November 2, 2008 by Justine Wai
Over the last thirty years, investment in the research and development of pharmaceuticals has risen dramatically. However, the availability of new drugs has not matched the rise in investment. Instead, Michael Heller has found that the pharmaceutical industry is stuck in a “patent gridlock”, where patent owners are blocking inventors from using patented products and processes that could lead to the development of new, lifesaving drugs.
Under s. 32 of the Patent Act, the inventor of an improvement on any patented invention may obtain a patent for that improvement, but does not obtain the right of making, selling or using the original invention. A majority of new patents are considered “improvements” because most new inventions, especially those in the drug industry, are amalgams of patented products or are tested with a patented process. Since the patent owner of the original invention has the right to block an inventor from using their product in the development of the improvement, the development of a new product can be halted due an inventor’s inability to obtain a license from the original patent owner. As such, s. 32 often causes a gridlock in the production of new products.
The problem of the patent gridlock is most troubling in relation to the development of new drugs. During the SARS crisis in 2003, when the biotech industry faced the possibility of a global pandemic, labs around the world cooperated in researching and developing the pathogen. However, when the development of the vaccine began, production was stalled due to drug makers’ uncertainty with respect to the cost and availability of licences to the patents on the SARS genomic sequence, testing procedures and processes. Unfortunately, the SARS vaccine situation is not unique. Inventors of all new drugs face the problem of having to obtain licenses at every step of the drug development process because nearly every original drug, test, process and procedure is patented. For every drug, an inventor must obtain numerous licenses from every patent owner involved and if even one license is refused, the new drug cannot be developed. Even more problematic, most of the “original” products are patented by large companies, many of whom either charge exorbitant fees for a license or, to retain control over their product, completely block inventors from using the product. These overwhelming obstacles clearly stifle the development of potentially lifesaving drugs.
A possible solution to the patent gridlock is to create a “patents pool”  where all drug industry patents are controlled by one association, rather than multiple owners. With a patents pool, inventors could obtain a single license covering all drug patents, making it possible for inventors to develop drugs more freely. However, to ensure that the patent owner’s rights are protected, there would need to be strict oversight over the licensee’s use of the patented product. Therefore, it is vital that future patents laws balance the original patent owner’s rights with the inventors’ ability to obtain licenses in their development of new, lifesaving drugs.
 Michael Heller, “Where are the Cures?”, Forbes Magazine, 11 August 2008 (Online available at: http://www.forbes.com/business/forbes/2008/0811/030.html)
 Patent Act (R.S., 1985, c. P-4) s. 32.
 Supra, note 1.
 James Surowiecki, “The Permission Problem”, The New Yorker, 11 August 2008 (Online available at: http://www.newyorker.com/talk/financial/2008/08/11/080811ta_talk_surowiecki)