Patrick Kilbride, U.S. Chamber of Commerce's Global Intellectual Property Center

Submission: US Chamber of Commerce's Global Intellectual Property Center
Prepared by: Patrick Kilbride and Ashley Mergen
Country: USA

Abstract

The U.S. Chamber and its affiliate the Global Intellectual Property Center (GIPC) are deeply committed to advancing a global innovation economy, one where all of the world’s citizens are empowered both to produce and benefit from new technologies, inventions, and creative content, including especially new, breakthrough medical treatments and diagnostics. We believe that strong, predictable, and well-enforced intellectual property (IP) laws are essential to that goal. Indeed, there can be no access to innovative products, without first ensuring a sustainable flow of innovative output. It is critical to point out that the broad range of evidence confirms that effective IP protection is one of several key enabling factors that not only helps encourage innovation, but also enables the dissemination, deployment, and broader use of public health and other technologies.

The United Nations agencies and other multilateral organizations have a critical role in facilitating a global innovation ecosystem that maximizes both innovative output and the diffusion of innovative solutions. Two multilateral bodies in particular, the World Intellectual Property Organization (WIPO) and World Trade Organization (WTO) play leadership roles in setting and administering global IP policy that advances those closely related ends.

If in fact the ultimate goal of the UN High Level Panel is to identify pathways to improved access to innovative healthcare solutions, we believe that goal would be best served by a process that takes into account the whole suite of potential challenges to the development and deployment of medical technologies. The UNHLP would find that rights administered by a stable IP system are an important facilitator—rather than inhibitor—of health care technology diffusion.

Submission

On behalf of the U.S. Chamber of Commerce, the world’s largest business federation, representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations, we appreciate this opportunity to share our views with the UN High Level Panel on Access to Medicines (“UNHLP” or “the Panel”).

The U.S. Chamber and its affiliate the Global Intellectual Property Center (GIPC) are deeply committed to advancing a global innovation economy, one where all of the world’s citizens are empowered both to produce and benefit from new technologies, inventions, and creative content, including especially new, breakthrough medical treatments and diagnostics. We believe that strong, predictable, and well-enforced intellectual property (IP) laws are essential to that goal. Indeed, there can be no access to innovative products, without first ensuring a sustainable flow of innovative output. It is critical to point out that the broad range of evidence confirms that effective IP protection is one of several key enabling factors that not only helps encourage innovation, but also enables the dissemination, deployment, and broader use of public health and other technologies.

-The Role of the United Nations and Multilateral Organizations on IP and Public Health

The United Nations agencies and other multilateral organizations have a critical role in facilitating a global innovation ecosystem that maximizes both innovative output and the diffusion of innovative solutions. Two multilateral bodies in particular, the World Intellectual Property Organization (WIPO) and World Trade Organization (WTO) play leadership roles in setting and administering global IP policy that advances those closely related ends.

The mission of WIPO is “to lead the development of a balanced and effective international intellectual property (IP) system that enables innovation and creativity for the benefit of all,” a role it has carried out as a UN institution since 1967. WIPO is the venue and administrative body for multilateral, norm-setting treaties in the intellectual property space. Of special note is WIPO’s role as a member and convening agent of the Trilateral Symposium with the WTO and the World Health Organization (WHO).

In similar fashion, the WTO’s Trade Related Aspects of Intellectual Property Rights (TRIPS) Council is the preeminent multilateral body for global, trade-related IP policy, with the 1994 TRIPS Agreement as its principal governing accord. Each country that accedes to the WTO also subscribes to the TRIPS Agreement, which establishes important minimum standards for national IP laws, while also ensuring the availability of appropriate flexibilities to meet urgent public interest needs.

Together, the WHO, WTO, and WIPO have lead responsibility for oversight and negotiation of multilateral policies related to IP and health. These three organizations have also already published a thorough and impartial report in 2013 broaching this very topic at hand. Accordingly, we also believe that the Trilateral Symposium is a proper venue for any discussion of IP rights as they relate to public health, as it brings together the most relevant UN institutions and other experts.

-Formation of the UN High Level Panel on Access to Medicines

For those reasons, we believe the formation of the High-Level Panel, before a discussion at the Trilateral Symposium, is at best premature. Moreover, the UNHLP’s scope appears to be duplicative of the WHO’s Global Strategy and Plan of Action (GSPOA) on Public Health, Innovation, and Intellectual Property, launched in 2008. We are concerned that the UNHLP process will undermine and confuse rather than enhance the already ongoing efforts by each of these important UN bodies and their established expertise. This concern is particularly acute at the current time because WHO Members have recently agreed to launch an evaluation and program review concerning the GSPOA where many similar issues will be reviewed.

Most urgently and importantly, we are discouraged by the UNHLP’s stated premise, which is an effort to address “the policy incoherence between the justifiable rights of inventors, international human rights law, trade rules and public health,” or “the misalignment between the rights of inventors, international human rights law, trade rules and public health where it impedes the innovation of and access to health technologies.” We reject this premise as fundamentally flawed and unsupported by empirical and practical evidence related to the development and deployment of innovative health care solutions.

Regardless of the intentions which may underlie this exercise, the assumption of “incoherence” or “misalignment” strongly suggests a pre-judged conclusion to the UNHLP process, and may prevent the Panel from engaging in a balanced and well-reasoned discussion from the outset on a topic that is complex and not susceptible to superficial solutions. Moreover, the request for submissions itself is strongly biased in favor of commenters who accept this premise as a given. Nevertheless, we take this opportunity to provide the perspective of enterprises that invest in research and development (R&D), market development, and the deployment of solutions to patients throughout the healthcare value chain.

If in fact the ultimate goal of the UNHLP process is to identify pathways to improved access to innovative healthcare solutions, we believe that goal would be best served by a process that takes into account the whole suite of potential challenges to the development and deployment of medical technologies. The UNHLP would find that rights administered by a stable IP system are an important facilitator—rather than inhibitor—of health care technology diffusion.

-Importance of IP: A Community of First Markets

Currently, a relatively small group of nations produces the vast majority of paradigm-changing technological innovations and related products. This list is coextensive with the list of countries that currently take an active role in protecting intellectual property. The U.S. example is illustrative where because of a strong intellectual property framework, three-fifths of exports are generated by IP-intensive industries, supporting some 40 million jobs. Furthermore, California’s Silicon Valley—the birthplace of the information-age—leads all other major international locales in patent filings. And, nearly one-half of all patents granted there are to immigrant inventors, demonstrating that global entrepreneurs seek environments with strong intellectual property rights.

In contrast, countries that operate as net-importers of innovative, or IP-intensive, products tend to be those that eschew stronger IP laws because they believe that benefits may accrue only to the exporting country.

Unfortunately, countries can become locked into these roles. A country that considers itself an innovative producer may favor stronger intellectual property rights in order to further stimulate innovation at home and safeguard its assets overseas; a net-consumer of innovation may believe its national self interest lies in policies that devalue intellectual property rights in order to cheapen access to innovative products. Without the protection of intellectual property rights, however, governments risk a policy path that further depresses domestic innovation and increases reliance on external producers of innovative goods and services, reinforcing a viscous cycle. When trapped in this cycle, investment in innovation and research and development suffers, depriving the world of countless potential breakthrough technologies.

When fully developed, IP laws form a legal infrastructure that helps bring innovative goods to market. Just as roads and ports—and the rules and enforcement that support them—speed physical goods to market, effective IP laws speed ideas to market as innovative products. IP does this by transforming an intangible idea into an enforceable asset that can be evaluated and hold value.

To be successful, IP depends significantly on rule of law. For IP to hold value for businesses, consumers and patients alike, the rules must be clear, predictable, and enforceable. IP owners and users must have access to due process. Where strong laws are in place, enforcement is consistent and credible, and disputes are fairly and transparently adjudicated, an infrastructure for innovation and its subsequent access can be seen to exist.

Those countries that fully invest in such an infrastructure form a de facto community of “first markets.” They provide appropriate incentives to enable the substantial research and development investments necessary for the location of capital-intensive industries and the jobs they create; they foster a legal and financial infrastructure that enables the successful commercialization of new products by small-scale innovators and start-ups; and, they provide a safe environment for developing the products of intellectual capital.

In 2012, then-Director for the U.S. Patent and Trademark Office David Kappos wrote about the concept of “first markets,” in relation to USPTO’s “Patents for Humanity” program. Kappos discussed how “patented technology can be tremendously beneficial to the lives of the poor. From life-saving medicines, vaccines, and medical technology to drought- and pest-resistant crops, from purification devices removing harmful contaminants in water and air to cell phones and other information devices that raise income and standards of living – the developing world benefits tremendously from modern technology. Not just as consumers, but as partners and producers of innovation as well – even exporting those innovations to the developed world.”

Ideally, the UN and its various agencies would lead an effort to strengthen IP laws on a global basis, creating a uniform set of conditions for innovators in every country to succeed.

-The Critical Role of IP to Expand and Enable Access

Earlier this year, the U.S. Chamber of Commerce released the 4th Edition of its International IP Index, assessing and ranking the IP environments of countries representing 85% of global gross domestic product. As a complement to this policy analysis, the U.S. Chamber Index also developed a set of rigorous and empirical statistical correlations demonstrating the strong, positive relationships between strength of an IP environment and important socioeconomic indicators.

For instance, the Chamber found among other things that:

•  Firms in economies with advanced IP rights in place are nearly 50% more likely to invest in R&D activities compared with those whose IP regimes lag behind;
• When applied specifically to the life sciences sectors, advanced IP regimes experience 2 to 6 times more biopharmaceutical R&D expenditure than do economies with less supportive IP regimes;
• Firms and people in economies scoring above the median level of the Chamber Index are 30% more likely to benefit from access to the most recent technological developments compared with those in economies with weak IP climates.

These correlations continue to reaffirm that IP rights are critical to expanding the public knowledge pool and increasing the diffusion of healthcare technology including medicines, vaccines, devices, and the know-how necessary for their effective administration. Former USPTO Director Kappos has noted that IP rights serve the public interest: “Far from being a roadblock, patents can be the currency of innovation that helps disseminate advanced technology in the developing world. Regardless of global destination, most high-tech goods are manufactured in a handful of countries which have functioning patent systems. Delivering innovative products to Africa, Southeast Asia, South America, or elsewhere thus requires legal rights in the manufacturing centers of the world. Patents enable business relationships that are otherwise difficult or impossible by encapsulating these legal rights into manageable assets.”

Furthermore, studies continue to show that a lack of effective intellectual property protection can prevent the deployment of the latest technologies to those who need it most. At the February 1, 2016 UNHLP mission briefing in Geneva, a representative of UN agency, WIPO stated, “[C]oherence exists in the recognition that without productive innovation there is nothing to have access to,” and the UNHLP’s “mandate and eventual work product should not minimize the positive results of innovation in the global health field.” Specific to medicines and healthcare technologies, it should be noted that recent studies show that strong IP protection results in faster launch and faster access to new medicines in developing countries. In addition, robust IP protection results in the introduction of many medicines in developing countries that would not otherwise be available to patients in those markets.

Research and development, further, is not only essential to maturing health technologies, but oftentimes gives those in proximity to R&D centers first access to these technologies, highlighting the need to resist short-sighted policies which could hamper this trend. As evidenced by 2015 Nobel Prize-winning economist Angus Deaton, differences in access to health care solutions “indicate the workings of a benevolent process, and policies to address inequalities should be designed so as not to hinder the diffusion of better health.” Professor Deaton went on to note that “while we should like to reduce the inequalities, we must be careful that our policies speed up the widespread adoption of beneficial treatments and do not discourage their introduction or the discovery of new treatments, and thus kill the innovative goose that is laying the golden eggs.”

These studies underscore the role that IP plays in the facilitation of access to health care technologies. Accordingly, any study of the policy relationship in this area should recognize that improved IP systems, including their establishment through important global norms to strengthen IP systems established by regional or multilateral trade agreements (e.g., implementation of TRIPS Agreement and those trade agreements that build on the TRIPS minimum standards), capacity building agreements to build IP expertise in government, and/or other IP bilateral and regional cooperation mechanisms, are key elements of a policy coherence and “best practice” promoting access to medicines

-IP Rights and Human Rights

In 2013, WIPO held a detailed seminar in conjunction with the Office of the United Nations High Commissioner for Human Rights (OHCHR) to mark the 50th anniversary of the Universal Declaration of Human Rights (UDHR). Article 27 of the UDHR provides: “(1) Everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits. (2) Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.” This not only enshrines access as a human right, but in the same vein ennobles IP rights as human rights, a reality not recognized by the premise of the UN High Level Panel on Access to Medicine.

Further, the very nature of the patent system advances human rights. The patent system requires that knowledge related to invention and discovery be accessible to society. Such disclosures actually catalyze innovation and promote the diffusion of medical knowledge and health technologies.

-Conclusions

In conclusion, we respectfully urge the panel to reconsider the premise that there is “incoherence” or “misalignment” between innovator rights and access to innovation in the field of medicines or other technologies, and to study the alternate thesis, namely that the more thorough and widespread implementation of proven IP models on a global basis would contribute greatly both to innovative output and access to innovation; and, finally, that UN leadership to promote broader adoption of advanced IP models could effectively make all countries a singular community of “first markets,” where all could share in and contribute meaningfully to a global innovation economy. Doing so, we firmly believe will contribute not just to achieving public health goals, but to the economic and development objectives of some of the poorest and most vulnerable regions in the world as well.

Bibliography and References

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