Māra Rozenblate, Senior European Patent Examiner, Ella Niedra, Public Relations Specialist, Development and International Cooperation Department
The patent system provides incentives for enterprising inventors to invest in costly but socially important research. However, alongside the development of innovative goods, medicines included, the ambitions of counterfeiters are growing. The Patent Office has a public education function in the fight against counterfeiting. Expanding cooperation with the Latvian Medicines Verification Organisation, as well as with supervisory authorities and other parties involved in the medicines supply chain contributes to our common efforts to reduce the counterfeit market.
The essentials of patenting pharmaceuticals
Patenting must start as soon as it is clear that the synthesised substance has potential, and it must not be publicly known anywhere in the world at the time the patent application is filed. If a patent is granted, protection lasts for 20 years from the filing of the application. During this period, the manufacturer retains monopoly rights on the market.
As the patent holder only obtains monopoly status in the countries where the patent is registered, most companies aim to patent their medicines in as many countries as possible around the world. To obtain a European patent, companies can file an application with the European Patent Office, where, based on the European Patent Convention, the patent is extended to up to 39 European countries, including the 27 Member States of the European Union. However, once granted, this patent must be individually validated and maintained in each of the countries where protection of the invention is sought, in accordance with the laws and regulations of that country.
The rules for granting patents are largely harmonised between countries. Since 1 June 2023, there is also a unitary European patent system, which offers a centralised approach: a granted European patent can be registered with unitary effect, which means that the patent will automatically have immediate effect in all EU countries that have already ratified the international agreement on the Unified Patent Court. Supplementary protection certificates are also an important tool in the pharmaceutical sector. These allow the patent protection period to be extended for up to five years, provided that the active ingredient already has a basic patent and a valid marketing authorisation. The Patent Office most often deals with requests for such certificates, and also approves European patents granted so that they are valid in Latvia.
If a medicine has proven itself on the market during the patent protection period, once the exclusivity period is over, there is an opportunity for competitors who are able to produce generics – patent-free medicines containing the same active ingredient as the one originally patented. This promotes wider access to medicines for patients and stimulates the creation of new inventions.
The monopoly advantage offered by a patent can only be limited in exceptional circumstances by triggering a compulsory licensing mechanism. If the product is vital for the welfare, protection or economic interests of the population, then compulsory licensing is a way to balance intellectual property rights and the needs of society. This means that in exceptional circumstances, where high prices and limited production capacity prevent demand from being met, a decision can be taken to authorise other manufacturers to produce the patented substance. For example, the Canadian company Biolyse Pharma was exceptionally granted permission to produce a generic version of the Covid-19 vaccine developed by Johnson&Johnson to ensure the availability of vaccines in Bolivia. This mechanism, however, is extremely rare.
How can we reduce the demand for counterfeits?
Compulsory licensing may seem like the "Sword of Damocles" to drug manufacturers, but a more legitimate source of concern for all those involved in the circulation of medicines is the threat to public safety posed by counterfeit medicines. Although the Patent Office is not directly involved in combatting counterfeiting, one of its priorities is to raise public awareness of the negative impact of counterfeiting, including in the category of medical products.
Unfortunately, a 2024 study published by the European Union Intellectual Property Office (EUIPO) on the ecosystem of intellectual property crime reveals that the proliferation of counterfeiting in Europe is underpinned by the involvement of pharmaceutical professionals in the manufacture, supply and dispensing of medicines. For example, counterfeiters may obtain fake prescriptions through pharmaceutical manufacturers, doctors and pharmacists, giving them access to medicines. These medicines are sold at a higher price or used by criminals to produce sub-standard and even dangerous mixtures and then sold.
International research shows that the transport of illegal goods is assisted by carriers, police, customs, security services and others at border crossing points. Graphic designers, lawyers and financial advisors are also involved in the development of counterfeit medicines and the cover-up of transactions. Social media content creators are also used to market medicines and nutritional supplements of questionable origin and impact. For example, in Romania in 2023, EUIPO, in cooperation with law enforcement authorities, uncovered a criminal network producing and distributing anabolic steroids across the EU. They used influencers and contacts in gymnasiums to promote the products, which ended up in the hands of young people.
Latvia loses an average of €45 million a year to the counterfeiting business. The most popular categories of counterfeit goods are clothing, accessories, cosmetics, perfumes and children's toys. The purchase of counterfeit goods is most often motivated by attractively low prices. Especially young people under 25 or even 30 are emotionally motivated to buy counterfeits of exclusive brands to demonstrate their purchasing power or feel as though they belong to a certain social group.
However, it should be remembered that various counterfeit products – not just medicines –can contain substances that are dangerous to health and can cause, for example, allergic reactions. The Patent Office therefore emphasises the health risks in its communication with the public. This year's anti-counterfeiting awareness campaign also highlighted the fact that the purchase of counterfeits finances organised crime, illegal employment, arms production and terrorism. The counterfeit market also contributes to environmental pollution.
With the involvement of the Customs Administration of the State Revenue Service, the Patent Board's annual anti-cheating campaigns urge people to buy goods only from verified outlets and to avoid untrustworthy e-commerce platforms where goods, including medicines, can be bought suspiciously easily and cheaply, without prescriptions or under questionable conditions.
Close cooperation with the State Revenue Service, the Health Inspectorate, the Consumer Rights Protection Centre and other organisations in organising seminars and other forms of information exchange helps to raise awareness of the harm caused by counterfeiting and how to limit it. Experience exchange with international partner institutions reveals that the methods used by IP criminals are becoming more diverse as technology advances. For example, innovations in 3D printing and artificial intelligence technologies make it easier to replicate holograms, logos and other authenticity features, making it more difficult for enforcement authorities to detect counterfeits.
As long as there is demand and IP crime appears to counterfeiters as a low-risk, high-reward activity, there will be supply. To break the endless circle and to ensure that the counterfeiting business continues to decline, the Patent Office will continue to invest in educating the public about the consequences of counterfeiting. Proactive exchange of information between institutions on the latest trends will allow a better understanding of where the counterfeiting market is heading and what potential solutions the Patent Office can develop together with the Latvian Medicines Verification Organisation, as well as other Latvian and international organisations.