The CBD requires parties to co-operate to ensure that patents and other intellectual property rights "are supportive of and do not run counter to" its objectives, implicitly recognizing the potential for conflict. The main potential problems stem from the CBD's emphasis on ensuring that local and indigenous communities—mainly in developing countries—have control over and reap a share of the benefits from their own biodiversity-related traditional knowledge and "informal" innovations. An example of traditional knowledge is the oral history held by an indigenous community of the herbs and plants that have medicinal properties—information of great value to pharmaceutical researchers searching for new drugs. Informal innovation is innovation that is carried out by the actual user of the product or system. For example, farmers have traditionally created innovative new plant varieties by saving seed from previous crops, selecting and planting, generation after generation, those that perform best under their local conditions.

This kind of knowledge and innovation has immense and growing value. Genetic resources provide the foundation for a range of new products and technological applications in biotechnology, agriculture, medicine and other areas. Knowledge developed and held in traditional knowledge systems of indigenous and local communities can provide clues to genetic resources or biochemicals that can be used for pharmaceuticals, herbal medicines and other products. They can also provide new genetic material for plant breeders, allowing them to confer desired traits such as pest and drought resistance to crop plants. In one case alone, incorporating disease resistance from a Latin American corn variety spared U.S. corn crops from devastation and saved the industry an estimated $6 billion.

Informal innovation and traditional knowledge do not get equal treatment under the TRIPS Agreement. TRIPS emphasizes patents and other intellectual property rights defined under conventional intellectual property regimes. These are almost all held in the developed countries by inventors and corporations in the formal research sector. No mechanisms are spelled out that grant traditional communities control over their knowledge and innovations, or that ensure they reap a share of the benefits therefrom. This treatment fails to deliver the kinds of incentives recognized by the CBD as essential to helping preserve biodiversity. Local communities will have much more reason to help preserve biodiversity if they derive some income from it.

TRIPS, however, does not require national intellectual property rights regimes to be identical. Individual countries have the right to adopt higher standards than TRIPS requires, and they can address concerns related to the CBD by imposing certain requirements on the process of applying for intellectual property rights protection, such as certification of origin. Countries can also create mechanisms within intellectual property rights law to achieve specific objectives, such as benefit sharing.

5.7.2 TRIPS and agriculture