PHARMACEUTICAL INDUSTRY IN EUROPE
8. Protecting the international
8.2 EU ADVOCACY OF IPRS AND THE TRIPS AGREEMENT
The IP ʻdoctrineʼ of the advanced pharmaceutical industry in Europe has already been described in great detail in Chapters 4 and 5. Special attention was also given to the rhetoric used by the industry in order to express its IP position.
This section looks at the governmental end of the IP equation, describing the views expressed by the EU (with specific reference to the UK and Germany) on IPRs generally and on TRIPs in particular. The result, as portrayed below, shows a high level of similarity between the IP views and rhetoric of the EU and that of the industry.
8.2.1 The Views of the EU on IPRs
Examining various documents, position papers, statements and website information concerning the EUʼs approach towards IPRs, it is possible to argue that the EU is an enthusiastic supporter of IPRs.
Most notably, the EU adheres to the assumption that IP protection is an important element which positively affects its economic performance and competitive abilities. To cite a few examples: in a special 1998 report on IPRs, the European Commission (henceforth, the Commission) argued that ʻIndustrial property (IPRs) is no longer regarded as just a complex area reserved for experts alone, but as a strategic issue of importance to growth in the communityʼ.1 A different report, dated October 1998, by the Committee on Legal Affairs and Citizenʼs Rights of the European Parliament, argued that ʻintellectual property is an essential factor in the promotion of innovation, and is basic to competitiveness in an advanced society such as that which exists in Europeʼ.2 The same notion was emphasized by the European Commissioner for Internal Market, Frits Bolkestein:
The need for the protection of industrial property rights for innovation and employment and its impact on competition is crucial. My short presentation of what the Commission has already achieved and the on-going activities clearly shows the importance the Commission attaches to the protection of Intellectual Property Rights within the EU and at a global level.3
The language used by the Commission concerning IPRs and future innovation closely resembles the rhetoric of the advanced pharmaceutical industry in Europe. As illustrated by DG Trade:
Numerous industries in the Union are heavily dependent on an effective adequate protection of intellectual property rights in order to guarantee reasonable return on investment for their expenses in research development creativity. For example, the
invention of a pharmaceutical product can require substantial investments in the order of several hundreds million ECUs while costs for the production of a film can easily amount to tens of millions of ECU and in some cases, may exceed one hundred million ECU.4
An additional example can be found in an Annexe Draft to the 1998 Conference of Accession to the European Union, in which the EU argued that ʻpatent protection in the field of pharmaceuticals is of vital importance as the main means of encouraging and protecting in investment and research of new productsʼ.5 The Commissionʼs views on the relationship between patents and industrial competitiveness are best expressed in a 1997 Green Paper entitled Promoting Innovation Through Patents: ʻIt is vital to protect the fruits of innovation. In economic terms, it has been clearly established that companies with specialized know-how which sell branded products and patented products or processes have a competitive advantage when it comes to maintaining or expanding their market share.6
Leading country members, such as the UK and Germany, have also expressed their solid support for IPRs, emphasizing their contribution to innovation and investment in Europe. When referring to various types of IPRs (patents, copyrights and trademarks) the DTI argued that ʻa strong system for protecting these measures is key to encouraging innovation and technology transfer in developed and developing countries alikeʼ.7 In a White Paper concerning world poverty published in December 2000, the UK put particular emphasis on IPRs and investment in pharmaceuticals: ʻIntellectual Property Rights – for instance, conferring copyright, patent or trademark protection – provide an essential incentive for private investment in research and development. This is particularly so in medicine and agriculture, where research can be costly and long term, and where the results are uncertain.ʼ8 A similar view was expressed by the President of the German Patent Office, Hans Georg Landfermann, concerning the increase in pace and volume of patent applications in Germany: ʻThis growth evidences the great importance that industry attaches to the protection of industrial property rights. Inventive talent and innovativeness are the basis for success particularly in todayʼs knowledge society.ʼ9
Also, the EU tends to attach positive features to IPRs with respect to their welfare and economic implications for society as a whole. As noted by the Director of the Industrial Property Unit in the Commission DG Trade (DG I/D/3), Paul Vandoren: ʻI have yet to come across a convincing paper suggesting that not having intellectual property laws will enhance long term growth. Also, the limitation in time of the protection granted for inventions inevitably implies that in due course their benefits will be truly shared by all citizens.ʼ10
Similarly, the Committee on Research, Technological Development and Energy of the European Parliament, called for the inclusion of an IP system in
the EUʼs 1996 annual research programme (referred to as the 5th Framework), expressing the view that IP ʻencourages, rather than inhibits, the transfer of technologiesʼ.11 The Commission, in one of its position papers, chose to link IPRs to neo-liberal and democratic ideals, arguing that the ʻprotection of these rights is a basic feature of democratic legal systems and market economiesʼ.12 8.2.2 The Views of the EU on the TRIPs Agreement
The EU is a prominent advocate of TRIPs and emphasizes the precedent established by the agreement in terms of the global protection of IPRs and the prevention of IP piracy. The Commission describes TRIPs as a ʻmajor step forward in the global protection of intellectual property rights through establishing minimum rights for right-holders and adequate enforcement mechanismsʼ.13
More specifically, the EU emphasizes the IP achievements secured by the TRIPs agreement, including the basic principles of national treatment and most favoured nation mechanisms for the settlement of disputes, TRIPs enforcement procedures and the detailed protection standards embodied in the agreement.14 As explained by the Commission:
The binding nature of the obligations accepted by its members is a particular strength, since the WTO has been able to go further to secure enforcement than specialised agencies such as the World Intellectual Property Organisation (WIPO), with which the WTO cooperates closely. Significant trade friction caused by international piracy and the sale of counterfeited goods was one of the driving forces behind the efforts to get a WTO agreement on IPRs.15
Indeed, in 1998 the Commissionʼs Vice President, Sir Leon Brittan, elaborated on the achievements secured by the WTO, including those in the field of IPRs:
The track record of the WTO since the conclusion of the Uruguay Round has been extremely positive for us all, bringing better business certainty and better market access. Tariff and non-tariff barriers have been slashed, our intellectual property has started to benefit from global protection, and our services industries are opening up new markets.16
The EU openly admits that developed countries were the driving force behind TRIPs, noting that ʻindustrialised countries have long shared a common appreciation of the necessity to secure the protection of intellectual property rights through the provision of administrative measures and civil and criminal legal procedures for their protectionʼ.17 In fact, according to the Commission, the EU played a leading role in the creation of the TRIPs agreement.18 Also, the Commission explicitly acknowledges that the EUʼs international activities are closely linked to the interests of European IP-based industries. For instance,
the Commission argues that its ʻprolific activity is due to the need, clearly felt nowadays, to provide European firms doing business in non-Community countries with an adequate legal framework within which to enjoy effective, genuine protection of know-how and innovationʼ.19 Similarly, in its 1996 report to the European Parliament concerning the WTO, the Committee on External Economic Relations concluded that with the implementation of the TRIPs agreement ʻEU enterprises enjoy similar conditions in third markets to those enjoyed by foreign enterprises in the EU since the completion of the internal marketʼ.20 The Committee also called for ʻfurther rules and sanctions to protect intellectual property because in the era of globalisation and information technologies the competitiveness of undertakings and economies depends on the knowledge and skills of peopleʼ.21
In parallel to expressing its views on TRIPs, the EU argues that developing countries and LDCs would also benefit from the agreement. In this case, the EU places IPRs within the general sphere of trade liberalization, linking developing countriesʼ commitments to a higher level of IP protection to the perceived benefits derived from free-trade and investment.22 According to the Commission, developing countries should internalize the fact that domestic regulation of IPRs and trade liberalization are ʻinterlinked and mutually supportiveʼ.23
Likewise the UK argues that ʻdeveloping countries have an important interest in providing intellectual property protection, as a way of encouraging more investment, research and innovation from which they should benefitʼ.24 When referring specifically to TRIPs it adds that ʻthe UK government believes that the agreement allows WTO members sufficient flexibility to implement domestic IPR regimes which take adequate account of their national circumstancesʼ.25
Furthermore, aware of the obvious gap between developed and developing countries in the distribution of IP gains, the EU emphasizes the long-term benefits the latter may expect from adopting a protective regime of IPRs.26 To quote the Director of the Industrial Policy Unit of DG Trade: ʻWhile it is true that the benefits of intellectual property protection take time to bear fruit, notably in developing countries, we should remain mindful of the fact that those countries which have the highest growth in the last fifty years all have good IP protection laws.ʼ27
Germany, however, expressed a more cautious view on the subject.
For instance, in 1999 the Federal Minister for Economic Cooperation and Development, Heidemarie Wieczorek-Zeul, referred to the potentially harmful effects of IP monopolies in developing countries:
The current dispute in the WTO over the protection of intellectual property shows the amount of power linked to knowledge and the political and economic interests at stake. Industry in the rich countries is demanding better protection in marketing the results of its research and inventions…From a business point of view that makes sense.
However, it also understandable that the developing countries fear being excluded from important technical developments, and often even being denied the benefits that others are deriving from local knowledge and genetic material from their own countries, for instance in the field of medicine.28
Notwithstanding the above, the IP views of the EU are not a result of an institutional reality in which common sets of ideas and beliefs were translated into a highly protective IP perspective. Nor is it a pluralist process that reconciles the divergent views and interests concerning IPRs. In Chapters 1 and 6 it was suggested and demonstrated that there is no single and transparent institution responsible for the IP international policy-making of the EU and that the IP views of different interest groups are conveyed through a multitude of channels.
Consequently, lobbying on IPRs is not exclusive to the advanced pharmaceutical industry in Europe or to IP advocates in general. For example, important consumer groups such as the Trans Atlantic Consumer Dialogue (TACD) and the BEUC (the European Consumersʼ Organisation), have expressed strong reservations about the TRIPs agreement.29 The TACD, for example, lobbied DG Trade directly in order to influence the Commission to take a much more moderate and flexible view regarding the implementation of the TRIPs agreement in developing countries and in LDCs.30 In fact, the Commission explicitly responded to the proposals made by the TACD concerning IPRs and access to medicines from February 2000, concluding that these recommendations ʻare not justified for legal and practical reasonsʼ.31 This rejection of the IP proposals by the TACD indicates that the Commission is aware of other views, but none the less chooses to support the industryʼs position. In this respect the above data suggests that an interest-based approach seems to provide a better explanatory route for the IP views of the EU as compared with an institutional approach.
Having examined the declarative level we can persuasively argue that the EU is highly supportive of IPRs and of the TRIPs agreement. The EU regards IPRs as an important factor contributing to its overall economic performance, most notably to its ability to compete against other industrial countries and to its attractiveness for future investments. As for the TRIPs agreement, the EU is equally enthusiastic, considering the agreement to be a major step forward in the creation of a global IP regime, which would naturally benefit its IP-based industries. Interestingly, the language used by the EU, and by the Commission in particular, is very similar to the rhetoric used by the advanced pharmaceutical industry in Europe. The EU tends to over-emphasize the potential benefits arising from IPRs. At the same time it downplays the implications deriving from the agreement, particularly for developing countries and LDCs.