Proponents of the natural rights theory argue that an inventor has an inherent right in the fruits of his/her intellect which include patents. Their belief is that “patents are the heart and core of property rights, and once they are destroyed, the destruction of all other property rights will follow automatically….”²³ As Locke expresses it, “every man has a property in his own person. The labour of his body, and the work of his hands, we may say are properly his.”²⁴ Likewise, Smith posits that “the labours of the mind and productions of the brain are as justly entitled to the benefit and emoluments that may arise from them, as the labours of the body are.”²⁵ For proponents of this theory, the grant of patent monopoly serves as a precondition for a liberal economic order.²⁶ And, the society, represented by the state, has an obligation to recognize, protect, and enforce the property rights that accrue from an invention.²⁷ In essence, the natural rights theory of patents serves the economic interests of private right holders, by supporting the grant of strong patents for inventions.

More fundamentally, the natural rights theory played a crucial rhetorical role in the strategy of industry groups to convince governments in developed countries to demand an ‘effective’ and ‘adequate’ protection for patents across countries.²⁸ As Oddi observes, during the Uruguay Round, the argument, based on a natural rights premise, was that ‘counterfeiting’, ‘theft’, ‘pirating’, and ‘infringement’ occur any time a patented invention is copied.²⁹ Accordingly, Article 27 of TRIPS—on patentable subject matter—implements natural rights theory, by providing that all inventions, including certain categories of inventions that have been traditionally excluded from protection by many countries, are now of such importance to international trade that they must be protected universally.³⁰ In addition, efforts by less developed countries to limit patent rights on grounds of public health and interest are made subject to the condition that such measures must not restrain trade and must be consistent with TRIPS.³¹

Thus, as argued in chapter “Evolutionary Trajectories of Patents and the Politics of Exclusion in Sub-Saharan Africa,” industry groups succeeded in obliging countries to recognize this variant form of patents-as-natural-entitlement claim for 20 years under their domestic positive laws irrespective of the perceived value of the invention to a particular country and the welfare cost. The natural rights theory was thus employed to entrench the economic interests of pharmaceutical right holders. The downside is that relying on the natural rights theory to characterize the privilege conferred by the patent system as a claimed property right (as manifested in TRIPS) could imperil public health in poor countries. This potential threat to public health and access to medicine issues is especially pronounced in SSA, where the level of local inventiveness is low. The fact that the overwhelming majority of pharmaceutical patents granted by SSA countries are to foreigners speaks loudest.³²

Nonetheless, there are limitations inherent in the natural rights theory of property as espoused by scholars. For example, Locke admits that to appropriate from the public domain, “enough and as good [must be] left in common for others.”³³ In addition, the appropriation should not cause any ‘waste.’ Today, patents as the primary juridical mechanism for controlling inventions run afoul of this proviso by giving the inventor the exclusive right to make, use, sell and/or import the invention (subject to a time limit and the other exceptions that limit patents).³⁴ The limitations in the natural rights theory should thus be employed to moderate the far reaching claims of patents-as-natural-rights in academic and policy discourse. That way, the public would not be made worse-off by the appropriation from the public domain of intangible resources.

Related to the above is the criticism that the natural rights theory fails to acknowledge the cumulative nature of the inventive process. Inventors rely on and build upon an existing stock of knowledge and inventions that may be in the public domain. As Mgbeoji aptly opines, “the reality is that inventions and innovations do not spring ex nihilo. Inventors, artists and creative people draw from the stock of pre-existing human knowledge and cultures.”³⁵ This lack of truly independent inventions makes it imperative to acknowledge the interests of the ‘other’ contributors to innovation in matters of pricing and distributing pharmaceuticals in the market place. On her part, Piper observes that the failure to conceive of innovation and the social good as being cumulative has impoverished patent theory and practice.³⁶

The natural rights theory also focuses on the individual inventor and thus fails to provide an explanation for granting pharmaceutical patents to companies. The natural rights theory does not explain the phenomenon in which an employer holds the right in the ‘inventive genius’ of the employee.³⁷ It also does not acknowledge the existence of interests in collectively-engineered inventions within indigenous communities. Critics also point out that the patents-as-natural-rights hypothesis does not fully explain the positive character of patent law. As Penrose notes, the patent system is a social institution established for a social purpose.³⁸ Patent law is not derived from any notion of reason, upon which the concept of natural right is justified; patent rights are a creature of statute. Indeed, ‘natural’ phenomena are excluded from patentability. The fact that inventors have to go through administrative processes to obtain patent rights undercuts any notions of patents-as-natural-rights. Notwithstanding these criticisms levelled at the natural rights theory, this theory played a crucial role in justifying the design of the globalized patent system as epitomized by TRIPS. This natural rights entitlement approach was adopted because it represented the position of more powerful nations.³⁹

Like the natural rights theory, the essence of the reward theory is that an inventor deserves reward for introducing new solutions to human problems. It posits that an inventor has a right to receive rewards for the useful services, via inventions, rendered to society, and, that society has a moral obligation to protect this exclusive reward.⁴⁰ This theory also argues that the reward offered to inventors serves as a morale booster for inventors to apply their inventive genius. It follows that without the ‘prize’ under the patent system inventions would not be made. This argument is, however, nuanced by studies, which indicate that the “current patent law discouraged drug companies from developing new drugs by allowing them to make excessive profits through minor changes to existing pharmaceuticals.”⁴¹ In addition, the patent system administered today is unable to ensure, in many instances, that the reward goes where it is most deserved.⁴²

There are also several inventions that were made without taking into consideration the reward rationale for the grant of patents to inventions. The aphorism that ‘necessity is the mother of invention’ reflects the reality that a number of significant inventions would be made irrespective of the availability of patent reward.⁴³ In most instances, the reward comes into the fray after the invention has hit the market-place. There are also instances whereby the inventor never enjoys this supposed reward or recognition in his/her lifetime. For example, Rosalind Franklin’s contributions to the discovery of the structure of the DNA were acknowledged only after the Nobel Prize was awarded to Francis Crick, James Watson, and Maurice Wilkins in 1962. In addition, a number of ground-breaking inventions exist by means that can be attributed to accidental discoveries.

Yet, another flaw in the reward theory is that it confuses inventiveness with the commercialization of inventions. Perhaps, a more accurate argument is that patents serve as a useful incentive for commercializing an invention, by offering profits to those desirous of such commercial enterprises.⁴⁴ In essence, the argument of the reward theory becomes relevant after the invention has been undertaken. Again, most of the criticisms that have been levelled at the natural rights theory also apply to the reward theory, and, therefore, need not be rehashed here. Suffice it to say that the reward rationale for patents is not attuned to the communal character of ownership in traditional knowledge/resources in SSA.

The idea of this theory is that a patent constitutes a bargain between the inventor and the public, in which the patentee obtains exclusive protection for a set-period of time in exchange for giving the public information about the invention.⁴⁵ This disclosure is expected to take place in a form of publication of the invention and the details of how it works in the course of the patent application process. This contract theory also assumes that the information disclosed in return for the grant of an exclusive patent right is enough for the public to work the invention. As Amani explains, “the disclosure essentially functions as a ‘how-to’ guide providing information so that others are able to make and use the invention.”⁴⁶

The disclosure theory is not free from criticism, however. It is axiomatic that inventors have made it a practice to disclose as little as they can in order to stifle competition. As Vaver perspicaciously puts it,

The game for patentees, especially in highly competitive industries, is to reveal as little and to claim as much as possible. The less disclosed, the more that can be retained as competitive edge. The wider one claims, the tougher it is for imitators.⁴⁷

The art of drafting patents in an arcane manner in order to disclose as little information as possible has rendered this disclosure rationale meaningless.⁴⁸ It may be said that this practice of disclosing little information during the patent application process undermines the TRIPS Agreement. Specifically, Article 29.1 mandates applicants to describe the invention in enough detail that a person skilled in the art may carry out the invention from the information disclosed. This goal of patent law as a quid pro quo did not gain significant influence in the design of the patent rules under TRIPS as compared to the copyright rules. Patent law focuses mainly on the pecuniary benefits for inventors to the disadvantage of the public interest. In consequence, the alleged contract between an inventor and society is out of balance, because patent law has become a primary tool for securing private market share.⁴⁹ The implication is that the grant of exclusive pharmaceutical patent rights generates short term benefits for the right holder but in the long term the welfare cost is detrimental to human development in poor countries.

Moreover, even if the alleged disclosure is sufficient to work the invention, most countries in SSA lack the capability to assimilate even the state-of-the-art into their technological base.⁵⁰ In SSA, the capacity of most countries (save South Africa) to manufacture medicines remains largely utopian. Also SSA countries generally lack the technological competence to collate and make accessible to local researchers and innovators, the technical and scientific information contained in pharmaceutical patent applications. Accordingly, the disclosure of technical biotech information during the application process may not be sufficient to work the invention in such countries. Such technical information could be of great value to countries in SSA if they invest in the viable scientific and technological infrastructure needed to work the invention.

In addition, the IP systems in SSA countries still have in place juridical mechanisms for protecting trade secrets in accordance with TRIPS. Therefore, if inventors believed that the use of trade secret laws or confidential information systems would better serve their interests, the patent system would be of minimal use to them. Again, the disclosure theory confuses the commercialization of inventions with the encouragement of inventiveness through the grant of patents.⁵¹ It is speculative in most instances to estimate the economic value of an invention prior to its commercialization, and, therefore, this social contract theory cannot reasonably explain why inventions occur. Thus, the social contract argument comes into play after the invention has been made and at a time when the inventor seeks to exploit the economic reward. Also, the fact that inventions are called forth by the needs of society renders the rationale of the disclosure theory questionable.⁵²

The incentive theory is arguably the most popular in contemporary patent discourse. The reason is that the economic rationale of the incentive theory resonates with the ideology of capitalism and free market economics spearheaded by the US. For example, the US Constitution explicitly grants Congress the power “to promote the progress of Science and useful Arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”⁵³ The US Supreme Court has also affirmed that patent protection is based on the idea of economic incentives.⁵⁴ This economic worldview of patents has shaped the trajectory of the globalized patent system, by giving primacy to the rights of pharmaceutical holders over the public interest to have access to medicines.

The hypothesis of the incentive rationale is that patent-incentives are needed to encourage technology transfer, R&D, and economic growth. The assumption, according to Penrose, is that it is desirable to encourage invention for its own sake and that a patent monopoly is the best mode of executing it.⁵⁵ Put differently, proponents of this theory argue that the patent system creates incentives that are needed to induce people to produce particular objects beneficial to society.⁵⁶ For his part, Merges notes that the patent system’s key economic goal is to reward “the achievement of a significant technical advance and thereby to spur innovative technological development.”⁵⁷ Thus, without the grant of patent-incentives potential inventors would be unwilling to put their industry to work.

As shown in chapter “Evolutionary Trajectories of Patents and the Politics of Exclusion in Sub-Saharan Africa,” during the Uruguay Round, industry groups argued that globalizing US/western IP standards would fuel creativity and innovation, generate higher rents, attract foreign investment, and encourage a more rapid transfer of technology. This incentives argument by industry was embraced by developed nations seeking to protect their economic interests and it consequently gained a cogent articulation in the TRIPS Agreement. For example, the main objectives of the TRIPS Agreement stipulate that “the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology….”⁵⁸ This goal is further strengthened in Article 66.2, which provides that incentives must be provided to enterprises to encourage technology transfer to LDCs. Thus far, TRIPS consolidates the expression of protectionism as a necessary condition to promote innovation and to stimulate technology and capital flows to less developed countries.⁵⁹ The downside is that the use of patents as the primary juridical mechanism for providing incentives can serve as a drawback in the pursuit of alternative mechanisms to encourage innovation.

Furthermore, the incentive theory attempts to establish a causal relationship between patent incentives, inventiveness and economic progress. In so doing, it posits that adopting a strong IP protection system will ensure that a country’s resources are allocated to their most valuable uses and thus promote economic growth and development.⁶⁰ However, both scholarly and economic studies of the international patent system conclude that the ‘relationship’ between strong patents and technology transfer is either weak or non-existent.⁶¹ As Mgbeoji argues, the evidence presented in defence of the alleged connection between strong patents, foreign direct investment and economic growth is anecdotal; in other instances the outcomes of such studies are based on debatable assumptions.⁶² Indeed, China’s explosive economic growth and technological advancement does not support revisionist’s attempts to correlate strong patent protection to economic development.⁶³ The point here is that enhanced patent protection does not necessarily stimulate innovation and technological advancement.⁶⁴

Moreover, there is little question that many inventions are created as a result of competitive market pressures.⁶⁵ As Chandra rightly notes, “the patent system stimulates innovation only where industry sees the opportunity for increasing sales and market shares.”⁶⁶ It is also difficult to deny that patents-as-incentive theory is more suited to developed countries than less developed countries in SSA. This is because patents do not incentivize the creation of drugs to treat diseases prevalent in poor countries.⁶⁷ The incentive argument for pharmaceutical patents in SSA is also not credible because “patent-driven research is primarily supported by profits derived from the lucrative western markets and not by any anticipated profits in impoverished nations.”⁶⁸ Further, the grant of patents does not offer any incentive for inventiveness when a country lacks infrastructure necessary to create patent-induced innovation.⁶⁹ In support of this conclusion is Oddi’s observation that the ratio of patent-induced inventions to total inventions in less developed countries is minimal.⁷⁰ For his part, Sachs points to a global chasm in innovation and technological advance, indicating that there is “a 96-fold higher ratio of patents per capita in the top ten countries than in the rest of the world.”⁷¹ There is limited correlation between the number of registered patents and innovation. For this reason, strong patent regimes should not be promoted as the means to secure direct investment in pharmaceuticals to less developed countries.⁷²

Also, the patents-as-stimulant for inventiveness argument does not take account of several other factors within the environment in which the inventive activities occur. Factors that contribute to technological innovation include the desire for academic honour, promotion, respect among peers, job security, the presence of biological resources in the global south, and the contribution of the labour force.⁷³ Without doubt, the providers of the social environment conducive to inventiveness contribute towards innovation.⁷⁴ As such, “the recognition that innovation is a social, collaborative phenomenon changes the way that policy-makers, researchers, industry and technology consumers ought to view and appreciate IP: as something to be shared and built upon rather than as something to accumulate for its own sake.”⁷⁵

Again, the presence of a number of serendipitous, but significant, inventions assails the incentive-inducement argument of the patent system. Historical evidence suggests that there was no dearth of inventions before the concept of patent law was introduced in Europe. As shown in chapter “Evolutionary Trajectories of Patents and the Politics of Exclusion in Sub-Saharan Africa,” Brunelleschi invented his sea-craft before the patent system was first introduced in Florence Italy. Also, the patent system was introduced when Venice was already at the height of its development.⁷⁶ Indeed, the delayed adoption of a patent system allowed most developed countries to develop technological bases in order to propel industrial advancement. As Hestermeyer presciently notes, “Switzerland and the Netherlands both industrialized without a patent system.”⁷⁷

Another view is that patent rights do not generally vest in the natural person who is supposed to be incentivized. The fact that 90 % of all patents are granted to employers, renders the argument of the incentive theory tantamount to “saying that you can spur the donkey on by offering a carrot to its rider.”⁷⁸ Mgbeoji notes that recognizing an employer’s property in the invention of the employee contradicts the original purpose of the patent system, which was to provide incentives to individual inventors for their ‘inventive genius.’⁷⁹ Also, the patents-propel-inventiveness hypothesis conflates the distinction between inventiveness and commercialization, by virtue of the fact that employers, rather than individual inventors, who are supposed to be motivated, are the primary owners of patent rights.

However, the above criticisms do not suggest that the incentive theory may not serve any useful purpose in encouraging some kinds of inventions. These patent-induced inventions are generally classified as ‘revolutionary inventions.’⁸⁰ Today, revolutionary inventions are rare. The bulk of inventions constitute improvements on existing technology. It thus follows that inventive activities (the bulk of which are non-revolutionary) are less dependent on the patent system.⁸¹ A more tenable argument is that the patent system is a useful mechanism to guarantee the investment of risk capital needed to commercialize an invention.⁸² This patents-propel-commercialization argument is quite different from saying that the patent system is a sine qua non (i.e., essential condition) for inventiveness in the scientific world. That notwithstanding, during the Uruguay Round, industry groups and the developed world emphasized the need for increased private wealth as a pre-condition for IP/trade liberalization. This trend of granting strong patents to pharmaceuticals, based on an economic incentives premise, has also been followed in SSA countries.

The prospect theory provides that the patent system and the exclusive rights it entails present an opportunity to develop a known technology in order to increase output from existing technological resources.⁸³ It posits that patent law assists and prompts other inventors to generate improved versions of the already-patented technology.⁸⁴ The prospect theory rejects the traditional view that patent protection should be limited to what has already been invented. Instead, it proposes that patent monopoly should extend to future inventions, which include technologies needed to commercialize the original invention.⁸⁵ As Cotropia and Lemley explain, “patent law facilitates the creation of improvements by both communicating the existence and technical details of the base technology and then providing patent protection for any patentable improvements that are developed.”⁸⁶

This theory also argues that broad patents should be granted early in order to encourage an initial inventor to invest in development without fear that another inventor will steal the work. The prospect rationale supports the need to provide the inventor with the necessary legal security for the work. It also supports the view that the grant of patent monopoly in future inventions would limit unproductive competition for the economic rent from future inventions. Like the disclosure theory, the prospect theory assumes that the public can learn about the base technology from either the patent itself or its commercial embodiment. This assumption arises because of the belief that the technical information is publicly available and readily accessible for further R&D.

Inherent in the underlying ethos of the prospect theory are several flaws, however. First, in order to sustain this prospect theory, resources must be allocated and managed in an efficient manner.⁸⁷ However, in practice, a perfect allocation of intangible property just does not happen, as the property itself is imperfect and inexhaustible. For Gold, the boundaries around knowledge assets are inherently fuzzy, because there is no objective method to identify the edges of knowledge assets.⁸⁸ Second, the prospect theory treats property rights in patents as if they are tangible property rights. It is, however, axiomatic that tangible and intangible property rights are not the same. Whereas the consumption of tangible property is rivalrous, the consumption of intangible property is non-rivalrous.

Third, and again, what is disclosed in the patent claim is generally not enough to work the patent. Empirical studies confirm that the disclosure function of the patent system is not working.⁸⁹ Even if the disclosure function of the patent system works well, most SSA countries lack the capability to assimilate the state-of-the-art-technology into their industrial base. This lack of adequate scientific infrastructure in SSA makes it difficult to implement the intricacies of the base technology, especially in the field of biotechnology. Thus, a state’s level of proficiency in technology is crucial to attaining the goals of this prospect justification for patents.

Fourth, proponents of the prospect theory fail to appreciate the fact that patent law limits independent invention that may trespass into an existing ‘fence’ of protection. Patent law, unlike copyright law, does not permit the independent creation of a work similar to an existing work. The requirement of ‘anticipation by prior art’ ensures that the patent system limits the creation of subsequent similar inventions. Adding insult to injury, contemporary patent systems, at least in the developed world where the bulk of original innovations take place, grant protection to clinical test data spanning between 5 years and 11 years, thereby creating an additional form of monopoly for data needed to obtain marketing approval for generic medicines.⁹⁰ In consequence, protecting clinical test data could affect the possibility of making follow-up pharmaceutical inventions and thus renders the ideals of the prospect theory questionable in many SSA settings. Finally, the rationale of the prospect theory in protecting future inventions does not reflect the reality of the regime of patents in SSA and beyond; patent rights are granted to protect actual inventions prior to applying for the patent.⁹¹

This theory posits that creating inventions at a faster rate benefits society.⁹² Accordingly, it argues that society would benefit from granting patents at a faster rate, but with a relatively narrow scope, in order to encourage innovation.⁹³ In the opinion of Merges and Nelson, since a broad scope of patents increases the likelihood of infringement, patents should be granted with limited scope in order to enable patent offices and the courts to exercise discretion in determining questions of patentability and infringement.⁹⁴ They argue that limiting the scope of patent protection would place inventors of significant improvements in a strong bargaining position vis-a-vis inventors of basic inventions.⁹⁵

In advancing the race-to-invent theory, Merges and Nelson criticize the prospect theory on the grounds that technological developments have regressed in industries where broad patents are granted.⁹⁶ They conclude that granting a relatively narrow scope of patent protection would facilitate a race-to-improve upon patented inventions to the end of increasing productivity.⁹⁷

The race-to-invent theory might have been a more explanatory theory in the pre-TRIPS era when states had relative regulatory freedom over matters of domestic patent law. For now, this theory has theoretical importance only. It does not reflect the reality of the globalized patent system. Presently, patent rules have been harmonized across jurisdictions via TRIPS. Also, developed countries are pushing less developed counterparts to assume enhanced obligations, which limit domestic regulatory discretion over pharmaceuticals. In consequence, the limitations imposed by the globalized patent regime call the practical relevance of the race-to-invent theory into question.

Furthermore, the race-to-invent theory does not respond to criticisms that it over-relies on the first-to-file rule of the patent system, which rule is followed in the patent legislation of countries in SSA. The ARIPO instrument also employs the first-to-file rule in granting regional patents in SSA. The downside is that the race-to-invent theory creates incentives for aggressive patenting, by allowing improvidently granted patents to survive in the market place.⁹⁸ Further, the race-to-invent theory may turn into a race-to-file system, by creating patent thickets to ward off genuine inventions. That way, inventors would not consider the negative effect of patents on other competitors and the public.⁹⁹

Critics also suggest that the incentives that the race-to-invent theory is supposed to provide could be achieved through market-induced incentives, such as lead time, and market recognition in racing inventions to the market-place.¹⁰⁰ Again, lacking the base technology and proficient scientific infrastructure would not permit countries in SSA to chalk up any success in the heated-race to invent.

Proponents of this theory assert that the patent system should aim at minimizing rent dissipation at stages of conception and innovation.¹⁰¹ As Grady and Alexander put it, “patents prevent rewards from being dissipated by competing imitations, thus preserving the incentive to innovate.”¹⁰² The basis of this hypothesis is that the incentives provided by the patent system may be channeled into redundant investments that would not benefit society. Further, Grady and Alexander posit that, under the rent dissipation theory, natural phenomena are unpatentable—not because they are comparatively worthless—but because a subsequent race among improvers is unlikely.¹⁰³ It is significant to note that proponents of this theory identify three potential sources of rent dissipation under the patent system.¹⁰⁴ First, the patent system allows one competitor to take the prize in its entirety upon winning the race to invent. A patent system based on a winner-takes-all structure leaves other potential inventors and competitors with no prize. Second, the quest to build on pioneer inventions may divert attention from basic research and generate unnecessary competition among potential inventors. Thus, competitors may over-invest in improving pioneer inventions. Third, the patent system may encourage excessive investment in protecting inventions via secrecy. Accordingly, in order to avoid this possible rent dissipation, the innovator should receive a ‘patent monopoly’ for the difference between what society is willing to pay for the invention and the development costs.

The flaws in the rent dissipation theory have also not been lost on commentators. According to Oddi, applying the rent dissipation theory would serve as a disincentive to invest in basic or pioneer research.¹⁰⁵ He also notes that the rent dissipation theory is difficult to apply to actual patent cases. In addition, it is difficult to determine when an invention constitutes an important improvement on existing technology and when it does not.¹⁰⁶ The rent dissipation theory also assumes that the primary purpose of the patent system is to seek rent. I think that the rent dissipation theory is more of a critique of the economic-related theories discussed earlier, rather than being a justification for patents.

In short, none of the theories discussed so far offers a credible justification for patents in SSA.¹⁰⁷ Yet, the natural rights theory in tandem with the incentive theory played a significant role in the development of the globalized patent rules on pharmaceuticals. Both theories are deeply rooted in the western tradition that emphasizes private property and its importance to western economic development. The theories do not adequately consider the values, ideologies, and economics of marginalized states in the design of patent regulatory and institutional frameworks in SSA. Yet, as shown in chapter “Patent Regulatory and Institutional Mechanisms in Sub-Saharan Africa,” the natural rights theory and the incentive theory are followed in SSA countries, at least through the implementation of TRIPS. Generally, Rawls on his part advocates a public justification that can be accepted even by those who disagree, because it proceeds from shared concepts and norms.¹⁰⁸ The justifications for patents as presently understood fail to measure up to this Rawlsian benchmark of a public justification.

More importantly, the existence of disparities in the technological and scientific capacities of developed and less developed countries affects the ability of the latter economies to experience the supposed benefits of the globalized patent system.¹⁰⁹ Rather, the beneficiaries of the economic-inspired theories that have influenced the globalized patent system are the multilateral corporations in developed countries that create inventions and are heavily engaged in international trade.¹¹⁰ Oddi surmises that the pharmaceutical and agricultural chemical industries are the chief beneficiaries of globalized patent norms under TRIPS.¹¹¹ By implication, developed countries benefit from the globalized patent regime by virtue of the ‘trickle down’ effect from patent owning enterprises having primary industrial bases within such countries.¹¹²

The reverse is, however, the case in SSA: countries fare poorly if these western-engineered theories and assumptions are employed to justify the adoption of strong patent systems. The low levels of inventiveness in SSA countries mean that the justifications for patents and their underlying assumptions do not benefit these countries. Also, the theoretical justifications do not adequately take into consideration the shared values in promoting access to medicines in poor countries. The lack of robust public interest-oriented justifications has thus positioned SSA countries at the receiving end of dysfunctional¹¹³ patent regulatory and institutional frameworks that impede access to medicines to treat epidemics. The next task, then, is to provide a synthesis of the failures or inadequacies in the functioning of the justifications proffered in defence of the globalized patent system. As earlier mentioned, this discussion of the inadequacies inherent in the globalized patent regime applies equally to pharmaceutical patent regulation.

The globalized pharmaceutical patent regime fails to recognize that there is a wide chasm between developed and less developed countries in terms of HIV/AIDS, malaria, and TB infection rate and the accessibility/availability of medicines. Similarly, it fails to take cognizance of the differences in states’ capacities as well as incapacities when it comes to available knowledge and innovativeness. The varying levels of development among states are due to the differences in goals, values, cultures, histories, political climate, economic and technological capacities of states.¹¹⁶ Under the WTO system, countries are classified into three broad economic groups: least developed countries, developing countries, and developed countries. Although, WTO law does not define ‘developing countries’, Article XVIII:1 of the GATT defines such countries as having economies with low standards of living and are in early stages of development. Naturally, LDCs (most of which are in SSA) are in a deeper hole in terms of their citizens’ standards of living and their limited capacities to commercialize innovation. Therefore, if a patent system, which is based on developed countries’ IP standards is implemented across the board it will hinder economically poor countries in SSA from benefiting.

Other explanations for this dysfunction are not far-fetched: developed and less developed countries have different goals. For his part, Ostergard articulated the differences in the goals of developed and less developed countries as:

Developed countries have attained a level of economic and political development that provides a high standard of living for their people. Their goal, at minimum, is to maintain that level of development. Developing countries have not attained the same level of economic or political development. Their goals reflect the desire to improve the standard of living for their people.”¹¹⁷

Most countries in SSA fall within the category of least developed states. Also, the HIV/AIDS, malaria, and TB infection rate in this region is much higher than that of the developed world. While some countries in SSA have an HIV/AIDS prevalence rate of about 30 %, others in the developed world have a low rate of about 0.1 %.¹¹⁸ Indeed, it is estimated that over 68 million people will dies from HIV/AIDS-related causes in the most affected nations by 2020.¹¹⁹ Therefore, pharmaceutical regulatory-policies that are good for the developed world could be the reverse (and most often are) in countries that are hardest hit by the HIV/AIDS, malaria, and TB epidemics.

In the context of the international patent system, the TRIPS Agreement obliges WTO members to grant patent rights without discrimination as to place of invention, the field of technology and whether the products are imported or locally produced.¹²⁰ It also treats WTO member states as complete equals before the Dispute Settlement Body. Accordingly, SSA countries and those in the developed world compete on the same normative terms and condition within the WTO system. Additionally, both the Most Favoured Nation (MFN) and the national treatment principles insist that WTO members comply with the minimum standards under TRIPS regardless of their level of development.¹²¹ In consequence, the notion of the applicability of a ‘one-size-fits-all’ patent protection regime across countries/regions calls the practical relevance of the formal suspension of TRIPS’ implementation for least developed countries into question. As Yu surmises, “had the level of intellectual property protection been adjusted to reflect the countries’ needs, interests, and conditions, those transitional provisions in the TRIPS Agreement might not have been needed.”¹²² Worse still, technical assistance initiatives have steered many LDCs in SSA to adopt international patent standards in utter disregard of the moratorium under the WTO system.

In addition, the theoretical justifications for patents, such as the natural rights theory and the incentive theory that support increasing patent standards to the disadvantage of the public right to health care are unsustainable in SSA. As primary consumers of technology, granting strong patents could pose obstacles to the realization of the right of access to medicines for the masses in SSA. Consequently, forcing less developed countries to adopt western-style patent protection of medicines, which in turn inhibits access, is unjust and deserves a rethink.

A patent was originally a grant of privilege.¹²³ The protection it provided therefore signified societal sacrifices in offering legal protection to an otherwise unprotected private property right. But now, due to the influence of natural law rhetoric, patent protection is considered by proponents as a claimed-right.¹²⁴ In treating pharmaceutical patent protection as a claimed-right, the globalized regulatory framework has created a monopoly in the hands of a few persons.¹²⁵ By monopoly, I mean a situation in which there is only one or limited supplier(s) of a good that is lacking close substitutes.¹²⁶ It also involves allowing the producer to choose either to produce at a larger quantity in order to sell at a lower price or to produce a smaller quantity to be sold at a higher price.¹²⁷ This point is echoed by Prindle who remarked that “patents are the best and most effective means of controlling competition. They occasionally give absolute command of the market, enabling their owner to name the price without regard to cost of production.”¹²⁸

Heller for his part argues that patents contribute to the reduction in the capacity of the pharmaceutical industry to generate new products.¹²⁹ In support of this assertion is a 2006 Report by the US Government Accountability Office which has concluded that the “current patent law discouraged drug companies from developing new drugs by allowing them to make excessive profits through minor changes to existing pharmaceuticals.”¹³⁰ Temin has also remarked that the pharmaceutical companies spend huge costs on excessive advertisement to sustain a form of price-fixing cartel and monopolize the market, rather than focusing on real research to produce new medicines.¹³¹ For instance, AstraZeneca is said to have spent a half billion dollars to advertise Nexium alone.¹³² In addition, pharmaceutical companies spend millions of dollars on legal fees and other lobbying activities to ward off generic manufacturers and other potential infringers.¹³³

A divergent viewpoint presented by Kitch is that the incentive to invent and market technologies will only exist if there are strong patents available to protect innovators in those markets.¹³⁴ Therefore, it is in the interest of the less developed world to adopt strong patent systems to attract foreign technology and consequently develop local capacities. Even if we concede that strong patents protect innovators, both historical and contemporary evidence suggest that strong patent laws are not important instruments in developing indigenous manufacturing capacity in the less developed world, however. It bears emphasizing that countries, such as Switzerland and the Netherlands developed their industrial capacities without recourse to a strong patent system. Indeed, American inventors imported British technology freely between 1790 and 1836 because the former then had a lax patent system. In this regard, the US Congress admits that “when the United States was a relatively young and developing country it refused to respect international intellectual property rights on the grounds that it was freely entitled to foreign works to further its social and economic development.”¹³⁵ India is another remarkable example of how the absence of a strong patent regime could enable a country to develop a vibrant generic pharmaceutical sector.¹³⁶ The point here is that patent exclusivity may slow innovation and create monopoly.

As to why patents slow innovation and create monopoly, Stiglitz explains that,

Knowledge is the most important input into the production of knowledge. Intellectual property restricts this input; indeed, it works by limiting access to knowledge. One way of thinking about this is in terms of any standard production process. If you increase the price of an input, it reduces the supply of the output. In this case, the input is knowledge; patents increase the price of this input, which in turn reduces the output.¹³⁷

This monopoly can be extended by the accumulation of many different patents in the hands of one patentee and by restrictive licensing mechanisms.¹³⁸ The patent system is said to threaten a tragedy of the anti-commons.¹³⁹

The effect of monopoly is that it stifles innovation and creates rent-seeking behaviour. It “gives all the rewards to a lucky and often-undeserving person who manages, in one way or other, to get the patent and grab the monopoly power.”¹⁴⁰ In fact, pharmaceutical patent monopoly leads to high prices of medicines on the market.¹⁴¹ This fact is confirmed by the WHO-Health Action International survey which has predicted that essential medicines will be very expensive and not universally available due to the prevailing patent regime.¹⁴² Patent monopoly also impedes access to the ‘necessaries of life’, including medicines without which the citizens of SSA cannot reasonably exist and be productive.¹⁴³ Monopolists in the pharmaceutical industry have increased their profits by discouraging innovation by generic rivals and raising the latter’s costs.

The irony is that most SSA countries do not have antitrust (anti-monopoly) legislation to check pharmaceutical patent abuses. For instance, efforts to pass comprehensive competition legislation in Ghana have been strongly resisted by industry groups and lobbyists such as Unilever. Alternatively, a number of SSA countries with anti-trust legislation may face enforcement obstacles. In Kenya and South Africa, for instance, recorded attempts to foster such competition by allowing third parties to produce generic versions of patented medicines were pre-empted by ways of voluntary settlements.¹⁴⁴ In another reported case, the South African Competition Tribunal’s refusal to sanction a merger between two health care groups in the ‘capitated managed care’ market was overturned on appeal by the Competition Appeal Court. The Tribunal had reasoned that “the general state of healthcare provisioning in South Africa, the policy objectives of the South African Government in the realm of healthcare provision, the mechanisms whereby government intends achieving those objectives, and the place and role of the private sector” worked against the merger.¹⁴⁵ However, on 31 January 2006, the Competition Appeal Court overturned the ruling of the Competition Tribunal and approved the merger unconditionally.¹⁴⁶ It noted that the Tribunal misdirected itself by adopting a ‘cautious and circumspect approach’ to the merger and over-relying on public interest considerations before reaching its decision. Further, it noted that the proposed merger would allow other competitors with sound financial and administrative networks to compete. The power politics employed by the pharmaceutical industry pose a significant challenge to the enforcement of competition laws, if any, by institutions in SSA countries. The point is that a lack of a pro-competitive patent environment allows what Drahos and Braithwaite refer to as ‘biogopolies’¹⁴⁷ or what Temin calls ‘oligopoly’—a price fixing cartel.¹⁴⁸

The aggregation of pharmaceutical patents into a cartel becomes a great enemy to good management.¹⁴⁹ It works to the advantage of a few but not to the general good of society. It causes the markets to be under-stocked and regulated at a level that keeps the prices of medicines very high.¹⁵⁰ This affects the efficiency and innovativeness of the economy in less developed countries.¹⁵¹ It also lessens consumer choice because of the high costs of brand name medicines. Regulating pharmaceutical markets from the unilateral angle of producers without corresponding consideration for the interests of consumers creates distortions.¹⁵² A monopoly thus makes the public worse-off and creates a false incentive for a few.¹⁵³ The converse is that the public would be better-off without monopoly and the patent industry would grow by leaps and bounds. In bestowing a patent monopoly, SSA countries should ensure that they get their money’s worth through other regulatory trade-offs, such as the use and enforcement of competition legislation.¹⁵⁴

Generally, it is estimated that over 70 % of the world’s biological resources are located in local and indigenous communities.¹⁵⁵ As knowledge or ideas (including traditional medicine practices) held and used by people who identify themselves as indigenous, traditional knowledge (TK) differs from formal knowledge in the ways it is acquired, stored and transmitted.¹⁵⁶ However, indigenous ideas are not patentable because it is considered that “the public interest is best served if abstract ideas circulate freely”.¹⁵⁷ It is, however, important to observe that ideas in communities in Africa go beyond abstract ideas. They consist of rich, traditional knowledge, lived and practiced by indigenous communities. They develop as the collective property of society, and are passed on to generations by word of mouth or through community practices. In essence, the individualist conception of patents is not suited to the communal character of indigenous resources.

This difficulty that patent legislation has in adequately addressing issues bordering on traditional knowledge has created what has been described as a “crisis of legitimacy in the intellectual property system.”¹⁵⁸ This crisis affects communities in SSA, as they are rich in indigenous ideas and traditional knowledge. An instance of this crisis in SSA has happened with respect to the hoodia cactus plant known to the Kung Bushmen of South Africa as cure for obesity.¹⁵⁹ The hoodia cactus plant has been patented by a British pharmaceutical firm (i.e., Phytopharm), and this company has, in turn, licensed its patent to Pfizer at the expense of the indigenous people.¹⁶⁰ Again, patents have been granted to the neem tree oil in the US. In Europe, patent protection for the neem tree was granted to a US pharmaceutical corporation until India’s challenge before the European Court caused its reversal.¹⁶¹ In most countries in Africa, as in India, the neem tree serves as communal medicine for treating various illnesses.

Pharmaceutical patent laws (including TRIPS) do not grant protection to traditional knowledge, because TK is not considered scientifically valid. As a tool of capitalism, the concept of patent law and its underlying justifications are viewed as unsuited for cultural knowledge, because it contradicts the historic status of traditional knowledge as a common heritage held in trust for the public good.¹⁶² Traditional knowledge is considered terra nullius (i.e., land belonging to no one), because patent law is based on the western conception of ownership. Indeed, patents are designed to legitimize western biomedicine over traditional medicine and consequently overlook the socio-cultural character of science.¹⁶³ This lack of protection for indigenous knowledge in less developed countries provides avenues for industrialized nations to plunder native lore.¹⁶⁴ For Shiva, the failure of the western patent system to protect traditional knowledge promotes biopiracy.¹⁶⁵ Also western appropriation of traditional knowledge (biopiracy) results in the enclosure of the commons.¹⁶⁶ It further squelches domestic firms that have long provided services with those traditional resources.¹⁶⁷

What is worse is that countries in the South have been coerced to grant protection to rights that are individualistic, contrary to the communal nature of traditional knowledge in those countries. Indeed, individualism is the mantra of neo-liberalization. It is in accord with this spirit that patent protection is granted to natural and artificial persons but not to communities. For Oguamanam, TRIPS’ disregard for traditional knowledge leaves it open to unbridled appropriation,¹⁶⁸ and sidelines the traditional custodians of wild habitat.¹⁶⁹ In reality, modern inventors and researchers feed on the common resources of indigenous communities, but fail to acknowledge the traditional owners.

The commonly trumpeted ‘defence’ is that traditional knowledge is unreliable because it has not been mentioned in previously published materials.¹⁷⁰ The response is that writing is not, and has never been, a sine qua non for measuring the utilitarian value of traditional knowledge. Consequently, the claim for reciprocal reward and acknowledgement by less developed countries (as owners of traditional knowledge) cannot be said to be unwarranted. In essence, (mis-)appropriating traditional knowledge and patenting it after scientific tinkering, without recognizing its true source and factoring in the interest of dispossessed communities is unethical, if not illegal. Further, exclusionary criteria, such as newness, novelty, non-obviousness, inventiveness and industrial applicability, which are used as sine quibus non for patent protection to deny any legal status to local knowledge, deserve rethinking.¹⁷¹ The reason is that these exclusionary criteria are premised on erroneous assumptions about IP and over-generalized notions about local knowledge.¹⁷²

To receive patent protection, the inventor is obliged to disclose sufficient information during the patent application process. In line with this contract theory, the inventor is promised that, upon disclosure, the state will grant exclusive monopoly in the exploitation of the patented invention. This exploitation takes the form of the grant of an exclusive right to make, import, sell or use the patented invention. This exclusive monopoly is granted in the hope that the disclosure will aid future advancement of science and technology. Thus, monopolistic protection is granted so that the public can have access to the information for further R&D of other inventions. Unfortunately, inventors subvert this requirement by making insufficient disclosure. As shown earlier, the disclosure function of the patent system is subverted by the arcane language in which patent claims are couched. In the pharmaceutical industry, the practice is to reveal as little and to claim as much protection as possible in order to ward off generic manufacturers and other potential infringers. Worse still, inventors are also granted patent protection for a patentable product which is otherwise not fully developed. And there is evidence of this trend in the global pharmaceutical patent order.¹⁷³ Scholars also agree that pharmaceutical patent claims are interpreted to favour pharmaceutical companies.¹⁷⁴

To sum up, the foregoing discussion shows that the assumptions upon which the globalized patent system is based are not sustainable in both pharmaceutical producing and consuming nations. Countries in SSA as ardent consumers of pharmaceutical products and processes with no corresponding inventive and manufacturing capacities are ill-prepared to swallow the justifications for patents, which are predicated upon western epistemology and knowledge values. Further, scholars predict that there would be very significant outflow of patent rents from South to North based on the globalized patent system under TRIPS.¹⁷⁵ This stands against the backdrop of the fact that there are only 83 scientists and engineers per 1 million people in SSA as compared to China, which has 454 researchers per million people.¹⁷⁶ Worse still, most SSA countries lack mechanisms to collate scientific technical data contained in patent applications (even if such data is disclosed) in order to make it accessible to local researchers. Like the ‘myth’ in Enlightenment thinking, the upsurge in patent standards, framed as a viable means for technology transfer, can create and sustain the economic dependency of SSA countries.

Nonetheless, countries in SSA have relied on the mythic justifications, which establish ‘assumptions-fit-all’ regulatory mechanisms, to ground their patent systems. The assumptions have been repeated over and over again to the extent that they seem to have attained a semblance of credibility, because of the faith that policy-makers (who also live under the ‘myth’) vest in it.¹⁷⁷ This false sense of optimism among policy makers in SSA is part of the neoliberal ideology of deception that has entrenched itself for years. Indeed, by embracing the promises of economic rhetoric, countries in SSA have reversed, or have been forced to reverse, the pursuit of human needs as the ultimate source of rights.¹⁷⁸ This outcome has led to a “corresponding neglect of the social dimensions of human personhood.”¹⁷⁹ Indeed, the ‘myth’ in the globalized patent system has produced a truncated human reality: millions of persons die from diseases in SSA due to the high cost of medicines engineered by western patents. A more nuanced approach is to move beyond questionable assumptions, by making the globalized patent system sensitive to the social conditions in SSA countries.

One strategy to cope with regulatory dysfunctions is that in implementing international patent standards espoused by TRIPS, SSA countries must distinguish/differentiate between patent rights in medicines (i.e., essential goods) and patent rights in non-life-saving technology such as software (i.e., non-essential goods). This is because the relevance of inventions differs among societies depending on their use and socio-economic context. As one commentator notes, when the product is a compact disc, perhaps countries in SSA can bear with the deprivation. But, when the product is a life-saving medicine, dead-weight losses quickly translate into dead patients.¹⁸⁰ More concretely, medicines should not be considered as being like other merchandise, otherwise health will always be subject to the market, with remedies and treatments available only to those with enough purchasing power.¹⁸¹ Indeed, the importance of patent rights in medicines to countries endemic for HIV/AID, malaria, and TB far outweighs patent rights even in defence-related products and processes.