Tag Archives: Innovation

IP Law and Trade Policies Compete With Medical Needs

The role of Intellectual Property Law and Trade Policies in Innovation and the access to medicines and medical technologies compete against each other in the Corona impacted world.

COVID-19 has shaken the world and medical technological breakthroughs with new vaccines or drugs would be the only way to save mankind. A global health crisis always triggers concerns over patented medicines and treatments that may impede access to affordable healthcare. A global pandemic or a health crisis stimulates the need for better access to medicines, creating a gray area between the protection of ideas, investments, and access to medicines for the larger good of public health. 

The Emerging Issue     

Intellectual Property Rights awards exclusivity to the inventor or the owner to manufacture and sell their invention.  

Almost a decade ago when HIV/AIDS had become a global crisis, concerns of better access to medicines were raised. Developing nations had concerns with regard to the implementation of strong Intellectual Property regimes as it would have a negative effect on the efforts to improve public health, thereby making it difficult for governments to have policies for affordable healthcare.

The major problem in developing nations is that the prime population pays for their own drugs and state provisions are selective and constrained. Though the concept of state health insurance schemes is blooming, its effectiveness, to date, is questionable. 

A similar situation exists in the current scenario for COVID-19 where not only are the beds in each hospital limited, but extravagant costs have to be borne by patients.

In Tamil Nadu, India, private hospitals are charging a whopping amount of Rs 30,000 per day, even though government orders state otherwise, capping the charges at Rs 7500 for mildly asymptomatic patients and in case they have been admitted to Intensive Care Unit then the charges are capped at maximum Rs. 15,000 per day. Claims of unfair charges are popping up every day where hospitals are being accused of merely robbing patients.

Not only that, exploitative pricing has become a common predicament in most Asian Countries where hospitals are overcharging in COVID-19 rapid tests. The rapid test packages offered by hospitals have been differing from 500,000 rupiah to 5.7 million rupiah ($32 to $365). Exorbitant pricing remains an issue in the United States as well, where an individual faced a $1.1 million hospital bill.

Access to proper healthcare has already started becoming a concern with hospitals turning the major crisis into a money minting machine, even when there is no absolute drug or vaccine for the disease. The concern is, if every entity starts to look at this crisis as an opportunity, sustaining public policy will be a distant task for the government.

The Exclusivity of a Patent 

The key objective of the patent system is to reward exclusively to the innovator for an invention that is novel and has some industrially enhanced efficacy to it. The patented innovation could be a product or a process, as engraved in the TRIPs (Trade-Related Aspects of Intellectual Property Right) Agreement, 1995. The patentee creates a solution to a problem and as an incentive, an exclusive right is given to the owner, to produce and sell it, for 20 long years. The pharmaceutical industry is majorly dependent on the patent system to recover its research and development cost and to generate profits for future innovation.

The Competing Interest: Public Health

Compulsory licensing is an act where the government authorizes a third-party to use, make and sell a patent without the permission of the patentee or the owner, when the medicine is not available at a reasonable and affordable price or when it is not obtainable in a justified quantity. Compulsory Licensing and competition from generic or biosimilar products are general issues that threaten many patent holders. A competing interest is involved here, where on one side, there is a greater good of public interest where the ownership of technological innovation should be with the public, and on the other side, there is private ownership of patents fuelling further innovations. 

Biosimilar and generic drugs are sold at a cheaper price and are said to have a trade-distorting effect. However, the provision of consensual licensing instead of any legal compulsion might be a silver lining to this whole circumstance. The possibility stems from the current world scenario where corporate social responsibilities on Multinational Corporations (MNC’s) are an obligation and a single-minded pursuit of business is no more encouraged. This can definitely balance the competing interests of the right holders and the public interest at large. 

With the current COVID-19 scenario, the World Health Organization has accepted a proposal for patent pooling in order to collectively share the patent right, test data, and information required to create drugs and vaccines. It showcases an attempt towards navigating patent rights for all countries thereby making new innovations available to everyone.

Patent Pooling is a framework where one or two patent holders enter into an agreement to share their innovation by means of licensing with each other or with a third party in order to provide fruitful technological solutions. Patent pooling can even help in the scenario where technology is not entirely developed and thereby lead to new innovations without any hindrance to access.

However, with the United States trying to quit the World Health Organization, a question emerges – ‘in case they do terminate their relationship, how is the patent pool going to function?’ We all know what happened to the International Trade Organization when the United States chose not to be a part of it and now with the changes in the current arrangement, the question emerges again. The world is approaching multilateralism and is finally able to compromise with nationalism in order to work in solidarity. 

Lahama Mazumdar is currently working as a Teaching Assistant in National University of Study and Research in Law, Ranchi and is a doctoral student at National Law University Odisha. 

Why Apple failed in India — and how it can start innovating again

Apple’s iPhone sales in India are expected to have fallen dramatically this year to 2 million, from 3 million phones last year.

Reuters reports that at the peak shopping season, in Diwali, Apple stores were deserted. This occurred in the world’s fastest-growing market, in which smartphone sales are often increasing by more than 20 percent every quarter.

Yet Apple’s loss of the Indian market was entirely predictable. In a Washington Post column of March 2017, I described Apple’s repetition in India of the mistakes it made in China: Relying entirely on its brand recognition to build a market for its products there. Rather than attempt to understand the needs of its customers, Apple made insulting plans to market older and inferior versions of iPhones to its Indian customers — and lost their loyalty.

IPhone isn’t special

The iPhone no longer stands out as it once did from its competition. Chinese and domestic smartphones boasting capabilities similar to those of the iPhone are now available for a fraction of the iPhone’s cost. Samsung’s  high-end phones have far more advanced features. And, with practically no brand recognition by the hundreds of millions of Indians who are buying their first devices, Apple does not have any form of product lock-in as it does with Western consumers who have owned other Apple products and are now buying smartphones.

Apple also made no real attempt to customize its phones or applications to address the needs of Indian consumers; they are the same as in the United States. Siri struggles no less on an Indian iPhone than on a U.S. one to recognize an Indian name or city or to play Bollywood tunes.

It wasn’t even their technical superiority that made the earlier iPhones so appealing to the well-to-do in India; it was the status and accompanying social gratification they offered. There is no gratification in buying a product that is clearly inferior. Indian consumers who can afford iPhones want the latest and greatest, not hand-me-downs.

So Apple could hardly have botched its entry into the Indian market more perfectly.

Pursuit of perfection

And it’s not just Apple’s global distribution and marketing strategy that needs an overhaul. The company needs to rethink the way it innovates. Its pursuit of perfection is out of touch with the times.

The way in which innovation happens now is that you release a basic product and let the market tell you how to make it better. Google, Facebook, Tesla and tens of thousands of startup companies are always releasing what are called minimum viable products, functional prototypes with the most basic of features. The idea is to get something out as quickly as possible and learn from customer feedback. That is because in the fast-moving technology world, there is no time to get a product perfect; the perfected product may become obsolete even before it is released.

Apple hasn’t figured that out yet. It maintains a fortress of secrecy, and its leaders dictate product features. When it releases a new technology, it goes to extremes to ensure elegant design and perfection. Steve Jobs was a true visionary who refused to listen to customers — believing that he knew better than they did about what they needed. He ruled with an iron fist and did not tolerate dissension. And people in one Apple division never knew what others in the company were developing; that’s the kind of secrecy the company maintained.

Jobs’s tactics worked very well for him, and he created the most valuable company in the world. But, since those days, technological change has accelerated and cheaper alternatives have become available from all around the globe.

More experimentation

Apple’s last major innovation, the iPhone, was released in 2007. Since then, Apple has been tweaking that device’s componentry, adding faster processors and more-advanced sensors, and releasing it in larger and smaller form factors — as with the iPad and Apple Watch. Even Apple’s most recent announcements were uninspiring: yes, yet more smaller and larger iPhones, iPads and watches.

There is a way in which Apple could use India’s market to its advantage: to make it a test bed for its experimental technologies. No doubt Apple has a trove of products that need market validation and that are not yet perfect, such as TV sets, virtual-reality headsets and new types of medical devices. India provides a massive market that will lap up the innovations and provide critical advice. Apple could develop these products in Indian languages so that they aren’t usable back at home, and price them for affordability to their Indian customers.

To the visionaries who once guided Apple, experimenting with new ideas in new markets would have been an obvious possibility to explore. Taking instead the unimaginative option of dumping leftovers on a prime market suggests that Apple’s present leaders have let their imaginations wither on the vine.

Vivek Wadhwa is a Distinguished Fellow at Harvard Law School and Carnegie Mellon’s School of Engineering at Silicon Valley. He is the author, with Alex Salkever, of “Your Happiness Was Hacked: Why Tech Is Winning the Battle to Control Your Brain — and How to Fight Back.” Follow him on Twitter @wadhwa.

This article is published with permission from the author.