Magazine article New Zealand Management
Gunning for Osama Big Pharma: Why the Thinking Behind Current Patent Law Reform Is Seriously Flawed
New Zealand's 53-year-old patent law has undergone a full review. The Patents Bill should go through Parliament in 2007. But will the new law achieve its intended objectives when it finally comes into force in 2008? And how well does it reflect on the Government's objective to harmonise trans-Tasman business laws?
A patent is a form of social contract. The state gives the patent owner a time-limited exclusive exploitation right; the patent owner makes the patented invention available to the public. The reform debate has been over how long the exclusivity period should be, the permissible scope of exclusivity and what is a patentable invention.
To a great extent, these issues have already been determined by the TRIPS Agreement--one of the bundle of agreements that resulted in the formation of the World Trade Organisation in 1994. TRIPS sets minimum thresholds of protection that member countries must provide under their laws.
The stated purpose of the Patents Bill is to encourage innovation, particularly in the growth areas of information and communications technology, biotechnology and the creative industries. No doubt the changes will bring most parts of our law into line with that of our trading partners. But peel away the rhetoric and look at the detail, and a different policy objective emerges. This objective is to limit patent protection to the extent allowed under TRIPS. The result is to disadvantage big pharma.
The Bill provides a patent term limited to 20 years. The 20-year term includes development time during which clinical trials of new drugs must be funded, but no income is derived. Most of our major trading partners allow the patent term to be extendible to compensate for those lost years.
Another provision of the Bill excludes patents for methods of medical treatment of humans on moral and social grounds. Australia has no such exclusions. After an extensive three-stage review, the Australian Law Reform Commission recommended against the exclusions contemplated in the New Zealand legislation. Why the difference? It has been a trans-Tasman objective for over 20 years to harmonise business laws to create a single economic market. It is not unreasonable to expect that a better policy objective than limiting patent protection would trump the harmonisation one.
The limits represent the last vestiges of trade protectionism. …