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<nettime> Brazil puts patients before patents

May 4, 2007
The Huffington Post
James Love

Brazil puts patients before patents, rejects Bush administration
pressure and issues compulsory license on important AIDS drug

On national television Brazilian President Luiz In?cio Lula Da Silva
has just announced a compulsory license on patents controlled by
Merck for the important AIDS drug efavirenz. Brazil has a large and
growing population of AIDS patients, and cannot afford to sustain
treatment without obtaining low cost generic copies of AIDS drugs.

Press coverage of today's action will likely have a narrative about
poor countries breaking rich country patents, but it could also be
presented as a larger discussion about the problems of giving
exclusive rights to patent owners.

Yesterday, the Wall Street Journal praised the US Supreme Court for
"restoring some sanity to America's runaway patent law, " by giving
"judges much-needed flexibility in granting or denying permanent
injunctions." The WSJ was referring to the 2006 decision involving an
attempt to enforce an injunction against eBay, enforcing a patent
owner's "exclusive" right to determine who can use the invention.

The U.S. Supreme court decision in eBay made it clear that, after
considering the facts in the case and the public interest, a judge
could choose to not enforce the exclusive right, and instead
authorize the infringer to use the patent, in return for a court
determined royalty.

Outside of the U.S., when Thailand or Brazil decide to allow non-
voluntary use of a patent, we call it a compulsory license, and a
smug U.S. and European press talk about the lack of respect for
intellectual property in certain developing countries (the ones that
dare to issue compulsory licenses).

In the U.S. the WJS and others call the non-voluntary use of a patent
something else -- patent reform.

Since June of 2006, U.S. courts have issued compulsory licenses on
patents in cases that have benefited Toyota (for patents on an
automatic transmission), Direct TV (set top box patents), Microsoft
(on DRM technology patents) and Johnson and Johnson (on a medial
device). The U.S. F.T.C. recently issued a compulsory license on
computer memory chips (the Rambus case).

Since 2005, Italy has granted compulsory licenses on patents for two
Merck products (an antibiotic and a prostrate and baldness drug), and
one GSK products (for migraine headaches.)

For more of these examples, see here and here.

Back to Brazil, and the very important announcement today regarding
it's compulsory license. What does this mean for drug developers?

The Brazil decision today, which involves the first (post WTO/TRIPS
Agreement) compulsory license on patents on medicines for all of
Latin America, will likely be widely copied in the region.

It is now time for drug developers to rethink their strategy and
business models. Developing countries will not accept prices that the
poor cannot afford. But prices that the poor can afford don't include
a premium for R&D.

The answer to this dilemma is not to raise prices, but to decouple
the R&D incentive from the price. The most far reaching way to do
this would be to replace drug monopolies with large prizes

James Packard Love
Knowledge Ecology International
Washington, DC +1.202.332.2670

"If everyone thinks the same: No one thinks." Bill Walton"

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