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> | I. Introduction
India granted its first compulsory license to an Indian generics manufacturer, Natco, in March 2012. Recently, the Indian patent appellate body upheld the grant of the compulsory license on Bayer’s anti-cancer drug, Nexavar. The issuance of the compulsory license has intensified debate among developing and developed nations over the proper role of intellectual property rights in increasing access to medicines. Developed countries argue that India’s grant violates TRIPS and will lead to less incentive for research on pharmaceuticals. This is because markets in developing countries are a key source of growth for pharmaceutical manufacturers in developed countries. On the other hand, developing countries argues that the TRIPS compulsory licensing provisions serve as a balancing mechanism, allowing strong intellectual property rights while acknowledging the need to increase access to medicines for the poor. India’s grant appears TRIPS compliant, and is an attempt to work around abuses of the patent system, similar to approaches taken in the US. | | | | |
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> | II. Background
TRIPS authorizes Member States to issue compulsory licenses in three circumstances. Art. 31 of TRIPS provides that compulsory licenses may be issued if “the proposed user made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions and that such efforts have not been successful within a reasonable period of time”; in cases of “national emergency or other circumstances of extreme urgency”; or “in cases of public non-commercial use.” Further, in order to grant a compulsory license, other procedural, and easily met, requirements must be fulfilled. The Doha Declaration provides that “the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health” and that TRIPS “can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all.”
Natco, an Indian generics manufacturer sought to negotiate a compulsory license with Bayer on its patented anti-cancer drug, Nexavar. Despite the lack of any terms or conditions that Natco was willing to accept in its initial letter, the Controller of Patents argued that Bayer’s refusal to negotiate constituted circumstances which would have fallen under the TRIPS exception.
III. Analysis
After determining that reasonable commercial negotiations had failed, the Controller of Patents decision upheld the grant of compulsory license based on three provisions of Indian Patent Law. First, the Controller determined that the “reasonable requirements of the public” had not been met. Second, the Controller determined that the Nexavar was not available to the public at a reasonably affordable price. Finally, the Controller determined that the patented product had not been worked in the territory of India. Although Natco failed to identify any commercial terms or conditions it would accept, the categorical refusal to license should be deemed to fall under TRIPS’ “reasonable commercial terms and conditions” compulsory licensing exception. This language has never been interpreted the Dispute Settlement Body, the World Trade Organization body charged with resolving disputed under TRIPS. However, given TRIPS’ strong commitment to increasing access to medicines in developing countries, as evidenced by the Doha Declaration, the circumstances of the Natco case should be deemed to fall within the scope of the TRIPS provision.
Further, even in the U.S. compulsory licenses may be granted even in a wide variety of cases when valid commercial negotiations do exist. For example, under Ebay v. MercExchange, courts are required to apply the traditional equitable four factor test to determine whether an injunction is appropriate in a certain case. This ruling has resulted in a “market competition” requirement for obtaining an injunction. Thus, even when a patent holder is willing to negotiate a court may award a compulsory license – allowing the infringer to practice the invention by paying the patentee a reasonable royalty. Further, in Apple v. Samsung, the Federal Circuit further required a causal nexus test to determine whether the patentees injury was caused by the sale of the infringing product, tightening the requirements for an injunction. The eBay decision enabled a check on non-practicing entities by reducing their incentive to hold market producers hostage through patents. While the Samsung decision reduced the ability of a patentee having a miniscule feature of a product from blocking the product. | | | | |
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< | -- By ShyamPalaiyanur - 23 Oct 2012
The Net Alters Human Consumption of Media
The net fundamentally alters human media consumption. First, by increasing the number of distributors, the net increases distributional efficiency and lowers distribution cost, facilitating access to diverse and broad ranging media. It is now technologically possible for any two people with working internet connections to share digital files with one another. Second, the net reduces the marginal cost of producing media to zero by replacing physical objects with bit streams. Technological advances have enabled users to convert physical goods such as DVDs, CDs, and books into digitized files. These two factors enable people to copy and distribute media to other consumers for zero marginal cost. There is no technological reason for producers to retain control of the distribution of media.
However, because the capital costs of producing new creative content is still non-zero, effective means for monetizing creative works must be developed. Traditional distributors in the film and music industry have failed to grasp the technological changes leading to various legal and technological attempts to stymie the fundamental change caused by the net. However, the net still offers methods for monetizing digital content that are beneficial to both consumers and artists. Unfortunately, for traditional distributors, these changes effectively cut them out from the distribution and production of low-capital goods.
These grafs don't
present your idea: they present background. Start with what you have
to say, and then communicate the context along with the development
of your idea. Facing the reader with a dense wall of not what you
have to say at the outset is a way of increasing the chances that
you'll never hold the reader's attention for what you have to say
when you finally get around to saying it.
The Future of Copyrighted Works
On December 10th 2011, comedian Louis C.K. released his fourth full-length comedy film, Live at the Beacon Theater. Although critically acclaimed, the release drew special attention for its unorthodox business model and distribution system. Louis C.K. self-produced the video and distributed the routine on his website for $5, free of any DRM. Consumers purchase the video by providing an e-mail address (to receive a log-in and password) and pay through PayPal? or Amazon. They can then download or stream the video. Further, the website will not retain personal information (besides the email and log-in) or spam the purchaser’s email account.
In less than two weeks the video generated over $1.1 million in sales. Louis C.K. earned over $220,000 in profit from the video, donated $280,000 to charity, paid bonuses to production teams totaling $250,000, and used the rest of the revenue to pay production costs. Overall, the artist himself acknowledged “the experiment really worked.” This is just one of the most recent cases where an artist has forgone traditional distribution methods to bring their creative work directly to the consumer. In the past marquee bands such as the Smashing Pumpkins and Radiohead released albums, Machina II and In Rainbow, respectively, directly to the public. However, under the Louis C.K. model, the video was offered for a fixed price, while under the Radiohead model, the consumer paid what they thought was fair. Since the release of Live at the Beacon Theater, other comedians, such as Aziz Ansari, have also released their routines through a similar model.
There are several key points to take away from this experiment. First, consumers are willing to pay for quality content despite the ease of pirating. Consumers are willing to pay a reasonable price to support artists. Further, many consumers daunted by the “challenge” of torrenting or downloading media will also pay rather than pirate and the reduced price will allow them to afford the work. Second, consumers will pay for content when producers don’t restrict their use of the media. Live at the Beacon Theater was sold DRM-free. The most important point, though, is that this distribution model is a success for both the artists and the consumer. As Louis C.K. acknowledges, artists can always choose traditional distribution systems, but users will continue to “[enjoy] torrenting that content”, resulting in reduced profits for the artist.
Criticism
One possible criticism is that the success of Live at the Beacon Theater is due to the experimental nature of the distribution model rather than the efficacy of the model. The claim is that consumers will pirate rather than buy the album once the distribution model becomes mainstream. However, because of the novelty of the distribution model and that it appeals to a consumer’s sense of fairness, people bought the video this time. There are several objections to this line of thought. First, the model isn’t new. In 2008, Radiohead released their album first through online digital sales and then through iTunes , CDs, and box-sets, forgoing record label distribution. They earned more money through this model than distribution through a record label. Next, it is true that many people will continue to pirate music and video content, but if prices are reduced more people will also be able to buy the content. Traditional distribution has utterly failed to stem the tide of piracy. In fact, almost 100 million files have been shared in the first half of 2012 alone. Third, this criticism misses the point. The net is technologically designed to share information and media, whether pirated or not. By embracing the way consumers use digital media and reducing barriers to buying the media, this model increases a consumer’s willingness to buy the creative work.
These were straw men.
The real problem is that the artist earned the money, not the
middlemen. From the point of view of middlemen, that's bad
news.
Conclusion
The structure of the net imposes changes in the form of media and the way society consumes media. However, far from destroying traditional content, the structure of the net may be harnessed to enable artists to distribute their work directly to consumers. One way for both consumers and artists to benefit from the increased distributional efficiency of the net is to embrace these features rather than pursuing the Sisyphean struggle of developing legal and technological mechanisms designed to maintain the status quo.
You can't draw a
conclusion from a story. You didn't have a theme at the outset, and
you haven't really a conclusion here. The route to an improved next
draft is to decide what your contribution to the discussion is. Your
idea. Not someone else's idea as expressed in one story about
something that happened, and a bunch of rhetorical avoidances of not
the real objections anyway. Once you have identified your idea, you
can begin the essay by expressing it, continue the essay by
developing it and providing the context necessary to the
understanding of that development, and concluding with a proposition
built on your idea that the reader can take forward for herself,
using your idea to create new ideas of her own.
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> | IV. Conclusion
India’s grant of a compulsory license based on TRIPS reasonable commercial negotiation exception mirrors efforts in the US to curb abuses of the patent system. In India, the exception has been used to provide needed access to medicine for the poor. In the US, the doctrines announced in eBay and Samsung have been used to solve various problems caused by the patent system in the US. Further, the grant of compulsory license should fall within a broad reading of the TRIPS provision given the commitment to increasing access to medicines announced in the Doha Declaration. | | | \ No newline at end of file |
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