Michelle Childs - IP Event
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Transcript of Michelle Childs - IP Event
How does intellectual property impact on consumers’ lives?
Consumers International World Congress - side event
29th October 2007 :Sydney
Michelle Childs , Head of European Affairs
Knowledge Ecology International
Some definitions: What is IP? An umbrella term to cover a collection of ‘rights’. Key differences between them
but generally are: legal rights which people (and now corporations) have over the things they
create or invent. They enable the owners to limit who may access and use their property and to protect it from unauthorized reproduction. Time limited monopoly allows owner to set price without fear of competition. However all have ‘balancing’ exceptions or limitations for users.
Main focus has been on: Copyrights: protects creative or artistic works e.g literature, art, educational
materials, software, music films and broadcasts.. Patents: Protects inventions, how things are works what they do, how they do it
what they are made of and how they are made. E.g medical treatments, seeds, (sometimes software, life forms genes).
Trademark: protects any sign or symbol that allows consumers to tell companies apart e.g brand name , logo, slogan, domain name, shape colour or sound.
What is intellectual property 2?
but also:
Trade secrets ,Broadcaster right, webcaster right, rights of publicity, plant breeder right, sui generis database protection, rights in pharmaceutical test data, Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), orphan drug exclusivity, pediatric testing exclusivity, boat hull protections, publication rights, DRM/TPM measures, contractual protections of non-copyrighted materials, protection of traditional knowledge, folklore, access to genetic resources, material transfer agreements, etc., etc.
Why is it an issue now?
Fear: of countries (BRIC) and companies. New business models v old. Knowledge Economy v access to knowledge (monopoly v competition)
Change: technology ‘Internet a copying machine’.Copying v control balance between right holders and users.
Pandemics- HIV/AIDS - innovation v access Lead to: Expansion:new types of subject matter, increase in terms of protection,
scope of protection removal or limitations and restrictions on owners. Harmonization of laws: for right holders v fragmentation of users rights Increased concern from civil society initially lead by access to medicines
activists.
Strength of IP protection
Dominant view of IP rules
innovation
IP expansion :PRESSURE POINTS
TRIPS Agreement : minimum standards - one size fits all
few developing countries were involved in negotiations Gave in because of market access in agriculture no country really understood implications
Written with and for Northern right holders- US and EU main proponents of TRIPS and TRIPS + provisions
World Intellectual Property Organization (WIPO) standard setting exercises
Bilateral Free Trade Agreements & other bilateral pressure
Role of consumers: innovation+Access Consumers interested in both sides of the debate- want
innovation, creativity and fair rewards and Access
Availability
Choice
Competition
Fair contract terms
Strength of IP protection
LOSSGAIN
OPTIMAL
Reality of continued strengthening of IP rules
innovation
Source: Peter Drahos
Copyright : Consumer concerns
Focus on right holders and protecting content rather than innovation to meet consumers needs.
Stronger copyrights laws driven by entertainment and software industries but affect cultural and education materials
Relevant to consumers in North and South:
Excessive Pricing: Cost of knowledge raised especially in South e.g South Africa Nelson Mandela’s Long Walk to Freedom $16.30 average income 10 x lower than in UK if adjust for income practical cost is equivalent to UK consumer paying $ 230 (source South African a2k project). In US minimal yearly changes to academic textbooks stop second hand market
Unavailability: Publishers don’t market in some countries, stop parallel imports
Unsuitability : Translation into indigenous languages not economic
The loaded dice?-TPM problems
Main focus for many consumer groups in the North
Barriers to Digital content relevant for South:Even with poor availability and high costs of infrastructure still feasible to extend access to educational, scientific and cultural works. Parity possible with Northern Institutions
Issue: New powers to enclose content- Technological Protection Measures (TPMs). (music
players,cd’s Ebooks, DTV)
Poor at preventing commercial copying, good at restricting consumer use.
Consumers face ‘triple lock’ : Copyright protection Technological restriction Legal protection of the technological restriction ( anti- circumvention provisions)
The loaded dice?-TPM problems 2 Exclude permitted uses under copyright (e.g private
copying ,lending, excerpting, resale and donation) Restrict expected consumer usage (e.g ‘format shifting’ , ‘space
shifting; and ‘time shifting’. EU DVB standards group ‘authorized domain’ define when, where and who can use content’
Split consumer usage so can exploit different pricing models –pay for normal functionality v wider choice.
Block assistive technologies used by people with disabilities (e.g block conversion into Braille)
Privacy- monitors usage e.g political, religious or philosophical beliefs. Builds personal profiles without knowledge or accountability.
Source: TACD resolution on DRM (www.tacd.org)
The loaded dice?-TPM problems 3 Undermine Security- e.g Sony ‘rootkit’ Lack of Interoperability- DRM’s lock consumers into one platform e.g
iTunes
Anti-competitive behaviour- e.g price discrimination and market segmentation.g regional encoding of DVDs .Lock out competitors or shut out or control complementary products. Threaten product diversity and choice for consumers
Transparency and Contract Terms- no notice of usage restrictions, terms alter after purchase without knowledge or consent. ‘Shrink wrap’ license terms which waiver rights.
Redress- shifts burden of protection of rights from holders to consumers- reluctant litigants.
Patents on seeds and life forms Companies are being granted patents for products, technologies that make use of the
TK, plants that have been identified, developed and used by local communities and indigenous people mainly in countries from the South
…..companies make huge profits but the local communities are unrewarded….and face the threat of having to buy these products in the future
Issue: patenting of plants, seeds and the sui generis plant variety protection leading to corporate control over food supply
Corporate mergers and broad patenting rights has led ……to top 10 seeds companies controlling 30% of the world’s commercial seed market.
Traditional farming practices of exchanging, reusing, selling seeds are threatened and farmers are being sued
Future of medicines 20 % of human genes have been patented in US, primarily by private firms and
universities c/f Human Genome project. Patents on diagnostic testing e.g BRAC 1 breast cancer gene
Patents on seeds: 2 An Action Aid study (1999) lists in two tables patents that have been claimed for
naturally occurring compounds, genes or gene sequences with a variety of functions. They include
62 patents on genes or natural compounds from plants which are traditional grown in developing countries. The plants include rice (34 patents), cocoa (7), cassava (2), millet (1), sorghum (1), sweet potato (2), jojoba (3)
132 patents on genes in staple food crops which originated in developing countries but which are now grown globally. The crops include maize (68 patents), potato (17 ) soybean (25) and wheat (22)
Basel based biotechnology giant Syngenta claims that it invented more than 30 000 gene sequences of rice…..more than 99.5% of the rice genome and is seeking global patents over thousands of genes in rice. “……..the multinational giant is all set to “own” rice, the world’s most important staple food crop
(Sharma (2005), Third World Resurgence)
Patents on medicines- rationale
Patents drive the financing of drug development
This create incentives for innovation of new treatments
Many patents attached to each drug on market (ingredients/shape/process/coating, etc.)
Consequences of exclusive marketing rights to finance R&D on Access and Availability
Medicines: Unavailable , unsuitable, unaffordable• Unavailable. Certain diseases ‘neglected’ few or no drugs
exist or are being developed. patent system relies on high prices to fund R&D if no market no incentive= no drugs
• Unsuitable- not adapted for needs of developing countries e.g heat stable, child formulations , diagnostic tools
Unaffordable -treatments do exist but too expensive for individuals and mass government treatment. Increasing an issue in Northern Countries e.g rationing of new drugs.
BMS/Sanofi prices for clopidogrel bisulfate (Plavix)
According to the Thai Ministry of Health, BMS/Sanofi prices for the heart drug Plavix were unaffordable for 80 percent of patients
The BMS/Sanofi price was more than eleven times the price of an imported generic
4.2
2
0.17
US/BMS Thai/BMS ThaiGeneric
Novartis at the World Bank in 2004 We consider India to be a market of 50
million
Some experts believe the current system of market monopolies for drug sales increased 2006 drug prices by $400 to $480 billion
Enforcement- the new battleground Enforcement key focus of US and EU future work- domestic and
international Rightholders should have a level of protection and consumers protected
against dangerous goods but..
Enforcement provisions do not distinguish between consumer use and commercial scale counterfeiting- same criminal and civil sanctions applied to both
Overboard definitions of ‘piracy’ can catch lawful use by consumers. Can be used anticompetitively.
Costs and benefits to different stakeholders not evenly counted. Costs to rights holders based on questionable assumptions, access costs to consumers not counted.
Opportunities for change: why now? Fear - Access- ‘coalition of the worried’ scientists, librarians,
health activists , consumers, companies. Costs outweigh benefits.
Change- More assertive Govts pro access,new business models and alterative incentive schemes
Pandemics :HIV/Aids- new patents- SARS/ Avian Flu- access ,speed, co operation, Southern power.
Economics
Are the current systems providing appropriate incentives?
Copyright: does longer = more creativity? Period of protection continually expanded
now last lifetime of creator + decades after death (e.g in EU life +70 years for authors) Push for more e.g sound recordings
But:
Most companies business models and end of year reports suggest actual time frame for calculating economic return is relatively short e.g films measured over months or years but not decades
Industry “anti piracy campaigns focuses on ‘new releases Cost to public domain and creativity
Problems of patent system for medicines Exclusive rights lead to pricing abuses and high prices are barriers
to access. Companies invest too much in non-innovative “me-too” products
and too little in truly innovative medicines.
Low levels of investment in products that provide incremental health care benefits
Low levels of investment in treatments for the poor (neglected, global infectious, orphan diseases)
Massive expenditures on marketing of products consume too many resources with very little if any net social benefits. Aim to gain bigger market share among duplicative products
Marketing
Financials for U.S. Corporations Marketing the Top 50 Drugs for Seniors, 2001
Percent of Revenue Allocated to:Mark., Adv, & Adm. R&D Profit
Merck $47,716 13% 5% 15%Pfizer $32,259 35% 15% 24%Bristol-Myers Squibb $19,423 27% 12% 27%Abbott $16,285 23% 10% 10%Wyeth $14,129 37% 13% 16%Pharmacia $13,837 44% 16% 11%Eli Lilly $11,543 30% 19% 24%Schering Plough $9,802 36% 13% 20%Allergan $1,685 42% 15% 13%Total $166,678 27% 11% 18%
Company Revenue
Source: Families USA, 2002
According to the market research firm IMS, global sales for pharmaceutical products were $602 billion in 2005, or 1.35 percent of global GDP.
The International Federation of Pharmaceutical Manufacturers Associations (IFPMA) claims global private sector investments in R&D were about $51 billion -- less than 9 percent of global sales.
3%3%8%
2%
84%Manufacturing, efficentdistributionR&D, not new
R&D, new, not better
R&D new, better
Marketing, profits, etc
About 13% of global pharma sales are reinvested in R&D
•Most R&D (11 of 13 percent) is invested in older products (3%) or “me too” products (8%)
•Approximately 2 percent is invested in products the US FDA considers significantly better than existing treatments
Source: Consumer Project on Technology, 2005
New paradigms for knowledge goods
Free software/open source software Open access publishing of scholarly research P2P sharing of music (with or without
remuneration to authors and performers)
Medical Innovation Prize Fund Prizes instead of high Prices. Basis idea: De-
couple incentive (funding for R&D) from price of product
Advantages: pay only for successful performance and generic competition from day 1.
Low prices plus pay for R&D = innovation + access
Opportunities for Consumers’ voices to be heard International: WIPO - Implementation of Development Agenda, Committees on
Copyright and patents WHO: Intergovernmental Working Group on IP innovation and
public health- Innovation+Access WTO?:Anti Counterfeiting Treaty? FTA’s and EPA’s Local: National reviews of IP/enforcement legislation Both:Targeted campaigns against anti consumer company
practice :A2M and A2K issues. CI campaign?!
Reasons to be cheerful…. but Governments: Some using flexibilities ,reviewing existing
laws….but not all, and some laws maybe worse. Industry splits: e.g Patents: software v Pharma.Copyrights and related rights:
tech companies v broadcasters.. But allies become opponents Creators and consumer blurring, working together e.g mash ups,
Radiohead … but will this last New business models: E.g flat fees, advertising for copyright,.. but fight back from old
model beneficiaries New approaches: free software open access publishing, prize
funds
The future?
Re- establish a fair balance between rights holders and consumers through explicit provisions on fair use,patent flexibilities and public access rights
The consumer interest and experiences to be taken into account
New solutions to provide a fair return for creative people and inventors and fair access
Critically examine claims for the need for increased IP protection
Enforcement- assess impact on consumers, distinguish between consumers and commercial counterfeiters.
More Information: Knowledge Ecology International
www.keionline.orgwww.cptech.org
Subscribe to: A2K and/orIP-health Mailing listshttp://lists.essential.org/mailman/listinfo/ip-health
Michelle [email protected]