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Patents

Patents give their owners exclusive rights to the production, use, or sale of a product. We grant these rights (usually for 20 years) to inventors when their invention is new, useful, and not obvious. These rights can be transferred or shared at the owner's discretion.

The idea is that patents allow their owners to charge higher prices than they could get if everyone was allowed to sell their product. Product development can be an expensive process, so this provides an important economic incentive to develop new useful products. Ultimately, innovation is paid for by those who buy the new product at the elevated price.

There are two major weaknesses to this approach to funding innovation:

  • Anyone who can't afford the asking price will be unable to access the product, even if the asking price is higher than the actual manufacturing price.
  • Other inventors must pay a premium to use this new product in their research, or may not be allowed to use it at all, so further innovation is hampered or outright blocked.

Of course, if the product in question is a life-saving medication, the world's approach to innovation is a matter of life or death for millions of people.

International agreements on patent law

Patents apply only within countries, not internationally: you must register a patent in every country where you want to control your invention. Each country implements its own set of patent laws, but it is constrained by any international agreements it has signed.

Countries that are members of the World Trade Organization (WTO)—which is most countries—must respect a number of multilateral trade agreements. The agreement governing patent law is called the Trade-Related aspects of Intellectual Property rightS (TRIPS) agreement. TRIPS requires a minimum of 20 years of patent protection for any new, useful, and non-obvious product, including medicines. Precise meanings of "new", "useful", and "non-obvious" are not made explicit in the agreement: each country gets to interpret these terms as it sees fit. TRIPS came into force in 1995, and member countries whose patent law did not meet the agreement at that time were given ten years to revise their laws (e.g. India: see our case studies).

Many countries have also entered additional bilateral trade agreements; these often require stronger legal protection for patents than TRIPS does.

Patents and access to medicines

TRIPS allows countries to override patents in times of national emergency, and for public non-commercial use. (Again, "emergency" is up to each country to define for themselves.) The mechanism by which a country overrides a patent is called a compulsory license: effectively, the government grants someone else the right to also manufacture, sell, or use the patented technology, so that the primary patent-holder no longer has a monopoly. The market becomes competitive, so prices fall.

For many technologies, these flexibilities may not be necessary, but they have received a great deal of attention for the case of medicines, due to the potential impact on public health. When TRIPS was first adopted, the intent of the flexibilities had not been made entirely clear, and countries were wary of actually using them, fearing negative repercussions from their trading partners.

WTO members therefore clarified the intent of the flexibilities—including the freedom to issue compulsory licenses—in the Doha Declaration of November 2001, which said:

"[TRIPS] can and should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote access to medicines for all".

Some countries have since taken advantage of compulsory licensing (e.g. Brazil and Thailand: see our case studies). However, compulsory licenses are only useful in countries with a domestic pharmaceutical manufacturing industry—i.e. in relatively wealthy countries.

The poorest countries, on the other hand, do not have the resources to produce their own medicines, so they must import all their medicines from wealthier countries. Patents governing drug manufacturing are therefore beyond their control. And even if the governments of manufacturing countries wanted to override patents in order to export cheaper drugs, the original TRIPS agreement only allowed compulsory licensing for national emergencies—not international ones. The WTO attempted to resolve this problem with its August 30 2003 decision. This allows manufacturing countries to issue compulsory licenses to export drugs to countries that cannot produce them, even while the drug remains patent-protected for domestic use in the manufacturing country.

Over 30 countries have since incorporated this new flexibility into their patent laws. However, as of June 2009, this flexibility has only been used once (by Canada and Rwanda: see our case studies).

Patenting by universities

30 years ago, university research culture in North America generally focused on pure discovery, and university researchers did not seek to commercialize their results. Any patents generated through publicly-funded research were the property of the funding agency. With nobody in particular standing to benefit from further development of technologies, many promising ideas went unpursued.

With the intent of spurring on the development of these technologies, in the US, the Bayh-Dole Act was adopted in 1980, which granted patent rights on federally-funded research to the funding recipient (i.e. the university), and not the funding agency. Commercialization and patenting of new technologies by universities have grown dramatically ever since.

(In Canada, there is no such explicit law, but Canadian federal funding agencies have adopted a similar policy: patent ownership is left up to the institution receiving the funding. At most Canadian univeristies, the researcher controls the patent, but the university provides services to help them commercialize their invention. One exception is UBC, which operates more like most American universities, in that the university controls the patent.)

What does this have to do with UAEM?

This is the context in which our work takes place. The principal focus of our work, as regards access to medicines, has been trying to convince universities to use their positions as patent-holders within this system to secure greater access to new technologies for the poor, while still maintaining the economic viability of innovation. It is important that we understand how such changes might play out within the existing system. In addition, as our group has grown, we have moved into advocacy around changing the international legal framework as well, including at the levels of national law and international agreements.

Further reading

These very readable documents cover similar material, but in greater depth.