InnovationUsing <strong>the</strong> power ofintellectual property <strong>to</strong>streng<strong>the</strong>n equitable accessArticle by Ana<strong>to</strong>le KrattigerOver <strong>the</strong> last decade, many countries around <strong>the</strong> worldrevised <strong>the</strong>ir laws related <strong>to</strong> intellectual property (IP).These changes were driven by a true “explosion of IPlegislation at <strong>the</strong> international level” 1 : in <strong>the</strong> last 15 years tennew IP specific treaties were concluded 2 , <strong>and</strong> nearly everyinternational treaty <strong>to</strong>day includes IP clauses.Because of its feared impact on low- <strong>and</strong> middle-incomecountries, <strong>the</strong> most discussed treaty in <strong>the</strong> context of <strong>health</strong>research <strong>and</strong> development has been <strong>the</strong> Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).Whe<strong>the</strong>r or not <strong>and</strong> <strong>to</strong> what extent TRIPS will impact <strong>the</strong>pricing <strong>and</strong> availability of <strong>health</strong> products are certainlylegitimate concerns. But access <strong>to</strong> <strong>health</strong> products <strong>and</strong>services depends on many fac<strong>to</strong>rs. One key fac<strong>to</strong>r is <strong>the</strong>successful innovation of new technologies, ei<strong>the</strong>r as newdrugs, vaccines, or services, or as adaptations of existingproducts <strong>to</strong> <strong>the</strong> contexts <strong>and</strong> frameworks of low- <strong>and</strong> middleincomecountries.Indeed, innovation management is a complex endeavour.Government <strong>and</strong> institutional leaders need <strong>to</strong> address a widerange of issues, ranging from policy choices <strong>to</strong>implementation strategies. Some of <strong>the</strong> most importantelements <strong>to</strong> consider in this context are:1. Intellectual property is just one of several fac<strong>to</strong>rs thatdetermine innovation in <strong>health</strong> research <strong>and</strong> development(R&D).2. When assessing <strong>the</strong> impact of legislative <strong>and</strong> policychoices, intellectual property must be considered in <strong>the</strong>context of o<strong>the</strong>r competencies:a. Supportive R&D policyb. National <strong>health</strong> programmes that sustain domesticmarkets, including distribution systems in both <strong>the</strong>public <strong>and</strong> private sec<strong>to</strong>rsc. High-quality manufacturing st<strong>and</strong>ards for drugs <strong>and</strong>vaccinesd. Effective regula<strong>to</strong>ry systemse. Mechanisms <strong>to</strong> facilitating trade in <strong>health</strong> products <strong>and</strong>technologies3. Mechanisms <strong>and</strong> best practices <strong>to</strong> harness <strong>the</strong> global IPregime in a manner that promotes both private <strong>and</strong> publicinterests, including <strong>the</strong> improvement of poor populations’access <strong>to</strong> <strong>health</strong> products.As a pre-requisite for countries <strong>to</strong> participate in <strong>the</strong> globalmarketplace <strong>and</strong> benefit from emerging technologies, stronginstitutional IP capabilities are needed. This should becoupled with careful consideration of <strong>the</strong> tremendous latitudeprovided by TRIPS in terms of national implementation.These should be coupled with national policies <strong>and</strong> practicesthat support <strong>the</strong> public sec<strong>to</strong>r’s endeavours <strong>to</strong> meet <strong>the</strong> needsof <strong>the</strong> poor. These need not be compulsory licensing that maybring advantages in <strong>the</strong> short term. Such approaches areunlikely <strong>to</strong> be effective in <strong>the</strong> medium- <strong>to</strong> long-term inenabling – let alone sustaining – collaborative efforts between<strong>the</strong> public <strong>and</strong> private sec<strong>to</strong>rs.It is not argued here that <strong>the</strong> IP rights system is perfect. Itis a compromise <strong>and</strong> an imperfect solution 3 . IP rights systemsrepresent <strong>the</strong> search for balance between making allknowledge freely available within <strong>the</strong> public domain <strong>and</strong>granting ownership of valuable discoveries <strong>to</strong> <strong>the</strong> inven<strong>to</strong>rs.His<strong>to</strong>rically, we have seen that this balance encouragesinvestment – <strong>and</strong> reinvestment – in innovation, primarily by<strong>the</strong> private sec<strong>to</strong>r. Unfortunately, this innovation is <strong>to</strong>oinfrequently directed <strong>to</strong>wards <strong>the</strong> needs of <strong>the</strong> poor. Thefailure is not in <strong>the</strong> IP rights system per se, but in part due <strong>to</strong><strong>the</strong> fact that insufficient attention has been paid by <strong>the</strong> publicsec<strong>to</strong>r <strong>to</strong> managing intellectual property. This lack of focusedattention must be corrected.Legislative frameworksThe IP legislative explosion mentioned above hasunsurprisingly led <strong>to</strong> suspicions about IP rights, which areoften viewed as controversial <strong>and</strong> complicated. Indeed, if oneconsiders <strong>the</strong>se numerous treaties from a purely legalperspective, one easily gets entangled in legalities requiring acohort of lawyers (<strong>and</strong>, arguably, very deep pockets). Yet thisview perhaps misses <strong>the</strong> point of what IP rights are all about.First <strong>and</strong> foremost, <strong>the</strong>y are intended <strong>to</strong> encourageinvestments in innovation. Second, IP rights systems werecreated <strong>to</strong> regulate access <strong>to</strong> <strong>and</strong> sharing of <strong>the</strong> less familiar“intellectual” form of property. Put differently, IP systems<strong>to</strong>day are meant <strong>to</strong> enable <strong>the</strong> orderly conduct of business in<strong>the</strong> realm of intellectual property. The purpose of statu<strong>to</strong>ry IPrights, <strong>the</strong> related contract laws, <strong>and</strong> <strong>the</strong> court systems is <strong>to</strong>enable predictable, transparent business dealings between<strong>and</strong> among institutions <strong>and</strong> individuals.084 ✜ Global Forum Update on Research for Health Volume 4
InnovationThe changes in international IP legislative frameworksthrough treaties are rapidly changing national legislation. And<strong>the</strong>se changes are profoundly affecting how <strong>health</strong>innovations <strong>reach</strong> <strong>the</strong> poor <strong>and</strong> how public <strong>and</strong> privateresearch <strong>and</strong> development institutions pursue <strong>the</strong>ir work. IPrights are sometimes viewed as barriers <strong>to</strong> innovations in<strong>health</strong> <strong>and</strong> o<strong>the</strong>r areas. In some circumstances, <strong>the</strong>y are. Butthis paper argues that overall it is not intellectual property, perse, that obstructs access, but ra<strong>the</strong>r how intellectual propertyis used <strong>and</strong> managed. What matters most is how creativelypublic sec<strong>to</strong>r institutions integrate IP considerations in<strong>to</strong> <strong>the</strong>iroverall business models <strong>and</strong> approaches. Seen in this light,<strong>the</strong> legislative framework provides a solid foundation for astable, predictable judiciary, which also allows <strong>the</strong> publicsec<strong>to</strong>r <strong>to</strong> use a national IP system as a <strong>to</strong>ol <strong>to</strong> achieve itsgoals. A stable IP system empowers <strong>the</strong> public sec<strong>to</strong>r <strong>to</strong>imagine, anticipate, <strong>and</strong> act.The policy choicesDetermining how institutions can adopt <strong>and</strong> adapt <strong>the</strong>advantages conferred by TRIPS <strong>and</strong> o<strong>the</strong>r legislativeinitiatives is crucial. For example, government policies arehugely important for establishing <strong>to</strong> what extent public sec<strong>to</strong>rinstitutions will practise IP management. In <strong>the</strong> UnitedStates, no o<strong>the</strong>r policy choice had a more significant impactthan <strong>the</strong> Bayh-Dole Act <strong>and</strong> o<strong>the</strong>r legislative <strong>and</strong> policydecisions in <strong>the</strong> early 1980s. They created conditions thatspurred investment in biotechnology R&D, leading <strong>to</strong>numerous <strong>health</strong> innovations. But above all, <strong>the</strong>se policychoices greatly affected how universities <strong>and</strong> public sec<strong>to</strong>rresearch institutions manage intellectual property <strong>and</strong> <strong>the</strong>irrelationship with <strong>the</strong> private sec<strong>to</strong>r.Although <strong>the</strong> circumstances of countries vary enormously,<strong>the</strong> following set of questions are nearly universally relevant:when should public sec<strong>to</strong>r R&D centres or universities seekpatent <strong>protection</strong> for <strong>the</strong>ir inventions? What informationrelated <strong>to</strong> research should <strong>the</strong>y keep confidential, if any?Under what circumstances should <strong>the</strong> public sec<strong>to</strong>r grantaccess (in o<strong>the</strong>r words license) <strong>the</strong>ir intellectual property? Andunder what terms? And <strong>to</strong> whom? These questions do nothave simple answers. This is largely because <strong>the</strong> answers willdepend on <strong>the</strong> context in which <strong>the</strong>y emerge. Even within <strong>the</strong>same institution, <strong>the</strong> answers may be diametrically opposedfor different types of inventions. Given <strong>the</strong>se complexities,what should be <strong>the</strong> government’s role in <strong>the</strong> area of policy?First of all, establishing an open, transparent governmentpolicy for <strong>the</strong> ownership of publicly funded research is animportant foundation for building sound institutional IPmanagement. Institutional leaders have little latitude when<strong>the</strong> underlying rules are opaque or not spelled out.Second, <strong>the</strong> policy rationale for technology transfer inpublic sec<strong>to</strong>r institutions should not be based on anticipatedrevenue flows; instead, long-term national, <strong>social</strong>, <strong>and</strong>economic objectives should structure policy decisions – withpublic benefit as <strong>the</strong> key fac<strong>to</strong>r. Indeed, since governmentfunds much research at national R&D <strong>and</strong> academicinstitutions, it has <strong>the</strong> prerogative <strong>to</strong> m<strong>and</strong>ate certainconditions for <strong>the</strong> benefit of <strong>the</strong>se institutions’ publicIn <strong>the</strong> United States, no o<strong>the</strong>r policy choice had a moresignificant impact than <strong>the</strong> Bayh-Dole Act <strong>and</strong> o<strong>the</strong>rlegislative <strong>and</strong> policy decisions in <strong>the</strong> early 1980smissions. Policy-makers have a lot of latitude when it comes<strong>to</strong> ensuring that investment in research is returned as a publicbenefit. They could certainly require, for example, thatproducts developed <strong>and</strong> marketed commercially from publiclyfunded research have some provision for delivery <strong>to</strong> <strong>the</strong> poor.Third, governments can also streng<strong>the</strong>n <strong>the</strong> courts <strong>and</strong>recognize <strong>the</strong>ir important role in balancing conflicting IPpolicies. Such efforts will provide useful guidance withregards <strong>to</strong> business, technology, <strong>and</strong> science planning <strong>and</strong>strategy. Not every dispute, however, should be resolved incourt. For public research <strong>and</strong> product development ingeneral, <strong>and</strong> for equitable access <strong>and</strong> meeting <strong>the</strong> needs of<strong>the</strong> poor in particular, governments have tremendousopportunities <strong>to</strong> promote policies that foster alternativedispute resolution procedures 4 . Such approaches are oftenpreferable for settling differences between parties. Courtaction is often stymied because of cost, length of procedure,legal uncertainty, a decision-maker’s lack of expertise,conflicts between confidentiality <strong>and</strong> publicity, <strong>the</strong> difficulty ofseeking action in foreign jurisdictions, <strong>and</strong> <strong>the</strong> negativeimpact on existing business relationships. Arbitration is anattractive option for all of <strong>the</strong>se reasons, <strong>and</strong> while it is aprivate mechanism, it is not al<strong>to</strong>ge<strong>the</strong>r free from regulation bynational laws. Governments <strong>and</strong> public institutions can helpmake arbitration or mediation procedures accessible <strong>and</strong>available by identifying <strong>and</strong> supporting neutral institutionsthat can provide cost-efficient, timely dispute resolutionservices. Such approaches would also take much of <strong>the</strong>negative public perception out of IP rights, especially fromlegal disputes that can deter increased private participation inmeeting <strong>the</strong> needs of <strong>the</strong> poor.Finally, it should be recognized that Product-DevelopmentPartnerships (PDPs) allow <strong>the</strong> private sec<strong>to</strong>r <strong>to</strong> invest <strong>and</strong>apply its expertise <strong>to</strong> address <strong>the</strong> needs of <strong>the</strong> poor. Manysuch PDPs are now driving <strong>the</strong> drug development pipeline inneglected disease R&D. A pioneering new institutionalstructure, PDPs will become increasingly prevalent indeveloping countries <strong>and</strong> contribute <strong>to</strong> <strong>the</strong> development ofproducts in less viable markets. National governments havetremendous opportunities <strong>to</strong> promote policies <strong>and</strong> capacitiesthat facilitate <strong>the</strong>se innovative partnerships, especially insuch areas as effective clinical trials <strong>and</strong> ethical reviewcapacities, appropriate regula<strong>to</strong>ry bodies for clinical research<strong>and</strong> product approval, <strong>and</strong> national <strong>and</strong> institutional IPpolicies that stimulate <strong>health</strong> <strong>and</strong> agricultural R&D.Institutional strategiesWhatever <strong>the</strong> impact of TRIPS <strong>and</strong> of streng<strong>the</strong>ned patentregimes, institutional IP management capacities will need <strong>to</strong>be streng<strong>the</strong>ned so that <strong>the</strong> legislative <strong>and</strong> policy changes canGlobal Forum Update on Research for Health Volume 4 ✜ 085