By Tove Iren S. Gerhardsen and William New

Patents are bound to be another hot issue this year. But although many parties are pushing for changes in this area – from global patent harmonisation and proposals for better patent protection of biodiversity and traditional knowledge, to ways to control soaring patent filings, to national reform of patent laws – actual implementation of these changes may be harder to obtain.

Among the main patent policy areas in 2007 will be: Patent harmonisation discussions on the periphery of the World Intellectual Property Organization (WIPO); developing countries’ push to make the patenting process of genetic material more transparent and part of the current trade talks at the World Trade Organization (WTO); discussions at the World Health Organization (WHO) on the link between innovation, public health and intellectual property; and discussions and legal cases at the European Union (EU) and in the United States related to definition and improvement their respective patent systems.

Patent Harmonisation

There have been discussions at WIPO about further harmonising national patent systems worldwide. The discussions under the WIPO Standing Committee on the Law of Patents (SCP) on a draft Substantive Patent Law Treaty (SPLT) included meetings and an open forum, but remained stalled last year.

The 25 September to 3 October 2006 WIPO General Assembly decided to put the patent harmonisation debate on hold in 2007 (IPW, WIPO, 4 October 2006).

As a result, a group of developed country WIPO members referred to as “Group B+” decided to take the issue in their own hands. The group met in November and are scheduled to meet again in May or June in Washington, DC, to continue discussing their own patent harmonisation with the hope of bringing an agreement back to WIPO later.

That meeting is expected to be at the commissioner level, meaning that heads of patent offices would meet, Kenichiro Natsume of the Japanese mission told Intellectual Property Watch in November. As of February, no date had been confirmed for the meeting, he said. In 2007, the United States took over leadership of the group from Japan. The group also has supported WIPO’s decision to keep patent issues on the table through a series of colloquia this year, including one on 16 February on flexibilities in the patent system.

The Group B+ countries agree on the need for greater harmonisation, but have struggled to find compromise on key issues. They did develop a draft text on harmonisation in autumn (IPW, WIPO, 11 November 2006).

WIPO also is in charge of – and receives significant revenues from the fees from – the Patent Cooperation Treaty, which helps facilitate patent protection in all treaty countries. Of WIPO’s 183 members, 136 have joined the PCT. The last meeting of the PCT Union, including international authorities under the PCT, was held on 5-7 February.

The working group on PCT reform under the PCT Union is scheduled to meet on 23-27 April, according to WIPO. A key issue will be ways to enable more complete searches of pre-existing technology in a wider number of languages, according to WIPO Deputy Director General Francis Gurry.

Gurry announced in February that international patent filing was at a record high in 2006, with the most rapid growth occurring in China, South Korea and Japan. The United States remained far ahead globally (IPW, Patent Policy, 7 February 2007).

WTO Biodiversity Patent Talks

There is also a patent aspect to the current round of trade discussions at the WTO, referred to as the Doha Development Agenda referring to its start in Doha, Qatar in 2001. The multilateral talks hit a standstill in the summer of 2006, but now officials argue that they are ready to pick up talks again.

Developing countries would like to see the relationship between the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the UN Convention on Biological Diversity (CBD) be discussed as part of the round.

The CBD calls for fair benefit sharing between the provider of genetic resources and the user and prior informed consent of the provider. This is often referred to as “access and benefit-sharing.” Many developing countries would like to see disclosure of origin, prior informed consent and benefit sharing become mandatory in patent applications, sources said.

There has been “no movement since July 2006″ on the CBD issue, but proponents are hoping “things will pick up again as part of the overall ‘resumption’,” a developing country official told Intellectual Property Watch in early February.

A group of about 10 developing countries has proposed an amendment to the TRIPS agreement to require disclosure of the origin of genetic material and traditional knowledge in patent applications, the informed consent of the owners of the genetic material and benefit schemes for potential gains of the patented invention using the genetic material. The amendment would be in the form of a TRIPS Article 29bis, according to the proposal (IPW, WTO/TRIPS, 7 June 2006).

Most developed countries are opposed, but Norway last year tabled a proposal supporting a portion of the Article 29bis idea, though it disagreed with the inclusion of sanctions. Norway proposed to make the disclosure of origin and source of genetic material and traditional knowledge mandatory in patent applications, but said that patents should not be revoked if incorrect or incomplete information was given in the patent applications and identified after the patent is granted. It said this should be penalised outside the patent system. Switzerland said the issue belongs in WIPO.

The WTO Council on TRIPS has a mandate to discuss the relationship between TRIPS and the CBD under paragraph 12(b) of the Doha Declaration. Peru raised the link between TRIPS and CBD in the 25-26 October 2006 TRIPS Council meeting, where Switzerland also raised some technical questions to the Norwegian proposal. (IPW, WTO/TRIPS, 1 November 2006).

At the 13 February TRIPS Council meeting, governments signalled that consultations on IP issues would be increased in the coming weeks as part of the overall revival of trade talks at the WTO. The consultations are addressing the TRIPS and CBD relationship, and issues related to geographical indications, products derived from places.

Also at the 13 February meeting, the United States issued a paper on enforcement, a topic some developing countries have sought to keep separate from the TRIPS Council. Additional meetings of the TRIPS Council are scheduled for 5-6 June and 23-24 October (IPW, WTO/TRIPS, 14 February 2007).

Meanwhile, at the Convention on Biological Diversity [www.biodiv.org], the implemention of international rules for genetic resources will continue to be discussed this year (IPW, Biodiversity/Genetic Resources, 4 April 2006).

Compulsory Licenses on Drugs on the Rise

Another related topic involving TRIPS is an apparently increasing number of compulsory licenses announced by governments, at least as a trend at the outset of 2007.

TRIPS Article 31 allows countries to issue compulsory licenses that override patents without the authorisation of the patent holder, provided certain provisions are respected. In the 2001 Doha Declaration on the TRIPS Agreement and Public Health, however, Article 5(b) states that: “Each member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licenses are granted.”

The Thai government announced one compulsory license for a pharmaceutical product at the end of 2006 and two additional ones in January 2007, sources said. Taiwan also announced a compulsory license on a patented drug for avian influenza at the end of 2005 that is valid until the end of this year, sources said. Many more countries, including developed countries, have made use of the compulsory license option.

Separately, the Philippine government is involved in a parallel import case of a patented medicine, sources said. Parallel importation is purchase of a patented drug from an approved source in an exporting country where it is sold more cheaply, without seeking the consent of the patent holder, as defined by a WHO report. The TRIPS agreement, reinforced by the 2001 Doha Declaration, leaves it to national governments to decide for themselves when a patent may be exhausted, such as with parallel imports (IPW, Public Health, 30 April, 2006).

And in India, a legal case involving medicine patents brought by Novartis is seen as a challenge to India’s 2005 implementation of TRIPS.

WHO Looks At IP

WHO also is involved in a project on intellectual property rights this year, which covers the issue of patents on medicines.

The WHO Intergovernmental Working Group on Public Health, Innovation and Intellectual Property will hold its next meeting in October 2007. The group held its first meeting on 4-8 December (IPW, Public Health, 11 December 2006). At the January Executive Board meeting members expressed dismay with the working group process so far, and WHO announced a number of activities scheduled to take place before the October meeting.

The first is an end-of-February deadline for member countries’ input to WHO regarding the process and possible expert candidates. A revised working document will be available to member states or review in July this year, WHO said. There also will be regional meetings a possible an online consultation in August and September, WHO said. The timeline is available here [pdf].

Other issues that have links to the world of patents are WHO’s role in the fight against avian influenza, malaria (there is a draft resolution with TRIPS language linked to access to medicines) and diseases in general, and its role in health research, all of which will be discussed at the Health Assembly.

EU Still Working on Patent Issues

The European Union has been discussing improving the competitiveness of its patent system vis-à-vis the United States for quite some time, but the talks on a single European Community patent as well as a patent court seem as stuck as the harmonisation talks are at WIPO.

EU Internal Market Commissioner Charlie McCreevy promoted the idea of a Community patent and the European Patent Litigation Agreement, a central European patent court available to signatory member nations in 2006. But he decided against providing the European Parliament with a significantly revised draft of the old idea by the end of 2006 (IPW, European Policy, 12 October 2006).

The proposal ran into opposition from a group of countries, led by France, that prefer that any European patent system be made part of the existing framework that includes the European Court of Justice. The EPLA in its current version is widely considered dead, according to sources. However, there is talk that McCreevy may offer a new proposal that meshes the existing EPLA approach with the French proposal.

Later in 2007, the European Commission will produce a communication on a range of IP rights measures, most aimed at smaller companies, according to McCreevy. It will cover such issues as: Patent quality in Europe; patent litigation insurance; alternative dispute resolution schemes; general awareness actions on IPR; use of patents, including licensing; better management and financial reporting of patents; international patent enforcement.

A Big Year for US Patent Policy

In the United States, Congress, the Bush administration and the Supreme Court will consider key patent issues. The changeover of the Congress from Republican (the party of President George Bush) to Democrat may make for some changes, but the issues under debate appear likely to be similar to last year: reform of US patent law, and skirmishes over the strength of bilateral trade agreement provisions on pharmaceutical patents.

Democratic Senator Patrick Leahy of Vermont, chairman of the Senate Judiciary Committee, said in December that patent reform would be on his committee agenda for this year (IPW, Patent Policy, 14 December 2006). The House Judiciary Committee also is moving on patent-related issues. And committee Chairman Howard Berman of California is considered sympathetic to content industries, sources said.

“This is going to be an important year for patent policy in America,” said Erik Flom, principal at Welsh and Katz in Chicago. All three branches of government – Legislative, Executive and Judicial – will address key policy issues, he said. “We could see changes in patent policy in everything from how easy it is to obtain and defend patents to how effective a business tool a patent is for litigation against competitors or negotiations with licensees.”

On the re-introduction of legislation to reform US patent law, Jonathan Yarowsky, Counsel for the Coalition for Patent Fairness (the chief bill proponent), is optimistic. “I truly believe we are building strong momentum to get this bill done in the new Congress,” he said. “But that will take real work and political outreach moving forward, as any comprehensive reform is challenging.”

Yarowsky said that over the past two or three Congresses, the coalition has been building recognition in and outside the Legislative Branch of the mounting problems with both patent quality and the lack of speedy resolution of disputes. As a very early recognition of these problems, the House of Representatives overwhelmingly passed a bill in early February creating a pilot program in the federal courts to enhance judicial expertise in the patent area. “This is both an indicator and a precursor of the need to do comprehensive patent reform,” he said.

There is a “strong sense” that progress will be made over the next several months, said Yarowsky. The coalition is hoping that within the first six months of the new Congress, patent reform legislation will be introduced in both the House and Senate, requisite oversight hearings will be held, and a bill will be voted out of both Judiciary Committees.

“We are placing a premium on the first year of this Congress,” he said, in part because of the overall distraction of next year’s Presidential election. At this point, committee staff is working with all interested parties to draft legislation. “That listening tour should conclude shortly,” he added.

But the outspoken opponents of patent reform are equally convinced they will again succeed. Last year, the pharmaceutical and biotechnology industries fought successfully to block completion of the patent reform bills. And inventors also vow to fight again this year.

“The prospects for so called patent reform are not anywhere near as rosy as the hype being put out by the Coalition for Patent Fairness, more aptly known as the Coalition for Patent Piracy, said Ronald Riley, president of the Professional Inventors Alliance.

Riley said the coalition is disliked by other industry segments. “There is a huge behind the scenes fight between coalition members and small and large companies alike who do not want their IP devalued,” he said. “Bear in mind that this is not really about patent reform, rather it is about changing law to mitigate the consequences of coalition members’ patent piracy and an attempt by tech companies who are well past their prime to cement their market positions legislatively.”

Tove Iren S. Gerhardsen may be reached at tgerhardsen@ip-watch.ch. William New may be reached at wnew@ip-watch.ch.