Dr Suman Sahai | How The Entire Patent System Was Subverted For Corporates

World Intellectual Property Day is celebrated every year on April 26. As we prepare to commemorate this day, it is a good time to consider what the philosophy of the patent system was when it was first introduced and what it has evolved into today. Patents were the first form of intellectual property rights (IPR) to be formally granted and codified; There are now many other types of intellectual property rights.

Granting a patent to the inventor of a product was to benefit society. The way to do this was to support innovation by giving the inventor an advantage for a limited time. If innovation is encouraged, society at large will benefit as innovations will bring new things and new ways of doing things. This will prevent stagnation and lead to new growth. The patent system granted an exclusive marketing right, usually for 20 years; thus, the innovator could make money by selling his product or process without any competition. This meant a pretty good return on investments. Financial gain was the incentive to pursue innovation.

However, it cannot be in the interest of any society to give a monopoly to a single person or organization and to benefit a single person at the expense of everyone else. The patent system allowed private financial gain, but not monopoly in perpetuity. The patent will be valid for 20 years, and at the end of this period, the patented information will be available to everyone. Public interest provisions were included to prevent the innovator from “benefiting forever” without sharing anything with the public.

The first assurance was transparency. According to patent rules, once you applied for a patent, you had to make your invention public in a way that anyone skilled in the field could copy it. You had to declare exactly how you invented that product and share the “know-how” of how that product was created. Thus, the new technology was transferred to the public and put into use after the end of the patent period. This feature has often been subverted by recent patent applicants, mostly companies. The disclosure of the invention is deliberately narrow, omitting several important steps so that it cannot be effectively replicated.

An important public interest feature of the patent system was “utility.” This meant that the patented product had to be of benefit to the public. No matter how creative and new an innovation is, it cannot be patented if it does not have a demonstrable benefit. This enabled society to benefit from the granting of the patent.

Another important step was the “compulsory licensing” feature. This is a clause that allows governments to intervene if a monopoly in the patent system becomes hostile to the public interest and disadvantages society in general. For example, in the case of a patented drug, the government can intervene if the pharmaceutical company that holds the patent does not provide that drug in the required quantity or prices it too high, thus putting it beyond the reach of ordinary people. Under the “compulsory licensing” provision, the government can license another company to produce the patented drug and pay compensation to the original patent holder. In this way, the welfare of the society was prioritized and the patent owner was not allowed to use his monopoly to the detriment of citizens.

The third important feature of the patent system, which was followed in previous periods, is the “operation of the patent”. So, if you have received a patent right in a certain country, you have to produce that product in that country. You cannot import it and exercise your monopoly on the market without giving anything in return. So why was it important to work on the patent? Manufacturing the product in the country where you hold the patent enabled both skill development and technology dissemination rather than granting exclusive marketing rights. This feature balanced the interests and the society did not lose.

Unfortunately, the patent system is slowly being subverted for the corporate sector, a major holder of patents, not to balance social welfare with (limited) private marketing, but to provide benefits in favor of monopolies. Governments appear to have allowed “patent work” to be widely distributed. Patent holders are increasingly importing products from their home countries and exploiting only the local market; hence there is neither technology diffusion nor skill development. Compulsory licensing provisions are fiercely fought by the corporate sector and are becoming difficult to implement.

Another challenge to a balanced patent system is the attempt to “evergreen” a patent and extend its life beyond 20 years. In this case, the company makes small, often insignificant changes to the process or product without significantly changing the properties of the original product. He then claims the innovation of a new product and applies for a new patent on that product, so he can extend his 20-year monopoly on the market for another 20 years. Essentially, the core product remains the same, with no new R&D investment made, no new features added, and society not gaining any new benefits from this modified product. This “evergreening” of patents is a trick developed by the corporate sector to fill its coffers. Some governments manage to resist this dishonest move, some cannot.

So there you are. The original patent system, which started as a system to benefit society and promote the betterment of society, has now turned into a tool of exploitation in the hands of the corporate sector with the help of some corrupt rulers who are docile and defiant.

Dr Suman Sahai is a scientist trained in genetics and the founding president of the Gene Campaign, a research and policy organization working on food and livelihoods.