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AFRO-NETS> Patent fair use (3)
- Subject: AFRO-NETS> Patent fair use (3)
- From: Christian Labadie <CLabadie@t-online.de>
- Date: Sat, 17 Feb 2001 12:27:07 -0500 (EST)
Patent fair use (3)
If South Africa joins India and Brazil into an effort of producing
generic drugs for AIDS patients, which impact will it have on the re-
search of new drugs, vaccines and treatments?
I apologise for the length of this message that tries to answer the
above question in the light of an historic precedent of "patent fair
use". If you have limited time to read, you may simply browse the
URLs listed at the bottom.
Cut the price or cut on research spending?
The Oxfam online petition  to GlaxoSmithKline carefully addresses
an aspect dealing with future research and that may become a centre
argument in the debate over the production of generic drugs for AIDS
patients in poor countries.
While asking for affordable and effective medicines, Oxfam is softly
suggesting that large pharmaceutical corporations aren't investing
enough into the development of treatments for the diseases suffered
by poor people in developing countries:
"Contribute a percentage of any drug that earns GlaxoSmithKline
more than US$ 1 billion per year to a research fund for diseases
that afflict poor people." (third point of Oxfam's online petition
Oxfam is launching a campaign to warn GlaxoSmithKline about a possi-
ble loss of reputation, an argument re-developed by the economy col-
umnist Larry Elliott in the Guardian/Guardian Weekly:
"... there is a risk that public opinion will turn against Merck
and Glaxo SmithKline in the way that they have turned against
Phillip Morris and the other tobacco companies. Becoming
an international pariah is not good for the share price either."
But unlike from tobacco companies, the public does expect a better
future from pharmaceutical corporations; and with retirement plans in
Western countries increasingly depending on stock investments, it is
unlikely that the public will let a morality consideration affect
their trust in their secure investments.
In that respect the plea of Medecins sans Frontieres  and of Act
Up-Paris  is choosing a radically different avenue by calling upon
the United States government to withdraw its request for a WTO (world
trade organisation) dispute settlement procedure on the Brazilian
patent law enabling Brazil to produce generic drugs for more than
90,000 AIDS patients in accordance to patent exceptions allowed by
the TRIPS accord (trade related intellectual property rights).
The clash will involve intimidations from the US government and of
other Western countries to avoid that developing countries join the
courageous Brazilian stand:
"Why hassle Brazil?" said James Love, director of the
Consumer Project on Technology , a Washington-based
consumer group. "Because they're going around touting
their model" for fighting AIDS "and the big drug companies
are going ballistic because of that." 
If Brazil wins at the WTO, the developing countries will pay a heavy
price for their support, e.g.:
"Case number 4183/98 in the South African high court is
an action brought by 42 pharmaceutical companies, including
the British giant GlaxoSmithKline, against the South African
government. The case is an attempt to block South Africa from
importing cheap medicine."  (case brought on Feb. 18, 1998,
court hearing on March 5, 2001 )
Yet the pharmaceutical companies may have lost an important political
support within South Africa. The leader of the South African Opposi-
tion Democratic Alliance (DA) gave a parliamentary speech showing how
a traditionally "pro-business and pro-drug company" party is now
changing its opinion on generic drugs:
Tony Leon 13 February 2001 "While the government must
shoulder the blame for the terrible mishandling of AIDS, my
party also wishes to acknowledge some responsibility in this
regard. The terrible human cost of AIDS outweighs a legitimate
attachment to narrow definitions of intellectual property rights.
Therefore, the DA's historic opposition to legislation that would
allow parallel imports and compulsory licensing for HIV/AIDS
drugs will cease from today, conditional on government declaring
AIDS to be a national emergency in terms of the TRIPS accord
and without compromising medicines control." 
If an international body would have declared AIDS an *international*
emergency and a uniform patent exception for AIDS drugs, this would
have avoided (a) the numerous hesitations and failed projects to
lower the price of patented drugs (i.e. South Africa would have
started importing them back in 1997/98 ) or to offer expensive
loans to buy them, (b) the legal current and future battles to define
what is a medical "national emergency" in terms of the TRIPS accord.
We need to carefully consider the consequences of this situation of
"patent fair use" on the motivation to develop new treatments. The
answer of GlaxoSmithKline to Oxfam reveals that the pharmaceutical
companies are considering to simply drop some research programmes if
they do not enjoy the revenue of their patents:
"Undermining intellectual property rights could have serious
implications for the flow of new treatments and vaccines." 
In the light of this statement how should we understand the Wall
Street Journal questionnaire:
"What should pharmaceutical companies charge developing
countries for AIDS drugs? Nothing, Cost, Cost plus a small
markup or Full price?" (Question of the Day,
This question elegantly shifts the public focus from generic produc-
tion to "fair pricing" for developing countries. In other words, the
pharmaceutical companies are ready to compromise on price for devel-
oping countries provided that a kind of "Berlin Wall" would protect
the price of essential drugs that ensure them revenues in rich coun-
tries. One can easily imagine that Western lawyers will start to in-
troduce legal battles to block developing countries from granting
their nationality to poor AIDS patients from rich countries who will
want to also have access to affordable AIDS treatments.
But some fundamental statements have been made and the public is now
awaiting the outcome of two major legal disputes against South Africa
and Brazil. The public is now aware that new diseases are also going
out of control. The public trust in governments and companies to
tackle issues such as that of BSE has never been so low in Europe.
Thus the question of research raised by Oxfam and GlaxoSmithKline may
no longer be left aside by a mere discussion on "fair price". The
damage is not on the reputation but on something dealing with the
control of research. The TRIPS accord does not pertain to a control
of future research. The question of "who will control research?" is
In addition Western employment trends are showing that the number of
new hires for chemists has dropped to a record low in Europe as phar-
maceutical companies are restructuring their research from chemistry
based to genetically engineered. Whether cells that are hosting HIV
could be targeted by a genetic treatment is a fascinating research
from a scientific standpoint, but it is too early to say whether it
will be tomorrow's cure to AIDS.
This suggests that the pharmaceutical companies may not be reinvest-
ing profits of AIDS drugs into AIDS research but indeed into other
genetically oriented projects that will ensure a strong position on
tomorrow's market. This would mean that the loans offered by the
World Bank to African countries to buy AIDS drugs would have in fact
sponsored the research that will secure an economic advantage and
dominance of Western pharmaceuticals on the market.
Yet more research is needed and it is Act Up-Paris that reminded us
of the poignant reality of AIDS patients no longer responding to cur-
rent available treatments:
"10% des malades du sida ne r?pondent plus aujourd'hui
en France aux traitements disponibles." 
Act Up-Paris is further questioning why pharmaceuticals are delaying
the introduction of new available molecules on the market and is de-
manding that the newly appointed French minister of health, Dr. Ber-
nard Kouchner, takes action.
The remarks of GlaxoSmithKline on research is revealing that we don't
have a real influence on the research orientations. The statement of
Oxfam should encourage the public to regain more control of research.
We are in a strong position to bargain with pharmaceutical companies.
Any deal will need to include some sort of commitment on research in-
vestments and more transparency on how research funds are used within
Otherwise we may need to address an even more complicated question:
who will continue AIDS research after the June hearing at the WTO,
should Brazil win?
It is only less than a century since Paul Ehrlich and Sahachiro Hata
discovered the first treatment of syphilis which then inspired Flem-
ing and the discovery of penicillin. A lot of drugs were found since
then. We have taken for granted that this can continue, unchanged.
We are apparently facing an unknown situation: do we have past exam-
ples of "patent fair use" that could help decide which is the best
What will happen if a "patent fair use" prevails on AIDS drugs? Once
AIDS will be recognised as a medical emergency for Brazil by the WTO,
and there are every reasons to think that the WTO can not rule dif-
ferently, this precedent will automatically apply to every country?
Can we possibly say that a percentage of the population must be HIV
infected in order to declare an emergency? This would the worst sce-
nario: waiting until every country on Earth is in medical emergency
with regards to AIDS to declare it an *intercontinental emergency*.
Is that what we want?
The only way to quench a "patent fair use" would be the UN declaring
the emergency today and declaring that all legal disputes on AIDS
must cease. But this is unlikely to occur. Then what will be the con-
sequences of "patent fair use" on research?
An historic precedent of "patent fair use"
There is a spectacular example of "patent fair use" that occurred a
century ago and was designed by a renowned New York banker: J.P. Mor-
It was a time of consolidations, mergers and acquisitions in the
electronic industry. The patent of Edison's incandescent electric
light had given place to a myriad of small electrical plants that
were using continuous current produced locally. Financial investors
wanted to consolidate that industry in order to avoid a waste of
capitals into small local companies. This situation is similar to
that we experience today with pharmaceutical companies.
An invention by a New York laboratory was about to revolutionise the
electric production and to enable to produce electricity at the Niag-
ara Falls and to directly consume it in New York city . The in-
vention even surprised the patent office and the New York patent-
lawyers Duncan, Curtis & Page had to splice the invention into sev-
eral patents presented on October 12, November 30 and December 23,
1887 and that hold the numbers 381.968 to 381.970 and 382.279 to
These seven patents describe the alternative current. The inventor
was offered the Nobel price in 1912 for his invention (although he
declined the price).
Another inventor in Pittsburgh, George Westinghouse, offered to im-
plement the invention of the alternative current. The agreement be-
tween Westinghouse and the inventor, Nikola Tesla, was one dollar of
patent fees for every PS of generator or motor manufactured. There
are estimations that this deal should have earned Nikola Tesla ca. 12
Millions dollars until 1905. But the deal was broken.
Westinghouse had to invest considerable sums in order to implement
the production of generators of alternative current. His company
could no longer face the competition resulting from financial con-
solidations (e.g. General Electric Company). In order to survive, the
Westinghouse Company had to follow the trend and to merge with other
US companies (the "U.S. Electric Company" and the "Consolidated Elec-
tric Light Company") to form the "Westinghouse Electric and Manufac-
However the financial investors under the inspiration of J.P. Morgan
refused to acknowledge the deal between Tesla and Westinghouse, argu-
ing that with the initial payments, Tesla had already received enough
for his invention. George Westinghouse, being an inventor himself,
wanted to honour his word to Tesla, but then had to curb under the
pressure of bankers.
It was argued that Tesla had such a prolific mind that he would re-
invest all his earnings into new experiments (among which to charge
the entire Earth to distribute wire-less electricity globally). The
financial market followed the wisdom of J.P. Morgan not to allow a
single laboratory to have such a control of the spending of research
Despite this set-back, Tesla continued to enjoy a friendship with
J.P. Morgan, who later paid Tesla's hotel bills when Tesla was ru-
Tesla said (on May 12, 1938) that the important fact to remember was
that the investments of Westinghouse to implement his patents had
helped the humanity to make the right choice between alternative and
continuous current at a time no one believed in his invention .
With this magnanimous "fair play", Nikola Tesla acknowledged that
"patent fair use" can have a regulating effect on research efforts
without compromising on progress.
The consequence has been that private patent-funded laboratories such
as that of Edison, Westinghouse or Tesla became obsolete and were
slowly replaced by grant-funded public laboratories (Call-Tech, MIT,
Fair play vs. patent fair use
In times of financial consolidations, a corresponding re-allocation
of research funds will follow. The warnings of GlaxoSmithKline that a
"patent fair use" will seriously impact research investments, are
compatible with the historical precedent of Nikola Tesla.
However Nikola Tesla wasn't a giant, he was perceived mostly as a
bright immigrant. The case of Tesla vs. Westinghouse was an internal
affair within the US, which did not go against the interest of the
country. The situation is reversed and one should not expect any sign
of "fair play" behaviour from a giant. There will be painful conse-
The former US president has left the unfortunate legacy of bombing a
Sudanese pharmaceutical plant. Sudden, swift and undeclared bombings
have become a common weapon of the US foreign policy. If the US
looses the case at the WTO, a quite plausible prospect, Africa should
prepare itself for retaliations. The US will pick-up on anything,
will send a few war-planes and drop uranium enriched bombs. Do expect
them! It will be the cost of producing home-made medicines for AIDS.
Despite its local conflicts Africa must learn to show a united front
when dealing with bombings coming from outside the continent. Africa
should swiftly put together an "African Security Council" and show a
determined collaborative African mind and should demand that the Af-
rican continent must always be consulted before any military action
takes place from outside its continent.
The African continent must try to depart from the Western geo-
strategic mentality derived from the two world-wars  and draw
strict consequences from the European security failures of the last
few years. The US diplomacy will try to use the same strategy of the
isolated fortress it used in Eastern Europe  by shopping country
by country and trying to implement new packages in its interests.
Resisting the lobbying pressure will involve to keep a free press and
to respect internal criticisms. This is a great challenge for Africa.
In that respect, it is fundamental that Supreme Court judge McNally
remains safe and respected despite his stand against the Mugabe gov-
ernment. Should an African country fail to respect one of its Justice
or try to intimidate its own Supreme court, this would dramatically
undermine the future of the whole African continent and most impor-
tantly the reputation of African courts. A justice with a sense of
duty and of principles must be respected regardless of their opin-
It is better that battles occur in the press or in court than at a
few thousands feet above the ground.
Who will conduct research after the WTO ruling in June 2001?
If the WTO grants Brazil the right to declare AIDS a national emer-
gency in accordance with the TRIPS accord, after an initial unpleas-
ant period that may involve conflicts, pharmaceutical industries will
choose to drop their research on diseases that could be tagged as
Countries will have to re-allocate corresponding research funds to
fill the gap. The countries most likely to find the motivation to fi-
nance research on medical "national emergencies" will be those mostly
affected by these diseases.
African scientists have gained notoriety and are now holding key po-
sitions in international scientific committees as in the "ad hoc IU-
PAC Education Strategy Development Committee" which counts two chem-
ists from Botswana and South Africa .
Unfortunately the public does not believe that developing countries
can take the lead in performing research on AIDS. This "cliche" must
There is no doubt that South Africa has the capacity of (a) producing
its own generic drugs, and (b) to deliver excellence in research. But
can other African countries follow? The answer is that African uni-
versities have come a long way in developing their own state-of-the-
art research facilities.
Development agencies should start to determine the needs of African
universities. For example, the university of Botswana enjoys a fine
chemistry department but needs to further develop its biology and
biochemistry research capacity in order to promote inter-disciplinary
research on AIDS. The Botswana medical school currently under con-
struction (the first batch of medical students entered this year)
must receive great attention and financial support.
To identify the needs of African research facilities, the IUPAC di-
rectory provides a list of key contacts for chemistry departments in
Botswana, Burkina Faso, Central African Republic, Ethiopia, Ghana,
Malawi, Mozambique, Nigeria, Tanzania and Uganda .
In order to provide emergency research funding, the Organisation for
the Prohibition of Chemical Weapons (OPCW) should offer an excellent
starting point :
"Capacity building: (f) Research projects: The OPCW supports
research projects, in areas relevant to the CWC, in laboratories
or institutions in countries with low GNP and which already have
ongoing research programmes. The criteria for selection as well
as for funding will soon be available in the form of Note by the
Technical Secretariat along with the appropriate application
Conclusion: Semantic consequence of the "patent fair use"
In the case of a generic drug, the patent is reduced to a "cited
work", a scientific acknowledgement. Blaise Cronin noted that "cita-
tions are frozen footprints in the landscape of scholarly achieve-
ments" . But this is assuming an already existing march of pro-
gress. It is a reader's or librarian's perspective.
Although developing countries know which drugs they would like to
produce, can they tell which treatment they will need tomorrow? It is
currently the market that shows the direction, and once the market
incentives disappear, a sense of disorientation will follow.
Encouraging all countries to contribute to the research effort will
require a sense of orientation without the backbone of pharmaceutical
companies. Patent fair use will transform patents into semantic cues
that will be one element of this research orientation. The twist is
to project current knowledge into future developments. Learning to
read through science will require the development of a sense of sci-
entific orientation , unless we want to surrender all of the ori-
entation of future research to a single global scientific body, a
kind of "World Science Academy", or as de Gaulle would have said: an-
other "grand machin".
The bold step of Brazil should be welcome as a sign that developing
countries want to reclaim some independence, some self-judgement. Re-
placing pharmaceutical giants, by another global UN-institution will
only delay a necessary step to free some of the orientation of re-
search. Western countries will have to accept that some of their
health will be in the hand of the research of poor countries. That's
how we should understand the statement of GlaxoSmithKline.
Producing generic drugs will give new responsibilities to poor coun-
tries, and will require developing a spirit of scientific independ-
ence. For this to happen, developing countries will need to respect
and to learn how to read the scientific footprints of others ... a
skill in which South African bushmen used to excel:-)
Hope this helps.
Christian Labadie, M.S.
 Oxfan, Take action now to help Cut the Cost:
 Evil triumphs in a sick society, by Larry Elliott, 12-Feb-2001
 Morten Rostrup, President of Medecins Sans Frontieres Interna-
tional Council, MSF Open Letter to [European Commissioner] Pascale
Lamy on South Africa, 12-Feb-2001,
 Act Up-Paris - http://www.actupp.org - World Trade Organisation
(WTO) threatens the survival of 100,000 people living with HIV, 1-
 James Love, Director of Consumer Project on Technology, 6-Feb-
Pharm-policy mailing list,
 US action at WTO threatens Brazil's successful AIDS programme, by
Stephen Buckley, MSF press release 7-Feb-2001, appeared in the Inter-
national Herald Tribune
 At the mercy of drug giants, Sarah Boseley in Johannesburg, 12-
Feb-2001 The Guardian
 Democratic Alliance in Dramatic about turn, DrugInfo/E-drug, 13-
 Jean-Pierre Garnier, Drug giants aren't the problem, Glaxo
SmithKline's chief executive responds to the Guardian's series: Drug
giants aren't the problem, 14-Feb-2001,
 A quoi pourrait servir Bernard Kouchner ? Press release of Act-
Up Paris, 8-Feb-2001,
 John J. O'Neill (1944) Prodigual Genius: The Life of Nikola
Tesla. Ives Washburn, Inc., New York 1944. Chapter 5. Collaboration
 Claude Raffestin, Dorio Lopreno, Yvan Pasteur (1995) Geopoliti-
que et Histoire. Payot, isbn 2-228-88901-6
 Ana Pouvreau (1998) Les Russes et La S?curit? Europ?enne. L'Har-
mattan, isbn 2-7384-7011-4
 IUPAC, Ad Hoc Education Strategy Development Committee (ESDC),
 IUPAC, Chemistry In Africa's Least Developed Countries: an Over-
view of Capacity Building and Research Support,
 Chemical Weapons Convention Website, Organisation for the Prohi-
bition of Chemical Weapons (OPCW), Capacity building in countries
with low GNP,
 Blaise Cronin (1984) The Citation Process, Taylor Graham, London.
 Christian Labadie (1996-2001) Citation Thread
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