CONTENTS
WHAT IS INTELLECTUAL PROPERTY?
Two experts explain the mysteries of patents, trademarks, copyrights, and trade secrets.
SUPPORT FOR ECONOMIC AND POLITICAL FREEDOM
The former U.S. Commissioner of Patents and Trademarks suggests why it is in every country's interest to establish and maintain an effective intellectual property system.
A DEVELOPING COUNTRY'S PERSPECTIVE
Intellectual property rights, says a Ghanaian copyright official, galvanize domestic industry while retaining national culture, inventiveness, and creativity.
PROGRESS IN THE PHARMACEUTICAL INDUSTRY
Striking a blow against patent piracy is essential to the future of pharmaceutical research, says a former association executive.
A TRADE ASSOCIATION AT WORK
The representative of a book publishing association recounts her organization's efforts to enforce international copyright standards.
INTERNATIONAL POLICY AND ACCORDS
Here are the key multinational treaties and conventions that require member countries to provide intellectual property protection for the benefit of foreign nationals.
GLOSSARY
From assignment to World Trade Organization, an attorney defines some commonly used terms related to intellectual property rights.
SOURCES OF INFORMATION ON INTELLECTUAL PROPERTY
How to get in touch with U.S. government entities, international organizations, and other groups in the forefront of the intellectual property scene.
ADDITIONAL READINGS
IN BRIEF...
Fair Use
Copyright in an Electronic Age
The U.S. Patent System
The U.S. Special 301 Process
The World Intellectual Property Organization
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PROGRESS IN THE PHARMACEUTICAL INDUSTRY
By Gerald J. Mossinghoff
Strong patent protection for pharmaceuticals drives medical
progress by providing economic incentives for innovation. Without
international respect for pharmaceutical patents, medical
innovation would suffer. In fact, a 1988 study of 12 industries
by Dr. Edwin Mansfield of the University of Pennsylvania
estimated that 65 percent of pharmaceutical products would not
have been introduced without adequate patent protection. If you
try to imagine health care without nearly two-thirds of the
medicines available today chemotherapy drugs, clot-busters
that save the lives of heart attack patients, AIDS medicines,
drugs that save the lives of premature babies, and many
others you have a vivid picture of the importance of
intellectual property protection to the pharmaceutical industry.
The underlying reason why pharmaceutical progress is
dependent on intellectual property protection is the staggering
cost of drug development. It costs an average of $500 million to
develop a new medicine. Perhaps in no other industry can an
invention that costs so much to discover and develop be copied or
reverse-engineered so inexpensively, at a small fraction of the
innovator's research and development costs. Without strong patent
protection, pharmaceutical companies could not attract the
investment needed to conduct this expensive, high-risk research.
The defining characteristic of the U.S. pharmaceutical
industry is the enormous and sustained financial commitment to
research and development. Between 1985 and 1996, the industry's
annual investment in R&D increased fourfold from $4,100
million in 1985 to nearly $16,000 million in 1996. It is the most
research-intensive of the high-technology industries in terms of
R&D spending as a percentage of revenues.
Pharmaceutical Patents and Developing Nations
Although generally perceived as a benefit only for
developed countries with large pharmaceutical industries, patent
protection is perhaps even more important for developing nations.
A strong pharmaceutical patent regime increases local
pharmaceutical research and development, attracts foreign
investment, fosters technology transfer, provides high-technology
employment, and increases exports. Perhaps most important, patent
protection for pharmaceuticals ensures the availability of
modern medicines that improve health.
In 1994, the World Bank polled a range of companies to
find out what kind of environment they needed to be willing to
invest in pharmaceutical efforts in countries where patent
protection was lacking. The study found that 29 percent would be
willing to invest in facilities to manufacture formulations. Only
13 percent would be willing to invest in facilities to provide
bulk material to final product manufacturing. No companies
indicated a willingness to invest directly in R&D if there were
no patent protections for pharmaceuticals.
The results of this study have been verified by the actual
investment behavior of U.S. companies. In 1996, Brazil adopted
very good patent legislation. Since then, Brazil has gained
between $1,700 million and $2,200 million in new investment
in high-technology industries, particularly concentrated in the
pharmaceutical sector. Japan, which did not protect
pharmaceutical patents until 1978, has also seen a dramatic
increase in U.S. pharmaceutical R&D investment, from $135.8
million in 1985 to $505.5 million in 1994.
Similarly, countries that have strengthened patent
protection for pharmaceuticals have seen impressive growth in
their domestic pharmaceutical industries. Italy, for example,
instituted strong patent protection for pharmaceuticals in 1978.
In 1978, there were only 123,000 million lira invested in local
pharmaceutical R&D. Only 10 years later, that investment had
grown to 592,300 million lira, and it is still growing.
Another indicator of the salutary effect of strong patent
protection on the domestic pharmaceutical industry is the fact
that the number of Italian pharmaceutical firms included among
the top 100 firms worldwide grew from only one in 1978 to seven
in 1987.
Mexico provides yet another clear example of the benefits
of pharmaceutical patent protection. Mexico strengthened
pharmaceutical patent protection in 1991. As a result,
investments in both R&D and pharmaceutical facilities increased
from a total of $41 million (U.S. dollars) in 1990 to $103
million just three years later.
Health Benefits of Pharmaceutical Patent Protection
The contribution of strong intellectual property
protection to human progress goes beyond economics. By providing
incentives for the development of new medicines, patent
protection improves health and reduces both the economic and
human toll of disease.
Although the pain, suffering, and grief caused by disease
is hard to measure, it is possible to quantify disease in terms
of Disability Adjusted Life Years, or DALYs. This measures the
years of loss per 1,000 inhabitants due to disease. In the
developing countries, the years of loss due to communicable
diseases is markedly higher than in the United States, Europe,
and Japan. In Latin America, for example, there are 99 years lost
per 1,000 inhabitants due to communicable diseases, compared to
only 15 in the United States, Europe, and Japan. For these
indigenous communicable diseases, drugs developed through local
R&D could be particularly significant.
Although there should be no complacency that all the
very real medical problems of the world can be solved simply by
strengthening patent protection, the stage is set for an era of
unprecedented progress. Scientists now understand what happens in
the human body, what causes diseases, and how we can intervene to
prevent, stop, or ameliorate disease. But in order to make the
promise of medical progress a reality for all the world's people,
we must remove the obstacles to investment in pharmaceutical
research. Striking a blow against patent piracy is a good place
to start.
Gerald J. Mossinghoff, a former U.S. assistant secretary of
commerce and commissioner of patents and trademarks, is now a
visiting professor of intellectual property law at the George
Washington University Law School in Washington, D.C. From 1985 to
1996, he served as president of the Pharmaceutical Research and
Manufacturers of America.
SIDEBAR: Case Study: Brazil's Pharmaceutical Industry
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