By Carlos M. Correa
GENEVA, Feb 3 2015 (IPS)

Industry’s demands and political pressures exerted by developed countries to expand and strengthen patent protection worldwide have been based on the argument that patents promote innovation and thereby contribute to achieve social, political and economic well-being, independently of the level of development of the country where they are granted and enforced.

This view ignores the fact that patents do not have the same impact in countries with different industrial bases, research and development (R&D) capabilities and availability of capital to finance innovation, among others.

Carlos M. Correa

Significantly, there is a growing body of academic studies challenging the belief that patents are essential to incentivise innovation, even in advanced countries, or to enhance economic growth.

While many scholars call for a substantial reform of the patent system, others go as far as suggesting its abolition.

In a working paper entitled The case against patents, Michele Boldrin and David K. Levine have argued that “in spite of the enormous increase in the number of patents and in the strength of their legal protection we have neither seen a dramatic acceleration in the rate of technological progress nor a major increase in the levels of research and development (R&D) expenditure. There is strong evidence, instead, that patents have many negative consequences.”

“Both of these observations are consistent with theories of innovation that emphasise competition and first-mover advantage as the main drivers of innovation and directly contradict theories postulating that government-granted monopolies are crucial in order to provide incentives for innovation.”

The role of the patent system is thus controversial, particularly in developing countries.“Patents do not have the same impact in countries with different industrial bases, research and development (R&D) capabilities and availability of capital to finance innovation, among others”

In the last 25 years, much emphasis has been put on the concept of intellectual property as ‘truly property’. Different variants of natural rights-based approaches have been articulated to justify developed countries’ relentless efforts to increase the scope and levels of intellectual property protection, notably for patents.

The idea that patents are a piece of property has provided ideological support for an expansion of the protectable subject matter, the extension of the term of protection, the reinforcement of the exclusive rights, and the strengthening of enforcement measures.

Patents confer exclusive rights. They limit the use of knowledge – a public good by its very nature – and competition, which promotes consumer well-being and innovation.

Nobody can produce or commercialise the protected invention during the lifetime of the patent, unless authorised by the patent holder or under compulsory licences, which are rarely granted. Given the exclusionary effects of patents, they have often been characterised as ‘monopolies’.

Yet, the rights conferred by patents are based on partial and often imperfect factual determinations. The examination process does not allow patent offices to reach definitive
judgments on patentability.

There is also uncertainty regarding the validity of patents in the boundaries of what is protected under individual patents. The patent claims are in many cases ambiguous and it is unclear what the actually protected subject matter is. Australian academic Peter Drahos asserts that “patents, unlike blocks of land, do not come with settled boundaries.”

Thus, it is fuzziness rather than definitiveness that characterises patent grants. This is not accidental, but deliberately sought by patent applicants to discourage competitors.

In addition to imprecise disclosures of what is deemed to be the invention, courts interpret patent claims with different theories and methodologies that lead to diverse outcomes with regard to what is deemed protected and eventually infringed.

Another fundamental problem with the patent regime is that it operates on the basis of a limited capacity to examine the patentability of claimed inventions and on a number of legal fictions created by legislators, patent offices or courts.

Such legal fictions are often dogmatically applied, without a critical assessment of their justification and implications.

A patent is granted in most countries after a substantive examination is conducted to determine whether it meets the patentability standard established by national laws which generally require novelty, inventive step (or non-obviousness) and industrial applicability (or utility).

However, some countries (such as Luxembourg and South Africa) confer patents without such a substantive examination or without assessing inventive step (for example, Switzerland and France).

While patent offices in developing countries (except China) receive a number of patent applications much lower than developed countries, some (such as Argentina, India and Thailand) have introduced legislative or other regulatory changes to tighten the application of the patentability requirements and reduce, through a rigorous examination, the proliferation of patents, particularly in the pharmaceutical field.

The intervention of patent offices through substantive examination in the process of creating patent rights gives them an appearance of validity. However, such intervention offers no guarantee in this respect and the public and uninformed business actors may be grossly misled.

The case of South Africa, where no substantive examination is currently made, is illustrative.

Thousands of patents have been registered in South Africa to cover minor or trivial developments that can block local production or importation of lower-priced generic medicines. However, the government of South Africa recently announced its intention to introduce a system of substantive examination, at least for pharmaceutical patents.

This proposal raised stiff opposition from pharmaceutical multinational companies, which were eventually found to finance a covered lobbying operation aimed at derailing the government’s initiative.

On the one hand, it is to be expected that the introduction of such a system would discourage patent applications that may not survive a serious substantive analysis; hence, the number of applications will presumably diminish over time, especially if fees are established at a level that discourages speculative patenting.

On the other, the available information on patent offices in other developing countries suggests that the number of examiners required to review pharmaceutical patent applications is manageable for South Africa even if it opted to rely on internal examiners only.

Unfortunately, many patent offices have tended to work under the assumption that their role is to grant as many patents as possible, and to decide in favour of the applicant in case of doubt. Applicants are often treated as ‘clients’.

As noted by Dominique Foray, patent offices have become extremely pro-patent since the early 1980s. The applicant, formerly considered with suspicion, has become a ‘client’ whose needs must be satisfied by quick, cheap procedures. The result is a total deterioration of examination procedures.

The patent office should function as a steward of the public interest, not as a servant of patent applicants and must protect the public against the issuance of invalid patents that add unnecessary costs and may confer market power. (END/IPS COLUMNIST SERVICE)

Edited by Phil Harris    

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

* This column is based on South Centre Research Paper No 58 of December 2014. A full version of the paper is available here.

Excerpt:

By Roberto Savio
ROME, Oct 22 2014 (IPS)

The new European Commission looks more like an experiment in balancing opposite forces than an institution that is run by some kind of governance. It will probably end up being paralysed by internal conflicts, which is the last thing it needs.

During the Commission presided over by José Manuel Barroso (2004-2014), Europe has become more and more marginal in the international arena, bogged down by the internal division between the North and the South of Europe.

Roberto Savio

We are going back to a new Thirty Years’ War – which took place nearly five centuries ago – between Catholics and Protestants. Catholics are considered profligate spenders, and there is a moral approach to economics from the Protestant side.

The Germans, for example, have transformed debt into a financial “sin”.  The large majority of Germans support the stern position of their government that fiscal sacrifice is the only way to salvation, and the looming economic slowdown will only strengthen that feeling. As a result, the handling of Europe’s internal governance crisis has largely pushed Europe to the side lines of the world.

It is a mystery why it is in the interests of Europe to push Russia into a structural alliance with China and, in such a fragile moment, inflict on itself losses of trade and investment with Russia which could reach 40 billion euro next year.“We are going back to a new Thirty Years’ War – which took place nearly five centuries ago – between Catholics and Protestants. Catholics are considered profligate spenders, and there is a moral approach to economics from the Protestant side.”

The latest issue of the prestigious Foreign Affairs magazine – the bible of the U.S. elite – carries a long and detailed article on “Why the Ukraine Crisis is the West’s Fault” by Chicago academic John J. Mearsheimer, who documents how the offer to Ukraine to join the North Atlantic Treaty Organisation (NATO) was the last of a number of hostile steps that pushed Russian President Vladimir Putin to stop a clear process of encroachment.

Mearsheimer wonders how all this was in the long term interests of the United States, beyond some small circles, and why Europe followed. But politics now has only a short-term horizon, and priorities are becoming conditioned by that approach.

A good example is how European states (with the exception of the Nordic states), have been slashing their international cooperation budgets. Not only have Spain, Italy and Portugal – and of course Greece – practically eliminated their official development assistance (ODA) budgets, but France, Belgium and Austria have also been following suit. Meanwhile China has been investing heavily in Africa, Latin America and, of course, Asia where the term ‘cooperation’ would not be the most appropriate.

But the best example of Europe’s inability to be in sync with reality is the last cut in the Erasmus programme, which sends tens of thousands of students every year to another European country. Has it been overlooked that one million babies have been born to couples who met during their Erasmus scholarships, and that this programme is being cut at a moment when anti-Europe parties are sprouting everywhere?

In fact, education – and especially culture (and medical assistance) – are under a continuous reduction in spending. As Giulio Tremonti, Finance Minister under Italian Prime Minister Silvio Berlusconi, famously said, “you don’t eat with culture”.

The per capita budget for culture in southern Europe is now one-seventh that of northern Europe. Italy, which according to UNESCO holds 50 percent of Europe’s cultural heritage, has just decided in its latest budget to open up 100 jobs in the archaeological field with a gross monthly salary of 430 euro. In today’s market, this is half what a maid receives for 20 hours of work a week.

Italian politicians do not say so explicitly, but they believe that there is already such rich heritage that there is no need for further investment and, anyhow, the tourists continue to arrive. The budget for all Italian museums is close to the budget of the New York Metropolitan Museum … in the real world, this is like somebody who wants to live by showing the mummified body of his great grandmother for the price of a ticket!

It can be said that, in a moment of crisis, the budget for culture can be frozen because there are more urgent needs. But no need is more urgent than to keep Europe running in the international competition in order to ensure a future for its citizens. And yet, the budget for research and development, which is essential for staying in the race, is also being cut year by year.

Let us look at the situation since 2009. Spain has reduced investment in R&D by 40 percent, which has led to a 40 percent cut in financing for projects and a 30 percent cut in human resources. Italian universities have witnessed a total cut of 20 percent in spending which has meant a reduction of 80 percent in hiring and 100% in projects, while 40 percent of PhD courses have disappeared.

France has cut hiring in centres of research by 25 percent and in universities by 20 percent. Less than 10 percent of demand for projects receives financing because funds are no longer available.

Greece has cut budget for centres of research and universities by 50 percent since 2011, and has frozen the hiring of any new researchers.

In the same period in Portugal, universities and research centres have suffered a cut of 50 percent, the number of scholarships for PhDs has been cut by 40 percent and post-doctoral courses by 65 percent.

It is important to recall that the Lisbon Strategy, the action programme for jobs and growth adopted in 2000,  aimed to  make the European Union “the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion” by 2010. Not only were most of its objectives not achieved in 2010, but Europe continues to slide backwards. The Lisbon Strategy had set 3 percent of GNP for R&D, but southern Europe is now below 1.5 percent.

A notable exception is the United Kingdom. The current government, which works in strong synchronicity with the City and its industrial constituency, has funded a 6 billion euro “Innovation and Research Strategy for Growth” plan to the applause of the private sector.

China is steadily increasing steadily its R&D budget, which is now 3 percent (what the Lisbon Strategy had set for Europe), but it aims to reach 6 percent of GNP by 2020 and, in just seven years, China has become the largest producer of solar energy, bankrupting several U.S. and European companies.

Is cutting Europe’s future in international competition really in the interests of Germany? Or it is that politics are losing the view of the forest while they discuss how many trees to cut, to reach a compromise between the Catholics and the Protestants?

We are now making of economics a moral science, which makes of Europe an unusual world. (END/IPS COLUMNIST SERVICE)

(Edited by Phil Harris)

Excerpt:

Jordi Muñoz began building drones as a hobby in 2007 and is now a founding partner of a fast-growing company in the field. Credit: Courtesy of Jordi Muñoz

By Emilio Godoy
MEXICO CITY, Apr 11 2013 (IPS)

Unmanned aerial vehicles (UAVs), better known as drones, have earned a bad reputation due to their controversial use by the United States in its “war on terrorism”, yet they have almost unlimited potential as tools for scientific research.

The word “drone” is most commonly associated with the remotely piloted and heavily armed aircraft that are used by the United States to strike down suspected terrorists, but have also caused a great many civilian deaths in countries like Afghanistan, Pakistan, Somalia and Yemen.

However, more than 40 countries around the world either deploy or manufacture drones, according to reports consulted for an article published by IPS.

These unmanned airplanes and helicopters are used for such diverse purposes as drawing maps, exploring the ocean floor, measuring temperature or pollution levels, monitoring weather phenomena, and the surveillance of high-risk areas or archaeological sites.

Last month, the U.S. space agency NASA sent drones into the plume of the Turrialba volcano in Costa Rica to study its chemical composition.

“The technology is emerging, the first applications have just barely begun. Society itself has learned to accept drones beyond their military uses, because they have seen the different ways they can be used. It’s just a matter of time” until they become more widely developed and used, said young Mexican entrepreneur Jordi Muñoz, co-founder of 3D Robotics, a pioneer in the manufacture of drones in Mexico.

His story mirrors the evolution of drones, which he began to build in 2007 with the help of 500 dollars provided by U.S. physicist Chris Anderson.

“He gave me the money purely on trust. It was the best 500 dollars I ever invested. I decided to build a drone. I was developing the automatic pilot and I went on Google to look for information when I came across a forum. I went in, registered, and saw that they were posting things about homemade drones,” recalled Muñoz, who is currently finishing a degree in computer engineering at the University of California, Berkeley in the United States.

The forum was DIY (“Do It Yourself”) Drones, an online community created by Anderson in 2007 as a space for hobbyists who build their own UAVs to share experiences, electronic codes and component maps.

“I started to post videos, write code, and document and publish what I was doing,” Muñoz told Tierramérica*. His work caught the attention of Anderson, the editor-in-chief of Wired magazine until this past January and now the young Mexican’s partner in 3D Robotics.

The company does not sell UAVs for military use. The vehicles are designed in the southwest U.S. city of San Diego and assembled across the border in Tijuana, Mexico. They receive between 100 and 150 orders daily from clients in the United States, Brazil, the United Kingdom, Australia, Germany, Israel and Japan.

3D Robotics currently employs 60 people and hopes to expand its staff to 100 by the end of the year. Since its founding in 2009, the company has earned around 10 million dollars through sales and received another five million from three U.S. funds that provide financing for tech firms.

“In 2013 we want to professionalise all of our products. There have been huge advances, everything has now been greatly simplified, and we want to make drones easy to use. But we need engineers to write code, for manufacturing,” said Muñoz.

Working on the basis of open licensing, a network of engineers around the world work together to improve codes and develop more advanced products.

In 2012, Muñoz was chosen as one of the top ten innovators under 35 in Mexico by Technology Review, which is published by the Massachusetts Institute of Technology.

A drone is equipped with a high-speed processor, battery, GPS receiver, compass and sensors like an accelerometer and gyroscope. Unmanned planes can fly for up to three hours, and helicopters for half an hour. Connected to a modem, they can transmit real-time data in a range of up to 60 kilometres.

In Mexico there are no regulations on the use of drones, although the government uses them to fight drug trafficking, some companies use them to supervise construction, and universities use them for scientific research.

At the Center for Research and Advanced Studies of the National Polytechnic Institute (CINVESTAV), three researchers are building prototypes for surveillance and security, with an eye towards commercial production.

“We lost a bit of time. If we had done it five years ago, we would be on a par with other countries. It wasn’t given much importance, so there was no research. We have a great deal of potential, above all because the students we are training start out with a more advanced awareness,” Hugo Rodríguez, a mechatronics researcher at CINVESTAV, told Tierramérica.

“The models will continue to improve, and we will gain experience by solving new problems. We could have a marketable prototype within a short time, with trained human resources,” said Rodríguez, who has a doctorate in automation and signal treatment from the University of Paris XI.

Since 2007, the centre’s specialists have designed a four-engine plane, two fixed-wing aircraft and two helicopters, and have experimented with their automatic controls.

“As this work continues to develop, a marketable technological application could emerge. We’ve been approached by companies, but we didn’t have a prototype ready yet,” said Rodríguez.

Seven students have graduated with Master’s degrees in mechatronics since 2007, and two Master’s degree candidates and two doctoral candidates are now working on this initiative.

Although the commercial use of drones is currently prohibited in the United States – they are only permitted for scientific or recreational uses – the government is preparing to integrate them into the national airspace in 2015. The Federal Aviation Administration (FAA) estimates that as many as 30,000 non-military UAVs will be in the sky by the end of the decade, for a range of different purposes.

A recent study, “The Economic Impact of Unmanned Aircraft Systems Integration in the United States”, predicts that in the first three years of integration, more than 70,000 jobs will be created.

The study, published in March by the Association for Unmanned Vehicle Systems International (AUVSI), an industry group, estimates that between 2015 and 2017, the economic impact of drone integration will be greater than 13 billion dollars and could reach 82 billion by 2025, in terms of revenues earned by manufacturers and suppliers from the sale of new products as well as “the taxes and monies that flow into communities and support the local businesses.”

* This story was originally published by Latin American newspapers that are part of the Tierramérica network.

Excerpt:

Innovation in the pharmaceutical industry has declined drastically in the last ten years despite the high profitability of the so-called “research-based” industry, and the availability of better and more powerful science and technological tools. Not only has productivity in terms of research fallen, but the vast majority of new molecules introduced to the market do not provide new therapeutic solutions since other treatments already exist, normally at a lower cost.

Funding for research is focused on areas with the greatest potential for profit. Those areas that would actually have the biggest impact on public health remain largely ignored. A clear indicator is the lack of investment in fighting diseases that are prevalent in developing countries, such as Chagas’ disease, tuberculosis and malaria.

The problem is that although millions would benefit from this type of investment, the majority of them are poor people who do not create an attractive market for big companies. Neither can they benefit from treatments for non-communicable diseases such as cardiovascular insufficiencies and cancer: even where treatments are available, the high prices of patented medications make them inaccessible.

As a result, in the 21st century, communicable diseases cause more than 10 million deaths per year -according to Health Action International (HAI)- of which 90 percent take place in developing countries; a third of the global population does not have regular access to the medicines that they need. The situation is worse in least developed countries (LDCs) in which up to half of the population does not have access to medicinal treatment.

From both a moral point of view as well as a human rights perspective ­ the right to health is recognised in international conventions and in numerous national constitutions ­ this situation calls for greater responsibility by governments and a new research paradigm centered on public health interests, especially to meet the needs of developing countries.

On May 26, 2012, the World Health Assembly adopted a resolution that could mark the first step toward a change in the current pharmaceutical research model. The members of the World Health Organization (WHO) decided to undertake an in-depth examination, at the governmental level, of a report produced in April 2012 by an international group of experts that recommended the adoption of a binding convention on research and development (R&D). If approved and implemented, such research could generate the medicines needed, particularly in developing countries, to address communicable and non-communicable diseases.

Some of the conclusions and recommendations of the report were the following:

– the present incentive systems, in particular intellectual property rights, fail to generate enough R&D in either the public or private sector in order to meet the health needs of developing countries;

– recent trends in the pharmaceutical industry show a decline in innovation, as reflected by the small number of approval of new molecular entities (NMEs), the majority of which do not represent a therapeutic novelty;

– to promote better financing and coordination of research, an open approach should be promoted, with the results of R&D being treated as “public goods” not subject to the exclusive rights conferred by patents;

– new forms of shared financing, direct subventions, prizes and patent pools (to increase access to health products) should also be promoted, and mechanisms to coordinate research should be established at the global level.

The report recommended that all countries should dedicate at least 0.01 percent of their gross domestic product to R&D relevant to meet the health needs of developing countries. As regards coordination, it advised the establishment of a global observatory on R&D, advisory services and a network of research institutions.

The main purpose of the report was, however, more ambitious: to start discussions regarding a possible binding international convention to promote R&D centered on diseases prevalent in developing countries, including non-communicable diseases.

This recommendation caused the biggest controversy between developed and developing countries at the World Health Assembly. A possible explanation is that developed countries perceive the suggestion of a new research model as a threat towards the present system based on the appropriation of profits from innovation through the patent system.

But the convention, if adopted, would generate more resources and greater efficiency in terms of research by means of better coordination and a fixation of priorities. Although the main beneficiaries would be developing countries, developed countries could also utilise the results of the research. Some of these countries face a severe crisis in their public health systems owing to the increase in the cost of treatment and a reduction in budgets.

The magnitude of the problem that must be confronted in order to generate enough R&D for pharmaceutical products needed by developing countries is such that this objective cannot be reached without effective commitment from all countries. Voluntary contributions from foundations or governments do not offer a sustainable, structural solution. In fact, many of the most promising initiatives for developing new pharmaceutical products to address the diseases that affect the poor are extremely vulnerable, as they depend on the continuity of charitable financing.

In order to promote development of new products and their access to populations, especially in developing countries, it is necessary to change the current research model. The cost of research should be delinked from the prices of the products generated. The challenge is not only about increasing investment in research or improving the rate of innovation. This will not suffice if the new products are not accessible to those who need them. (END/COPYRIGHT IPS)

Carlos M. Correa is special advisor on trade and intellectual property of the South Centre, and a member of the Consultative Expert Working Group of the World Health Organization. For further analysis see South Bulletin 67 Article ( http://www.southcentre.org).