The solution to the ongoing pandemic is not to weaken intellectual property rights – intellectual property is part of the solution for us to cope with the next pandemic.
The world has been impacted by a pandemic for over a year now. It is clear that the pandemic will not be over until the whole world has had access to vaccination, and it is quite natural that many want to find quick and easy solutions.
Recently, the proposal to suspend patents on vaccines has gathered more supporters. At first glance, this may seem like a relevant proposal. Patents provide an exclusive right and, if you suspend this right, more actors could produce vaccines, which in theory would improve access.
At the Confederation of Swedish Enterprise, we have closely followed developments in this area and have decided not to support the proposal. There are two main reasons for this: the first is linked to the content of the proposal; the second is the design of the patent system.
Studying the debate on the suspension of patents, it seems as if not all parties in the debate have actually read the proposal submitted by India and South Africa in October 2020.
Anyone who does read this proposal will quickly realise that it covers a far greater amount of intellectual property protection than simply patents. The proposal also applies to much more than vaccines alone.
The proposal covers copyright, industrial designs, patents and the protection of undisclosed information (business secrets) provided that there is a link to the pandemic. The proposal even contains this: “The waiver in paragraph 1 shall not apply to the protection of Performers, Producers of Phonograms (Sound Recordings) and Broadcasting Organizations under Article 14 of the TRIPS Agreement.” According to the proposal, a songwriter who writes a song urging us to wash our hands should not be granted copyright to their lyrics, but the singer and record producer should have their rights untouched. A small business owner who designs smart protective equipment would also be able to be deprived of their opportunity to exercise design protection. If access to vaccines was the aim of the proposal, then it is far more comprehensive than it needs to be.
These concerns address the proposal itself. The second reason is linked to the design of the patent system. The system provides strong protection for the holder of the patent. Critics claim it offers too much protection; supporters say what it provides is balanced.
There are two elements that make the Confederation of Swedish Enterprise believe that the patent protection is balanced. The first concerns the purpose of the system. An important consideration behind the patent system is that it provides an incentive for innovation. An inventor, researcher or company making a calculation of whether it is worth investing in an innovation process often has the patent system as an important element in their considerations.
Another important reason is that patent applications become public. It is sometimes even expressed in terms of the inventor receiving exclusivity in exchange for information about the invention. Patent information is available online, for example via the Swedish Intellectual Property Office’s website.
The second element is that the patent system, both nationally and internationally, contains several safety measures so that the protection does not become too strong. One of these measures is the thresholds contained in the patent system. Patents are a right that arise from the filing of a registration. Linked to this are costs, such as application and annual fees. The patent rights exist only in those countries for which a registration was made. For each new country where patents are applied for, costs are added, not just through additional fees but also through translation costs. Although translation costs can be high, they are linked to the purpose of the patent system of disseminating information. The thresholds in the patent system mean that patents are not sought in many countries ”just because”. Anyone applying for a patent clearly does not have an interest in the patented invention not entering the market, it would entail sunk costs. Rather, it is in their interests to either try to get the invention to as many potential customers as possible or to grant licences so that others can produce the protected technology or application.
Part of the debate concerns companies obtaining patents on innovations based on research financed by public authorities. There is a comprehensive regulatory framework that governs who can do what, not least through the EU regulatory framework around State Aid. Despite the general discussion at the moment, companies in fact are not free to do whatever they desire.
The exclusive right granted by the patent also contains several limitations and restrictions. To a great extent, these limitations and restrictions serve to balance the interests of the patent owner with other interests. In Article 27 of the TRIPS agreement, it is stated that members may exclude different inventions and actions from patentability. In Article 30, it is stated that members may provide limited exceptions to the exclusive rights conferred by a patent, “provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interest of the patent owner, taking into account the legitimate interests of third parties”. This balancing of different interests is the key.
The TRIPS agreement is sometimes referred to as the infrastructure for trade in the knowledge economy. Currently, 164 countries are affiliated to the agreement, committing them to a certain minimum level of protection for knowledge-based assets. Of course, issues relating to the different conditions in different countries have been the focus of debate, not least when it comes to access to medicines. A system of compulsory licences has therefore been created.
Critics have said, in the current debate that the system of compulsory licences is insufficient. However, it has been difficult to get an answer to the question of what the precise nature of the concrete problems with the current system. From the perspective of the Confederation, it would be better to highlight the shortcomings of the system of compulsory licenses and address those issues, rather than to remove all intellectual property protections for items that may be linked to the pandemic.
Intellectual property issues are often highly complex. Turning them into simple poster policy may provide for nice headlines and work from a communications perspective. However, it is not patent law that blocks access to vaccines worldwide; in reality, there are other more important factors such as a lack of production capacity, something that may even be caused by protectionist trade policy decisions. For example, it was recently found that Sweden cannot become self-sufficient in vaccines mainly because production is wholly dependent on international suppliers of materials and equipment.
The solution to the ongoing pandemic is not to weaken intellectual property rights – intellectual property is part of the solution for us to cope with the next pandemic.