By Carlos M. Correa
GENEVA, Sep 29 2014 (IPS)

The steady increase in patent applications and grants that is taking place in developed and some developing countries (notably in China) is sometimes hailed as evidence of the strength of global innovation and of the role of the patent system in encouraging it. 

Carlos M. Correa

However, such an increase does not correspond to a genuine rise in innovation. It points instead to a major deviation of the patent system away from its intended objective: to reward those who contribute to technological progress by creating new and inventive products and processes.

The increase in the number of patents reflects, to a large extent, the low requirements of patentability applied by patent offices and courts. Patents granted despite the absence of a genuine invention detract knowledge from the public domain and can unduly restrain legitimate competition.

Low standards of patentability encourage a large number of applications that would not otherwise be made, leading to a world backlog estimated at over 10 million unexaminedpatents.

This problem affects various sectors. For instance, Nokia is reported to hold around 30,000 patents relating to mobile phones, a large part of which are likely to be invalid, while Samsung holds more than 31,000 patent families. A study covering various fields of clean energy technologies, including solar photovoltaic, geothermal, wind and carbon capture, found nearly 400,000 patent documents.“The steady increase in patent applications and grants … does not correspond to a genuine rise in innovation. It points instead to a major deviation of the patent system away from its intended objective: to reward those who contribute to technological progress by creating new and inventive products and processes”

The proliferation of patents is particularly high and problematic in the pharmaceutical sector, where large companies actively seek to acquire broad portfolios of patents in order to extend patent protection beyond the expiry of the original patents on new compounds. These ever-greening strategies allow them to keep generic producers out of the market and charge prices higher than those that would otherwise exist in a competitive scenario.

For example, the basic patent for paroxetine, an antidepressant, expired in the late 1990s, whereas ‘secondary’ patents will extend up to 2018.

Ever-greening strategies by one company often force others to follow the same pattern as a defensive approach.  The proliferation of ‘secondary’ or ‘spurious’ patents can impose significant costs on patients and public health systems.

Several measures can be applied at the national level to avoid the proliferation of patents on trivial developments in full consistency with the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS), because they fall within the policy space that World Trade Organisation (WTO) members have retained to design and apply their patent laws.

The most important policy that governments may implement is the rigorous application of the requirements of patentability, based on a thorough examination of patent applications. The TRIPS agreement neither defines the concept of ‘invention’ nor how such requirements need to be interpreted.

Thus, national laws may differentiate inventions and discoveries, and require that the former result from an inventive activity, thereby excluding pre-existing subject matter that is merely found, such as natural substances.

While some patent offices grant patents on the basis of legal fictions on novelty, there is no reason to follow such practices in other jurisdictions.

An example of this practice by some patent offices is to admit what are known as ‘selection patents’, whereby one of more items that were previously disclosed are independently claimed. This type of patents provide an effective means of ever-greening, because protection can be extended for the full length of a new patent, i.e. normally twenty additional years, despite the fact that novelty was actually lost when such items were first disclosed.

While some large patent offices, such as the U.S. Patent and Trademark Office, the European Patent Office and the Chinese Patent Office, seem to apply a lax inventive step standard thereby allowing for the granting of a large number of ‘low quality’ patents, there are strong public interest arguments to follow a different approach, particularly in developing countries.

A strict application of the industrial applicability/usefulness requirement, when provided for by the national law, may also contribute to prevent the grant of unwarranted patent rights.

This is the case, in particular, for claims on new medical uses, which are equivalent to claims over methods of treatment that have no industrial application or technical effect. The lack of industrial applicability may be a sufficient ground to reject such claims.

Given the policy space left by the TRIPS agreement to adopt their own definitions of the patentability standards, and to do so consistently with their legal systems and practices, governments can follow different methods to ensure that patents are granted only when there are sufficient merits under the applicable law.

Governments may introduce specific standards in the patent laws themselves. A notable case is the Indian Patent Act, as amended in 2005, which incorporated in section 3(d) specific standards to assess patent applications in the field of chemicals and pharmaceuticals.

In a case brought by Novartis (a Swiss pharmaceutical company) against the rejection of its patent application relating to a beta crystalline form of imatinib mesylate, the Indian Supreme Court held that the claimed invention failed in both the tests of invention and patentability.

The definition of the standards of patentability can also be made through regulations, including patent offices’ guidelines. A good example is provided by the guidelines on the patentability of pharmaceutical products and processes adopted by the Argentine government in 2012 to limit the ever-greening of pharmaceutical patents.

Finally, it is worth noting that in applying patentability standards, patent offices can differentiate, in line with the TRIPS agreement, among fields of technology in order to take into account particular features of specific sectors and public policies objectives, for instance in relation to the promotion of generic drugs.

Measures to accommodate these differences constitute a necessary response to the diversity of technologies and, consequently, a condition sine qua non for an intrinsically balanced system of protection that remains neutral in its effects on competition. (END/IPS COLUMNIST SERVICE)

(Edited by Phil Harris)

This column is taken from the author’s research paper on ‘Tackling the Proliferation of Patents: How to Avoid Undue Limitations to Competition and the Public Domain’, published by the South Centre (http://www.southcentre.int/research-paper-52-august-2014/).

Excerpt:

By Thalif Deen
UNITED NATIONS, Feb 26 2013 (IPS)

When U.N. Secretary-General Ban Ki-moon, a former foreign minister of South Korea, met with Psy last October, he jokingly told the wildly popular rapper that he was “a bit jealous” of him.

Courtesy of Samuel Koo

“Until two days ago, someone told me I am the most famous Korean in the world,” Ban told the pop star, who has generated over one billion views on YouTube, the highest ever in the website’s history.

“Now, I have to relinquish (that title). But I have no regrets,” he said during a photo opportunity – even as the secretary-general pretended to gyrate like the rapper, triggering peals of laughter in his 38th floor offices in the U.N. Secretariat.

Not to be outdone, Psy, who has skyrocketed to fame with his Gangnam Style “wacky horse-dance” video, responded with mock-seriousness, “So, now you have the first and second famous Korean in the same building.”

But both Ban and Psy (real name: Park Jae-sang), two global brand names from the Republic of Korea (ROK), have been outpaced by one of the largest electronic conglomerates in that country: Samsung.

Last year, one U.S. newspaper branded the electronic giant, which has invaded most offices and homes in the United States with its smart phones, tablets, TV sets, refrigerators and washing machines, with a title worthy of its name: the Republic of Samsung (Forget ROK).

Samuel Koo, chairman of the Presidential Council on National Branding, who presides over a brand-conscious institute in the capital of Seoul, says Koreans seem to have a love-hate relationship with big conglomerates, referred to as “chaebol”, and particularly with Samsung.

With its more than 60 affiliates, Samsung accounts for a quarter of Korea’s exports and stock market and generates a whopping 20 percent of its gross domestic product (GDP).

In an interview with IPS, Koo said while Koreans are enjoying the fruit of the economic success that Samsung and other chaebol have brought, they also seem troubled by the fact that its enormous power also influences politics, government and even media.

Still others complain about Samsung’s outlawing of unions and corporate governance, which lags behind international standards, he added.

For example, the Korean Development Institute’s study shows that Chairman Lee Kun-hee’s family exercises voting rights in affiliates that are 17 times greater than the family’s actual shareholdings.

The anticipated succession from Lee Kun-hee to his son, Lee Jae-yong, will once again underline the family’s grip on power, said Koo, who last year was the U.N. Commissioner-General for Expo 2012 and also president of the Seoul Tourism Organisation.

Excerpts from the interview follow.

Q: What is the reason for the growing phenomenon of Korean brand names?

A: Aside from Samsung, which made the top 10 for the first time on the world’s 100 Best Global Brands in 2012 by Interbrand, the world’s leading brand consultancy, Hundai and Kia made to the list by being ranked as 53 and 87, respectively.

LG, SK and POSCO are other brands that will push Korea to be the economic engine of Asia while sustaining its vibrancy as forecast by experts and news media at home and abroad.

Some predict conglomerates such as Samsung will help propel Korea to the rank of the fourth most affluent country in the world in 2050 with per capita income estimated at 107,752 dollars.

Q: How visible is the Korean brand name in the world of culture, including art, music, movies and cuisines?

A: In recent years, Korea has emerged as a powerhouse in all spheres of culture and sports – the most notable being the phenomenal success of Psy. The Korean Wave, Hallyu, is certainly a recognisable brand in popular culture which includes TV Dramas and K-Pop.

Director Kim Ki-Duk’s anti-capitalist movie “Pieta” has won the coveted Golden Lion prize at the Venice film festival. We made to the fifth in the gold medal standings of the 2012 London Olympics.

Korean artists’ presence in classical music, ballet.and paintings is iincreasingly visible as well. Korean food is also gaining global attention.

Q: Korea is one of the few countries in the United Nations which transformed itself from a recipient of aid to a donor. What would be its contribution to the world’s poorer nations?

A: Korea’s overseas assistance programme consists of the overseas volunteer programme called World Friends Korea (WFK), official development assistance (ODA) and Knowledge Sharing Programme (KSP). Since 2009, Korea has sent more than 20,000 WFK volunteers overseas, the second largest in number after the U.S. Peace Corps. The WFK programme will continue to be expanded.

Korea’s still small ODA will reach 0.25 percent of its GDP by 2015. Over the last five years we have been increasing our aid to least developed countries (LDCs) and other low-income countries (LICs), particularly heavily indebted poor countries (HIPCs).

Our goal of course is to reach the U.N. recommended level of 0.7 percent. Also through KSP, Korea is transferring its development experience to developing countries. Among the countries that have benefited from the programme are Vietnam, Cambodia, Algeria, Azerbaijan and Ghana.

Excerpt: