As the overall level of convergence between industries in the
business world keeps increasing, it is only logical for the related
legal aspects to follow suit every step of the way. Nonetheless,
even though this is becoming something of a regular occurrence
nowadays, there are particular legal practice areas that have been
tied to their industry counterparts for quite a long time now, and
perhaps none so much as the relationship between the pharmaceutical
industry and intellectual property (IP) rights.
Often called the "pharmaceutical company's most
valuable resource", IP protection is of vital importance to
the functioning of such companies for a variety of reasons, many of
which – contrary to popular belief – are not deriving
from selfish profit-making intentions. In order to understand these
reasons, one should take into consideration the highly challenging
business model under which pharmaceutical companies operate. More
precisely, if we were to look at the process of medicine
development, official data shows that out of 5 000 – 10 000
experimental compounds (which are often researched and developed
for close to 10 years while costing in the range of EUR 1-2
billion), only 1 ends up as approved by the governing body.
Moreover, having in mind that only 2 out of every 10 medicines
produced can recoup the costs of development, it becomes clear how
important it is for pharmaceutical companies to capitalise on the
few successes they find. This is where it comes down to IP
protections to make this possible, since through the process of
registering patents they provide resources for research and
development, encouraging further innovation as a consequence.
Therefore, it may be fair to assume that creating, obtaining,
protecting, and managing IP should become a corporate activity
similar to the way resources and funds have been raised, so that
– among other things – conditions are created for the
continued evolution of knowledge.
However, seeing as how pharmaceuticals present a constituting
element of globalisation – they are equally essential
everywhere to everyone – it comes as no surprise that a
number of accompanying issues arise concerning IP protection in a
broader context. A premier example in this regard being the
discrepancy between the major economies of the world and the
developing, emerging countries and markets. Whereas in the first
and second world countries it is possible for companies to enforce
their IP rights through regulations and agreements with relevant
entities, emerging markets (especially those large scale ones such
as China and India) – have networks of countless local
manufacturers who produce cheap counterfeit versions of patented
drugs – some of which even find their way back into the
western countries. This has put multinational pharmaceutical
companies in a rather difficult position, as they now need to
account for the balance between aiming for innovation and progress
by invoking their IP rights on one hand, and formulating a way to
provide affordable drugs for the developing world on the other.
Finally, an illustrative, recent example in this regard, can be
found in GlaxoSmithKline's (GSK) decision to not
invoke their IP rights on medicines in low-income countries and
thus widen access to its products by allowing generic manufacturers
to produce low-cost copies of GSK drugs with no risk of legal
challenge. Such an approach on behalf of GSK should, however, be
put in perspective by calling upon the recent Decision brought forth by the World Trade
Organisation (WTO) that has extended the drug patent exemption
for all of the least-developed-countries (LDC) of the WTO until
2033. Considering the fact that many countries from the LDC group
are the same countries in which GSK has decided to rescind their IP
rights, it becomes clear that their decision is somewhat less
revolutionary than it might seem at first, albeit still valid in
terms of what the accompanying publicity might accomplish for the
treatment of the entire issue going forward.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The focus on the product being obvious or anticipated as at a certain date provides powerful protection and commercial certainty without conflicting with a patentee's ability to obtain patent protection.
Following the UK Government's announcement that it will ratify the Unified Patent Court Agreement, the Unitary Patent and Unified Patent Court (UPC) are expected to go live in December 2017.
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