during the negotiations of the Nagoya Protocol. Importantly, the definition of a “genetic resource” - as provided in Article 2 of the CBD and referred to in Article 2 of the Nagoya Protocol - is “genetic material of actual or potential value” with “genetic material” being defined as mate- rial of biological origin containing functional units of heredity. Functional units of heredity are usually referred to as genes. The term genetic resource therefore covers materials such as organisms, or parts thereof, in which genes are present. In other words, the term refers to tangible genetic material, which must physically contain genes. It therefore follows from the definition of genetic material that intangible digital sequence information cannot constitute a genetic resource as defined by the CBD. Adhering to the literal understanding of the definition of genetic resource, as outlined above, however, does not preclude benefit sharing from products developed using digital sequence information. Information generated by utilising a (physical) genetic resource might be covered by an agreement (MAT) between the user and the provider of the genetic resource. This may include conditions on how the intangible digital sequence information can be used and may include an obligation to make the data public or keep it private. In such case, a user (and all entities further down the value chain) will have to comply with the contractual obligations related to digital sequence informa- tion pursuant to the MAT, including potential benefit sharing provisions. In addition, it needs to be stressed that freely accessible digital sequence information encourages innovation through natural product research, stimulates scientific collaboration and promotes publications. Exchange of digital sequence information is also essential to achieve the objectives defined in Article 12 of the CBD, which are to promote and cooperate in scientific advances in biological diversity research and to develop pro- grams for scientific and technical education, as well as promote technology transfer, collaboration and capacity building. The draft “Cancun Declaration on Mainstreaming the Conservation and Sustainable Use of Biodiversity for Well-Being” recognizes this by a commitment to “promote the generation and use of bio- diversity-related knowledge and information and make it readily available to society to support decision making at all levels.” To include digital sequence information in the definition of genetic resources under the Nagoya Protocol would not only increase legal uncertainty but also attach indefinite access and benefit sharing obligations to the use of such information. In addition, the resulting system would be unworkable, because monitoring and checking compliance would be extremely bur- densome or even impossible to achieve. PO: The types of genetic resources, types of providers, and complexity of systems to track the genetic resource use are more diverse in biotech than in the seed side. But the number of genetic resources used in plant breeding is much larger, and the number of products where Due Diligence Declarations may be required is much greater than in biotech. FM: The most distinguishable differences are between crop pro- tection products as derivatives of genetic resources and seeds, which may or may not include improvements using biotechnology. The seed sector conserves old varieties, as source material for future breeding, and it has the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA) that can offer global harmonization, and legal certainty and that so far does not impose specific additional costs during R&D phases. ES: THERE IS STILL A LOT OF UNCLARITY ON THE REGULATIONS. HOW SHOULD THIS BE SOLVED?  WHAT DO YOU NEED TO ARRIVE AT LEGAL CERTAINTY?  DM: It is of key importance to clearly define the material scope of utilization. An activity only comes under the scope of ABS regulations if it involves utilization, which is defined as “to conduct research and development on the genetic or biochemical composition of genetic resources, including through the use of biotechnology (…)”. Utilisation is more than just gathering knowledge, and requires further uses to be developed from that knowledge by conducting research and development on the genetic or bio- chemical composition of this genetic resource. A key example in this regard is the sequencing or screening of biological material for the presence of interesting characteristics, which normally “The types of genetic resources, types of providers, and complexity of systems to track the genetic resource use are more diverse in biotech than in the seed side.”