1 The Group of Eight (G8), also known as Group of Seven and Russia, is an international forum for the governments of Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States. Together, these countries represent about 65% of the world economy and the majority of global military power. The group's activities include regular meetings and policy research, culminating with an annual summit meeting attended by the heads of government of the member states. The European Commission is also represented at the meetings. Recently the Group was expanded to include five developing countries: Mexico, China, India, Brazil, and South Africa. This new Group is known as the G8+5. See Press Release, Joint Science Academies’ Statement on Growth and Responsibility: The Promotion and Protection of Innovation (May 2007), http://www.www.royalsociety.org/displaypagedoc.asp?id=25502.

2 Id.

3 See Press Release, Network of African Science Academies, Joint Statement by the Network of African Science Academies (NASAC) to the G8 on Sustainability, Energy Efficiency, and Climate Change (May 2007), royalsociety.org/downloaddoc.asp?id=4226. Further, in May 2008, the World Health Organization Intergovernmental Working Group on Public Health gave renewed emphasis to the need for the promotion of “upstream research and product development in developing countries,” support for “early-stage drug research and development in developing countries,” and “improving cooperation, participation and coordination of health and biomedical research and development.” World Health Organization Intergovernmental Working Group on Public Health, Innovation and Intellectual Property [WHO IGWG], White Paper: Draft Global Strategy on Public Health, Innovation, and Intellectual Property, paras. 30(2.1) and 30(2.2) (May 3, 2008), available at http://www.who.int/phi/documents/IGWG_Outcome_document03Maypm.pdf.

4 At the Millennium Summit in September 2000 the UN Millennium Declaration was adopted, committing nations to a new global partnership to reduce extreme poverty. It set out a series of time-limited targets that have become known as the Millennium Development Goals (MDGs) and have a deadline of 2015. UN Millenium Project: About MDGs, http://www.unmillenniumproject.org/index.htm (last visited Apr. 12, 2008). See generally Lawrence O. Gostin, Meeting Basic Survival Needs of the World's Least Healthy People, Toward a Framework Convention on Global Health, 96 Geo. L.J. 331 (2008).

5 Diarrhoeal diseases account for 17% of deaths among children under five years of age worldwide, or nearly 2 million child deaths every year, making them the second most common cause of child deaths globally. See UNICEF End Decade Databases, http://www.childinfo.org/eddb/Diarrhoea/index.htm (last visited Apr. 12, 2008).

6 Many commentators have suggested that the elite pharmaceutical industry is failing to devote sufficient R&D effort towards finding effective cures and treatments for tropical infectious diseases including malaria, leishmaniasis, leprosy, and Guinea worm. These so called ‘neglected’ diseases predominantly effect poor populations in low income countries. Patrice Trouiller, for example, has pointed out that of the 1,393 total new drugs approved between 1975 and 1999, only 1% (16 drugs) were specifically indicated for a tropical disease. Patrice Trouiller et al., Drug development for Neglected Diseases: A Deficient Market And A Public-Health Policy Failure, 359 The Lancet 2188, 2188 (2002), cited in Philip Stevens, Diseases of poverty and the 10/90 Gap, 3-4 (2004), http://www.who.int/intellectualproperty/submissions/InternationalPolicyNetwork.pdf.

7 Medecins Sans Frontieres & The Drugs for Neglected Diseases Working Group, Fatal Imbalance: The Crisis in Research and Development for Drugs for Neglected Diseases 10 (2001), http://www.doctorswithoutborders.org/publications/reports/2001/fatal_imbalance_short.pdf.

8 In terms of mortality rates, neglected diseases often do not represent the most pressing public health priorities in low-income countries. They constitute a small fraction of their total disease burden. According to the 2002 World Health Organization's (WHO) World Health Report, tropical diseases accounted for only 0.5% of deaths in high-mortality poor countries, and only 0.3% of deaths in low mortality poor countries. See WHO, World Health Report 81-82 (2008) (Figure 4.8 concerning the “Amount and patterns of burden of disease in developing and developed countries” and Figure 4.9 concerning “Global distribution of burden of disease attributable to 20 leading selected risk factors”).

9 For example, the treatment of leishmaniasis relies on drugs developed in the 1940s, which can cause kidney failure. Also, the parasite that causes malaria rapidly adapts itself to new drugs. See Parliamentary Office of Science and Technology, Fighting Diseases of Developing Countries, 241 Postnote 1, 1 (2005), http://www.parliament.uk/parliamentary_offices/post/pubs2005.cfm.

10 Increasing economic development means that the nature of diseases suffered by both low- and high-income countries is converging. For example, non-communicable diseases such as cancers and cardiovascular diseases now represent over 60% of the total global disease burden, affecting both rich and poor countries. Stevens, supra note 6, at 5.

11 Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations (Apr. 15, 1994), reprinted in World Trade Organization, The Results of the Uruguay Round of Multilateral Trade Negotiations: The Legal Texts 2 (1995); Marrakesh Agreement Establishing the World Trade Organization (Apr. 15, 1994), reprinted in World Trade Organization, The Results of the Uruguay Round of Multilateral Trade Negotiations: The Legal Texts 4 (1995) [hereinafter WTO Agreement]; Annex IC: Agreement on Trade-Related Aspects of Intellectual Property Rights, reprinted in World Trade Organization, The Results of the Uruguay Round of Multilateral Trade Negotiations: The Legal Texts 321 (1995) [hereinafter TRIPS Agreement].

12 See, e.g., The Patents (Amendment) Act, 2005, No. 15 of 2005, Acts of Parliament, 2005, available at http://www.patentoffice.nic.in/ipr/patent/patent_2005.pdf.

13 TRIPS Agreement, supra note 11, at Art. 28.

14 Roberto Mazzoleni & Richard R. Nelson, Public Research Institutions And Economic Catch-Up 36 Res. Pol’y 1512, 1515 (2007).

15 Id. at 1516.

16 Id.

17 Id.

18 The Technology Transfer Block Exemption, laid out in the European Commission Regulation on the Application of Article 81(3) of the Treaty to Categories of Technology Transfer Agreements (Commission Regulation 772/2004, 2004 O.J. (L 123) (EC) [hereinafter TTBE]), applies to technology transfer agreements including patent licensing agreements; know-how licensing agreements; software copyright licensing agreements and combinations of these. For a summary of this legislation, see SCADPLUS: Technology Transfer Agreements, europa.eu/scadplus/leg/en/lvb/l26108.htm (last visited Apr. 12, 2008). The rationale for the TTBE is provided by Article 81(1) of the EC Treaty which prohibits anticompetitive agreements unless they can be saved under Article 81(3), which prohibits anticompetitive licensing agreements affecting trade between Member States. See Consolidated Versions of the Treaty on European Union and of the Treaty Establishing the European Community, 2006 O.J. (C 321 E) [hereinafter EC Treaty]. Further see Cyril Ritter, The New Technology Transfer Block Exemption under EC Competition Law, 31 Legal Issues Econ. Integration 161 (2004).

19 See generally Benjamin Coriat, Fabienne Orsi & Cristina d’Almeida, TRIPS and the International Public Health Controversies: Issues and Challenges, Indus. & Corp. Change 1033, 1059-60 (2006) (contrasting the supply of medicines in developing countries before and after the conclusion of the TRIPS Agreement, arguing that TRIPS needs greater accommodation for the manufacture of generic medicines).

20 The Patents (Amendment) Act, 1970, No. 39 of 1970, Acts of Parliament, 1970, available at http://www.www.wipo.int/clea/en/details.jsp?id=2393.

21 Section 3 lists the subject matter that is deemed non-patentable to include: inventions that are “injurious to public health, mere discoveries, admixtures and trivial rearrangements” as well as: “any process for the medicinal, surgical, curative, prophylactic or other treatment of human beings … to render them free of disease or to increase their economic value or that of their products.” Id. See generally Dwijen Rangnekar, Context and Ambiguity in the Making of Law: A Comment on Amending India's Patent Act, 10 J. World Intell. Prop. 365, 375 (2007); Padmashree Gehl Sampath, India's Product Patent Protection Regime: Less or More of “Pills for the Poor“? 9 J. World Intell. Prop. 694, 700-02 (2006) [hereinafter Sampath].

22 See The Patents Act, 197012, at § 5(1) (providing that in the case of “inventionsclaiming substances intended for use, or capable of being used, as food or as medicine or drug, … no patent shall be granted in respect of claims for the substances themselves, but claims for the methods or processes of manufacture shall be patentable”).

23 See id. at § 53(1) (providing that “in respect of an invention claiming the method or process of manufacture of a substance, where the substance is intended for use, or is capable of being used, as food or as a medicine or drug, be five years from the date of sealing of the patent, or seven years from the date of the patent whichever period is shorter; and in respect of any other invention, be fourteen years from the date of the patent”).

24 TRIPS Agreement, supra note 11, at Art. 28.

25 See TRIPS Agreement, supra note 11, at Art. 2 (incorporating Article 5 of the Paris Convention as amended in 1883); Paris Convention for the Protection of Industrial Property Art. 5, Mar. 20, 1883, 21 U.S.T. 1583, 828 U.N.T.S. 305 [hereinafter Paris Convention].

26 See Paul Champ & Amir Attaran, Patent Rights and Local Working under the WTO TRIPS Agreement: An Analysis of the U.S.-Brazil Patent Dispute, 27 Yale J. Int’l L. 365, 365- 70 (2002) (arguing against too simplistic an interpretation of the relationship between Article 68 of Brazil's Industrial Property Law concerning local working requirements and Articles 27 and 28 of the TRIPS Agreement); see also Michael Halewood, Regulating Patent Holders: Local Working Requirements and Compulsory Licences At International Law, 35 Osgoode Hall L. J. 243, 247 (1997) (similarly arguing that that domestic law requiring mandatory working and compulsory licensing would not contradict the substantive provisions of the NAFTA and the TRIPS Agreements).

27 See Request for the Establishment of a Panel by the United States, Brazil – Measures Affecting Patent Protection, WT/DS 199/3 (Jan. 8, 2001) (concerning the U.S. complaint that Brazil discriminated against the availability and enjoyment of patent rights on the basis of whether products are imported or locally produced).

28 See Notification of Mutually Agreed Solution, Brazil – Measures Affecting Patent Protection, WT/DS199/4G/L/454, IP/D/23/Add.1 (July 19, 2001). Without prejudice to their respective positions, the United States and Brazil agreed to enter into bilateral discussions prior to Brazil's invoking Article 68 against a U.S. patent holder.

29 See also Sub-Comm’n on the Promotion & Prot. of Human Rights, Res. 2001/21, U.N. Doc. E/CN.4/Sub.2/RES/2001/21 (Aug. 16, 2001).

30 TRIPS Agreement, supra note 11, at Art. 30.

31 See id. at arts. 2 & 3.

32 See id. at arts. 3 & 8.

33 Gail E. Evans, Law-Making Under the Trade Constitution 23-24 (2000).

34 William van Caenegem, Intellectual Property Law and Innovation 1-2 (2007).

35 World Trade Organization Ministerial Declaration on the TRIPS agreement and Public Health, WT/MIN(01)/DEC/2, 41 I.L.M. 755 (2002).

36 See International Covenant on Economic, Social and Cultural Rights, G.A. Res. 2200A (XXI), U.N. GAOR, 21st Sess., Supp. No. 16, U.N. Doc. A/6316 (Dec. 16, 1966) (explaining that the right to health constitutes a legally binding obligation upon State parties); see also Charter of Fundamental Rights Of the European Union, Art. 35, O.J. (C 364/1) (2000) (concerning the right of access to preventive health care and the right to benefit from medical treatment under the conditions established by national laws and practices); Universal Declaration on Human Rights, G.A. Res. 217A, at 25, U.N. GAOR, 3d Sess., 67th plen. mtg., U.N. Doc. A/810 (1948) (endorsing the right to health); Constitution of the World Health Organization, July 22, 1946, 62 Stat. 2679, 14 U.N.T.S. 185 (articulating the first “right to health”). See also African Charter on Human and People's Rights, June 27, 1981, OAU Doc. CAB/LEG/67/3 rev.5, 21 I.L.M. 58 (1982); Holger P. Hestermeyer, Human Rights and the WTO: The Case of Patents and Access to Medicines 83-115 (2007).

37 See Appellate Body Report, Canada-Term of Patent Protection, WT/DS170/AB/R (Sept. 18, 2000).

38 See Panel Report, Canada – Patent Protection Of Pharmaceutical Products, WT/DS114/R (Mar. 17, 2000) [hereinafter Panel Report on Canada].

39 Id.

40 Id. at ¶ 7.2.

41 A Bolar provision permits generic producers to file for regulatory approval prior to the expiration of the patent.

42 Panel Report on Canada, supra note 38, at ¶7.7.

43 The decision of August 30, 2003 addressed the public health needs of countries with no capacity to manufacture under a compulsory license. The so-called Paragraph 6 Solution created a mechanism for such countries to import cheaper generics made under compulsory licensing elsewhere. A permanent amendment to TRIPS was agreed to on December 6, 2005 in Article 31bis: http://www.wto.org/english/tratop_e/trips_e/wtl641_e.htm.

44 The notification (IP/N/9/RWA/1), filed on 19 July, is the first in several steps that will have to be taken before the affordable drugs reach patients in the African country. Rwanda informed the WTO that it expected over the next two years to import 260,000 packs of the HIV/AIDS drug TriAvir, manufactured in Canada by Apotex, a major generics producer headquartered in Toronto. Rwanda Becomes First Country to Try to Use WTO Procedure to Import Patented HIV/AIDS Drugs, 11 Bridges Weekly Trade News Dig. (2007), http://www.ictsd.org/weekly/07-07-25/story2.htm.

45 Simon Montlake & Elizabeth H. Williams, Thailand's IP Gamble: Just Say ‘No’ to Big Pharma, 170 Far E. Econ. Rev. 39 (2007). In August 2007, Brazil and Thailand signed a bilateral agreement to cooperate on health issues, including generic licensing, which may be a harbinger of more such bilateral and regional health agreements. Id.

46 AIDS Healthcare Foundation, Profit at What Cost? AIDS Drugs for All (8 Aug. 2007), at 2, http://www.aidshealth.org/index2.php?option=com_content&do.pdf=1&id=1124.

47 See Philippines Information Agency, PGMA to Sign Cheaper Medicines Law (June 6, 2008), http://www.pia.gov.ph/?m=12&fi=p080606.htm&no=12.

48 Jakkrit Kuanpoth, Patents and Access to Antiretroviral Medicines in Vietnam after World Trade Organization Accession, 10 J. World Intell. Prop. Vol. 10 201, 218 (2007) (explaining that because of the data exclusivity provisions under the bilateral Agreement between the United States of America and the Socialist Republic of Vietnam on Trade Relations of 2001, Vietnam cannot rely on the data submitted by the originator company to register generic versions of the same drugs for five years after registration of the originator product).

49 Article 39.3 of TRIPS provides: “Members, when requiring, as a condition of approving the marketing of pharmaceutical … products which utilize new chemical entities, the submission of undisclosed test or other data, … shall protect such data against unfair commercial use.” TRIPS Agreement, supra note 11, at Art. 39.3. See also Frederick M. Abbott & Jerome H. Reichman, The Doha Round's Public Health Legacy: Strategies for the Production and Diffusion of Patented Medicines Under the Amended TRIPS Provisions, 10(4) J.Int’l Econ. L. 921, 963, 2007.

50 Frederick M. Abbott, The WTO Medicines Decision: World Pharmaceutical Trade and the Protection of Public Health, 99 Am. J. Int’l L. 317, 357 (2005).

51 African Union Conference Of Ministers Of Trade, 3rd Ordinary Session, AU's Ministerial Declaration on EPA Negotiations, AU/TI/MIN/DECL. (III) (2005), http://www.africaunion.org/root/AU/AUC/Departments/TI/EPA/DOC/de/EPA_Decl_Cairo_EN.pdf.

52 For example, in 2006, Pfizer sued the government of the Philippines for importing its patented hypertension drug Norvasc from Pakistan at a price almost 90% lower than Pfizer's market price for the Philippines. On March 1, 2006, US pharmaceutical company Pfizer sued the Philippine International Trading Corp (PITC) and the Bureau of Food And Drugs (BFAD) before the Regional Trial Court of Makati Branch. It accused them of infringing its patent for its anti-hypertension drug Norvasc (which has the generic name amlodipine besylate), after the PITC imported some samples of a similar drug sold by Pfizer in India (under the brand name Amlogard) and submitted the samples to the BFAD for testing and product registration. Pfizer's Philippine patent expires in June 2007. The PITC filed a Ps1.5 million ($30,000) countersuit against Pfizer, claiming that the US company was attempting to stop the government from importing cheap medicine. Hechanova Bugan & Manila Vilchez, IP Rights v. Public Health, Managing Intell. Prop. (2006).

53 See Members Accepting Amendment of the TRIPS Agreement, http://www.wto.org/english/tratop_e/trips_e/amendment_e.htm (last visited Apr. 12, 2008).

54 Daniel Lederman & William Maloney, Research and development (R&D) 13 (The World Bank, Working Paper Series 3024, 2003) (concluding that one dollar's worth of R&D buys greater increases in productivity for countries far from the technological frontier than for innovating countries who must invent the new technologies that push the frontier forward).

55 For example, the creation of the United Nations Development Program; World Bank; World Health Organization Special Program for Research and Training in Tropical Diseases (WHO/TDR) enabled the establishment of a partnership-oriented approach to drug discovery and development between public-sector organizations and private companies. This process rapidly accelerated in the late 1990s, when an increase in funding opportunities through national governments and philanthropic institutions, such as the Rockefeller and Gates Foundations, allowed projects to be initiated with million-dollar budgets. Solomon Nwaka & Robert G. Ridley, Virtual Drug Discovery and Development for Neglected Diseases Through Public–Private Partnerships, 2 Nature Reviews, Drug Discovery 919, 920 (2003), http://www.who.int/tdr/topics/discovery_research/files/virtual_drug_discovery.pdf.

56 See Abbot & Reichman, supra note 49, at 943; Jerome H. Reichman & Rochelle Cooper Dreyfuss, Harmonization Without Consensus: Critical Reflections On Drafting A Substantive Patent Law Treaty, 57 Duke L. J. 85, 98 (2007); Graeme Dinwoodie & Rochelle Dreyfuss, TRIPS and the Dynamics of Intellectual Property Lawmaking, 36 Case Western Reserve J. Int’l L 95, 116 (2004).

57 See International Foundation of Pharmaceutical Manufacturers Association, The Pharmaceutical Innovation Platform: Sustaining Better Health Worldwide 49 (2004), http://www.ifpma.org/documents/NR1916/PIP_final.pdf.; see also Sonja Bartsch & Lars Kohlmorgen, The Role of Southern Actors in Global Governance: the Fight Against HIV/AIDS 8-9 (German Inst. Global and Area Stud., Working Paper No. 46, 2007); see generally Wolfgang Hein & Lars Kohlmorgen, Global Health Governance, 8 Global Social Pol’y 80 (2008) (explaining that the new institutional structures in global health governance are characterized by a combination of moral values and material interests that allows some progress in the fight against poverty-related diseases).

58 The Centre for Health Policy and Strategic Studies in Lagos Nigeria was founded in 1995. Among Nigeria's Medical Schools, the University of Ibadan and the College of Medicine at the University of Lagos are particularly active in R&D. On the advantages of PPPs see Kevin Outterson, Access to Global Disease Innovation 2 (forthcoming) (submitted to WHO IBWG 2006).

59 KEMRI received an award for Quality Scientific Research and excellent management in the International Quality Summit Awards Ceremony in 2007 in New York. See BioChem Solutions: Product Development, http://www.www.biocheminc.com/development.php.

60 Local and regional collaborators include universities, hospitals, and government agencies. Examples include: the Kenyatta National Hospital; the Suez Canal University- Egypt; Noguchi Memorial Institute of Medical Research, Ghana; the Ethiopia Health and Nutrition Research Institute; Makerere University Medical School; University of Zambia Medical School; and the Medical Research Council of South Africa. International collaborators include the World Health Organization (WHO); Japan International Cooperation Agency (JICA); Walter Reed Army Institute of Medical Research (WAIR); United States Agency for International Development (USAID) and; the Royal Tropical Institute, Amsterdam. See Kenya Medical Research Institute: Collaborators, http://www.kemri.org/International%20and%20Local%20Collaborators.html.

61 The OECD Science, Technology and Industry Scoreboard 2007, analyzes shares of NPL (non-patent literature) in citations across patent classes in order to provide insights into the technologies that are closer to scientific R&D and thus more dependent on the progress of scientific knowledge. An analysis of over 540, 000 international patent applications filed under the Patent Co-operation Treaty (PCT), published by the European Patent Office (EPO) shows that in the last 15 years the International Patent Classification (IPC) sub-classes with a higher than average share of citations to NPL (over 15%) are mainly in the fields of biotechnology, pharmaceuticals, other fine organic chemistry, and information and communications technology. This is consistent with other observed patterns of scienceindustry linkages in these fields, such as university spin-offs, industry-university cooperation in R&D, and the tendency for biotechnology companies to cluster around universities. See Source OECD: STI 2007, http://www.masetto.sourceoecd.org/vl=7460882/cl=15/nw=1/rpsv/sti2007/ (last visited Apr. 12, 2008).

62 Pub. L. No. 96-517, § 6(a), 94 Stat. 3015, 3019-28 (1980) (codified as amended at 35 U.S.C. §§ 200-212 (2000)).

63 See generally Council on Government Relations, The Bayh-Dole Act: A Guide to the Law and Implementing Regulations (1999), http://www.cogr.edu/docs/Bayh_Dole.pdf.

64 “It is the policy and objective of Congress to use the patent system to promote the utilization of inventions arising from federally supported research or development … [and] to promote the collaboration between commercial concerns and nonprofit organizations, including universities.” 35 U.S.C.§ 200 (2000).

65 See generally Dominique Guellec and Bruno van Pottelsberghe de la Potterie, The Internationalisation Of Technology Analysed with Patent Data, 30(8) Res. Pol’y 1, 9, 10, 13 (2001) available at http://www.ulb.ac.be/cours/solvay/vanpottelsberghe/resources/Pap_ResPol_1.pdf.

66 In view of the organizational and educational tasks required to secure patent rights, most universities have an R&D Department or Knowledge Transfer Office as well as a company that provides commercialization services to the University. The creation of a research-owning company will also provide medical research departments with the requisite legal capacity to enter into contracts for the development of pharmaceuticals and diagnostics. Once invested with the legal power to exercise control over property, including intellectual property, the PRO will then have the power to contract with its employees concerning the assignment and ownership of intellectual property. A department, institute, or centre in itself does not have the required legal personality. A corporation as a legal entity is the most effective means of ensuring that the PRO has the legal capacity to assume ownership and control of intellectual property. The intellectual property will be owned by the University or a nominee company of the University (e.g. “Unisearch Incorporated”). Organisation of Economic Co-operation and Development [OECD], Turning Science into Business, Patenting and Licensing at Public Research Organisations, 2003 Sci. & Info. Tech. 1 (2003) [hereinafter OECD].

67 See The Role of Federally-Funded University Research in the Patent System: Hearing before the S. Comm. on the Judiciary, 110th Cong. (2007) (statement of Robert Weissman, Director, Essential Action).

68 Interest groups, such as the Association of University Technology Managers (AUTM), have formed; and pharmaceutical companies have a vested interest in this model's survival. Much of the data used to support the argument that the Bayh-Dole Act (Patent and Trademark Act Amendments of 1980, Pub. L. No. 96-517, 94 Stat. 3015) is working is based on surveys conducted by AUTM.

69 OECD, supra note 66; see also David C. Mowery and Bhaven Sampat, The Bayh-Dole Act of 1980 and University-Industry Technology Transfer: A Policy Model for Other Governments?, J. Tech. Transfer 115 (2005).

70 A similar trend in the UK highlights the success of Cambridge Enterprise, the University of Cambridge's knowledge and technology transfer service company. Jeanette Walker, Cambridge: Europe's Leading Location For Biotechnology, 10 Drug Discovery Today 956, 956, 959 (2005). Thomas J. Siepmann remarks that the “two largest licensing/royalty income powerhouses in U.S. academia are Columbia University and the University of California. These two institutions alone brought in $400 million in royalties and licensing deals in 2000, according to the Association of University Technology Managers Licensing Survey.” Thomas J. Siepmann, The Global Exportation of the US Bayh-Dole Act, 30 U. Dayton L. Rev. 209, 239 (2005) (citing Assn. of U. Tech. Managers, AUTM Licensing Survey: FY 2000: A Survey Summary of Technology Licensing (and Related Performance for U.S. and Canadian Academic and Nonprofit Institutions and Patent Management Firms), 12 (Lori Pressman ed., 10th ed., 2002), available at http://www.provendis.info/home/downs/AUTMFY2000Survey.pdf). Further, the Lambert Review notes that “the US universities that are best at technology transfer also have strong reputations for long-term research.” Richard Lambert, HM Treasury, Lambert Review of Business- University Collaboration, Final Report 49 (2003), http://www.hmtreasury.gov.uk/consultations_and_legislation/lambert/consult_lambert_index.cfm. The indications are that the infrastructure needed to capitalize on research results from universities is not at the level required to make investing worthwhile. Tom Coupé concludes, “those universities that established a technology transfer office, possibly in reaction to Bayh- Dole, do seem to have increased their patenting activity more than those that did not establish such an office.” Tom Coupé, Science Is Golden: Academic R&D and University Patents, 28 J. Tech. Transfer 31, 43 (2003). See also Bhaven N. Sampat & Richard R. Nelson, World Bank, The Emergence and Standardization of University Technology Transfer Offices: A Case Study of Institutional Change 23, 26, 30 (1999), http://www.isnie.org/ISNIE99/Papers/nelson.pdf.

71 Around one in ten of all firms in Europe collaborated with a partner for their innovation activities during 2002-04. OECD & Statistical Office of the European Communities, Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data (2005), http://www.oecd.org/document/23/0,2340,en_2649_37417_35595607_1_1_1_37417,00.html. Public institutions own 7% of all international patents filed under the Patent Cooperation Treaty (PCT) between 2002 and 2004. More than 10% of patent applications by US residents are owned by public institutions compared to around 4% of patents owned by European residents. Compare Singapore, where almost 40% of all PCT filings are owned either by the government or the higher education sector. Source OECD: STI 2007, masetto.sourceoecd.org/vl=7460882/cl=15/nw=1/rpsv/sti2007/ (last visited Apr. 12, 2008).

72 Among OECD countries, Ireland has the highest proportion of patenting by universities (9.7% during 2002-04), a noticeable increase over the mid-1990s when universities owned 3.5%. In Australia, Belgium, China, Spain, the United Kingdom and the United States, the higher education sector accounts for 6% to 8% of all international patent applications. Between 1996-98 and 2002-04, the share of patents filed by universities decreased slightly in Australia, Canada and the United States but increased markedly in Japan and the European Union, notably in France and Germany. This increase resulted directly from policy changes in these countries in the early 2000s: OECD Technology and Industry Scoreboard. Id.

73 See Nicholas S. Argyres & Julia Porter Liebeskind, Privatizing the Intellectual Commons: Universities and the Commercialization of Biotechnology, 35 J. Econ. Behav. & Org 427 (1998) (arguing that since the passage of the Bayh-Dole Act in 1980 a gradual but halting privatization of the intellectual commons has been occurring in US universities).

74 Some estimates would put this figure within the range of US$100 to $500 million in research expenditures annually. Centre For Management Of Intellectual Property In Health Research And Development [MIHR], Section 6: Establishing and Operating Technology Transfer Offices, in Handbook of Best Practices: Executive Guide to Handbook 73, 74, http://www.iphandbook.org/handbook/ (follow “Establishing and Operating Technology Transfer Offices” hyperlink) (last visited June 7, 2008) [hereinafter MIHR Handbook].

75 The availability of venture capital, combined with the willingness of Wall Street to support companies with initial public offerings, put the United States as much as five to ten years ahead of Europe and Japan in developing a biotechnology industry. Brigitte Haar, Venture Capital Funding for Biotech Pharmaceutical Companies in an Integrated Financial Services Market: Regulatory Diversity within the EC, 2 European Business Organization Law Review 585, 587 (2001). In contrast, in Sweden and, until recently, in Germany and Japan, university professors have been entitled to own patents resulting from their research. The patents are thus registered as belonging to individuals or businesses rather than to public institutions. Siepmann, supra note 70, at 222-23, 225-26. Concerning the effects of Bayh- Dole and royalty sharing see Coupé, supra note 70, at 43-44.

76 William M. Landes & Richard A. Posner, The Economic Structure of Intellectual Property Law 13 (2003).

77 Patenting statistics at MIT reflect the relationship between patents, markets, and profits. See Archive of AUTM licensing reports for 2004-2006, http://www.autm.net/surveys/index.cfm (last visited Apr. 12, 2008).

78 Drugs for Neglected Diseases Initiative, Addressing the Lack of Research and Development for Neglected Diseases (2006), http://www.researchappeal.org/dndi.pdf/RD_Briefing_for_EU_Feb06_final.pdf.

79 Of the new chemical entities developed between 1975 and 1996, only 11 were for the treatment of tropical diseases. Patrice Trouiller & Pierro Ollario, Drug Development Output from 1975 to 1996: What Proportion for Tropical Diseases? 3 Int’l. J. Infectious Diseases 61, 61-63 (1999).

80 Therefore, only 10% of worldwide research is allocated to tropical diseases affecting 90% of the world population. UK Parliamentary Report, Fighting Diseases of Developing Countries, Postnote, June 2005, at 1, http://www.parliament.uk/documents/upload/POSTpn241.pdf.

81 See World Bank, Africa Development Indicators (2007), http://siteresources.worldbank.org/INTSTATINAFR/Resources/adi2007_final.pdf.

82 The major strengths that the Indian pharmaceutical industry has to offer PROs in developing countries include a cost-competitive manufacturing base that extends to clinical studies, extensive skills in chemistry and process development, ability to manufacture over 50% of the bulk drugs needed for its pharmaceutical production activities locally, the emergence of a promising biotechnology industry, availability of local scientists and R&D personnel of a high scientific quality, and a wide network of organizations performing various aspects of pharmaceutical R&D. Sampath, supra note 21, at 700-02.

83 Ranbaxy is but one Indian pharmaceutical company that announced plans to spin off its drug-discovery division to a new subsidiary, to be called Ranbaxy Life Science Research. This division will enable the company to create intellectual property at a faster pace while also positioning Ranbaxy for future expansion. Ranbaxy to Demerge R&D Unit into a Subsidiary, Econ. Times, Feb 20, 2008, http://economictimes.indiatimes.com/News/News_By_Industry/Healthcare__Biotech/Ranbaxy_to_demerge_RD_unit_into_a_subsidiary/articleshow/2796824.cms. For more information concerning the capacity of developing countries with innovation capacity to access foreign technology, see S. P. Agarwal, Ashwani Gupta & R. Dayal, Technology Transfer Perspectives in Globalising India (Drugs and Pharmaceuticals and Biotechnology), 32 J. Tech. Transfer 397, 397-423 (2007); John H. Barton & EJ Emanuel, The Patents-Based Pharmaceutical Development Process: Rationale, Problems, and Potential Reforms, 294 JAMA 2075, 2075-82 (2005).

84 The Indian pharmaceutical company Cipla has a presence in all the 53 markets of Africa. In addition to the AIDS drugs, it supplies medicines for asthma, malaria, cancer, cardiac problems, antibiotics and a variety of other products to African countries. Nandini Patwardhan, India on African Safari, Express Pharma, http://www.expresspharmaonline.com/20070630/market01..html [hereinafter Patwardhan] (explaining how Indian pharmaceutical companies consider the potential demand for drugs within Africa as an opportunity not to be ignored).

85 The latest anti-malarials (single and multi-dose combination) and anti-retrovirals (ARVs), as approved by WHO, have experienced a huge demand. India is the preferred country to source pharmaceutical products because of its quality and its competitiveness. Id. India's full compliance with the TRIPS Agreement will only affect newer, patented medicines, particularly those that have been patented since 2005. These will be few, but the impact will be sizeable, as it will affect disease categories that show a high speed of new product development due to emerging resistance, such as antibiotics and antiinfectives (e.g. ARVs, TB drugs, anti-malarials), and new drug classes — such as those for cancer and diabetes which have little therapeutic competition/substitution. Sampath, supra note 21, at 718.

86 Patwardhan, supra note 84. Ranbaxy Laboratories recently acquired Be-Tabs Pharmaceuticals, the largest manufacturer of penicillin formulations in South Africa. According to the company's press release, the acquisition makes Ranbaxy the fifth largest generic pharmaceutical company in South Africa. Ranbaxy Concludes Be-Tabs Buyout in S. Africa, Hindu Bus. Line May 9, 2007, http://www.thehindubusinessline.com/2007/05/09/stories/2007050904010200.htm.

87 Patwardhan, supra note 84 (explaining how Indian pharmaceutical companies consider the potential demand for drugs within Africa as an opportunity not to be ignored). See generally PriceWaterhouseCoopers, Gearing up for a Global Gravity Shift: Growth, Risk and Learning in the Asia Pharmaceutical Market (2007), http://www.pwchk.com/webmedia/doc/633153381934174976_pharm_gb_gravityshift_may2007.pdf

88 The phrase “Big Pharma” is commonly used to refer to pharmaceutical companies such as Novartis, Hoffmann–La Roche and GlaxoSmithKline with revenue in excess of $3 billion, or R&D expenditure in excess of $500 million. See Select Committee on Health, House of Commons, Fourth Report, 2004-5, H. C. 42-I, available at http://www.publications.parliament.uk/pa/cm200405/cmselect/cmhealth/42/4205.htm.

89 Kazuhiro Asakawa & Ashok Som, Internationalization of R&D in China and India: Conventional Wisdom Versus Reality, Asia Pac. J. Mgmt (2008) (discussing the growing trend of foreign research and development investment in China and India). Further concerning the move by Big Pharma to outsource R&D to Asia see PriceWaterhouseCoopers, supra note 87, at 24-27.

90 Joanna Von Braun & Meir P. Pugatch, The Changing Face of the Pharmaceutical Industry and Intellectual Property Rights, 8 J. World Intell. Prop. 599 (2005) (discussing the need for change, based on the instability of the revenue stream for the development and marketing of innovative products).

91 James Gilbert, Preston Henske & Ashish Singh, Rebuilding Big Pharma's Business Model 1-10 (2003), http://www.www.bain.com/bainweb/publications (explaining that the blockbuster business model that underpinned the major pharmaceutical companies’ success is irreparably broken).

92 Nonetheless, generating revenue for universities was not the actual goal of the Bayh- Dole Act, which requires that the profits accruing to the beneficiary nonprofit organizations “be utilized for the support of scientific research or education.” 35 U.S.C. § 202(c)(7) (2000).

93 Council on Governmental Relations, The Bayh-Dole Act: A Guide To The Law and Implementing Regulations 1-4 (1999), http://www.cogr.edu/docs/Bayh_Dole.pdf.

94 Bart Verspagen, University Research, Intellectual Property Rights and European Innovation Systems, (Eindhoven Centre for Innovation Studies, Working Paper 06.05, March 2006).

95 J.H. Reichman & Paul Uhlir, A Contractually Reconstructed Research Commons For Scientific Data In A Highly Protectionist Intellectual Property Environment, 66 Law & Contemp. Probs. 315, 320 (2003).

96 Ian Ayres & Gideon Parchomovsky, Tradable Patent Rights: A New Approach to Innovation (Yale Law School, Public Law Working Paper No. 145), http://http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1020276#PaperDownload.

97 There is also some concern about the quality and breadth of patents issued by patent offices, notably some DNA patents. Some believe that in a number of cases the criteria of novelty and inventive step are not being met, and that broad patents are issued that could give the patent holders an overly-strong negotiating position vis-à-vis possible licensees. See generally Nuffield Council on Bioethics, Annual Report (2002), http://www.nuffieldbioethics.org/fileLibrary.pdf/nuffield_annual_report_2002.pdf.

98 See generally Paul A. David, David Mowery, & W. Edward Steinmueller, Analysing the Economic Payoffs from Basic Research, 2 Econ. of Innovation and New Tech. 73 (1992); Partha Dasgupta and Paul A. David, Toward a New Economics Of Science, 23 Pol’y Res. 487 (1994), available at http://www.compilerpress.atfreeweb.com.

99 David C. Mowery et al., The Growth Of Patenting And Licensing by U.S. Universities: An Assessment Of The Effects Of The Bayh–Dole Act of 1980, 30 Research Policy 99, 103 (2001).

100 See National Institutes of Health, Report of the National Institutes of Health (1998), http://www.nih.gov/news/researchtools/index.htm; see also Centre for Science in the Public Interest, http://www.cspinet.org/about/mission.html (last visited Apr. 12, 2008).

101 University of Cambridge Mission and Core Values, http://www.admin.cam.ac.uk/univ/mission.html (last visited Apr. 12, 2008).

102 Patents Act, 1977, c. 37, § 30 (Eng.) [hereinafter U.K. Patents Act]; see also Phillip B.C. Jones, Violation of a Patent License Restriction: Breach Of Contract Or Patent Infringement?, 33 IDEA: J. of Law & Tech. 225 (1993).

103 See Lorelei Ritchie de Larena, License to Sue? (FSU College of Law, Public Law Research Paper No. 279, Oct. 2, 2007), available at ssrn.com/abstract=1018715 (discussing the intersection of normative values between intellectual property and contract law).

104 Article 2(1) in the International Covenant on Economic, Social and Cultural Rights states that each “State Party to the present Covenant undertakes to take steps, individually and through international assistance and co-operation, especially economic and technical, to the maximum of its available resources, with a view to achieving progressively the full realization of the rights recognized in the present Covenant by all appropriate means, including particularly the adoption of legislative measures.” International Covenant on Economic, Social and Cultural Rights, Art. 2(1), Jan. 3 1976, available at http://www.unhchr.ch.html/menu3/b/a_cescr.htm. Additionally, Article 23 specifically identifies “the furnishing of technical assistance” as well as other activities, as being among the means of “international action for the achievement of the rights recognized.” Id. at Art. 23. Reaffirming this obligation in respect of Least-Developed Country Members (LDCs), the TRIPS Agreement states that “[d]eveloped country Members shall provide incentives to enterprises and institutions in their territories for the purpose of promoting and encouraging technology transfer to least-developed country Members in order to enable them to create a sound and viable technological base.” TRIPS Agreement, supra note 11, at Art. 66(2).

105 Concerning the current balance of rights and obligations, see Resolution 2000/7 of the UN Sub-Commission on Human Rights stating, “that since the implementation of the TRIPS Agreement does not adequately reflect the fundamental nature and indivisibility of all human rights, including the right of everyone to enjoy the benefits of scientific progress and its applications, the right to health …, there are apparent conflicts between the intellectual property rights regime embodied in the TRIPS Agreement, on the one hand, and international human rights law, on the other.” U.N. Sub-Commission on Human Rights Res. 2007/7, ¶ 2, U.N. Doc. E/CN.4/Sub.2/2000/L.20 (Aug. 17, 2000), available at http://www.www.unhchr.ch/Huridocda/Huridoca.nsf/0/c462b62cf8a07b13c12569700046704e?Opendocument.

106 A license provides a party with permission to do an act that would otherwise be prohibited. Licenses may be made: orally or in writing; may be express or implied by the court for business efficacy: U.K. Patents Act, supra note 102, at § 67. For example, an exclusive licensee can sue infringers in their own right. As with other licenses, an exclusive license may be made orally (there is no statutory requirement for the license to be made in writing) and may be express or implied. Morton-Norwich v. Intercen & United Chemicals [1981] FSR 337.

107 Exclusivity is also very important to university spin-offs in the biomedical field because both rely on protected intellectual property as their main asset in raising capital for development. Organisation for Economic Co-operation and Development [OECD], Patents and Innovation: Trends and Policy Challenges 22 (2004), http://www.oecd.org/dataoecd/48/12/24508541.pdf.

108 Association of University Technology Managers (AUTM), In the Public Interest: Nine Points to Consider in Licensing University Technology 12 (2007), http://www.autm.net/aboutTT/Points_to_Consider.pdf [hereinafter AUTM].

109 Id.

110 Id at 13.

111 The Lambert Model contracts were constructed by stakeholders from the UK University Research & Industry Links (AURIL), the Confederation of British Industry (CBI) and the Small Business Service (SBS). Lambert Working Group on Intellectual Property, Model Agreements (2005) http://www.www.innovation.gov.uk/lambertagreements/index.asp?lvl1=2&lvl2=0&lvl3=0&lvl4=0.

112 AUTM , supra note 108, at 12.

113 Oliver Herzfeld & Richard Bergovoy, Trademark Licensing Made Easy (Part I), Managing Intellectual Property, July 2007, http://www.www.managingip.com/Article.aspx?ArticleID=1393888.

114 Id.

115 Id.

116 Id.

117 Id.

118 Id.

119 Id.

120 AUTM , supra note 108, at 12.

121 Id. at 13.

122 Id.

123 Id.

124 AUTM, supra note 108, at 12.

125 Id. at 2.

126 William Cornish & David Llewelyn, Intellectual Property: Patents, Copyrights, Trademarks and Allied Rights 284 (2007) [hereinafter Cornish & Llewelyn].

127 Id.

128 Id.

129 Id.

130 Id.

131 Id. at 292.

132 Consolidated Version of the Treaty Establishing the European Community, Art. 28, 2002 O.J. (C 325), available at http://www.interreg3c.net/sixcms/media.php/5/EC+Treaty.6806.pdf [hereinafter Treaty Establishing the European Community].

133 See generally David T. Keeling, Intellectual Property Rights in EU Law: Free Movement and Competition Law 6-7 (2003).

134 Treaty Establishing the European Community, supra note 132, at Art. 30.

135 In Case 15/74, Centrafarm B.V. v Sterling Drug, 1974 E.C.R. 1147, the European Court of Justice (ECJ) held that the owner of the patent in Holland could not use its patent to block imports into Holland of drugs which had been put onto the market in the U.K. with its consent under the protection of its U.K. patent in Case 187/80, Merck Inc. v. Stephar BV, 1981 E.C.R 2063. Regarding trademarked pharmaceuticals, see Case C-348/04, Boehringer Ingelheim KG and Boehringer Ingelheim Pharma GmbH & Co. KG v Swingward, available at oami.europa.eu/en/mark/aspects/pdf/JJ040348.pdf. The ECJ said that rules allowing trademark owners to object to parallel imported pharmaceuticals within the European Economic Area (EEA) apply to re-labelled, as well as re-boxed, products.

136 The TTBE (Commission Regulation 772/2004, 2004 O.J. (L 127) (EC)) provides a block exemption that creates a safe harbor. Note that the technology transfer agreement must concern the production or supply of goods. Note further that R&D agreements are not covered by the TTBE, but Commission Regulation 2659/2000, 2000 O.J. (L 304) (EC).

137 Case 258/78 L.C. Nungesser KG & Kurt Eisele v. Commission of the European Communities, 1982 E.C.R. 2015.

138 Treaty Establishing the European Community, supra note 132, at Art. 28.

139 Cornish & Llewelyn, supra note 126, at 292-3. See also Sergio Baches Opi, The Approaches Of The European Commission and The U.S. Antitrust Agencies Towards Exclusivity Clauses in Licensing Agreements, B.C. Int’l & Comp. Law Rev. 85, 102-03 (2000). Art. 81(3) of the EC Treaty provides by way of exception that “the provisions of paragraph 1 may, however, be declared inapplicable in the case of: any agreement … between undertakings,” which contributes to promoting technical or economic progress and “which does not afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.” EC Treaty, supra note 18, at Art. 81(3).

140 Cornish & Llewelyn, supra note 126, at 292-3. See also Opi, supra note 139, at 102-03.

141 Case 258/78 L.C. Nungesser KG & Kurt Eisele v. Commission of the European Communities, 1982 at para. 57, eur-lex.europa.eu.

142 Id.

143 The test of whether an agreement may benefit from the block exemption is whether the parties to the agreement fall within specified market share thresholds. Where the parties are competitors, the threshold is reached if their combined market share is 20% or more. Where they are not, the threshold is only crossed if either of them separately has a 30% share or more. See TRIPS Agreement, supra note 11, at Art. 3. There is reciprocity when each party is licensing competing technologies to the other. For the definitions of reciprocal and nonreciprocal agreements, see id. at arts. l(c)-(d).

144 Cornish & Llewelyn, supra note 126, at 293.

145 Id.

146 Id. On the distinction between absolute and open exclusivity, see Commission Notice, Guidelines on the Application of Article 81 of the EC Treaty to Technology Transfer Agreements, 2004 O.J. (C 101) (EU) [hereinafter Article 81 Guidelines].

147 Cornish & Llewelyn, supra note 126, at 293.

148 Id. Active sales by the licensee are made by actively approaching individual customers inside another distributor's exclusive territory by for instance direct mail or visits or other promotions specifically targeted at that customer group; whereas sales in response to unsolicited requests from individual customers are considered passive sales. Commission Notice, Guidelines on Verticle Restraints, para. 50, 2000 O.J. (C 291) (EC) (2000).

149 E.g., Article 81 Guidelines, supra note 146, at paras. 63, 64, 77.

150 Case 258/78 L.C. Nungesser KG & Kurt Eisele v. Commission of the European Communities, 1982 E.C.R. 2015, para. 44.

151 The standard improvement clause in a patent license would stipulate: “If during the continuation of this Agreement the Owner shall develop or discover any improvement to any of the Inventions (‘Improvement’), the Owner shall promptly notify the Licensee and provide full details to the Licensee.” Mark Anderson, Technology Transfer; Law, Practice and Precedents 42 (2d ed. 2003).

152 Terrell on Patents 10-52, (16th ed. 2005). See also Richard Binns & Bryan Driscoll, Intellectual Property Issues in R&D Contracts, 1 Pharm. Sci. & Tech.Today 95, 99 (1998).

153 Philip Mendes, International Trade Center, Licensing and Technology Transfer in the Pharmaceutical Industry, in Exporting Pharmaceuticals: A guide for small and medium-sized exporters 17 (2005), available at http://www.wipo.int/sme/en/documents/pharma_licensing.html.

154 See generally Cornish & Llewelyn, supra note 126, at Ch. 7: Property Rights and Exploitation.

155 Id. See also Donald M. Cameron & Rowena Borenstein, Ogilvy Renault LLP, Key Aspects of IP License Agreements 22 (2003), http://www.jurisdiction.com/lic101.pdf.

156 See generally National Broach v Churchill Gear [1965] R.P.C. 61.

157 AUTM, supra note 108, at 4.

158 Id.

159 Where the nature of the licensed subject matter leaves any room for uncertainty, the licensor may be advised to add an exclusionary clause pointing out that “improvement'’ does not include developments to materials or processes useful in practicing the inventions of the licensed patents, but which do not themselves infringe the licensed claims of the licensed patent: Harold Einhorn, LexisNexis, Ch. 6A: Government, University and Biotechnology Licensing, in Patent Licensing Transactions § 6A.03[c] (1968), http://www.lexisnexis.com/practiceareas/ip.pdfs/531CH6A.pdf.

160 In the U.S.A, if the licensee participated in the improvement enough to qualify as a named inventor, he will have the right of use regardless of the existence of a license. See 35 U.S.C. § 262 (2001).

161 AUTM, supra note 108, at 4. Note that the “priority date” or the date of filing of the first application marks the point at which the patent will be examined for novelty, both at home and in the case of subsequent foreign applications: Paris Convention, supra note 25, at Art. 4.

162 AUTM, supra note 108, at 4.

163 Id.

164 See TTBE, supra note 18, at Art. 5 and recital (14).

165 The Commission may withdraw the benefit of the block exemption pursuant to Article 29(1) of Regulation (EC) 1/2003 (the Modernisation Regulation) where it finds in a particular case that a technology transfer agreement to which the exemption provided for in Article 2 applies, nevertheless has certain effects which are incompatible with the conditions laid down in Article 81(3) of the EC Treaty. Council Regulation 1/2003, of 16 December 2002 on the Implementation of the Rules on Competition Laid Down in Articles 81 and 82 of the Treaty, 2003 O.J. (L 1) 1 (EC). See also TTBE, supra note 18, at Art. 6 and recital (16).

166 Intel Technologies v. Via Technologies Inc. & Anor, [2002] EWCA (Civ) 1905, [72] (Eng.), available at http://www.bailii.org/ew/cases/EWCA/Civ/2002/1905.html.

167 An express reservation of rights in a licensing agreement can ensure that the PRO's institutional objectives to support humanitarian applications of its technology are not inhibited by an overly broad definition of the licensee's rights: Section 2: Specific Strategies and Mechanisms for Facilitating Access to Innovation, in MIHR Handbook, supra note 74, at 35, 41, http://www.www.iphandbook.org/handbook/ (follow “Specific Strategies and Mechanisms for Facilitating Access to Innovation” hyperlink) (last visited June 7, 2008).

168 U.K. Patents Act, supra note 102, at § 60(5)(a). Note: although both Article 69 and the Protocol of the European Patent Convention (EPC) specify that the scope of the right is determined by the terms of the claims, the experimental use exception in Europe has its origins in Art. 31(b) of the 1975 Luxembourg Convention on the Community Patent (Community Patent Convention). This provision became Art. 27(b), by means of the 1989 Agreement relating to Community Patents (Council Agreement 89/695/EEC, Relating to Community Patents, 1-27, 1989 O.J. (L 401)), that amended the 1975 Convention. The same text of Art. 27(b) is now found in Art. 9(b) of the draft Community Patent Regulation of 2004 which states that a “Community Patent shall not extend to acts done for experimental purposes relating to the subject matter of the patented invention.” Proposal 10786/00, for a Council Regulation on the Community Patent, Art. 9(b), 2000 O.J. (C 337 E) (EU).

169 AUTM, supra note 108, at 2.

170 Id.

171 Id. See, e.g., Gene Service, Material Transfer Agreements for the Supply of Biological Matter, http://www.geneservice.co.uk/products/mtas/Tomlinson_IJ_MTA_NIH_02_05_07.pdf (last visited Apr. 12, 2008).

172 AUTM, supra note 108, at 2.

173 See, e.g., Indian Patents Act, supra note 12, at §60(5)(b).

174 Cornish & Llewelyn, supra note 126 at 254-55.

175 [1999] R.P.C. 397 (A.C).

176 Lionel Bentley & Brad Sherman, Intellectual Property Law 545 (2002).

177 Article 64 (3) of the EPC provides that any infringement of a European patent shall be dealt with by national law. European Patent Convention, Art. 64(3), Oct. 5, 1973, http://www.epo.org/patents/law/legal-texts.html/epc/1973/e/ma1.html. Therefore no provision regarding defenses to infringement is found in the EPC. Concerning the membership of the EPC, see Member States of the European Patent Organisation, http://www.epo.org/aboutus/epo/member-states.html#contracting (last visited May 8, 2008).

178 Most Members of the EPO have introduced a uniform, general non-industry specific experimental use exception in their patent statutes. For example, section 60(5)(a) and (b) of the U.K. Patents Act, refer to an act which is “done privately and for purposes which are not commercial” followed immediately by reference to an act which “is done for experimental purposes relating to the subject-matter of the invention.” The U.K. Patents Act, supra note 102, at § 60(5)(a), (b). See also Cornish & Llewelyn, supra note 126, at 254

179 See Monsanto v. Stauffer Chem. Co. [1985] R.P.C 515 (A.C.); Smith Kline & French Laboratories Ltd. v. Evans Medical Ltd. [1989] F.S.R 513. The Court in the latter case observed that “what is or is not an experiment must depend upon the facts of each case but can include experiments designed with a commercial end in view.”

180 Inhale Therapeutic Systems Inc v Quadrant Healthcare Plc [2002] R.P.C. 21.

181 307 F.3d 1351 (Fed. Cir. 2003), cert. denied, 123 S. Ct. 2639 (2003).

182 The later concept reflects the common law experimental use exception, considered to have originated in the remarks of Justice Story that the legislature could not have intended to punish those who undertook “philosophical experiments” with protected items: Whittemore v. Cutter, 29 F. Cas. 1120, 1121 (C.C.D. Mass. 1813).

183 Cornish & Llewelyn, supra note 126, at 254.

184 Id.

185 Monsanto Co v Stauffer Chemical Co [1985] RPC 515, (A.C.).

186 Cornish & Llewelyn, supra note 126, at 255.

187 The Hatch-Waxman Act is also known as the Drug Price Competition and Patent Term Restoration Act of 1984. 35 U.S.C. §271 (2006). It allows generics to win FDA marketing approval by submitting bioequivalence studies. Manufacturers of generic pharmaceuticals are permitted to use the technology of a patented pharmaceutical to perform work that would assist in the marketing or regulatory approval of the generic product, while the patent is in force. This “Bolar” provision then allows the generic producer to market and manufacture their goods as soon as the patent expires. It also grants a period of additional marketing exclusivity to make up for the time a patented pipeline drug remains in development. This extension cannot exceed five years, and it is in addition to the 20 years exclusivity granted by the issuance of a patent.

188 “Conducting the necessary studies and trials with a view to the application of paragraphs 1, 2, 3 and 4 and the consequential practical requirements shall not be regarded as contrary to patent rights or to supplementary protection certificates for medicinal products.” Council and European Parliament Directive 2004/27/EC, of 31 March 2004 Amending Directive 2001/83/EC on the Community Code Relating to Medicinal Products for Human Use, Art. 10, 2004 O.J. (L 136) 6 (EC). This provision was implemented in the UK Patents Act as follows: “An act which, apart from this subsection, would constitute an infringement of a patent for an invention shall not do so if … it consists of: (i) an act done in conducting a study, test or trial which is necessary for and conducted with a view to the application of paragraphs 1 to 5 of Article 13 of Directive 2001/82/EC or paragraphs 1 to 5 of Article 10 of Directive 2001/83/EC, or (ii) any other act which is required for the purpose of the application of those paragraphs.” The U.K. Patents Act, supra note 102, at § 60(5). Note the trade-off is that Directive introduced an eight year data exclusivity period with an additional two years of market exclusivity so that a generic medicinal product “shall not be placed on the market until ten years have elapsed from the initial authorization of the reference product.”

189 Merck KGaA, Petitioner v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005).

190 Drug Price Competition and Patent Term Restoration Act of 1984, 35 U.S.C. §271(e)(1) (2006). This safe harbor provision of the Hatch-Waxman Act exempts from patent infringement the use of a patented invention “solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs.” The scope of protection under the safe harbor provision has been the subject of considerable uncertainty and controversy.

191 Cornish & Llewelyn, supra note 126, at 255.

192 A narrow interpretation of the experimental use exception in Madey v. Duke, 307 F.3d 1351 (Fed. Cir. 2002), impedes the “Progress of Science and useful Arts.” Brief of Amici Curiae Consumer Project on Technology and Public Knowledge in Suppport of Petition for Writ of Certiorari, 307 F.3d 1351 (Fed. Cir. 2003).

193 Andrew Gowers, Gowers Review of Intellectual Property 45-76 (2006), http://www.hm-treasury.gov.uk/media/6/E/pbr06_gowers_report_755.pdf

194 307 F.3d 1351, 1362 (Fed. Cir. 2002).

195 AUTM, supra note 108, at 11.

196 Id.

197 Michael A. Heller, The Tragedy of the Anticommons: Property in the Transition from Marx to Markets, 111 Harv. L. Rev. 621, 626 (1988).

198 See J. Barton, Patents and the Transfer of Technology to Developing Countries, in OECD, Patents and Innovation: Trends and Policy Challenges 26, 26 (2004), available at http://www.oecd.org/dataoecd/48/12/24508541.pdf.

199 Benjamin Coriat & Fabienne Orsi, Are “Strong Patents” Beneficial to Innovative Activities? Lessons from the Genetic Testing for Breast Cancer Controversies, 14 Indus. & Corp. Change 1205, 1212-13 (2005)

200 Id. at 1213. Note however the difficulties Myriad Genetics experienced in attempting to dominate the European market; the grant of three patents on BRCA genes by the European Patent Office (EPO) to the company provoked significant controversy.

201 Jonathan F. Tait & The Intellectual Property Subcommittee of the Economics Committee, Points to Consider in Preparing License Agreements for Patented Genetic Tests 1-2 (2004), available at http://www.acmg.net/AM/Template.cfm?Section=Search2&section=Products1&template=/CM/ContentDisplay.cfm&ContentFileID=66.

202 AUTM, supra note 108, at 5.

203 See, e.g., Conditions for Patentability; Novelty and Loss of Right to Patent, 35 U.S.C § 102 (2008) (providing a “grace period” of one year prior to the date of application in the United States). Disclosures by the inventor during the “grace period” do not have a patentdefeating effect. In contrast, other patent laws, including that in the European Patent Convention (EPC), have an “absolute novelty” requirement such that any disclosures, including those by an inventor himself, made prior to the date a patent application is filed, are considered prior art.

204 See, e.g., South African Institute of Intellectual Property Law, Copyright Information, http://www.saiipl.org.za/introductio-patents.htm (explaining that in South Africa it is possible to file a provisional patent application, a complete patent application, or a Patent Cooperation Treaty (PCT) International Patent Application which also designates South Africa). If the idea has not been finalized in detail then a provisional patent application is usually the first step in obtaining patent protection while having 12 months during which to conduct further experiments and make further improvements. Id.

205 Paris Convention, supra note 25, at Art. 4.

206 See World Intellectual Property Organization, Patent Cooperation Treaty, (Jun. 19, 1970), available at http://www.wipo.int/pct/en/texts/articles/atoc.htm. Currently, 124 countries in the world are members of the PCT, with South Africa having joined in 2000. World Intellectual Property Organization, PCT: One Million and Counting 2 (2004), http://www.wipo.int/export/sites/www/pct/en/million/leaflet.pdf. The cost of filing a PCT application typically ranges from R20,000 to R45,000. The main advantage of filing a PCT application is that the deadline for filing patent applications in countries or territories of interest is delayed by a further 18 months.

207 See Massachusetts Institute of Technology v. AB Fortia, 774 F.2d 1104 (Fed. Cir. 1985). See also Ann L. Monotti, The Legal Issues: Patenting & Technology Transfer, users.ox.ac.uk/∼edip/Monotti_paper.doc (last visited June 17, 2008).

208 AUTM, supra note 108, at 10.

209 See European Patent Office, DG3: DBA case G 0003/93 EBA (Aug. 16, 1994), available at legal.european-patent-office.org/dg3/biblio/g930003ep1.htm (regarding the underlying legal principles EPO Enlarged Board of Appeals).

210 See European Patent Organisation, The Patent Process, http://www.epo.org/aboutus/office/annual-reports/2005/business-report/patent-process.html (paying filing fee during priority application leads to EPO issuance of a search report and a written opinion, which may provide the applicant with advanced notice of the doubtfulness of patentability).

211 Fuel Economy Co Ltd v Murray (1930) 47 R.P.C. 346, 353; Matthew Jones, Licensee Estoppel: An Overview Of The Position Under English And European Law, 2 J. Intell. Prop. L. & Prac. 750-55 (2007).

212 MedImmune, Inc. v. Genentech, Inc., 127 S. Ct. 764 (2007).

213 Id. at 776.

214 See id. at 766. Genentech's legal argument was that the suit did not involve a “case or controversy” (required by the Constitution and the Declaratory Judgment Act) because there was no real legal dispute between the parties as long as there was a license. The question presented to the Supreme Court was: Does Article III's grant of jurisdiction of “all Cases … arising under … the Laws of the United States” implemented in the “actual controversy” requirement of the Declaratory Judgment Act, 28 U.S.C. § 2201(a), require that a patent licensee refuse to pay royalties and materially breach the license agreement before the licensee can sue to have a court declare the patent invalid, unenforceable or not infringed?

215 Id at 777.

216 Id at 776.

217 See id. (“Promising to pay royalties on patents that have not been held invalid does not amount to a promise not to seek a holding of their invalidity.”).

218 Of course, such arguments may be less persuasive where, as in MedImmune, the license covers pending applications that later issue as challenged patents (i.e., the licensee never had the opportunity to analyze the claims of the licensed patents), and a dispute develops over the validity and/or infringement of the new patents. But see Gen-Probe Inc. v. Vysis, Inc., 359 F.3d 1376 (Fed. Cir. 2004) (holding that unless a licensee breaches the license by refusing to pay royalties, there is no actual controversy and the federal courts lack jurisdiction.).

219 See Lear v. Adkins, 395 U.S. 653 (1969) (regarding the enforceability of such a provision).

220 See, e.g., The Drug Price Competition and Patent Term Restoration Act, 21 U.S.C. §301 (1984), which provides for a notification process similar to that by Generic Drug Manufacturers under paragraph IV of Section 505(j) of the Drug Price Competition and Patent Term Restoration Act of 1984.

221 Article 5(1)(c) of the TTBE states that the exemption will not apply to “any direct or indirect obligation on the licensee not to challenge the validity of intellectual property rights which the licensor holds in the common market, without prejudice to the possibility of providing for termination of the technology transfer agreement in the event that the licensee challenges the validity of one or more of the licensed intellectual property rights.” See TTBE, supra note 18, at Art. 5(1)(c).