[Ip-health] FT Patent Pool Story - think-tank says broad co-operation among drugs ,rivals could benefit developing nations

[Marina Kukso]

Financial Times (London, England)

May 20, 2005 Friday
London Edition 1
SECTION: BUSINESS LIFE SCIENCE & TECHNOLOGY; Pg. 14

LENGTH: 764 words

HEADLINE: Patent pools spread ripples in research - PATENTLY OBVIOUS - A
US think-tank says broad co-operation among drugs rivals could benefit
developing nations. Andrew Jack and Frances Williams report

BYLINE: By ANDREW JACK and FRANCES WILLIAMS

As politicians, scientists and officials gathered at the World Health
Assembly in Geneva this week for their annual debate on how best to
prevent and tackle disease, one idea from outside the official channels
sparked particular interest: patent pooling.

At a time when drug companies are struggling to sustain the pace of
medical innovation, and low-income developing countries are struggling
to pay for existing treatments, Essential Innovations, a US-based
non-governmental organisation, has called for an approach it believes
could help address the two issues.

A "patent pool" is an agreement between two or more patent owners to
licence patents to one another or to outsiders. Most are voluntary,
devised when companies find their ability to innovate is stifled by
patent protection owned by others on key technical developments. The
companies share royalties, and proponents argue that such deals have
helped stimulate innovation and rapid growth.

"Patent pools are a growth industry," says Jamie Lovie, chairman of
Essential Innovations. "They could offer a solution at a time when big
money for research is not being disseminated, and when donors are
beginning to wake up to the fact that the current system is not serving
their interests."

There are several historical examples in non-medical fields: for
instance, the DVD-video and DVD-Rom agreements in the late 1990s between
Sony, Philips and Pioneer; and MPEG-2 compression, with patent and
royalty-sharing arrangements between companies including Fujitsu,
General Instrument Corp, Lucent Technologies, Matsushita, Philips and Sony.

There are also precedents for government intervention to create
compulsory pools - notably when war-time need for aircraft was
negotiated through the Manufacturers' Aircraft Association in 1917, in
response to blockages created by Wright and Curtiss, the leading patent
holders.

Drug companies already practise sophisticated licensing arrangements and
alliances with chosen research partners in the search for new medicines.
But, if the idea of a broader pooling between competitors has yet to
take off in the sector, it is now being discussed.

For example, the World Health Organisation has been working to ensure
that development of a pandemic influenza vaccine is not hindered by
ownership of a key patent by a single US company.

A consultative group - which the WHO established to study ways to
develop a vaccine against severe acute respiratory syndrome (Sars)
following the outbreak in 2003 - has floated the idea of a pool.

The system is seen as a possible way to navigate the considerable legal
and commercial challenges - and delays - triggered by the growing number
of research institutes that have made patent applications in this field.

The immediate focus of Essential Innovation's most recently proposed
patent pool - which it suggested to the WHO and the UK government's
Commission on Africa - is less on tackling innovation than on fairly
disseminating the benefits of drugs for Aids in developing nations. It
proposes a co-ordinated system, with all patent-holders licensing their
medicines into the pool, which would negotiate modest royalties to
African and other poor countries based on their income levels and HIV
infection rates.

By doing this, the legal principle of intellectual property would be
preserved, thereby redressing the current reality of generic drugs
companies ignoring or threatening to violate existing patents and
selling their copies cheaply in the developing world.

Michelle Childs, of the US-based Consumer Project on Technology, which
helped establish Essential Innovations, argues that the pool would
provide a much less bureaucratic and costly alternative to individual
"compulsory licensing" of essential medicines to circumvent patent
protection, a complex legal route rarely used.

But many question marks remain. Jon Pender, Glaxo=ADSmithKline's
spokesperson, warns the system could discourage pharmaceutical groups
from investing in future innovation, and might make them "wash their
hands" of Africa - with all the subsequent problems of safe training and
administration of medicines.

Despite the complications, Malebona Matsoso, head of WHO's technical
co-operation on essential drugs, insists that the idea deserves further
detailed study.


Text Box...............
A patent pool is:

*an agreement between two or more patent owners to licence patents to
one another or to others

*voluntary - and typically devised when companies find their ability to
innovate is stifled by patent protection owned by others on key
technical developments

*an arrangement where companies share royalties


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Marina Kukso
Duke University '06
mk30@duke.edu
(847)436-2068