October 12, 2011

Medicines Patent Pool: a Potent Tool to Address IP Barriers


A patent pool is a way of facilitating access to intellectual property through which, two or more patent-holders agree to share their intellectual property with each other or with third parties through negotiation of licences.

Off late the pharmaceutical industry is slowly absorbing the idea that patent pools could function as an interesting alternative to exclusive single-firm production, simple bilateral licensing or cross-licensing. Increasingly, patent pools for medicines are being considered as a tool to facilitate access to large numbers of inventions in this sector.

Médecins Sans Frontières[1] (MSF) and Knowledge Ecology International[2] (KEI) first presented the concept of a patent pool for medicines to UNITAID in 2006. In July 2008, the UNITAID Board decided to explore the feasibility of setting up a voluntary HIV/AIDS medicine patent pool, which received approval in December 2009. In July 2010 the Medicine Patent Pool (MPP) was legally created and established as an independent entity with the mission of improving access to HIV medicines in developing countries and became operational in November 2010.

As of late 2011, the MPP has remain restricted to ARVs, despite of strong indications by several MPP proponents that the MPP could be useful for other drugs beyond ARVs in the near future. In 2009, GSK proposed a pool for medicines for neglected tropical diseases for Least Developed Countries (LDCs) as part of its Open Innovation Agenda[3].

MPP is particularly useful in situations where a number of related inventions are patented by many different organizations and where access to these inventions is essential for the development and commercialization of a (new) product. Such situations are commonly referred to as ‘patent thickets’[4] in cases where it is cumbersome to safeguard one’s freedom to operate (FTO) because the commercial production, marketing and use of a new product, process or service is likely to infringe many existing patent rights owned by many third parties (third party patent rights). To gain access to those third party patent rights, one will need to enter into a multitude of licensing negotiations often leading to an accumulation of royalties (royalty stacking). For some companies or researchers this might be a reason to redesign or completely stop a research project[5]. In such situations MPP act as facilitators and its use of one-stop-licenses normally reduce royalties and transaction costs, increases legal certainty and reduces enforcement litigation, thereby mitigating the costs and risks of R&D and reducing significantly the costs for end users.

[1] http://www.msfaccess.org/
[2] http://keionline.org/; See IGWG Briefing Paper on Patent Pools Collective Management of Intellectual Property -- The use of Patent Pools to expand access to essential medical technologies. KEI Research Note 2007:3 (1) January 23, 2007 available at: http://accessvector.org/oldkei/content/view/65/; EMILA working plan, available at: http://www.keionline.org/index.php?option=com_content&task=view&id=64&Itemid=44
[3] BVGH (2010) Pool for Open Innovation against Neglected TropicalDiseases: Core Principles, BVGH
[4] Shapiro, C. (2001) Navigating the patent thicket: cross licenses, patentpools, and standard-setting. In Innovation Policy and the Economy(Jaffe, A. et al., eds), pp. 119–150, MIT Pres
[5] Heller, M.A. (1998) The tragedy of the anticommons: property in thetransition from Marx to markets. Harv. Law Rev. 111, 621–688; Heller, M.A. (2008) The Gridlock Economy: How Too Much OwnershipWrecks Markets, Stops Innovation, and Costs Lives, Basic Books; Heller, M.A. and Eisenberg, R.S. (1998) Can patents deter innovation?The anticommons in biomedical research. Science 280, 698–701

No comments: