• Global trade in generic medicines

    In the Philips Electronics & Nokia cases, the European Court of Justice recently affirmed that patents and trademarks are not enforced against goods in-transit through Europe (C-466/09).  European IP owners are unhappy with the ruling and some academics are unhappy as well (IPKat, for example). The EC has been working on a new tougher Regulation for some time (see Vrins’ article in JIPL&P 2011). But for global health, this is the right ruling.

    In 2009, generic drugs were shipped from India to Africa and Brazil.  Sometimes the most direct route isn’t the cheapest, so these drugs ended up “in-transit” in the Netherlands on their way to Africa and Brazil.  The drugs fully complied with all intellectual property laws in India and Brazil, but the patents had not yet expired in Europe.  The Dutch authorities seized the drugs and triggered a firestorm.  (MSF letter here; my related academic paper here).  If these drugs had been destined for sale in Europe, they would have infringed the patents and trademarks.  But they were just moving through a port in the global stream of commerce.

    Global IP law recognizes that IP rights are territorial, and that each country will apply patent, trademark and copyright rules somewhat differently.  Law can protect the companies’ legitimate expectations of profits in wealthy countries without blocking global trade in fully legal generic medicines.

    The ECJ got it right.


    • But why not just abolish outright all intellectual property laws for patents and repeal patent laws in toto? They are just engines of monopoly and Adam Smith would have abhorred them. So-called “free trade “under the WTO is, in fact, monopolized, not free, trade.

      The economic argument for patents is bogus as the inventor rarely gets rewarded and his natural reward is the goodwill generated by being first in the field. Instead, patents are used to suppress innovation by would-be competitors. New cancer cures are suppressed in favour of inferior “licensed” and IP-protected drugs peddled by the legal drug cartels who exploit IP monopoly to the full. The US taxpayer and patient pays the bill, just as Adam Smith saw the great trade monopolies of his day as conspiracies laying burdens above all on the domestic consumer and taxpayer. How long can the US Treasury afford to feed the rapacious “Big Pharma” monopolies. the US Congreess has created? Instead of enriching America, IP law is impoversihing it. just like the 18th century mercantile system.

      On the logic of modern patent law, the descendants of Christopher Columbus should be collecting rent from everyone living in the USA. As if discovery equals creation! The current US IP law is actually killing people both in the USA and elsewhere.