GREEN IP SCHEME An Innovation Today for Innovations Tomorrow A Driver to Foster Socio/Ecological Technologies

1. GREEN IP SCHEMEAn Innovation Today for Innovations TomorrowA Driver to Foster Socio/Ecological Technologies … The revamped regime, namely the "Green Intellectual Property (GIP)" scheme or more explicitly the "Patent Insurance (PI)" scheme, would call for maintaining a reliable and sustainable patent system and assuring unimpeded access to socio/ecological needs or "green" technologies while "insuring" strong patent protections and consequently stimulating R&D even for unexploited markets. …

2. Green Technologies • Sociological technologies, typically including medicines. • Ecological technologies such as conventional eco-friendly technologies as well as hydrogen economy and space photovoltaic.

3. Since the Young Report in 1985, pro-patentists have argued patents allow us to enrich our society through technological progress accelerated by an increase in capital intensity for patentees. • However, patents have also spawned fierce disputes when they interfered with access to necessary technologies such as essential medicines. • Since the Doha Declaration in 2001, particularly, the worldwide anti-patent protest has successfully justified the flexibility in the patent regime for impoverished nations, which have now begun actually invoking the public health safeguard measures, specifically raising number of compulsory licenses. Do we need patents?

4. Since 2002, the Japanese International Cooperation Agency (“JICA”) has undertaken the Project for Improvement of Environmental Protection Technology for Metallurgical Combustion at Beijing in order to transfer eco-friendly technology to the Chinese steel industry. • JICA has deployed equipment provisions, conducted joint exercises, invited experts, and held workshops in China in order to improve their existing technologies (Bolar exemption). • However, several critics have argued that applying these eco-friendly technologies on a widespread scale to factories in China runs into patent-related difficulties. Since the technologies were developed by the Japanese steel industry, some are protected by patents. This protection means that Chinese industries have to pay high royalties when they import or produce these Japanese patent-protected products. JAPAN INTERNATIONAL COOPERATION PROJECT, JICA PROJECT REPORT

5. Fierce battles over drug patents. JAN 1995: Creation of WTO and entry into force of TRIPS. MAY 1998: South Africa AIDS trial. MAY 2000: US/WTO dispute panel against Brazil. NOV 2001: Doha declaration. Since 2001: Brazil, repeated warning of compulsory licenses for negotiating lower prices. AUG 2003: August 30th decision (Paragraph VI scheme). MAY 2006: Novartis case in India. MAR 2006: Pfizer case in Philippines. NOV 2006: Thailand, first invoking compulsory license. JAN 2007: Thailand, subsequently invoking two compulsory licenses. MAY 2007: Brazil, invoking compulsory license. OCT 2007: Canada, first notifying compulsory license for aid exportation. SEP 2007: Thailand, announcing a plan of four compulsory licenses.

6. 700 2000 1948 A downward trend of the number of patent applications for HIV/AIDS medicines in and toward the US since 2001. Rheu./Ap.Pub 600 1500 1493 500 400 HIV/Ap.Pub. HIV/AIDS 1000 Rheumatism 914 319 Rheu./Patent 300 844 276 760 200 560 548 500 171 439 145 133 129 122 100 95 HIV/Patent 0 0 1996 1997 1998 1999 2000 2001 2002 2003 Year of Applications

7. Although applications filed under PCT increased by 4.7% in 2007... • Biotechnology: -2.5% • Pharmaceuticals: 0.1% • Agriculture and food (GM): -1.2%

8. Retrogression to the "IP anarchy“Remember the failure of Vienna Exhibition in 1873? • The degradation of reliance on patents would result in the reduced number of applications and resultant fomentation of corporate secrecy to avoid invention disclosure. • Increased use of secrecy and implanted protections would slow the rate of incremental and genuine innovations in areas where the soft patent regime or the open source approach has proven impossible. Sources: Scenarios for the future, EPO, 2007.

9. WHO/CIPIH has recognized a number of proposals to foster R&D for neglected needs, including prizes, treaties, public-private partnerships, advance market commitments, market exclusivities (orphan drug schemes), tax credits, patent pools, patent buy-outs, open source schemes, patent extensions and fast tracking regulatory review. • How can society find stable financial resources for state and NGO funding comparable to the earnings by patent monopolies? • … And the government is not always successful in planning and directing research. Alternative mechanisms to foster R&D Sources: Public health innovation and intellectual property rights, WHO/CIPIH, 2004. Scenarios for the future, EPO, 2007.

10. Green IP (Patent Insurance) Scheme • The PI scheme is designed to impose the "PI premium" in addition to existing official fees on patent applicants/owners to create the "PI trust fund." • The premium would consist of mandatory and voluntary PI fees, which would finance the core and extended PI plans, respectively. • The PI trust fund would be operated by the International Bank for Intellectual Property (IBIP), a financing institution proposed to be an affiliated entity of the World Intellectual Property Organization (WIPO).

11. Core Plan • The core plan would cover all patents regardless of their value in return for the mandatory premium. • Under this plan, the PI fund would furnish a financial source for a variety of the proposed tools to foster ecological R&Ds and to intensify activities in needed but neglected technologies, especially including prizes, public-private partnerships and treaties. • This financial aid would allow society to recognize the utility of the patent regime as fending off criticism, resulting in upholding the efficient patent system and consequently ensuring patent properties. • The core plan would serve as a "green tax" to facilitate market incorporating its failure attributed to the current IP system.

12. Extended Plan • The extended plan would be offered to more valuable patents, such as high-tech ecological and drug patents, by paying the voluntary premium. • This plan would provide financial assistance to technology users when they have unfavorable or no access to a patented technology due to a lack of capital and such users are condemned to issue safeguard measures. • This assistance would compensate the cost of technology transfer, particularly royalty assumption, and subsidize the purchase of patented technology in a bid to deter users from actually invoking safeguard measures. • As a result, insured patents would be guaranteed, while assuring unimpeded access to technologies.

13. Monetary flow throughout the Green IP scheme. Disbursement Mandatory Premium Core Plan for for WIPO All Patents Green R&Ds PI Trus t Fund Voluntary Premium Extended Plan International Bank for for for Valuable Patents Safeguard Measures in Green Techs Intellectual Property (IBIP) Fund Generation

14. Win-Win? • The PI scheme would circumvent undermining of the patent regime and frequent issuing of safeguard measures. • At the same time, it would facilitate unimpeded access to technologies and increased incentives for neglected needs and genuine innovations. • These mutual benefits for patentees as well as users would convince patent applicants/owners to readily accept the financial burden of contributing to the PI scheme. • The scheme would create a substantial financial source for green R&Ds. • The potential scale of the PI trust fund has been estimated to potentially reach several tens of billions of US dollars annually, which would substantially accelerate the progress of various green technologies, typically including not only essential medicines, such as AIDS/HIV drugs, but also ecological technologies, e.g., solar power generation.

15. Global financial resources (potential scale) for the Patent Insurance Trust Fund (US dollars).

16. Make a Difference Together !Call for Collaborations !Itaru Nitta Green Intellectual Property Project itaru@greenip.org