General: Patents & Compulsory Licensing

From an S&P Industry Analysis on Biotechnology...

just general coverage of the different types of patents. Could be useful for any case involving a patented product.
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Among the different types of patents, a �composition of matter� patent, which describes the product�s chemical or biological nature, generally provides the company with the best protection. A �use� patent lets the holder manufacture and market the compound for a specific therapeutic purpose, preventing competitors from using the drug in the same way. A �process� patent describes the manufacturing process of a product.

The US Patent and Trademark Office issued its first patent for a genetically altered animal in 1988 amid considerable controversy. More recently, debate has erupted about patents on genetically engineered human cell lines and synthetic constructs incorporating human genes. A recent US Supreme Court decision regarding patents is of great importance to the biotechnology industry. In April 2007, the court adopted what appears to be a tougher standard for patenting new products. The case at hand involved an auto parts manufacturer, but it is broadly applicable to the bio-tech and pharmaceutical industries. In brief, it stated that predictable advances � based on modest innovations that would have likely occurred in the normal course of progress, or are combinations of existing technologies � are so obvious that they are ineligible for patents. Biotechnology companies and trade groups are expressing concern, even as they wait to see how implications of the decision play out in lower courts.

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WTO regulations contain an exception known as compulsory licensing, which allows a country to break patents in a national emergency and make copies of an important drug, either on its own or by licensing rights to do so to private generics companies. Governments that use compulsory licensing are concerned that their huge, poor populations do not have the money to pay for life-saving, brand-name medications.

Compulsory licensing has become an area of controversy, as some developing countries get increasingly aggressive about fighting Western drug companies over high-priced brand-name drugs. In response, some biotechnology companies have set up programs to make some of their drugs (mostly for infectious diseases) more accessible to poor people in developing countries. For example, in September 2006, Gilead Sciences Inc. licensed nonexclusive rights for its HIV/AIDS treatment Viread to eight Indian generics companies, which will sell the drug in 95 very poor countries (but not in the US) at extremely low prices. In December 2007, under the President�s emergency plan for AIDS relief, the FDA granted approval to Matrix Laboratories Ltd. (a subsidiary of Mylan Inc.) to sell generic Viread outside the US.
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