Coronavirus: patents rights and the public interest

Patent pooling is one idea that has been mooted, while there are also backstop powers written into patent laws around Europe that might enable manufacturers to make use of life sciences patents to help address the challenges posed by Covid-19 should the need arise.

Germany

In Germany, new emergency legislation passed by the country's parliament last week is now in force and impacts on patents in the life sciences sphere.

According to Munich-based Marc L. Holtorf of Pinsent Masons, the law firm behind Out-Law, the emergency legislation complements existing provisions in German patent law that enable competent authorities to allow themselves or third parties to make use of patented inventions for public interest purposes.

Because the German government has declared a state of emergency, and in line with the provisions in the new legislation, it is now open to Germany's health minister to identify patents – as well as utility models and supplementary protection certificates (SPCs) – owned by pharmaceutical or medical technology companies that should be made widely available to use by third parties to address the current public health crisis.

It is possible, for instance, that manufacturers that neither own nor have a licence to use patents for face masks or other personal protective equipment (PPE) in Germany will be able to do so if the health minister deems it necessary to boost production of that equipment in light of a shortage and the risks to the health of doctors and other front-line health workers if they are not supplied with the correct kit.

Holtorf also explained that patent rights relevant to ventilators could also be "disappropriated" for the purposes of increasing production and, ultimately, helping to save the lives of coronavirus patients.

Patent owners will be entitled to reasonable compensation from the federal government, and not third parties, where their patents are made available to others in this way.

Holtorf said, however, that the powers granted to the health minister under the new emergency legislation should be distinguished from compulsory licences directly claimed from a patent owner by a third party. Under the German compulsory licence regime patent owners might expect to receive a more substantial payment of royalties for third party use.

Ireland

Ireland is a major manufacturing hub for many of the world’s leading medicinal products and medical devices. Medtronic, for example, manufacture ventilators at their Galway facility which is now operating on a 24/7 basis. Around half the ventilators in the world are made in Ireland, mainly by Medtronic, according to IDA Ireland, an agency responsible for attracting inward foreign direct investment to the country.

Like in Germany, the Irish government is also introducing emergency legislation to deal with the Covid-19 pandemic. This includes the Emergency Measures in the Public Interest (Covid-19) Bill 2020. Patent rights have not yet been limited but there are a number of options in existing legislation that could be invoked in the public interest, according to Dublin-based Ann Henry of Pinsent Masons.

The Patents Act 1992 (as amended) provides the government with the ability to do certain acts concerning the use of patented inventions if, in the government’s opinion, "exceptional circumstances" are deemed to exist. The current Covid-19 pandemic is likely to be viewed as an 'exceptional circumstance'.

Section 78 of the Patents Act provides that in exceptional circumstances, a government minister, or person authorised by them, can exercise certain powers in relation to products or processes which are the subject of a patent. For example, the minister or authorised person, may use an invention which is the subject of a patent for any purpose which appears to the minister to be necessary or expedient for the following acts, by way of example:

• the maintenance of supplies and services essential to the life of the community;
• securing a sufficiency of supplies and services essential to the wellbeing of the community;
• ensuring the public safety and the preservation of the state

This section affords ministers or persons authorised by them wide powers including to carry out acts which would otherwise constitute patent infringement without the owner’s consent. Those acts might include, for example in the case of medicinal products or devices, the making, using, importing, stocking or selling of the medicines or devices concerned.

According to Henry, the Irish government is unlikely to exercise emergency powers in relation to inventions that are the subject of patents unless there is a dramatic deterioration in events as successive governments have spent decades establishing the reputation of Ireland as a centre of excellence for R&D in pharma and tech. 

Instead, the focus at this point is on collaboration. Henry said there are positive examples featured every day in the news of how the private sector in pharma and tech in Ireland are collaborating and innovating together to serve the interests of the public in Ireland and internationally in the fight against Covid-19.

The UK

As Cerys Wyn Davies of Pinsent Masons explained recently, it is possible in the UK that the government will invoke 'Crown use' provisions of patent law to enable manufacturers to assist in the fight against Covid-19.

The rarely used Crown use exemption from patent infringement can be invoked where future demands for damages or royalties remain a potential risk for third party manufacturers. The exemption, written into the UK's Patents Act 1977, allows the UK government to authorise others to make use of any patent rights without the prior agreement of the patent owner, to the extent they are for the "services of the Crown".

The authorisation only needs to relate to a particular act, such as for example the reproduction of a ventilator design. It does not need to specify the patents being licensed. It is intended that the patent owner would be compensated at a later date by negotiation with the government. Government authorisation can be given retrospectively.

The Crown use exemption was considered in the recent case of IPCom v Vodafone where it was held that Vodafone’s emergency access to the mobile phone network services provided under a contract with the UK government had the necessary written authorisation from government to invoke Crown use and to shelter Vodafone from patent infringement.

Like Germany and other countries that are signatories of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the UK government can grant compulsory licences too. This would mean waiving the obligation on the authorised party to make "efforts to obtain authorisation from the rights holder on reasonable commercial terms and conditions".

Industry initiatives, patent pooling and other schemes

While government intervention to liberate patents for the fight against Covid-19 is one option, another solution around licensing has been put forward.

One group of US and UK-based scientists, lawyers, entrepreneurs and individuals, for example, have developed a formal licence that encourages rights holders to pave the way for others to use their intellectual property, for free, in the fight against Covid-19.

Some pharmaceutical companies and medical technology companies have already taken matters into their own hands as they look to do the right thing.

Gilead, for instance, has asked the US Food and Drug Administration (FDA) to rescind the 'orphan drug' designation it was granted for the investigational antiviral remdesivir for the treatment of Covid-19. It also announced that it is "waiving all benefits that accompany the designation".

Orphan drug designation in the US applies to the development of treatments for rare diseases and provides pharmaceutical manufacturers with a seven year long period of exclusivity for developing their products, as well as other incentives designed to support its development through clinical testing and to launch.

In a similar vein, Abbvie has reportedly said that it will not enforce its patent rights in Kaletra, a drug commonly used to treat HIV, in a move that will enable researchers to study its potential efficacy in treating Covid-19.

Patent pooling is a further option that is being considered.

A proposal from Costa Rican president Carlos Alvarado Quesada envisages voluntary pooling of rights relating to Covid-19 diagnostics, drugs and vaccines. That proposal has been welcomed by the director-general of the World Health Organisation, Tedros Adhanom Ghebreyesus. The WHO has said that it is "exploring all avenues to ensure people who need it have access to effective and safe products for Covid-19", according to the Financial Times.

Patent pooling already happens for other diseases, notably HIV, under the auspices of the Medicines Patent Pool, but Nicole Jadeja of Pinsent Masons cautioned that patent pooling for Covid-19 may not be the magic bullet some might think it is. It will not be patents that hinder efforts to deliver diagnostics and safe and effective treatments and vaccines as quickly as possible to as many people as possible, she said.

Jadeja said we are seeing an incredibly positive, collaborative response to the Covid-19 crisis from many businesses across the pharma industry. Many companies are working alongside each other – including those working with the Gates Foundation in the Covid-19 life sciences consortium co-chaired by Vas Narasimhan, chief executive of Novartis – in pooling compounds, know-how, technology and expertise in a diverse range of collaborations to find solutions to the crisis.  

The Milken Institute has been tracking the development of Covid-19 treatments, while in the UK alone the ABPI has reported that, as at the end of March, there were around 20 companies with potential medicines in various stages of development and around 50 ongoing projects relating to treatments, many involving collaborations between industry and academia.

Jadeja said there are numerous, but surmountable, challenges associated with developing Covid-19 treatments and vaccines which have nothing to do with patents. This includes the tension between the need to develop flexible, innovative, clinical pathways to get a vaccine to people quickly, and the need to deliver a vaccine which the regulators are confident will be safe and effective for the millions of healthy people it will potentially be used for. There is also the challenge of funding the highly specialised and regulated manufacturing facilities needed to ensure we have the manufacturing capabilities to meet global demands, she said.