Compulsory licensing

A compulsory license is a tool that the state or court can employ to compel a patent holder to license the patented invention. Article 31 of TRIPS ²⁴⁸ asserts that it is up to WTO Member States to determine the grounds upon which to grant compulsory licenses. It has been suggested that a compulsory license can be used as a balancing mechanism between the biotechnology industry and access to healthcare. Former Canadian Supreme Court Justice Ian Binnie argued that the Canadian government should implement a compulsory licensing scheme in ‘high-outlay, high-reward areas”

like biotechnology.²⁴⁹ For instance, one can argue that a complete monopoly over a gene is inappropriate, and Sir Robin Jacob suggests that a well-designed compulsory license provisions would be helpful in the area:

245 Article 63(1) of the Convention on the Grant of European Patents of 5 October 1973; Regulation (EU) No. 1257/2012 of the European Parliament and the Council of 17 December 2012 implementing

enhanced cooperation in the area of the creation of unitary patent protection, OJ EU, 31.12.2012, L 361/1.

246 For instance, in Germany, Section 11 Nr. 2 of the German Patent Act states: “The effects of the patent shall not extend to acts done for experimental purposes relating to the subject matter of the patented invention”. In the UK, section 60(5)(b) of the Patents Act exempts from patent infringement acts “done for experimental purposes relating to the subject matter of the invention”.

247 Resnik, D. “A Biotechnology Patent Pool: An Idea Whose Time Has Come?” at 9.

248 The TRIPS Agreement is Annex 1C of the Marrakesh Agreement Establishing the World Trade Organization, signed in Marrakesh, Morocco on 15 April 1994.

249 Young, C. “Law is Lagging Genetic Research, Warns Former SCC Judge Binnie,” in The Lawyers Weekly. Vol. 33, No.40, March 7, 2014.

75

There are many who say that a complete monopoly over a gene is inappropriate, just because you were first to isolate it, or even if you are first to isolate it and know what it is for. It may be that well-designed compulsory license provisions would be helpful in this area…A lot depends on the nature of the invention – one that is not only high risk but involves billions in research and years in time to bring to market stands in a different economic category than an isolated gene, especially one isolated by more or less standard techniques.²⁵⁰

However, compulsory licenses are granted only under extraordinary

circumstances, like a national emergency.²⁵¹ Moreover, the state may be hesitant to use it regularly as it is contrary to the essence of a patent right.

2.7. Conclusion

With the arrival of growing levels of patenting activity in biotechnology, the idea of the formation of a possible thicket that could obstruct access to essential technologies and create an anticommons has drawn certain consideration. The

anticommons theory advances the argument that the over-fragmentation of patent rights can lead to additional costs and the potential underuse of a product or process. There are three main arguments that emphasize the existence of an anti-commons in

biotechnology. First, institutions and companies who require access to many different types of technical knowledge to develop new inventions may encounter a thicket of patents. Second, blocking patents can exacerbate a patent thicket, referring to upstream patents that can affect future downstream inventions. Third, researchers and companies may have to pay high licensing fees because they will have to negotiate with several different companies who hold the relevant patents in the field. Moreover, proposed measures to control the negative effects of patent thickets include: patent pools, a research exemption, and compulsory licensing.

This thesis acknowledges that due to the nature of gene patents, there is no way to invent around them. As a result, conditions conducive to the development of an

250 Jacob, R. “One Size Fits All?” in Perspectives on Properties of the Human Genome Project. S. Kieff (ed.) San Diego: Elsevier Academic Press, 2003 at 453.

251 For a discussion on compulsory licenses, see Van Zimmeren, E. & G. Van Overwalle.

“A Paper Tiger? Compulsory License Regimes for Public Health in Europe” in International Review of Intellectual Property and Competition Law. Vol. 4, pp. 4-40, 2011.

76 anticommons exist. Nevertheless, there is a lack of empirical evidence that proves the presence and negative consequences of patent thickets in biotechnology. Even so, the importance of biotechnology innovation encourages patent policy makers to take into account this issue when considering any potential patent law reforms.

77 Chapter 3: The Justifications of Patents for Human Genetic Materials

“It is evident then that it is best to have property private, but to make the use of it common; but how the citizens are to be brought to it is the particular business of the

legislator.”

-Aristotle, The Politics, II.v.

3.1. Introduction

Aristotle’s quote above sets the tone for this chapter and overall thesis,

maintaining that private property performs a social function, in the way that it serves the common good of society. The quote emphasizes that private property should be used in a way which increases the overall good of humanity. This social aspect of property is a noticeable theme in academic property discourse.²⁵² This chapter provides a definition of property, followed by an inquiry into the concept of property as a social and legal construct. Next, the focus will return to a discussion of the patent system as a social contract between the state and patent holder with a focus on the right to exclude. It emphasizes that patents perform a social function, such as protecting business interests and the temporary nature of the right. The weaknesses of a natural law approach to the propertization of human biological materials will be addressed and an explanation for why it is limited in its application to patenting human biological materials. Instead, a social construction of property is appropriate for the justification of patenting genetic material, as the patent system is a social legal construction designed to increase societal welfare. The economic justifications of patenting human biological materials will follow. The primary question is what type and extent of rights an inventor should have in human genetic materials that could meet the objectives of the patent system whilst also advancing societal interests.

252See Lametti, D. “The Concept of Property: Relations Through Objects of Social Wealth,” in University of Toronto Law Journal. Vol. 53, pp.325-378.2003, Penner, J. The Idea of Property in Law. Oxford:

Clarendon Press, 1997, Davies, M. & N. Naffine. Are Persons Property?: Legal Debates about Property and Personality. Aldershot: Ashgate, 2001. Chapter 1; Honoré, A.M. "Ownership" in Oxford Essays in Jurisprudence. Guest, A. (ed.). Oxford: Oxford University Press, 1961 at 174.

78 3.2. Defining Property

Advances in the medical and biotechnological fields have resulted in a perception of how human genetic materials are valued economically, becoming increasingly valuable in parallel with the rising advancement of therapies and

diagnostics, which compels the courts and legislators to re-examine granting property rights to the human biological materials. Before the arguments for and against the recognition of property rights on human biological material are examined, the definition of “property” will be clarified below.

Black’s Law Dictionary defines property as: “The right to possess, use, and enjoy a determinate thing...the right of ownership...Any external thing over which the rights of possession, use, and enjoyment are exercised.”²⁵³ The right of ownership results in a variety of property interests: including “the rights to use, transfer, exclude;

or-property protects the fruits of human labour, or activities in which human beings flourish.”²⁵⁴ From this definition, characteristics of ownership include: possession, ability to exclude, and transferability. Under this description of property, genetic information can qualify as property. An individual has rights and powers in one’s genetic information, including protection from third party interference. An individual’s right of control over one’s body, and right to exclude others from infringing on the body suggest that there is a property right to the human body, including one’s genetic

material.

Similarly, the Shorter Oxford English Dictionary defines property as: “The condition of being owned by or belonging to some person or persons; hence, the fact of owning a thing; the holding of something as one’s own; the right (esp. the exclusive

253“

Property” Black’s Law Dictionary (8^th ed.). Bryan A. Garner (Editor in Chief). Minnesota: Thomson West, 2004 at 1252

254 Underkuffler, L. The Idea of Property: Its Meaning and Power. Oxford: Oxford University Press, 2003 at 14.

79 right) to the possession, use, or disposal of anything; ownership, proprietorship.”²⁵⁵ The emphasis is on ownership and the right to possess, use, and dispose something.

Along the same lines, the Law of the Twelve Tables, c.450 B.C., the first occasion of codified Roman law states: “When one makes a bond and a conveyance of property, as he has made formal declaration so let it be binding.”²⁵⁶ Two characteristics can be derived from this law: possession and the right to transfer. As long as one has formally declared one’s ties to the property, (in this case, it would be an oral

announcement), one has legally acquired or possessed the assumed property. In addition, transferability rights can be established from the phrase “conveyance of property,” which means transferring ownership from one party to another. Table VI, Law 3 states: “A beam that is built into a house or a vineyard trellis one may not take from its place.” From this law, a right of exclusion can be extracted from the phrase.

Three common characteristics of property can be derived from these definitions of property: possession, exclusive use, and transferability. Thus, it is apparent that the concept of property in law is based on a comprehension of legal rights.