The Standardization and the Patent Issue in Telemedicine

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1 The Standardization and the Patent Issue in Telemedicine Makoto ISHIKAWA Associate Professor Kyoto University of Education

2 Standardization in telemedicine Telemedicine is the medical care using information and communication technologies (ICT). Network externality works to ICT. Economic benefits are increased by standardization. 2

3 Network Externality Scale of market Critical mass Excess inertia Excess momentum Time In this case, in order to diffuse a new product, the number of user shall be over the critical mass in some way. Standardization is important and necessary to increase the number of users. 3

4 Economic Benefits of Standardization (1) Businesses benefit from standards. (In this case, businesses means the companies which produce telemedicine products and systems.) Users benefit from standards. (In this case, users means doctors and their staffs, and hospitals using telemedicine products and systems.) 4

5 Economic Benefits of Standardization (2) Benefits of Standards for Business Potential Competitive Advantage Cost Reduction Improvements in the Supplier/Client Relationship R&D Activities Intellectual Property 5

6 Economic Benefits of Standardization (3) Benefits of Standards for Users Price reduction of products/services Selection of suppliers in the market The facilitation training for the operation of products/systems Greater availability of complementary goods in the market 6

7 Decision on Rate of Licensing Fee Rate of licensing fee high Factor in rising rate (1) Contribution to standard (2) Scale of investment for R&D low small big Factor in lowering rate (1) Effect on public benefits (2) Marketability (3) Convertibility Effect by each factor Which factor do we have to give weight to? 7

8 Handling of the Patent Right in standardization Since ICT is developed on a business basis, a lot of patent rights exist in the ICT. In standardizing, the handling of the patent right contained in the object of standardization causes a problem. Especially, in a developing country, the patent right contained in the ICT serves as a barrier to diffusion of standardized technology. 8

9 The Feature of Patent System (1) Advanced country Developing country Patent period Long Short Patent scope of protection Wide Narrow 9

10 The Feature of Patent System (2) In order to diffuse technology, the patent system of a developing country is suitable. However, in many developing countries, the patent system is revised to a type of an advanced country. 10

11 The Feature of Patent System (3) China Thailand Indonesia Agreement on TRIPs Agree in 2001 Agree in 1995 Agree in 1995 Patent law Revised law enforcement in2001 Amendment enforcement in 1999 Amendment enforcement in 2001 Philippines Malaysia India Agreement on TRIPs Agree in 1995 Agree in 1995 Agree in 1995 Patent law The IP law enforcement in 1998 Amendment enforcement in 2001 Amendment enforcement in

12 Standardization and Patent Issue in Telemedicine (1) In standardization of ICT, since a lot of patent rights are included, the payment of a large amount of licensing fee is needed. The price of the products of the telemedicine which uses standardized technology becomes high, and therefore, the diffusion of the telemedicine in a developing countries is obstructed. 12

13 Standardization and Patent Issue in Telemedicine (2) The usage rule of the patent included in the proposal of the technical standards in ITU-T 1 Abandonment of exercise of a patent 2 License under reasonable and non-discriminatory condition (RAND condition) 3 Refuse usage of a patent 13

14 Standardization and Patent Issue in Telemedicine (3) Copy of AIDS drug In developing countries, such as South Africa and Brazil, there is an example that the copy of AIDS drug manufactured under the patents was accepted without license fee. In case of a public nature is very high such as emergency that AIDS spreads, the exercise of a patent may be restricted. 14

15 Standardization and Patent Issue in Telemedicine (4) Patent Initiative of IBM Corp. Open software standards lead to greater efficiency (November, 2005) IBM Corp. opens its patents about an electric format, an instrument format and a web service in order to promote the development and diffusion of technical standards of software related to medical care and education. 15