MAKING PATENTS PUBLIC:
Redefining Intellectual Property When AIDS Drugs Are At Issue

In January 2000, speaking before the U.N. Security Council, former Vice President Al Gore declared that AIDS "is a security crisis–because it threatens not just individual citizens, but the very institutions that define and defend the character of a society." This powerful statement marked the first time that a public health issue had ever been placed at the top of the Security Council's agenda.

Suddenly, the debate about the AIDS epidemic took a new turn. The public health world was struck by Gore's unprecedented contention that AIDS was not only a crippling, unfortunate public health catastrophe that had wreaked havoc on the developing world, but an issue of national security as well. Gore's statement transformed the debate.

As a result, various countries began to explore new ways to ease their national AIDS burden, in light of the new recognition that AIDS was a national security issue, against which a nation could logically defend itself. Among other options, they reexamined their regimes of intellectual property laws — specifically, the recognition of patent protections on drugs that treat AIDS.

The solution they reached, like Gore's reconceptualization of the AIDS crisis itself, was unprecedented. They decided to suspend patent protections in order to manufacture cheaper, generic versions of AIDS drugs for the general public.

Brazil Defies AIDS Drug Patents

Brazil became the first country to take this route. In August 2001, Brazil announced that it would invoke a national emergency exception to international trade agreements and manufacture its own version of an AIDS drug, in clear defiance of the patent owned by the Swiss drug manufacturer Roche.

This brazen decision took the world by surprise. It highlighted the acrimonious debate about the intersection of international law and national autonomy in the context of global healthcare. And it did more: it forced us to question the very purpose of intellectual property itself, offering up a new vision of the purpose and scope of patent protections in times of national crisis.

These questions may someday affect us here in the U.S., too. Suppose that on some terrible day, a deadly bacteria like anthrax takes hold here, and the foreign company that owns the patent on an especially effective new anti-anthrax antibiotic seeks to charge a significant premium to produce more. Our government, too, might then want to violate a patent due to a public health crisis that we see as dovetailing with a national security issue.

This raises an important question: Is there a way for a government confronting a national emergency to use its national power to seize the supply of a drug, or create an illicit generic version, without harming the incentives towards innovation that a patent supposedly confers?

U.S. Patent Protections

The right to patent is enshrined in the U.S. Constitution, which states, "[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." The theory behind a patent is that it grants the holder a right to exploit its own technology for a limited period of time by excluding others from using, producing, or selling the invention.

The exclusivity period means that a patent allows its holder to recoup the costs associated with the development of the invention, thereby making it profitable for companies to engage in more innovation. In return, a patent holder is required to disclose the nature of its invention for public consumption.

International Patent Protections: The TRIPS Agreement

Internationally, patents enjoy protection under the TRIPS (Trade Related Aspects of International Intellectual Property Rights) agreement, which provides drug companies with twenty years of exclusive patent rights. The TRIPS agreement has effectively forced developing nations to pay the asking price for certain drugs — a sum that has often crippled their economies.

For example, Brazil, which had long been a leader among developing countries for its AIDS prevention efforts, halved its AIDS deaths by supplying drugs to patients free of charge. Yet paying for the Roche drug, Nelfinavir, consumed more than a quarter of Brazil's total spending on AIDS, and had a devastating effect on its economy.

Desperate, Brazil took a different approach. It argued that the TRIPS agreement's unused provisions allowing for "compulsory licenses" enabled Brazil to manufacture generic versions of patented drugs in situations of national emergency.

Brazil's decision to manufacture the drug on its own reverberated throughout the international public health community. On a deeper level, however, it signified the increasing willingness of less-developed nations to defy international norms (not to mention the wishes of multinational corporations) to ensure public health.

The Result of Brazil's Decision to Ignore an AIDS Drug Patent

Worried that other countries might follow suit, Roche quickly offered Brazil a 40% reduction on the price of the drug — an increase of ten percent over the percentage reduction it had already offered. Other countries saw that the playing field had shifted.

Brazil's decision marks only the latest in a growing international trend towards incorporating public health considerations in international patent enforcement. For example, one month after Gore's proclamation, then-President Clinton declared in an Executive Order that the United States will not seek to revise the intellectual property laws of sub-Saharan countries that use domestic law to provide access to HIV/AIDS medications, provided that they adhere to the TRIPS agreement.

And despite predictions to the contrary, the Bush Administration has remained steadfastly in support of the Executive Order. Moreover, in April of this year, 39 of the largest drug companies in the world announced that they had decided to drop a lawsuit to prevent South Africa from purchasing generic versions of their patented AIDS medicines.

The debate over patents and AIDS prevention has also increasingly turned its attention to the role of private entities in the U.S. As Salon reported, for example, at Yale Law School a number of students, led by (then) first-year student Amy Kapcynski, engaged in a massive campaign to convince Yale University and Bristol-Myers Squibb to pledge not to enforce a patent on a key drug in HIV treatment in South Africa.

Yale's licensing agreement to Bristol-Myers required that such deals "benefit society in general." Noting this clause, the activists contended that by ignoring the vast market of patients who needed access to the drugs, Yale violated the terms of its own agreement.

Bristol Myers ultimately capitulated, and agreed that they would not enforce its patent license in South Africa. "This is not about profits and patents," the firm wrote. "[I]ts about poverty and a devastating disease. We seek no profits on AIDS drugs in Africa, and we will not let our patents be an obstacle."

Revisioning Patents in Time of Public Need

This exception for patent protections–in times of public need or emergency–has thus raised deep-seated questions about the nature of intellectual property itself, defying many of the commonly held assumptions regarding the protection of inventions. A representative of Doctors Without Borders stated that "Brazil is not breaking patent rules. [I]t is breaking a monopoly that keeps medicines outrageously expensive for the profit of multinational pharmaceutical companies."

Yet many would argue otherwise — for the heart of a patent, some say, is the exclusivity it provides. Put another way, a patent owner receives a property right in his or her invention, which necessarily includes the right to exclude others from the use of the invention except on the owner's terms — including the fee he decides to charge.

A compulsory license framework challenges the idea that exclusivity — rather than, say, the right to make a reasonable profit — is at the heart of a patent. Compulsory licensing abridges exclusivity, forcing patent owners to contract with parties on terms to which they would never normally. Instead of allowing an owner to dictate the price of its use, a compulsory license allows the price of a license to be set by a third party, like the government. It may also allow production of a drug to happen in a foreign country, far from the patent owner's plant, and contrary to the patent owner's wishes.

Compulsory licensing, however, has legal precedents. Tort rules, for example, allow for use of certain private property in times of necessity. (The law of eminent domain, in which the government can take a property owner's land for a public works project, is one example).

Optimistically speaking, a compulsory licensing regime may be able to balance incentives to innovate against larger social goals — and to do so more successfully than traditional patent rules could. Yet there remains the important question, raised by drug companies themselves, of whether imposing compulsory licensing schemes on HIV drugs lower profits, and thereby deleteriously affect innovation.

In the end, the world may decide that patents should never become an obstacle to public health. But this proclamation–morally simple, legally complex–is much more challenging than it appears. Brazil's ultimate decision may have paved the way for the influx of cheaper and more accessible medicines, but it also forces us to ask whether this decision heralds a new vision of the patent itself.