INTERNATIONAL IP PROTECTION
5. Core IP interests and the organizational structure of the advanced
5. Core IP interests and the organizational
relevant IP components (patents, trade secrets and trademarks) are highly protected. Industry arguments in favour of such a system tend to link the future of pharmaceutical innovation, as well as its survival, with the existence of IPRs.
A few examples may be given. EFPIA consistently argues that ʻdevelopment of the pharmaceutical industry crucially relies on intellectual property rightsʼ, adding that ʻany small change, positive or negative, in the IPR rules could dramatically…make our pharmaceutical companies more or less advantageous in developing new, risky and costly technologiesʼ.2 GlaxoWellcomeʼs Chairman and CEO, Sir Richard Sykes, expressed a similar, though more melodramatic, view on the matter: ʻThe research-based pharmaceutical industry tends to be firm in its defence of intellectual property rights because they are the lifeblood of our industry – we literally could not exist without them.ʼ3 Merckʼs chairman, Raymond V. Gilmartin, argues that a strong system of IPRs is one of the most essential conditions determining the ability of US and European pharmaceutical industries to continue to introduce new cutting-edge medicines.4 When referring to biotechnological inventions the German association of pharmaceutical research-based companies, the VFA, argued that the ʻfuture of the research based pharmaceutical industry in Europe hinges on the establishment of legal certainty (IPRs) in this technology of the futureʼ.5
Focusing on specific IP components (patents, trade secrets and trademarks), the demand of the advanced pharmaceutical industry for a strong international IP system becomes even clearer. Together, these forms of IPRs create a strong monopolistic trading environment in which pharmaceutical MNCs are able both to protect their knowledge assets and to exploit them commercially. The IP interests relevant to the advanced pharmaceutical industry in Europe are discussed below.
5.2.1 Strong Patent Protection
The advanced pharmaceutical industry repeatedly expresses its need for strong patent protection, both in terms of scope and duration. Interestingly, the rhetoric used by the industry has two distinctive features.
First, it is quite melodramatic with respect to the ability of patents to stimulate future inventive activities. A typical example is a position paper by IFPMA noting that ʻwithout patent protection, the world would have been deprived of the innovative medicines which have saved countless lives…because the industry as we know it today would not existʼ.6
Second, the language used by the advanced pharmaceutical industry is quite vague when dealing with patent monopolies. The industry either disregards the monopolistic effect of patents or, alternatively, argues that patents actually stimulate competition rather than stifle it. As EFPIA put it: ʻPharmaceutical patents do not provide a monopoly for treating a disease. They only confer an
exclusive right, for a prescribed time – i.e. 20 years from the date of filling the patent application – to prevent others from manufacturing and selling the patented medicine without the permission of the patent holder.ʼ7 Given the negative connotation of the term ʻmonopolyʼ in general, and under a neo-liberal orientated institution such as the WTO in particular, this may not come as a surprise.
5.2.2 Protection of Trade Secrets via Data Exclusivity
The advanced pharmaceutical industry in Europe is interested in internationalizing the use of IPRs as a means of protecting data submitted to regulatory authorities for the purpose of obtaining product marketing approval (data exclusivity).
As argued by the IFMPA: ʻData submitted to meet government registration requirements for a pharmaceutical product should be treated as confidential and not be made available directly, indirectly, or by reference for the benefit of any other commercially interested party.ʼ8
As discussed in Chapter 4, data exclusivity would allow pharmaceutical MNCs to preserve their effective market position (in addition to that provided by patents) vis-à-vis generic competitors. Similar to its patent rhetoric, the advanced pharmaceutical industry uses a defensive tone arguing that to allow generic companies to rely on such data is economically harmful, legally unjust, and may even put patientsʼ health in danger.9
5.2.3 Protection of Trademarks as a way of Securing Brand Loyalty Pharmaceutical MNCs also aim to maintain a strong international trademark system, one that would allow them to secure the brand loyalty of doctors and consumers. In other words, the advanced pharmaceutical industry in Europe opposes policies aiming to restrict the market power which derives from brand- based strategies, such as the Single Community Trademark policy in Europe (Directive 2309/93 EEC, July 1993).
Again, the industry justifies its need for a strong trademark system by linking it to public safety and, at the same time, by blurring its monopolistic implications.
EFPIA argues that a strong trademark system, in addition to protecting brand owners, reduces the risk to consumers from counterfeit or non quality-assured products that may frequently appear under more ʻlaxʼ systems of product differentiation.10 EFPIA adds that ʻtrade mark rights for medicines are vital for protecting patients and should be strengthened rather than threatenedʼ.11
Thus, the advanced pharmaceutical industry in Europe is in favour of continuing to secure a strong system of IPRs. Specifically, such a system should include the following: (1) long term and wide scope of patent protection; (2) exclusivity period for trade-secrets, particularly for information submitted to regulatory
authorities for the purpose of product market authorization (data exclusivity);
(3) high level of brand proliferation via extensive trademark rights.