Intellectual Property Law - Essay Example

Intellectual Property Law: The TRIPS Agreement INTRODUCTION The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) was established by the World Trade Organization (WTO) in 1994 at a meeting in Uruguay on multilateral trade regulations (Weiss, 1990). Its stated purpose was to address the widespread global inconsistencies in the protection of intellectual property rights. Intellectual property rights is a legal term that applies to specific ownership rights to intangible property associated with knowledge, processes or images, also known as incorporeal property rights of ownership (Sanders, 2007). The right to ownership implies a block to imitation by others for the duration of the protection timeframe specified by law. Patents and other intellectual property rights are an essential component to trade agreements and market economics on a global scale, as the absence of protection may seriously undermine the economic value of the product and create impediments to discovery (de Almeida, 1990). One of the main purposes of the TRIPS Agreement was to foster a climate of international opportunities to develop and share new products and property that would be afforded international standards of protection. The minimum standards established by TRIPS were designed to meet the need of rapidly developing products and technologies that impact the global economy (Weiss, 1990). The purpose of this essay is to examine the degree to which the TRIPS Agreement has fulfilled its provisional objectives and to explore the effects of this agreement on intellectual property rights, specifically as they relate to patented medicines and global healthcare. Effects of the TRIP Agreement on the transfer and dissemination of technology The TRIPS agreement carries more force than any other provisions established to promote equitable trade and commerce by the WTO, as it is a mandate whose provisions must be adhered to by all participating members of the WTO (Mercurio, 2004). The minimum levels of intellectual property protection represent a mandate that must be provided by all members of WHO to all other nations who are members of WHO. The TRIPS agreement attempted to provide flexibility for member nations who might receive fewer benefits from the mandated patent rights stipulations; however, soon after its implementation it became apparent to many observers and participants alike that the provisions of the TRIPS agreement were more favourable to economically privileged nations than to member nations of the so-called third world (de Almeida, 1990). One of the most disheartening consequences of the TRIPS agreement was that it had the effect of limiting access to life saving drugs by poorer nations who could not afford the high cost of pharmaceuticals while under patent protection (Mercurio, 2004). This resulted in long delays (often years) between the development of new drugs to treat disease endemic to poorer nations such as HIV-AIDS and their availability in these countries (Abbott, 2005). In its attempt to level the playing field, so to speak, and offer all WHO member nations the same rights of protection for inventions, novel technologies and processes, the TRIPS agreement overlooked the basic fact that member nations of the WHO are not a level playing field, but have individual economic bases that would be unequally served by the implementation of this protective mandate (Ewelukwa, 2005). This important issue as it relates to the implementation of the TRIPS agreement was addressed at a subsequent conference held by the WHO in 2001 in Doha, Qatar. What resulted has been called the “Doha Declaration”; its main purpose was to address the adverse consequences of the TRIPS agreement on healthcare in developing nations (Mercurio, 2004). The Declaration forcefully stated the primacy of healthcare over intellectual property issues in the elaboration of international standards for medical practice and drug discovery and development (Das, 2005). The net effect of this modification to the original TRIPS agreement was to facilitate the issuance of compulsory licenses permitting the export of medicines to designated countries who cannot afford the high costs of specific patented drugs (Matsushita et al, 2006). The Doha Round of multilateral trade negotiations (the Doha Round) formally adopted the Declaration of TRIPS and Public Health, which extended the scope of the original TRIPS agreement to address the components of the initial declaration that inadvertently created important disparities between wealthy and poorer nations regarding access to pharmaceuticals and other important healthcare issues (Das, 2005). The Doha Round explicitly stated that WHO member nations have the fundamental right to enact measures designed to protect public health of their citizenry (Mercurio, 2004). It also attempted to address many of the issues and ambiguities of the original TRIPS agreement in order to provide a greater equity among all member nations in matters that relate to the development of new pharmaceuticals, patent protection rights, and trade agreements that impact accessibility to healthcare products under international patent protection (Abbott, 2005). Most importantly, the DOHA Declaration sought to affirm the rights of developing nations to access new lifesaving drugs and to focus attention on many of the world’s current healthcare conditions that have reached crisis proportions (Das, 2005). The uniqueness of this document involves its primary focus on global healthcare needs as they involve the WTO. Most importantly, it asserted that a country’s obligation to meet the healthcare needs of its citizenry must take precedence over issues of trade, commerce and intellectual property rights agreements set forth by the TRPS agreement (Mercurio, 2004). The Doha Declaration was hailed as a triumph by many participating nations as a global statement that forcefully addresses the healthcare crises experienced by many developing nations in the context of commerce trade and new drug development (Das, 2005). Effects of the TRIPS Agreement on the promotion of technological innovation Another important area neglected by the TRIPS agreement and the subsequent Doha Declaration involves the deficit of research to develop new drugs designed to treat diseases endemic to third world countries (Rao and Guru, 2003). Current estimates are that 1.7 billion people die each year in underdeveloped nations as a result of inadequate medical care that includes lack of accessibility to therapeutic medicines. The diseases that afflict the poor represent a neglected area for research and development of new medicines by pharmaceutical companies, as the prospects of a profit-making return are low (Abbott, 2005). Pharmaceutical companies are generally unwilling to devote the enormous capital investments necessary to develop new medicinals to treat diseases where there is little financial profit to be gained at the end of the process (Rao and Guru, 2003). The TRIPS agreement addresses only the issue of patentable drugs that are cost effective to produce; there is currently no provision that addresses this critical healthcare issue as it relates to global health and the commercial requirements to sustain pharmaceutical profitability. The Doha Declaration, in its broadest scope, addresses this issue in its stated purpose of promoting the access of medicines to all people (Das, 2005). This broad-based provision may be interpreted readily to suggest that it encourages strategic methods to ensure a greater focus on research and discovery of medicines designed to treat diseases endemic to the developing world (Ewelukwa, 2005). The TRIPS agreement established standards of protection of intellectual property rights in the form of patent protection for all inventions, including new technologies and pharmaceuticals. (Ewelukwa, 2005). The protection covers a period of twenty years from the time of patent filing, and prohibits the manufacture, sale or import of a patented object until after the date of patent expiry. All nations who are members of the WTO are obliged to abide by this mandate. The goal of the TRIPS agreement was to establish standards for intellectual property rights that would be required of member countries (Mercurio, 2004). The TRIPS agreement established a 20 year minimum patent to be enforced globally on all newly discovered pharmaceuticals. Intellectual property matters covered in the TRIPS agreement include copyrights, Trademarks, product and process patent terms and applications, integrated circuits, and confidentiality/disclosure agreements (Mercurio, 2004). The scope of the TRIPS agreement is vast and includes all areas of intellectual property rights; however, the impact of this agreement is greatest in the area of pharmaceutical drug research, discovery, and dissemination since this is one of the most active areas of new product discovery and has enormous impact on healthcare worldwide (Abbott, 2005). The purpose of establishing this long-term monopoly was to encourage research and discovery of new pharmaceuticals, a process that is extremely costly and represents a high-risk investment with uncertain prospects for financial return. This document established a direct connection between international intellectual property rights and world health issues, particularly as they relate to medicine accessibility on an international scale (Sanders, 2007). This has occurred since the de facto monopoly on the sale of patented medicines through the patent lifetime has resulted in exorbitant pricing increases on patented medicines that have made them virtually inaccessible to poorer nations (Ewelukwa, 2005). The TRIPS agreement attempted to compensate for this inequity of accessibility by allowing developing nations the option of issuing compulsory licenses to meet emergency needs for specific medicines, this measure has proven to be of little benefit as developing nations frequently lack the capability for drug production to meet these needs (de Almeida, 1990). In its attempt to provide a global standard for intellectual property protection rights, the TRIPS agreement was intended to promote the development and accessibility to new technologies, inventions and pharmaceuticals on a global scale. Unfortunately, the fact that economically disadvantaged nations lack the capability to research, develop and/or manufacture pharmaceuticals has placed these nations at a distinctively disadvantaged position not only in regard to procuring the economic benefits specified by the document provisions, but also in improving healthcare conditions that promote social welfare (Ewelukwa, 2005). The TRIPS Agreement does not provide this difference in capacity for research and development of new pharmaceuticals and technologies by poorer nations; therefore, the types of drugs produced and developed are largely under the control of wealthier nations and pharmaceutical companies with little incentive to develop new products that address the major health issues facing these countries (Meng, 1990). An important weakness of the TRIPS Agreement is that it offers little incentive to the larger nations and pharmaceutical companies to develop new products to address the healthcare needs of economically disadvantaged nations (Trebilcock and Howse, 2005). The issue of accessibility is moot if a needed medicine does not exist because of a lack of research in developing new drugs to meet specific healthcare needs. For this reason, diseases endemic to poorer areas of the world have been largely neglected by research and drug development (Sanders, 2007). It is essential that a comprehensive global intellectual property rights agreement include incentives to encourage research and discovery of new drugs and technologies designed to meet the urgent healthcare needs of economically underdeveloped nations (Ewelukwa, 2005). The failure to address issue creates a permanent in inescapable disparity of access to healthcare discoveries between economically privileged and underprivileged areas of the world (Abbott, 2005). Impact of the TRIPS Agreement to the mutual advantage of producers and users of technological knowledge In attempting to address fundamental inequities related to issues of accessibility, the Doha Declaration affirmed the original provisions of the TRIPS Agreement stating that member nations have the right to enact legislation that provides for exemptions to the patent protection provisions of TRIPS under circumstances of medical need that require access to patented drugs at affordable cost to the member nation (Mercurio, 2004). This assertion emphasizes the intent of the original TRIPS Agreement to place healthcare needs of member nations at a higher priority than the protection of property rights by global agreement (Das, 2005). This provision of TRIPS was elaborated further by the Doha Declaration to provide for flexibility among member nations in adherence to TRIPS Agreement provisions on intellectual property and patent rights when needed in order to protect public health. Specifically, this provision of TRIPS permits member nations to supercede TRIPS patent agreement provisions by importing generic versions of patented pharmaceuticals when needed to meet healthcare crises, epidemics and other emergencies (Weiss, 1990). These exceptions cannot be enacted without compliance to the procedural steps outlined in the TRIPS provisions. The TRIPS provisions that require licenses for export have done much to increase accessibility to pharmaceuticals. This compulsory licensing mechanism is designed to ensure the right to access patented medicines by developing nations (de Almeida, 1990). Evaluation of balance of rights and obligations affected by implementation of the TRIPS Agreement The Implementation Agreement that elaborates further on the original TRIPS Agreement has provided a mechanism to address the inherent accessibility issues present in the original TRIPS Agreement; however, there are many weaknesses in the provisions that have not been adequately addressed (Mercurio, 2004). Among these areas of concern are details regarding specific diseases and/or geographic regions and countries that require exemptions from patent rights enforcement. Another weakness is a lack of provision for provider costs involved in patent exemptions that afford increased drug accessibility. The most significant weakness of the document is its failure to safeguard the mechanism for increased accessibility from fraud and diversionary methods to import and export patented drugs fraudulently. This latter loophole may jeopardize the entire premise of intellectual property protection upon which the TRIPS Agreement was established (de Almeida, 1990). The issue of diversion of patented pharmaceuticals is very serious matter as it threatens to undermine the entire basis of the TRIPS Agreement (Ewelukwa, 2005). One of the major arguments regarding TRIPS implementation involves the failure of the agreement to provide for an effective mechanism to monitor the diversion of medicines. Current TRIPS guidelines involve only technical and financial incentives to prevent diversion and only at the request of a member nation. This is clearly an inadequate means to prevent or block the ongoing diversion of patented pharmaceuticals to third party markets by unlawful means. The TRIPS Agreement has no mechanism of enforcement of patented property importation or exportation; there is no system of redress or penalties for fraud (Matsushita et al, 2006). Another important issue relates to member nation compliance. Few nations have actively sought licensing to produce generic drugs or to enact legislation to address the exemptions that may be necessary to implement TRIPS provisions in areas where healthcare emergencies may arise (Mercurio, 2004). It also has become apparent that the TRIPS Agreement has resulted in decreased availability of patented pharmaceuticals in the developing world. This negative impact also has been experienced by nations who lack the capability to produce generic versions of patented drugs, such that their availability is limited even after patent expiry (Ewelukwa, 2005). Is the TRIPS Agreement Conducive to Social and Economic Welfare? The Doha Declaration attempted to extend the parameters of the TRIPS agreement by directly addressing the healthcare issues of member nations as a foundation for establishing flexibility provisions. In so doing, the document has had the affect of attracting global attention to the many epidemics of infectious disease and endemic medical disorders that plague many parts of the world, and often occur in less developed countries and regions (Mercurio, 2004). Among the healthcare issues cited are the HIV/AIDS epidemic in sub-Saharan Africa, tuberculosis and malaria, all of which continue to extract an enormous toll of suffering and mortality in developing areas of the world (Abbott, 2005). The TRIPS Agreement has also had a negative impact as it relates to regional and bilateral free trade agreements (FTAs) between member nations (Matsushita et al, 2006). This has resulted in part due to the requirements for additional patent protection provisions to the FTAs in accord with the TRIPS-Plus provisions. These provisions were designed to create a higher standard of patent protection than can be achieved on a multi-national level and were incorporated due to pressure from the pharmaceutical industry. The increasing limitations of FTAs on patent flexibility has the potential of creating a stranglehold on regional importing and exporting of pharmaceuticals essential to meeting the healthcare needs of participating nations. Among these FTA inclusions are restrictions on compulsory licensing, the creation of “new use” patents, barriers to parallel importation, and stricter market regulations tied to patent rights. Although these restrictions are not present in the original TRIPS Agreement, they are consistent with WHO standards and represent a serious loophole that threatens to undermine the effective implementation of the TRIPS Agreement (Matsushita et al, 2006). An important extension of the TRIPS agreement encompassed by the Doha Declaration involves the assertion that the implementation of TRIPS’ provisions must be untaken with the view of addressing international healthcare issues, including the need to develop new medicines and pharmaceuticals to meet the needs of the specific healthcare concerns of member nations (Mercurio, 2004). This provision was designed to address the critical need for pharmaceutical companies to conduct research and discovery protocols designed to develop drugs to treat diseases that occur primarily in underdeveloped nation s of the world. Currently, these diseases are neglected by researchers and pharmaceutical R&D programs, as the development of new drugs to treat these diseases offers little prospect of profitability (Ewelukwa, 2005). In this fashion, the Declaration established a connection between intellectual property rights and the issue of new drug development as it relates specifically to neglected global diseases. Moreover this amendment to the TRIPS agreement brings focus to the issue of intellectual property rights as they affect accessibility of new drugs and pharmaceuticals to developing member nations (Mercurio, 2004). This component of the Doha Declaration addresses one of the most serious weaknesses of the TRIPS Agreement, which involves the inherent disparities created by the provisions of the original agreement regarding intellectual property rights that impede accessibility of new, patented life-saving medicines by poorer nations (Das, 2005). This economic disparity represents a major flaw of the TRIPS agreement that its global implementation untenable in the context of human rights issues (de Almeida, 1990). Among its amendments to the TRIPS agreement, the Doha Declaration includes flexibility in compliance to sale and distribution of patented pharmaceuticals to areas of the world where they are desperately needed, but unaffordable due to economic issues (Das, 2005). A major goal of the Doha Declaration was to extend the mandate of the TRIPS agreement by asserting that the need for intellectual property rights and protection on a global scale must be evaluated in the context of social welfare concerns among member countries and that the primary goal of such trade agreements must be to promote both the economic and social well-being of WTO members, particularly as these issues impact public health (Das, 2005). These “flexibility” provisions may be adopted by member nations when necessary to meet their healthcare needs. CONCLUSIONS The TRIPS agreement has emerged as the world’s most important guideline for the development of pharmaceuticals designed for global consumption. Its effects are based largely on its standardisation of patent intellectual property rights that has encouraged the widespread increase in the research and development of new pharmaceuticals. The stabilization and consistency afforded to patent rights by the TRIPS agreement has fostered a greater interest on the part of pharmaceutical companies to develop and market new drugs in the global sphere. Unfortunately, a significant disparity exists between some of the loftier provisions of the TRIPS Agreement and the realities of its implementation. In attempting to devise a universal standard that would promote the development and dissemination of new inventions and discoveries worldwide, TRIPS has not lived up to this expectation. Nowhere has the impact been greater than in the area of pharmaceutical discovery and global healthcare issues. The patent rights protection components of the agreement have resulted in a tremendous inequity between the wealthier nations who develop new drugs and profit from their marketability under the protection of international intellectual property protection standards and the poorer nations who may not be able to afford the cost of the patented pharmaceuticals. The net effect is an imbalance of production, profit and consumption that places nations with less economic advantage in a situation where they are not allowed to producer cheaper, generic versions of marketed drugs prior to patent expiry and who lack the economic resources to develop new patentable medicines or to afford to purchase patented drugs currently on the market. The current flexibility to access of patented medicines by nations in need is insufficient to address the significant and basic design flaws in this document. The differences in economic status and healthcare needs between wealthy and poorer nations is not a transient event but rather involves a stable disequilibrium that must be balanced by incorporating solid provisions into international trade agreements that provide a specified mechanism for nations meeting established criteria to obtain patented products and technologies at affordable cost. This mechanism should not be implemented ad hoc on a case-by-case application basis, but must be grounded in the provisions of the agreement. This focus is necessary to produce an inclusive document that balances the needs and productivities of member nations to address the accessibility to essential patented medicines to all member nations. Yet another disparity that was not addressed by the TRIPS Agreement or the subsequent Doha Declaration involves the almost virtual absence of research of new pharmaceuticals designed to treat diseases endemic to the developing world. Among the most serious of these is HIV/AIDS which is epidemic in certain areas of sub-Saharan Africa and diseases receiving less global attention, including malaria and tuberculosis. Because of the huge costs that are required to research and develop new drugs, major pharmaceutical companies often will not or cannot devote research efforts to develop drugs that will be largely unaffordable in the regions of the world where they are most needed. While the pharmaceutical companies have received much criticism for the failure to address these global healthcare needs, it must be understood by the global community that incentives must be incorporated into trade and commerce agreement affecting intellectual property rights and distribution that make the endeavor to find new treatments for third-world diseases a more cost-effective enterprise. In wealthy nations, research of new treatments for rare diseases has been promoted by government agencies that confer “orphan drug” status to these research and discovery efforts. The patent and reimbursement terms of these agreements are designed to encourage pharmaceutical companies to direct their attention to diseases whose treatment offers little remunerative benefit. Similar approaches might be utilized to encourage research and development of new pharmaceuticals to treat diseases whose occurrence is largely restricted to developing nations. Unfortunately, the TRIPS Agreement has done little to address this urgent issue that has a tremendous impact on global healthcare and requires immediate attention. Yet another weakness of the TRIPS Agreement cited in this essay is the absence of an implementation provision that would monitor the distribution practices for patented properties in a manner that provides for redress to fraudulent trade activities. Current provisions and additions provided by the Doha Declaration set forth a policy agenda requiring the mandatory licensing of pharmaceuticals based on health emergency needs to poorer nations. There is little enforcement of this regulation; moreover, this flexibility clause invites fraudulent abuses involving the purchase of low cost patented drugs and subsequent re-sale for huge profit to third party consumers. These practices not only undermine the foundations of the TRIPS Agreement but also are detrimental to healthcare, since the low-cost pharmaceuticals may never reach their intended patients. This oversight may be addressed by instituting a regulatory body in the WTO whose function involves oversight of the TRIPS Agreement. Yet another encroachment on the successful implementation of the TRIPS Agreement is the Free Trade Agreements that have been made bilaterally or regionally that significantly alter the intellectual property rights standards set forth by the TRIPS agreement. The Free Trade Agreements do not fall under the purview of the TRIPS amendment and often set a much higher standard for the exchange of patented materials between neighboring or regional nations. The net effect of the FTAs is to undermine the provisions of TRIPS, which were established in the form of minimum criteria that could be increased by individual free trade agreements. The existence of these FTAs with highly restrictive standards has created greater barriers to patent product accessibility to economically challenged nations. Currently, there is no penalty imposed by the WTO for engaging in such restrictive agreements; moreover, it is essential that thse standards of intellectual property protection se forth by the TRIPS Agreement be defined to represent global norms rather that minimum standard requirements. On the positive side, the TRIPS Agreement and the subsequent Doha Declaration represent an important set of documents established by members of the World Trade Organisation that have brought international healthcare as it relates to drug discovery and intellectual property rights to the forefront of the world stage. One cannot expect that a single agreement can solve the many problems and challenges associated with development and exchange of new products and technologies. However, the TRIPS Agreement places these important commodities in the realm of international trade and establishes a set of rules that require compliance by member nations. These international standards are essential if a global focus on pharmaceutical technology is to be achieved; however, it is essential that the provisional agreements take into account the intrinsic differences that define the multinational WTO participants. These differences include not only economic status, but also differences in needs that must be addressed by emergent technologies and pharmaceuticals. Increased efforts must be devoted to enhancing the infrastructures of developing nations to support national platforms of drug discovery, development and distribution that will have the effect of a more equitable social system that may benefit fro the international trade agreements such as TRIPS and the Doha Declaration that have provided an insight into the relationships between trade, commerce and social welfare. References Abbott, F. (2005) The WTO Medicines Decision: World Pharmaceutical Trade and the Protection of Public Health. American Journal of International Law, 317. 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(1990) GATT and Intellectual Property Rights- The International Law Framework, Liberalization of Services & Intellectual Property in the Uruguay Round of GATT. Progress & Undercurrents in Public International Law, Volume 6 Fribourg: University Press. Rao, M. B., and Guru, M. (2003) Understanding TRIPS, Managing Knowledge in Developing Countries, New York: Response Books. Sanders, A. Kaperman. (2007) The Development Agenda for Intellectual Property Rational Humane Policy or ‘Modern-day Communism, Intellectual Property & Free Trade Agreements, International Intellectual Property Law Series. New York: Hart Publishing. Trebilcock, M., and Howse, R. (2005) The Regulation of International Trade, 3d Edition. London: Routledge. Weiss, F. (1990) TRIPS in search of an Itinerary: Trade Related Intellectual Property Rights and the Uruguay Round Negotiations Liberalization of Services & Intellectual Property in the Uruguay Round of GATT. 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