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TWN Info Service on WTO and Trade Issues (Mar06/11)

10 March 2006
 

WIPO Forum on draft SPLT 1-3 March Report 4 (Final)

Clash over patents on genes and on medicines as forum ends


The final day of the WIPO open forum on patents saw heated exchanges on the impact of patents and "flexibilities" of the system on access to medicines, as well as an interesting debate on whether genes and life forms should be patented.

The Nobel Laureate, Sir John Sulston, who is credited with the discovery of the human genome, gave his view that gene patenting should not be allowed, and that patents had been found to have had a hindering effect on upstream science, especially on gene-based diagnostic tests.

The highlight in another session on patents and health was a heated exchange between the leading representative of the multinational drug companies and the former Chairman of the US generic trade association , on whether patents hinder access to medicine and whether compulsory licensing results in health benefits.

The forum was held by WIPO to discuss issues surrounding its draft Substantive Patent Law Treaty (SPLT), negotiations on which have been deadlocked because of differences between developed and developing countries. The final day of the three-day forum was held on 3 March.

Below is the report of day 3 (final Day) of the WIPO Forum.


With best wishes
Martin Khor
TWN

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Clash over patents on genes and on medicines as WIPO forum ends

By Sangeeta Shashikant (TWN), Geneva, 5 March 2006


The final day of the WIPO open forum on patents saw heated exchanges on the impact of patents and "flexibilities" of the system on access to medicines, as well as an interesting debate on whether genes and life forms should be patented.

The Nobel Laureate, Sir John Sulston, who is credited with the discovery of the human genome, gave his view that gene patenting should not be allowed, and that patents had been found to have had a hindering effect on upstream science, especially on gene-based diagnostic tests.

The highlight in another session on patents and health was a heated exchange between the leading representative of the multinational drug companies and the former Chairman of the US generic trade association , on whether patents hinder access to medicine and whether compulsory licensing results in health benefits.

The forum was held by WIPO to discuss issues surrounding its draft Substantive Patent Law Treaty (SPLT), negotiations on which have been deadlocked because of differences between developed and developing countries. The final day of the three-day forum was held on 3 March.

In a session on "bio-technological inventions, patenting of genes and life forms and the impact of patenting on upstream science", Professor Joseph Strauss of the Max Planck Institute for Intellectual Property said that there was no empirical evidence on serious negative impacts on upstream science, despite the large number of patents that have been granted on genes. He also said that without patents on biotech products, many biotech companies could not have provided medicines.

Nancy Linck from the Biotechnology Industry Organization said the US patent system is a "strong enduring system that can be improved but is certainly not broken". She added that having disclosure of the source of origin (of genetic resources) in the patent system would be devastating especially for the small biotech companies.

She faulted the developing countries which do not have national access and benefit sharing regimes in place, as this resulted in a situation where it is not clear who to reward when the genetic material is taken. She also said that the US would not sign on to any initiative that incorporates disclosure requirements.

Several of the previous speakers' arguments were rebutted by Nobel Laureate and Vice Chair of the Human Genetics Commission Sir John Sulston (who is credited with the discovery of the human genome). He said that in the last 30 years although IP expansion has been breathtaking, with clear beneficiaries, the value for society as a whole is less certain, as exploration and innovation are threatened by the culture of exclusive rights.

He said that life forms are not patentable since they occur in nature and there is no inventive step. A modified life form is patentable, but only as far as the actual modification is concerned and it involves an inventive step. In future when new life forms will be synthesized from scratch, such life forms will be inventions, and therefore patentable. Before that point it will be commonplace to modify life forms so extensively that their origins are unclear.

He added that conflicts arise because under the current exclusive-rights system possession of a patent confers too much power. Therefore, stricter controls need to be instituted on its use and until that has been done, it is better to retain a precautionary position on claims.

On the issue of patenting of genes, he said that genes are discoveries, and the inventive step consists of their isolation from nature. However, even the isolation has been obvious for many years. He noted that there has been a corresponding shift to claims through functionality (of the genes), but this constitutes discovery. So logically gene patenting should not be allowed at all, he said.

Sir John also said he was assured 15 years ago that strong gene patents would be essential to ensure that companies' efforts are spread out, rather than focussing on a few easy targets. But the pharmaceutical scene is now awash with "look-alike" drugs, an outcome that has nothing to do with patents and everything to do with markets.

Stressing that patenting has an impact on upstream science, he referred to a comprehensive survey, combined with review material, published by the National Research Committee (NRC) of the US, which concluded that there is some inhibition on research caused by third party patents. In most fields a minority of researchers declare significant impediment. The exception is in the area of gene-based diagnostic tests, where a majority had experienced interference.

Another finding was that only 7% of researchers were motivated by patents while the majority were motivated by scientific importance (97%); personal interest (95%); and availability of funding (80%).

Making the point that patents can be an obstacle, he gave his own personal experience as a researcher, when the supplier of the machines tried to keep the emerging data encrypted, so that they are tied to the software throughout the analysis. He said that negotiation did not work so they decrypted the output file from the machine.

Surveys concluding that all is well are not necessarily a vindication of the system. This only often means that people are getting around or ignoring the obstacles put in their way by patents. Tightening the system will be destructive of science.

The NRC, he said, concluded that patents already have a small negative effect on upstream research, and that this is likely to increase. To offset this trend, it recommends measures to maintain the vigour of public research.

At question time, Josh Sarnoff from the American University asked Linck how fair was it to patent genetic materials, even if there is uncertainty as to who to reward. He added that the disclosure requirement is designed to remove the uncertainties. Responding, Linck reiterated that having disclosure requirement within the patent system is not the way to go, adding that requirements of the disclosure are difficult to satisfy.

Another participant said there was a need to ensure that the patent system is made more equitable and including the disclosure requirements would make it more equitable.

To a question as to whether the problems of bad patents can be resolved so long as the patent offices have an economic interest in granting the patents, Sulston and Strauss both agreed that the system in patent offices have to be changed.

But when Strauss commented that scientists are not well rewarded and the IP system can provide sufficient rewards, Sulston rebutted him, saying that there are a lot of rewards for scientists including the joy of simply doing the research. He also added that when traditional knowledge is used in a profit-making manner, it is an injustice.

At another session on "Patents and Public Health, Including Second Use Patents", following the panel presentations, there was a heated exchange between one of the speakers, Eric Noehrenberg, who represents the global drug industry, and William F. Haddad, former Chairman of the US generic trade association.

The other speaker on that panel, James Love, Director of Consumer Project on Technology, said medicines were costly and un-affordable to many. The pharmaceutical companies seek maximum profit and use the patent system to raise prices. Using patents is a costly way to finance R&D, particularly for products that are new and better than existing products.

Thus, he proposed to separate the market for innovation from the market for products. He supported a bill in the US Congress (the Medical Innovation Prize Act of 2005) which provides generic producers non-voluntary authorizations to use any and all patents (and sui generis IP, such as rights in registration data) relevant to the manufacture and sale of all prescription medicines in the US market.

The bill provides for remuneration to the developers of new medicines, through a medical innovation prize fund worth more than the current royalties from patents. This way, he said, the patent system would remain intact through product development and market approval, while at the same time there is no market exclusivity, thus allowing generic companies to compete freely.

He said that the prize payments would be awarded for the first ten years that a product is on the market, based upon evidence of the incremental health benefits of the product. There would also be funding for global public health priorities, and for neglected diseases affecting the poor in developing countries.

He highlighted the benefits of competitive and decentralized sources of funds for R&D, diversity of approaches to R&D, and open source projects.

He noted a new paradigm emerging on a global framework for health R&D, in which every country is required to support medical R&D, the obligation would depend on the level of development, and purchases of medicines, public sector research, prize funds and so on would be allowed, to the degree that they stimulate R&D.

He added that the WHO Executive Board had agreed to forward to the World Health Assembly for debate a resolution on a new "Global Framework on Essential Health Research and Development". This Resolution is widely supported by many NGOs, scientists and governments.

Noehrenberg challenged Love saying that there was no consensus on the WHO Resolution and many parts are bracketed. To this, Love said that in any negotiation process, brackets are frequently found in a draft before it is finalized.

Noehrenberg, representing the International Federation of Pharmaceutical Manufacturers and Associations, remarked that "parallel trade" was bad for poor countries, and that compulsory licenses do not result in health benefits.

He said the recent WTO amendment to the TRIPS Agreement to incorporate the 30 August 2003 decision (that waives the limitation on exports of generic products if it is to countries with insufficient manufacturing capacity) was a solution that is easy to use. [This amendment had been criticized by health activists for being difficult to use, thus hampering access to medicines to poor countries.]

Noehrenberg's basic premise was that the patent system works to bring about R&D and medicines into the market, and there should not be attempts to use the system's flexibilities (such as compulsory license) as this would remove the companies' incentives to innovate. He also claimed that these flexibilities in trade agreements were put there to facilitate "industrial policy" and not "health policy."

At question time, many participants challenged Noehrenberg's presentation, especially on his position that the use of "flexibilities" was not for health purposes.

Haddad, former chairman of the association of US generic drug producers, asked Noehrenberg: "What planet have you been living on the last few years? Your statement is not only false but also misleading".

"I came to hear an intellectual debate", he said, adding however that he listened instead to the same argument of the big drug companies made 30 years ago. "What I saw there was my country (referring to the US) demanding and threatening to go along with what PhRMA (the drug multinationals) wanted," he added.

He also said that first there was the TRIPS agreement, and then TRIPS-plus policies, and while this is going on, two thirds of the world's population are being denied access to medicines, although affordable generic versions are available. He called Noehrenberg's presentation "rehashed thrash" that lacked any intellectual content.

Another participant that appeared to be angered by Noehrenberg's presentation said that the forum was convened to discuss harmonization, but in the presentation, the "flexibilities" of the international trade agreements are not being recognized (by the big drug companies).

She asked how many more resolutions will it take for the flexibilities that have been endorsed internationally to be respected, since on every step of the way, these flexibilities are being trampled on?

A Brazilian delegate asked Noehrenberg whether his constituents can state what is industrial policy and what is health policy. He asked whether Noehrenberg was advocating leaving out provisions relating to flexibilities in any future SPLT initiative and legally how this would relate to the flexibilities in the TRIPS Agreement and in the Paris Convention.

Noehrenberg insisted that he was presenting an academic argument. He agreed that there were flexibilities but the reality was that they do not have public health benefits. To a question asking if he could provide examples of his claim that there was diversion of lower priced medicines in developing countries to developed countries, he said that he could give examples of such diversion taking place in Senegal and Uganda. Haddad responded that the cases of diversion were simply untrue.

Love also replied to Noehrenberg's remarks on compulsory licensing, citing cases where compulsory licenses are being used for health purposes. For example, many countries including the US have indicated that compulsory licenses will be issued for the avian flu drug Tamiflu, where patent is a barrier.

There were also other panels including on "Software Patents", "Patents and Standards", "Grace Period" and "Scope of the Patent System and Alternative Models to Promote Innovation".

The main issue in the "Software Patents" panel was whether patents should be granted on software. The US does grant such patents while in Europe debate is ongoing on this matter. This issue was also discussed in the panel on "Patents and Standards".

Speakers such as Rishab Aiyer Ghosh, Senior Researcher at United Nations University-MERIT and Jules Theeuwes from the University of Amsterdam, and some participants, felt that more work was needed to understand the issue especially whether patenting would hinder development of innovative products, before patents are granted for software products.

There were also views that there are some features of software that make it different from other products, so it should be treated differently, in relation to IPRs. A participant said that this is a "vague area", even in US patent offices there are divergences in perspectives on this issue.

Panelists that appeared to be in favour of software patents were Jonathan Zuck, President of the Association for Competitive Technology and Benoit Mueller from the Business Software Alliance (BSA).

James Love said that there is a debate in the US on whether the software patent system is too strong and there are also problems in managing disclosure. He added that the TRIPS Agreement does not allow discrimination between products in application of the rules. He also asked whether it is a mistake to have a "one-size-fits-all" idea in the system.

 


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