IP, Patents, and Trade

Definition of Intellectual Property

Intellectual Property (IP) covers a number of different legal rights that are awarded by states to persons in return for some valuable "creative" activity. Two well known examples of intellectual property are patents, which may be awarded to protect inventions, and copyright. A patent allows its owner to stop anybody else from making use of their invention, unless given permission (in return for a payment for example). Intellectual property rights only last for a limited period of time, for example, 20 years for patents, 70 years for copyright.

What is a patent?

A patent is a form of intellectual property protection granted by a state to an inventor for a fixed period of time in exchange for disclosure of an invention.  A patent provides the right to exclude others from making, using, selling, offering for sale, or importing the patented invention (read more at http://en.wikipedia.org/wiki/Patent). 

Patent protection lasts at least 20 years from the date the patent application was filed. The TRIPS agreement (see below) requires patent protection to be available for inventions in all fields of technology in all nations who are members of the World Trade Organization. This provision is essentially aimed at pharmaceutical products, for which certain developing countries, as well as developed countries, had refused to grant patents. Patent protection has been an incentive for research and development of new drugs, but questions remain as to whether the patent system will ensure investment in medicines needed by the poor.


Linking Patents to Health

Globalization and the international regulation of trade are becoming increasingly linked to health. The WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), is the most important international agreement on protection of patents, copyrights, and trademarks. TRIPS does not establish a uniform international law, but sets out minimum guidelines for intellectual property protection that must be met by all WTO Members by 2006 at the latest. TRIPS treats medicines in the same way as any other patented product - such as compact discs or video games.

Extended intellectual property protection can be considered a threat to public health in poor countries because it gives patents on medicines for a minimum of 20 years, which grants a monopoly to patent-holders during that time. This will lead to further increases in drug prices and negatively impact the developing world's ability to produce affordable generic alternatives to branded drugs.


TRIPS, Doha, and TRIPS-plus - What does it all mean?

There are safeguards within TRIPS that developing countries can write into their national laws in order to protect public health.  These safeguards can ensure affordability and availability of patented technologies in cases of patent abuse or emergency situation. 

Safeguards include:

  • compulsory licensing
  • exceptions to exclusive rights and other measures which promote generic competition
  • extension of the transitional period
  • parallel importation 


Doha: Affirming Right of Nations to Act

In part this increase in manufacturing of generics is due to the Doha Declaration, signed in November 2001 by the US and other WTO members. This agreement states that the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement "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."

Thus, while the TRIPS agreement aims to protect patent rights, the Doha Declaration specifically reaffirms a country's right to override drug company patents in the interests of public health. Countries requiring medications, such as antiretroviral medications (ARV's), may issue a compulsory license which allows countries to produce needed medications without the permission of the patent holder. Under the current WTO rules, there is no clear provision for the poorest of countries who have neither the money to buy medications nor the capacity to produce their own.

This issue is currently being debated. The US Trade Representative at that time, Robert Zoellick, came under great pressure from large US-based pharmaceutical companies, and proposed that any solution to this problem only be applicable to drugs for a limited number of diseases. This goes against the Doha Declaration that clearly states patents should not interfere with public health, no matter the disease. [AMSA project in a box]


TRIPS-Plus: going even further than TRIPS
In recent years, many developing countries have been coming under pressure to enact or implement tougher or more restrictive conditions in their patent laws than are required by the TRIPS Agreement - these are known as ‘TRIPS plus' provisions.  Countries are by no means obliged by international law to do this, but many, such as Brazil, China or Central American states have had no choice but to adopt these, as part of trade agreements with the United States or the European Union. These have a disastrous impact on access to medicines.  [MSF: TRIPS]

(Information on this page adapted from SGAC glossary and MSF FAQ on TRIPS)

Read More About:

  • Pharmaceutical Industries and The Problem With Research and Development
  • In the search for vaccines and other cures to eliminate diseases that affect the poor, the cost of pharmaceutical research continues to increase. When organizations such as GlaxoSmithKline state that they will be reducing their prices in comparison to how much they charge in wealthier countries, they justify their exorbitant rates based on the high costs and risks associated with research and development (R&D). The medical field have used the high costs of R&D as grounds to explain high prices in the developed world. The same justification has been used to explain why companies cannot afford research in developing countries where they are unable to charge such high prices. This issue does not only affect the higher priced drugs, medication such as phenibut has also risen in price, when looking at factors such as a how long does phenibut last? Are these price increases really justified?

    Developing new drugs is definitely expensive, a recent study found that it can cost more than $2.6 billion. Pharma activists have often stated that the profit made can go towards further research to provide additional value to patients. However, critics argue that these studies magnify costs and are used as a scapegoat to justify price hiking. Furthermore, pharmaceutical companies will often blame R&D costs, but it is very rarely mentioned how costly it is to market these products. As stated by the Washington Post, drug makers spend too much money marketing their products than investing in developing better drugs.

    The problem is that all this investment costs money, and it is the patient who ends up paying for it. Take for example the life saving drug Daraprim, the price was raised from $13.50 per tablet to $750 per tablet. Although the CEO of that pharmaceutical company has been prosecuted, and this case is at the extreme end of the scale, it is one example out of many that highlight the financial burden that is placed on patients.

    What is the solution?

    There are two major problems here, on one hand, patients are forced to pay for the expenses associated with research and development, and in some cases, they are unable to afford the medication needed, and on the other hand, there is not enough money being invested in R&D where diseases are affecting the poor.

    A solution to this crisis is essential, there must be a viable method of providing drugs at an affordable price to those who need them. Pharmaceutical companies are going to have to start looking at ways they can conduct research and develop drugs at a reasonable cost. The problem is so severe that the World Health Organization and other medical authorities have had to intervene.

    This issue is not going to be rectified overnight, some organizations are proposing that policies are changed, and people are educated and made aware of the problems. Other organizations are advocating for more practical strategies. Whatever the solution, action needs to be taken as swiftly as possible; this is more than a financial issue, people are losing their lives.