By Carlos M. Correa From Caribbean Life

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.

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.
For more on this story go to: http://www.caribbeanlifenews.com/stories/2015/2/2015-02-03-oped-patent-cl_2015_2.html
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