Patent Insurance Scheme: Financial Resource For WHO Global IP Strategy?

By Itaru Nitta, Green Intellectual Property Project, Geneva, Switzerland

In its Assembly 2008, the World Health Organization (WHO) adopted the Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property to squarely steer the global R&D [research and development] and IP policy toward maladies afflicting impoverished nations. Subsequent to this historic resolution, its implementation necessitates new funding that should be substantive and sustainable, and not inflate the price of patented products.

These requirements would be sufficiently met with the Patent Insurance Scheme (also called “Green IP”) being proposed to impose an extra, official fee on patent applicants and holders as a form of insurance premium, and to establish a trust fund that would defend patent rights against the risk of compulsory licence and other flexibilities increasingly justified by growing anti-patent protests, while at the same time provide a wide variety of financial assistance relating to R&D and IP for developing countries (visit www.greenip.org for details).

Since the Patent Insurance Scheme is designed to be embedded in the existing patent system, the scheme would possess a substantive and sustainable financial scale (possible annual revenue: up to several tens of billions in US dollars, visit www.greenip.org for details) due to continuing growth of both quantity (e.g., filing number) and quality (e.g., subject matter) in the present patent system worldwide.

The scheme would also prevent the burden of paying the premium from affecting the cost of patented products by two measures: the translation waiver and reduced price of official fees.

• Once patent applicants pay the premium and purchase the patent insurance, they would no longer need to file an application translation with a local patent office while their application enters a designated country or region, unless the office needs a faithful translation for a trial or litigation. This waiver of translation would compensate or even outweigh the financial load of the patent premium because application translation accounts for a significant proportion in the costs of obtaining a foreign patent (roughly speaking, the total cost for a single foreign application is US$10,000 and its translation costs usually US$3,000 or more). The translation waiver would be supported by considerable improvement in computer translation, allowing a patent office to examine an application without a human-conducted translation or even by utilising such translation of limited portions (e.g., only claims and relevant descriptions in a specification).
   
• Another technical progress in examination of patent applications would offer a discounted price in official fees for those who have already paid the premium. This lowering would be brought about by streamlining examination, embracing functionalities of emerging technologies for intelligently identifying and measuring innovations. These tools would include information & communication technologies, highly-evolved Web technologies, patent-mappings and other intelligent methodologies.

Preliminary interviews, carried out by the Green IP Project in Geneva and Tokyo, have revealed that many patent professionals and practitioners, especially attorneys and examiners predict that examination assisted with machine translations and intelligent tools would be actually close to practical use until around 2030.

The dual benefit not only for users in developing countries but also for patentees in ensuring patent rights would readily build consensus by patentees on their burden of the premium. In addition to this advantage originally recognised in the scheme, the translation waiver and discounted official fees would further facilitate an agreement by patentees and industries on financing for developing nations. Such financing would be intended for operational expenses of medical prizes, grants, treaties, public-private partnerships, advance market commitments, market exclusivities (orphan drug schemes), tax credits and other incentives proposed.

The Patent Insurance Scheme would no longer regard the patent system as an innovation protector, but rather as more like a pro-active driver for the most necessary and largest overall health benefit irrespective of commercial profitability.

Itaru Nitta is at the Green Intellectual Property Project, Geneva, Switzerland