Controversial Changes to Drug Patent and Copyright Rules Have Manageable Side Effects – C.D. Howe Institute

Controversial changes to drug patent and copyright rules required under Canada’s recent trade deals will have manageable side effects.

March 30, 2017 – Controversial changes to drug patent and copyright rules required under Canada’s recent trade deals will have manageable side effects, according to a new report from the C.D. Howe Institute. In “Patents, Copyright and Competition: Assessing the Impact of Trade Deals on Canada,” authors Daniel Schwanen and Aaron Jacobs review claims that strengthened protection for patents and copyright would result in a dramatic  increase in healthcare costs as well as  copyright payments, and provide some estimates of their own.

“Fears that IP provisions included in the Comprehensive Economic and Trade Agreement (CETA) and the Trans-Pacific Partnership (TPP) will limit Canadians’ access to medicine or copyrighted material are, in our view, much exaggerated,” state the authors. “The agreements do require Canada to take measures that will impose costs on some Canadians, but on balance these costs must be seen in light of the agreements’ overall beneficial impact,” they add.

The authors review early estimates of the costs of provisions affecting extended copyright in the TPP, and stronger protection for patents in both CETA and the TPP. These estimates, they find, are exaggerated, and their costs could well be offset by other available policies.

The report determines that the IP provisions of CETA and the TPP would be considerably less costly than their critics have suggested, and that any such costs would be manageable. In any event they are far from negating the net benefits of the two trade agreements. “CETA’s provisions are due to come into effect starting this year; the TPP seems to be a dead letter, but a number of its provisions, including those pertaining to copyright, might well resurface in other trade negotiations, including a reopened NAFTA,” notes Schwanen.

“Canadian governments could significantly dampen, or even offset altogether, any costs that might arise from extended patent and copyright protection,” notes Jacobs. “Canada also remains free to pursue, at the World Intellectual Property Organization and in other international forums, reforms that promote the public interest in the dissemination of knowledge and technology.”

Further, while Canadians are not significant owners of intellectual property, they are net sellers of their brainpower. Canada is a strong net exporter of R&D services to the rest of the world. Indeed, at $4.2 billion, Canada’s little-heralded trade surplus in such services almost offsets the cost of their use of foreign-held intellectual property. This emphasis on producing, rather than exploiting, IP is currently seen as problematic, but it suggests a high potential for Canada’s becoming a net IP exporter. “In that context, Canada might well look back in a few years on improved IP protection in trade agreements as a major booster of Canadians’ incomes,” conclude the authors.

Click here for the full report.

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada’s most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

For more information contact: Aaron Jacobs, Researcher; or Daniel Schwanen, Vice President, Research, C.D. Howe Institute: 416-865-1904 or email: [email protected].

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