In this ongoing covid era, patent pooling has established its crucial need in the pharmaceutical sector. So, what Patent Polling exactly means? Pooling in simple terms means accumulation. Patent Pooling is a process in which two or more patent owners agree to license their patents to one another or the third parties[i]. Patent pooling mostly comes in the picture when an inventor gets stuck into any complex technology which requires a complementary patent to achieve an efficient form however such a complementary patent belongs to another patent holder. Patent Pool is just like a joint venture made for sharing each other’s intellectual property rights[ii].
Patent Pools impart essential technologies by way of patents to various companies or firms for making competent products. Patent pools also cover those technologies which are not yet established in a full-fledged way. So, how does a patent pool works? In a patent pooling agreement, patent rights of various technologies are assigned among various patent holders and the pooled patents are made available to the member and non-member licensees. Such patent pools ensure that the licensing fees which are collected should be appropriately allocated to each member in proportion to each patent’s value[iii].
Historically, most of the patent pools were concentrated in Europe and the United States although recently Asian companies increased their participation in patent pools given their growing role in technological innovation[iv]. There are several eminent examples of patent pools like sewing machine is the first-ever example of a patent pool and during the world war, I, the American government with the help of the patent pool merged Wright company and the Curtiss company to satisfy the demand for aircraft.
Through this blog, the author has tried to shed some light on the concept of patent pooling and what sort of effect it lays on the competition. The author has also tried to explain why patent pools have emerged as a boon in this covid era. Finally, the author will conclude by giving his outlook on the instant situation of patent pooling.
Patent Pooling: A malediction for competition?
Like everything else, patent pools have also got two sides i.e. positive and negative. The positive side of a patent pool enunciates that patent pools by way of increasing the efficiency of the developing technology in the concerned field help in reducing the litigation costs and reducing transactional costs that occurred otherwise. But, on the other hand, the negative side of a patent pool narrates a different story. The negative side of a patent pool articulates that patent pooling can create an anti-competitive situation by distorting the competition[v]. So, is a patent pool a blessing or curse for the competition? The author has chalked out three essential features that a patent pool must have to be considered as a benison for IPR.
These features are as follows:-
A valid patent pooling agreement must make sure that the technology concerned is a competing technology and is not defeating the object of any anti-competition laws.
A valid patent pool must be provided with a non-discriminatory and non-exclusive worldwide license.
A valid patent pooling agreement should not increase the risk of collusive behavior outside the pool.
Filler for the lacuna of a pandemic patent tool.
The aggregation and dissemination of innovative products can be ensured by creating a patent pool. Patent pools are very useful in administering and licensing patents related to specific areas of technology. Patent pools are usually managed by the central agencies and the patents which are registered in a pool are made available for licensing by the central agencies by mentioning the royalty rates payable for such licenses. If someone wants to obtain the license, then that person has to approach the pool and agree to the terms mentioned in the agreement before starting the process of manufacturing and selling[vi].
In the current scenario, where everyone is waiting eagerly for a vaccine of covid-19. Patent pooling can contribute to making the manufacturing process a bit faster. If a global pool of covid-19 innovations is created in respect of medicines and vaccines then it can Fastrack the process of manufacturing and distributing vaccines. This global pool can be managed by a trustworthy global organization. If a global pool is created, then all the countries will have the right to implement these innovations without taking any permission from the patent holders and without resorting to the provisions such as compulsory licensing, state acquisitions, etc. This will surely reduce the hectic and long process of licensing[vii].
The creation of a pool and immediate licensing will ensure that there are hundreds of manufacturers across the globe. Patent pooling can ensure the development of medicine for covid-19 while being transparent about the legalities and IPRs[viii]. The collaboration of big pharma companies with the generic companies under the umbrella of a patent pool for the creation of the required medicine will benefit both low and middle-income countries. It will be a win-win situation as the patent holders will receive royalties for their innovations benefitting the income influx of the economy and both low and middle-income countries would get to access the much-needed medications at affordable prices.
Conclusively, the author wants to say that instead of creating different patent pools, there should be a single global patent pool for smoother functioning of the licensing process and fast-tracking the process of distribution of covid-19 medicines and vaccines. The creation of a global pool will not only protect IPR but also it will make the vaccine more affordable and easily available in both privileged and less privileged countries.
[i] Patent Pools and Antitrust- A comparative analysis, World Intellectual Property Organization, 1 Nov 2020, 2:44 AM, https://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf. [ii] Micheal Reanaud, The Patent Pool Explained: An effective mechanism when the Burden is Shared, 1 Nov 2020, 2:50 AM, https://www.ipwatchdog.com/2020/10/30/the-patent-pool-explained-an-effective-mechanism-when-the-burden-is-shared/id=126859/. [iii] Balkrishna Pisupati, Patent Pooling, A Covid success story, 1 Nov 2020, 3:01 AM, https://www.thehindubusinessline.com/opinion/patent-pooling-a-covid-success-story/article31891866.ece. [iv] Supra at 1. [v] IP and competition policy,1 Nov 2020, 3:29 AM, https://www.wipo.int/ip-competition/en/. [vi] Patent Polling: A boon amidst Covid-19 pandemic, 1 Nov 2020, 4:20 AM, https://www.lexology.com/library/detail.aspx?g=ba09f470-2269-4ae3-92c0-c52f769633ac. [vii] The Medicines Patent Pool: Simulating Innovation, Improving Access, 1 Nov 2020, 4:22 AM, https://www.wipo.int/edocs/mdocs/mdocs/en/wipo_gc_lic_ge_12/wipo_gc_lic_ge_12_ref_factsheet.pdf. [viii] Id.