Waxman the Taxman Calls on USTR to Give Away US Constitutionally Protected Private Patents and Trade Secrets to Foreign Governments for Little Value

http://www.fiercepharma.com/story/dems-back-compulsory-licensing/2008-04-10


Dems back compulsory licensing


Fierce Pharma


April 10, 2008


Now Rep. Henry Waxman and 26 of his Congressional counterparts are wading into the compulsory licensing fray. They're questioning U.S. Trade Rep Susan Schwab for her downgrading of Thailand after it issued patent-breaking licenses for three drugs. Though Schwab gave various reasons for putting Thailand on the trade watch list, the reps' letter says the move appears to be a condemnation of compulsory licensing itself. So they're asking Schwab to "reaffirm" the World Trade Organization agreement that allows for those compulsory licenses in public health emergencies at each Member country's discretion.


Can you hear the howling already? As you know, compulsory licensing is controversial in the drug industry; after all, it lets countries bypass the patents on brand-name meds so they can buy cheap copycats. Drugmakers are understandably reluctant. But proponents say that otherwise, patients in poor countries might never get access to the lifesaving meds they need. It's a complex issue, and a contentious one, so you can expect the debate to intensify--especially if Congress decides to get more involved.



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http://oversight.house.gov/documents/20080409144118.pdf


Democrats Urge Trade Ambassador to Focus on Access to Medicines


Committee on Oversight and Government Reform, U.S. House of Representatives


Wednesday, April 09, 2008


In a letter to U.S. Trade Representative Schwab, Chairman Waxman and twenty-six other Members of Congress asked that in reviewing the global state of intellectual property rights the Ambassador act upon the United States’ commitment to respecting measures that improve access to live-saving medicines in developing countries.


"As you conduct the annual "Special 301" review of the global state of intellectual
property rights (IPR) protection and enforcement, we ask you to pay close attention to issues
related to public health and access to medicines. Specifically, in determining whether a public health measure raises concerns regarding the 'adequate and effective' protection of intellectual property rights, you should consider not only the extent to which greater property rights and protections could enhance innovation, but also the United States' commitment to respecting measures that improve access to life-saving medicines in developing countries.


A particular concern we have relates to the issuance of compulsory licenses for medicines. In the 2007 Special 301 Report, you downgraded Thailand to the "Priority Watch List," shortly after it issued compulsory licenses on three pharmaceutical products. The Report appeared to express concern with a perceived "lack of transparency and due process" that occurred when Thailand issued the licenses. Unfortunately, ambiguity in that language has led some to interpret the Report as condemning the issuance of compulsory licenses as inherently indicative of a weakened respect for patents.


[Indeed, Mr. Waxman was quoted in Bangkok Post as stating the following: "Rep. Henry Waxman (D-Calif.) also was supportive of Thailand's actions, according to the Post. 'Thailand is an important U.S. ally that is trying to save the lives of its citizens,' Waxman said in a statement. He added, 'Accordingly, the U.S. should show compassion and provide support to our longtime friend rather than impose punitive actions' -- such as the Office of the U.S. Trade Representative's recent announcement that the country has been put on its Priority Watch List. According to Vichai, the Thai government will continue with its plans for compulsory licenses" (Bangkok Post, 5/23/07). See "Drug Access - Thai, U.S. Officials Have Not Reached Agreement About Compulsory Licenses for Patented Drugs, Thai Health Minister Says", The Global Fund at: http://www.theglobalfund.org/programs/news_summary.aspx?newsid=49&countryid=THA&lang=ru .


[MR. WAXMAN, YOUR ACTIONS ACTUALLY ENCOURAGED THAILAND TO 'TAKE' U.S. OWNED DRUG PATENTS FOR LESS THAN FULL, COMPLETE AND ADEQUATE FAIR MARKET VALUE COMPENSATION FOR A PUBLIC USE - TO FULLFILL ITS ALLEGED HEALTH NEEDS. WILL YOU COMPENSATE THE DRUG COMPANIES FOR THEIR ECONOMIC LOSS? WE STRONGLY DOUBT IT!!]


As you know, the use of compulsory licenses, with 'adequate remuneration' paid to the patentholder, is permitted by the WTO Agreement on Trade-Related Aspects of Intellectual Property (the "TRIPS Agreement"). In the 2001 Doha Declaration, the United States and the other 142 WTO Members committed to respecting 'the right of WTO Members to use, to the full, the provisions of the TRIPS Agreement,' which provide 'flexibilities' to enable a Member 'to protect public health and, in particular, to promote access to medicines for all.' One crucial flexibility is that each Member has 'the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted.'


...In fact, TRIPS does not limit compulsory licenses to "emergencies," but rather, as discussed above, permits countries to determine when they are necessary.


[UNFORTUNATELY, MR. WAXMAN, THIS INTERPRETATION OF THE TRIPS DOHA DECLARATION IS THE MOST LIBERAL ONE POSSIBLE. ALSO, 'ADEQUATE REMUNERATION' UNDER U.S. LAW MEANS, FULL, COMPLETE COMPENSATION - FAIR MARKET VALUE UNDER U.S. LAW. IT DOESN'T MEAN ADEQUATE COMPENSATION UNDER A THIRD COUNTRY'S LAW - THAT WOULD CONSTITUTE A U.S. GOVERNMENT 'GIVE-AWAY' OF U.S. PRIVATE INTELLECTUAL PROPERTY RIGHTS IN VIOLATION OF THE U.S. CONSTITUTION.]

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http://oversight.house.gov/documents/20070312150354-57129.pdf


US Trade Policies Restrict Access to Life Saving Medicines


Committee on Oversight and Government Reform, U.S. House of Representatives


Sunday, March 11, 2007


Rep. Waxman and other members write to US Trade Representative Susan Schwab to express their concern that the US is elevating intellectual property protection at the expense of public health in recent Free Trade Agreements with Peru, Colombia and other developing countries.


"[R]ecent U.S. free trade agreements (FTAs) appear to...strip away flexibilities to which countries are entitled under... the 2001 "Doha Declaration" on the [World Trade Organization] Trade-Related Aspects of Intellectual Property Agreement (TRIPS) and public health.


...Under WTO rules, pharmaceutical innovations receive twenty years of patent protection. Recent U.S. FTAs add an additional requirement [contained in US law]: a period of "data exclusivity" that begins when a patented drug receives marketing approval. During this period, regulators cannot rely upon clinical test data submitted for a drug's first approval when considering marketing approval for generic versions. The effect can be to delay the availability of generics even if a patent has already expired.


...For any patient, five years or more without a medicine priced out of reach can be severe.
The consequences are especially serious for patients with HIVIAIDS or other chronic diseases,
where the cost of treatment can mean the difference between life and death. Colombia and Peru, parties to recently negotiated U.S. FTAs, together have more than a quarter million people
infected with HIV and alarmingly low treatment access rates.


...Compulsory licensing is the government granting of a license to a manufacturer other than the patentholder to produce a drug at an affordable price. The Doha Declaration affirmed the TRIPS principle that each WTO member country has 'the fieedom to determine the grounds upon which such licences are granted.' However, the U.S. has included provisions in FTAs to narrow these grounds. USTR has also refused to reference the right to compulsory licensing - or other public health exceptions - in the text of FTAs. Instead, USTR has relied upon the use of vaguely worded "side letters" that are subordinate to the agreements and non-binding on the parties. The letters also fail to provide clear and specific assurances affirming the ability of governments to take various measures to address public health needs.


[MR. WAXMAN, THAT IS ONLY ONE INTERPRETATION OF WHAT THE DOHA DECLARATION SAYS, AND PREDICTABLY, IT IS THE MOST LIBERAL INTERPRETATION. ESSENTIALLY, YOUR PREFERRED SOLUTION OF 'TAKING' U.S. PRIVATE PROPERTY RIGHTS TO FULFILL A FOREIGN GOVERNMENT'S 'PUBLIC USE' WITHOUT PAYMENT OF FULL, ADEQUATE AND JUST COMPENSATION, WOULD EFFECTIVELY CONSTITUTE A HIDDEN TAX ON U.S. DRUG PATENT & TRADE SECRET RIGHTS THAT WOULD SEVERELY DIMINISH THE ABILITY OF THEIR HOLDERS TO SECURE A REASONABLE RETURN ON INVESTMENT & PROFIT MARGIN, IN CONTRAVENTION OF THE U.S. CONSTITUTION.]


...The world's consensus at Doha was that all nations have the right to use the flexibilities
available under TRIPS to 'promote access to medicines for all.' Protecting innovation is
important, but the intellectual property provisions in current FTAs extend pharmaceutical monopolies without sufficient regard to consumer access and public health."


[DEAR MR. WAXMAN, YOU SEEM SO GENEROUS WITH VALUABLE PRIVATE PROPERTY THAT IS NOT YOUR OWN. UNDER YOUR INTERPRETATION, U.S. TAXPAYING DRUG PATENT & TRADE SECRET OWNERS WOULD HAVE NO SAY IN THE PRICE THAT THE U.S. PTO WOULD PAY THEM FOR THEIR INTELLECTUAL PROPERTY, WHICH WOULD SURELY BE LESS THAN FAIR MARKET VALUE. IF YOU BELIEVE THAT THE U.S. GOVERNMENT SHOULD 'TAKE' U.S. PRIVATE PROPERTY FOR A 'PUBLIC USE' IN A 3RD COUNTRY TO PROVIDE IT WITH AFFORDABLE DRUG PRICES' - i.e., PRICES THAT THEY WANT TO PAY IN THEIR MARKET, WHICH ARE PENNIES ON THE DOLLAR, THEN THE USG MUST COMPENSATE THE PROPERTY OWNER WHOLLY. OTHERWISE, THE TAKING ACTUALLY CONSTITUTES A HIDDEN TAX.]

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http://lists.essential.org/pipermail/ip-health/2005-June/008087.html


Rep. Waxman Statement on Brazilian Compulsory License Dispute


June 29, 2005


Back during 2005, Mr. Waxman expressed his disdain for U.S. private patent rights when compared to the rights of foreign governments to 'take' them for their 'public use' at less than full, adequate and just compensation.


BRAZILIAN GOVERNMENT'S DECISION TO ISSUE A COMPULSORY LICENSE FOR LOPINAVIR/RITONAVIR


[Congressional Record: June 28, 2005 (Extensions)][Page E1389-E1390]


Tuesday, June 28, 2005


HON. HENRY A. WAXMAN of california in the house of representatives


[Page 1390]


Mr. WAXMAN. Mr. Speaker, Brazil's HIV/AIDS program has been recognized by the United Nations AIDS program as one of the best in the world in both treatment and prevention.


Working alongside nonprofit organizations,the government has aggressively fought the disease by offeringuniversal antiretroviral treatment. Many of the first-line antiretroviral drugs used in Brazil are locally produced by generic companies, allowing the country to afford to treat tens of thousands of patients.


But other second-line antiretroiviral drugs like the lopinavir/ritonavir combination, efavirenz, and tenofovir have been sold by theirbrand name producers at a high cost. These three drugs alone consume70% of Brazil's AIDS budget. According to Brazilian Health MinisterHumberto Costa, the Brazilian government pays more than $2,600 annuallyper patient to purchase doses of lopinavir/ritonavir.


Some who oppose Brazil's action have claimed that it violates trade rules. In fact, the World Trade Organization's 1994 Agreement on TradeRelated Aspects of Intellectual Property specifically permits compulsory licensing. The 2001 Doha Declaration reaffirmed this option, stating, ``Each member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted.''


As a signatory of the Doha Declaration, the United States should respect the rights of other nations to address important health problems.


[THE PROBLEM HERE IS THAT THE DOHA DECLARATION IS NOT A TREATY AS IS THE WTO TRIPS AGREEMENT, WHICH GOVERNS].

KEI Activists Try to Promote Anti-Patent Populism to Prod Politically-Motivated Patent Reforms Reminiscent of Prior Poor Policy Proposals

The following 1886 New York Times Op-Ed was disseminated by James Love of the George Soros-Funded Activist Organization, Knowledge Ecology International (KEI), in an Effort to Persuade US Policymakers & Congressional Representatives How the US Patent System is Broken and Needs to Be Replaced. Sadly, This Effort is Not Only Misguided But also Dangerous to Future U.S. Global Economic & Technological Competitiveness.


The article below is actually demonstrative of the historical ebbs and flows of U.S. patent policy during the late 19th and 20th centuries, as is reflected in additional information provided by the ITSSD following this article.


In the 19th Century, the New York Times on a number of occasions reported and editorialized on various proposals at radical reform of patent laws, including this automatic licensing [COMPULSORY LICENSING] proposal in 1886.


"PATENT LAW AMENDMENTS." The New York Times, February 11, 1886.


Representative Dunn, of Arkansas, introduced in the House on Monday a bill to prevent the establishment of monopolies under the patent laws of the United States. Section 4,884 of the Revised Statutes gives the inventor a complete monopoly of his invention. It provides that, in addition to a description of the invention, every patent shall contain "a grant to the patentee, his heirs or assigns, for the term of seventeen years, of the exclusive right to make, use and vend the invention or discovery throughout the United States and the Territories thereof." Mr. Dunn's bill amends this section by declaring that the grant to the inventor shall be, as now, for seventeen years, but instead of an exclusive and entire property in the invention, it shall cover "a royalty of 10 per centum of all gross sales of the right to make, use, and vend the same throughout the United States." Any person, it is further provided, shall have the right to make, use, and vend the patented article upon payment of the 10 per cent royalty to the patentee or his heirs or assigns.


The principle of Mr. Dunn's bill is sound and its purpose is commendable. It is obvious that some amendment of the bill would be necessary, for patented inventions vary so widely in respect to their cost of construction, the extent of the public demand for them, and the expense of putting them on the market, that a 10 per cent royalty would in many cases be a very insufficient return to the patentee for his expenditures of time, labor, money, and brains. The effect of such a law would be to discourage invention, and that would be a worse evil than the tendency to monopoly which the bill aims to check. The problem is too complicated to be solved in that simple way, but there is not the slightest doubt that a just and workable amendment to the patent laws can be drawn up which would prevent the use of the grants of the Patent Office as a foundation for greedy and oppressive monopolies.


It is high time that the interests of the people as against those of patentees received some consideration and protection. The spirit of the time is hostile to monopolies, and justly so. It is hard enough for the public to bear the exactions of corporate monopolies which have no other warrant than a charter granted under State laws and no protection save that accorded them by bribed legislators and lenient Judges. But that the great seal of the United States should be allowed to confer a license for unlimited extortion is a monstrous wrong. The doctrine that a corporation may demand "what the traffic will bear" is held to be outrageous and wicked. Yet letters patent of the United States at present grant to patentees an absolutely unrestricted right to apply this doctrine to the sale and use of their inventions. Surely there is somewhere a just limit to the profit which a patentee may be permitted to exact from the public under his grant from the Government, a limit which would yield him the due reward of his genius and insure him a full and generous return for his toil and outlay, and yet would protect the people to whom his devices were a necessity from that boundless avarice which experience has shown is often fostered in the favoring and secure shelter of a patent. Such a restriction would not discourage inventors, and it would have the salutary effect of making useful inventions more widely available.


There is one form of extortion under the patent laws, and it is the most common one which ought to be made impossible. The best example of this kind of legalized pillage is furnished by the Bell Telephone Company. That company, protected by a patent whose validity is strenuously disputed, exacts and annual rent of $14 from the local companies for telephone instruments which cost $3.42. That is the whole case in a nutshell of robbery by royalty. As a consequence of this 350 per cent profit and of its great revenues from the local companies, whose stock it holds to the face value of $22,000,000, the capital stock of the Bell Company, according to the statement of Boston newspapers, has been "watered" to seven times its original amount, and still the dividends are 17 per cent upon the enormously inflated capital. No such monopoly as that ought to exist by the sanction of the Government.


There should be most assuredly a well defined limit to extortion in the form of rent or royalty upon patented machines and devices. And the privilege of exacting royalties is one which should never be accorded save with reasonable safeguards. It ought not to be possible for a patentee to exact his own price with no alternative to the user. The latter should have the option of purchase outright in lieu of royalty or rent paid at stated periods; and the permissible royalty or rent would naturally become the basis of the purchase price. A patentee ought to be content to sell his machine or device at a fair price, and the user ought to have the right of absolute ownership in it if he chooses to remunerate the patentee in that way.


James Love, Knowledge Ecology International (KEI)


**********************************************************************************
It is no surprise that U.S. government treatment of patents, copyrights & trade secrets has long been influenced by concerns and fears about economic downturns.


“A Brief History of the Patent Law of the United States”


According to at least legal commentator,


“[D]ifferent attitudes...have prevailed at [] different times and...have had...effects on...the...development of [] patent law...In the last two decades of the nineteenth century there was a period of economic depression and increasing concern about the power of "big business" leading to the passage of the Sherman Antitrust Act in 1890. This climate was reflected in the patent field by an increasing tendency of the courts to hold patents invalid. By the late 1890's the depression had run its course and patents came back into favor with the reviving economy. In general the twentieth century has seen a dynamic interrelationship between the patent system and the application of antitrust laws. Although the first antitrust law, the Sherman Act, was enacted in 1890, the courts did not start to give it teeth until Theodore Roosevelt’s administration (1901-1909). It was not until the 1930's that the patent system started to come under attack, being viewed as assisting in the maintenance of monopolies that were seen as being at least a contributing factor to the economic misery of the thirties. This skepticism about the patent system survived World War II and blossomed again in the depressed economic conditions of the 1970's, a period of strong anti-trust enforcement...In the early 1980's, the thinking of the Chicago School of economists came to the fore and with the election of President Reagan enthusiasm for antitrust enforcement went out of fashion.” (Ladas & Perry, LLP – 2003)



Source: Rediscovering the Value of Intellectual Property Rights, Presented at The 20th Liberty Forum Of Instituto de Estudos Empresariais - iee “Property Rights and Development”, ‘IP in the 21st Century: Challenges & Concerns’, in Porto Alegre, Brazil
April 17, 2007, accessible at: http://www.itssd.org/ppt/IPinthe21stCentury.ppt .

Brookings Analyst Criticizes USG For Ensuring That Foreign Governments Protect US Constitutionally Recognized Private IP Rights Abroad

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/17/EDR1V0LCD.DTL


U.S. expanding the law - domestic and foreign - to benefit corporations


By Ben Klemens


Sunday, February 17, 2008


As a U.S. taxpayer, you may be contributing to fewer cheap drugs on international shelves. Public dollars support the Office of the U.S. Trade Representative, the trade agency with authority to pressure foreign governments to change their domestic intellectual property laws. As such, the agency actively presses for laws that would keep generic drugs out of markets worldwide.


[IS THIS COMMENTATOR SUGGESTING THAT THE US TRADE REPRESENTATIVE INSIST THAT FOREIGN GOVERNMENTS WEAKEN THEIR DOMESTIC INTELLECTUAL PROPERTY LAWS SO THAT THEY ARE ABLE TO ‘TAKE’ U.S. HELD PATENTS, COPYRIGHTS AND TRADE SECRETS WITHOUT PAYING ADEQUATE AND FULL COMPENSATION FOR THEM, CONTRARY TO THE FIFTH AMENDMENT OF THE BILL OF RIGHTS TO THE U.S. CONSTITUTION?? IS THIS COMMENTATOR ADVOCATING THE GIVE-AWAY OF U.S.-OWNED INTELLECTUAL PROPERTY RIGHTS AS A FORM OF TECHNOLOGY TRANSFER IN ORDER TO IMPROVE AMERICA’S IMAGE ABROAD??]


Congress is considering legislation to create a separate executive branch office dedicated to using government resources for lobbying other countries to change their laws, sometimes exclusively to benefit certain U.S. companies.


That's a bad idea for patients here and abroad, because it would give the U.S. government more power in an area where it should instead have less.


[DOES THIS COMMENTATOR FAVOR THE EXERCISE OF MORE GOVERNMENT POWER TO DETERMINE HOW DRUGS SHOULD BE MADE, HOW THEY SHOULD BE PRICED, HOW MUCH PROFITS DRUG COMPANIES SHOULD MAKE, JUST AS THEY DO IT IN EUROPE, CANADA, BRAZIL AND OTHER SOCIALIST COUNTRIES??? DOES THIS COMMENTATOR ADVOCATE IN FAVOR OF SOCIALIZED MEDICINE AND UNIVERSAL HEALTHCARE FOR ALL AT THE EXPENSE OF NEW HEALTHCARE RESEARCH & DISCOVERIES AND PRODUCT INNOVATIONS??]


The international intellectual property system is based on an ingenious 1994 international treaty: Rather than establishing an unwieldy international copyright and patent office, the agreement merely stipulates that every signatory country must have domestic copyright and patent systems that meet certain basic requirements.


[THIS COMMENTATOR IS OBVIOUSLY UNAWARE OF THE CONSTITUTIONAL OBLIGATION OF BOTH THE U.S. CONGRESS AND THE PRESIDENT TO PROTECT THE PRIVATE PROPERTY RIGHTS OF U.S. CITIZENS, WHETHER TANGIBLE OR INTANGIBLE, NO MATTER WHERE THEY ARE LOCATED. HE ALSO IS UNAWARE THAT THE WTO TRIPS AGREEMENT INCORPORATES AND FURTHER ENHANCES THE PROTECTION OF INTELLECTUAL PROPERTY (PATENTS & COPYRIGHTS) ALREADY RECOGNIZED AND PROTECTED UNDER THE TERMS OF TWO WORLD INTELLECTUAL PROPERTY ORGANIZATION (WIPO) AGREEMENTS, SO THAT SUCH PROTECTIONS ARE MORE CLOSELY ALIGNED WITH THOSE PROVIDED FOR UNDER U.S. DOMESTIC LAW. THE DECISION NOT TO ESTABLISH A SUPRANATIONAL WORLD INTERNATIONAL COPYRIGHT AND PATENT OFFICE, WHICH THIS COMMENTATOR FAVORS, WAS CERTAINLY A PRUDENT ONE, IN ORDER TO MAINTAIN U.S. SOVEREIGNTY.]


The trade agency's interpretation of what other countries' domestic laws need to cover expands beyond the broadest definitions within U.S. law. To give one example, data gathered during clinical trials of new drugs are not protected by copyright, patent or trademark in the United States. But as a rule of bureaucratic procedure, the Food and Drug Administration restricts use of test results finding that a brand-name drug is safe when considering the safety of identical generic drugs. Even though it is hard to argue that this FDA rule is an intellectual property law, the trade representative is using its authority to press for comparable rules restricting the approval process for generic drugs in other countries.


[THIS COMMENTATOR OBVIOUSLY IS UNAWARE OF THE COMMON LAW NOTION OF TRADE SECRETS WHICH CONSTITUTE A RECOGNIZED AND ENFORCEABLE PRIVATE PROPERTY RIGHT UNDER THE LAWS OF MANY U.S. STATES. THUS, THE USTR AND FDA ARE MERELY PROTECTING THESE SAME INTANGIBLE PROPERTY RIGHTS HELD BY U.S. CITIZENS FROM UNJUSTIFIED FOREIGN GOVERNMENTAL INTRUSION AND EXPLOITATION AND ‘TAKINGS’, CONSISTENT WITH THE PROVISIONS OF THE WTO TRIPS AGREEMENT, IN MUCH THE SAME WAY THAT SUCH RIGHTS WOULD BE PROTECTED AGAINST U.S. GOVERNMENTAL ACTION UNDER U.S. CIVIL AND CONSTITUTIONAL LAW. INDEED, THE FDA RULES PROSCRIBE THE TAKING OF TRADE SECRETS AND ACTUALLY IMPOSE CIVIL AND CRIMINAL PENALTIES ON GOVERNMENT EMPLOYEES FOR VIOLATING TRADE SECRETS. THUS, THE USTR AND FDA ARE NOT ACTING BEYOND THEIR LEGAL AUTHORITY BY ENSURING THAT FOREIGN GOVERNMENTS DO NOT VIOLATE U.S. CONSTITUTIONALLY PROTECTED PRIVATE PROPERTY RIGHTS.]


It doesn't take much sleuthing to follow the money back to the U.S. pharmaceutical manufacturers on the trade agency's advisory panel, who can maintain monopolist profits while a generic drug is blocked from the market in Guatemala, Malaysia or any of the dozen other countries that the trade agency is pressuring to adopt U.S.-style restrictions on generic drug approval.


[THIS COMMENTATOR IS ALSO ABLE TO TRACE NEW DRUG AND MEDICAL DEVICE DISCOVERIES AND INNOVATIONS BACK TO THE LIFE SCIENCES COMPANIES THAT INVESTED THE $$ AND EFFORT TO INVENT THEM AND SEE THAT THEY RECEIVE THE NECESSARY FEDERAL REGULATORY APPROVALS TO MAKE IT TO MARKET. PATENTS AND TRADE SECRETS ARE BY DEFINITION EXCLUSIVE PRIVATE PROPERTY RIGHTS OF TEMPORARY DURATION].


Proselytizing U.S. intellectual property law would be easier if we knew exactly what U.S. intellectual property law is, but many debates still rage in the courts and in the law journals. Is software patentable? Justice Breyer, Justice Stevens and the U.S. Patent and Trademark Office's semi-judicial board of appeals have clearly expressed that it is not. Yet the trade representative thinks it is, which is why a 2000 agreement with Jordan required that country to change its domestic laws to better accommodate the patenting of software, and its nonbinding reports find fault with countries whose patent systems do not allow software patents.


[THIS COMMENTATOR OBVIOUSLY WISHES TO PORTRAY THE U.S. AND GLOBAL INTELLECTUAL PROPERTY SYSTEM AS UNCERTAIN, UNCLEAR AND BROKEN INORDER TO RECOMMEND AN ALTERNATIVE TO THE PRESENT MARKET-BASED SYSTEM. THAT ALTERNATIVE WOULD ENTAIL CENTRALIZED GOVERNMENT SANCTIONED TOP-DOWN ESTABLISHMENT OF A HEALTH CARE MARKET SYSTEM THAT DETERMINES FOR INDUSTRY AND PATIENTS ALIKE WHAT IS NEEDED, HOW IT IS TO BE DEVELOPED, HOW IT IS TO BE ADMINISTERED AND HOW MUCH THEY SHOULD CHARGE/PAY FOR IT. THIS SOUNDS AN AWFUL LOT LIKE THE SOCIALIZED MEDICAL SYSTEMS CURRENTLY OPERATING IN EUROPE AND CANADA AND IN BRAZIL.]


The U.S. Trade Representative's treaties bind all parties to rewrite their domestic laws accordingly. That is, the agency can dictate how Congress is to write domestic law, and how federal courts interpret it, via its international treaties. We all want intellectual property law to evolve with the times, but every new treaty by the trade agency makes evolution a little more difficult.


[THIS COMMENTATOR OBVIOUSLY IS UNAWARE OF THE RELATIVE ROLES (BALANCE OF CONSTITUTIONAL POWERS AND OBLIGATIONS) BETWEEN THE LEGISLATIVE AND EXECUTIVE BRANCHES AS CONCERNS INTERNATIONAL TREATY NEGOTIATION, RATIFICATION AND ENFORCEMENT. IF THE U.S. CONSTITUTION RECOGNIZES AND PROTECTS U.S. DEVELOPED AND HELD PRIVATE INTELLECTUAL PROPERTY RIGHTS, BOTH WITHIN AND WITHOUT THE TERRITORIAL U.S., THEN EVERY NEW TREATY ENTERED INTO BY THE UNITED STATES MUST CONTINUE TO ENSURE THAT THESE CONSTITUTIONALLY PROTECTED PRIVATE PROPERTY RIGHTS ARE UPHELD ABROAD. ACTUALLY, THE INTERNATIONAL LAW OF INTELLECTUAL PROPERTY RIGHTS IS EVOLVING FOR THE BETTER UNDER SUCH PRINCIPLES, AND NOT FOR WORSE.]


HR4279, now pending in the House Judiciary Committee, would establish an Office of the U.S. Intellectual Property Enforcement Representative, spinning off intellectual property from the trade representative's portfolio into its own office, without repealing the agency's authority to negotiate other countries' intellectual property laws. The new office would have authority to define the scope of intellectual property as it sees fit, and it would have expanded ability to use the resources of other departments (the Department of Justice, the State Department, Homeland Security, state and local governments, and many others) in pressuring other countries to change their domestic laws accordingly.


[H.R. 4279, ENTITLED, THE “PRIORITIZING RESOURCES AND ORGANIZATION FOR INTELLECTUAL PROPERTY ACT OF 2007 – ‘THE PRO-IP ACT’”, IS INTENDED TO STRENGHTEN COPYRIGHT AND TRADEMARK PROTECTION AGAINST FOREIGN & DOMESTIC PIRACY. HOWEVER, IT MAY ACTUALLY GO BEYOND THE TENOR AND SCOPE OF CURRENT IP LAW TO PENALIZE NOT ONLY COMMERCIAL INFRINGERS BUT ALSO ORDINARY CONSUMERS WHO MERELY COPY ALREADY PURCHASED MUSIC CDS AND MOVIE DVDS FOR THEIR OWN PERSONAL USE, AT NO ECONOMIC LOSS TO THE COMPANIES.]


SEE, e.g.,: Paul Devinsky and Rita Siamas, “United States: House Proposes Creation Of An IP Enforcement Czar, Seeks Stronger Trademark And Copyright Enforcement”, McDermott, Will & Emery (Jan. 15, 2008) at: http://www.mondaq.com/article.asp?articleid=55962


The 1994 treaty on trade-related international property defines a simple base for copyright, patent and trademark, and it makes sense for the trade agency to hold countries to the basic framework. But our trade representative has gone well beyond that, to simply interpreting intellectual property as its corporate advisory boards wish, and then using the muscle of the U.S. government and the resources of U.S. taxpayers to press other countries into changing their laws to suit that interpretation. Congress needs to restrict the trade representative's expansive tendencies, instead of releasing what little rein is left.


[H.R. 4279 ARGUABLY REFLECTS THE CONCERNS OF THE MUSIC & ENTERTAINMENT INDUSTRY AND ITS FAILURE TO DEVELOP A NEW BUSINESS MODEL THAT CAN RESPOND AND HARNESS THE EVOLVING DOMESTIC MARKETPLACE. FOREIGN COPYRIGHT & TRADEMARK PIRACY, HOWEVER, POSES A SIGNIFICANT PROBLEM AND CERTAINLY RISKS FUTURE INDUSTRY REVENUES. BUT DOES THIS BILL PROVIDE THE BEST SOLUTION?]


Ben Klemens is a guest scholar in Economic Studies at the Brookings Institution. Brookings is a private nonprofit organization devoted to independent research and innovative policy solutions.


[WHILE AT BROOKINGS, MR. KLEMENS HAS ADVOCATED IN FAVOR OF OPEN SOURCE SOFTWARE, AMONG OTHER THINGS]


http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/17/EDR1V0LCD.DTL

This article appeared on page E - 5 of the San Francisco Chronicle

Silly Apologist-Analyst Recommends That America Give Away its Future IP-Based Economy to the World

http://www.brookings.edu/opinions/2006/0825trade_klemens.aspx


U.S. Patent Imperialism Hurts American Interests


August 25, 2006 —


The Patent Reform Act of 2006 (S.3818), introduced to the Senate floor on August 8, will entirely fail to reform patents. The bill makes important modifications to rules on filing and review of paperwork, but the Senate has chosen to overlook many serious problems with patents that cost consumers billions of dollars and embarrass the U.S. internationally.


Much of this excess cost and embarrassment comes as a result of a double standard between imports and domestic goods. All patent disputes may be tried in U.S. District Courts, but disputes over imports may also be tried at the International Trade Commission (ITC), a branch of the Department of Commerce. The ITC uses a broader definition of patent infringement than the district courts, meaning that an import may be found to infringe on a patent that it would not infringe upon if it were produced in the U.S. Such a double standard affects U.S. taxpayers and consumers, who have fewer choices and more monopolies with which to contend.


[THIS COMMENTATOR IS OBVIOUSLY REFERRING TO SECTION 337 OF THE TARIFF ACT OF 1930, WHICH PERMITS THE U.S. INTERNATIONAL TRADE COMMISSION (ITC) TO INVESTIGATE COMPLAINTS BROUGHT BY PARTIES IN ORDER TO DETERMINE WHETHER ALLEGEDLY 'PIRATED' IMPORTED ARTICLES SHOULD BE BARRED FROM ENTERING THE U.S. UNDER SECTION 337 THE ITC POSSESSES THE AUTHORITY TO EXCLUDE IMPORTS BECAUSE OF 'UNFAIR ACTS', 'UNFAIR METHODS OF COMPETITION' OR 'ACTS OF INTELLECTUAL PROPERTY INFRINGEMENT' COMMITTED IN CONNECTION WITH IMPORTATION. AS CONCERNS THE PROCEDURAL LIGITATION METHODS REFERENCED, THE COMMENTATOR IS OBVIOUSLY REFERRING TO A 1989 GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT) PANEL DECISION WHICH FOUND THAT CERTAIN ASPECTS OF SECTION 337 HAD VIOLATED THE NATIONAL TREATMENT PROVISIONS OF THE GATT INTERNATIONAL TRADE LAW. THE URUGUAY ROUND OF TRADE NEGOTIATIONS PURSUANT TO WHICH THE WORLD TRADE ORGANIZATION WAS CREATED, ADDRESSED THESE VIOLATIONS. AS A RESULT, FOLLOWING U.S. ACCESSION TO THE WTO AGREEMENTS, CONGRESS IN 1995 ENACTED IMPLEMENTING LEGISLATION TO AMEND SECTION 337, CONSISTENT WITH THE NEW WTO REQUIREMENTS].


[THIS COMMENTATOR'S ARGUMENT APPEARS TO OBJECT TO SECTION 337 AS AMENDED, MUCH AS THE EUROPEAN UNION DID DURING 2000. SEE: UNITED STATES SECTION 337 OF THE TARIFF ACT OF 1930 AND AMENDMENTS THERETO Request for Consultations by the European Communities and their member States, WT/DS186/1 IP/D/21 18 (January 2000) AT: http://trade.ec.europa.eu/doclib/docs/2004/january/tradoc_114327.pdf ].


Over the past decade, there have been abundant examples of how patent law has been stretched too far to the detriment of U.S. consumers and manufacturers. The reader may recall the problems faced by the makers of the Blackberry, who faced a lengthy patent battle in domestic courts over software on its Canadian email servers. In hearing that case, the Court of Appeals for the Federal Circuit (CAFC) declared that if "control and beneficial use" of a device is in the U.S., then it is beholden to U.S. patent law. With this simple declaration, millions of web sites all around the world suddenly had liability exposure in U.S. courts.


In another example, Creative, Inc., claims that the iPod violates its patent on organizing songs by artist, album, and genre (U.S. patent #6,928,433). Since the iPod is made abroad, Creative sued Apple in domestic courts and petitioned the ITC to block their U.S. sale. On Wednesday, with the threat of an iPod ban looming, Apple paid Creative $100 million to withdraw its complaints.


And the dueling standards collide at a cost to the government, too. For example, Amgen, Inc., has a patent on Epogen, a drug that treats anemia in patients who are on dialysis for end-stage renal disease. Thanks to its patent, Amgen is the monopolist vendor of a life-saving drug—and it sets its price accordingly. Every year, Medicare pays over $1 billion for this drug alone.


[THIS COMMENTATOR TAKES THE IDEOLOGICAL POSITION THAT ALL INTELLECTUAL PROPERTY RIGHTS, ESPECIALLY PATENTS ON HEALTH CARE PRODUCTS AND DEVICES AND INFORMATION TECHNOLOGIES, CONSTITUTE ILLEGAL MONOPOLIES. THIS POSITION IS AKIN TO THAT ADVANCED BY SOME EMERGING ECONOMIES SUCH AS BRAZIL AND BY DEVELOPING COUNTRIES SUCH AS THAILAND.]


A Swiss pharmaceutical company, Roche, has a drug that would compete head-to-head with Epogen, and thus force down Epogen's price and possibly improve patient outcomes—except the drug is produced abroad. Roche's product is likely to be found to be a valid, non-infringing competitor to Amgen's patents and products in U.S. District Courts, but will have a harder time getting past the ITC's broader definition of patent infringement. As a result, Amgen may continue to bill Medicare at the full monopoly price.


Maintaining a separate definition of patentability for imports directly violates WTO treaties mandating non-discrimination. Other court-invented innovations in patent law also create a growing rift between the U.S. and the rest of the world that will be a liability for the U.S. in negotiations over trade and tariffs.


[THE U.S. CONGRESS AMENDED SECTION 337 TO COMPLY WITH THE WTO AGREEMENTS].


All of the rulings that have shaped patent law in the last few decades have come from the CAFC, a court founded in the early 1980s to resolve patent and trade disputes. It is heavily stocked with former prominent patent attorneys, so it no surprise that the CAFC has actively expanded the powers of patents well beyond pre-1980 limits.


[THIS COMMENTATOR TAKES ISSUE WITH THE FACT THAT A UNIQUE COURT (THE FEDERAL CIRCUIT COURT OF APPEALS WAS ESTABLISHED TO IMPROVE JUDICIAL EFFICIENCY AND ADJUDICATION OF PATENT DISPUTES) POSSESSING SPECIALIZED KNOWLEDGE IN INTELLECTUAL PROPERTY. OTHER IMPORTANT PIECES OF FEDERAL LEGISLATION AFFECTING PATENT RIGHTS WAS ENACTED TO IMPROVE, AND REMARKABLY IMPROVED, U.S. GLOBAL COMPETITIVENESS - NAMELY THE BAYH-DOLE ACT. ALSO THE HATCH-WAXMAN ACT WAS ENACTED DURING SUCH TIME. IT IMPROVED CONSUMER ACCESS TO GENERIC DRUGS].


Rather than striving to maximize innovation and economic benefits, the CAFC tends to rule via tortuously close readings of statute. Its ruling that established the separate ITC standard for patent infringement is based almost entirely upon a reading of the boilerplate phrase "for purposes of this title." Its statement regarding "control and beneficial use" is nowhere to be found in statute, but did build upon a prior CAFC divination—that the Congress of 1952 intended that software would one day be patentable.


Patent law has been expanded and forcefully exported by a single court, without oversight by Congress. Internationally, the courts' favoring of domestic producers over importers, and the CAFC's self-declaration that it has jurisdiction over any Internet-enabled computer in the world, has put U.S. trade negotiators in a weaker position and will hurt Americans in the long run. Domestically, it has created the usual problems associated with unfettered monopolies: prices rise, choices diminish, and consumers suffer.


Congress needs to take real action to explicitly establish a single standard for patent infringement regardless of the manufacturer's address, and to restore the scope of patents to where it was before the CAFC's unilateral expansions. The Patent Reform Act of 2006 is not enough.

EU Supports Flexible Compulsory Licenses for Healthcare, But None for Entertainment or Information Technologies; Is This a TRIPS Double Standard?

http://www.ip-watch.org/weblog/index.php?p=907


EU Threatens Taiwan With WTO Case Over Law On Compulsory Licences


31 January 2008


By David Cronin


Intellectual Property WatchBRUSSELS -


The European Union has demanded that Taiwan change its intellectual property law within two months following a probe into how the East Asian island overruled patents on recordable CDs (CD-Rs).


Philips, the Dutch electronics giant which holds patents for the core technologies used in CD-Rs, filed a complaint with the EU in early 2007 over the activities of a Taiwan-based company Gigastorage.


Since the 1990s, Philips had given licences to use technology for which it held patent rights to several companies in Taiwan. These firms went on to supply about 80 percent of the global market in CD-Rs by the early part of this decade.


While Gigastorage was one of the firms with which Philips had a licence agreement, this accord was scrapped in 2001. Gigastorage subsequently asked the Taiwanese national authorities to enable it to continue making the discs by issuing a compulsory licence. Its request was granted in 2004.


After investigating Philips’ complaint, the EU’s executive, the European Commission, warned on 30 January that it could start dispute proceedings against Taiwan in the World Trade Organization unless its patent law is swiftly amended.


http://ec.europa.eu/trade/issues/respectrules/tbr/pr300108_en.htm



The Commission has objected to a provision in the Taiwanese law allowing national authorities to grant a compulsory licence if a rights-holder has refused a voluntary one.


...According to the EU Commission the provision of the [Taiwanese] Patent Act dealing with compulsory licences was inconsistent with Article 28 of the TRIPs Agreement, because it allows the grant of the such licences where there is no more than a refusal to deal on the part of the patent owner. Further, the Commission services concluded that the interpretation of various procedural requirements relating to the grant of compulsory licences in the decisions of the authorities of Chinese Taipei were inconsistent with Article 31 of the TRIPs Agreement. The Commission services also found that Chinese Taipei had failed to respect the obligation to ensure that the compulsory licences were not used to produce for export, and that in fact they had been predominantly used to produce for export."


[THE EUROPEAN COMMISSION'S OBJECTION TO COMPULSORY LICENSES FOR WHAT ESSENTIALLY AMOUNTS TO A 'FAILURE TO WORK'/ REFUSAL TO DEAL' IS QUITE HUMOROUS GIVEN THAT EUROPE HAS TAKEN THIS POSITION WITH RESPECT TO U.S. PHARMACEUTICAL AND SOFTWARE PRODUCTS SOLD IN EUROPE, AND BRAZIL & THAILAND HAVE DONE THE SAME THING AS TAIWAN WITH RESPECT TO U.S. HIV/AIDS DRUG PATENTS].


...“The EU fully supports the use of compulsory licensing in specific circumstances, in particular to facilitate access to medicines,” said Peter Mandelson, the European commissioner for trade.


“However, we cannot accept the abuse of this system. I hope that the Taiwanese authorities will move quickly to bring their law and practice into line with WTO rules. I cannot rule out seeking WTO dispute settlement if they do not.”


The Commission said that it is challenging Taiwan’s patent law as part of its overall efforts to remove barriers to trade encountered by European firms doing business abroad. In a 2006 strategy paper titled Global Europe, the Commission argued that the protection of European patent rights outside the EU’s borders is essential to guarantee the competitiveness of European industry.


A report prepared by EU officials who examined the Philips’ complaint concludes that “circumstantial evidence” has been found to suggest the Taiwanese authorities are willing to use compulsory licensing as an industrial policy instrument, rather than as a limited exception to patent rights.


[THIS PRACTICE IS OTHERWISE REFERRED TO AS 'IP OPPORTUNISM']


It suggests that a compulsory licence was issued in this case to pressurise Philips into lowering the royalty rates it charged to all CD-R manufacturers in Taiwan. None of the other CD-R manufacturers in Taiwan opposed the advantages given to Gigastorage, it noted.


According to the Commission, the case sets a “terribly dangerous precedent of an industrial policy built on violation of the TRIPS agreement.”


A Taiwanese diplomat familiar with the case said that producers on the island had encountered a “dramatic change” because the international price of CD-Rs has fallen considerably in recent years. Although the Taiwanese authorities had asked Philips to reassess the royalty rates it was charging to reflect this situation, the Dutch firm declined to do so, the diplomat said.


[THIS SOUNDS AWFULLY SIMILAR TO THE BRAZILIAN GOVERNMENT'S ARGUMENT THAT BRAZIL HAS ENCOUNTERED A 'DRAMATIC CHANGE' BECAUSE THE INTERNATIONAL PRICE OF ITS NATIONAL 'UNIVERSAL ACCESS TO HEALTHCARE' PROGRAM HAVE INCREASED CONSIDERABLY IN RECENT YEARS.]


“It might seem odd that the Commission wants us to change the law within two months,” the diplomat continued. “Maybe it just wants to send out a signal not just to Taiwan but to others that it will vigorously safeguard Europe’s intellectual property concerns.”


Despite the Commission’s warning, a preliminary settlement was reached between Philips and Gigastorage in October 2007. The settlement followed a ruling in Philips’ favour, delivered by the US International Trade Commission earlier in the year. The Commission said its aim is a change to Taiwanese law.


http://www.usitc.gov/secretary/fed_reg_notices/337/337-TA-474.Notice.1170697224.pdf


The amount of compensation being paid as a result of the settlement has not been disclosed.


[THE PRIOR SITUATION DESCRIBING THE EUROPEAN UNION'S GROWING DISPUTE WITH TAIWAN OVER THE LATTER'S ISSUANCE OF A COMPULSORY LICENSE AGAINST EUROPEAN COMPANY (PHILIPS) INFORMATION / ENTERTAINMENT TECHNOLOGIES FOR THE PURPOSE OF SECURING A BETTER PRICE MUST BE READ IN LIGHT OF TAIWAN'S PREVIOUS ISSUANCE IN 2005 OF A COMPULSORY LICENSE FOR EUROPEAN COMPANY (ROCHE) MEDICINES:


'Taiwan’s Adventures With Tamiflu’


“In November 2005, Taiwan's government issued a license to allow local companies to manufacture generic versions of Tamiflu -- the only drug in the world considered effective in combatting the effects of bird flu. To date, Taiwan has recorded no cases of bird flu, but according to health authorities, it lies squarely in the path of migrating birds from China...At the time, Taiwan's health authorities stated very clearly that the purpose of the compulsory license was only to stockpile enough Tamiflu to protect against an outbreak of bird flu. But...Taiwan[] [subsequently]...amend[ed] [its] patent laws to allow the export of its generics to other nations.¨


...‘The new provision will relax regulations on drug exportation, so that upon the request of poorer countries, local drug companies may manufacture and export drugs to those countries without the consent of the patent holders...As such, these medicines would be available at a much cheaper price than their authorized versions...


This amendment seems custom-designed to allow companies which are making generic Tamiflu for Taiwan's DOH under compulsory license conditions to make extra money from their participation in the project. And it seems to contradict the DOH's earlier statement made when it was enacting compulsory licensing conditions in November 2005, when it said that any Taiwan-made generic Tamiflu was strictly for local use only and would not be exported to any other country’... [W]hatever gains Taiwan generates with developing nations, it will lose with the developed world...” (Andrew Leonard - Salon 2006)


¨The following compulsory licensing conditions were agreed upon between Taiwan’s DOH and the patent-holder, during negotiations:

§“Taiwan must use Tamiflu supplied by Roche before resorting to using any supply produced under the compulsory license”;

§“The compulsory license could be cancelled if TDOH obtained a voluntary license from Roche during the compulsory period”;

§“The products produced under the compulsory license would be limited to domestic prevention”;

§“Taiwan’s Dept. of Health would provide adequate remuneration to Roche” (Finnegan, Henderson, Farabow, Garrett & Dunner, LLP)

Activist NGOs Call For Developing Country IP & Economic Welfare (More 'Balance' Needed In IP and Trade); Not For R&D and Business Skills Training

http://www.ip-watch.org/weblog/index.php?p=898


Intellectual Property Watch


29 January 2008


NGO Panel: More Balance Needed In IP And Trade; Disclosure May Not Be Enough


By Catherine Saez


A more balanced international regime for intellectual property rights and trade is needed to rectify the current system, which too strongly favours developed countries, developing country panellists said at a recent event.


But some say that a proposed requirement to disclose the origin of genetic material and associated traditional knowledge in patent applications would not be sufficient to improve this balance.


The current patent system has been seen as the primary enabling mechanism for biopiracy, the misappropriation of genetic resources, said panellist Xuan Li, coordinator of the innovation and access to knowledge programme at the intergovernmental South Centre. The World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) also has allowed the misappropriation of genetic resources, she said.


[THIS IS PATENTLY UNTRUE AND SMACKS OF SOCIALIST PUBLIC GOODS IDEOLOGY TO DISGUISE PATENT PIRACY PREDILECTIONS]


Li made the remarks at a 24 January event organised by the South Centre and the Center for International Environmental Law (CIEL), held alongside a weeklong meeting of the UN Convention on Biological Diversity (CBD) working group on access and benefit sharing (ABS).


A Chinese official on the panel also raised these concerns and said that TRIPS is sometimes unbalanced and privileges the holder of IP.


[THE CHINESE ARE DISINGENUOUS, CONSIDERING THEY WISH TO DEVELOP THEIR OWN TEMPORARY INTELLECTUAL PROPERTY MONOPOLIES]**

A more balanced system should be devised in the future that would be more favourable to developing countries, the official said, adding that an amendment to TRIPS Article 29 on a mandatory disclosure requirement (see South Centre paper [pdf]) is proposed by developing countries including China, in order to bring the agreement more in line with CBD principles, like benefit sharing.


[CHINA TENDS TO PLAY BOTH SIDES OF THE FENCE]**


The protection of biodiversity and the rights of indigenous peoples are being analysed at several international fora. Approaches to the disclosure of origin issue have been raised at the WTO, the World Intellectual Property Organization (WIPO), and the CBD.


As the CBD is a prior treaty to TRIPS, under the Vienna Convention, TRIPS needs to be compatible with the CBD mandate, said panellist Dalindyebo Shabalala, director of the IP and sustainable development project at CIEL.


[THIS ALSO IS UNTRUE - THE LATEST TREATY IN TIME ON THE SAME OR SIMILAR SUBJECT MATTER USUALLY SPEAKS TO THE MORE MODERN INTERPRETATION OF TERMS AND REFLECTS THE MORE MODERN THINKING OF TREATY PARTIES - ESPECIALLY IF THE MORE RECENT TREATY TERMS IN QUESTION ARE MORE SPECIFIC THAN THOSE OF THE EARLIER TREATY ON THE SAME OR SIMILAR SUBJECT - THUS, THE TRIPS RULES ARGUABLY SUPERCEDE THE MORE GENERAL CBD RULES]


The ABS working group was established by the CBD Conference of the Parties at its fifth meeting in May 2000, with a mandate to develop guidelines and other approaches to assist parties and stakeholders with the implementation of the access and benefit-sharing provisions of the convention.


Another mandate was given to the working group in 2004 to elaborate and negotiate an international regime on access to genetic resources and benefit sharing with the aim of adopting an instrument to effectively implement provisions in Articles 8 and 15 and the three objectives of the convention. These include conservation of biological diversity, sustainable use of its components, and fair and equitable sharing of the benefits arising out of the utilisation of genetic resources.


In the second mandate of the ABS working group, WIPO was asked to play a significant role in CBD deliberations. Some industrialised countries have sought to have WIPO play the role of the major provider of technical expertise on IP-related issues such as the protection of traditional knowledge and disclosure of origin, according to Shabalala.


However, the processes at WIPO do not fully reflect the human rights dimension of the protection of indigenous/traditional knowledge associated with genetic resources, as the delegates and the secretariat have a lack of experience on human rights and environmental issues, he said. According to Shabalala, other United Nations agencies also have competence in understanding IP issues, such as the World Health Organization or the United Nations Conference on Trade and Development.


Concerning a certificate of origin for resources, Pierluigi Bozzi of the Economics Department at the University of Rome put into perspective the importance of knowing the precise origin of genetic resources in the context of the CBD. “The unlawful removal of a resource becomes visible only after the event and in times and places far from the original context,” he said.


[THIS IS TYPICAL EUROPEAN POSITION FAVORING 'GEOGRAPHIC INDICATORS' AND RULE OF ORIGIN AS A MEANS OF DISGUISED TRADE PROTECTIONISM]**


The real asset of the ascertainment of the place of the origin of genetic resources would be to bring management and control of a biological element back to its own ecosystem, allowing the country to bear the responsibility for the knowledge and the management of that specific biological component. This would also allow the benefits and incentives to be spread across the entire value chain, not only to the end of it, according to Bozzi. The fair and equitable sharing of the benefits is a “prerequisite” to realise the two first objectives of the CBD (conservation and sustainable use of biodiversity), he said.


[THIS IS A PRESCRIPTION FOR STATE-CENTRALIZED OWNERSHIP OF THE COMMONS - RES COMMUNIS - AND THUS A MANDATE FOR WELFARE STATE SOCIALISM]


The indigenous perspective on disclosure seems somewhat different, according to Le’a Malia Kanehe, legal analyst at the Indigenous Peoples Council on Biocolonialism. She said that several problems had been identified with disclosure, such as trans-boundary people or biopiracy having taken place prior to the CBD. The latter case would mean that genetic resources would be ex-situ, outside of indigenous control. But the main concern of the indigenous peoples, according to Kanehe, is to find out if disclosure really addresses the rights and interests of indigenous peoples, particularly in the case where national law does not recognise indigenous peoples’ rights.


[NOW, THIS IS A LEGITIMATE CONCERN]


An ongoing international project to develop prior art databases of traditional knowledge for patent examiners also is potential dangerous as they might become a “shopping list” of traditional knowledge over which indigenous people could lose both ownership and control (IPW, Biodiversity/Genetic Resources/Biotechnology, 19 December 2007; IPW, Subscribers, 17 December 2007). An international patent system might not be consistent with local customary laws, she said. Indigenous people should have the choice whether or not to commercialise their knowledge. “We don’t want to be third-party beneficiaries,” she said.


[THIS ARTICLE'S PORTRAYAL OF THE CURRENT PRIVATE PROPERTY-BASED GLOBAL IP STANDARDS AS UNFAIR TO DEVELOPING COUNTRIES IS NOT ONLY WRONG, BUT ALSO REFLECTS AN IDEOLOGY PREDISPOSED AGAINST PRIVATE PROPERTY IN FAVOR OF 'PUBLIC GOODS'.

THIS IS ESPECIALLY TRUE CONSIDERING THAT ALL WHICH IS NECESSARY TO PROECT THE RIGHTS OF INDIGENOUS AND OTHER DEVELOPING COUNTRY CITIZENS WHO ARE 'INVENTORS' AND PROPERTY HOLDERS IS A NATIONAL 'RULE OF LAW' FRAMEWORK THAT RECOGNIZES AND PROTECTS EXCLUSIVE PRIVATE PROPERTY RIGHTS IN PATENTED DISCOVERIES AND DERIVATIVE INNOVATIONS.

WHAT IS CRUCIAL AND IMPORTANT IS THAT THE DISCOVERIES CAN BE REDUCED TO THE UNIVERSAL STANDARD FOR PATENTABILITY: NOVEL, USEFUL & UNOBVIOUS. TO SUGGEST THAT ANY EFFORT TO REDUCE TRADITIONAL KNOWLEDGE TO SUCH A STANDARD WOULD, IPSO FACTO, SHORTCHANGE INDIGENOUS PEOPLES IS CLEARLY INACCURATE AND FALSE.

THE COMMONS IS OWNED BY NO ONE, NOT EVEN THE STATE, THOUGH THE STATE CAN ACT AS 'TRUSTEE' FOR ITS CITIZENS IN PRESERVING AND PROTECTING THE PUBLIC GOOD DERIVED FROM THE USE OR NONUSE OF THE COMMONS. WHILE THE STATE MAY FAIRLY CHARGE AN ACCESS FEE TO 'TAKE' FROM THE COMMONS, IT SHOULD NOT BE ENTITLED TO ANYTHING MORE THAN AN ADMINISTRATIVE FEE. IT SHOULD NOT BE ENTITLED TO DERIVE A ROYALTY STREAM FROM THE HUMANLY MANIPULATED PRODUCTS DERIVED FROM NATURE, UNLESS THE STATE HAS BEEN INVOLVED, SCIENTIFICALLY AND/OR ECONOMICALLY IN SOME OF THE HUMAN MANIPULATION OF THE NATURE THAT RESULTS IN MARKET-RELEVANT INNOVATIONS .

ONLY TO THE EXTENT THAT FLORA EXTRACTED FROM THE 'COMMONS' (NATURE), PRESUMABLY WITH STATE OR INDIGENOUS PEOPLE CONSENT, CAN BE PROVEN TO HAVE BEEN SUFFICIENTLY MANIPULATED BY HUMANS IN SUCH AS WAY AS TO MAKE IT NOVEL, USEFUL AND UNOBVIOUS, CAN THE RESULTING DISCOVERY/INNOVATION BE PATENTED AND LATER COMMERCIALIZED FOR PROFIT AS PRIVATE PROPERTY.

CONSIDERING ITS MANY INACCURATE STATEMENTS, THE ADVICE GIVEN IN THIS ARTICLE BY THE AUTHOR, IF FOLLOWED, WILL ACTUALLY DEPRIVE DEVELOPING COUNTRY CITIZENS OF THE OPPORTUNITY TO INNOVATE THEMSELVES. BY FOCUSING ON ALLEGED 'BIOPIRACY' RATHER THAN HELPING DEVELOPING COUNTRY INVENTORS TO BECOME SKILLED IN RESEARCH & DEVELOPMENT AND ENTREPRENEURSHIP ACTUALLY FOSTERS GREATER STATE WELFARE AT THE EXPENSE OF INDIVIDUAL WELFARE WHICH IS NOT ENHANCED AS A RESULT.

LASTLY, THIS ARTICLE SEEMS TO PROMOTE A 'NEGATIVE PARADIGM' OF SUSTAINABLE DEVELOPMENT INSOFAR AS IT ADVOCATES IN FAVOR OF STATE-CENTRED OR EVEN SUPRANATIONAL UN-CENTERED GOVERNANCE THAT DIMINISHES INDIVIDUAL GROWTH AND OPPORTUNITY FOR THE SAKE OF THE 'PUBLIC GOOD'. HENCE, UNDER THE PROPOSED SYSTEM INDIVIDUALS WILL NEVER BE ABLE TO REALIZE THEIR HUMAN POTENTIALS.]

EU Commission 'Openly' Promotes Utopian 'Open' Public Innovation Standards That Disadvantage Small & Medium-sized Enterprises (SMEs)

http://www.ip-watch.org/weblog/index.php?p=894


25 January 2008


Standardisation Policy More Effective Than Legislation On IP?


Posted by William New


By Monika Ermert for Intellectual Property Watch





Efforts by European Union authorities to take advantage of standardisation as a de facto regulatory tool have not been sufficiently systematic in recent years, according to a study published by the European Commission last week. Yet standards especially in information and communications technology (ICT) are becoming more important, said Patrick Van Eecke, attorney at the Brussels office of DLA Piper UK and co-author of the study.



The study http://ec.europa.eu/enterprise/ict/policy/standards/piper/executive_summary.pdf
recommended a dialogue between standardisation organisations and all stakeholders. Also urgently needed is a balance between technical standards and intellectual property rights, according to the study.




Concerns that overly rigid IPR protection might become a problem for invention and innovation recently also resulted in other recommendations and decisions at the EU level. A call for changes in the EU patent system was made in a study commissioned by the European Parliament’s Scientific and Technological Options Assessment (STOA) unit and an inquiry into possible anticompetitive practices by the pharmaceutical industry that was initiated by European Commissioner for Competition Neelie Kroes.




[THE EU COMMISSIONERS' DECISION TO LAUNCH SUCH INQUIRIES IS BASED ON IDEOLOGY - DISREPECT FOR EXCLUSIVE NEGATIVE PRIVATE PROPERTY RIGHTS IN AMERICA , WHICH DO NOT EXIST IN EUROPE]**




A debate on future EU standardisation policy will take place at a conference organised by the European Commission on 12 February in Brussels.



Author Van Eecke, speaking with Intellectual Property Watch, pointed to the growing relevance of technical standards that “are more important than legislation.” Companies and citizens either abide by laws passed by governments or not, but to not follow well-established technical standards would mean to be excluded from the market.




[THIS IDEA OF 'TAKING OVER' GLOBAL INDUSTRY STANDARDS HAS BEEN AN ASPIRATION OF THE EU'S SINCE THE LISBON AGENDA MADE ITS DEBUT DURING 2000. ]**


“If you are a policymaker, you really would like to make sure that companies and citizens abide by the rules, so instead of drafting a law you could put them into a standard,” he said.


Using privacy as an example, he said, “You can draft one hundred laws that should protect it - and hope that people follow the law. But if you are able to have EU data protection implemented in the technical standards, it might be much more effective.” Van Eecke said that legislators who try to rule via standards would end up drawing the conclusion from American cyberlaw luminary Lawrence Lessig’s theory that code is the (new) law and shifts legislators’ attention to standardisation.




[IN OTHER WORDS, COUNSEL IS FISHING FOR NEW CLIENTS THAT FAVOR AN 'OPEN SOURCE' TO KNOWLEDGE (A2K) PARADIGM THAT PAYS LESS THAN EVEN CONCESSION RATE PRICES. TOO BAD HIS CLIENTS WOULD STILL NEED TO PAY HIS BILL EVEN THOUGH THEIR 'OPEN SOURCE' PRODUCTS BRING IN LITTLE PROFIT, IF ANY!!!]


“Yet what you see is that more and more standards are not drafted by organisations that take orders from the EU Commission or governments.” The European Union has tried to build strong EU standardisation bodies by institutionalising the European Committee for Standardisation (CEN), the European Committee for Electrotechnical Standardisation (CENELEC) and the European Telecommunications Standardisation Institute (ETSI). Yet instead, more and more standards have been crafted by private standardisation bodies like the Internet Engineering Task Force, (IETF), World Wide Web Consortium (W3C) or industry consortia like the Organisation for the Advancement of Structured Information Standards (OASIS).










A big step forward, said Van Eecke, would be if the study resulted in a dialogue between organisations and stakeholders in a high-level forum that would decide on what to put into the standards.



Instead of reinventing the wheel and pushing for standards by “official” EU standardisation bodies, EU regulators should join the private standardisation bodies where necessary and try to have the regulators’ policy perspectives reflected in their work, Van Eecke said.



For example, instead of leaving discussions on standards at the IETF to US authorities alone, the European Union should participate and promote its ideas there, too. To have European political standards implemented in technical standards would also mean to possibly give them a global reach. Opening up EU standardisation bodies to more stakeholders also should be considered, Van Eecke said.


[THE EU COMMISSION HAS ALREADY EXPORTED ITS POLITICAL STANDARDS WITHIN OSTENSIBLY PRIVATE INDUSTRY FORESTRY CERTIFICATION & LABELING STANDARDS TO GAIN A COMPETITIVE ADVANTAGE AGAINST FOREIGN WOOD PRODUCT EXPORTS -- SEE: Discerning the Forest From the Trees: How Governments Use Ostensibly Private and Voluntary Standards to Avoid WTO Culpability, at: http://www.itssd.org/GTCJ_03-offprints%20KOGAN%20-%20Discerning%20the%20Forest%20from%20the%20Trees.pdf ] ***



The degree to which it is necessary to have a balance of interests and highly knowledgeable experts representing the public sector in standardisation issues is exemplified by the separate, ongoing fight over US software maker Microsoft’s attempt to get its electronic document format standardised by the International Organisation for Standardisation (ISO).


Other measures recommended by the study point to possible access problems. To get access to official standards is costly and a barrier especially for small and medium-sized enterprises.


Therefore, a new EU standardisation policy should, the study argued, include “a coherent and harmonised (free) availability policy for standards/specifications established by all standards/specification producing organisations within the European standardisation system” and “a thorough study on the relationship between the intellectual property rights and ICT standards to be initiated by the European Commission, the purpose of which should be to launch a global discussion with other global regions.”



The balance between the much wanted law-like standards and IPR is difficult, noted the study, because “the underlying philosophies of standardisation and IPR-protection are seen as opposite. Whereas standardisation intends to put ideas into the public domain, protection of IPR makes them private property.”


[EUREKA!!]


Furthermore, the legal framework of standardisation is blurred, while recognition of private rights over private creations is clear and patent ambushes (patent claims made late in the development of a standardisation process) are prevailing in court cases.



The European Commission so far has tried to alleviate the problem by passing so-called FRAND rules that try to ensure “fair, reasonable and non-discriminatory” licensing when it comes to standards. A new ETSI IPR policy adopted in 2006 addressed the problem of IPR owners not agreeing to licences, yet the problem still is not really resolved, according to the study.



Van Eecke said the one big success story in mandated EU standardisation on ICTs is the mobile wireless standard, GSM. But he said, “A lot of money has been wasted for licences, even if it has worked out in the end.”



Motorola is said to have had the largest share of GSM relevant patents, with 3,831 mobile patents between 1976 and 2004 (of a total of 10,224 mobile telecommunication patents). While Motorola in the end did not fare as well in the GSM arena as its big rivals which traded their own thousands of patents against the US company, smaller companies did not succeed in entering the mobile phone market, according to experts.


EU initiatives on patent system and open access


The difficulty patents and copyright protection can bring for the competition and the public welfare is highlighted by the investigation of the pharmaceutical sector just announced by the EU Competition Directorate, a strong call for reform of the EU patent system by STOA and the recent announcement of the European Research Council for Open Access to results from public research.


[THIS NEGATIVE ASSESSMENT OF THE UTILITY OF PATENTS AND OF THE RELIANCE OF THE PATENT SYSTEM ON THE RECOGNITION OF EXCLUSIVE PRIVATE PROPERTY RIGHTS IS IDEOLOGICALLY BASED]**


The pharmaceutical sector inquiry, according to the Commission, was started because “there are indications of commercial practices by pharmaceutical suppliers including notably patenting or the exercise of patents which may not serve to protect innovation but to block innovative and/or generic competition, litigation, which may be vexatious, and agreements, which may be collusive.”

[DITTO]**


In order to check on possible market distortions, the EU competition authority would “use its powers of investigation in particular with respect to pharmaceutical suppliers of innovative and generic medicines for human consumption, consumer and professional organisations in health care, as well as authorities granting patents and marketing authorisations for drugs,” the Commission said.


[THE EUROPEAN COMMISSION, IN OTHER WORDS, WILL EXERCISE ITS VAST UNCHECKED POWER TO LAUNCH 'WITCH-HUNTS' AGAINST COMPANIES IN ORDER TO LOCATE & IDENTIFY AN EVIL 'MONOPOLY MARKET FAILURE', DEFINED AS INCLUDING INDIGENOUS INNOVATIONS OWNED BY COMPANIES THAT, DUE TO THE FORCES OF (WHAT SCHUMPETER REFERS TO AS) 'CREATIVE DESTRUCTION', FIND THEMSELVES AS THE ONLY ONES IN THEIR MARKETS OFFERING SUCH TECHNOLOGIES AND/OR PRODUCTS]**


Increasing access to patented inventions in every field was requested by the STOA report on the EU patent system. Authors there recommend “to explore and support more flexible, non-exclusive exercises of patent rights, such as licence of right, patent pools and clearinghouses” that would give access to licensing also to small and medium-sized enterprises not involved in the patent race and therefore not able to bargain with patents of their own.


[THE EUROPEAN COMMISSION APPEALS HERE TO POPULIST SENSIBILITIES IN THEIR ZEST TO GARNER SUPPORT FROM THE SMALL & MEDIUM-SIZED COMPANIES - HOWEVER, IN ACTUALITY, IT IS THE VERY SAME 'SMEs', WHICH BEING PREVENTED FROM EXERCISING EXCLUSIVE PRIVATE PROPERTY RIGHTS IN THEIR INVENTIONS & INNOVATIONS, CANNOT EXPLOIT PATENTS IN THE EUROPEAN MARKETPLACE]**


The STOA report also holds that defensive publication should become an alternative practice. Instead of patenting their inventions - an effort too costly, for example, for small companies or university research - they should be able to publish their inventions in “publicly-available” databases.


[THIS WILL ONLY FURTHER DISADVANTAGE EUROPEAN SMEs, AS THEIR INNOVATIONS WILL BE LOOKED UPON OPENLY BY MULTINATIONAL CORPORATE AND DEVELOPING COUNTRY PILFERERS!!]


Access to scientific research funded by the European Research Council should be made accessible over appropriate research repositories and made open access within six months of publication, the ERC suggested. The council that has been working on public access issues for some time now wrote that it considers “essential that primary data - which in the life sciences for example could comprise data such as nucleotide/protein sequences, macromolecular atomic coordinates and “anonymized” epidemiological data - are deposited to the relevant databases as soon as possible, preferably immediately after publication and in any case not later than six months after the date of publication.”

KEI Anti-Patent Activist Praises Thailand For Planning to Issue 4 Cancer Drug Compulsory Licenses

http://www.bangkokpost.com/News/25Jan2008_news15.php


[Thai] Government approves four cancer drugs: Compulsory licensing a must, says Mongkol


January 25, 2008


Bangkok Post


APIRADEE TREERUTKUARKUL


The outgoing military-appointed government will go ahead with the implementation of compulsory licensing (CL) for four cancer drugs, Public Health Minister Mongkol Na Songkhla said yesterday. The minister did not disclose the names of the drugs listed for compulsory licensing, simply saying the decision had been made on Jan 4 following a proposal submitted by the sub-panel chaired by Government Pharmaceutical Organisation (GPO) board chairman Vichai Chokewiwat.


The Vichai [VICHY] panel has advised the public health minister to issue compulsory licences for the breast cancer drug Letrozole and the leukaemia drug Imatinib, both produced by Novartis, the breast and lung cancer drug Docetaxel, produced by Sanofi-Aventis, and lung cancer drug Erlotinib, made by Roche.


The objective is to seek cheaper generic forms of the drugs for treating patients under the universal healthcare scheme, thereby saving the government huge sums of money.


Dr Mongkol said he had thoroughly considered the pros and cons of applying CL to such cancer drugs.


''We would not do it if it's not necessary. But we don't have time for more negotiation. We did the best we can,'' he said, adding that health officials had met patent owners for at least 13 rounds of negotiations over prices without making any significant progress.


The minister said he was certain that generic versions of cancer drugs would be of high quality and that patients under the universal healthcare scheme would receive the best benefits from the state policy on CL.


Letters stating the necessity to bypass patents of cancer drugs would be sent to all sectors involved _ the GPO, the Department of Intellectual Property and pharmaceutical companies owning the patents to the drugs by next week as he would soon finish his term, he said.


''I have faced pressure from several sides by making such a decision, but I am happy that poor patients will not go bankrupt due to the cost of cancer treatment,'' he said.


Cancer ranks as the number one cause of death in Thailand. The male population suffers mostly from lung cancer, whereas breast cancer is the major cause of death among women.


Meanwhile, pharmaceutical giant Sanofi-Aventis has threatened legal action against an India-based generic drug maker chosen to supply Thailand with a generic version of the heart drug Plavix.


Withit Artavatkun, managing director of the GPO board, said the threat was the latest in a series of attempts by the patent owner of Plavix to interrupt the country's CL policy.


Plavix, a blood thinner, is used to treat coronary artery, peripheral vascular and cerebrovascular diseases.


''Sanofi-Aventis' threat will not affect the procurement agreement as the first batch of two million heart drug tablets will be arriving by next week,'' said Dr Withit.


The India-based Zydus Cadila firm was chosen ahead of the other potential supplier Emcure Pharmaceuticals, also based in India, because Emcure had not yet provided bioequivalent documents essential for a registration grant from the Food and Drug Administration.


However, Dr Withit believed a threat from the patent owner was one of the main reasons that delayed Emcure's decision to supply a copycat version of the heart drug to Thailand.


The company last year also sent a letter to Emcure, claiming that selling generic versions of the medicine to Thailand was illegal as the country had not made public its decision to override the patent.


However, the GPO managing director said the ministry had officially declared its policy on the compulsory licensing of Plavix for over a year.

Former ITSSD Intern Reveals How American & European Activists and Politicians Attack U.S. Intellectual Property Rights

The New War on Drugs:
Activists and Politicians Attack Intellectual Property Rights

Capital Research Center - Organizational Trends

January 2008

http://www.capitalresearch.org/pubs/pdf/v1199294989.pdf

America’s pharmaceutical industry is the envy of the world and the savior of millions of sick people. But activist groups, many of them founded by Ralph Nader and funded by liberal foundations, are campaigning to limit the industry’s incentives to produce new life-saving drugs. Their strategy focuses on undermining the intellectual property rights that protect pharmaceutical innovation.

By Karl Crow


Karl Crow is a 3rd Year student at Temple University's Beasley School of Law. In 2007 he was an intern at the Institute for Trade, Standards, and Sustainable Development (ITSSD) in
Princeton, New Jersey.

Open Source for Cost Effective Drug Discovery

Dr. Samir K
Brahmachari,

the new Director-General of the CSIR is all set to unleash the open source revolution in drug discovery and biotechnology. The Economic Times Reports: “For the first time ever, India plans to launch an innovate drug discovery programme roping in global IT firms, researchers, companies, and young minds at scientific laboratories to invent drugs at a fraction of the cost of an MNC-developed drug. Drug discovery has hitherto been the forte of MNC pharma giants.The government has begun discussions with Sun Microsystems to set up web-management tools for an ‘open source’ drug discovery project, which works similar to a popular online encyclopaedia formed by articles contributed and edited by the brightest minds worldwide.

The first project would be to develop medicines for tuberculosis and later extend to other diseases like malaria and AIDS.Under the proposed project, researchers attached to institutions like the Royal Society of UK, Imperial College of London, Medicine Sans Frontiers and various Indian universities will have an opportunity to work on a drug discovery process even at an individual level. What’s more, the contribution would also fetch reward and recognition. Corporates like the Kinetic Group, entities like the Welcome Trust and various corporate groups would sponsor these rewards.

The project is likely to be implemented either by the Council of Scientific and Industrial Research (CSIR) itself or the Institute of Genomics and Integrative Biology.‘We have already built a database of the requirements for developing drugs for infectious diseases. This would be hosted online, where individual experts could contribute in solving specific aspects of the drug discovery. Specific contracts will then be assigned to individual contract manufacturers and clinical research organisations,’ the project’s architect and CSIR’s new director general Samir K Brahmachari told ET.

‘The chemical entities thus developed will instantly become generics as the knowledge will be in public domain. This is diametrically opposite to the concept of intellectual property protection, which involves legal expenses to bar others from applying their minds on the invention,’ Mr Brahmachari said. Mr Brahmachari also heads the department of industrial research. ‘When a thousand young students contribute in solving a complex puzzle, we are empowering them to be the knowledge leaders of tomorrow.

For researchers at state-owned laboratories, it offers an exiting challenge of social importance,’ he added. It is likely that generics makers, like Ranbaxy and Cipla, could be more interested, than MNCs, as it would be volume-based. MNCs are more keen on low-volume high-value brands.If successful, the project would also challenge MNC drug makers claims that they invest billions of dollars in risky experiments hoping to develop one useful drug.

The project will get one-third funding from the government, one-third from international sources and the rest from philanthropic entities.” Sounds like a fantastic idea! Dr. Brahmachari’s open source strategy appears not only to challenge the notion that patents are necessary for innovation, but also the notion that investment for mass production needs monopoly incentives through patents. Look out for Spicy IP’s interview with Dr. Brahmachari in the coming week!

Most Indian drug majors too in line for patent protection

14 Dec, 2007, 0046 hrs IST,Khomba Singh, TNN




NEW DELHI:

It’s not just global drug discovery majors that are seeking patent protection. Out of the 8,000 drug patent applications in India filed between 1995 and 2004, about 40% are from Indian pharma companies.

Domestic majors such as Ranbaxy Laboratories, Dr Reddy’s Laboratories and Cipla have filed over 100 patent applications each. Between 1995 and 2004, the Indian patent office received over 8,000 patent applications related to medicine.

Ranbaxy Laboratories, India’s largest drug maker, has claimed protection for 112 drugs during the period, including few which are at various stages of clinical development. In addition, Ranbaxy has also filed 30 patents in 2006, including seven for new drug delivery systems (NDDS), which are in advanced stages of development.

Similarly, other pharma majors such as Cipla and Dr Reddy’s Laboratories have each sought protection for over 100 drugs, says Dr Amit Sengupta who reviewed the mailbox applications in India in collaboration with the health ministry. However, many of these applications, both from global MNCs and Indian companies, are frivolous which may not qualify as a candidate for a patent.

According to Professor Carlos M Correa, a former member of the World Health Organisation (WHO) Commission on Intellectual Property, Innovation and Public Health (CIPIH), many of the patent applications worldwide are merely ‘new laboratory techniques’ and therefore would not qualify for patents. “The pipeline of discovery drugs are drying up. While there are around a million applications in the US, only 20 new chemical entity (NCE) got US Food and Drug Administration’s approval in 2005 compared to 51 in 1997,“ he said.

[THIS IS NOT BRAIN SCIENCE - WHEN FACED WITH IDEOLOGUES LIKE DR. CORREA WHO DISPISE PRIVATE PROPERTY RIGHTS, ESPECIALLY IPRs, PROMOTE CONVERSION OF PRIVATE PROPERTY INTO PUBLIC COMMUNAL PROPERTY AND SEEK TO JUSTIFY DEVELOPING COUNTRY GOVERNMENT EXPROPRIATION OF PATENTS WITHOUT PAYMENT OF FAIR & ADEQUATE COMPENSATION, PROFIT-SEEKING LIFE SCIENCES COMPANIES IN THE PHARMACEUTICAL & BIOTECHNOLOGY SECTORS WILL SLOW DOWN THEIR DEVELOPMENT OF PATENTABLE MEDICINES.]**

Companies are now merely tinkering with the existing drug and seeking patent applications for the same. Only 2-3 application from each of the Indian companies are serious contenders for a patent, Dr Sengupta added. However, some innovator companies feel that there are many innovations which deserve patent protection. “Innovations are either patentable or non-patentable. Patent offices are getting mature to weed out those inventions which do not merit a patent and one should look at the actual data of patents rejected before a claim like this is made, “ Novartis India vice-chairman and MD Ranjit Shahani said.

Since India became trade-related aspects of intellectual property rights (TRIPS)-compliant in 2005, both global and Indian companies have rushed to claimed protection for new drugs or innovations. If drugs get patented, the innovator company will get exclusive marketing right for 20 years. Few global companies have already got patent for drugs in cancer, anti-Aids and other therapeutic areas.

Foolish Academics Prescribe Wrong Antidote for Developing Country Diseases: Fewer Patents & More Compulsory Licenses Will Cause More Harm Than Good

Fewer Patents, More Compulsory Licenses: The Knock-Off Effects of India's Strict Patent Act and Thailand's Compulsory Licenses

By Professor Brook K. Baker

Health GAP

December 11, 2007

Activists have long claimed that access to medicines campaigns set precedents that have a snowball effect. What we are now seeing, given India's victory against Novartis in the drug company's challenge to section 3d of the India Patent Act and given Thailand's highly publicized campaign to issue compulsory licenses on both AIDS and heart disease medicines, is a new wave of patent withdrawals and a growing wave of compulsory licenses.

[CORRECTION, PROF. BAKER: WHAT WE ARE NOW SEEING IS A LYNCH-MOB APPROACH TO PUBLIC ADVOCACY BASED ON FEARS AND MISREPRESENTATIONS RATHER THAN FACTS. ACTIVISTS WILL CAUSE MUCH GREATER HARM THAN GOOD TO DEVELOPING COUNTRY EFFORTS TO IMPROVE PUBLIC HEALTHCARE]***

This reciprocal wave action creates a wider opening for continuing access to newer and lower costs medicines. But the promise of this opening will only be realized if more countries amend their patent acts to take advantage of the TRIPS-compliant, definitional flexibilities that India has enacted and if more countries use the TRIPS-compliant flexibilities for issuing compulsory licenses for generic medicines that Thailand has used.

[ACTUALLY, MORE AND MORE PHARMACEUTICAL AND BIOTECH COMPANIES WILL WITHDRAW PATENT APPLICATIONS IN SUCH DEVELOPING/EMERGING COUNTRIES BECAUSE OF THEIR CONCERN THAT THEIR MEDICAL INNOVATIONS WILL BE EXPROPRIATED BY GOVERNMENTS WITHOUT PAYMENT OF FAIR & ADEQUATE COMPENSATION - HENCE, THEY WILL NO LONGER MAKE AVAILABLE THE MUCH NEEDED MEDICINES DEVELOPED AND COMMERCIALIZED OUTSIDE SUCH COUNTRIES BASED ON RECOGNIZED AND LEGALLY PROTECTED PATENTS. IDEOLOGUES LIKE PROF. BAKER, NEVERTHELESS CONTINUE TO INSIST THAT PRIVATE IP SHOULD BE CONVERTED INTO PUBLIC PROPERTY.] ****

Patent victories

In the summer of 2006, following massive August 7 protests in Bangalore and Bangkok, GlaxoSmithKline withdrew its patent application for lamivudine/zidovudine (Combivir or Combid), an important first-line combination antiretroviral, both in India and, perhaps even more significantly, in Thailand. The withdrawal in India was clearly obligatory under India's new Patent Act 2005, which has strict standards preventing patenting of mere combinations of existing medicines, and was relatively straightforward, even under Thailand's easier, more "Westernized" patenting standards. Combivir was a simple fixed-dose combination of two earlier discovered drugs and involved neither newness nor an inventive step. The principal new "ingredient" in the combination was silicone - a trivial addition graphically represented by Indian demonstrators when they dumped sand in front of the Glaxo office. The anti-Combid victory in Thailand was reminiscent of an earlier activist victory in 2004 where a robust civil society movement forced Bristol Myers Squibb to abandon its patent on ddi. Although Glaxo saw the writing on the wall, Novartis did not and tried to mount a TRIPS and constitutional challenge to section 3d of the Indian Act.

Once again protestors mounted an international campaign, and good lawyering by the Lawyers Collective and others resulted in a resounding defeat for Novartis in the Chennai High Court, in August, when all of Novartis's efforts to undermine India's strict standards for patentability were defeated.

At the time, activists claimed that the Novartis case had critical implications for access to medicines, certainly for AIDS drugs, but for other medicines as well. There were thousands of patent applications waiting in the India 1995-2005 patent "mailbox," the vast majority of which involved minor tweaks on pre-1995 medicines. If Novartis had won, many of those patent applications would have been pursued and many might have succeeded. However, with Novartis's defeat, the pharmaceutical industry began to strategically review its mailbox filings, and its new filings as well, to weed out the clearly unmeritorious applications.

The most recent example is further withdrawals by GlaxoSmithKline of two ARV patent applications, on Abacavir and Trizivir (GSK drops claims on two AIDS medicines, The Economic Times, 7 Dec 2007). Sources report that Glaxo's decision to withdraw those applications was in response to Novartis's loss and was undertaken to avoid a patent-defeat precedent that might have undermined its attempts to pursue patent claims in countries with weaker patent standards.

The growing evidence of India's success in stopping the flow of patent applications on trivial variations of existing products should lend courage to activists and patent reformers in other countries. India has clearly set a new and defensible standard for patenting only truly innovative pharmaceutical products. The Philippines parliament is already considering a statutory amendment in line with section 3d of the Indian Act, but the momentum should not stop there. Other countries can lighten the load on their under-resourced patent offices and ensure high standards of patentability for medicines by taking the route forged by India.

The Indian success has also been reinforced by the availability of pre-grant opposition procedures, which allow consumer groups, generic companies, and IP specialists to intervene and challenge weak patent applications. There are already fifteen pre-grant oppositions in India concerning AIDS medicines and the number is likely to grow as public interest groups begin to appreciate the importance of stopping 90-95% of the patent applications on pharmaceutical patents that can be rejected under the Indian standard even though they sail through the U.S. patent office.

[UTOPIAN ACADEMICS SUCH AS PROF. BAKER CONVENIENTLY OMITS THE INTENTION OF ACTIVISTS, NAMELY, TO ESTABLISH MEDICINES AND MEDICAL TECHNOLOGIES AS 'PUBLIC GOODS' THAT MAY BE EXPROPRIATED BY GOVERNMENTS]***

Compulsory licensing victories

Activists in Thailand have waged a near decade-long campaign to convince the Thai government to issue compulsory licenses on AIDS medicines.

Although the first effort in 1999 concerning ddi was unsuccessful because of fears of U.S. trade retaliation, activists persisted and new leadership in the Thai Health Department issued compulsory licenses on efavirenz, lopinavir/ritonavir, and clopidrogel in late 2006 and early 2007. Of course, Thailand was not the first developing country to issue compulsory licenses on AIDS medicines. Malaysia and Indonesia had done so earlier for first-line regimens, and over half a dozen countries had done so in Africa as well. However, in terms of middle-income countries with large populations living with HIV/AIDS, Thailand was the first to issue licenses on higher-cost, second-line medicines. Brazil had threatened such licenses, but in the end had improvidently settled for price concessions instead.

The impact of Thailand's leadership is immediately apparent. Shortly after Thailand's bold move, Brazil issued a compulsory license on efavirenz on May 4. Indonesia did so even earlier, in March of 2007, though, unlike Brazil, its license drew little attention from Big Pharma, the USTR, or the army of right-wing think tanks that have mounted a global disinformation campaign about the legality and propriety of compulsory licenses.

Emboldened by Thailand, Indonesia is considering additional licenses on tenofovir, videx, and lopinavir/ritonavir. The proactive Ministry of Health in Thailand is also continuing to weigh additional government use C.L.s on four cancer medicines and up to 20 additional products for treating hypertension, diabetes, and hyperlipideamia. Lawyers in South Africa have petitioned the Competition Commission to obtain additional licenses on efavirenz, both to promote competition but also to allow co-formulation of fixed-dose combinations.

Most of the licenses thus far have been issued for government use. This form of licensing has certain advantages because it is widely practiced in rich countries, including the U.S., because it obviates the need for prior negotiations with the drug company, and because it reserves the private sector to the patent holder's monopoly control, undermining claims that all profits are foregone and that research and development will be undermined.

However, there are also some drawbacks to government use licenses, especially when one considers how much pressure has been brought to bear on Thailand even though it carved out a private-sector monopoly reserve for Big Pharma. The first drawback, not so apparent in Thailand as perhaps in other countries, is that many poor people cannot access medicines in public sector pharmacies, which often experience stock-outs or otherwise fail to carry essential medicines. These patients must therefore rely on private sector pharmacies where monopoly pricing prevails. Thus, in countries where high disease burdens persist and where major portions of the population are de facto dependent on private-sector pharmacies, government use licenses may be an imperfect solution to access on the ground. The second drawback is that having two pricing regimes in the same country, high private-sector prices and low public-sector prices, encourages "arbitrage," or more accurately theft and resale of public sector medicines to private sector consumers. Third, avoiding negotiations may be overrated since governments can set short time limits for such negotiations and insist on strict pro-access terms whether by regulation or negotiation demands.

The impact of Thailand's compulsory licensing victories will be lessened if other developing countries do not follow suit. In fact, a better scenario will arise when developing countries cooperate more vigorously in the selection and timing of compulsory licenses. Generic producers are most likely to invest the $1-$1.5 million dollars needed to formulate a generic equivalent if they can see a sizeable market in developing countries that aggregate their collective demand. In addition, with larger, more secure, and more predictable markets, more producers will enter the market and more producers will manufacture at efficient economies of scale. The combination of competition and efficiency will result in lower prices and more secure and redundant sources of supply.

The strongest way for countries to cooperate may well be through creation of patent pools that allow the collective management of both compulsory and voluntary licenses (negotiations on both in- and out-licenses).

Alternatively, developing countries could form regional "buying groups" and/or work intensively with the Clinton Foundation (at least for ARVs).

However, in order to be able to take advantage of their South-South strength, countries will need to be more proactive both in amending their patent legislation to allow maximum use of TRIPS-compliant flexibilities and in utilizing those flexibilities to actually issue compulsory licenses.

The current, countervailing strategy of Big Pharma, besides USTR intimidation and even product withdrawals, seems to be the use of strategic price discounts and restrictive licensing. Although these concessions look tempting in the short-run - since they reduce the treat of trade sanction and product embargoes - they are futile in the long run since they are Pharma controlled and because they deter generic entry. An even greater danger is presented by so-called free trade agreements where the United States attempts to impose TRIPS-plus intellectual property protections that hamper countries ability to ensure access to medicines for all.

Conclusion

The space that has been created by activist-backed defense of India's strict patent standards and by activist-prompted issuance of multiple compulsory licenses in Thailand is one of the most promising outcomes of AIDS advocacy in 2007. Hard fought precedents have been won, but enemies in Big Pharma and in the U.S. government are hard at work plotting a reversal of fortune. It is only by building on these recent victories - by rejecting more patents, by issuing more compulsory licenses, and by opposing TRIPS-plus IPR provisions - that activists and pro-access forces in developing countries can create a momentum that cannot be stopped.

Standing still is not an option.

Professor Brook K. Baker, Health GAP
Northeastern U. School of Law
Program on Human Rights and the Global Economy