PATENT A patent is a legal document, granted for any novel, non-obvious and utility product or process, by a state to an inventor for a statutorily specified period of time upon the disclosure of his invention in a document known as the patent specification. The patent confers the owner/inventor with an exclusive monopoly rights over his invention, preventing others from exploiting his invention to which the patent has been issued.
Patent Barriers to access and availability
Monopoly prices act as barrier to access.
Patents restrict innovation .
Patents are often a barrier to development of combination products.
The complexity of identifying, tracking and obtaining licenses for patented technologies together with fear of potential claims for infringement, act as barriers to generic competition.
Uncertainty over size of market/export potential also inhibits generic scale up and prevents economies of scale .
DEFINITION A “patent pool” may be defined as an agreement between two or more patent owners to aggregate (pool) their patents and to license them to one another or to third parties, whether directly by patentee to licensee or through an entity set up specifically to administer the pool (Merges, 2001)
Patent pool process A “patent pool” is not a term found in the patent law
Patent pool process A patent pool is a simple system where patent-owners voluntarily give their patents to a central organization that then licenses them to other companies and researchers. Companies that make unbranded drugs and researchers that want to use the patents to develop new versions of the drugs can access the patents in the Pool in exchange for paying a fair royalty to the patent owners. The Pool acts as a ‘one-stop-shop’ for managing the negotiations and receiving and paying the royalties.
BENEFITS Patent pools provide many benefits for licensees including:
Offers practical way to overcome patent barriers, which encourages competition and leads to lower prices
Avoiding protracted negotiations on licensing terms and conditions with each patent owner through a single point of contact « one stop shop »
Clearing of blocking positions
Gaining competitive advantage by getting products to market more quickly
Making the technology accessible to all users on fair, reasonable, and non-discriminatory terms and conditions
reduced licensing transaction costs.
Management of multiple owners and staking of royalties
Potential to facilitate downstream innovation and development
Every pool is different Some are voluntary, while others are forced Geographic coverage varies Some acted like cartels . Some focus on upstream R&D. Some are created to promote access and competition
PATENT POOL EXAMPLES Sewing machine: In 1856 Sewing machine manufacturer – grover,baker, singer & wheeler & wilser accusing each other for infringement of patent. When they met in new york, lawyer –orlando, president of grover & baker suggested for patent pool rather expensive litigation
PATENT POOL EXAMPLES AIRCRAFT In 1917, as a result of a recommendation of a committee formed by the Assistant Secretary of the Navy (The Honorable Franklin D. Roosevelt), an aircraft patent pool was privately formed encompassing almost all aircraft manufacturers in the United States. The creation of the Manufacturer’s Aircraft Association was crucial to the U.S. government because the two major patent holders, the Wright Company and the Curtiss Company, had effectively blocked the building of any new airplanes, which were desperately needed as the United States was entering World War I. See Harry T. Dykman, Patent Licensing within The Manufacturer’s Aircraft Association (MAA), 46 J. PAT. OFF. SOC’Y 646, 648 (1964).
PATENT POOL EXAMPLES RadioIn 1924, an organization first-named the Associated Radio Manufacturers, and later the Radio Corporation of America, merged the radio interests of American Marconi, General Electric, American Telephone and Telegraph (AT&T) and Westinghouse, leading to the establishment of standardization of radio parts, airway’s frequency locations and television transmission standards.
A MEDICINES PATENT POOL Create voluntary & non-voluntary Patent Pools focused on patents required for the production and distribution of generic versions of essential medical technologies in the developing world Model UNITAID proposal for HIV-AIDS drugs The Medicines Patent Pool - established by UNITAID, an international health financing agency - aims to create a common space for patent-holders to license their technology for use by generic manufacturers in exchange for royalties. Proponents of the pool argue that not only does it have the potential to reduce the price of existing ARVs (the life-prolonging antiretroviral ), but it could also stimulate the development of urgently needed new medicines and formulations such as paediatric ARVs and fixed-dose combinations.
Pool is created to promote access to essential medical technologies
Licenses are offered on non-discriminatory basis to any person to make, sell, import or export
Royalty payments are reasonable and affordable, adjusted by country capacity
CONCLUSION Patent pool do not eliminate risk, but only reduce it. The flaws in the design of the pool governance can create risk that one patent holder can breach the common cause of the group hence the patent pool (complex arrangements) needs to be set up by experienced practitioners in order to achieve the aims and benefit the contributors and end users.