The TRIPs Agreement represents a major increase in the global protection of intellectual property rights (IPR). This book investigates the realm of intellectual property rights (IPR) within the context of international political economy (IPE).
THE AIMS AND PURPOSE OF THIS BOOK
It takes the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) as a case study and relates it to the advanced (research-based) pharmaceutical industry in Europe. It explores the way in which the latter organized and operated between 1995 and 1999 to secure its interests in relation to the international intellectual property (IP) agenda as set out in the TRIPs Agreement.
THE INADEQUATE ECONOMIC JUSTIFICATION FOR THE ESTABLISHMENT OF IPRS
IPRs are the creation of market exclusivity (monopoly) in the use of existing knowledge inventions for patents and consumer information for registered trademarks. Furthermore, Chapter 3 concludes that the international IP agenda, as derived from the TRIPs agreement, is even more difficult to explain solely in economic terms.
AN INTERNATIONAL POLITICAL ECONOMY
However, the economic theory of patents is far more problematic, as it is currently not possible to conclude whether they provide a net benefit or a net loss for society.2 The structural balance that is built into the patent system – that increase the amount of available knowledge in the future the effective use of existing and available knowledge is hampered in the present – is probably its most problematic aspect.3 As a result, there is no clear theoretical path one can follow to decide on overall economic benefits by patents. All of the above suggests that a purely economic approach cannot provide an adequate and satisfactory explanation for the creation of intellectual property rights.
FRAMEWORK IS ESSENTIAL FOR INVESTIGATING THE LINKAGE BETWEEN INTEREST GROUPS AND
THE ADVANCED PHARMACEUTICAL INDUSTRY IN EUROPE AND THE TRIPS AGREEMENT
- The Importance of IPRs to the Advanced Pharmaceutical Industry
- The Advanced Pharmaceutical Industry in Europe as a Dominant Factor in the Field of IPRs
- The TRIPs Agreement and its Effect on the International Agenda of IPRs during the Period 1995–1999
- The Role of the Data Gathering for this Book and its Contribu- tion to the Efficacy and Accuracy of its Contents
The advanced pharmaceutical industry in Europe considers the regional European level particularly important for its IP-related activities. Therefore, it is more logical that research will focus on the activities of the advanced pharmaceutical industry when the TRIPs agreement was signed in 1995.
THE STRUCTURE OF THIS BOOK
More importantly, the chapter examines the main elements of the TRIPs Agreement (general provisions and basic principles, dispute settlement, enforcement of the agreement, TRIPs Council and the system of notifications). Secondly, the chapter focuses on the operational level, and analyzes the strategies and activities of the advanced pharmaceutical industry in Europe and of the EU in relation to the TRIPs agreement.
THE PLAUSIBILITY OF THE SUBMISSIONS AND RIVAL EXPLANATIONS
Nevertheless, it can be argued that institutions and ideas dominate in the creation and preservation of the international IP system. Despite the revealed tension in the central IP trade-off, the main mandate and institutional culture of IP agencies is still overwhelmingly centered on the protection role.
NOTES
The economic theory of IPRs (patents and trademarks)
- INTRODUCTION
- THE ECONOMICS OF PATENTS
- Research, Development and Inventions
- The Production and Distribution of Inventions in the Absence of Patents
- An Alternative Reward System for Patents
- The Patent System
- The Patent Term of Protection
- Problematic Aspects of the Patent System
- THE ECONOMICS OF REGISTERED TRADEMARKS
- Registered Trademarks as a Method for Optimizing the Production and Dissemination of Product Information to
- Trademarks and Market Power
- Trademarks as a Social Burden
- CONCLUSION
- Patents
- Trademarks
Thus, free-riding presents the first and most fundamental problem in producing inventions in the absence of patents. It is not clear whether the trend towards patent concentration will reduce or increase inefficiency in the patent system.
Economic and political explanations for the emergence of a stronger
- INTRODUCTION
- THE EFFECTS OF AN INTERNATIONAL IP SYSTEM ON TRADE IN IP-RELATED PRODUCTS
- Theoretical Implications
- Empirical Implications
In one of the most comprehensive studies of the international patent system, UNCTAD found that in 1964 and 1972, citizens of developed countries owned 97 percent and 95.6 percent of all patents granted to foreigners, respectively.14 In contrast, foreign ownership of patents by citizens of developing countries in in those years was less than 1 percent.15 UNCTAD also highlights the fact that between 1964 and 1972, five developed countries owned about 80 percent of patents granted to foreigners, with the United States holding about 40 percent of these patents. UNCTAD, reviewing data from 1964 and 1974, found that while the foreign share of registered trademarks in developed countries decreased from 20 to 18 percent, it increased from 27.5 to 50 percent in developing countries.26.
- AN INTERNATIONAL IP SYSTEM AND TECHNOLOGY TRANSFER
- Direct Effects on Technology Transfer – the Extent to which the Granting of IP Protection to Foreigners Forces them to make
- Indirect Effects of IPRs on Technology Transfer – the Extent to which a Stronger IP Environment Influences Technology
- THE POLITICAL USE OF TRADE RETALIATION AS A TOOL FOR ACHIEVING STRONGER
This section has focused on the direct effects of intellectual property rights on TT and assessed the extent to which the granting of intellectual property rights to foreigners requires them to make their technology available and accessible in developing countries. Two major problems are common to the attempts to present empirical claims about the connection between a stronger IP environment in the developing countries and a greater attractiveness for TT. First, there are difficulties in capturing and assessing the dynamic aspect of the IP-TT connection.
INTERNATIONAL IP PROTECTION
Despite becoming a member of the International Union for the Protection of Industrial Property in 1878, in which the principle of national treatment was paramount, Switzerland did not have a patent system at the time. According to Penrose, Switzerland's decision to eventually introduce a patent system was mainly due to pressure from other countries, especially Germany. This was considered very damaging to the German chemical industry, which put heavy pressure on both the German and Swiss governments.
The Use of Trade Retaliation by the US and the EC during the Uruguay Round
However, consultations between the two governments did not produce any favorable outcome for the US. Consequently, the use of trade retaliation by developed countries, especially the US and the EC, has in many cases been a successful tool to secure greater. These countries have decided to commit to a stronger IP agenda, mainly due to fears of retaliation from the US and the EC.
CONCLUSION
In some countries, such as Korea and Brazil, there was fierce domestic opposition to the introduction of stronger IP legislation. Regarding the indirect effects of IPRs on TT, it is plausible that stronger IP legislation is positively related to TT. The basic assumption underlying the use of trade retaliation is that it may impose additional costs, such as lost export revenue due to increased tariffs, on those countries that tolerate weak IP protection.
The advanced pharmaceutical industry in Europe and IPRs
- INTRODUCTION
- AN OVERVIEW OF THE WORLDʼS PHARMACEUTICAL INDUSTRY
- The Global Distribution of Pharmaceutical Capabilities
- THE ADVANCED PHARMACEUTICAL INDUSTRY IN EUROPE
- Production and Trade
- Capacity for Innovation
- THE IMPORTANCE OF IPRS TO THE ADVANCED PHARMACEUTICAL INDUSTRY
- The Importance of Patents to Research-based Pharmaceutical MNCs during the Marketing Stage of Innovative Drugs
- The Role of Patents and Data Exclusivity during the Pre-marketing Stage of Pharmaceutical Drugs – an ʻInsuranceʼ Tool
- The Importance of Trademarks to Pharmaceutical MNCs
- CONCLUSION
First, the industry is dominated by a small number of pharmaceutical multinationals based in a few developed countries. Once brand loyalty is achieved, it becomes an important factor in the ability of multinational pharmaceutical companies to maintain the market position of their off-patent prescription drugs. The link between intellectual property rights and research-based multinational corporations is explored in the third and final part of the chapter.
Core IP interests and the organizational structure of the advanced
- INTRODUCTION
- PRIMARY IP INTERESTS: SECURING AND MAINTAINING A STRONG INTERNATIONAL
- Strong Patent Protection
- Protection of Trade Secrets via Data Exclusivity
- Protection of Trademarks as a way of Securing Brand Loyalty Pharmaceutical MNCs also aim to maintain a strong international trademark
- THE INTRA-INDUSTRY IP ORGANIZATIONAL STRUCTURE OF THE ADVANCED
By focusing on specific components of IP (patents, trade secrets and trademarks), the advanced pharmaceutical industry's demand for a strong international IP system becomes even clearer. Second, the language used by the advanced pharmaceutical industry is quite vague when it comes to patent monopolies. Thus, the advanced pharmaceutical industry in Europe is in favor of continuing to secure a strong IPR system.
PHARMACEUTICAL INDUSTRY IN EUROPE
The Company Level
In terms of bureaucratic and structural functions, each company has its own corporate IP division, responsible for managing day-to-day IP-related activities. Corporate IP activities have two main purposes: (1) securing IPRs at the contract level, including identifying patent opportunities, patent applications, registering trademarks, protecting test data, and so on; in a row; (2) enforcement of IPRs and exploitation of their commercial benefits. By sharing the same professional language, set of beliefs and daily practices, corporate IP directors are able to create a strong foundation of collaboration.
The National Level
Mainly influenced by research-based companies, ABPI's international IP objectives are typical of the interests of the advanced pharmaceutical industry in Europe. As with ABPI's Intellectual Property Committee, members of VFA's patent and trademark committees are typically directors of corporate IP divisions in pharmaceutical MNCs. For issues related to the WTO, VFA also maintains contact with the General Directorate of Foreign Economic Policy and European Integration Policy (DG V) of the Ministry of Economy and Technology.
The Regional Level – the European Federation of Pharmaceutical Industries and Associations (EFPIA)
EFPIA has a dominant role in formulating and representing the IP objectives of industry in Europe. EFPIA is therefore one of the most important and effective IP representatives of the advanced pharmaceutical industry in Europe. In practice, bodies such as the Commission and the Council of the European Union play a decisive role in the European IP decision-making process.
The International Level
The United States, Great Britain, Germany, France, Italy and Switzerland are permanent members of the Council.94. Unlike IFPMA, which acts as an official representative of industry on a wide range of issues, INTERPAT is a much more specialized forum, representing only members of research-based pharmaceutical companies and focusing exclusively on IPR.100 Its main purpose is to. Much wider in scope, IFPMA uses its special consultative position with international institutions such as the World Bank, WTO and WIPO to promote awareness of the IP claims of pharmaceutical multinationals.
THE INTER-INDUSTRY (HORIZONTAL) IP ORGANIZATIONAL STRUCTURE OF THE
- The Regional Level – the European Chemical Industry Council (CEFIC) and the Union of Industrial and Employerʼs
- The International Level – the Trans Atlantic Business Dialogue (TABD) and the US Intellectual Property Committee (IPC)
Using forums such as IFPMA and INTERPAT, pharmaceutical multinational companies can expand their IP organizational structure internationally. Internationally, European pharmaceutical multinationals are either part of or partners in forums such as TABD and the US IPC (which represent the intellectual property interests of well-established and dominant multi-industry multinationals). It also enables multinational pharmaceutical companies to collaborate with companies from other industries, such as the film and telecommunications industries.
CONCLUSION
With regard to vertical relationships (corporate, national regional and international), pharmaceutical MNCs should be placed at the core of the industry's IP organizational structure. Operating as a transatlantic business lobby group, TABD largely reflects the IP interests of the advanced pharmaceutical industry. For the sake of simplicity, the term ``industry'' is sometimes used here instead of the term ``advanced pharmaceutical industry in Europe''.
TRIPs and pharmaceuticals
- INTRODUCTION
- A BRIEF HISTORY OF THE TRIPS AGREEMENT
- MAJOR ELEMENTS OF TRIPS
- General Provisions and Basic Principles: Significant Increase in the Global Commitment to the Protection of IPRs
- Dispute Settlement and Enforcement – an Agreement with ʻTeethʼ TRIPs provisions concerning dispute settlement and enforcement make it
- The Council for TRIPs: the System of Notifications and the Built- in Agenda
- TRIPS BUILT-IN FLAWS
- Insufficient Assistance to Countries with Low IP Capabilities WTO members with low IP capabilities, mostly LDCs but also developing
- TRIPS PHARMACEUTICAL IP AGENDA
- TRIPs Patents – an Enhanced International Patent Regime The most significant achievement for the advanced pharmaceutical industry
- TRIPs Trademarks – Securing a Global System of Brand Proliferation
- TRIPs and Undisclosed Information – Protecting Trade Secrets Globally
- The International Exhaustion of IPRs – Adopting a Global Policy of Parallel Imports
- CONCLUSION
Patent rights are probably the most essential part of TRIP's pharmaceutical IP agenda (Articles 27-34). Finally, the TRIPS Agreement explicitly recognizes the need to make patent rights available in the pharmaceutical and agrochemical fields in developing countries and LDCs (Art. 70.8). Data exclusivity is one of the most innovative elements of TRIPs with regard to the pharmaceutical intellectual property agenda (Article 39).
Opposition of developing
- INTRODUCTION
- REACTIONS TO TRIPS DURING THE WTO MINISTERIAL MEETINGS OF 1996 AND 1998
- THE IP DEMANDS OF DEVELOPING COUNTRIES AND LDCS DURING THE 1999 WTO MINISTERIAL
- Demands Concerning TRIPs Structure – Technology Transfer, Non-violation Disputes and Transitional Periods
- Demands Concerning TRIPs Pharmaceutical and Biotechnological IP Agenda
- CONCLUSION
The year 1999 brought a significant shift in the attitude of developing countries and least developed countries towards the TRIPs agreement. In Seattle, developing and least developed countries called for the establishment of intellectual property rights in traditional knowledge. In short, as the ministerial meeting in Seattle approached, developing countries and least developed countries became very unhappy about the TRIPs agreement.
Protecting the international
- INTRODUCTION
- EU ADVOCACY OF IPRS AND THE TRIPS AGREEMENT
- The Views of the EU on IPRs
- INDUSTRYʼS EFFORTS FOR EXPLOITING TRIPS ACHIEVEMENTS AND THEIR IMPACT ON THE
- Industryʼs Activities between 1996 and 1998 – Demands for the Rapid Implementation of TRIPs
- Translating Industryʼs Inputs to European Action – EU Activities Relating to the Implementation and Enforcement of TRIPs
- ʻSEATTLEʼ-RELATED ACTIVITIES –
After examining the declarative level, we can convincingly argue that the EU is a strong supporter of intellectual property rights and the TRIPS Agreement. In both disputes, the EU's actions significantly reflected the interests of Europe's advanced pharmaceutical industry. Arguments put forward by the parties and conclusions of the panel During the dispute proceedings, the EU put forward the following arguments:92.
INDUSTRYʼS EFFORTS FOR PRESERVING TRIPS INTERNATIONAL PHARMACEUTICAL IP AGENDA
Core Strategy – Preventing any Downgrading in the Level of IP Protection Provided by the TRIPs Agreement
The industry and its IP allies used all available channels (position papers, conferences, press releases, in-person meetings, etc.) to emphasize the principle of non-downgrading of TRIPs and did so repeatedly and simultaneously. In a position paper of June 1999, EFPIA argued that ``if the TRIPs agreement is included on the agenda of the Millennium Round, the mandate for negotiation must be clearly limited to improvements in the level of protection of intellectual property''.111 In another position paper dated October 1999, EFPIA added that the `Commission's general commitment in principle that such negotiations should in no way lead to a lowering of standards or affect the ongoing work in the TRIPs Council (embedded agenda) and that the current transition periods for TRIPs implementation should not be delayed pivot'.112 Similarly, the IFPMA urged all countries to `remain faithful to the Uruguay Round Agreement and to all those countries making the significant effort to align their legislation and practices with their TRIPs obligations'.113 CEFIC, the chemical equivalent of EFPIA, in its position paper of October 1998, concluded that 'in light of the negotiations that took place on the occasion of the Uruguay Round, and the TRIPs -agreement resulting from it, the chemical industry could not accept any weakening of TRIPs in response to unrealistic demands'. The delegation met with key officials such as Rita Hayes, deputy US trade representative, Roderick Abbott, head of the EU's permanent delegation to the international organizations in Geneva, Paul Vandoren, director of Unit /D/3 (New Technology, Intellectual Property and Public Procurement) meeting. ) with DG Trade of the European Commission and Pascal Leardini, DG Internal Market, both of the European Commission, Adrian Otten, Director of the WTO Intellectual Property and Investment Department, Dr Kamil Idris, Director of WIPO, as well as other officials.116 During these meetings representatives of the advanced pharmaceutical industry in Europe and its IP allies underlined the need for TRIPs implementation by developing countries and the possibility of limiting IP negotiations in Seattle to TRIPs built-in agenda.117.
Complementary Strategy – Presenting Tough IP Demands for the Possible Negotiations on ʻTRIPsIIʼ
