By Liza Porteus Viana for Intellectual Property Watch
WASHINGTON, DC – There is a growing backlash against intellectual property rights and international rules aimed at protecting innovation and ideas in certain parts of the globe, several pharmaceutical and other innovator companies said Wednesday.
Not only does the protection of intellectual property need to be strengthened, they said, but when it comes to medicine, the drug industry now says the public debate needs to be changed from one of “intellectual property versus access” to one of “intellectual property and access.”
“Right now the debate is being framed, ‘you can have access or innovation’ – but you can have both,” Marc Boutin, executive vice president of the National Health Council, said during a US Chamber of Commerce intellectual property summit here.
With advances in pharmaceuticals, biologics, and medical devices, Boutin said, “the opportunity for people with chronic conditions are huge.”
The industry pitch that interchanges innovation and intellectual property along with access appears to be a reaction to the ongoing consumer and health advocacy effort that calls for “innovation+access.” But that initiative views IP rights among all possible alternatives, while the industry targets more enforcement of IP rights as the solution.
Thailand and Brazil rocked the intellectual property community when they announced compulsory licensing of certain drugs, although all sides acknowledge that WTO members have a right to use this tool. They used a rule included in the 1994 World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) that gives countries the right to either produce the drug themselves or import generics from other countries, without permission from the patent holder.
Innovator companies still maintain that moves like that undermine incentives to produce often life-saving drugs.
“Compulsory licensing is a bullet in the heart of the intellectual property system,” said Carl Horton, chief intellectual property counsel for General Electric, which carefully tracks movement toward compulsory licensing in various countries.
But Taiwan and Brazil are not the only countries “who have run a truck through the flexibilities … of the TRIPS agreement” with compulsory licences, added Patricia Sherman, vice president of government affairs at Siemens, an electronics and electrical engineering company that operates in the industry, energy and health care sectors. And these countries are not just focusing on medicines, she said.
Taiwan, for example, in 2004 granted a compulsory licence to Gigastorage to produce CDs for which electronics company Philips had a patent. “That, I find especially troubling,” Sherman said. “You have moved from a continuum of pharmaceuticals that address pressing human needs and disease, life-threatening illnesses to entertainment.”
Groups like Knowledge Ecology International and public health advocates have hailed compulsory licences as a way to provide greater access to much-needed medicines for the poor at lower costs. They also point out that US and other developed-nation industries – such as information technology and automobiles – use compulsory licences for a variety of products without criticism. Other non-governmental organisations have begun to favour changes in the patent system to allow developing countries to acquire environmental technologies.
But innovator companies, who follow traditional business models that depend on patent protection, are trying to raise fear that if countries use compulsory licences for medicines, there is little to stop them from taking others’ technology to curb emissions or greenhouse gases to deal with climate change.
“If we allow CL use in all cases without consequences, why can’t China, India or any other country simply take US technology to meet their emissions goals?” Pfizer CEO Jeff Kindler asked the Senate Finance Committee on International Enforcement of Intellectual Property Rights and American Competitiveness in July. “The key to better health in the developing world is not to destroy patents – but to create partnerships aimed at improving the public welfare.”
Rich Bagger, senior vice president of worldwide public affairs and policy at Pfizer, on Wednesday stressed that the challenges of global health are enormous, and intellectual property is part of the solution, not the problem. People need to understand that the pharmaceutical industry is complex and requires large amounts of research, financing, infrastructure and capacity-building, he said, adding that all of that requires assurances from countries that they will act in ways that protect intellectual property.
“People who point to IP as a barrier to access or challenge to global health really miss the point of the complex nature” of the drug industry, Bagger said. “We’re trying to seed a discussion on that, as people put down the swords and shields of the IP versus access debate and recognise that we need to work together on solutions that are based upon IP and access.”
Meanwhile, the US Chamber of Commerce’s Global Intellectual Property Center and the American Chamber of Commerce in Mexico on Wednesday released a study on the impact of counterfeiting and piracy in the Mexican cities of Guadalajara, Monterrey, Mexico City, and Tijuana. It did not disclose who funded the study.
The US Trade Representative placed Mexico on its Special 301 watch list – US trading partners the US unilaterally decides are providing inadequate and ineffective intellectual property protections. Mexico this year is one of 36 countries on the lower-level watch list, based on the assertion that counterfeiting and piracy are growing problems there.
The survey found, among other things, that 89 percent of people surveyed know someone who buys pirated goods in Mexico, whether they be CDs, DVDs, clothing, shoes, or other goods. About 75 percent admitted to buying pirated products themselves. More people were more likely to buy the abovementioned goods than, say, counterfeit medicines that could directly affect their well-being.
“We’re talking about billions of dollars lost” to industry and the Mexican government, said Rafael Diaz-Granados, president of General Electric Mexico and president of the American Chamber of Commerce’s intellectual property committee.
Mexican President Felipe Calderone has vowed to crack down on organised crime, which relies, in at least part, on money made from pirated goods, industry sources say. Mexico is educating customs enforcement officers on how to spot counterfeit trademarked goods, and is working with Canada and the United States on ways to collectively combat piracy in those three countries through the Security and Prosperity Partnership of North America, Diaz-Granados said.
“We know what we have to do,” said Diaz-Granados. But “this is not a fight that we can do on our own.”
The American Chamber of Commerce in Mexico and US Chamber of Commerce also urged enactment of what is known as the PRO-IP Act. S 3325, the Prioritizing Resources and Organization for Intellectual Property Act of 2008 passed both the US Senate and House and has been sent to President Bush for his signature.
The bill, an earlier version of which the Bush administration opposed, requires the USTR to spur countries that violate US intellectual property rights to take more steps to halt violations, provides more funds to do so, and gives the president enforcement tools to deal with those countries that refuse to crack down on IP theft. The measure will become law if Bush signs it or fails to veto it by 14 October.
Chamber President Thomas J. Donohue had a message for Bush: “Mr President, you will be doing a great service for the nation’s innovators, workers and consumers by signing this legislation into law. I urge you to do so.”
Liza Porteus Viana may be reached at info@ip-watch.ch.