on Intellectual Property Rights Report on Integrating Intellectual
Property Rights & Development Policy - Comments from GlaxoSmithKline
(GSK) welcomes the opportunity to comment on the Report of the Commission
on Intellectual Property Rights. We have focussed our comments on
those sections of the Report most relevant to our own activities.
property is critical to GSK and to patients throughout the world.
The fundamental framework on which medical advances depend, and which
has led to sustained investment in research and development, requires
intellectual property. Patents stimulate and underpin the search for
new and better medicines, including those for diseases prevalent in
the developing world.
of intellectual property is recognised by Kofi Annan, who has said
that "intellectual property is key to bringing forward new medicines,
vaccines and diagnostics urgently needed for the health of the world's
poorest people". It was recognised in the Doha Declaration, which
addressed the healthcare needs of the developing world and stated
"intellectual property protection is important for the development
of new medicines
.". It was recognised by the UK Government's
High Level Working Group on Access to Essential Medicines in the Developing
World, which brought together a wide range of stakeholders and commented
"It is clear that to increase R&D expenditure on neglected
diseases will require a continued commitment for protection of intellectual
". Finally, in the Pharmaceutical Industry Competitiveness
Task Force Report of 2001, the UK Government and the UK pharmaceutical
industry agreed that "effective intellectual property rights
for pharmaceuticals are an essential precondition for sustained investment
in the R&D of new medicines".
have been appropriate attempts in recent years to ensure that the
international IP framework balances the needs of all stakeholders,
including the developing world, for example through the helpful clarification
of TRIPS flexibilities in the Doha Declaration. We hoped the work
of the Commission would further reinforce that process. However, we
believe the opportunity has been missed.
concerned about the Commission's perspective. Unfortunately, recognition
of the role of intellectual property in improving healthcare, and
by implication in supporting development, does not appear to be shared
by the Commission on Intellectual Property Rights. The authors appear
to have started from the unproven assumption that intellectual property
has a detrimental impact on developing countries, rather than adopting
a more neutral starting point. Indeed, it is perhaps significant that
the Commission was asked "to consider whether and how IPRs could
play a role in helping the world meet these [development] targets."
concerned about the Commission's methodology. The Commission admits
"we have also been struck by the inconclusive and contested nature
of much of the economic research devoted to elucidating the impact
of IPRs, even in relation to the developed world. There is much that
is uncertain and given the nature of the subject, may remain so
and notes "the paucity of studies that directly address these
issues of critical importance to policymakers in developing countries,
let alone reach definitive conclusions on the impact of IPRs."
this lack of economic data, and the contradictory nature of much of
the existing evidence, the Commission initiated little new research.
Its analytical approach is therefore open to the following criticism:
`it fails to address relevant facts. For example, it glosses over
the Attaran Study and his strong evidence and conclusion that IP is,
at most, a minimal cause of the existing crisis in access to medicines
· it applies inconsistent standards to the weight it gives
to evidence. For example, it dismisses evidence regarding the positive
effects of increased IP on economic growth (page 22) and research
activity (page 33) as failing to show a relationship of cause and
effect. Elsewhere, however, it accepts evidence which is equally open
to criticism - for example, see the whole section on History (pages
18-20), the econometric evidence on the effect of patents on prices
of medicines (pages 36-38) and the Commission recognition elsewhere
(page 21) that econometric evidence is often contested precisely because
it does not show cause and effect.
· it treats simple assertions as evidence of a problem, without
discussing the accuracy of these assertions. A good example of this
comes at page 116 where it is stated that "some would argue that
this standard [of inventiveness] as it is now applied, for example
by the USPTO or EPO, is too low resulting in a proliferation of patents
for trivial inventions".
concerned that the Commission draws generalised conclusions. While
professing to recognise a distinction between "developing countries"
on page 2, nearly all subsequent references to "developing countries"
(including recommendations) group them all together. No attempt is
made to recommend adoption of strong IP standards in any developing
countries. At most, the Commission says things such as countries "may"
want to adopt standards higher than it generally recommends. We question
the assumption that all developing countries have the same needs and
that the so-called "South" will never have any ideas worth
protecting and will rely on theft of others' IP for their development.
that the Commission has failed to place IP in a proper context. IP
is a policy tool. Its purposes include the promotion of innovation
and technology transfer, each of which is supportive of, not inimical
to, development. However, IP is only one such tool. The Report fails
even to consider what other tools could or should be used to promote
development and how IP integrates with these tools. It also fails
to assess the relative impact of IP on development in comparison to
other factors such as local political will, education standards or
international trading rules. Dealing with IP in total isolation gives
a wholly disproportionate impression of its impact. This flaw in the
Commission's approach unfortunately pervades the whole Report and,
in our view, weakens many of its conclusions .
result of the concerns outlined above, we believe that the Report
presents an unbalanced and inaccurate analysis of the impact of IPR
on developing countries. Some key conclusions reached by the Commission
are at best highly questionable. These include:
that IP is of little relevance in promoting trade, technology transfer
· that IP is "of at best secondary importance in generating
incentives" for development of drugs for developing world diseases.
In fact, IP is a necessary (but not sufficient) incentive for such
development. As stated above, this has been publicly acknowledged
by a number of respected and impartial commentators.
· that IP is, or is likely to become, a barrier to access to
two conclusions have the effect of undermining the very rationale
for IP protection in the developing world. The latter gives the impression
that IP is harmful to the developing world. They are illustrative
of the tone of the whole Report. Although many recommendations when
seen in isolation are apparently unobjectionable, when taken in the
context of the Report as a whole, they suggest that developing countries
would be well advised to adopt the lowest standards of IP in order
to promote development.
stated above, we believe the Commission initiative represented an
important opportunity, one that we believe has been missed. Unfortunately,
the Report is being seen around the world as endorsed by the UK Government.
We hope that the Government, and all other stakeholders, will recognise
the need to pick a sensible path between those recommendations that
will support development and those that will actually be detrimental
1: Intellectual Property and Development
- IPRs as a Stimulus to Innovation
Commission Report - "Further innovation based on the protected
technology may be stifled because, for instance, the length of the
patent term is too long or the scope of the protection granted is
too broad." (page 14)
cites no coherent evidence to the effect that this is in fact a problem.
In the gene and research tool patenting field, GSK is only aware of
anecdotal reports to support this claim, and we are certainly not
aware of any evidence in support of the assertion beyond this field.
In Europe, patent law actually provides for an "experimental
use" exception from infringement that allows defined research
activities on patented subject matter to be undertaken by academic
and commercial institutions without infringement. Such research may
itself lead to an invention, which may be an improvement of, or a
new use for, the patented subject matter, for which third parties
are free to obtain their own patent protection. Patents of this kind
are commonly referred to as "dependent patents". They can
be commercially exploited using the mechanism set out in Article 31(l)
argues that "several lessons can be learned from history".
It is implied that one such lesson would be that as weak IP at certain
stages has encouraged development for (now developed), countries,
it follows that developing countries today should be encouraged to
adopt similarly weak IP laws until they reach a certain (undefined)
level of development.
assuming that the data are correct, they show nothing more than an
association, in certain circumstances, between "weak" levels
of IP and technological and economic growth. They fail to demonstrate
a causative link between the two, still less the extent of any causative
link. Nor is there any analysis of whether or not stronger IP would
actually have increased the speed of development.
also fails to address certain facts which suggest the importance of
IP protection in development. These include the following:
Pharmaceutical industry investment in Mexico and Brazil increased
significantly after each country strengthened their IPR in the 1990s;
for example, investment in Brazil totalled $2b between 1996 and 2000,
resulting in jobs, tax revenue, exports and GDP growth
· The fact (acknowledged by the Report) that Canada used compulsory
licensing extensively in the pharmaceutical field between 1969 and
the late 1980s but then decided to tighten its IP laws in 1980s and
to introduce tax breaks (also acknowledged by the Report, page 37).
It would appear that widespread use of compulsory licensing undermined
Canada's R&D base to such an extent that the Government felt the
need to take dramatic action to re-build its science base starting
with the re-introduction of tougher IPR.
· Lack of patent protection for pharmaceutical products is
associated with a "brain drain" from India. India's own
trade association OPPI estimated that more than 15% of scientists
working for US pharmaceutical companies in the US are of Indian origin.
This "brain drain" in itself impacts development. The remaining
chemical engineers in the pharmaceutical industry in India have, at
least until recently, spent their time on reverse engineering to circumvent
existing "process" patents (i.e. re-inventing the wheel)
rather than on innovation. Similarly, in the 1960s, only 16% of Korean
scientists and engineers with doctorates from the US returned to Korea.
In contrast to India, in the 1980's, when Korea's patent laws were
strengthened, some 60% returned.
· India has introduced fairly high standards of IP protection
outside the pharmaceutical industry. As the Commission notes, some
28 companies set up R&D centres in India between 1997 and 1999.
Moreover, since the introduction of "black box" protection
in India, many Indian companies have devoted more resources to pharmaceutical
innovation, and at least one Western pharma company has set up a research
· GSK maintains both a research and a manufacturing presence
in China, which provides "product" patent protection. It
does not have such a presence in India, where patent protection for
pharmaceuticals is not available.
that none of the evidence referred to above of itself proves a significant
causal link between strong IP protection and development. However,
each fact shows as much of a positive association between strengthened
IP and development as the evidence cited by the Commission purports
to show a negative association.
About the Impact of IP
drawn by the Commission from studies of academic papers (page 24)
are inconclusive - they show some positive and some negative effects
of IP. Even if these conclusions are justified by those studies, this
simply proves that IP alone will not have a significant impact on
development. It is one of a number of factors. However, there is no
attempt to put the impact of IP into context in the development debate.
Report - "The determinants of effective technology transfer are
many and various. The ability of countries to absorb knowledge from
elsewhere and then make use and adapt it for their own purposes is
also of crucial importance. This is a characteristic that depends
on the development of local capacity through education, through R&D
and the development of appropriate institutions without which even
technology transfer on the most advantageous terms is unlikely to
This aspect of the process of the technology
transfer is largely in the hands of developing countries themselves."
with the assessment that a number of factors contribute toward a conducive
environment for technology transfer. Central to these for the pharmaceutical
industry are appropriate economic, scientific and market conditions.
However, strong IPR is also an important factor, at least for the
innovative pharmaceutical industry. The existence and enforcement
of an IPR system in a recipient country is generally a prerequisite
for any out-licensing / joint venturing decisions, and industry's
confidence in that system is a key element. As mentioned above, history
demonstrates that where IPR is strong and a market exists, investment
is far more likely to follow.
difficult to see how the recently expressed concerns of many African
countries to have local manufacturing capabilities for pharmaceuticals
can be addressed if they do not adopt appropriate standards of IP.
Chapter 2: Health
products, and R&D or donation programmes, in six of the WHO's
priority disease areas, as well as in HIV/AIDS. We are currently the
only international pharmaceutical company engaged in research and
development for new interventions to prevent and treat the World Health
Organisation's top three priority diseases - HIV/AIDS, malaria and
TB. We have a research centre at Tres Cantos in Spain, dedicated to
diseases of the developing world. GSK has also been offering substantial
discounts on vaccines to governments, charities and agencies for public
health programmes for over 20 years, and offering preferential prices
to governments of developing countries for our HIV/AIDS anti-retroviral
treatments since 1997.
Report - "We believe that presence or absence of IP protection
in developing countries is of at best secondary importance in generating
incentives for research directed to diseases prevalent in developing
countries." (page 33)
R&D of medicines and vaccines for diseases of the developing world
requires intellectual property protection and a viable market - IP
is a necessary, but not sufficient incentive. While it is true that
R&D is incentivised by the existence of a market and without such
a market costly and risky R&D is unlikely to happen, that is no
reason to dismiss the role of IP. The Commission fails to take the
next step in its reasoning and ask what role IP plays as an incentive
for R&D if there is a market. The answer is that IP is a necessary
incentive, as it allows the innovator to exploit the market and to
obtain a return on investment. Without IP, the innovator will be subject
to generic competition from early in the product's life thus, in essence,
depriving the innovator of the market.
believe IP should not be dismissed as "of at best secondary importance".
Indeed, it is interesting to note that elsewhere the Chair of the
Commission seems to acknowledge this. In the unpublished paper cited
at footnote 20 to Chapter 6 he says:
that, without some form of monopoly or oligopoly rent, there will
be no way to support research and development - proprietary position
IP, the private sector (the sector that undertakes the vast majority
of the risk and cost of drug development) is unlikely to undertake
development of drugs relevant primarily to the developing world. Because
the Commission fails to recognise this, it is able to argue that weak
IP will not have a significant negative impact on the developing world.
same token, the Commission fails to ask what happens to R&D if
there is no IPR protection in the first place. If IPR were so unimportant
to the generation of new ideas, then one would expect numerous examples
of healthy research-based economies absent of IPR. None of these exist,
at least in the modern world. Indeed, as our comments on Chapter 1
show, there is evidence that introduction of IP in at least some developing
countries is associated with increased local R&D and retention
of local research personnel. Further, India's history demonstrates
how a weak IP system can at best lead to waste of R&D effort on
re-engineering and at worst, a brain drain of talent to IP protected
Report - "Because the IP system does little to stimulate research
on diseases that particularly affect poor people, public funding for
research on health problems in developing countries should be increased.
funding for research on health problems in developing countries should
be increased. This additional funding should seek to exploit and develop
existing capacity in developing countries for this kind of research
and promote new capacity, both in the public and private sectors."
that the traditional "for profit" pharmaceutical model that
is successful for the discovery and development of medicines for the
developed world is not appropriate for R&D into diseases which
are prevalent only in the developing world. Developing a drug or vaccine
is costly, risky and time-consuming. Only private industry has ever
put up the money and the time to do it. It is a fact that business
has to make a return on investment. For medicines or vaccines used
primarily in the developing world, the lack of a market means it is
difficult, probably impossible, for a company to recover its costs.
The return on investment is too low to justify an adequate allocation
of resources. The only hope for a developing world disease product
is for there to be a significant first world market, but realistically
this is rare..
sector model has different, but still strong, limitations. Developing
new drugs or adapting existing drugs to meet developing world needs
requires development expertise, clinical trial expertise and regulatory
expertise. These come from years of experience. The R&D-based
pharmaceutical industry possesses these skills. Others do not. Discovery
is a strength in academia, but development and manufacturing capabilities
are lacking. So is the necessary understanding of what the regulatory
authorities require to approve a drug. And it simply is not possible
for them to acquire these skills quickly or cheaply, even if they
were motivated to do so.
need to look at the third way - a partnership model for developing
world disease R & D. Put simply, companies provide the technology
that they have invested in for decades, as well as their development
and distribution expertise, to the partnership. And the public sector
partners help fund the development costs while also helping to ensure
that the medicines and vaccines developed get to the people that need
them. This has the double benefit of encouraging R&D and accelerating
the product's uptake in the developing world.
are to be made in the area, then stakeholders need to work collaboratively,
respecting each other's expertise, rather than trying to compete.
that public money should be directed towards the public sector may
well help to stimulate research in the short term. However, it may
not prove viable in the longer term and, more importantly, may not
generate the much-needed therapies in the most efficient way possible.
the private sector, which has the expertise in drug development, is
expected to act as simply a contracted research organisation (which
is most unlikely from a commercial perspective given the opportunity
costs this would involve), it will need other guarantees of return
for its efforts. Patent rights (or some other form of exclusivity)
are likely to be required, again demonstrating the importance of patents
as an incentive.
Report - "Given that in developing countries most people are
poor and that patent protection can increase prices, it is necessary
to examine with particular care the arguments put forward by some
that patents in developing countries are not likely significantly
to affect access to pharmaceuticals subject to patent protection."
the statement above, the Commission seems to have failed to examine
the arguments with particular care or to look at the empirical evidence
about the existing access crisis. A number of relevant, undisputed
facts have seemingly been ignored by the Commission.
Over 95% of drugs on the WHO Essential Medicines List (EML) are not
patent protected and yet the WHO says that 30% of people in developing
countries do not have access to these drugs. We conclude from this
that patents cannot therefore be a barrier to access to these drugs.
However the Commission states "it does not follow that the patent
system has no adverse effects. Even if patents do not exist for particular
products and countries, the patent system may still have an effect
on access to medicines. Most low income developing countries have
to rely on imports for their supplies. The existence of patents in
potential supplier countries may allow the patentee to prevent supplies
being exported to another country, particularly through controls on
distribution channels." [emphasis added]. This fails to address
the facts, as there are no patents in key supplier countries for these
· In India, which has very limited intellectual property protection
for pharmaceuticals and the most well-developed generics industry
in the developing world, there are 4m HIV positive people who do not
have access to ARV drugs despite several Indian companies manufacturing
several of the ARVs. The proportion of HIV patients receiving anti-retroviral
medicines is no greater than in, for example, Africa where patents
are alleged to be a barrier. Patents cannot be a barrier to access
in India. These data are not mentioned by the Commission.
· Attaran's evidence of patenting of HIV drugs in Africa is
mentioned by the Commission. Attaran concludes that patents "generally
do not appear to be a substantial barrier to
Africa today". However, the Commission does not address this
evidence nor the conclusion reached by Attaran. It merely expresses
surprise that the patenting level described by Attaran is as high
as it is.
· Millions of people have been dying from malaria and TB in
the developing world for many years, certainly long before most relevant
countries (including some in the EU) granted patent protection for
pharmaceutical products. Patents therefore cannot have been a barrier
to access under these circumstances
· The Commission refers to the falling prices of HIV drugs
in the last 2 years, implying incorrectly that this was solely due
to generic competition, but fails to mention that the consumption
of allegedly cheaper drugs is still minimal in comparison to demand.
cited above establishes that it is misleading and counter-productive
to focus on IP and patents as a barrier to access to medicines.
welcome that the Commission recognises that many factors - other than
just IPR - impact upon access to healthcare in the developing world.
The real issues are lack of political will, funding and infrastructure.
However, although the Commission acknowledges that other factors have
a role, it makes no attempt to assess their relative importance. Without
knowing which factors are and are not significant (and we believe
the facts clearly demonstrate that patents are not significant), no
assessment can be made as to how policy changes relating to one factor
will impact the access crisis. The Commission suggests that adoption
of weaker patent rules will have a significant effect on improving
access for the poorest. It will not. It will, however, have a significant
adverse impact on research and development in the future and may impact
on the activities of R&D companies in the developing world.
Report - "Countries need to adopt a range of policies to improve
access to medicines. Additional resources to improve services, delivery
mechanisms and infrastructure are critical. Other macroeconomic policies
need to be in harmony with health policy objectives. But so also does
the IP regime. Countries need to ensure that their IP protection regimes
do not run counter to their public health policies and that are consistent
with and supportive of such policies." (page 39).
that IP policies should not run counter to public health policies,
but challenges the implication that strong IP rules are counter to
healthcare policies and weak IP rules support them.
It is important to recognise that income generated by patents allows
innovative companies to add value locally by providing medical, clinical,
regulatory and philanthropic support in developing countries. Innovative
companies do not simply sell products. The Commission fails to address
this benefit and the problems that will arise if this added value
is removed. Similar support from the generics is rarely, if ever,
forthcoming. The short term attraction of "cheaper" generics
and the contribution they make to public health policies needs to
be seen in this broader context.
Report - "Developing countries should not eliminate potential
sources of low cost imports, from other developing or developed countries.
In order to be an effective pro-competitive measure in a scenario
of full compliance with TRIPs, parallel imports should be allowed
whenever the patentee's rights have been exhausted in the foreign
country. Since TRIPs allows countries to design their own exhaustion
of rights regimes (a point restated at Doha) developing countries
should aim to facilitate parallel imports in their legislation"
acknowledges the value of differential pricing and the need to segment
markets to prevent low priced products undermining high priced markets.
However, it then undermines this statement by failing to differentiate
between "developing countries". GSK's offer of not-for-profit
preferential prices to 63 of the world's poorest countries (and corresponding
calls for greater protection against diversion from these countries)
is predicated upon the belief that wealthier developing countries,
such as Brazil, are better able to make some contribution to the costs
of R&D and should not therefore be entitled to receive our floor
price. Differentiation must be made between the likes of Brazil and
Burundi. Parallel trade between Brazil (the eighth largest economy
in the world) and Burundi would endanger existing preferential pricing
by encouraging "developing" countries to adopt widespread
use of parallel imports, the report contradicts its previous conclusion
that "widely supported moves to establish differential pricing
would reduce margins to reward R&D in developing countries, further
undermining any incentive for additional research on developing country
diseases". (page 33). Extensive parallel trade will undermine
the R&D incentive and the incentive to differentially price.
trade has never been shown to facilitate the availability of lower
cost medicines. Parallel traders buy goods in low-price countries
and resell at higher prices in the importing country. This form of
arbitrage (witnessed recently by GSK with the illegal re-importation
of our ARVs back into Europe from Africa) benefits neither the patients
nor governments - only the parallel trader is enriched. In fact, it
"sucks" medicines from poorer, lower-cost markets into higher-cost
markets and opens up the supply chain to the threat of counterfeit
or poor quality products.
Report - "Developing countries should establish workable laws
and procedures to give effect to compulsory licensing, and provide
appropriate provisions for government use." (page 44)
is a good example of a recommendation that is unobjectionable in itself
but which, when taken in context, is disturbing. It is set in a context
of inaccurate conclusions about the lack of incentive created by IP
and the adverse impact of patents on access. It follows directly on
from statements that "essential elements" of compulsory
licensing laws should include straightforward and fast procedures,
full exploitation of TRIPs flexibilities and royalties which "need
not be very high".
therefore, this recommendation clearly implies that compulsory licensing
(actual or threatened) should regularly be used as a matter of policy
as opposed to as an exceptional remedy to address abuses of patent
rights. Use of compulsory licensing in this manner would significantly
undermine the benefits to be gained from patents (which are real)
without having a significant beneficial impact on access.
principle should be to aim for strict standards of patentability and
narrow scope of allowed claims, with the objective of:
limiting the scope of subject matter that can be patented
· applying standards such that only patents which meet strict
requirements for patentability are granted and that the breadth of
each patent is commensurate with the inventive contribution and the
· facilitating competition by restricting the ability of the
patentees to prohibit others from building on or designing around
· providing extensive safeguards to ensure that patent rights
are not exploited inappropriately.
with several of these points in our comments on Chapter 6, along with
our concerns about how the Commission describes the use of compulsory
licensing laws in the US and UK.
Report - "Most developing countries, particularly those without
research capabilities, should strictly exclude diagnostic, therapeutic
and surgical methods from patentability, including new uses of known
products." (page 49)
in the Report is there a discussion of the benefits of allowing patents
for new uses of known products i.e. that without such patents there
is no incentive to do R&D into new uses. In the medical field,
there are numerous examples of second uses being developed for known
products. Examples include Taxol for breast cancer, zidovudine for
HIV, and atovaquone (originally an anti-malarial) for opportunistic
unlikely that these developments would have taken place were it not
for the availability of patent protection for the new use. Indeed,
in the EU, introduction of extended market exclusivity through data
protection is being considered as a necessary incentive for research
into new uses despite the existence of patent protection for such
we believe, the Commission wrongly undervalues the importance of IP
as a precondition of medical research for diseases of the developing
world, implementation of this recommendation would reduce the already
weak incentives for research into such diseases.
Report - "Countries may allow health authorities to approve equivalent
generic substitutes by "relying on" the original data. Developing
countries should implement data protection legislation that facilitates
the entry of generic competitors, whilst providing appropriate protection
for confidential data, which may be done in a variety of TRIPS compatible
ways. Developing countries need not enact legislation the effect of
which is to create exclusive rights where no patent protection exists
or to extend the effective period of the patent monopoly beyond its
proper term." (page 51)
of law, the first and third sentences of this paragraph are simplistic
and contentious. Adoption by developing countries of these recommendations
would almost certainly lead to WTO Dispute Resolution.
data protection in the sense of exclusive rights will be the only
incentive for R&D in cases where, for whatever reason, patent
protection is unavailable (including adoption of the recommendations
of high standards of patentability and no patents for therapeutic
methods/new uses of known substances). In these cases, if exclusive
rights are not granted, there will be no incentive to undertake R&D.
Chapter 4 - Traditional Knowledge and Geographic Indications
practical interest in these issues is limited and few if any of our
patent applications rely on any form of traditional knowledge (TK)
or indigenous genetic resources. However, we would make the following
comments about some of the Report's observations.
Report - "There is much to gain at this early stage by considering
the issues in a number of fora, while ensuring coherent approaches
are developed and that effort is not duplicated." (page 79)
involved in defining TK and identifying some legal protection for
it, do not lend themselves well to consideration by just one forum,
and particularly not to the TRIPs Council alone. GSK therefore supports
and awaits with interest WIPO's deliberations around finding a sui
generis model for TK protection, as well as ongoing discussion within
the CBC and UNCTAD.
Report - "Those countries that only include domestic use in their
definition of prior art should give equal treatment to users of knowledge
in other countries. In addition, account should be taken of the unwritten
nature of much traditional knowledge in any attempt to develop further
the patent system internally." (page 83)
an effective way of avoiding the inappropriate exploitation/commercialisation
of TK would be to ensure that TK is recognised globally as prior art.
Appropriate and accessible databases of TK could be developed which
patent examiners would take into account as part of "prior art"
Report - "All countries should provide in their legislation for
the obligatory disclosure of information in patent application of
the geographical source of genetic resources from which the invention
.. Sanctions, possibly of the type discussed above,
should be applied where it can be shown that the patentee has failed
to disclose the known source or where he has sought to deliberately
mislead about the source." (page 87)
TK, GSK would support the introduction of a multilateral system for
disclosing and sharing the information about the geographical origin
of non-human biological material used to support patent applications.
However, we would not support any obligation on patent applicants
to provide proof of evidence of benefit sharing or prior informed
consent as a "pre-condition" for securing or maintaining,
or as a requirement for the validity of, a patent. Equally, and again
as with TK, in GSK's view the legal consequences of failing to obtain
consent or to share benefits adequately should lie outside the ambit
of patent law.
Chapter 6 - Patent Reform
Report - "We believe that in considering the design of their
patent systems, developing countries should adopt a pro-competitive
Such a pro-competitive strategy is best realised by
seeking to restrict the scope of patent protection provided."
Report - "This should be achieved, within the constraints of
international and bilateral obligations, by:
applying standards such that only patents which meet strict requirements
for patentability are granted and that the breadth of each patent
is commensurate with the inventive contribution and the disclosure
much research consists of the relatively routine development of existing
technologies. For instance, gene sequencing, formerly a labour intensive
manual technique, is now a fully automated process, involving little
creativity." (page 112)
majority of patent publications relating to DNA sequences relate to
sequences that have been derived and characterised through the use
of bioinformatic tools. In fact, experience shows that the patent
system is working and that the relevant standards are already in place:
Many of the patent publications are not granted patents but merely
· Many of these published applications have been withdrawn,
abandoned or rejected by the Patent Offices. Many are also likely
to be withdrawn, abandoned or rejected in the future.
· Many of the patents that have been granted (and most are
US patents) have claims that have been significantly limited compared
with the claims as filed with the original application.
· Of the small number of European patents that have been granted,
a number of have been successfully opposed. The decision on the ICOS
patent in particular appears to have set something of a precedent
for the EPO in its examination for industrial application and inventive
Report - "Some would argue that this standard [inventive step]
as it is now applied, for example by the USPTO or the EPO, is too
low resulting in a proliferation of patents for trivial inventions
which may not contribute to the over-riding objective of the patent
system which is the advancement of science for public benefit.
objective of any standard should be to ensure that routine increments
to knowledge, involving minimal creative input, should not generally
be patentable." (page 116)
statement of what "some would argue" is implicitly accepted
in the Report without discussion. The Commission cites no evidence
that these standards are too low or that "routine increments
involving minimal creative input" are being patented; nor does
it cite evidence that this is causing a problem either in the developed
or in the developing world.
inventive step standards in the EPO and USPTO are amongst the highest
in the world. And, as a generalisation, the smaller the contribution
to the art, the narrower the scope of protection in any granted patent.
This is because, in general, patents in the US and EPC countries give
protection commensurate with the technological contribution.
Report - "We are not aware of any significantly higher standard
being applied currently elsewhere. However, there are examples of
higher standards being applied in the past. For example, in the first
half of the 20th Century, the US applied a "flash of creative
genius" standard which would probably render the majority of
patents currently issued invalid." (page 116)
this is simply an exhortation to grant fewer patents. Even if a higher
standard of inventiveness is appropriate (and no evidence is given
to support this), no evidence is put forward for the statement that
"the majority of patents currently issued would be invalid".
Application of such a test today might delay publication of new knowledge
through patent applications (as companies would delay applying for
patents until they had distanced themselves sufficiently from the
prior art to satisfy the "flash of creative genius" test).
More importantly, without being satisfied that their research involves
the "flash of genius", companies might not pursue development
of potentially advantageous products.
matter of practice, it is highly unlikely that the Patent Offices
in many developing countries, which do not have significant experience
in applying patent law, would be able to distinguish between something
that is and is not "a flash of genius". Getting the balance
right between too high and too low a standard requires many years
experience with real life issues.
Report - "For developing countries, the currently prevalent low
standard of inventive step raises two concerns. The first is that
as applied in developed countries, it could hinder research of importance
to developing countries." (page 116)
is made, on a number of occasions, to the possibility of patents hindering
research, but no consistent body of evidence is given for this assertion.
There is evidence that the contrary is true. The two examples given
on pages 128 and 129 (CCR5 gene and Golden Rice) in fact show that
patents did not substantially hinder research.
stated, many patent laws actually contain provisions aimed at preventing
hindrance of research, for example, through research exemptions and
laws relating to exploitation of improvement patents though compulsory
Report - "One suggestion that has been made would be to require
the patent applicant to demonstrate that the proposed invention reflects
a standard of inventiveness higher than that which is normal in the
industry involved." (page 116)
is intended to mean that the person skilled in the art must be from,
and assumed to have the common general knowledge of those in, the
industry, this is in essence a statement of at least European practice.
it is intended to mean that a higher level of inventiveness is needed
for patentability in innovative industries, this in fact penalises
innovation. It is often those very industries that require incentives
to undertake research. To make it harder to get patents for industries
that are innovative would be a penalty for, and deterrent to, innovation.
Further, this would complicate litigation enormously by requiring
an assessment of how innovative an industry is.
Report - "Developing countries should adopt the best mode provision
to ensure that the patent applicant does not withhold information
that would be useful to third parties." (page 117)
intention here is laudable. However, it displays a misunderstanding
of how the patent system works in practice. Best mode will in fact
almost certainly be disclosed because it is a requirement of US law.
Thus, information as to best mode will be available to developing
introduction of a best mode requirement in national law complicates
(and thus increases the cost of) litigation which the Commission wishes
Report - "But what is meant by a broad claim? Take the example
of an inventor of a new compound for the treatment of headaches. She
discloses the potential use for her compound in her patent application,
but her claims extend beyond that use to the compound itself, and
all its potential uses. During the life of the patent, someone else
establishes that the compound is also useful in treating heart disease.
Is it right that the patentee can then prevent the compound being
used, without her authorisation, for purposes she had not foreseen?
Are such broad claims really justified on the basis of limited disclosure?"
is a highly rhetorical paragraph, suggesting its answer without proper
analysis of the extent to which there is problem. Again, the tone
of the paragraph suggests a clear message to limit patent protection
without any analysis of the substance of the issue.
Report - "Developing countries should also consider supplementing
the judgement of patent examiners by inviting other available experts
to comment on patent applications. In Brazil, applications for pharmaceutical-related
patents are passed for evaluation to the Ministry of Health who may
be in a better position to comment on, for example, the inventiveness
of the claimed invention." (page 119)
be interested in the basis of the Commission's view that Ministries
of Health will have experts available or be qualified to judge inventive
step from a patent perspective.
Report - In considering introducing or revising [compulsory licensing]
legislation, they could seek guidance from the patent laws in other
countries. For example, the US has used compulsory licensing in more
than 100 antitrust cases. The UK provides that compulsory licences
may be granted on the following grounds
.." (page 119)
follows from the discussion of compulsory licences in Chapter 2 and
requires further comment as the references to US and UK law are misleading.
majority of "compulsory licences" in the US are not compulsory
licences of the type discussed in current debates (or Chapter 2) at
all. They are conditions of merger clearance. When applications are
made for merger clearance, the competition authority will, in some
circumstances, require divestment of parts of a business and/or its
rights. Thus, if two companies wish to merge, a condition of the merger
may be such a "compulsory licence". The grant is not compulsory
as the companies can decline to merge and the condition will not bite.
One cannot draw parallels between this type of situation and a policy
of compulsory licensing of the nature frequently discussed, particularly
in the access to medicines debate.
very few of the cases (fewer than 10 of the more than 100 mentioned),
the "compulsory licence" was part of a wider corporate restructuring
that was required to remedy an anti-trust violation. These cases are
extremely rare and, again, cannot be equated to adoption of a policy
of regular compulsory licensing of the type frequently called for
in recent debates.
the breadth of the grounds for compulsory licensing in the UK, it
is used rarely in the UK and, indeed across the EU as a whole. The
European Commission recently estimated, based on experience of Member
States existing patent systems, that if a Community Patent were introduced,
there would be in the order of 10 compulsory licence cases per year
in the EU.
does not support the implication that both the US and the UK regularly
resort to compulsory licensing (or its threat); nor, therefore, does
it support the implication that developing countries should do the
extent that UK compulsory licence law is relevant at all, it is relevant
to the question of royalties. Under the transitional provisions of
the Patents Act 1997, a form of compulsory licence (know as "licence
of right") was available. Many of the cases related to pharmaceuticals.
However, unlike, for example, the case of Canada (where a uniform
royalty was set by Statute) the UK cases were based on full examination
of relevant evidence and royalty rates of between 20-35% were often
awarded. This is not mentioned by the Commission's discussion (page
44) which leads to the assertion that "the implication of other
countries experience is that royalty rates need not be very high".
that TRIPs requires that "the right holder shall be paid adequate
remuneration in the circumstances of each case, taking into account
the economic value of the authorisation" (Article 31h), the UK
experience appears more relevant than that of Canada, and yet the
Commission fails to draw on this evidence.
Report - "An extensive use of compulsory licensing in developing
countries is unlikely given the procedural complexities of the system."
simply not true to say that the "system" (presumably referring
to TRIPs) need be procedurally complex. Furthermore, although compulsory
licensing may not be used regularly in the developing world now, its
use or threat of use in the developing world is likely to increase
because of the high profile that it has been given as a solution to,
for example, the access to medicines issue.
discussions in the WTO about compulsory licensing for export would
be unnecessary if there were little likelihood of compulsory licensing
being used extensively in practice.