Working Paper

Federation of American Scientists Working Group on BW Verification⁽¹⁾

September, 1997

Lately there has been considerable discussion and concern regarding the possible loss of confidential property and information (CPI) during sampling and analysis in a BWC compliance regime. This concern can be largely reduced, because active steps can be taken to protect CPI during sampling and analysis. Specifically, CPI can be fully protected with (1) a rigorous sampling procedure such as that proposed here, (2) restriction of analysis to procedures that can produce only generic information, (3) full use of the tools available under Managed Access, (4) strict chain-of-custody procedures, and (5) watchful monitoring of the inspection team.

In this paper, means for minimizing the loss of CPI through sampling and analysis are examined. There are three general concerns:

• Loss of confidential property through theft of valuable production or research microorganisms, or disclosure of information about their makeup;
• Loss of confidential information about proprietary process technology; and
• Loss of confidential economic information.

In each of these areas, sampling and analysis add little additional risk beyond that of other on-site activities, provided that adequate CPI protection measures are adopted and followed. In fact, sampling and analysis of microorganisms can be more readily limited than other on-site activities.

With the important exception of microorganisms, confidentiality concerns in the biological field are similar to those in the chemical realm, and these appear to have been successfully addressed in the CWC. We hope the proposals herein will evoke further discussion, because specific CPI concerns must be examined in depth before appropriate measures can be agreed upon to ensure the protection of CPI under a BWC compliance regime.

For the protection of CPI surrounding production and research strains, carefully designed procedures must be adopted. There are a number of reasons why protecting the CPI of production and research strains is critical:

• Presently-used production strain microorganisms are often the product of years of development and an investment of millions of dollars.
• The product manufactured from a single production strain may have sales well over $100 million per year, often in the tens of millions.
• Since microorganisms reproduce themselves, the theft of only a single, live production-strain microorganism could allow a competitor to "set up shop." ⁽²⁾
• With modern biotechnology, production strains can be developed that contain foreign genes to make products that are not normally made by microorganisms. The identity of the foreign genes in the strain and how the genes are configured or "built into" the strain could be highly confidential.

The kinds of CPI to be found in production and research strains are:

6. The mutations in a traditional strain;

7. The genes inserted in a recombinant strain;

In the above list, bullets (1), (2), (7) and (8) may represent property and bullets (3)-(8) may represent confidential information that may need to be protected.

Despite the real concern over possible loss of CPI in production and research strains, procedures can be developed to protect CPI and at the same time allow the inspection team to carry out sampling and analysis that is adequate for BWC purposes. This has been possible for every situation examined, including what appear to be the most important situations. It is possible, however, that some situations worthy of discussion have been overlooked, and we urge industry and defense establishment representatives to raise the specific issues and provide detailed comments.

Protection of CPI using carefully-designed sampling, analysis and chain-of-custody procedures. Protection of CPI is dependent on sampling procedures, analytical methodologies⁽³⁾, and the chain-of-custody of samples. Chain of custody, for example, is especially important for samples of live microorganisms, since their theft could put a competitor into business. Among the analytical methodologies for identifying microorganisms, cell-culture methods are preferred because they are the "gold standard;" and they are routinely used by industry in its own production testing. Cell-culture methods present difficulties from a CPI perspective because they utilize live microorganisms. Analytical methodologies are available, however, that can utilize dead microorganisms. These methods are preferable from a CPI point of view, but they are not widely used in industry and, for use in a BWC compliance regime, they would have to be developed⁽⁴⁾ to meet the high standards required by industry to assure compliance with national regulations concerning the integrity of products.

A sampling procedure for proprietary microorganisms, assuming the organisms are to be analyzed by methodologies such as DNA probe and immunoassay analyses that can utilize dead microorganisms, is presented below. ⁽⁵⁾ Since every facility and sampling situation may be different, Managed Access negotiations may suggest changes in this procedure, or an entirely different one. It would be wise for facilities subject to inspections under the BWC to devise in advance their own preferred procedures, if the one presented here does not fit their situations.

All types of CPI found in production and research strains would be protected by the procedure proposed above. Because the sample contains only dead microorganisms, there is protection against the theft of live strains that could end up in the hands of a competitor. Because the inspected party can carry out analysis with the inspection team’s materials in advance of the inspection team’s testing, it can assure that the tests do not identify CPI. Because the inspection team can provide its own standards and controls, it can confirm that the samples treated by the reagents and procedures of the inspected Party are testable--that is, that pathogen characteristics identified by the analytical methods employed are not destroyed.

The proposed procedure also protects unconsumed samples and prevents their removal from the site. Even if that were not the case, it is almost impossible to identify a proprietary gene sequence unless one knows in advance what one is looking for--in which case it is no longer proprietary.

Sampling without inactivation. In testing a vaccine microorganism, a definitive property to differentiate it from a biological weapon would be lack of virulence. DNA probes can sometimes be used to identify virulence genes. When this is not possible or reliable, virulence can be determined in the appropriate animal model or possibly cultured animal cells. As in cell-culture methods for identification, the sampling procedure has to be modified to eliminate inactivation. Testing a commercial or a biological defense vaccine for lack of virulence would not yield any confidential information provided that the microorganism were not removed from the site. Virulence studies, however, can be time-consuming, so the inspected Party and the inspection team may need to negotiate how to handle the longer presence of inspectors on the site. Cell-culture methods for identifying microorganisms, which are commonly used by industry in its own production testing, should be available to the BWC inspectors on site, but they should be avoided whenever possible in situations where there is high concern about loss of valuable proprietary research or production strains.

To ensure that live strains do not escape the facility, chain-of-custody, watchful monitoring of inspectors by the inspected party, and gowning and showering procedures should be employed.

Vaccine analysis. Vaccines for public use are readily obtainable, so little about their formulation can be kept secret. Vaccines developed for biological weapons defense, however, may be confidential A vaccine, to be effective, may need to contain several different isolated antigens. The formulation that provides the proper antigen mix and adjuvant would be highly confidential. Alternatively, the vaccine could be a proprietary nonpathogenic strain of the BW agent. In immunological analysis, the use of a single (monoclonal) antibody designed to detect a specific antigen characteristic of a pathogen could yield information about the vaccine’s formulation. To prevent loss of this information, mixes of monoclonal antibodies could be required so that it would be impossible to know which antigens were responsible for a positive reaction. On the other hand, DNA analysis of microorganisms used in vaccine production, using probes against, for example, genes for toxin proteins, virulence factors, or other identifying DNA sequences, would not be expected to yield information about vaccine formulation. Again, the inspected Party can carry out tests in advance of the inspectors to assure that proprietary genes are not identified.

Testing for antibiotic resistance. The presence of a pathogen with multiple antibiotic resistance would be a suspicious finding in most contexts. DNA probes may be used, but culture methods with live organisms would be more reliable. According to one vaccine manufacturer, "The only reason that a vaccine manufacturer would utilize such a strain is if the envelope [cell surface] might have a composition of utility for vaccine development. I don’t know of a vaccine strain where this is the case. In general, legitimate vaccine facilities are unlikely to utilize multi-antibiotic-resistant strains, because of the increased danger to the facility workers."

For this area of concern, Managed Access guidelines as laid out in the Chemical Weapons Convention and also envisioned for the BWC are adequate to protect confidential information about proprietary process technology during sampling and analysis in a BWC regime. To illustrate this, consider as an example a situation that would probably be of relatively high confidentiality concern. (Since each situation in each facility will be different, the following example is meant only to illustrate that creative thinking and on-site negotiation, using the "tools" that Managed Access makes available, should be able to satisfy both BWC and inspected Party interests in most situations.)

Suppose the inspection team asks for a sample of microorganisms from some process point where the physical location of the sampling "port" happens to be surrounded by items of proprietary equipment and a highly proprietary equipment configuration. Up to this point in the inspection, the team has not requested to view nor has it been allowed to view this area of the facility. How can the inspection team be assured that the sample was obtained from the requested process point and that the integrity of the sample was maintained, if they are not allowed to view the area?

• The sensitive pieces of equipment can be shrouded, even to the point where only the sampling port is exposed. Even the shape of the equipment can be disguised during shrouding. ⁽⁹⁾
• The inspected State Party can request that only one inspector be allowed into the area where the sample is to be taken.
• The actual sample can be taken by an employee of the facility under observation of the inspector.
• Alternatively, the inspected Party could request the use of a television camera trained only on the sampling port and the employee as he takes the sample and transports it to the inspector.

Except in unusual circumstances, the above procedures should both sufficiently protect the proprietary process technology and assure the inspection team that the desired sample was acquired.

All these procedures are acceptable under the rules for Managed Access in the CWC (Verification Annex, Part X, Section C, "Conduct of Inspections"). If the inspected party still feels it cannot protect its proprietary process technology even with such precautions, under Managed Access it can deny access to the area and suggest alternative means to satisfy the inspection team. Of course, denying access frequently during an inspection would serve to raise suspicions about the inspected facility, but the choice is in the hands of the inspected Party.

Consideration of the protection of process technology CPI in such situations gives rise to some general points:

• With respect to proprietary process equipment, the act of sampling presents no additional concerns over other activities in a BWC inspection.
• The rules for Managed Access clearly allow for denying access to the sampling site, which would protect process CPI. The inspection team would then have to use photographic means or take on faith the integrity of the sample.
• The inspection team may be interested in why an area is off limits, and sampling and analysis is a simple way to assure the team that nothing suspicious is going on there, without allowing the team to view equipment in the area. In this situation, sampling and analysis could be used to protect CPI, as opposed to compromising it.
• Legally, it will be the inspected State Party, not the facility directly, that is accountable. Implementing legislation should spell out how private institutions, such as commercial facilities, and the government will make Managed Access decisions during an inspection. Government and industry should work together to develop appropriate legislation and policies.
• There will likely be sanctions against members of the inspection team if they breach confidentiality.

Three kinds of economic information could possibly be revealed during sampling:

• Information about manufacturing cost;
• Information about the manufacturing capacity of a facility; and
• Information about manufacturing capability of a facility.

Manufacturing cost. The act of sampling would present no additional concerns about revealing manufacturing cost over other activities in a BWC inspection.

In general, the cost of drug manufacture, while confidential, is not an important competitive issue, since drugs traditionally sell for several-times their manufacturing cost. Although manufacturing-process cost-savings are often actively pursued even for high-margin pharmaceuticals, information about a company’s manufacturing cost usually will not damage the company nor give a competitor a significant advantage in the marketplace. For vaccines, however, where the object often is to provide them at affordable prices, a company’s manufacturing cost would be an important piece of information. For commodity products like citric acid, manufacturing cost is almost always an important competitive determinant. For such products, cost-saving aspects of the manufacturing process can be shrouded during sampling, and again access to an area can be denied in the rare situations where shrouding and other Managed Access techniques are not sufficient.

Manufacturing capacity of a facility. Capacity is in part a size issue, and to that extent, it cannot be completely disguised. For drug manufacture, the ability to make large quantities is not usually an element of competitive advantage; therefore, any general capacity information that an inspection team would learn during sampling would be of little value to competitors. For vaccines, information about a facility’s ability to make large quantities is confidential. However, much can be learned about the capacity of any commercial manufacturing operation simply from public sales records and market research reports, which are often public, and from expert observation of the facility from outside its walls or from the air.

A significant change in capacity could represent a change in business strategy that a company deems important to keep confidential. This would represent a rare situation where Managed Access would need to be skillfully applied, but this problem is not specific to sampling and analysis and will have to be addressed in other contexts in an inspection.

For commodity products, capacity can be an important element of competitive advantage, but any significant increase in capacity would usually be signaled by construction, increase in purchases, and types of purchases and other activities that are readily visible to competitors.

Manufacturing capability of a facility. New capabilities, for example, could signal a significant change in business strategy, and as such could be highly confidential. Access to areas which would reveal these new capabilities could be handled by the same means used to protect proprietary process technology. Again, this problem will arise in an inspection whether or not sampling and analysis are undertaken.

If proper procedures are adopted, the acts of sampling and analysis will contribute little or no additional risk to CPI beyond that of other on-site inspection activities.