As old as Grandmas sewing machine, the Patent Pool concept is seen finding popular application in recent times across various industry sectors.
Nothing unduly complex about the mechanism that can be simply explained as an arrangement wherein a group of patent right holders arrive at an understanding to cross license and pool in their patent assets in complementary manner and apply it towards a common goal. Aggregation and Collective management of IP assets in short is what is is.
One of the earliest examples of a patent pool was arrived at between the inventors of the sewing machine Grover, Baker, Singer Wheeler, and Wilson, all accusing the others of patent infringement. They met in Albany, New York to pursue their suits. Orlando B. Potter, a lawyer and president of the Grover and Baker Company, proposed that, rather than sue their profits out of existence, they pool their patents and thus this concept emerged.
Recent development in the hi tech sector such as the MPEG 3, DVD Technology etc allseem to have a Patent Pool consortium as the backbone on which the technology was founded.
The health care segment and biotech segment is displaying equal enthusiasm in promoting this model.
Latha Jishnu in the BS reports on recent developments with respect to Patent Pools.
“Early this month, UNITAID took a decision that can only be described as momentous. Addressing the intellectual property aspect of access to medicines, the executive board decided in principle to set up a patent pool — a decision that has delighted health activists but is not exactly making the pharmaceutical industry whoop for joy. A patent pool is a mechanism in which various patents held by different entities, such as companies, universities and research institutions are made available to others for production or further development, such as pediatric or fixed-dose formulations. The patent holders are paid a royalty by those using the patents, with the pool managing the negotiations, the licensing arrangements and payments.
Medecins Sans Frontieres (MSF), which has been pushing this idea for some time now, says a patent pool can help speed up the availability of generic versions of new medicines long before the 20-year patent term runs out. For the IPR holder, too, there is an incentive: it would widen the market for their products since drugs produced under licence from the patent pool would be exported to designated countries.
A patent pool has become increasingly critical because the prices of new drugs are way too high for patients in poor countries, specially for antiretrovirals (ATRs) to treat AIDS. MSF pays between $613 and $1,022 for the newer WHO-recommended regimen for first-line AIDS treatment — a seven to 12-fold increase compared to older first-line treatments which are now available for just $87 per patient per year. Increased competition would bring down prices and MSF believes that a patent pool is the best way to do it. UNITAID's budget for the current year is just $361 million, far from adequate for the demand it needs to meet.”
Patent pools have a rather contentious and mixed record in the West and it is only recent that the U.S laws and the FTC have loosened the noose on patent pools
In similar context the Competition Act of India that came in to effect recently stipulates
“no person or enterprise shall enter into a combination, which causes or is likely to cause an appreciable adverse effect on competition within India and such a combination shall be void.
With the maturing of the Indian Innovation ecosystem , the spectre is likely to be dotted by such interesting arrangements and patent consortium's
The Ranbaxy Daichi merger is but a harbinger of the new models of innovation that could emerge in the Indian scenario. The Ardharishwar model is perhaps the first of its kind where unrelated bedfellows commune and innovate towards a common purpose .In keeping with this trend Indian Innovation is likely to lend widespread acceptance to the concept of patent pools that could be likened to the trinity of Brahma , Vishnu and Maheshwara.
Would be interesting to watch the CCIs’ stance on this and the yardsticks that would be applied in its governance of the Act. Would a pro-development benchmark come into play or would the CCI indiscriminately dismantle such arrangements and allow no room or leeway at all. Well it’s about evolving a system to accommodate such holy communions and laying down guidelines to distinguish it form the unholy.
There is a much to be said in terms of far reaching social and economic benefits that Patent Pools have to offer.
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