(2000; 140 pages) [French] [Spanish]
The basic premises of this work are that, within the limits imposed by international obligations, notably the TRIPs Agreement1 of the World Trade Organization, developing country patent laws should be: a) designed to serve the interests of all groups in the society, and b) responsive to health policy objectives and, in particular, to the needs of the poor.
1 For a general analysis of the TRIPs Agreement and of the timing for its implementation under the specified transitional periods, see UNCTAD, 1996; Correa and Yusuf, 1998; Velasquez and Boulet, 1999; Correa, 2000.
There is broad recognition of the role that patents and IPRs can play in stimulating health-related research and development (R&D), particularly in the more advanced countries. Patents are considered particularly important given the high costs and risks of R&D and the fact that this R&D may lead to inventions of potential use to all countries2. There is also recognition that the level of protection conferred on inventions may influence foreign investment, technology transfer and research (especially joint research programs and research to address local needs)3. Patents work by providing government-sanctioned, limited-term monopolies as an incentive and reward for useful inventions.
2 On the little attention paid, however, in pharmaceutical R&D to the specific needs of developing countries, see e.g., Beaglehole and Bonita, 1997, p. 220; Sachs, 1999; Chowdhury, 1995.
3 The theoretical work and empirical evidence on such influence are, however, controversial and unconclusive. See, e.g., United Nations, 1993; Maskus, 1998.
But there are price and competition costs to IPRs. In the health sector, where denial of affordable access to treatment or pharmaceuticals can have life-or-death consequences, the conditions, including price, that determine access to medicines are critical matters, especially for the low-income segments of the population. While recognizing that IPRs are not the only relevant factor, it seems clear that the way in which IPRs are established and enforced may have a significant impact on access to medicines; any IPR system must therefore strike a balance between creating incentives for innovation and consumers’ interest in the availability and access to the protected goods.
The TRIPs Agreement has introduced a new and important international framework for IPRs - which in turn has important implications for the health sector4. The TRIPs Agreement sets out detailed obligations in respect of the protection of inventions5, including:
• to recognize patents for inventions in all fields of technology, with limited exceptions;
• not to discriminate with respect to the availability or enjoyment of patent rights;
• to grant patent rights for at least twenty years from the date of application;
• to limit the scope of exceptions to patent rights and to grant compulsory licenses only under certain conditions;
• to effectively enforce patent rights.
4 See, e.g., Bale, 1991; Velasquez and Boulet, 1999.
5 See, e.g., Sandri, 1996; Correa and Yusuf, 1998.
The TRIPs Agreement, however, does not establish a uniform international law nor even uniform legal requirements. WTO member countries are obliged to comply with the minimum standards of the TRIPs Agreement. But they also have considerable room to develop their own patent and other intellectual property laws in response to the characteristics of their legal systems and developmental needs. In implementing the TRIPs provisions, WTO Member countries may legitimately adopt regulations that ensure a balance between the minimum standards of IPR protection and the public good. Moreover, they can adopt measures which are conducive to social and economic welfare (Article 7 of the TRIPs Agreement), such as those necessary to protect public health, nutrition and the public interest in sectors of vital importance for their socio-economic and technological development. Countries can also adopt measures to prevent the abuse of intellectual property rights (Article 8.1 and 8.2 of the TRIPs Agreement).
It should be borne in mind that in the case of the countries that are bound to introduce patent protection for pharmaceuticals as a result of the TRIPs Agreement, patents will only be available for products for which a patent application was filed after 1 January, 1995. This means that other products (including those already applied for or patented in other countries, or commercialized before that date) will remain in the public domain, unless the national law admits (as in the case of Brazil) the retroactive protection of the so-called “pipeline” products.
Given diverse national objectives, it is not surprising that different countries’ patent systems diverge, in some cases significantly. There is no single “patent system”. Moreover, the solutions adopted in particular countries have changed over time6. In the future, they may evolve further in order to better respond to equity considerations7 and to the nature of innovation in “cumulative systems technologies” 8.
6 Thus, many developed countries applied in early phases of their development legal solutions (such as the non-patentability of pharmaceutical products) more recently adopted by developing countries. For an analysis of the evolution of the patent system, see, e.g., Penrose, 1974; Bercovitz, 1990; Goldstein, 1993.
7 See, e.g., Thurow, 1997; Sachs, 1999.
8 See, e.g., Merges and Nelson, 1996.
Countries treat specific patent issues - including eligibility requirements, scope of protection, exceptions to exclusive rights and compulsory licenses - in quite different ways. In developing their own IPR rules, policy and law makers in developing countries must recognize that, even within the general framework of international treaties, there is considerable room for devising and implementing their own solutions on particular matters. Countries will be most successful in meeting their own needs if they are able to draw on the varied experience of national systems worldwide, which means that a good knowledge of comparative law is valuable9.
9 See, e.g., Oddi, 1996.
Some countries - particularly developed countries - have opted for legal systems that confer strong patents rights. They have done so in order to protect revenue streams from their already established technological base and to promote investment in technological innovation. There is considerable debate in such countries, however, on the level and scope of protection which are optimal to foster innovation without unduly restricting the free circulation of ideas and stifling competition10. A growing concern is voiced in some countries11 on the shortcomings of the examination process and the proliferation of low quality patents (see Section IV). Moreover, the economics of patent law is still an uncertain area, for which a robust theoretical framework and empirical evidence are lacking.
10 See, e.g., Scherer, 1981; Merges and Nelson, 1996; Thurow, 1997.
11 See, e.g., Gleick (2000), who argues that “the patent system is in crisis... The (US) patent office has grown entangled in philosophical confusion of its own making; it has become a ferocious generator of litigation; and many technologists believe that it has begun to choke the very innovation it was meant to nourish”, p. 44.
Less technologically advanced countries may logically prefer to promote the transfer of technologies needed for development, and to preserve and enhance competition in order to secure access to goods, services and technologies on the most favourable market terms. Even in the countries which advocate and practice the strongest protection for IPRs, national laws provide for checks and balances to protect against the possible abuse of the powers conferred by intellectual property protection (the provision for compulsory licenses is one such example)12.
12 See, e.g., Gutterman, 1997; Anderson and Gallini (Ed.), 1998.
In designing a national patent system, policy makers should consider cross-cutting issues, such as the protection of the environment13 and public health, the promotion of competition14 and technology transfer15, the protection of consumers and the support of small local inventors, while respecting inventors’ rights to obtain a reward for contributions made to technical progress.
13 See, e.g., the proposals for amendment of the TRIPs Agreement by the government of India, submitted to the WTO Committee on Trade and the Environment (WTO/CTE/1, 12 November, 1996).
14 See, e.g., Reichman, 1994 and 1997.
15 See, e.g., Correa, 1999c.
In addition, careful consideration should be given to other regulatory measures affecting public health, such as those relating to the approval and registration of medicines, in order to develop a consistent legal framework that enhances access to required medicines.
The protection of public health is one of the most pressing issues in developing countries. A large part of the world population still lacks access to essential drugs; in the poorest parts of Africa, for instance, over 50 per cent of the population lack that access16. An estimated 1.5 billion people are not expected to survive to the age of 60, and more than 880 million people lack access to health care17. Of the more than 33 million HIV-positive people in the world, 95 per cent live in developing countries, and most of them cannot afford the necessary drugs18. To deal with this dramatic situation, an integrated approach to the deeply interrelated issues of national health policy, pharmaceutical policy and patent policy is required. None of these policies can be framed or implemented in isolation.
16 See, e.g., WHO, 1998. It should be noted that the great majority of “essential drugs” as identified, for instance, by WHO, are “off-patent” and the access thereto will not be affected by the implementation of new patent policies. The discussion in this paper refers only to drugs which are or may be protected in the future by patents or other IPRs.
17 See, e.g., UNDP, 1999.
18 See, e.g., UNAIDS, 1998.