PATENTS AS PROTECTION OF TRADITIONAL MEDICAL KNOWLEDGE?
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PATENTS AS PROTECTION OF TR ADITIONAL MEDICAL
KNOWLEDGE?
A Law and Economics Analysis
Petra Ebermann
Cambridge – Antwerp – Portland
Patents as Protection of Traditional Medical Knowledge? A Law and Economics Analysis
Petra Ebermann
© 2012 Intersentia
Cambridge – Antwerp – Portland
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Intersentia v
ACKNOWLEDGMENTS
Th is book was in large parts written while I was a research assistant at the Institute of Law and Economics at the University of Hamburg. A number of people have contributed to the fi nal success of this project and I want to take the opportunity to thank them.
First of all, I am especially grateful to my supervisor Th omas Eger for his time, helpful comments and advice and likewise to Hans-Bernd Schäfer who kindly agreed to act as second reviewer and handled the review process very effi ciently whilst off ering appropriate critique. My colleagues at the Institute were supportive at all times and provided well appreciated comments and inspiration.
Amongst them, I would like to mention Katharina Greczszuk and Katherine Walker explicitly who have also become good friends of mine during this time. I wish to thank the editors of the scientifi c series ‘European Studies in Law and Economics’ for giving me the opportunity to publish this book in this series:
Michael G. Faure, Luigi A. Franzoni and Patrick C. Leyens. I thank the Max Planck Institute of Intellectual Property and Competition Law in Munich for allowing me to conduct parts of my research at their library. I am especially indebted to Inga Ebermann and Tanja Friedrich for their active support, valuable comments and advice and Gabor Gottlieb and Paul Stange for providing practical and technical support at all times.
Most importantly, I want to take the opportunity to thank my parents, my sister (once more) and Patrick Hauser for their support, patience, kindness and constant encouragement.
Intersentia vii
CONTENTS
Acknowledgments . . . v
Introduction . . . 1
PART 1. TRADITIONAL MEDICAL KNOWLEDGE, BIOLOGICAL DIVERSITY AND INTELLECTUAL PROPERTY RIGHTS . . . 9
Chapter 1. Th e Concept of Traditional Medical Knowledge and the Impact of Biotechnology . . . 11
1.1. A Defi nition of Traditional Medical Knowledge . . . 11
1.1.1. Traditional and Indigenous Knowledge . . . 11
1.1.2. Traditional Medical Knowledge . . . 13
1.1.3. General Characteristics of Traditional Medical Knowledge . . . 14
1.1.3.1. Traditional Knowledge Holders . . . 15
1.1.3.2. Creation and Preservation . . . 15
1.1.3.3. Ownership . . . 15
1.2. Th e Role of Natural Resources in Pharmaceutical R&D . . . 16
1.2.1. Overview . . . 16
1.2.2. Pharmaceutical Biotechnology . . . 17
1.2.3. Bioprospecting Research Project . . . 19
1.3. Th e Value of Pharmaceutical Biotechnology and Traditional Medical Knowledge . . . 21
1.3.1. Th e Value of Pharmaceutical Biotechnological R&D . . . 21
1.3.2. Th e Value of Traditional Medical Knowledge . . . 22
Chapter 2. Th e Convention on Biological Diversity . . . 25
2.1. Biological Diversity . . . 25
2.1.1. Loss of Biodiversity . . . 25
2.1.2. Consequences of Biodiversity Loss . . . 26
2.2. Main Objectives of the CBD . . . 27
2.2.1. Conservation and Sustainable Use . . . 28
Contents
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2.2.2. Access to Biological Resources and Benefi t Sharing . . . 30
2.2.2.1. National Sovereignty . . . 31
2.2.2.2. Th e Tragedy of the Commons . . . 32
2.2.2.3. Th e Role of Property Rights in Access and Benefi t-Sharing Regulation . . . 33
2.3. Article 8 (j) CBD . . . 35
2.3.1. Th e Elements of Traditional Knowledge Protection . . . 35
2.3.2. Relationship with the Objectives . . . 35
2.3.3. Form of Protection . . . 37
2.3.3.1. Protection by Intellectual Property Rights. . . 37
2.3.3.2. Positive and Negative Approaches to Protection. . . 38
Chapter 3. Trade-Related Intellectual Property Rights and Traditional Medical Knowledge . . . 39
3.1. Th e TRIPS Agreement . . . 39
3.1.1. Introduction . . . 40
3.1.1.1. Th e International Legal Developments . . . 40
3.1.1.2. Th e Economic Rationale of Intellectual Property Protection . . . 41
3.1.2. Objectives of the TRIPS Agreement . . . 43
3.1.2.1. Promotion of Free Trade . . . 44
3.1.2.2. Promotion of Economic Development . . . 45
3.1.2.3. Intellectual Property Rights and Developing Countries . . . 47
3.1.3. General Principles of Non-Discrimination . . . 52
3.1.3.1. National Treatment . . . 52
3.1.3.2. Most-Favoured-Nation Clause . . . 52
3.2. Th e International Legal and Economic Framework of Patents . . . 53
3.2.1. Historical Development of Today’s Patent Laws . . . 54
3.2.2. Overview on TRIPS Rules on Patents . . . 54
3.2.2.1. Patentable Subject Matter . . . 55
3.2.2.2. Rules on Biotechnological Inventions and Biological Resources . . . 56
3.2.2.3. Disclosure . . . 57
3.2.3. Th e Economic Underlyings of Patenting . . . 57
3.2.3.1. Th e Incentive-to-Invent Th eory . . . 57
3.2.3.2. Patent Scope . . . 59
3.3. Th e Interaction Between Traditional Medical Knowledge, the TRIPS Agreement and the CBD . . . 61
3.3.1. Traditional Knowledge in the TRIPS Context . . . 61
3.3.2. Intellectual Property Rights and the CBD . . . 62
Contents
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3.3.2.1. Article 8 (j) CBD – Preservation of and Respect for the Knowledge, Innovations and Practices of Traditional
Communities. . . 62
3.3.2.2. Conservation and Sustainable Use of Biodiversity . . . 63
3.3.2.3. Article 15 CBD – Access to Genetic Resources and Fair and Equitable Benefi t Sharing . . . 63
3.3.2.4. Article 16 CBD – Access to and Transfer of Technology . . . 63
3.4. Summary of the Main Results of Part 1 . . . 64
PART 2. THE STATUS QUO – PROTECTION OF TRADITIONAL MEDICAL KNOWLEDGE AND BIOTECHNOLOGICAL INVENTIONS UNDER CURRENT PATENT LAW . . . 67
Chapter 1. Patentability Criteria in the US and the EU . . . 71
1.1. Legal Foundations for (Biotechnological) Patents in the US and the EU . . . 72
1.1.1. Sources of US Patent Law . . . 72
1.1.1.1. Th e Constitution . . . 72
1.1.1.2. Federal Statutes and Regulations . . . 72
1.1.1.3. Case Law . . . 73
1.1.2. European Patent Law . . . 74
1.1.2.1. Th e European Patent Convention . . . 74
1.1.2.2. Th e Biotechnology Directive . . . 75
1.1.2.3. National Laws and Court Decisions . . . 76
1.2. Substantive Patent Requirements . . . 76
1.2.1. Products of Nature . . . 76
1.2.1.1. US Patent Law . . . 77
1.2.1.2. European Patent Law . . . 79
1.2.2. Novelty . . . 82
1.2.2.1. Th e State of the Art in US Patent Law . . . 82
1.2.2.2. Th e European Approach to Novelty . . . 84
1.2.3. Inventive Step and Non-Obviousness . . . 85
1.2.3.1. US Patent Law – Non-Obviousness . . . 86
1.2.3.2. European Patent Law – Inventive Step . . . 89
1.2.4. Utility and Industrial Application . . . 91
1.2.4.1. US – Utility . . . 91
1.2.4.2. EU – Industrial Application . . . 93
1.3. Specifi cation . . . 94
1.3.1. Disclosure of the Invention . . . 94
Contents
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1.3.1.1. US Patent Law . . . 94
1.3.1.2. Europe . . . 96
1.3.2. Patent Claims . . . 98
1.3.2.1. Claim Categories . . . 98
1.3.2.2. Claim Draft ing . . . 98
1.4. Concluding Remarks . . . 100
Chapter 2. Biotechnological Patents on Pharmaceutical Drugs Developed in Bioprospecting Research Projects . . . 101
2.1. Th e Patentability of Biotechnological Inventions Using Traditional Medical Knowledge . . . 101
2.1.1. Natural Products Doctrine . . . 101
2.1.2. Traditional Medical Knowledge as Invalidating Prior Art . . . 102
2.1.2.1. Th e Neem Patents . . . 103
2.1.2.2. Analysis of the Prior Art Assessment in the Neem Proceedings . . . 104
2.1.2.3. Th e Standard of Disclosure . . . 105
2.1.3. Non-Obviousness in Bioprospecting Research Projects . . . 106
2.1.3.1. US Patent Law: Th e Standard of Non-Obviousness in the Aft ermath of KSR . . . 107
2.1.3.2. Th e Inventive Step Requirement in Europe: Neem and Hoodia . . . 109
2.2. Analysis of the Results . . . 112
2.2.1. Th e Importance of Patents for Pharmaceutical R&D . . . 112
2.2.2. Th e Predictability of the Outcomes of Patent Proceedings . . . 114
Chapter 3. Th e Rights of the Providers of Traditional Medical Knowledge . . . 117
3.1. Th e Patentability of Traditional Medical Knowledge . . . 117
3.1.1. Products of Nature . . . 117
3.1.2. Novelty and Non-Obviousness . . . 118
3.1.3. Formal Requirements. . . 120
3.2. Th e Owner of the Patent: Th e Concept of Joint Inventorship . . . 120
3.2.1. Legal Defi nition of Joint Inventorship . . . 121
3.2.1.1. Requirements for Joint Inventorship in US Patent Law . . . 121
3.2.1.2. Joint Inventorship Under the EPC . . . 122
3.2.2. Joint Inventorship of Traditional Knowledge Groups and Pharmaceutical Companies . . . 124
3.3. Analysis of the Results . . . 127
3.3.1. Th e Public Good Problem . . . 127
Contents
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3.3.1.1. Suboptimal Rate of Innovation . . . 128
3.3.1.2. Free-Riding . . . 129
3.3.2. Allocation of Resources . . . 129
3.3.3. Implementation of the CBD . . . 131
3.3.3.1. Prior Informed Consent . . . 131
3.3.3.2. Benefi t Sharing . . . 131
3.3.3.3. Disclosure of the Origin of the Source . . . 132
3.4. Summary of the Main Results of Part 2 . . . 132
PART 3. PROTECTING AND REWARDING TRADITIONAL MEDICAL KNOWLEDGE CONTRIBUTIONS UNDER PROPERTY AND LIABILITY REGIMES . . . 135
Chapter 1. Th e Property Rights-based Approach to Protection . . . 139
1.1. Th e Construction of Traditional Knowledge Rights . . . 139
1.1.1. Novel Interpretation of Existing Norms . . . 139
1.1.1.1. Invention . . . 140
1.1.1.2. Novelty and Inventive Step . . . 140
1.1.2. Sui Generis Systems – Defi nition of New Rights for Indigenous Peoples . . . 141
1.2. Implementation of Article 8 (j) CBD Th rough Traditional Knowledge Rights . . . 144
1.2.1. Interpretation and Infringement . . . 144
1.2.1.1. Literal Infringement . . . 145
1.2.1.2. Th e Doctrine of Equivalents . . . 145
1.2.1.3. Implications for the Right of Traditional Knowledge Providers . . . 148
1.2.2. Economic Analysis – Th e Eff ects of Patents in Cumulative Innovation Scenarios . . . 149
1.2.2.1. Optimal Allocation of Rights and Division of Profi ts . . 149
1.2.2.2. Hold-Up and Anticommons . . . 151
1.2.2.3. Conclusion . . . 153
1.3. Co-Operation Between Indigenous Groups and Pharmaceutical Companies and Joint Inventorship . . . 154
1.3.1. Modifi cation of the Requirements . . . 154
1.3.2. Th e Rights of Joint Inventors . . . 155
1.3.2.1. Use of the Patented Invention. . . 155
1.3.2.2. Sharing of Profi ts . . . 156
1.3.2.3. Discussion . . . 156
1.4. Conclusion on the Property Rights Approach . . . 157
Contents
xii Intersentia
Chapter 2.
Benefi t-Sharing Agreements and Liability Rules . . . 159
2.1. Mandatory Benefi t-Sharing Agreements as Conditions to Patentability . . . 160
2.2. Benefi t Sharing Under a Liability-Based Approach . . . 161
2.2.1. Conditions of a Compensatory Liability Regime . . . 162
2.2.2. Determination of the Value. . . 163
2.2.2.1. Statutory Rules . . . 164
2.2.2.2. Collective Rights Organizations . . . 164
2.2.3. Impact of Benefi t Sharing on Retail Costs of Pharmaceuticals . . . 165
2.3. Conclusion on Benefi t Sharing . . . 167
Chapter 3. Prior Informed Consent and Disclosure Requirements . . . 169
3.1. Th e Content and Scope of the Requirements . . . 169
3.1.1. Prior Informed Consent Requirement . . . 169
3.1.2. Disclosure Requirements . . . 170
3.1.3. Eff ects and Costs of Prior Informed Consent and Disclosure Requirements. . . 170
3.1.3.1. Th e Sanction in Case of Non-Compliance . . . 170
3.1.3.2. Th e Eff ects of Disclosure Requirements . . . 171
3.1.3.3. Th e Eff ects of Prior Informed Consent . . . 172
3.2.. Compatibility with TRIPS . . . 172
3.2.1. Prior Informed Consent . . . 173
3.2.2. Disclosure Requirements . . . 173
3.2.2.1. Substantive or Formal Requirements . . . 173
3.2.2.2. Article 29 TRIPS . . . 173
3.2.2.3. Article 62 TRIPS . . . 174
3.3. Conclusion on Disclosure and Prior Informed Consent Requirements . . . 175
3.4. Summary of the Results of Part 3 . . . 175
Conclusion. Th e Results of the Analysis and the Implications for Future Discussions . . . 177
Bibliography . . . 185
List of Cases . . . 193
About the author . . . 197
About the series . . . 199
