Discussions at an open forum last week on a possible harmonisation of international patent laws showed that countries do not only disagree on whether it would be useful or not but also have different expectations on what such a harmonisation would encompass. Judging from the at times sharp debate, the most contentious issue seems to be public health and patents.

The open forum took place at the World Intellectual Property Organization (WIPO) on 1-3 March (see also IPW, WIPO, 8 March 2006).

Discussions about removing differences in the global patent system under a draft Substantive Patent Law Treaty (SPLT) started in 2001 and has been discussed in the WIPO Standing Committee on the Law of Patents (SCP), set up in 1998. But after contentious debates at WIPO in 2005 and a strong rift between developed and developing countries, the open forum was suggested to try to unblock the process.

The friendly environment referred to by many participants during most of the meeting took a sharp turn at the end of the last day when the topic of “Patents and public health, including second use patents” appeared on the agenda under the subhead “The interface of the patent system with other areas of public policy.”

James Love, director of the Consumer Project on Technology, said the pharmaceutical industry is growing and now comprises some 1.5 percent of global gross domestic product (GDP). But he said there are inequalities in terms of access to medicines with the United Kingdom and India spending the same percent of GDP on medicines despite the large difference in population. Love also called attention to the fact that Africa only accounts for one percent of the global pharmaceutical market.

Love talked about a bill (HR 117) in the US Congress which suggests changing the current research and development system to encourage more research into neglected diseases. This would be done through a Medical Innovation Prize Fund, he said (IPW, Public Health, 30 May 2005).

Another similar effort is an R&D resolution put forward by Brazil and Kenya at the World Health Organization executive board meeting in January and which has been forwarded to the WHO Health Assembly in May (IPW, Public health, 28 January 2006).

Eric Noehrenberg, director of intellectual property and trade issues at the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) said that 90 percent of the products on the WHO’s Essential Drug List came from the R&D pharmaceutical industry and 95 percent of them were no longer under patents, which means that cheaper generics might also be available. He thus said that the industry was developing medicines for neglected diseases and there was no need for yet another “bureaucratic” system suggested by Love.

Noehrenberg also said that parallel trade was always bad for poor countries because the medicines often originated from these low-cost countries to high-cost countries. He also gave examples of how compulsory licenses have not helped. Noehrenberg further argued that flexibilities for developing countries in trade and patent systems are an industry debate not a health debate. This was contended by the audience with one person saying that in France it was the health ministry dealing with these issues.

Noehrenberg additionally said that the industry has tried to help provide needed medicines in least developed countries but “government policy stops us.”

William Haddad, a US generics industry leader and CEO of Biogenerics, strongly confronted Noehrenberg, accusing him of perpetuating lies and calling his talk a “rehashing of old arguments.” Haddad said that as two-thirds of the world population was systematically being hindered in access to essential medicines, it was time to think anew. He asserted that powerful developed countries such as the United States had forced developing countries to accept international deals on access to medicines.

Haddad said there are some good initiatives from the industry, however, such as GlaxoSmithKline’s work on avian influenza medicines and Sanofi-Synthelabo on malaria medicines.

What Do Countries Want from the SPLT?

The draft SPLT and what countries want from this project also was discussed at the forum. Jeffrey Hawley, immediate past president of the Intellectual Property Owners Association in New York said that he had found no concise statement of the SPLT’s objective. By contrast, this is clearly stated in both the patent laws of the United States (to offer incentives for individual innovation), and Japan (which is to promote industry).

Hawley favoured a definition made by Jonathan Zuck, president of the US-based Association for Competitive Technology, saying that IP should create incentives for investment by rewarding innovation. Zuck also said that although the system could be improved – referring to questionable “innovation” such as the use of a shopping cart icon for purchasing from websites – on the whole the law does not need to be changed. Rather, its execution needs improvement.

Hugh Laddie, a former United Kingdom judge and IP consultant with Rouse & Company, said that the exclusions from the SPLT, i.e., what would not be eligible for protection, would be just as important as what would be included. This is dealt with in Article 12 of the draft SPLT.

Laddie said that in the draft SPLT, valuable exclusions (areas not eligible for patenting) found in the EU system are missing. These include methods of doing business, and computer programmes, noting that Microsoft had succeeded without the benefit of patents, he said. Laddie asked the drafters of the SPLT to be careful not to “protect areas that will do nothing to promote development, particularly in developing countries.”

Zuck said that small and medium-sized companies want harmonisation as this would provide them with access and predictability.

Frederick Abbott, professor of international law at the Florida State University College of Law, said that if there was harmonisation this would probably have to be countered by policing in some form as the power would be concentrated in a single authority.

Abbott also talked about contractual licenses and transfer of technology, and said that “rules regarding anticompetitive aspects of patent licensing are within the reasonable potential subject matter scope” of an SPLT. He said these could be in a positive or negative form, but noted that a negative approach “would permit maintenance of regulatory flexibility,” although these would probably be difficult to negotiate. Abbott said that developing countries may benefit from greater use of per se rules and other positive prohibitions.

Jerome Reichman of the Duke University Law School (US) said that harmonisation of worldwide patent laws would be “extremely damaging” for developing countries as they were still working on adjusting to the World Trade Organization Agreement on Trade-Related Aspects of Intellectual property Rights (TRIPS). What they needed now, he said, was not more rules but rather a period of “calm and stability.”

If a new round of international IP negotiations was launched this would raise the technology ladder for developing countries again, Reichman said.

Narendra Zaveri, an activist from India, said that the national offices have some advantages that the SPLT will not have as they can correct mistakes if missed in one office. He also referred to “laughable” patents with only insignificant improvements, such as drops of honey, or a composite ice cream cone.

Zaveri also said that harmonisation would mean “all powers but no accountability” to any political power or system, saying that it would bind all stakeholders in all member countries, who would be deprived of their rights to protect other stakeholders. “Grant of such laughable, frivolous or ‘me-too’ drug patents [are] most disastrous for people in developing countries,” he said, adding that safeguards should be provided to avoid that patents are exploited.

Noehrenberg said that industry supports harmonisation, but it does not want to see anything on disclosure of origin in the SPLT. Nancy Linck of the Biotechnology Industry Organization in Washington, DC also said that harmonisation of patent laws was especially in the interest of small companies which really needed it, as the big companies could afford dealing with the current different systems.

Yin Xintian of the Chinese State Intellectual Property Office told Intellectual Property Watch that China supports harmonisation but it depends on which direction the process would go. As for a grace period, consideration should be given to a fair environment for the inventor but also for the public for perhaps six months, Xintian said, adding that China was supporting the EU on this point.

Zuck asked why everything should be available to everyone, noting that he could not just tell anyone to invite him to stay in their bedroom.

Love warned about protecting the current patent scheme in a “Biblical manner” saying that it was so good that it could not tinker with it and nobody could ever come up with anything better.

Leonardo Burlamaqui of the Candido Mendes University in Rio de Janeiro favoured a model with strong state intervention, noting that also in the United States the government has been in and out of regulating the market, and the development of East Asia is another example of such a successful model, he said.

Adding Biodiversity to SPLT

One of the issues most important to developing countries is biodiversity and adding language requiring disclosure or the origin of genetic resources in patent applications and thus also to the SPLT.

Begoña Venero of the Peruvian Institute for the Defense of Consumers talked about the importance of taking indigenous people and the identification of country of origin into account in patent applications using traditional knowledge, and to include this requirement under Article eight of the SPLT on prior art. She said there should not be IP protection without disclosure, but in terms of documenting knowledge one should not disclose unnecessary information.

Benjamin Zycher of the Pacific Research Institute in California said that the terms “disclosure” and “benefit sharing” had to be defined and said that only the contractual approach, often meaning an upfront payment from the company to the indigenous people, would meet the concern of poor people.

Joshua Sarnoff of American University in Washington, DC argued, however, that the IP system should address access and benefit sharing and include “mandatory disclosure requirements” in order to avoid perpetually unjust conduct. He said the concern arises in cases where patents are legal but are based on illegal conduct. Disclosure would help inventors and the patent system share the same burden, Sarnoff said, adding thus that mandatory disclosure of origin should be a requirement in any initiative trying to harmonise patent law.

André Bourgouin, vice president of the pharmaceutical company Ipsen, said that patents were essential to his and other industries, and that uncertainty has already brought many industries to abandon biodiversity. He also said the origin was sometimes difficult to determine as products could have various origins from various countries. To make disclosure obligatory would thus be “counterproductive,” he said, adding that there were only some 50 patents related to innovations based on biodiversity.

On Software Patents and Databases

As for software patents, Zuck said that instead of discussing what constituted software, the debate should focus on what is innovative and on implementing procedural reform.

Rishab Aiyer Ghosh from the United Nations University-MERIT, said that often open source is the main reason for competition in many markets. But many companies tell companies not to look at databases in order to avoid becoming liable for willful infringement, Ghosh said.

Jules Theeuwes of the University of Amsterdam said that the Dutch government had said that the same patent regime should apply to software as to other sectors, despite the benefits of software being reduced as time goes by while costs go up. Rigo Wenning of the World Wide Web Consortium said that the Internet relies on open source development.

Love suggested that there should be different patent systems for medicines and software instead of “one size fits all.” This would be more pragmatic as there are different problems in different sectors, Love said.

John Amand, director of international affairs at the European Patent Office (EPO), said his office is easing access to the technology disclosed in patent data and publications. He cited an example of a Danish invention of plants that can discover landmines, on which the EPO had 111 pages of patent documents available, compared with the three-page account of the invention published in the scientific magazine Nature.

Dominique Guellec of the Organisation for Economic Cooperation and Development talked about its patent statistics and a project it was developing with the EPO. He mentioned the internationalisation of technology with a number of co-inventors from various countries.