There used to be a time when intellectual property (“IP”) law was an obscure and esoteric area of the law, simply of interest to a few science geeks, music companies and branding types (the offensive and outdated – but endearingly funny – “man with a ponytail”).
Somewhere along the line people caught on and as IP assets increased as a percentage of overall asset value, the interest in IP law grew. Nowhere has this growth and the commensurate interest been more pronounced that in the S&P 500 where, in 1975, IP assets made up 17% of total asset value on the index, and by 2020 that shot up to just over 90%.
There is a ceiling to this measurement, but not to the associated value. As value increases so will interest and as interest increases, so will the ever-increasing arguments to balance the IP rights with what it aims to achieve.
Two recent developments in the EU illustrate this well – the first looking to potentially weaken IP rights and the second looking to bolster them.
On 3 February 2021 the news publication Politico ran an astonishing article entitled “Europe hints at patent grab from Big Pharma”.
The title is alarmist and we're quite convinced that no such thing is going to happen in Europe. While the conversation has been bubbling for some time in developing countries, including South Africa, it is quite extraordinary that the suggestion is even out there for discussion in Europe. Let's examine some of the claims made in the article.
“Ever so softly European politicians are beginning to voice a once unthinkable threat by suggesting they could snatch patents from drug companies to make up for massive shortfalls in the supply of coronavirus vaccines.”
“The EU could always be relied upon to defend US, Japanese and European drug-makers from poor nations in Africa and South Asia that have long wanted the recipe of critical medicines to be handed over to generic manufacturers.”
“European politicians.. are arguing, albeit cautiously that patents may no longer be as sacrosanct as they once were.”
“The big question is whether they are just sabre-rattling, knowing full well that any patent raid would shatter an ultimate commercial taboo and risk an exodus of leading companies from Europe over fears about the loss of IP.”
A former Greek prime minister has called for a “European patents pool.” A German minister has said that he “would be willing to talk about coercive measures.” However “the European Commission's Internal Market Commissioner… is at pains to stress that there is no question of redistributing patents.”
To be clear, we don't think the loose usage of terms like “snatch”, “patent raid” and “coercive measures” are meant to suggest expropriation of patents, they are far more likely to suggest compulsory licences and even these seem very far off in Europe.
The article talks about the fact that India and South Africa “are pushing for the nuclear option, above and beyond compulsory licensing...they want a temporary international waiver on the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) for corona-related medical products.”
An economics professor in Switzerland is quoted as saying that “you can essentially see it as a play by two countries, India and South Africa, who never really liked the current intellectual property rights rules of the WTO. I see it in a broader 25-year long context of this sort of guerrilla war against these rules.”
Nuclear option, guerrilla war… emotive words indeed and not very helpful for a necessary conversation on the topic.
On the other side of the same argument, the European Union (EU) and China have entered into an important trade deal.
A central aspect of this deal is that each party will offer protection to 100 of the other party's Geographic Indications (“GIs”). The topic of GIs has been controversial beyond the EU for a long time and this is a significant coup for the proponents of this form of IP right.
In the case of the EU the GIs that will be protected in China include Cava, Feta, Prosciutto di Parma and Munchener Bier. Chinese names that will enjoy protection in Europe include Anji Bai Cha and Anqiu Da Jian, names that I am personally not familiar with (according to Google, the former is a white tea and the latter is a type of ginger). Interestingly the agreement on GIs is described as “primarily a confidence-building exercise, serving as a measurement of the parties' ambition to ensure the deal is implemented effectively.” The thinking is apparently to extend the agreement to include a further 175 products from both sides over a period of four years.
According to reports, China was, in 2019, the third largest destination for EU agri-food products, a trade that's worth some EUR14.5-billion, with wines and spirts featuring strongly. The deal makes provision for GI owners to request enforcement action and a Joint Committee will apparently have the task of monitoring enforcement.
Two very different stories on the same topic: one about how a pandemic has led some to question whether pharmaceutical companies should have exclusive rights to their vaccines, the other about GIs forming an important component of a hugely significant trade deal between two economic.
Is IP law searching for balance?
Originally Published by ENSafrica, March 2021
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